EXHIBIT 10.03
Hyperion Telecommunications, Inc.
$200,000,000
12% Senior Subordinated Notes due 2007
PURCHASE AGREEMENT
February 25, 1999
XXXXXXX XXXXX XXXXXX INC.
XXXXX SECURITIES INC.
FIRST UNION CAPITAL MARKETS CORP.
c/o Xxxxxxx Xxxxx Barney Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies & Gentlemen:
Hyperion Telecommunications, Inc., a corporation organized under the
laws of Delaware (the "Company"), proposes to issue to Xxxxxxx Xxxxx Xxxxxx
Inc., Xxxxx Securities Inc. and First Union Capital Markets Corp. (each, an
"Initial Purchaser," and together, the "Initial Purchasers") $200,000,000
principal amount of its 12% Senior Subordinated Notes due 2007 (the
"Securities"). The Securities and the Highland Securities (as defined) are to be
issued under an indenture (the "Indenture") dated as of March 2, 1999 between
the Company and Bank of Montreal Trust Company, as trustee (the "Trustee").
Certain terms used herein are defined in Section 14 hereof.
The Company also intends to issue an additional $100,000,000 principal
amount of its 12% Senior Subordinated Notes due 2007 (the "Highland Securities")
to Highland Holdings ("Highland") pursuant to a separate purchase agreement (the
"Highland Purchase Agreement"), dated as of the date hereof, between the Company
and Highland.
The sale of the Securities to the Initial Purchasers will be made
without registration of the Securities under the Securities Act, in reliance
upon exemptions from the registration requirements of the Securities Act.
In connection with the sale of the Securities, the Company has prepared
a preliminary offering memorandum, dated February 17, 1999 (as amended or
supplemented at the Execution Time, including any and all exhibits thereto and
any information and documents incorporated by reference therein, the
"Preliminary Memorandum"), and a final offering memorandum, dated February 25,
1999 ( as amended or supplemented at the Execution Time, including any and all
exhibits thereto and any information and documents incorporated by reference
therein, the "Final Memorandum"). Each of the Preliminary Memorandum and the
Final Memorandum sets forth certain information concerning the Company and the
Securities. The Company hereby confirms that it has authorized the use of the
Preliminary Memorandum and the Final Memorandum, and any amendment or supplement
thereto, in connection with the offer and sale of the Securities by the Initial
Purchaser. Unless stated to the contrary, any references herein to the terms
"amend," "amendment" or "supplement" with respect to the Final Memorandum shall
be deemed to refer to and include any information filed under the Exchange Act,
subsequent to the Execution Time, which is incorporated by reference therein.
It is understood and acknowledged that holders (including subsequent
transferees) of the Securities will have the registration rights set forth in
the registration rights agreement (the "Registration Rights Agreement"), to be
dated the Closing Date (as defined below), for so long as such Securities
constitute "Transfer Restricted Securities" (as defined in the Registration
Rights Agreement). Pursuant to the Registration Rights Agreement, and subject to
the terms and conditions set forth therein, the Company will, among other
things, agree to file with the Commission under the circumstances set forth
therein, (i) a registration statement under the Securities Act relating to the
Company's 12% Senior Subordinated Notes due 2007 (the "New Securities") to be
offered in exchange for the Securities (the "Exchange Offer") and (ii) under
certain circumstances, a shelf registration statement pursuant to Rule 415 under
the Securities Act relating to the resale by certain holders of the Securities,
and to use its best efforts to cause such registration statements to be declared
effective. The holders of the Highland Securities will also have certain
registration rights as set forth in the Registration Rights Agreement.
This Agreement, the Indenture, the Securities, the New Securities and
the Registration Rights Agreement are hereinafter referred to collectively as
the "Operative Documents."
The Company wishes to confirm as follows its agreement with you in
connection with your several purchases of the Securities.
1. Agreements to Sell and Purchase. The Company hereby agrees, subject
to all the terms and conditions set forth herein, to issue and sell to each
Initial Purchaser and, upon the basis of the representations, warranties and
agreements of the Company herein contained and subject to all the terms and
conditions set forth herein, each Initial Purchaser agrees, severally and not
jointly, to purchase from the Company, at a purchase price of 98.4% of the
principal amount thereof, plus accrued interest, if any, from March 2, 1999 to
the Closing Date, the principal amount of Securities set forth opposite the name
of such Initial Purchaser in Schedule I hereto.
2. Offering of Securities. Each Initial Purchaser, severally and not
jointly, represents and warrants to and agrees with the Company that:
(a) It has not offered or sold, and will not offer or sell,
any Securities except (i) to those it reasonably believes to be
qualified institutional buyers (as defined in Rule 144A under the
Securities Act, "QIBs") and that, in connection with each such sale, it
has taken or will take reasonable steps to ensure that the purchaser of
such Securities is aware that such sale is being made in reliance on
Rule 144A or (ii) in accordance with the restrictions set forth in
Exhibit A hereto.
(b) Neither it nor any person acting on its behalf has made or
will make offers or sales of the Securities in the United States by
means of any form of general solicitation or general advertising
(within the meaning of Regulation D) in the United States.
3. Delivery of the Securities and Payment Therefor. Delivery to the
Initial Purchasers of and payment for the Securities shall be made at the office
of Xxxxxx and Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 A.M.,
New York City time, on March 2, 1999 or such later date (not later than March 4,
1999) as the Initial Purchasers shall designate, which date and time may be
postponed by agreement between the Initial Purchasers and the Company or as
provided in Section 9 hereof (such date and time of delivery and payment for the
Securities being herein called the "Closing Date").
Delivery of the Securities shall be made to the Initial Purchasers
against payment by the Initial Purchasers of the purchase price thereof to or
upon the order of the Company by wire transfer of immediately available funds or
such other manner of payment as may be agreed by the Company and the Initial
Purchasers. Certificates for the Securities shall be registered in such names
and in such denominations as the Initial Purchasers may request not less than
two full business days in advance of the Closing Date.
The Company agrees to have the Securities available for inspection,
checking and packaging by the Initial Purchasers in New York, New York, not
later than 1:00 PM on the business day prior to the Closing Date.
4. Agreements of the Company. The Company agrees with the several
Initial Purchasers as follows:
(a) If at any time prior to the completion of the distribution
of the Securities by the Initial Purchasers (as determined by the Initial
Purchasers), any event occurs as a result of which the Final Memorandum, as then
amended or supplemented, would include any untrue statement of a material fact
or omit to state any material fact necessary to make the statements therein not
misleading or if it should be necessary to amend or supplement the Final
Memorandum to comply with applicable law, the Company promptly: (i) will notify
the Initial Purchasers of any such event; (ii) subject to the requirements of
paragraph (c) of this Section 4, will prepare and provide to the Initial
Purchasers pursuant to paragraph (b) of this Section 4 an amendment or
supplement which will correct such statement or omission or effect such
compliance; and (iii) will supply any supplemented or amended Final Memorandum
to the several Initial Purchasers and counsel for the Initial Purchasers without
charge in such quantities as you may reasonably request.
(b) The Company will furnish to each Initial Purchaser and to
counsel for the Initial Purchasers, without charge, during the period referred
to in paragraph (a) of this Section 4, as many copies of the Final Memorandum
and any amendments and supplements thereto as it may reasonably request.
(c) The Company will not amend or supplement the Final
Memorandum, other than by filing documents under the Exchange Act that are
incorporated by reference therein, without the prior written consent of the
Initial Purchasers; provided, however, that, prior to the completion of the
distribution of the Securities by the Initial Purchasers (as determined by the
Initial Purchasers), the Company will not file any document under the Exchange
Act that is incorporated by reference in the Final Memorandum unless, at least
one Business Day prior to such proposed filing, the Company has furnished the
Initial Purchasers with a copy of such document for their review and the Initial
Purchasers have not reasonably objected to the filing of such document. The
Company will promptly advise the Initial Purchasers when any document filed
under the Exchange Act that is incorporated by reference in the Final Memorandum
shall have been filed with the Commission.
(d) Prior to the execution and delivery of this Agreement, the
Company has delivered to you, without charge, in such quantities as you have
requested, copies of each form of the Preliminary Memorandum. The Company
consents to the use, in accordance with the provisions of the Securities Act and
with the securities or Blue Sky laws of the jurisdictions in which the
Securities are offered by the several Initial Purchasers and by dealers, prior
to the date of the Final Memorandum, of each Preliminary Memorandum so furnished
by the Company. The Company consents to the use of the Final Memorandum in
accordance with the securities or Blue Sky laws of the jurisdictions in which
the Securities are offered by the several Initial Purchasers, in connection with
the offering and sale of the Securities.
(e) The Company will arrange, if necessary, for the
qualification of the Securities for sale by the Initial Purchasers under the
laws of such jurisdictions as the Initial Purchasers may designate and will
maintain such qualifications in effect so long as required for the sale of the
Securities; provided that in no event shall the Company be obligated to qualify
to do business in any jurisdiction where it is not now so qualified or to take
any action that would subject it to service of process in suits, other than
those arising out of the offering or sale of the Securities, in any jurisdiction
where it is not now so subject. The Company will promptly advise the Initial
Purchasers of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose.
(f) The Company will not, and will not permit any of its
Affiliates to, resell any Securities that have been acquired by any of them
under circumstances that would require the registration of the Securities under
the Securities Act other than pursuant to the terms of the Registration Rights
Agreement.
(g) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf will, directly or indirectly, make offers
or sales of any security, or solicit offers to buy any security, under
circumstances that would require the registration of the Securities under the
Securities Act.
(h) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf will engage in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of the Securities or the Highland Securities
in the United States.
(i) So long as any of the Securities are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities Act, the
Company will, during any period in which it is not subject to Section 13 or
15(d) of the Exchange Act, or it is not exempt from such reporting requirements
pursuant to and in compliance with Rule 12g3-2(b) under the Exchange Act,
provide to each holder of such restricted securities and to each prospective
purchaser (as designated by such holder) of such restricted securities, upon the
request of such holder or prospective purchaser, any information required to be
provided by Rule 144A(d)(4) under the Securities Act. This covenant is intended
to be for the benefit of the holders, and the prospective purchasers designated
by such holders, from time to time of such restricted securities.
(j) During the period of five years after the date of this
Agreement, the Company will furnish to the Initial Purchasers (i) a copy of each
report of the Company mailed to securityholders generally or filed with the
Commission or the Nasdaq National Market and will promptly notify the Initial
Purchasers of such mailing or filing and (ii) furnish from time to time such
other information concerning the Company and its Subsidiaries as you may
reasonably request.
(k) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf will engage in any directed selling efforts
with respect to the Securities or the Highland Securities, and each of them will
comply with the offering restrictions requirement of Regulation S. Terms used in
this paragraph have the meanings given to them by Regulation S.
(l) The Company will cooperate with the Initial Purchasers and
use its best efforts to (i) effect the inclusion of the Securities as Private
Offerings, Resales and Trading through Automated Linkages ("PORTAL") Market
securities in accordance with the rules and regulations adopted by the NASD
relating to trading in the PORTAL Market and (ii) permit the Securities to be
eligible for clearance and settlement through The Depository Trust Company.
(m) The Company will not, and will not permit any of its
Affiliates to, for a period of 90 days following the Execution Time, without the
prior written consent of Xxxxxxx Xxxxx Barney Inc., offer, sell or contract to
sell, or otherwise dispose of (or enter into any transaction which is designed
to, or might reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash settlement or
otherwise) by the Company or any Affiliate of the Company or any person in
privity with the Company or any Affiliate of the Company), directly or
indirectly, or announce the offering of, the Highland Securities (except with
respect to the purchase by Highland on the Closing Date of the Highland
Securities pursuant to the Highland Purchase Agreement) or any debt securities
issued or guaranteed by the Company (other than the Securities).
(n) If this Agreement shall terminate or shall be terminated
after execution pursuant to any provisions hereof (other than pursuant to
Section 9 or Section 10 hereof) or if this Agreement shall be terminated by the
Initial Purchasers because of any failure or refusal on the part of the Company
to comply with the terms or fulfill any of the conditions of this Agreement, the
Company agrees to negotiate in good faith regarding the reimbursement to the
Initial Purchasers for out-of-pocket expenses (including fees and expenses of
counsel for the Initial Purchasers) incurred by you in connection herewith.
(o) The Company will not, and will not permit any of its
Affiliates to, take, directly or indirectly, any action designed to or which has
constituted or which might reasonably be expected to cause or result, under the
Exchange Act or otherwise, in unlawful stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Securities or the Highland Securities.
(p) The Company will apply the net proceeds from the sale of
the Securities and the Highland Securities substantially in accordance with the
description set forth in the Final Memorandum under the caption "Use of
Proceeds."
5. Representations and Warranties of the Company. The Company
represents and warrants to each Initial Purchaser that:
(a) The Preliminary Memorandum, at the date thereof, did not
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein not misleading. At the Execution
Time, on the Closing Date and on any settlement date, the Final Memorandum did
not, and will not (and any amendment or supplement thereto, at the date thereof,
at the Closing Date and on any settlement date, will not), contain any untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein not misleading; provided, however, that the Company
makes no representation or warranty as to the information contained in or
omitted from the Preliminary Memorandum or the Final Memorandum, or any
amendment or supplement thereto, in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of the Initial
Purchasers specifically for inclusion therein.
(b) All the outstanding shares of Common Stock of the Company
have been duly authorized and validly issued, are fully paid and nonassessable
and are free of any preemptive or similar rights; and the capital stock of the
Company conforms to the description thereof set forth under the caption
"Capitalization" in the Final Memorandum.
(c) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under this Agreement,
the other Operative Documents and the Highland Purchase Agreement and to
consummate the transactions contemplated hereby and thereby, including, without
limitation, the corporate power and authority to issue, sell and deliver the
Securities as provided herein.
(d) This Agreement has been duly and validly authorized,
executed and delivered by the Company and is the legal, valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms, except insofar as indemnification and contribution provisions may be
limited by applicable law or public policy or equitable principles and subject
to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors generally and subject to general
principles of equity.
(e) The Indenture has been duly and validly authorized by the
Company and, upon its execution and delivery by the Company and assuming due
authorization, execution and delivery by the Trustee, will constitute the legal,
valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization or similar laws affecting the rights of
creditors generally and subject to general principles of equity.
(f) The Securities have been duly and validly authorized by
the Company and, when duly executed by the Company in accordance with the terms
of the Indenture, assuming due authentication of the Securities by the Trustee
and upon delivery to the Initial Purchasers against payment therefor in
accordance with the terms hereof, will be validly issued and delivered and will
constitute legal, valid and binding obligations of the Company entitled to the
benefits of the Indenture, enforceable against the Company and the Guarantors in
accordance with their terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization or similar laws affecting the rights of
creditors generally and subject to general principles of equity. The description
of the Securities in the Final Memorandum is accurate in all material respects.
(g) The New Securities have been duly and validly authorized
for issuance by the Company, and when executed by the Company in accordance with
the terms of the Indenture and delivered in accordance with the Exchange Offer
as provided for in the Registration Rights Agreement, and assuming due
authentication of the New Securities by the Trustee, the New Securities will
constitute legal, valid and binding obligations of the Company entitled to the
benefits of the Indenture, enforceable against the Company in accordance with
their terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity. The description of the
New Securities in the Final Memorandum is accurate in all material respects.
(h) The Registration Rights Agreement has been duly and
validly authorized by the Company and, when duly executed and delivered by the
Company, will constitute the legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors generally and subject to general
principles of equity. The description of the Registration Rights Agreement in
the Final Memorandum is accurate in all material respects.
(i) The Highland Purchase Agreement has been duly and validly
authorized, executed and delivered by the Company and Highland, and constitutes
the legal, valid and binding agreement of the Company and Highland, enforceable
against the Company and Highland in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors generally and subject to general
principles of equity. The Company and Highland have delivered to the Initial
Purchasers and counsel to the Initial Purchasers an executed copy of the
Highland Purchase Agreement, together will all other documents and agreements
related thereto, the form and substance of which has been reviewed and deemed
satisfactory by the Initial Purchasers and counsel to the Initial Purchasers.
(j) Each of the Company and its Subsidiaries (as defined) (A)
has been duly organized, is validly existing as a corporation or limited
liability company, as applicable, in good standing under the laws of its
respective jurisdiction of formation, (B) has all requisite corporate or limited
liability company power and authority to carry on its business as it is
currently being conducted and as described in the Final Memorandum and to own,
lease and operate its properties and (C) is duly qualified and in good standing
as a foreign corporation or limited liability company, as applicable, and is
authorized to do business in each jurisdiction in which the nature of its
business or its ownership or leasing of property requires such qualification
except, with respect to this clause (C), where the failure of the Company and
its Subsidiaries to be so qualified or in good standing does not and could not
reasonably be expected to (x) individually or in the aggregate, result in a
material adverse effect on the assets, liabilities, business, results of
operations, condition (financial or otherwise), cash flows, affairs or prospects
of the Company and the Subsidiaries, taken as a whole, (y) interfere with or
adversely affect the issuance or marketability of the Securities or (z) in any
manner draw into question the validity of this Agreement or the ability of the
Company and its Subsidiaries to conduct their businesses in the manner set forth
in the Final Memorandum (any of the events set forth in clauses (x), (y) or (z),
a "Material Adverse Effect"). The Company has no direct or indirect subsidiaries
as of the Closing Date other than those set forth on Schedule II hereto
(referred to herein collectively as "Subsidiaries" and individually as a
"Subsidiary").
(k) Each of the Joint Ventures (as defined) (A) has been duly
formed as a partnership, limited liability company or corporation, as
applicable, under the laws of its respective jurisdiction of formation, (B) has
all requisite partnership, limited liability company or corporate power and
authority, as applicable, to carry on its business as it is currently being
conducted and as described in the Final Memorandum and to own, lease and operate
its properties and (C) is duly qualified and in good standing as a foreign
partnership, limited liability company or corporation, as applicable, authorized
to do business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification except, with
respect to this clause (C), where the failure to be so qualified or in good
standing does not and could not reasonably be expected to result in a Material
Adverse Effect. Neither the Company nor its Subsidiaries has any ownership
interest in any Joint Venture other than those set forth on Schedule III hereto
(referred to herein collectively as "Joint Ventures" and individually a "Joint
Venture").
(l) All of the outstanding capital stock of each Subsidiary is
owned by the Company, free and clear of any and all security interests, claims,
liens, limitations on voting rights or other charges or encumbrances, other than
security interests, claims, liens, limitation on voting rights or other charges
or encumbrances arising from the pledge of the capital stock of Hyperion
Telecommunications of Kentucky, Inc., Hyperion Telecommunications of New York,
Inc., Hyperion Telecommunications of Vermont, Inc., Hyperion Telecommunications
of Tennessee, Inc. and Hyperion Telecommunications of Florida, Inc. as security
for the Company's 12 1/4% Senior Secured Notes due 2004. Except as disclosed in
the Final Memorandum, there are not currently, and there will not be as a result
of the transactions contemplated hereby, any outstanding subscriptions, rights,
warrants, calls, commitments of sale or options to acquire, or instruments
convertible into or exchangeable for, any capital stock or other equity interest
of the Company, any Subsidiary or any Joint Venture.
(m) None of the Company, the Subsidiaries or the Joint
Ventures is and, after giving effect to the transactions contemplated hereby,
none of them will be (A) in violation of its charter, bylaws, partnership
agreement or operating agreement, as applicable, (B) in default in the
performance of any bond, debenture, note, indenture, mortgage, deed of trust or
other agreement or instrument to which it is a party or by which it is bound or
to which any of its properties is subject, or (C) in violation of any local,
state or Federal law, statute, ordinance, rule, regulation, requirement,
judgment or court decree (including, without limitation, the Communications Act
of 1934, as amended by the Telecommunications Act of 1996 (together, the
"Telecommunications Act"), and the rules and regulations of the Federal
Communications Commission (the "FCC") and environmental laws, statutes,
ordinances, rules, regulations, judgments or court decrees) applicable to the
Company, any Subsidiary, any Joint Venture or any of their respective assets or
properties (whether owned or leased) other than, in the case of clauses (B) and
(C), any default or violation that could not reasonably be expected to have a
Material Adverse Effect. There exists no condition that, with notice, the
passage of time or otherwise, would constitute a default under any such document
or instrument that could reasonably be expected to have a Material Adverse
Effect.
(n) 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, court decree or order (including, without
limitation, the Telecommunications Act and the rules and regulations of the FCC)
that has been enacted, adopted or issued by any governmental agency or, to the
best of the Company's knowledge, that has been proposed by any governmental body
or (iii) no injunction, restraining order or order of any nature by a federal or
state court or foreign court of competent jurisdiction to which the Company, any
Subsidiary or any Joint Venture is or could reasonably be expected to be subject
or to which the business, assets, or property of the Company, any Subsidiary or
any Joint Venture are could reasonably be expected to be subject, that, in the
case of clauses (i), (ii) and (iii) above, (y) is required to be disclosed in
the Final Memorandum and that is not so disclosed, or (z) could reasonably be
expected to individually or in the aggregate, result in a Material Adverse
Effect.
(o) Neither the issuance and sale of the Securities, the
issuance and sale of the Highland Securities, the execution, delivery or
performance by the Company of this Agreement, the other Operative Documents and
the Highland Purchase Agreement, or the consummation by the Company, the
Subsidiaries and the Joint Ventures of the transactions contemplated hereby and
thereby violate, conflict with or constitute a breach of any of the terms or
provisions of, or constitute a default under (or an event that with notice or
the lapse of time, or both, would constitute a default under), 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, bylaws, partnership agreement or operating
agreement governing the Company, any Subsidiary or any Joint Venture, (ii) any
bond, debenture, note, indenture, mortgage, deed of trust or other agreement or
instrument to which the Company, any Subsidiary or any Joint Venture is a party
or by which any of them or their property is or may be bound, (iii) any local,
state or federal law, statute, ordinance, rule, regulation or requirement
(including, without limitation, the Telecommunications Act and the rules and
regulations of the FCC and environmental laws, statutes, ordinances, rules or
regulations) applicable to the Company, any Subsidiary, any Joint Venture or any
of their respective assets or properties or (iv) any judgment, order or decree
of any court or governmental agency or authority having jurisdiction over the
Company, any Subsidiary, any Joint Venture or any of their respective assets or
properties, except in the case of clauses (ii), (iii) and (iv) for such
violations conflicts, breaches, defaults, consents, impositions of liens or
accelerations that would not singly, or in the aggregate, have a Material
Adverse Effect. Other than as described in the Final Memorandum, 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, the other Operative Documents and the Highland
Purchase Agreement or (2) the issuance and sale of the Securities and the
Highland Securities and the consummation of the other transactions contemplated
hereby and thereby, except (x) such as have been obtained and made (or, in the
case of the Registration Rights Agreement, will be obtained and made) under the
Securities Act, the Trust Indenture Act of 1939, as amended (the "TIA") and
state securities or Blue Sky laws and regulations or such as may be required by
the NASD or (y) where the failure to obtain any such consent, approval,
authorization or order of, or filing registration, qualification, license or
permit would not reasonably be expected to result in a Material Adverse Effect.
(p) The accountants who have certified or shall certify the
financial statements included or incorporated by reference in the Final
Memorandum are independent public accountants as required by the Securities Act.
(q) The financial statements, together with related schedules
and notes, included or incorporated by reference in the Final Memorandum,
present fairly the consolidated financial position, results of operations and
changes in financial position of the Company and the Subsidiaries on the basis
stated or incorporated by reference in the Final Memorandum at the respective
dates or for the respective periods to which they apply; such statements and
related schedules and notes have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved, except as disclosed therein; and the other financial and statistical
information and data included or incorporated by reference in the Final
Memorandum are accurately presented and prepared on a basis consistent with such
financial statements and the books and records of the Company and the
Subsidiaries. The statistical information and data included in the Final
Memorandum are accurately presented in all material respects.
(r) Except as disclosed in the Final Memorandum, subsequent to
the respective dates as of which such information is given in the Final
Memorandum and the Preliminary Memorandum, (i) none of the Company, any
Subsidiary or any Joint Venture has incurred any liabilities or obligations,
direct or contingent, which are material, individually or in the aggregate, to
the Company, the Subsidiaries and the Joint Ventures taken as a whole, not
entered into any transaction not in the ordinary course of business, (ii) there
has not been, singly or in the aggregate, any change or development which could
reasonably be expected to result in a Material Adverse Effect, (iii) there has
been no dividend or distribution of any kind declared, paid or made by the
Company or its Subsidiaries on any class of capital stock and (iv) there has
been no distribution of profits or return of capital contribution by any Joint
Venture.
(s) The Company has not distributed and, prior to the later to
occur of (i) the Closing Date and (ii) completion of the distribution of the
Securities (as determined by the Initial Purchasers), will not distribute any
offering material in connection with the offering and sale of the Securities or
the Highland Securities other than the Final Memorandum, the Preliminary
Memorandum or other materials, if any, permitted by the Securities Act.
(t) There is (i) no unfair labor practice complaint pending or
threatened against the Company, 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
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 in a Material Adverse
Effect. To the best of the Company's knowledge, no collective bargaining
organizing activities are taking place with respect to the Company, the
Subsidiaries or the Joint Ventures. None of the Company, any Subsidiary or any
Joint Venture has violated (A) any federal, state or local law or foreign law
relating to discrimination in hiring, promotion or pay of employees, (B) any
applicable wage or hour laws or (C) any provision of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or the rules and regulations
thereunder, which in the case of clause (A), (B) or (C) above could reasonably
be expected to result in a Material Adverse Effect.
(u) 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 or is violating any
term or condition of any such permit, license or approval which could reasonably
be expected to, either individually or in the aggregate, have a Material Adverse
Effect.
(v) Each of the Company, the Subsidiaries and the Joint
Ventures has (i) good and marketable title to all of the properties and assets
described in the Final Memorandum as owned by it, free and clear of all liens,
charges, encumbrances and restrictions, except such as are securing the
Company's 12 1/4% Senior Secured Notes due 2004, are described in the Final
Memorandum or would not have a Material Adverse Effect, (ii) peaceful and
undisturbed possession under all leases to which any of them is a party as
lessee, (iii) all licenses, certificates, permits, authorizations, approvals,
franchises and other rights from, and has made all declarations and filings
with, all federal, state and local authorities (including, without limitation,
the FCC), all self-regulatory authorities and all courts and other tribunals
(each an "Authorization") necessary to engage in the business as presently
conducted by each of them in the manner described in the Final Memorandum,
except as described in the Final Memorandum or where failure to hold such
Authorizations would not, individually or in the aggregate, have a Material
Adverse Effect and (iv) no reason to believe that any governmental body or
agency is considering limiting, suspending or revoking any such Authorization.
Except where the failure to be in full force and effect would not have a
Material Adverse Effect, all such Authorizations are valid and in full force and
effect and each of the Company, the Subsidiaries and the Joint Ventures is in
compliance with the terms and conditions of all such Authorizations and with the
rules and regulations of the regulatory authorities having jurisdiction with
respect thereto. All leases to which the Company, the Subsidiaries and the Joint
Ventures is a party are valid and binding and no default by the Company, any
Subsidiary or any Joint Venture has occurred and is continuing thereunder and no
defaults by the landlord are existing under any such lease that could reasonably
be expected to result in a Material Adverse Effect.
(w) Each of the Company, the Subsidiaries and the Joint
Ventures owns, possesses or has the right to employ all patents, patent rights,
licenses (including all FCC, state, local or other jurisdictional regulatory
licenses), inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information,
software, systems or procedures), trademarks, service marks and trade names,
inventions, computer programs, technical data and information (collectively, the
"Intellectual Property") presently employed by the Company, its Subsidiaries or
the Joint Ventures in connection with the businesses now operated by it or which
are proposed to be operated by the Company, its Subsidiaries or the Joint
Ventures free and clear of and without violating any right, claimed right,
charge, encumbrance, pledge, security interest, restriction or lien of any kind
of any other person, and none of the Company, any Subsidiary or any Joint
Venture has received any notice of infringement of or conflict with asserted
rights of others with respect to any of the foregoing except as could not
reasonably be expected to have a Material Adverse Effect. The use of the
Intellectual Property in connection with the business and operations of the
Company, the Subsidiaries and the Joint Ventures does not infringe on the rights
of any person, except would not have a Material Adverse Effect.
(x) None of the Company, any Subsidiary, any Joint Venture or
any of their respective officers, directors, partners, employees, agents or
affiliates or any other person acting on behalf of the Company, any Subsidiary
or any Joint Venture, as the case may be, has, directly or indirectly, given or
agreed to give any money, gift or similar benefit (other than legal price
concessions to customers in the ordinary course of business) to any customer,
supplier, employee or agent of a customer or supplier, official or employee of
any governmental agency (domestic or foreign), instrumentality of any government
(domestic or foreign) or any political party or candidate for office (domestic
or foreign) or other person who was, is or may be in a position to help or
hinder the business of the Company, any Subsidiary or any Joint Venture (or
assist the Company, any Subsidiary or any Joint Venture in connection with any
actual or proposed transaction) which (i) might subject the Company, any
Subsidiary or any Joint Venture, or any other individual or entity to any damage
or penalty in any civil, criminal or governmental litigation or proceeding
(domestic or foreign), (ii) if not given in the past, could reasonably be
expected to have had a Material Adverse Effect on the assets, business or
operations of the Company, any Subsidiary or any Joint Venture or (iii) if not
continued in the future, could reasonably be expected to have a Material Adverse
Effect.
(y) 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.
(z) None of the Company, the Subsidiaries or the Joint
Ventures is now, and after sale of the Securities to be sold by the Company
hereunder, the sale of the Highland Securities and application of the net
proceeds from each such sale as described in the Final Memorandum under the
caption "Use of Proceeds" will not be (i) an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act or (ii) a "holding company" or a "subsidiary company" or an
"affiliate" of a holding company within the meaning of the PUC Act.
(aa) There are no holders of securities of the Company, the
Subsidiaries or the Joint Ventures who, by reason of the execution of this
Agreement, any other Operative Document or the Highland Purchase Agreement or
the consummation 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 Securities Act.
(bb) 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.
(cc) Each of the Company, the Subsidiaries and the Joint
Ventures maintains insurance covering its properties, operations, personnel and
businesses. Such insurance insures against such losses and risks as are adequate
in accordance with customary industry practice to protect the Company, the
Subsidiaries, the Joint Ventures and their respective businesses. None of the
Company, any Subsidiary or any Joint Venture has received notice from any
insurer or agent of such insurer that substantial capital improvements or other
expenditures will have to be made in order to continue such insurance. All such
insurance is outstanding and duly in force on the date hereof.
(dd) Set forth on Exhibit B hereto is a list of each employee
pension or benefit plan with respect to which the Company or any corporation
considered an affiliate of the Company within the meaning of Section 407(d)(7)
of ERISA (an "ERISA Affiliate") is a party in interest or disqualified person.
The execution and delivery of this Agreement, the other Operative Documents and
the Highland Purchase Agreement and the issuance and sale of the Securities and
the Highland Securities will not involve any prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Internal Revenue Code of
1986, as amended. The representation made by the Company in the preceding
sentence is made in reliance and subject to the accuracy of, and compliance
with, the representations and covenants made or deemed made by the QIBs as set
forth in the Final Memorandum under the caption "Notice to Investors."
(ee) None of (A) the execution, delivery and performance of
this Agreement or any other Operative Document, (B) the issuance and sale of the
Securities and the Highland Securities, (C) the application of the proceeds from
the issuance and sale of the Securities and the Highland Securities or (D) the
consummation of the transactions contemplated in connection with any of the
foregoing as set forth in the Final Memorandum, will violate Regulations U or X
promulgated by the Board of Governors of the Federal Reserve System or analogous
foreign laws and regulations.
(ff) Except pursuant to this Agreement and the other Operative
Documents, there are no contracts, agreements or understandings between the
Company, any of its Subsidiaries or any of its Joint Ventures and any other
person that would give rise to a valid claim against the Company or any of the
Initial Purchasers for a brokerage commission, finder's fee or like payment in
connection with the issuance, purchase and sale of the Securities.
(gg) The Company has filed in a timely manner each document or
report required to be filed by it pursuant to the Exchange Act and the rules and
regulations thereunder; each such document or report at the time it was filed
conformed to the requirements of the Exchange Act and the rules and regulations
thereunder; and none or such documents or reports contained an untrue statement
of any material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
(hh) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf has, directly or indirectly, made offers or
sales of any security, or solicited offers to buy any security, under
circumstances that would require the registration of the Securities under the
Securities Act.
(ii) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of the Securities or the Highland Securities
in the United States.
(jj) The Securities satisfy the eligibility
requirements of Rule 144A(d)(3) under the Securities Act.
(kk) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf has engaged in any directed selling efforts
with respect to the Securities and the Highland Securities and each of them has
complied with the offering restrictions requirement of Regulation S. Terms used
in this paragraph have the meanings given to them by Regulation S.
(ll) The Company has not paid or agreed to pay to any person
any compensation for soliciting another to purchase any securities of the
Company (except as contemplated by this Agreement).
(mm) The Company has not taken, directly or indirectly, any
action designed to cause or which has constituted or which might reasonably be
expected to cause or result, under the Exchange Act or otherwise, in the
stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities or the Highland Securities.
(nn) The information provided by the Company pursuant to
Section 4(i) hereof will not, at the date thereof, contain any untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein not misleading.
The Company acknowledges that the Initial Purchasers and, for purposes
of the opinions to be delivered to the Initial Purchasers pursuant to Section
7(c), (d), (e) and (f) hereof, counsel to the Company and counsel to the Initial
Purchasers, will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.
6. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Initial Purchaser, the directors, officers,
employees and agents of each Initial Purchaser and each person who controls any
Initial Purchaser within the meaning of either the Securities Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Securities
Act, the Exchange Act or other Federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Memorandum, the Final Memorandum (or in any supplement or amendment
thereto) or any information provided by the Company to any holder or prospective
purchaser of Securities pursuant to Section 4(i), or in any amendment thereof 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, in the light of the circumstances
under which they were made, not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will not
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made in the Preliminary
Memorandum or the Final Memorandum, or in any amendment thereof or supplement
thereto, in reliance upon and in conformity with written information furnished
to the Company by or on behalf of any Initial Purchasers specifically for
inclusion therein; provided, further, that the indemnification contained in this
paragraph (a) with respect to any Preliminary Memorandum shall not inure to the
benefit of any Initial Purchaser (or to the benefit of any person controlling
such Initial Purchaser) on account of any such loss, claim, damage, liability or
expense arising from the sale of the Securities by such Initial Purchaser to any
person if a copy of the Final Memorandum shall not have been delivered or sent
to such person and the untrue statement or alleged untrue statement or omission
or alleged omission of a material fact contained in such Preliminary Memorandum
was corrected in the Final Memorandum, provided that the Company has delivered
the Final Memorandum to the several Initial Purchasers in requisite quantity on
a timely basis to permit such delivery or sending. The foregoing indemnity
agreement shall be in addition to any liability that the Company may otherwise
have.
(b) Each Initial Purchaser severally and not jointly agrees to
indemnify and hold harmless the Company, each of its directors, each of its
officers, and each person who controls the Company within the meaning of either
the Securities Act or the Exchange Act, to the same extent as the foregoing
indemnity from the Company to each Initial Purchaser, but only with reference to
written information relating to such Initial Purchaser furnished to the Company
by or on behalf of such Initial Purchaser specifically for inclusion in the
Preliminary Memorandum or the Final Memorandum (or in any amendment or
supplement thereto). This indemnity agreement will be in addition to any
liability any Initial Purchaser may otherwise have. The Company acknowledges
that the statements set forth in the last paragraph of the cover page regarding
the delivery of the Securities, the legend in the block capital letters and the
related disclosure on page 2 concerning stabilization, syndicate covering
transactions and penalty bids and, under the heading "Plan of Distribution," (i)
the sentences related to concessions and reallowances and (ii) the paragraph
related to stabilization, syndicate covering transactions and penalty bids in
the Preliminary Memorandum and the Final Memorandum, constitute the only
information furnished in writing by or on behalf of the Initial Purchasers for
inclusion in the Preliminary Memorandum or the Final Memorandum (or in any
amendment or supplement thereto).
(c) Promptly after receipt by an indemnified party under this
Section 6 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 6, notify the indemnifying party in writing of the
commencement thereof, but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest; (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties that are different
from or additional to those available to the indemnifying party; (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action; or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 6 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Initial Purchasers agree
to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company
and one or more of the Initial Purchasers may be subject in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and by the Initial Purchasers on the other from the offering of the
Securities; provided, however, that in no case shall any Initial Purchaser
(except as may be provided in any agreement among the Initial Purchasers
relating to the offering of the Securities) be responsible for any amount in
excess of the purchase discount or commission applicable to the Securities
purchased by such Initial Purchaser hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company and
the Initial Purchasers shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and of the Initial Purchasers on the other in connection
with the statements or omissions which resulted in such Losses, as well as any
other relevant equitable considerations. Benefits received by the Company shall
be deemed to be equal to the total net proceeds from the offering (before
deducting expenses) received by it, and benefits received by the Initial
Purchasers shall be deemed to be equal to the total purchase discounts and
commissions in each case set forth on the cover of the Final Memorandum.
Relative fault shall be determined by reference to, among other things, whether
any untrue or any alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information provided by the
Company on the one hand or the Initial Purchasers on the other, the intent of
the parties and their relative knowledge, information and opportunity to correct
or prevent such untrue statement or omission. The Company and the Initial
Purchasers agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 6,
each person who controls an Initial Purchaser within the meaning of either the
Securities Act or the Exchange Act and each director, officer, employee and
agent of an Initial Purchaser shall have the same rights to contribution as such
Initial Purchaser, and each person who controls the Company within the meaning
of either the Securities Act or the Exchange Act and each officer and director
of the Company shall have the same rights to contribution as the Company,
subject in each case to the applicable terms and conditions of this paragraph
(d).
7. Conditions of Initial Purchasers' Obligations. The several
obligations of the Initial Purchasers to purchase the Securities shall be
subject to the accuracy of the representations and warranties on the part of the
Company contained herein at the Execution Time, the Closing Date and each
settlement date pursuant to Section 3 hereof, to the accuracy of the statements
of the Company made in all certificates pursuant to the provisions hereof, to
the performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, that would have a Material Adverse Effect on the Company,
the Subsidiaries and the Joint Ventures, taken as a whole, not contemplated by
the Final Memorandum, which in your opinion, as Initial Purchasers, would
materially adversely affect the market for the Securities, or (ii) any event or
development relating to or involving the Company, the Subsidiaries, the Joint
Ventures or any officer or director of the Company that makes any statement made
in the Final Memorandum untrue or which, in the opinion of the Company and its
counsel or the Initial Purchasers and their counsel, requires the making of any
addition to or change in the Final Memorandum in order to state a material fact
required by the Securities Act or any other law to be stated therein or
necessary in order to make the statements therein not misleading, if amending or
supplementing the Final Memorandum to reflect such event or development would,
in your opinion, as Initial Purchasers, materially adversely affect the market
for the Securities.
(b) You shall have received a certificate, dated the Closing
Date, signed on behalf of the Company by (i) the President or a Vice Chairman
and (ii) a Vice President, Vice Chairman, Secretary or Assistant Secretary, in
form and substance reasonably satisfactory to you, confirming, as of the Closing
Date, the matters set forth in the introduction of this Section 7 and in
paragraphs (a) and (k) of this Section 7, certain incumbency matters and that,
as of the Closing Date, the obligations of the Company to be performed hereunder
on or prior thereto have been duly performed.
(c) You shall have received on the Closing Date, an opinion,
dated the Closing Date, in form and substance satisfactory to you, of Xxxxxxxx
Xxxxxxxxx, counsel for the Company, to the effect set forth in Exhibit C hereto.
(d) You shall have received on the Closing Date an opinion,
dated the Closing Date, in form and substance satisfactory to you, of Xxxxxxx &
Berlin, special regulatory counsel to the Company, to the effect set forth in
Exhibit D hereto.
(e) You shall have received on the Closing Date an opinion,
dated the Closing Date, in form and substance satisfactory to you, of Downs
Xxxxxxx & Xxxxxx, PC, special regulatory counsel to the Company, to the effect
set forth in Exhibit D hereto.
(f) You shall have received an opinion, dated the Closing
Date, in form and substance reasonably satisfactory to you, of Xxxxxx & Xxxxxxx,
counsel to the Initial Purchasers, covering such matters as are customarily
covered in such opinions.
(g) At the time this Agreement is executed and at the Closing
Date, you shall have received from Deloitte & Touche, independent public
accountants for the Company dated as of the date of this Agreement and of the
Closing Date, respectively, a customary comfort letter addressed to the you and
in form and substance satisfactory to you with respect to the financial
statements and certain financial information of the Company, the Subsidiaries
and the Joint Ventures contained or incorporated by reference in the Final
Memorandum.
(h) (i) There shall not have been any change in the capital
stock of the Company nor any material increase in the short-term or long-term
debt of the Company (other than in the ordinary course of business) from that
set forth or contemplated in the Final Memorandum (exclusive of any amendment or
supplement thereto); (ii) there shall not have been, since the respective dates
as of which information is given in the Preliminary Memorandum and the Final
Memorandum (exclusive of any amendment or supplement thereto), except as may
otherwise be stated in the Final Memorandum and, any material adverse change in
the condition (financial or other), business, prospects, properties, net worth
or results of operations of the Company and the Subsidiaries taken as a whole;
and (iii) the Company and the Subsidiaries shall not have any liabilities or
obligations, direct or contingent (whether or not in the ordinary course of
business), that are material to the Company and the Subsidiaries, taken as a
whole, other than those reflected in the Preliminary Memorandum and the Final
Memorandum (exclusive of any amendment or supplement thereto).
(i) The Company shall not have failed at or prior to the
Closing Date to have performed or complied with any of its agreements herein
contained and required to be performed or complied with by it hereunder at or
prior to the Closing Date.
(j) Prior to the Closing Date, the Company, the Subsidiaries
and the Joint Ventures shall have furnished or caused to be furnished to you
such further certificates and documents as you shall have requested.
(k) Subsequent to the date hereof, there shall not have been
any decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Securities Act) or any notice given of any intended or
potential decrease in any such rating or of a possible change in any such rating
that does not indicate the direction of the possible change.
(l) The Company shall have entered into the Registration
Rights Agreement and each of the Company and the Trustee shall have entered into
the Indenture and the Initial Purchasers shall have received counterparts,
conformed as executed, thereof.
(m) The Company and Highland shall have delivered to the
Initial Purchasers and counsel to the Initial Purchasers evidence satisfactory
to the Initial Purchasers that the Company has issued and sold to Highland the
Highland Securities for the consideration set forth in the Final Offering
Memorandum.
(n) The Company shall have delivered to the Initial Purchasers
a "lock-up" letter satisfactory to the Initial Purchasers from Highland.
(o) The Securities shall have been approved by the NASD for
trading on the PORTAL Market and shall be eligible for clearance and settlement
through The Depository Trust Company.
(p) The Company, the trustee under the indenture relating to
the Company's 13% Senior Discount Notes due 2003 and the trustee under the
indenture relating to the Company's 12 1/4% Senior Secured Notes due 2004 shall
have received the fairness opinions required under Section 4.11 of each such
indenture with respect to the purchase of the Highland Securities by Highland.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you and your counsel. All certificates and documents signed by any
officer of the Company and delivered to you or to counsel for the Initial
Purchasers shall be deemed representations and warranties by the Company to each
Initial Purchaser as to the statements made therein. All certificates and
documents signed by any officer of the Company and delivered to you or to
counsel for the Initial Purchasers shall be deemed representations and
warranties by the Company to each Initial Purchaser as to the statements made
therein.
If any of the conditions specified in this Section 7 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Initial Purchasers and counsel for the Initial Purchasers,
this Agreement and all obligations of the Initial Purchasers hereunder may be
cancelled at, or at any time prior to, the Closing Date by the Initial
Purchasers. Notice of such cancellation shall be given to the Company in writing
or by telephone or facsimile confirmed in writing.
8. Expenses. The Company agrees to pay the following costs and expenses
and all other costs and expenses incident to the performance by it of its
obligations hereunder: (i) the preparation, printing or reproduction of the
Final Memorandum (including financial statements and exhibits thereto), the
Preliminary Memorandum, and each amendment or supplement to any of them; (ii)
the printing (or reproduction) and delivery (including postage, air freight
charges and charges for counting and packaging) of such copies of the Final
Memorandum, the Preliminary Memorandum, and all amendments or supplements to any
of them as may be reasonably requested for use in connection with the offering
and sale of the Securities; (iii) the preparation, printing, authentication,
issuance and delivery of certificates for the Securities, including any stamp
taxes in connection with the original issuance and sale of the Securities; (iv)
the printing (or reproduction) and delivery of this Agreement, the Blue Sky
Memoranda and all other agreements or documents printed (or reproduced) and
delivered in connection with the offering of the Securities; (v) the listing of
the Securities on PORTAL; (vi) the registration or qualification of the
Securities for offer and sale under the securities or Blue Sky laws of the
several states as provided in Section 4(d) hereof (including the reasonable
fees, expenses and disbursements of counsel for the Initial Purchasers relating
to the preparation, printing or reproduction, and delivery of the Blue Sky
Memoranda and such registration and qualification); (vii) all fees and expenses
(including fees and expenses of counsel to the Company) of the Company in
connection with the approval of the Securities by DTC for "book-entry" transfer,
(viii) the rating of the Securities by rating agencies, (ix) the reasonable fees
and expenses of the Trustee and its counsel in connection with the Indenture and
the Securities, (x) the transportation and other expenses incurred by or on
behalf of the Company in connection with presentations to prospective purchasers
of the Securities; (xi) the fees and expenses of the Company's accountants and
the fees and expenses of counsel (including local and special counsel) for the
Company.
9. Default by an Initial Purchaser. If any one or more Initial
Purchasers shall fail to purchase and pay for any of the Securities agreed to be
purchased by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to take
up and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Initial Purchasers)
the Securities which the defaulting Initial Purchaser or Initial Purchasers
agreed but failed to purchase; provided, however, that in the event that the
aggregate amount of Securities which the defaulting Initial Purchaser or Initial
Purchasers agreed but failed to purchase shall exceed 10% of the aggregate
amount of Securities set forth in Schedule I hereto, the remaining Initial
Purchasers shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the Securities, and if such nondefaulting Initial
Purchasers do not purchase all the Securities, this Agreement will terminate
without liability to any nondefaulting Initial Purchaser or the Company. In the
event of a default by any Initial Purchaser as set forth in this Section 9, the
Closing Date shall be postponed for such period, not exceeding five Business
Days, as the Initial Purchasers shall determine in order that the required
changes in the Final Memorandum or in any other documents or arrangements may be
effected. Nothing contained in this Agreement shall relieve any defaulting
Initial Purchaser of its liability, if any, to the Company or any nondefaulting
Initial Purchaser for damages occasioned by its default hereunder.
Any notice under this Section 9 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
10. Termination of Agreement. This Agreement shall be subject to
termination in the absolute discretion of the Initial Purchasers, by written
notice given to the Company prior to delivery of and payment for the Securities,
if at any time prior to such time (i) trading in the Company's Common Stock
shall have been suspended by the Commission or the Nasdaq National Market, or
trading in securities generally on the New York Stock Exchange or the Nasdaq
National Market shall have been suspended or limited or minimum prices shall
have been established on either such Exchanges; (ii) a banking moratorium shall
have been declared either by Federal or New York State authorities; or (iii)
there shall have occurred any outbreak or escalation of hostilities, declaration
by the United States of a national emergency or war or other calamity or crisis
the effect of which on financial markets is such as to make it, in the sole
judgment of the Initial Purchasers, impracticable or inadvisable to proceed with
the offering or delivery of the Securities as contemplated by the Final
Memorandum (exclusive of any amendment or supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Initial Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Initial Purchasers or the Company
or any of the officers, directors or controlling persons referred to in Section
6 hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 4(n) and 8 hereof shall survive the termination or
cancellation of this Agreement.
12. Miscellaneous. Except as otherwise provided in Sections 4, 9 and 10
hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Company, at the office of the
Company at Hyperion Telecommunications, Inc., Main at Xxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxx, Xx., Vice President, Finance;
or (ii) if to you, as Initial Purchasers, care of Xxxxxxx Xxxxx Xxxxxx Inc., 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: General Counsel.
This Agreement has been and is made solely for the benefit of the
several Initial Purchasers, the Company, its directors and officers, and the
other controlling persons referred to in Section 6 hereof and their respective
successors and assigns, to the extent provided herein, and no other person shall
acquire or have any right under or by virtue of this Agreement. Neither the term
"successor" nor the term "successors and assigns" as used in this Agreement
shall include a purchaser from any Initial Purchaser of any of the Securities in
his status as such purchaser.
13. Applicable Law; Counterparts. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
14. Definitions. The terms which follow, when used in this Agreement,
shall have the meanings indicated.
"Affiliate" shall have the meaning specified in Rule 501(b) of
Regulation D.
"Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or trust
companies are authorized or obligated by law to close in The City of New York.
"Commission" shall mean the Securities and Exchange
Commission.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean, the date and time that this
Agreement is executed and delivered by the parties hereto.
"Investment Company Act" shall mean the Investment Company Act
of 1940, as amended, and the rules and regulations of the Commission promulgated
thereunder.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"PUC Act" shall mean the Public Utility Holding Company Act of
1935, as amended.
"Regulation D" shall mean Regulation D under the Securities
Act.
"Regulation S" shall mean Regulation S under the Securities
Act.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"TIA" shall mean the Trust Indenture Act of 1939, as amended,
and the rules and regulations of the Commission promulgated thereunder.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Initial Purchasers.
Very truly yours,
HYPERION TELECOMMUNICATIONS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: President
Confirmed as of the date first above mentioned.
XXXXXXX XXXXX XXXXXX INC.
XXXXX SECURITIES INC.
FIRST UNION CAPITAL MARKETS CORP.
By: XXXXXXX XXXXX BARNEY INC.
By: /s/ Xxxx X. Xxxxxxxxx
Name: Xxxx X. Xxxxxxxxx
Title: Director
S-I
SCHEDULE I
HYPERION TELECOMMUNICATIONS INC.
Aggregate Principal Amount of
Initial Purchaser Securities Purchased
Xxxxxxx Xxxxx Xxxxxx Inc...................... $125,000,000
Chase Securities Inc.......................... 37,500,000
First Union Capital Markets Corp.............. $ 37,500,000
------------------------
TOTAL.................................. $200,000,000
========================
S-II
SCHEDULE II
SUBSIDIARIES
Hyperion Telecommunications, Inc.
Hyperion Communications General Holdings, Inc.
Hyperion Communications Capital, Inc.
Hyperion Communications Long Haul, L.P.
Hyperion Telecommunications International, Inc.
Hyperion Communications International, LLC
Hyperion Communications of Alabama, LLC
Hyperion Communications of Arkansas, LLC
Hyperion Telecommunications of Arkansas, Inc.
Hyperion Communications of Connecticut, Inc.
Hyperion Communications of Delaware, LLC
Hyperion Communications of District of Columbia, LLC
Hyperion Telecommunications of Florida, Inc.
Hyperion Communications of Florida, LLC
Hyperion Communications of Georgia, LLC
Hyperion Communications of Illinois, Inc.
Hyperion Communications of Indiana, L.P.
Hyperion Telecommunications of Kansas, Inc.
Hyperion Communications of Kansas, LLC
Hyperion Communications of Kentucky, Inc.
Hyperion Telecommunications of Lexington, Inc.
Hyperion Telecommunications of Louisville, Inc.
Hyperion Telecommunications of Louisiana, Inc.
Hyperion Communications of Maine, Inc.
Hyperion Communications of Maryland, LLC
Hyperion Telecommunications of Baltimore, L.L.C.
Hyperion Communications of Massachusetts, Inc.
Hyperion Communications of Michigan, Inc.
Hyperion Telecommunications of Mississippi, Inc.
Hyperion Communications of Mississippi, L.P.
Hyperion Communications of New Hampshire, Inc.
Hyperion Telecommunications of New Jersey, Inc.
Hyperion Telecommunications of Central New Jersey, Inc.
Hyperion Communications of New Jersey, LLC
Hyperion Communications of New York, Inc.
Hyperion Communications of Eastern New York, Inc.
Hyperion Telecommunications of Albany, Inc.
Hyperion Telecommunications of Buffalo, Inc.
Hyperion Telecommunications of Syracuse, Inc.
Hyperion Telecommunications of North Carolina, Inc.
Hyperion Communications of North Carolina, L.P.
Hyperion Communications of Ohio, Inc.
Hyperion Telecommunications of Ohio, L.L.C.
Hyperion Telecommunications of Pennsylvania, Inc.
Hyperion Telecommunications of Coudersport, Inc.
Hyperion Communications of Pennsylvania, LLC
Hyperion Telecommunications of Pittsburgh, L.L.C.
Hyperion Telecommunications of Scranton, Inc.
Hyperion Telecommunications of Harrisburg, Inc.
Hyperion Communications of Rhode Island, Inc.
Hyperion Communications of South Carolina, Inc.
Hyperion Telecommunications of Tennessee, Inc.
Hyperion Communications of Tennessee, L.P.
Hyperion Communications of Nashville, L.P.
Hyperion Communication of Texas, L.P.
Hyperion Communications of West Virginia, LLC
Hyperion Communications of Vermont, Inc.
Hyperion Enhanced Networks of Virginia, Inc.
Hyperion Telecommunications of Virginia, Inc.
Hyperion Communications of Virginia, LLC
Hyperion Telecommunications of Southwest Virginia, L.L.C.
S-III
SCHEDULE III
JOINT VENTURES
Entergy Hyperion Telecommunications of Arkansas, L.L.C.
MediaOne Fiber Technologies, Inc.
Multimedia Hyperion Telecommunications
Entergy Hyperion Telecommunications of Louisiana, L.L.C.
Entergy Hyperion Telecommunications of Mississippi, L.L.C.
Allegheny Hyperion Telecommunications, L.L.C.
Hyperion Susquehanna Telecommunications
PECO Hyperion Telecommunications
AVR of Tennessee, L.P. d/b/a Hyperion of Tennessee, L.P.
MediaOne of Virginia
A-1
EXHIBIT A
SELLING RESTRICTIONS FOR OFFERS
AND SALES OUTSIDE THE UNITED STATES
1. (a) The Securities have not been and will not be registered
under the Securities Act. Each Initial Purchaser, severally and not jointly,
represents and agrees that, except as otherwise permitted by Section 2(a)(i) of
the Agreement to which this is an exhibit, it has offered and sold the
Securities, and will offer and sell the Securities, (i) as part of their
distribution at any time and (ii) otherwise until 40 days after the later of the
commencement of the offering and the Closing Date, only in accordance with Rule
903 of Regulation S under the Securities Act. Accordingly, each Initial
Purchaser represents and agrees that neither it, nor any of its Affiliates nor
any person acting on its or their behalf has engaged or will engage in any
directed selling efforts with respect to the Securities within the meaning under
Regulation S, and that it and they have complied and will comply with the
offering restrictions requirement of Regulation S. Each Initial Purchaser agrees
that, at or prior to the confirmation of sale of Securities (other than a sale
of Securities pursuant to Section 2(a)(i) of the Agreement to which this is an
exhibit), it shall have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases Securities from it
during the distribution compliance period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been
registered under the U.S. Securities Act of 1933 (the
"Securities Act") and may not be offered or sold within the
United States or to, or for the account or benefit of, U.S.
persons (i) as part of their distribution at any time or (ii)
otherwise until 40 days after the later of the commencement of
the offering and March 2, 1999, except in either case in
accordance with Regulation S or Rule 144A under the Securities
Act. Terms used above have the meanings given to them by
Regulation S."
(b) Each Initial Purchaser also, severally and not jointly,
represents and agrees that it has not entered and will not enter into any
contractual arrangement with any distributor with respect to the distribution of
the Securities, except with its affiliates or with the prior written consent of
the Company.
(c) Terms used in this section have the meanings given to them
by Regulation S.
2. Each Initial Purchaser, severally and not jointly,
represents and agrees that (i) it has not offered or sold, and will not offer or
sell, in the United Kingdom, by means of any document, any Securities other than
to persons whose ordinary business it is to buy or sell shares or debentures,
whether as principal or as agent (except in circumstances which do not
constitute an offer to the public within the meaning of the Companies Xxx 0000
of Great Britain), (ii) it has complied and will comply with all applicable
provisions of the Financial Services Xxx 0000 of the United Kingdom with respect
to anything done by it in relation to the Securities in, from or otherwise
involving the United Kingdom, and (iii) it has only issued or passed on and will
only issue or pass on in the United Kingdom any document received by it in
connection with the issue of the Securities to a person who is of a kind
described in Article 9(3) of the Financial Services Xxx 0000 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom the document may
otherwise lawfully be issued or passed on.
B-1
EXHIBIT B
LIST OF EMPLOYEE PENSION AND BENEFIT
PLANS OF HYPERION TELECOMMUNICATIONS, INC.
AND ITS SUBSIDIARIES
Adelphia Communications Corporation Employee Benefit Plan
Adelphia Communications Corporation 401(k) Savings and Protection Profit
Sharing Plan
C-1
EXHIBIT C
FORM OF OPINION OF XXXXXXXX XXXXXXXXX
D-1
EXHIBIT D
FORM OF OPINION OF REGULATORY COUNSEL
