EXHIBIT 1.1
HYPERION TELECOMMUNICATIONS, INC.
329,000 Units consisting of
$329,000,000 of
13% Series A Senior Discount Notes due 2003
and
Warrants to Purchase 613,427 Shares of Common Stock
Purchase Agreement
April 10, 1996
BEAR, STEARNS & CO. INC.
CHASE SECURITIES INC.
NATIONSBANC CAPITAL MARKETS, INC.
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HYPERION TELECOMMUNICATIONS, INC.
329,000 Units consisting of
$329,000,000 of
13% Series A Senior Discount Notes due 2003
and
Warrants to Purchase 613,427 Shares of Common Stock
PURCHASE AGREEMENT
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April 10, 1996
New York, New York
BEAR, STEARNS & CO. INC.
CHASE SECURITIES INC.
NATIONSBANC CAPITAL MARKETS, INC.
c/o Bear, Stearns & Co. Inc.
245 Park Avenue
New York, New York 10167
Ladies & Gentlemen:
Hyperion Telecommunications, Inc., a Delaware corporation (the "Company"),
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proposes to issue and sell to Bear, Stearns & Co. Inc., Chase Securities Inc.
and NationsBanc Capital Markets, Inc. (together, the "Initial Purchasers")
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329,000 units (the "Units") consisting of $329,000,000 aggregate principal
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amount of 13% Series A Senior Discount Notes due 2003 (the "Series A Senior
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Notes") and warrants (the "Warrants") to purchase an aggregate of 613,427 shares
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of common stock (the "Common Stock"), $.01 par value, of the Company (the
"Warrant Shares"), subject to the terms and conditions set forth herein. Each
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Unit will consist of $1,000 principal amount of Series A Senior Notes and one
Warrant. The Series A Senior Notes will be issued pursuant to an indenture (the
"Indenture"), to be dated the Closing Date (as defined below), between the
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Company and Bank of Montreal Trust Company, as trustee (the "Trustee"). The
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Warrants will be issued pursuant to a warrant agreement (the "Warrant
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Agreement") to be dated the Closing Date, between the Company and Bank of
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Montreal Trust Company, as warrant agent (the "Warrant Agent"). The Series A
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Senior Notes and the Warrants will not trade separately until the earlier of (i)
90 days from the date of issuance, (ii) such date as the Initial Purchasers may,
in their discretion, deem appropriate, (iii) in the event a Change of Control
occurs, the date the Company mails notice thereof to holders of the Senior Notes
and (iv) the date on which the Exchange Offer (as defined) is consummated (such
date, the "Separation Date"). The Units, the Series A Senior Notes and the
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Warrants are more fully described in the Offering Memorandum referred to below.
The Series A Senior Notes and the Series B Senior Notes issuable in exchange
therefor are collectively referred to herein as the "Senior Notes." The Units,
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the Senior Notes and the Warrants are collectively referred to herein as the
"Securities." Capitalized terms used but not otherwise defined herein shall have
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the meanings given to such terms in the Indenture.
1. Issuance of Securities. The Company proposes to, upon the terms and
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subject to the conditions set forth herein, issue and sell to the Initial
Purchasers 329,000 Units consisting of $329,000,000 in
aggregate principal amount at maturity of Series A Senior Notes and Warrants to
purchase 613,427 shares of Common Stock. The proceeds to the Company from the
sale to the Initial Purchasers of the Units will be used for capital
expenditures and working capital by the Company, its Subsidiaries (as defined)
and the Joint Ventures (as defined) as more fully set forth in the Offering
Memorandum, under the caption entitled "Use of Proceeds."
Upon original issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Securities Act of 1933,
as amended (the "Act"), the Units, the Senior Notes, the Warrants and the
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Warrant Shares (and all securities issued in exchange therefor or in
substitution thereof) shall bear the following legend:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE
SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3)
OR (7) UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR").
THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (Y) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, OR (c) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION
OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY, (3) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH
CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (Z) IT WILL NOTIFY
ANY PURCHASER OF THE SECURITY EVIDENCED HEREBY, PRIOR TO CLOSING OF ANY
SALE, OF THE RESALE RESTRICTIONS SET FORTH IN (Y) ABOVE."
2. Offering. The Units will be offered and sold to the Initial Purchasers
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pursuant to an exemption from the registration requirements under the Act. The
Company has prepared a preliminary Offering Memorandum, dated March 20, 1996
(the "Preliminary Offering Memorandum") and a final offering memorandum, dated
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April 10, 1996 (the "Offering Memorandum"), relating to the Company, the Units,
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the Senior Notes and the Warrants.
The Initial Purchasers have advised the Company that the Initial Purchasers
will make offers (the "Exempt Resales") of the Units on the terms set forth in
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the Offering Memorandum, as amended or
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supplemented, solely to persons whom the Initial Purchasers reasonably believe
to be "qualified institutional buyers," as defined in Rule 144A under the Act
("QIBs"), and to a limited number of persons who have represented to the Company
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that they are institutional "Accredited Investors" referred to in Rule
501(a)(1), (2), (3) or (7) under the Act (each, an "Accredited Investor"). The
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QIBs and the Accredited Investors are referred to herein as the "Eligible
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Purchasers." The Initial Purchasers will offer the Units to such QIBs and
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Accredited Investors initially the price set forth herein. Such price may be
changed at any time without notice.
Holders (including subsequent transferees) of the Senior Notes will have
the registration rights set forth in the registration rights agreement relating
thereto (the "Registration Rights Agreement") in substantially the form of
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Exhibit A hereto, and holders (including subsequent transferees) of the Warrants
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will have the registration rights set forth in the registration rights agreement
relating thereto (the "Warrant Registration Rights Agreement"), in each case, to
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be dated the Closing Date, in substantially the form of Exhibit B hereto, for so
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long as such Senior Notes, Warrants or any Warrant Shares constitute "Transfer
Restricted Securities" (as defined in each such agreement, respectively).
Pursuant to the Registration Rights Agreement, the Company will agree to file
with the Securities and Exchange Commission (the "Commission"), under the
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circumstances set forth therein, (i) a registration statement under the Act (the
"Exchange Offer Registration Statement") relating to the Series B Senior Notes
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to be offered in exchange for the Series A Senior Notes (the "Exchange Offer")
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and (ii) a shelf registration statement pursuant to Rule 415 under the Act (the
"Shelf Registration Statement") relating to the resale by certain holders of the
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Senior Notes, and to use its best efforts to cause such registration statements
to be declared effective and consummate the Exchange Offer. Pursuant to the
Warrant Registration Rights Agreement, the Company will agree to file with the
Commission, under the circumstances set forth therein, shelf registration
statements pursuant to Rule 415 under the Act (the "Warrant Shelf Registration
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Statements") relating to the resale by certain holders of the Warrants and the
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Warrant Shares, and to use its best efforts to cause such Warrant Shelf
Registration Statements to be declared effective.
This Agreement, the Securities, the Warrant Shares, the Indenture, the
Warrant Agreement, the Registration Rights Agreement and the Warrant
Registration Rights Agreement are hereinafter sometimes referred to collectively
as the "Operative Documents."
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3. Purchase, Sale and Delivery. (a) On the basis of the representations,
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warranties and covenants contained in this Agreement, and subject to its terms
and conditions, the Company agrees to issue and sell to the Initial Purchasers,
and each Initial Purchaser agrees severally and not jointly to purchase from the
Company, that amount of Units set forth opposite its name on Schedule I hereto.
The purchase price for the Units shall be $514.07 per Unit.
(b) Delivery of the Units shall be made, against payment of the purchase
price therefor, at the offices of Latham & Watkins at 885 Third Avenue, New
York, New York or such other location as may be mutually acceptable. Such
delivery and payment shall be made at 10:00 a.m., New York time, on April 15,
1996 or at such other time as shall be agreed upon by the Initial Purchasers and
the Company. The time and date of such delivery and payment are herein called
the "Closing Date."
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(c) One or more Units in definitive form, registered in the name of Cede &
Co., as nominee of The Depository Trust Company ("DTC"), having an aggregate
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amount corresponding to the aggregate amount of the Units sold pursuant to
Exempt Resales to QIBs and Accredited Investors (collectively, the "Global
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Unit"), each such Global Unit consisting of $1,000 aggregate principal amount at
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maturity of Senior Notes in definitive form, registered in the name of Cede &
Co., as nominee of DTC (the aggregate of a such Senior Notes is hereinafter
referred to as the "Global Senior Note"), and one Warrant in definitive form,
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registered in the name of Cede & Co., as nominee of DTC (the aggregate of a such
Warrants is hereinafter referred to as the "Global Warrant") shall be delivered
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by the Company to the
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Initial Purchasers (or as the Initial Purchasers direct), against payment by the
Initial Purchasers of the purchase price therefor, by wire transfer of
immediately available funds to the Company's account, provided that the Company
shall give at least two business days' prior written notice to the Initial
Purchasers of the information required to effect such wire transfers. The Global
Unit shall be made available to the Initial Purchasers for inspection not later
than 9:30 a.m. on the business day immediately preceding the Closing Date.
4. Agreements of the Company. The Company covenants and agrees with the
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Initial Purchasers as follows:
(a) To advise the Initial Purchasers promptly and, if requested by the
Initial Purchasers, confirm such advice in writing of; (i) the issuance by
any state securities commission of any stop order suspending the
qualification or exemption from qualification of any Securities for
offering or sale in any jurisdiction, or the initiation of any proceeding
for such purpose by any state securities commission or other regulatory
authority; and (ii) the happening of any event that, in the reasonable
opinion of either counsel to the Company or counsel to the Initial
Purchasers, makes any statement of a material fact made in the Preliminary
Offering Memorandum or the Offering Memorandum untrue or that requires the
making of any additions to or changes in the Preliminary Offering
Memorandum or the Offering Memorandum in order to make the statements
therein, in the light of the circumstances under which they are made, not
misleading. The Company shall use its best efforts to prevent the issuance
of any stop order or order suspending the qualification or exemption of any
Securities under any state securities or Blue Sky laws and, if at any time
any state securities commission or other regulatory authority shall issue
an order suspending the qualification or exemption of any Securities under
any state securities or Blue Sky laws, the Company shall use its best
efforts to obtain the withdrawal or lifting of such order at the earliest
possible time.
(b) To furnish the Initial Purchasers and those persons identified
by the Initial Purchasers to the Company, without charge, as many copies of
the Preliminary Offering Memorandum and the Offering Memorandum, and any
amendments or supplements thereto, as the Initial Purchasers may reasonably
request. The Company consents to the use of the Preliminary Offering
Memorandum and the Offering Memorandum, and any amendments and supplements
thereto required pursuant hereto, by the Initial Purchasers in connection
with Exempt Resales.
(c) Not to amend or supplement the Preliminary Offering Memorandum
or the Offering Memorandum prior to the Closing Date unless the Initial
Purchasers shall previously have been advised thereof and shall not have
objected thereto within a reasonable time after being furnished a copy
thereof. The Company shall promptly prepare, upon the Initial Purchasers'
request, any amendment or supplement to the Preliminary Offering Memorandum
or the Offering Memorandum that may be necessary or reasonably requested by
the Initial Purchasers in connection with Exempt Resales.
(d) If, after the date hereof and prior to consummation of any Exempt
Resale, any event shall occur as a result of which, in the judgment of the
Company or in the reasonable opinion of either counsel to the Company or
counsel to the Initial Purchasers, it becomes necessary or advisable to
amend or supplement the Preliminary Offering Memorandum or Offering
Memorandum in order to make the statements therein, in the light of the
circumstances when such Offering Memorandum is delivered to an Eligible
Purchaser which is a prospective purchaser, not misleading, or if it is
necessary or advisable to amend or supplement the Preliminary Offering
Memorandum or Offering Memorandum to comply with applicable law, (i) notify
the Initial Purchasers and (ii) forthwith to prepare an appropriate
amendment or supplement to such Offering
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Memorandum so that the statements therein as so amended or supplemented will
not, in the light of the circumstances when it is so delivered, be
misleading, or so that such Offering Memorandum will comply with applicable
law.
(e) To cooperate with the Initial Purchasers and counsel to the
Initial Purchasers in connection with the qualification or registration of
the Units, the Series A Senior Notes and the Warrants under the securities
or Blue Sky laws of such jurisdictions as the Initial Purchasers may
reasonably request and to continue such qualification in effect so long as
required for the Exempt Resales; provided that the Company shall not be
required to take any action that would subject it to service of process in
suits or taxation, other than as to matters and transactions relating to the
Preliminary Offering Memorandum, the Offering Memorandum or Exempt Resales,
in any jurisdiction where it is not now so subject.
(f) Whether or not the transactions contemplated by this Agreement
are consummated or this Agreement becomes effective or is terminated, to pay
all costs, expenses, fees and taxes incident to the performance of the
obligations of the Company hereunder, including in connection with: (i) the
preparation, printing, filing and distribution of the Preliminary Offering
Memorandum and the Offering Memorandum (including, without limitation,
financial statements) and all amendments and supplements thereto required
pursuant hereto, (ii) the preparation (including, without limitation,
duplication costs) and delivery of all preliminary and final Blue Sky
memoranda prepared and delivered in connection herewith and with the Exempt
Resales, (iii) the issuance, transfer and delivery by the Company of the
Securities to the Initial Purchasers, (iv) the qualification or registration
of the Securities for offer and sale under the securities or Blue Sky laws
of the several states (including, without limitation, the cost of printing
and mailing a preliminary and final Blue Sky Memorandum and the reasonable
fees and disbursements of counsel to the Initial Purchasers relating to such
qualification or registration), (v) furnishing such copies of the
Preliminary Offering Memorandum and the Offering Memorandum, and all
amendments and supplements thereto, as may be requested for use in
connection with Exempt Resales, (vi) the preparation of certificates for the
Securities (including, without limitation, printing and engraving thereof),
(vii) the fees, disbursements and expenses of the Company's counsel and
accountants, (viii) all expenses and listing fees in connection with the
application for quotation of the Securities in the National Association of
Securities Dealers, Inc. ("NASD") Automated Quotation System - PORTAL
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("PORTAL"), (ix) all fees and expenses (including fees and expenses of
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counsel to the Company) of the Company in connection with the approval
of the Securities by DTC for "book-entry" transfer, (x) the rating of the
Securities by rating agencies, (xi) the reasonable fees and expenses of the
Trustee and its counsel in connection with the Indenture and the Senior
Notes, (xii) the reasonable fees and expenses of the Warrant Agent and its
counsel in connection with the Warrant Agreement and the Warrants, (xiii)
the performance by the Company of its other obligations under this Agreement
and the other Operative Documents and (xiv) "roadshow" travel and other
expenses incurred in connection with the marketing and sale of the Units,
the Senior Notes and the Warrants.
(g) To use the proceeds from the sale of the Units in the manner
described in the Offering Memorandum under the caption "Use of Proceeds."
(h) Not to voluntarily claim, and to resist actively any attempts to
claim, the benefit of any usury laws against the holders of any Securities.
(i) To do and perform all things required to be done and performed
under this Agreement by it prior to or after the Closing Date and to
satisfy all conditions precedent on its part to the delivery of the Units.
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(j) Not to sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Act) that would be
integrated with the sale of the Units in a manner that would require the
registration under the Act of the sale to the Initial Purchasers, the QIBs
or the Accredited Investors of the Units, the Senior Notes or the Warrants
or to take any other action that would result in the Exempt Resales not
being exempt from registration under the Act.
(k) For so long as any of the Securities remain outstanding and
during any period in which the Company is not subject to Section 13 or 15(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), to
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make available to any QIB or beneficial owner of Units, Senior Notes or
Warrants in connection with any sale thereof and any prospective purchaser
of such Units, Senior Notes or Warrants from such QIB or beneficial owner,
the information required by Rule 144A(d)(4) under the Act.
(l) To cause the Exchange Offer to be made in the appropriate form
to permit registered Series B Senior Notes to be offered in exchange for
the Series A Senior Notes and to comply with all applicable federal and
state securities laws in connection with the Exchange Offer.
(m) To comply with all of its agreements set forth in the Registration
Rights Agreement and the Warrant Registration Rights Agreement and all
agreements set forth in the representation letters of the Company to DTC
relating to the approval of the Securities by DTC for "book-entry"
transfer.
(n) To use its best efforts to effect the inclusion of the Units, the
Senior Notes and the Warrants in PORTAL and to obtain approval of the
Securities by DTC for "book-entry" transfer.
(o) During a period of five years following the Closing Date, to
deliver without charge to each of the Initial Purchasers, as they may
reasonably request, promptly upon their becoming available, copies of (i)
all reports or other publicly available information that the Company shall
mail or otherwise make available to its securityholders and (ii) all
reports, financial statements and proxy or information statements filed by
the Company with the Commission or any national securities exchange and
such other publicly available information concerning the Company or its
subsidiaries, including without limitation, press releases.
(p) Prior to the Closing Date, to furnish to each of the Initial
Purchasers, as soon as they have been prepared in the ordinary course by
the Company, copies of any unaudited interim financial statements for any
period subsequent to the periods covered by the financial statements
appearing in the Offering Memorandum.
(q) Neither the Company nor any of its Subsidiaries nor any of the
Joint Ventures (as defined) will take, directly or indirectly, any action
designed to, or that might reasonably be expected to, cause or result in
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Securities. Except as permitted by
the Act, the Company will not distribute any preliminary offering
memorandum, offering memorandum or other offering material in connection
with the offering and sale of the Securities.
(r) Not to, and to cause its affiliates not to, offer, sell,
contract to sell or grant any option to purchase or otherwise transfer or
dispose of any Securities or any other debt or equity security issued by
the Company for a period of 180 days after the Closing Date, without the
prior written consent of the Initial Purchasers, except for the issue and
exchange of Series B Senior Notes for Series A Senior Notes in the Exchange
Offer.
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(s) To comply with the agreements in the Indenture, the Warrant
Agreement, the Registration Rights Agreement and the Warrant Registration
Rights Agreement and each other Operative Document.
(t) To reserve and continue to reserve as long as any Warrants are
outstanding, a sufficient number of shares of Common Stock for issuance
upon exercise of the Warrants.
5. Representations and Warranties. (a) The Company represents and
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warrants to each of the Initial Purchasers that:
(i) The Preliminary Offering Memorandum and the Offering Memorandum
(and each supplement and amendment thereto) have been prepared in
connection with the Exempt Resales. The Preliminary Offering Memorandum and
the Offering Memorandum do not, and any supplement or amendment to them
will not, contain any 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, not misleading,
except that the representations and warranties contained in this paragraph
shall not apply to statements in or omissions from the Preliminary Offering
Memorandum and the Offering Memorandum (or any supplement or amendment
thereto) made in reliance upon and in conformity with information relating
to the Initial Purchasers furnished to the Company in writing by or on
behalf of the Initial Purchaser expressly for use therein. No stop order
preventing the use of the Preliminary Offering Memorandum or the Offering
Memorandum, or any amendment or supplement thereto, or any order asserting
that any of the transactions contemplated by this Agreement are subject to
the registration requirements of the Act, has been issued.
(ii) When the Units, the Senior Notes and the Warrants are issued and
delivered pursuant to this Agreement, no Unit, Senior Note or Warrant will
be of the same class (within the meaning of Rule 144A under the Act) as
securities of the Company that are listed on a national securities exchange
registered under Section 6 of the Exchange Act or that are quoted in a
United States automated inter-dealer quotation system.
(iii) Each of the Company and its Subsidiaries (as defined) (A) has
been duly organized, is validly existing as a corporation in good standing
under the laws of its respective jurisdiction of incorporation, (B) has all
requisite corporate power and authority to carry on its business as it is
currently being conducted and as described in the Offering Memorandum and
to own, lease and operate its properties and (C) is duly qualified and in
good standing as a foreign corporation 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 any other
Operative Document or the ability to conduct its business in the manner set
forth in the Offering Memorandum (any of the events set forth in clauses
(x), (y) or (z), a "Material Adverse Effect"). The Company has no direct or
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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").
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(iv) Each of the Joint Ventures (as defined) (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 partnership or
corporate power and authority, as applicable, to carry on its business as
it is currently being conducted and as described in the Offering Memorandum
and to own, lease and operate its properties and (C) is duly qualified and
in good standing as a foreign partnership 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"), except for TCG Pittsburgh, a New York
general partnership ("TGC Pittsburgh").
(v) All of the outstanding shares of capital stock of the Company
have been duly authorized and validly issued and are fully paid and
nonassessable and were not issued in violation of any preemptive or similar
rights. At December 31, 1995, on a combined basis, after giving effect to
the issuance and sale of the Units pursuant hereto, the Company had an
authorized and outstanding consolidated capitalization as set forth in the
Offering Memorandum under the caption "Capitalization."
(vi) 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 Offering Memorandum, there are not currently, and will not
be as a result of the Offering, 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.
(vii) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement, the
Indenture, the Warrant Agreement, the Registration Rights Agreement, the
Warrant Registration Rights Agreement and the other Operative Documents 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 and therein.
(viii) This Agreement has been duly and validly authorized, executed
and delivered by 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.
(ix) The Indenture has been duly and validly authorized by the
Company and, when duly executed and delivered by the Company, will be the
legal, valid and binding obligation 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.
(x) The Units have been duly and validly authorized by the Company.
The Series A Senior Notes have been duly and validly authorized for
issuance and sale to the Initial Purchasers by the Company pursuant to this
Agreement and, when issued and authenticated in accordance with the terms
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of the Indenture and delivered against payment therefor in accordance with
the terms hereof and thereof, will be the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance
with their terms and entitled to the benefits of the Indenture, 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 Series A Senior Notes
in the Offering Memorandum is accurate in all material respects.
(xi) The Series B Senior Notes have been duly and validly authorized
for issuance by the Company and, when issued and authenticated in
accordance with the terms of the Exchange Offer and the Indenture, will be
the legal, valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms and entitled to the
benefits of the Indenture, 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 Series B Senior Notes in the Offering Memorandum is
accurate in all material respects.
(xii) The Registration Rights Agreement has been duly and validly
authorized by the Company and, when duly executed and delivered by the
Company, will be the legal, valid and binding obligation 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 Offering Memorandum is accurate in all material respects.
(xiii) The Warrant Agreement has been duly and validly authorized by
the Company and, when duly executed and delivered by the Company, will be
the legal, valid and binding obligation 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 Warrant Agreement in the Offering Memorandum
is accurate in all material respects.
(xiv) The Warrants have been duly and validly authorized for
issuance and sale to the Initial Purchasers by the Company pursuant to this
Agreement and, when issued and countersigned in accordance with the terms
of the Warrant Agreement and delivered against payment therefor in
accordance with the terms hereof and thereof, will be the legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms and entitled to the benefits of the Warrant
Agreement, 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 Warrants in the Offering Memorandum is accurate in all
material respects.
(xv) The Warrants are exercisable into Warrant Shares in accordance
with the terms of the Warrant Agreement. The Warrant Shares have been duly
authorized for issuance by the Company and, when issued and paid for upon
exercise of the Warrants in accordance with the terms thereof, will be
validly issued, fully paid and nonassessable, free of any preemptive or
similar rights.
(xvi) The Warrant Registration Rights Agreement has been duly and
validly authorized by the Company and, when duly executed and delivered by
the Company, will be the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or
9
similar laws affecting the rights of creditors generally and subject to
general principles of equity. The description of the Warrant Registration
Rights Agreement in the Offering Memorandum is accurate in all material
respects.
(xvii) None of the Company, the Subsidiaries or the Joint Ventures is
and, after giving effect to the Offering 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 of 1996 (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.
(xviii) None of (A) the execution, delivery or performance by the
Company and the Subsidiaries, as the case may be, of this Agreement and the
other Operative Documents, (B) the issuance and sale of the Securities and
(C) consummation by the Company, the Subsidiaries and the Joint Ventures of
the transactions described in the Offering Memorandum violate, conflict
with or constitute a breach of any of the terms or provisions of, or a
default under (or an event that with notice or the lapse of time, or both,
would constitute a default), or require consent under, or result in the
imposition of a lien or encumbrance on any properties of the Company, 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 and the rules
and regulations of the FCC and environmental laws, statutes, ordinances,
rules or regulations) applicable to the Company, any Subsidiary, any Joint
Venture or any of their respective assets or properties or (iv) any
judgment, order or decree of any court or governmental agency or authority
having jurisdiction over the Company, the Subsidiaries, the Joint Ventures
or any of their assets or properties, except in the case of clauses (ii),
(iii) and (iv) for such violations conflicts, breaches, defaults, consents,
impositions of liens or accelerations that would not singly, or in the
aggregate, have a Material Adverse Effect. Other than as described in the
Offering 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
and the other Operative Documents or (2) the issuance and sale of the
Securities and the transactions contemplated hereby and thereby, except (x)
such as have been obtained and made (or, in the case of the Registration
Rights Agreement and the Warrant Registration Rights Agreement, will be
obtained and made) under the Act, the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act") and state securities or Blue Sky laws
-------------------
and regulations or such as may be required by the NASD or (y) where the
failure to obtain any such
10
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.
(xix) There is (i) no action, suit or proceeding before or by any
court, arbitrator or governmental agency, body or official, domestic or
foreign, now pending or threatened or contemplated to which the Company,
any of the Subsidiaries or any of the Joint Ventures is or may be a party
or to which the business or property of the Company, any Subsidiary or any
Joint Venture is subject, (ii) no local, state or Federal law, statute,
ordinance, rule, regulation, requirement, judgment or court decree
(including, without limitation, the Telecommunications Act and the rules
and regulations of the FCC) or order that has been enacted, adopted or
issued by any governmental agency or, to the best of the Company's
knowledge, that has been proposed by any governmental body or (iii) no
injunction, restraining order or order of any nature by a federal or state
court or foreign court of competent jurisdiction to which the Company, any
Subsidiary or any Joint Venture is or could reasonably be expected to be
subject or to which the business, assets, or property of the Company, any
Subsidiary or any Joint Venture are could reasonably be expected to be
subject, that, in the case of clauses (i), (ii) and (iii) above, (y) is
required to be disclosed in the Preliminary Offering Memorandum and the
Offering 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.
(xx) No action has been taken and no local, state or Federal law,
statute, ordinance, rule, regulation, requirement, judgment or court decree
has been enacted, adopted or issued by any governmental agency that
prevents the issuance of the Securities or prevents or suspends the use of
the Offering Memorandum; no injunction, restraining order or order of any
nature by a federal or state court of competent jurisdiction has been
issued that prevents the issuance of the Securities or prevents or suspends
the sale of the Securities in any jurisdiction referred to in Section 4(e)
hereof; and every request of any securities authority or agency of any
jurisdiction for additional information has been complied with in all
material respects.
(xxi) There is (i) no unfair labor practice complaint pending against
the Company, any Subsidiary or any Joint Venture or threatened, before the
National Labor Relations Board, any state or local labor relations board or
any foreign labor relations board, and no significant grievance or
significant arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against the Company, any Subsidiary or
any Joint Venture threatened, (ii) no significant strike, labor dispute,
slowdown or stoppage pending against the Company, any Subsidiary or any
Joint Venture threatened against the Company, any Subsidiary or the Joint
Venture and (iii) no union representation question existing with respect to
the employees of the Company, any Subsidiary or any Joint Venture that, in
the case of clauses (i), (ii) or (iii), could reasonably be expected to
result in a Material Adverse Effect. To the best of the Company's
knowledge, no collective bargaining organizing activities are taking place
with respect to the Company, the Subsidiaries or the Joint Ventures. None
of the Company, any Subsidiary or any Joint Venture has violated (A) any
federal, state or local law or foreign law relating to discrimination in
hiring, promotion or pay of employees, (B) any applicable wage or hour laws
or (C) any provision of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or the rules and regulations thereunder, which
-----
in the case of clause (A), (B) or (C) above could reasonably be expected to
result in a Material Adverse Effect.
(xxii) 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
11
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.
(xxiii) 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 Offering Memorandum as owned by it, free and clear of all
liens, charges, encumbrances and restrictions, except such as are described
in the Offering Memorandum or as would not have a Material Adverse Effect,
(ii) peaceful and undisturbed possession under all leases to which any of
them is a party as lessee, (iii) all licenses, certificates, permits,
authorizations, approvals, franchises and other rights from, and has made
all declarations and filings with, all federal, state and local authorities
(including, without limitation, the FCC), all self-regulatory authorities
and all courts and other tribunals (each an "Authorization") necessary to
-------------
engage in the business as presently conducted by any of them in the manner
described in the Offering Memorandum, except as described in the Offering
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.
(xxiv) 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.
(xxv) 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
12
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 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.
(xxvi) All tax returns required to be filed by the Company, each of
the Subsidiaries and each of the Joint Ventures in all jurisdictions have
been so filed. All taxes, including withholding taxes, penalties and
interest, assessments, fees and other charges due or claimed to be due from
such entities or that are due and payable have been paid, other than those
being contested in good faith and for which adequate reserves have been
provided or those currently payable without penalty or interest. There are
no proposed additional tax assessments against the Company, any Subsidiary,
any Joint Venture or the assets or property of the Company, any Subsidiary
or any Joint Venture.
(xxvii) None of the Company, the Subsidiaries or the Joint Ventures is
(i) an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended (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"), except for TCG Pittsburgh, a New York general partnership ("TGC
Pittsburgh").
(xxviii) 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 any other Operative Document to which it is a
party 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.
(xxix) 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.
(xxx) 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.
(xxxi) 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
13
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Units, the Senior Notes or the
Warrants or (ii) since the date of the Preliminary Offering Memorandum (A)
sold, bid for, purchased or paid any person any compensation for soliciting
purchases of, the Units, the Senior Notes or the Warrants or (B) paid or
agreed to pay to any person any compensation for soliciting another to
purchase any other securities of the Company.
(xxxii) No registration under the Act of the Units, the Senior Notes
or the Warrants is required for the sale of the Units to the Initial
Purchasers as contemplated hereby or for the Exempt Resales assuming (i)
that the purchasers who buy the Units in the Exempt Resales are either QIBs
or Accredited Investors and (ii) the accuracy of the Initial Purchasers'
representations regarding the absence of general solicitation in connection
with the sale of Units to the Initial Purchasers and the Exempt Resales
contained herein. No form of general solicitation or general advertising
was used by the Company or any of its representatives (other than the
Initial Purchasers, as to which the Company makes no representation or
warranty) in connection with the offer and sale of any of the Securities in
connection with Exempt Resales, including, but not limited to, articles,
notices or other communications published in any newspaper, magazine, or
similar medium or broadcast over television or radio, or any seminar or
meeting whose attendees have been invited by any general solicitation or
general advertising. No securities of the same class as the Securities have
been issued and sold by the Company within the six-month period immediately
prior to the date hereof.
(xxxiii) Set forth on Exhibit C 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 sale of the Units to be purchased by the
QIBs and the Accredited Investors will not involve any prohibited
transaction within the meaning of Section 406 of ERISA or Section 4975 of
the Internal Revenue Code of 1986. The representation made by the Company
in the preceding sentence is made in reliance upon and subject to the
accuracy of, and compliance with, the representations and covenants made or
deemed made by the QIBs and the Accredited Investors as set forth in the
Offering Memorandum under the caption "Notice to Investors."
(xxxiv) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its date, and each amendment or supplement thereto, as of
its date, contains the information specified in, and meets the requirements
of, Rule 144A(d)(4) under the Act.
(xxxv) Subsequent to the respective dates as of which information is
given in the Offering Memorandum and up to the Closing Date, except as set
forth in the Offering 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, nor
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.
(xxxvi) None of the execution, delivery and performance of this
Agreement, the issuance and sale of the Securities, the application of the
proceeds from the issuance and sale of the Securities and the consummation
of the transactions contemplated thereby as set forth in the
14
Offering Memorandum, will violate Regulations G, T, U or X promulgated by
the Board of Governors of the Federal Reserve System or analogous foreign
laws and regulations.
(xxxvii) The accountants who have certified or will certify the
financial statements included or to be included as part of the Offering
Memorandum 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-4 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 Offering Memorandum, 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 Offering Memorandum 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 Offering
Memorandum are accurately presented in all material respects.
(xxxviii) The Company does not intend to, nor does it believe that it
will, incur debts beyond its ability to pay such debts as they mature. The
present fair saleable value of the assets of the Company on a consolidated
basis exceeds the amount that will be required to be paid on or in respect
of the existing debts and other liabilities (including contingent
liabilities) of the Company on a consolidated basis as they become absolute
and matured. The assets of the Company on a consolidated basis do not
constitute unreasonably small capital to carry out the business of the
Company, the Subsidiaries and the Joint Ventures, taken as a whole, as
conducted or as proposed to be conducted. Upon the issuance of the Units,
the present fair saleable value of the assets of the Company on a
consolidated basis will exceed the amount that will be required to be paid
on or in respect of the existing debts and other liabilities (including
contingent liabilities) of the Company on a consolidated basis as they
become absolute and matured. Upon the issuance of the Units, the assets of
the Company on a consolidated basis will not constitute unreasonably small
capital to carry out its businesses as now conducted, including the capital
needs of the Company on a consolidated basis, taking into account the
projected capital requirements and capital availability.
(xxxix) Except pursuant to this Agreement, there are no contracts,
agreements or understandings between the Company, any of its Subsidiaries
or any of its Joint Ventures and any other person that would give rise to a
valid claim against the Company or either 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.
(xl) Each of the Company, the Subsidiaries and the Joint Ventures has
complied with all provisions of Section 517.075, Florida Statutes, relating
to doing business with the Government of Cuba or with any affiliate located
in Cuba.
(xli) Except as disclosed in the Offering Memorandum, 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
(assuming for purposes of this paragraph 5(xli) that Regulation S-K is
applicable to the Offering Memorandum).
(xlii) Each of the Company and Hyperion Telecommunications of
Pennsylvania, Inc. will be released from all of their obligations under the
agreement governing the TCG Pittsburgh Joint
15
Venture pursuant to an amendment to such partnership agreement to be
effective as of January 1, 1995, which amendment shall be promptly
executed.
Each certificate signed by any officer of the Company and delivered to
the Initial Purchasers or counsel for the Initial Purchasers pursuant to this
Agreement shall be deemed to be a representation and warranty by the Company to
the Initial Purchasers as to the matters covered thereby.
The Company acknowledges that each of the Initial Purchasers and, for
purposes of the opinions to be delivered to the Initial Purchasers pursuant to
Section 8 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.
(b) Each of the Initial Purchasers severally and not jointly represents,
warrants and covenants to the Company and agrees that:
(i) Such Initial Purchaser is a QIB, with such knowledge and
experience in financial and business matters as are necessary in order to
evaluate the merits and risks of an investment in the Units.
(ii) Such Initial Purchaser (A) is not acquiring the Units with a view
to any distribution thereof that would violate the Act or the securities
laws of any state of the United States or any other applicable jurisdiction
and (B) will be reoffering and reselling the Units only to QIBs in reliance
on the exemption from the registration requirements of the Act provided by
Rule 144A and to Accredited Investors in a private placement exempt from
the registration requirements of the Act.
(iii) No form of general solicitation or general advertising has been
or will be used by any of the Initial Purchasers or any of their
representatives in connection with the offer and sale of any of the Units,
including, but not limited to, articles, notices or other communications
published in any newspaper, magazine, or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have been
invited by any general solicitation or general advertising.
(iv) In connection with the Exempt Resales, such Initial Purchaser
will solicit offers to buy the Units only from, and will offer to sell the
Units only to, QIBs and Accredited Investors. Such Initial Purchaser
further agreed (A) that it will offer to sell the Units only to, and will
solicit offers to buy the Units only from (1) QIB's who in purchasing such
Units will be deemed to have represented and agreed that they are
purchasing the Units for their own accounts or accounts with respect to
which they exercise sole investment discretion and that they or such
accounts are QIBs and (2) Accredited Investors who make the representations
contained in, and execute and return to one of the Initial Purchasers, a
certificate in the form of Annex A attached to the Offering Memorandum and
-------
(B) that, in the case of such QIBs and Accredited Investors, acknowledges
and agrees that such Units will not have been registered under the Act and
may be resold, pledged or otherwise transferred only (x)(I) to a person who
the seller reasonably believes is a QIB in a transaction meeting the
requirements of Rule 144A or (II) in a transaction meeting the requirements
of Rule 144 or (III) in accordance with another exemption from the
registration requirements of the Act (and based upon an opinion of counsel
if the Company so requests), (y) to the Company or (z) pursuant to an
effective registration statement under the Act and, in each case, in
accordance with any applicable securities laws of any state of the United
States or any other applicable jurisdiction and (C) that the holder will,
and each subsequent holder is required to, notify any purchaser of the
security evidenced thereby of the resale restrictions set forth in (B)
above.
16
Each of the Initial Purchasers understands that the Company and, for
purposes of the opinions to be delivered to the Initial Purchasers pursuant
to Section 8 hereof, counsel to the Company and counsel to the Initial
Purchasers will rely upon the accuracy and truth of the foregoing
representations and hereby expressly consents to such reliance.
6. Indemnification.
---------------
(a) The Company and its Subsidiaries, jointly and severally, agree to
indemnify and hold harmless (i) each Initial Purchaser, (ii) each person,
if any, who controls an Initial Purchaser within the meaning of Section 15
of the Act or Section 20(a) of the Exchange Act and (iii) the respective
officers, directors, partners, employees, representatives and agents of any
Initial Purchaser or any controlling person to the fullest extent lawful,
from and against any and all losses, liabilities, claims, damages and
expenses whatsoever (including but not limited to attorneys' fees and any
and all expenses whatsoever incurred in investigating, preparing or
defending against any investigation or litigation, commenced or threatened,
or any claim whatsoever, and any and all amounts paid in settlement of any
claim or litigation), joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or otherwise, insofar as
such losses, liabilities, claims, damages or expenses (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
Offering Memorandum or the Offering Memorandum, or in any supplement
thereto or amendment thereof, 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; provided
that the Company will not be liable in any such case to the extent, but
only to the extent, that (i) any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance
upon and in conformity with written information furnished to the Company by
or on behalf of the Initial Purchasers expressly for use therein and (ii)
the foregoing indemnity with respect to any untrue statement contained in
or omitted from the Preliminary Offering Memorandum shall not inure to the
benefit of any Initial Purchaser (or any person controlling such Initial
Purchasers), from whom the person asserting any such loss, liability,
claim, damage or expense purchased any of the Units which are the subject
thereof if it is finally judicially determined that such loss, liability,
claim, damage or expense resulted solely from the fact that such Initial
Purchaser sold Units to the person asserting such loss, liability, claim,
damage or expense, who was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Offering Memorandum, as amended or
supplemented, and (x) the Company shall have previously and timely
furnished sufficient copies of the Offering Memorandum, as so amended or
supplemented, to such Initial Purchaser in accordance with this Agreement
and (y) the Offering Memorandum, as so amended or supplemented, would have
completely corrected such untrue statement or omission of a material fact.
This indemnity agreement will be in addition to any liability which the
Company may otherwise have, including, under this Agreement.
(b) Each Initial Purchaser, severally and not jointly, agrees to
indemnify and hold harmless the Company and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act, against any losses, liabilities, claims, damages
and expenses whatsoever (including but not limited to attorneys' fees and
any and all expenses whatsoever incurred in investigating, preparing or
defending against any investigation or litigation, commenced or threatened,
or any claim whatsoever and any and all amounts paid in settlement of any
claim or litigation), joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or otherwise, insofar as
such losses, liabilities, claims, damages or expenses (or actions in
respect thereof) arise out of or are based upon any untrue
17
statement or alleged untrue statement of a material fact contained in the
Preliminary Offering Memorandum or the Offering Memorandum, 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, in
each case to the extent, but only to the extent, that any such loss,
liability, claim, damage or expense arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Initial
Purchaser expressly for use therein; provided that in no case shall any
Initial Purchaser be liable or responsible for any amount in excess of the
discounts and commissions received by such Initial Purchasers, as set forth
on the cover page of the Offering Memorandum. This indemnity will be in
addition to any liability which any of the Initial Purchasers may otherwise
have, including under this Agreement.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify each party
against whom indemnification is to be sought in writing of the commencement
thereof (but the failure so to notify an indemnifying party shall not
relieve it from any liability which it may have under this Section 6 except
to the extent that it has been actually prejudiced in any material respect
by such failure or from any liability which it may otherwise have). In case
any such action is brought against any indemnified party, and it notifies
an indemnifying party of the commencement thereof, the indemnifying party
will be entitled to participate therein, and to the extent it may elect by
written notice delivered to the indemnified party promptly after receiving
the aforesaid notice from such indemnified party, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party.
Notwithstanding the foregoing, the indemnified party or parties shall have
the right to employ its or their own counsel in any such case, but the fees
and expenses of such counsel shall be at the expense of such indemnified
party or parties unless (i) the employment of such counsel shall have been
authorized in writing by the indemnifying parties in connection with the
defense of such action, (ii) the indemnifying parties shall not have
employed counsel to take charge of the defense of such action within a
reasonable time after notice of commencement of the action, or (iii) such
indemnified party or parties shall have reasonably concluded that there may
be defenses available to it or them which are different from or additional
to those available to one or all of the indemnifying parties (in which case
the indemnifying party or parties shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties), in
any of which events such fees and expenses of counsel shall be borne by the
indemnifying parties. The indemnifying party under subsection (a) or (b)
above, shall only be liable for the legal expenses of one counsel (in
addition to any local counsel) for all indemnified parties in each
jurisdiction in which any claim or action is brought; provided that the
indemnifying party shall be liable for separate counsel for any indemnified
party in a jurisdiction, if counsel to the indemnified parties shall have
reasonably concluded that there may be defenses available to such
indemnified party that are difference from or additional to those available
to one or more of the other indemnified parties and that separate counsel
for such indemnified party is prudent under the circumstances. Anything in
this subsection to the contrary notwithstanding, an indemnifying party
shall not be liable for any settlement of any claim or action effected
without its prior written consent; provided that such consent was not
unreasonably withheld.
7. Contribution. In order to provide for contribution in circumstances in
------------
which the indemnification provided for in Section 6 is for any reason held to be
unavailable from the Company or is insufficient to hold harmless a party
indemnified thereunder, the Company and the Initial Purchasers shall contribute
to the aggregate losses, claims, damages, liabilities and expenses of the nature
contemplated
18
by such indemnification provision (including any investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement of, any
action, suit or proceeding or any claims asserted, but after deducting in the
case of losses, claims, damages, liabilities and expenses suffered by the
Company, any contribution received by the Company from persons, other than the
Initial Purchasers, who may also be liable for contribution, including persons
who control the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act) 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 and the Initial Purchasers from the
offering of the Units or, if such allocation is not permitted by applicable law
or indemnification is not available as a result of the indemnifying party not
having received notice as provided in Section 6, in such proportion as is
appropriate to reflect not only the relative benefits referred to above but also
the relative fault of the Company and the Initial Purchasers in connection with
the statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and the Initial Purchasers shall
be deemed to be in the same proportion as (x) the total proceeds from the
offering of Units (net of discounts but before deducting expenses) received by
the Company and (y) the discounts received by the Initial Purchasers,
respectively, in each case as set forth in the table on the cover page of the
Offering Memorandum. The relative fault of the Company and of the Initial
Purchasers 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 Initial Purchasers and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and the Initial Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to above. Notwithstanding the provisions
of this Section 7, (i) in no case shall any Initial Purchaser be required to
contribute any amount in excess of the amount by which the discount applicable
to the Units purchased by such Initial Purchaser pursuant to this Agreement
exceeds the amount of any damages which such Initial Purchaser has otherwise
been required to pay by reason of any untrue or alleged untrue statement or
omission or alleged omission and (ii) 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. For purposes of this Section 7, (A) each person, if any, who
controls any Initial Purchaser within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act and (B) the respective officers, directors,
partners, employees, representatives and agents of any Initial Purchaser or any
controlling person shall have the same rights to contribution as such Initial
Purchaser, and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act shall have the
same rights to contribution as the Company, subject in each case to clauses (i)
and (ii) of this Section 7. Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may be made
against another party or parties under this Section 7, notify such party or
parties from whom contribution may be sought, but the failure to so notify such
party or parties shall not relieve the party or parties from whom contribution
may be sought from any obligation it or they may have under this Section 7 or
otherwise. No party shall be liable for contribution with respect to any action
or claim settled without its prior written consent; provided that such written
consent was not unreasonably withheld.
8. Conditions of Initial Purchasers' Obligations. The several obligations
---------------------------------------------
of the Initial Purchasers to purchase and pay for the Units, as provided herein,
shall be subject to the satisfaction of the following conditions:
(a) All of the representations and warranties of the Company contained
in this Agreement shall be true and correct on the date hereof and on the
Closing Date with the same force and effect as if made on and as of the
date hereof and the Closing Date, respectively. The Company shall
19
have performed or complied with all of the agreements herein contained and
required to be performed or complied with by it at or prior to the Closing
Date.
(b) The Offering Memorandum shall have been printed and copies
distributed to the Initial Purchasers not later than 10:00 a.m., New York
City time, on the day following the date of this Agreement or at such later
date and time as to which the Initial Purchasers may agree, and no stop
order suspending the qualification or exemption from qualification of the
Units, the Senior Notes or the Warrants in any jurisdiction referred to in
Section 4(e) shall have been issued and no proceeding for that purpose
shall have been commenced or shall be pending or threatened.
(c) No action shall have been taken and no local, state or Federal
law, statute, ordinance, rule, regulation, requirement, judgment or court
decree shall have been enacted, adopted or issued by any governmental
agency which would, as of the Closing Date, prevent the issuance of the
Units, the Senior Notes or the Warrants; no action, suit or proceeding
shall have been commenced and be pending against or affecting or, to the
best knowledge of the Company, threatened against, the Company, the
Subsidiaries or the Joint Ventures before any court or arbitrator or any
governmental body, agency or official (including, but not limited to the
FCC or any state regulatory authority or body) that, if adversely
determined, could reasonably be expected to result in a Material Adverse
Effect; and no stop order shall have been issued preventing the use of the
Offering Memorandum, or any amendment or supplement thereto, or which could
reasonably be expected to have a Material Adverse Effect.
(d) Since the dates as of which information is given in the Offering
Memorandum, (i) there shall not have been any material adverse change, or
any development that is reasonably likely to result in a material adverse
change, in the capital stock or the long-term debt, or material increase in
the short-term debt, of the Company, the Subsidiaries or the Joint Ventures
from that set forth in the Offering Memorandum, (ii) no dividend or
distribution of any kind shall have been declared, paid or made by the
Company or any Subsidiary on any class of its capital stock, (iii) neither
the Company nor any Subsidiary nor any Joint Venture shall have incurred
any liabilities or obligations, direct or contingent, that are material,
individually or in the aggregate, to the Company, the Subsidiaries and the
Joint Ventures taken as a whole, and that are required to be disclosed on a
balance sheet or notes thereto in accordance with generally accepted
accounting principles and are not disclosed on the latest balance sheet or
notes thereto included in the Offering Memorandum. Since the date hereof
and since the dates as of which information is given in the Offering
Memorandum, there shall not have occurred any Material Adverse Change.
(e) The Initial Purchasers shall have received a certificate, dated
the Closing Date, signed on behalf of the Company by (i) the President and
(ii) a Vice President, Secretary or Assistant Secretary, in form and
substance reasonably satisfactory to the Initial Purchasers, confirming, as
of the Closing Date, the matters set forth in paragraphs (a), (b), (c) and
(d) of this Section 8, certain incumbency matters and that, as of the
Closing Date, the obligations of the Company to be performed hereunder on
or prior thereto have been duly performed.
(f) The Initial Purchasers shall have received on the Closing Date an
opinion, dated the Closing Date, in form and substance satisfactory to the
Initial Purchasers and counsel to the Initial Purchasers, of Buchanan
Ingersoll, counsel for the Company, to the effect set forth in Exhibit D
---------
hereto.
(g) The Initial Purchasers shall have received on the Closing Date an
opinion, dated the Closing Date, in form and substance satisfactory to the
Initial Purchasers and counsel to the Initial
20
Purchasers, of Dow Lohnes & Albertson, special regulatory counsel to the
Company, to the effect set forth in Exhibit E hereto.
---------
(h) The Initial Purchasers shall have received on the Closing Date an
opinion, dated the Closing Date, in form and substance satisfactory to the
Initial Purchasers and counsel to the Initial Purchasers, of each of
Pennington, Culpepper, Moore, Wilkinson, Dunbar & Dunlap, P.A.; Roland,
Fogel, Koblenz & Carr; Sonneschein, Nath & Rosenthal; Downs Rachlin &
Martin; Swidler Berlin; and Gullett Sanford Robinson & Martin, each of whom
are special state regulatory counsel for the Company, to the effect set
forth in Exhibit E hereto.
---------
(i) The Initial Purchasers shall have received an opinion, dated the
Closing Date, in form and substance reasonably satisfactory to the Initial
Purchasers, of Latham & Watkins, counsel to the Initial Purchasers,
covering such matters as are customarily covered in such opinions.
(j) At the time this Agreement is executed and at the Closing Date the
Initial Purchasers shall have received from Deloitte & Touche, independent
public accountants for the Company dated as of the date of this Agreement
and as of the Closing Date, a customary comfort letter addressed to the
Initial Purchasers and in form and substance satisfactory to the Initial
Purchasers and counsel to the Initial Purchasers with respect to the
financial statements and certain financial information of the Company, the
Subsidiaries and the Joint Ventures contained in the Offering Memorandum.
(k) Latham & Watkins shall have been furnished with such documents, in
addition to those set forth above, as they may reasonably require for the
purpose of enabling them to review or pass upon the matters referred to in
this Section 8 and in order to evidence the accuracy, completeness or
satisfaction in all material respects of any of the representations,
warranties or conditions herein contained.
(l) Prior to the Closing Date, the Company, the Subsidiaries and the
Joint Ventures shall have furnished to the Initial Purchasers such further
information, certificates and documents as the Initial Purchasers may
reasonably request.
(m) The Company and the Trustee shall have entered into each of the
Indenture, the Registration Rights Agreement, the Warrant Agreement and the
Warrant Registration Rights Agreement and the Initial Purchasers shall have
received counterparts, conformed as executed, thereof.
(n) On the Closing Date, concurrently with the sale of the Units, the
Company shall have (i) repaid $25.0 million of the principal amount of the
indebtedness owed by the Company to Adelphia (all such indebtedness
referred to herein as the "Adelphia Indebtedness") and evidence of such
repayment, in form and substance reasonably satisfactory to the Initial
Purchasers and counsel to the Initial Purchasers, shall have been provided
to the Initial Purchasers and (ii) executed and delivered a written
subordinated promissory note evidencing the Adelphia Indebtedness
containing terms and provisions (including subordination provisions
pursuant to which the Adelphia Indebtedness is expressly subordinate in
right of payment to the Senior Notes) in form and substance reasonably
satisfactory to the Initial Purchasers and counsel to the Initial
Purchasers.
All opinions, certificates, letters and other documents required by
this Section 8 to be delivered by the Company will be in compliance with the
provisions hereof only if they are reasonably satisfactory in form and substance
to the Initial Purchasers. The Company will furnish the Initial
21
Purchasers with such conformed copies of such opinions, certificates, letters
and other documents as it shall reasonably request.
9. Initial Purchasers' Information. For the purposes of Sections 4(a) and
-------------------------------
6(b) herein and otherwise, the Company and the Initial Purchasers severally
acknowledge that the statements with respect to the offering of the Units set
forth in the last paragraph of the cover page and the third paragraph and the
sixth paragraph under the caption "Plan of Distribution" in such Offering
Memorandum constitute the only information furnished in writing by or on behalf
of the Initial Purchasers expressly for use in the Offering Memorandum.
10. Survival of Representations and Agreements. All representations and
------------------------------------------
warranties, covenants and agreements of the Initial Purchasers and the Company
contained in this Agreement, including, without limitation, the representations
and warranties and agreements contained in Sections 4(f) and 11(d), the
indemnity agreements contained in Section 6 and the contribution agreements
contained in Section 7, shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of the Initial Purchasers
any controlling person thereof or by or on behalf of the Company or any
controlling person thereof, and shall survive delivery of and payment for the
Units to and by the Initial Purchasers. The representations contained in Section
5 and the agreements contained in Sections 4(f), 6, 7 and 11(d) shall survive
the termination of this Agreement, including any termination pursuant to Section
11.
11. Effective Date of Agreement; Termination
----------------------------------------
(a) This Agreement shall become effective upon execution and delivery
of a counterpart hereof by each of the parties hereto.
(b) The Initial Purchasers shall have the right to terminate this
Agreement at any time prior to the Closing Date by notice to the Company
from the Initial Purchasers, without liability (other than with respect to
Sections 6 and 7) on the Initial Purchasers' part to the Company if, on or
prior to such date, (i) the Company shall have failed, refused or been
unable to perform in any material respect any agreement on its part to be
performed hereunder, (ii) any other condition to the obligations of the
Initial Purchasers hereunder as provided in Section 8 is not fulfilled when
and as required in any material respect, (iii) in the reasonable judgment
of the Initial Purchasers any material adverse change shall have occurred
since the respective dates as of which information is given in the Offering
Memorandum in the condition (financial or otherwise), business, properties,
assets, liabilities, prospects, net worth, results of operations or cash
flows of the Company and the Subsidiaries taken as a whole, other than as
set forth in the Offering Memorandum, or (iv)(A) any domestic or
international event or act or occurrence has materially disrupted, or in
the opinion of the Initial Purchasers will in the immediate future
materially disrupt, the market for the Company's securities or for
securities in general; or (B) trading in securities generally on the New
York Stock Exchange, the American Stock Exchange or the Nasdaq National
Market shall have been suspended or materially limited, or minimum or
maximum prices for trading shall have been established, or maximum ranges
for prices for securities shall have been required, on such exchange, or by
such exchange or other regulatory body or governmental authority having
jurisdiction; or (C) a banking moratorium shall have been declared by
Federal or state authorities, or a moratorium in foreign exchange trading
by major international banks or persons shall have been declared; or (D)
there is an outbreak or escalation of armed hostilities involving the
United States on or after the date hereof, or there has been a declaration
by the United States of a national emergency or war, the effect of which
shall, in the Initial Purchasers' judgment, make it inadvisable or
impracticable to proceed with the offering or delivery of the Units on the
terms and in the manner contemplated in the Offering Memorandum; or (E)
there has been a material adverse change in general economic, political or
financial conditions in the United States, or the effect of
22
international conditions on the financial markets in the United States
shall be such that, it is, in the Initial Purchasers' judgment, inadvisable
or impracticable to proceed with the delivery of the Units as contemplated
hereby.
(c) Any notice of termination pursuant to this Section 11 shall be by
telephone, telex, telephonic facsimile, or telegraph, confirmed in writing
by letter.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to any of clauses (iii) or (iv)
of Section 11(b), in which case each party will be responsible for its own
expenses), or if the sale of the Units provided for herein is not
consummated because any condition to the obligations of the Initial
Purchasers set forth herein is not satisfied or because of any refusal,
inability or failure on the part of the Company to perform any agreement
herein or comply with any provision hereof, the Company will, subject to
demand by the Initial Purchasers, reimburse the Initial Purchasers for all
out-of-pocket expenses (including the reasonable fees and expenses of
Initial Purchasers' counsel), incurred by the Initial Purchasers in
connection herewith.
12. Notice. All communications hereunder, except as may be otherwise
------
specifically provided herein, shall be in writing and, if sent to the Initial
Purchasers shall be mailed, delivered, or telexed, telegraphed or telecopied and
confirmed in writing to Bear, Stearns & Co. Inc., 245 Park Avenue, New York, New
York 10167, Attention: Corporate Finance Department, telecopy number: (212) 272-
3092; and if sent to the Company, shall be mailed, delivered or telexed,
telegraphed or telecopied and confirmed in writing to Hyperion
Telecommunications, Inc., 5 West 3rd Street, Coudersport, Pennsylvania 16915,
Attention: Daniel Milliard, telecopy number: (814) 274-8631, with a copy to
Buchanan Ingersoll, One Oxford Centre, 301 Grant street, 20th Floor, Pittsburgh,
Pennsylvania 15219-1410, Attention: Carl E. Rothenberger, Jr.; provided that any
notice pursuant to Section 7 shall be mailed, delivered or telexed, telegraphed
or telecopied and confirmed in writing.
13. Parties. This Agreement shall inure solely to the benefit of, and shall
-------
be binding upon, the Initial Purchasers and the Company and the controlling
persons and agents referred to in Sections 6 and 7, and their respective
successors and assigns, and no other person shall have or be construed to have
any legal or equitable right, remedy or claim under or in respect of or by
virtue of this Agreement or any provision herein contained. The term "successors
and assigns" shall not include a purchaser, in its capacity as such, of Units
from the Initial Purchasers.
14. Construction. This Agreement shall be construed in accordance with the
------------
internal laws of the State of New York. TIME IS OF THE ESSENCE IN THIS
AGREEMENT.
15. Captions. The captions included in this Agreement are included solely
--------
for convenience of reference and are not to be considered a part of this
Agreement.
16. Counterparts. This Agreement may be executed in various counterparts
------------
which together shall constitute one and the same instrument.
[Signature pages follow]
23
If the foregoing correctly sets forth the understanding among the
Initial Purchasers, the Company, please so indicate in the space provided below
for that purpose, whereupon this letter shall constitute a binding agreement
between us.
Very truly yours,
Hyperion Telecommunications, Inc.
By: /s/ Daniel R. Milliard
------------------------------
Name: Daniel R. Milliard
Title: President and Secretary
Accepted and agreed to as of
the date first above written:
Bear, Stearns & Co. Inc.
By: /s/ Donald R. Mullen, Jr.
-------------------------------
Name: Donald R. Mullen, Jr.
Title: Senior Managing Director
Chase Securities Inc.
By: /s/ S. Cuskley
-------------------------------
Name: S. Cuskley
Title: MD
NationsBanc Capital Markets, Inc.
By: /s/ Thomas Mooney
-------------------------------
Name: Thomas Mooney
Title: Senior Vice President
Schedule I
Number of
Units to
Initial Purchasers be Purchased
- ------------------ ------------
Bear, Stearns & Co. Inc. 197,400
Chase Securities Inc. 65,800
NationsBanc Capital Markets, Inc. 65,800
- ----------------------------- -------
Total 329,000
=======
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.
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
TCG South Florida
Exhibit A
Form of Registration Rights Agreement
Exhibit B
Form of Warrant Registration Rights Agreement
Exhibit C
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
EXHIBIT D
Form of Opinion of Buchanan Ingersoll
1. Each of the Company and its Subsidiaries is duly incorporated and
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, and has all requisite corporate power and
authority to carry on its business as it is being conducted and as described in
the Offering Memorandum and to own, lease and operate its properties, and is
duly qualified and in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where the
failure to be so qualified would not, singly or in the aggregate, have a
material adverse effect on the business, financial condition or results of
operations of the Company, the Subsidiaries and the Joint Ventures, taken as a
whole.
2. Each of the Joint Ventures is duly formed and valid existing as a general
partnership in good standing under the laws of its jurisdiction of formation,
and has all requisite partnership power and authority to carry on its business
as it is being conducted and as described in the Offering Memorandum and to own,
lease and operate its properties, and is duly qualified and in good standing as
a partnership authorized to do business in each jurisdiction in which the nature
of its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not, singly or
in the aggregate, have a material adverse effect on the business, financial
condition or results of operations of the Company, the Subsidiaries and the
Joint Ventures, taken as a whole.
3. The authorized, issued and outstanding capital stock of the Company is as
set forth in the Offering Memorandum under the caption "Capitalization." All of
the outstanding shares of capital stock of the Company have been duly
authorized, validly issued, and are fully paid and nonassessable and were not
issued in violation of any preemptive rights or similar rights.
4. All of the partnership interests owned by the Company and each Subsidiary
have been duly authorized and validly issued and, except as set forth in the
Offering Memorandum, are owned by each of the Company and its Subsidiaries, as
the case may be, free and clear of any security interest, charge, claim, lien,
limitation on voting rights or encumbrance.
5. All of the outstanding capital stock of each Subsidiary is owned by the
Company, free and clear of any security interest, charge, claim, lien,
limitation on voting rights or encumbrance. To our knowledge, there are not
currently, and will not be following the Offering, any outstanding
subscriptions, rights, warrants, calls, commitments of sale or options to
acquire, or instruments convertible into or exercisable or exchangeable for, any
capital stock or other equity interest of the Company or any Subsidiary.
6. When the Series A Senior Notes are issued and delivered pursuant to the
Agreement, no Series A Senior Note will be of the same class (within the meaning
of Rule 144A under the Act) as securities of the Company that are listed on a
national securities exchange registered under Section 6 of the Exchange Act or
that are quoted in a United States automated inter-dealer quotation system.
7. The Company has all requisite corporate power and authority to execute,
deliver and perform its obligations under the Agreement, the Indenture, the
Senior Notes, the
Registration Rights Agreement and the other Operative Documents, as applicable,
and to consummate the transactions contemplated thereby, including, without
limitation, the corporate power and authority to issue, sell and deliver the
Senior Notes as provided herein and therein.
8. The Agreement has been duly and validly authorized, executed and
delivered by the Company.
9. Each of the Indenture and the Registration Rights Agreement has been duly
and validly authorized, executed and delivered by the Company and is the valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as such enforceability may be limited (a) by
the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium or other similar laws now or hereafter in effect relating to or
affecting creditors' rights and remedies generally, (b) by the effects of
general principals of equity, whether enforcement is considered in a proceeding
in equity or at law, and the discretion of the court before which any proceeding
therefor may be brought, (c) by the enforceability of the waiver of rights or
defenses contained in Section 4.06 of the Indenture, (d) under certain
circumstances of provisions providing for the indemnification of or contribution
to a party with respect to a liability where such indemnification or
contribution may be contrary to public policy and (e) by the effects of an
implied covenant of good faith and fair dealing.
10. The Series A Senior Notes have been duly and validly authorized for
issuance and sale to the Initial Purchasers by the Company pursuant to the
Agreement and, when issued and authenticated in accordance with the terms of the
Indenture and delivered against payment therefor in accordance with the terms of
the Agreement and the Indenture, will be the valid and binding obligations of
the Company, enforceable against the Company in accordance with their terms, and
will be entitled to the benefits of the Indenture, except as such enforceability
may be limited (a) by the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting creditors' rights and remedies generally, (b) by
the effects of general principals of equity, whether enforcement is considered
in a proceeding in equity or at law, and the discretion of the court before
which any proceeding therefor may be brought, (c) by the enforceability of the
waiver of rights or defenses contained in Section 4.06 of the Indenture, (d)
under certain circumstances of provisions providing for the indemnification of
or contribution to a party with respect to a liability where such
indemnification or contribution may be contrary to public policy and (e) by the
effects of an implied covenant of good faith and fair dealing.
11. The Series B Senior Notes have been duly and validly authorized for
issuance by the Company and, when issued and authenticated in accordance with
the terms of the Exchange Offer and the Indenture, will be the valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms, and will be entitled to the benefits of the Indenture, except as
such enforceability may be limited (a) by the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting creditors' rights and remedies
generally, (b) by the effects of general principals of equity, whether
enforcement is considered in a proceeding in equity or at law, and the
discretion of the court before which any proceeding therefor may be brought, (c)
by the enforceability of the waiver of rights or defenses contained in Section
4.06 of the Indenture, (d) under certain circumstances of provisions providing
for
the indemnification of or contribution to a party with respect to a liability
where such indemnification or contribution may be contrary to public policy and
(e) by the effects of an implied covenant of good faith and fair dealing.
12. The summary of each of the Series A Notes, the Indenture and the
Registration Rights Agreement contained in the Offering Memorandum is accurate
and complete in all material respects.
13. No registration under the Act of the Senior Notes is required for the
sale of the Senior Notes to the Initial Purchasers as contemplated by the
Agreement or for the Exempt Resales assuming (i) that the Initial Purchasers are
Qualified Institutional Buyers, as defined in Rule 144A under the Act ("QIB"),
(ii) that the purchasers who buy the Senior Notes in the Exempt Resales are
either QIBs or Accredited Investors, (iii) the accuracy of the Initial
Purchasers' representations regarding the absence of general solicitation in
connection with the sale of the Senior Notes to the Initial Purchasers and the
Exempt Resales contained in the Agreement, (iv) the accuracy of the Company's
representations in Sections 5(a)(ii), (xxiii), (xxxi) and (xxxv) (other than
with respect to the first sentence) of the Agreement and (v) with respect to
Accredited Investors, the accuracy of the representations made by each
Accredited Investor as set forth in the letters of representation executed by
such Accredited Investor in the form of Annex A to the Offering Memorandum.
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14. The Offering Memorandum, as of its date (except for the financial
statements (including the notes thereto) and supporting schedules and other
financial, statistical and accounting data included therein or omitted
therefrom, as to which no opinion need be expressed), and each amendment or
supplement thereto (if any), as of its date, contains all the information
specified in, and meets the requirements of, Rule 144A(d)(4) under the Act.
15. Prior to the Exchange Offer or the effectiveness of the Shelf
Registration Statement, the Indenture is not required to be qualified under the
Trust Indenture Act.
16. None of (A) the execution, delivery or performance by the Company of the
Agreement and the other Operative Documents, as applicable, (B) the issuance and
sale of the Senior Notes or (C) consummation by the Company, the Subsidiaries
and the Joint Ventures of the transactions described in the Offering Memorandum
violates, conflicts with or constitutes a breach of any of the terms or
provisions of, or a default under (or an event that with notice or the lapse of
time, or both, would constitute a default 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 or bylaws or partnership agreement of the Company, any
Subsidiary or any Joint Venture, as applicable, (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 it or its
property is or may be bound identified to such counsel as material (assuming all
of such agreements are governed by Pennsylvania law), (iii) any local, state or
Federal law, statute, ordinance, requirement, administrative statute, rule or
regulation applicable to the Company, any Subsidiary or any Joint Venture or its
assets or properties (except with respect to the matters set forth in the
opinion of Dow, Lohnes & Albertson, as to which no opinion need be expressed) or
(iv) any judgment, order or decree of any court or governmental agency or
authority having jurisdiction over the Company, any Subsidiary or any Joint
Venture or its
assets or properties. Assuming compliance with applicable state securities and
Blue Sky laws, as to which such counsel need express no opinion, and except for
the filing of a registration statement under the Act and qualification of the
Indenture under the Trust Indenture Act of 1939, as amended, in connection with
the Registration Rights Agreement, no consent, approval, authorization or order
of, or filing, registration, qualification, license or permit of or with, any
court or governmental agency, body or administrative agency is required for (1)
the execution, delivery and performance by the Company of the Agreement and the
other Operative Documents, as applicable, (2) the issuance and sale of the
Senior Notes or (3) consummation by the Company, the Subsidiaries and the Joint
Ventures of the transactions described in the Offering Memorandum, except such
as have been obtained and made or have been disclosed in the Offering
Memorandum.
17. None of the Company, the Subsidiaries or the Joint Ventures is (i) an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended, or (ii) a
"holding company" or a "subsidiary company" or an "affiliate" of a holding
company within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
18. None of the execution, delivery and performance of the Agreement, the
issuance and sale of the Senior Notes, the application of the proceeds from the
issuance and sale of the Senior Notes and the consummation of the transactions
contemplated thereby as set forth in the Offering Memorandum, will violate
Regulations G, T, U or X promulgated by the Board of Governors of the Federal
Reserve System.
We have participated in conferences with officers and other representatives
of the Company, representatives of the independent certified public accountants
of the Company, the Initial Purchasers and the representatives of the Initial
Purchasers at which the contents of the Preliminary Offering Memorandum and the
Offering Memorandum and related matters were discussed and, although we have not
undertaken to investigate or verify independently, and do not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Preliminary Offering Memorandum or the Offering Memorandum
(except as indicated in paragraphs 12 and 14 above), on the basis of the
foregoing, no facts have come to our attention which led us to believe that the
Preliminary Offering Memorandum or the Offering Memorandum, as of its date or
the Closing Date, contained an untrue statement of a material fact or omitted to
state any 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 (except as to financial statements and related notes, the financial
statement schedules and other financial and statistical data included therein).
Exhibit E
Form of Opinion of Dow, Lohnes & Albertson
1. Each of the Company, the Subsidiaries and the Joint Ventures has all of
the licenses, permits and authorizations, if any, required by the FCC and the
State Regulatory Agencies for the provision of telecommunications services
except where the failure to obtain or hold such license, permit or authority
would not have a Material Adverse Effect on the Company, the Subsidiaries and
the Joint Ventures, taken as a whole.
2. Neither the Company, any Subsidiaries nor any Joint Ventures is subject
to any pending complaint or investigation before the FCC or, to the best
knowledge of counsel, to any threatened complaint or investigation before the
FCC, or, any pending or threatened complaint or investigation before any State
Regulatory Agencies based on any alleged violation by the Company, the
Subsidiaries or the Joint Ventures in connection with their provision of or
failure to provide telecommunications services of a character required to be
disclosed in the Offering Memorandum.
3. The statements in the Offering Memorandum under the heading of ["Risk
Factors Regulation" and "Business - Government Regulation"] fairly and
accurately summarize the matters therein described.
4. The Company, the Subsidiaries and the Joint Ventures have the consents,
approvals, authorizations, licenses, certificates, permits, or orders of the FCC
or any State Regulatory Agency, if any, for the consummation of the transactions
contemplated in the 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.
5. Neither the execution and delivery of the Purchase Agreement nor the sale
of the Senior Notes contemplated thereby 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.