2,000,000 Shares
Hyperion Telecommunications, Inc.
Class A Common Stock
INTERNATIONAL UNDERWRITING AGREEMENT
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May ___, 1998
SMITH BARNEY INC.
CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
NATIONSBANC MONTGOMERY SECURITIES LLC
As Lead Managers for the Several Managers
c/o Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Ladies & Gentlemen:
Hyperion Telecommunications, Inc., a Delaware corporation (the "Company"),
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proposes to issue and sell outside the United States and Canada an aggregate of
2,000,000 shares (the "Shares") of its Class A Common Stock, $.01 par value per
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share (the "Class A Common Stock"), to the several underwriters named in
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Schedule I hereto (the "Managers"), for whom Smith Barney Inc., Credit Suisse
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First Boston (Europe) Limited and NationsBanc Montgomery Securities LLC are
acting as representatives (the "Lead Managers").
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It is understood that the Company is concurrently entering into a U.S.
Underwriting Agreement, dated the date hereof (the "U.S. Underwriting
-----------------
Agreement"), providing for the sale of 8,000,000 shares (the "Firm U.S.
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Shares") of the Class A Common Stock (plus an option granted to purchase up to
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an additional 1,500,000 shares of Class A Common Stock (the "Additional U.S.
---------------
Shares")) solely for the purpose of covering over-allotments) through
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arrangements with certain underwriters in the United States and Canada (the
"U.S. Underwriters"), for whom Smith Barney Inc., Credit Suisse First Boston
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Corporation and NationsBanc Montgomery Securities LLC are acting as
representatives (the "Representatives"). All shares of Class A Common Stock
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proposed to be offered to the U.S Underwriters pursuant to the U.S. Underwriting
Agreement, including the Firm U.S. Shares and the Additional U.S. Shares, are
herein called the "U.S. Shares"; the U.S. Shares and the Shares, collectively,
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are herein called the "Underwritten Shares."
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The Company also understands that the Lead Managers and the Representatives
have entered into an agreement (the "Agreement Between U.S. Underwriters and
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Managers") contemplating the coordination of certain transactions between the
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Managers and the U.S. Underwriters and that, pursuant thereto and subject to the
conditions set forth therein, the Managers may purchase from the U.S.
Underwriters a portion of the U.S. Shares or sell to the U.S. Underwriters a
portion of the Shares. The Company understands that any such purchases and
sales between the Managers and the U.S. Underwriters shall be governed by the
Agreement Between Managers and U.S. Underwriters and shall not be governed by
the terms of this Agreement or the U.S. Underwriting Agreement.
The Company wishes to confirm as follows its agreement with you and the
other several Managers on whose behalf you are acting, in connection with the
several purchases of the Shares by the Managers.
1. Registration Statement and Prospectuses. The Company has prepared and
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filed with the Securities and Exchange Commission (the "Commission") in
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accordance with the provisions of the Securities Act of 1933, as amended, and
the rules and regulations of the Commission thereunder (collectively, the
"Act"), a registration statement on Form S-1 (File No. 333-48209) under the Act,
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including prospectuses subject to completion, relating to the Underwritten
Shares. The term "Registration Statement" as used in this Agreement means the
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registration statement (including all financial schedules and exhibits), as
amended at the time it becomes effective, and as thereafter amended by post-
effective amendment. The term "Prospectuses" as used in this Agreement means
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the prospectuses in the forms included in the Registration Statement or, if the
prospectuses included in the Registration Statement omit information in reliance
on Rule 430A under the Act and such information is included in prospectuses
filed with the Commission pursuant to Rule 424(b) under the Act, the term
"Prospectuses" as used in this Agreement means the prospectuses in the forms
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included in the Registration Statement as supplemented by the addition of the
Rule 430A information contained in the prospectuses filed with the Commission
pursuant to Rule 424(b). The term "Prepricing Prospectuses" as used in this
-----------------------
Agreement means the prospectuses subject to completion in the forms included in
the Registration Statement at the time of the initial filing of the Registration
Statement with the Commission, and as such prospectuses shall have been amended
from time to time prior to the date of the Prospectuses.
It is understood that two forms of Prepricing Prospectus and two forms of
Prospectus are to be used in connection with the offering and sale of the
Underwritten Shares: a Prepricing Prospectus and a Prospectus relating to the
U.S. Shares that are to be offered and sold in the United States or Canada to
U.S. or Canadian Persons (the "U.S. Prepricing Prospectus" and the "U.S.
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Prospectus," respectively), and a Prepricing Prospectus and a Prospectus
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relating to the Shares that are to be offered and sold outside the United States
or Canada to persons other than U.S. or Canadian Persons (the "International
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Prepricing Prospectus" and the "International Prospectus," respectively). The
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U.S. Prospectus and the International Prospectus are herein collectively
referred to as the "Prospectuses," and the U.S. Prepricing Prospectus and the
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International Prepricing Prospectus are herein called the "Prepricing
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Prospectuses." For purposes of this Agreement: "Rules and Regulations" means
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the rules and regulations adopted by the Commission under either the Act or the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as applicable;
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"U.S. or Canadian Person" means any resident or national of the United States or
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Canada, any corporation, partnership or other entity created or organized in or
under the laws of the United States or Canada or any estate or trust the income
of which is subject to United States or Canadian income taxation regardless of
the source of its income (other than the foreign branch of any U.S. or Canadian
Person), and includes any United States or Canadian branch of a person other
than a U.S. or Canadian Person; "United States" means the United States of
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America (including the states thereof and the District of Columbia) and its
territories, its possessions and other areas subject to its jurisdiction; and
"Canada" means Canada and its territories, its possessions and other areas
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subject to its jurisdiction.
2. Agreements to Sell and Purchase. The Company hereby agrees, subject
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to all the terms and conditions set forth herein, to issue and sell to each
Manager and, upon the basis of the representations, warranties and agreements of
the Company herein contained and subject to all the terms and conditions set
forth herein, each Manager agrees, severally and not jointly, to purchase from
the Company, at a purchase price of $ per Share (the "purchase price per
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share"), the number of Shares set forth opposite the name of such Manager in
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Schedule I hereto (or such number of Shares increased as set forth in Section 10
hereof).
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3. Terms of Public Offering. The Company has been advised by you that
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the Managers propose to make a public offering of their respective portions of
the Shares as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable and initially to offer the
Shares upon the terms set forth in the International Prospectus.
4. Delivery of the Shares and Payment Therefor. Delivery to the Managers
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of and payment for the Shares shall be made at the office of Latham and Watkins,
885 Third Avenue, New York, New York 10022 at 10:00 A.M., New York City time, on
, 1998 (the "Closing Date"). The place of closing for the Shares and
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the Closing Date may be varied by agreement between you and the Company.
Certificates for the Shares to be purchased hereunder shall be registered in
such names and in such denominations as you shall request prior to 9:30 A.M.,
New York City time, on the second business day preceding the Closing Date. Such
certificates shall be made available to you in New York City for inspection and
packaging not later than 9:30 A.M., New York City time, on the business day next
preceding the Closing Date. The certificates evidencing the Shares to be
purchased hereunder shall be delivered to you on the Closing Date, against
payment of the purchase price therefor in immediately available funds.
5. Agreements of the Company. The Company agrees with the several
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Managers as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective before the offering of the Shares may commence, the
Company will endeavor to cause the Registration Statement or such post-effective
amendment to become effective as soon as possible and will advise you promptly
and, if requested by you, will confirm such advice in writing, when the
Registration Statement or such post-effective amendment has become effective.
(b) The Company will advise you promptly and, if requested by you,
will confirm such advice in writing: (i) of any request by the Commission for
amendment of or a supplement to the Registration Statement, the Prepricing
Prospectuses or the Prospectuses or for additional information; (ii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the Shares for
offering or sale in any jurisdiction or the initiation of any proceeding for
such purpose; and (iii) within the period of time referred to in paragraph (f)
below, of the happening of any event which makes any statement of a material
fact made in the Registration Statement or the Prospectuses untrue or which
requires the making of any additions to or changes in the Registration Statement
or the Prospectuses in order to state a material fact required by the Act or the
regulations thereunder to be stated therein or necessary in order to make the
statements therein not misleading, or of the necessity to amend or supplement
the Prospectuses to comply with the Act or any other law. If at any time the
Commission shall issue any stop order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible time.
(c) The Company will furnish to you, without charge, four signed
copies of the Registration Statement as originally filed with the Commission and
of each amendment thereto, including financial statements and all exhibits
thereto, and will also furnish to you, without charge, such number of conformed
copies of the Registration Statement as originally filed and of each amendment
thereto, but without exhibits, as you may request.
(d) The Company will not (i) file any amendment to the Registration
Statement or make any amendment or supplement to the Prospectuses of which you
shall not previously have been
3
advised or to which you shall object after being so advised or (ii) so long as,
in the written opinion of counsel for the Managers, a prospectus is required to
be delivered in connection with sales by any Manager or dealer, file any
information, documents or reports pursuant to the Exchange Act, without
delivering a copy of such information, documents or reports to you, as Lead
Managers for the Managers, prior to or concurrently with such filing.
(e) Prior to the execution and delivery of this Agreement, the Company
has delivered to you, without charge, in such quantities as you have requested,
copies of each form of the International Prepricing Prospectus. The Company
consents to the use, in accordance with the provisions of the Act and with the
securities or Blue Sky laws of the jurisdictions in which the Shares are offered
by the several Managers and by dealers, prior to the date of the International
Prospectus, of each International Prepricing Prospectus so furnished by the
Company.
(f) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period as in the written
opinion of counsel for the Managers a prospectus is required by the Act to be
delivered in connection with sales by any Manager or dealer, the Company will
expeditiously deliver to each Manager and each dealer, without charge, as many
copies of the International Prospectus as you may request. The Company consents
to the use of the International Prospectus in accordance with the provisions of
the Act and with the securities or Blue Sky laws of the jurisdictions in which
the Shares are offered by the several Managers and by all dealers to whom Shares
may be sold, both in connection with the offering and sale of the Shares and for
such period of time thereafter as the International Prospectus is required by
the Act to be delivered in connection with sales by any Manager or dealer. If
during such period of time any event shall occur that in the judgment of the
Company or in the opinion of counsel for the Managers is required to be set
forth in the International Prospectus or should be set forth therein in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, or if it is necessary to supplement or amend the
International Prospectus to comply with the Act or any other law, the Company
will forthwith prepare and, subject to the provisions of paragraph (d) above,
file with the Commission an appropriate supplement or amendment thereto and will
expeditiously furnish to the Managers and dealers a reasonable number of copies
thereof.
(g) The Company will cooperate with you and with counsel for the
Managers in connection with the registration or qualification of the Shares for
offering and sale by the several Managers and by dealers under the securities or
Blue Sky laws of such jurisdictions as you may designate and will file such
consents to service of process or other documents necessary or appropriate in
order to effect such registration or qualification; provided that in no event
shall the Company be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action which would subject it to
service of process in suits, other than those arising out of the offering or
sale of the Shares, in any jurisdiction where it is not now so subject.
(h) The Company will make generally available to its security holders
a consolidated earnings statement, which need not be audited, covering a twelve-
month period commencing after the effective date of the Registration Statement
and ending not later than 15 months thereafter, as soon as practicable after the
end of such period, which consolidated earnings statement shall satisfy the
provisions of Section 11(a) of the Act.
(i) During the period of five years after the date of this Agreement,
the Company will (i) make generally available a copy of each report of the
Company mailed to stockholders or filed with the Commission or the Nasdaq
National Market and will promptly notify you of such mailing or filing and (ii)
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furnish to you from time to time such other information concerning the Company
and its Subsidiaries as you may request.
(j) If this Agreement shall terminate or shall be terminated after
execution pursuant to any provisions hereof (otherwise than pursuant to the
second paragraph of Section 10 hereof or by notice given by you terminating this
Agreement pursuant to Section 10 or Section 11 hereof) or if this Agreement
shall be terminated by the Managers because of any failure or refusal on the
part of the Company to comply with the terms or fulfill any of the conditions of
this Agreement, the Company agrees to reimburse the Lead Managers for all out-
of-pocket expenses (including fees and expenses of counsel for the Managers)
incurred by you in connection herewith.
(k) The Company will apply the net proceeds from the sale of the
Shares substantially in accordance with the description set forth in the
Prospectuses.
(l) If Rule 430A of the Act is employed, the Company will timely file
the Prospectuses pursuant to Rule 424(b) under the Act and will advise you of
the time and manner of such filing.
(m) For a period of 180 days after the date hereof (the "Lock-up
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Period"), the Company will not, without the prior written consent of Smith
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Barney Inc., offer, sell, contract to sell or otherwise dispose of any Common
Stock (or any securities convertible into or exchangeable for Common Stock) or
grant any options or warrants to purchase Common Stock, except for (i) sales to
the Managers pursuant to this Agreement and the U.S. Underwriters pursuant to
the U.S. Underwriting Agreement, (ii) the issuance of shares to Adelphia
Communications Corporation (the "Parent") in connection with the Adelphia Note
Contribution (as defined in the Prospectuses) and (iii) the issuance of shares
to the Parent in connection with the Adelphia Share Purchase (as defined in the
Prospectuses); (iv) the issuance of options or grants under the Company's Long-
Term Incentive Compensation Plan; (v) the issuance of the Adelphia Warrant (as
defined in the Prospectuses); (vi) the issuance of the Additional MCI Warrants
(as defined in the Prospectuses) required to be issued by the Company in
accordance with the Company's agreement with MCImetro Access Transmission
Services, Inc.; (vii) the issuance of shares pursuant to the exercise of
warrants and options described in clauses (vi), (v) and (vi), the MCI Warrant
(as defined in the Prospectuses) and the Lenfest Warrant (as defined in the
Prospectuses); (viii) the issuance of Class B Common Stock upon the exercise of
outstanding Class B Warrants (as defined in the Prospectuses); and (ix) the
issuance of shares upon the conversion of Class B Common Stock.
(n) The Company has furnished or will furnish to you "lock-up"
letters, in form and substance satisfactory to you, signed by the Parent and
each of the Company's stockholders set forth on Schedule II hereto.
(o) Except as stated in this Agreement and in the U.S. Underwriting
Agreement and in the Prepricing Prospectuses and Prospectuses, the Company has
not taken, nor will it take, directly or indirectly, any action designed to or
that might reasonably be expected to cause or result in stabilization or
manipulation of the price of the Common Stock to facilitate the sale or resale
of the Shares.
(p) The Company will use its best efforts to have the Common Stock
listed, subject to notice of issuance, on the Nasdaq National Market
concurrently with the effectiveness of the Registration Statement.
6. Representations and Warranties of the Company. The Company represents
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and warrants to each Manager that:
5
(a) Each International Prepricing Prospectus included as part of the
Registration Statement as originally filed or as part of any amendment or
supplement thereto, or filed pursuant to Rule 424 under the Act, complied when
so filed in all material respects with the provisions of the Act; except that
this representation and warranty does not apply to statements in or omissions
from such International Prepricing Prospectus made in reliance upon and in
conformity with information relating to any Manager or Manager furnished to the
Company in writing by a Manager through the Representatives or by a Manager
through the Lead Managers expressly for use therein. The Commission has not
issued any order preventing or suspending the use of any Prepricing Prospectus.
(b) The Registration Statement in the form in which it became or
becomes effective and also in such form as it may be when any post-effective
amendment thereto shall become effective and the Prospectuses and any supplement
or amendment thereto when filed with the Commission under Rule 424(b) under the
Act, complied or will comply in all material respects with the provisions of the
Act and did not or will not at any such times contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; except that this
representation and warranty does not apply to statements in or omissions from
the Registration Statement or the Prospectuses made in reliance upon and in
conformity with information relating to any Manager or Manager furnished to the
Company in writing by a Manager through the Representatives or by a Manager
through the Lead Managers expressly for use therein.
(c) All the outstanding shares of Common Stock of the Company have
been duly authorized and validly issued, are fully paid and nonassessable and
are free of any preemptive or similar rights; the Shares have been duly
authorized and, when issued and delivered to the Managers against payment
therefor in accordance with the terms hereof, will be validly issued, fully paid
and nonassessable and free of any preemptive or similar rights; and the capital
stock of the Company conforms to the description thereof in the Registration
Statement and the Prospectuses.
(d) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and to
consummate the transactions contemplated hereby, including, without limitation,
the corporate power and authority to issue, sell and deliver the Shares as
provided herein.
(e) Each of this Agreement and the U.S. Underwriting Agreement has
been duly and validly authorized, executed and delivered by the Company and is
the legal, valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except insofar as indemnification and
contribution provisions may be limited by applicable law or public policy or
equitable principles and subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization or similar laws affecting the rights of
creditors generally and subject to general principles of equity.
(f) Each of the Company and its Subsidiaries (as defined) (A) has been
duly organized, is validly existing as a corporation or limited liability
company, as applicable, in good standing under the laws of its respective
jurisdiction of formation, (B) has all requisite corporate or limited liability
company power and authority to carry on its business as it is currently being
conducted and as described in the Registration Statement and the Prospectuses
and to own, lease and operate its properties and (C) is duly qualified and in
good standing as a foreign corporation or limited liability company, as
applicable, 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
6
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 Common Stock or (z) in any manner draw into
question the validity of this Agreement or the ability to conduct its business
in the manner set forth in the Registration Statements and the Prospectuses (any
of the events set forth in clauses (x), (y) or (z), a "Material Adverse
----------------
Effect"). The Company has no direct or indirect subsidiaries
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as of the Closing Date other than those set forth on Schedule III hereto
(referred to herein collectively as "Subsidiaries" and individually as a
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"Subsidiary").
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(g) Each of the Joint Ventures (as defined) (A) has been duly formed
as a partnership, limited liability company or corporation, as applicable, under
the laws of its respective jurisdiction of formation, (B) has all requisite
partnership, limited liability company or corporate power and authority, as
applicable, to carry on its business as it is currently being conducted and as
described in the Registration Statement and the Prospectuses and to own, lease
and operate its properties and (C) is duly qualified and in good standing as a
foreign partnership, limited liability company or corporation, as applicable,
authorized to do business in each jurisdiction in which the nature of its
business or its ownership or leasing of property requires such qualification
except, with respect to this clause (C), where the failure to be so qualified or
in good standing does not and could not reasonably be expected to result in a
Material Adverse Effect. Neither the Company nor its Subsidiaries has any
ownership interest in any Joint Venture other than those set forth on Schedule
IV hereto (referred to herein collectively as "Joint Ventures" and individually
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a "Joint Venture").
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(h) All of the outstanding capital stock of each Subsidiary is owned
by the Company, free and clear of any security interest, claim, lien,
limitations on voting rights or other charge or encumbrance, other than security
interests, claims, liens, limitation on voting rights or other charges or
encumbrances arising from the pledge of the capital stock of , ,
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, and , as security for the Company's 12 1/4% Senior Secured Notes
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due 2004. Except as disclosed in the Prospectuses, there are not currently, and
will not be as a result of the transactions contemplated hereby, any outstanding
subscriptions, rights, warrants, calls, commitments of sale or options to
acquire, or instruments convertible into or exchangeable for, any capital stock
or other equity interest of the Company, any Subsidiary or any Joint Venture.
(i) None of the Company, the Subsidiaries or the Joint Ventures is
and, after giving effect to the transactions contemplated hereby will be (A) in
violation of its charter and bylaws, partnership agreement, or operating
agreement as applicable, (B) in default in the performance of any bond,
debenture, note, indenture, mortgage, deed of trust or other agreement or
instrument to which it is a party or by which it is bound or to which any of its
properties is subject, or (C) in violation of any local, state or Federal law,
statute, ordinance, rule, regulation, requirement, judgment or court decree
(including, without limitation, the Communications Act of 1934, as amended by
the Telecommunications Act of 1996 (the "Telecommunications Act"), and the rules
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and regulations of the Federal Communications Commission (the "FCC") and
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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.
(j) 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
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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 Registration Statement or
the Prospectuses and that is not so disclosed, or (z) could reasonably be
expected to individually or in the aggregate, result in a Material Adverse
Effect.
(k) Neither the issuance and sale of the Shares, the execution,
delivery or performance by the Company of this Agreement or the U.S.
Underwriting Agreement by the Company, or the consummation by the Company of the
transactions contemplated hereby and thereby violate, conflict with or
constitute a breach of any of the terms or provisions of, or a default under (or
an event that with notice or the lapse of time, or both, would constitute a
default), or require consent under, or result in the imposition of a lien or
encumbrance on any properties of the Company, 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 or operating 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 Prospectuses, 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 or the U.S. Underwriting Agreement
or (2) the issuance and sale of the Shares and the transactions contemplated
hereby and thereby, except (x) such as have been obtained and made under the Act
and state securities or Blue Sky laws and regulations or such as may be required
by the NASD or (y) where the failure to obtain any such consent, approval,
authorization or order of, or filing registration, qualification, license or
permit would not reasonably be expected to result in a Material Adverse Effect.
(l) The accountants who have certified or shall certify the financial
statements included in the Registration Statement and the Prospectuses are
independent public accountants as required by the Act. The historical financial
statements of the Company and each of the Subsidiaries comply as to form in all
material respects with the requirements applicable to registration statements on
Form S-1 under the Act and present fairly in all material respects the financial
position and results of operations of the Company and each of its Subsidiaries,
at the respective dates and for the respective periods indicated. Such
financial statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
presented. The other financial information and data included in the
8
Registration Statement and Prospectuses, 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
Prospectuses 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 Prospectuses are accurately presented in all material
respects.
(m) The financial statements, together with related schedules and
notes, included in the Registration Statement and the Prospectuses, present
fairly the consolidated financial position, results of operations and changes in
financial position of the Company and the Subsidiaries on the basis stated in
the Registration Statement at the respective dates or for the respective periods
to which they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the other financial and statistical information and data included
in the Registration Statement and the Prospectuses are accurately presented and
prepared on a basis consistent with such financial statements and the books and
records of the Company and the Subsidiaries.
(n) Except as disclosed in the Registration Statement and the
Prospectuses, subsequent to the respective dates as of which such information is
given in the Registration Statement and the Prospectuses, (i) none of the
Company, any Subsidiary or any Joint Venture has incurred any liabilities or
obligations, direct or contingent, which are material, individually or in the
aggregate, to the Company, the Subsidiaries and the Joint Ventures taken as a
whole, not entered into any transaction not in the ordinary course of business,
(ii) there has not been, singly or in the aggregate, any change or development
which could reasonably be expected to result in a Material Adverse Effect, (iii)
there has been no dividend or distribution of any kind declared, paid or made by
the Company or its Subsidiaries on any class of capital stock and (iv) there has
been no distribution of profits or return of capital contribution by any Joint
Venture.
(o) The Company has not distributed and, prior to the later to occur
of (i) the Closing Date and (ii) completion of the distribution of the Shares,
will not distribute any offering material in connection with the offering and
sale of the Shares other than the Registration Statement, the Prepricing
Prospectuses, the Prospectuses or other materials, if any, permitted by the Act.
(p) There is (i) no unfair labor practice complaint pending against
the Company, 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 or threatened against the Company, any Subsidiary or any Joint Venture,
(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.
9
(q) None of the Company, any Subsidiary or any Joint Venture has
violated any environmental, safety or similar law or regulation applicable to it
or its business or property relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes, pollutants
or contaminants ("Environmental Laws"), lacks any permit, license or other
------------------
approval required of it under applicable Environmental Laws is violating any
term or condition of such permit, license or approval which could reasonably be
expected to, either individually or in the aggregate, have a Material Adverse
Effect.
(r) 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 Prospectuses as owned by it, free and clear of all liens, charges,
encumbrances and restrictions, except such as are described in the Prospectuses
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 Prospectuses, except as described in
the Prospectuses 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.
(s) 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.
(t) 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
10
(domestic or foreign) or any political party or candidate for office (domestic
or foreign) or other person who was, is or may be in a position to help or
hinder the business of the Company, any Subsidiary or any Joint Venture (or
assist the Company, any Subsidiary or any Joint Venture in connection with any
actual or proposed transaction) which (i) might subject the Company, any
Subsidiary or any Joint Venture, or any other individual or entity to any damage
or penalty in any civil, criminal or governmental litigation or proceeding
(domestic or foreign), (ii) if not given in the past, could reasonably be
expected to have had a Material Adverse Effect on the assets, business or
operations of the Company, any Subsidiary or any Joint Venture or (iii) if not
continued in the future, could reasonably be expected to have a Material Adverse
Effect.
(u) 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.
(v) None of the Company, the Subsidiaries or the Joint Ventures is
now, and after sale of the Shares to be sold by the Company hereunder and
application of the net proceeds from such sale as described in the Prospectuses
under the caption "Use of Proceeds" will not be (i) an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "Investment Company Act"), or
----------------------
(ii) a "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 "PUHC Act").
--------
(w) Except as disclosed in the Prospectuses, there are no holders of
securities of the Company, the Subsidiaries or the Joint Ventures who, by reason
of the filing of the Registration Statement or consummation of the transactions
contemplated by this Agreement or the U.S. Underwriting Agreement, 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 (including, without
limitation, Class A Common Stock and Class B Common Stock) under the Act. No
such rights with respect to any shares of Class A Common Stock were exercised
and will not be exercised in connection with the sale of the Shares for a period
of 180 days after the date hereof.
(x) 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.
(y) 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
11
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.
(z) None of the Company, any Subsidiary or any Joint Venture has (i)
taken, directly or indirectly, any action designed to, or that might reasonably
be expected to, cause or result in stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Class A
Common Stock, (ii) since the date of the Prospectuses, (A) sold, bid for,
purchased or paid any person any compensation for soliciting purchases of the
Common Stock or (B) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Company.
(aa) Set forth on Exhibit A 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 and the issuance and sale of the Shares will not
involve any prohibited transaction within the meaning of Section 406 of ERISA or
Section 4975 of the Internal Revenue Code of 1986, as amended.
(bb) None of (A) the execution, delivery and performance of this
Agreement or the U.S. Underwriting Agreement, (B) the issuance and sale of the
Shares, (C) the application of the proceeds from the issuance and sale of the
Shares or (D) the consummation of the transactions contemplated in connection
with any of the foregoing as set forth in the Prospectuses, 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.
(cc) 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 any of the Managers for a brokerage commission, finder's
fee or like payment in connection with the issuance, purchase and sale of the
Common Stock.
(dd) The Company has filed in a timely manner each document or report
required to be filed by it pursuant to the Exchange Act and the rules and
regulations thereunder; each such document or report at the time it was filed
conformed to the requirements of the Exchange Act and the rules and regulations
thereunder; and none or such documents or reports contained an untrue statement
of any material fact or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
(ee) 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.
(ff) Except as disclosed in the Prospectuses, there are no business
relationships or related party transactions required to be disclosed therein
pursuant to Item 404 of Regulation S-K of the Commission.
The Company acknowledges that the Managers and, for purposes of the
opinions to be delivered to the Managers pursuant to Section 8(e), (f) and (g)
hereof, counsel to the Company and counsel to the Managers, will rely upon the
accuracy and truth of the foregoing representations and hereby consents to such
reliance.
12
7. Indemnification and Contribution. (a) The Company agrees to indemnify
--------------------------------
and hold harmless each of you and each other Manager and each person, if any,
who controls any Manager within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act from and against any and all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation) arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in any International Prepricing Prospectus or in the
Registration Statement or the International Prospectus or in any amendment or
supplement thereto, or arising out of or based upon any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such
losses, claims, damages, liabilities or expenses arise out of or are based upon
any untrue statement or omission or alleged untrue statement or omission which
has been made therein or omitted therefrom in reliance upon and in conformity
with the information relating to such Manager furnished in writing to the
Company by any Manager through the Lead Managers expressly for use in connection
therewith; provided, however, that the indemnification contained in this
paragraph (a) with respect to any International Prepricing Prospectus shall not
inure to the benefit of any Manager (or to the benefit of any person controlling
such Manager) on account of any such loss, claim, damage, liability or expense
arising from the sale of the Shares by such Manager to any person if a copy of
the International Prospectus shall not have been delivered or sent to such
person within the time required by the Act and the regulations thereunder, and
the untrue statement or alleged untrue statement or omission or alleged omission
of a material fact contained in such International Prepricing Prospectus was
corrected in the International Prospectus, provided that the Company has
delivered the International Prospectus to the several Managers in requisite
quantity on a timely basis to permit such delivery or sending. The foregoing
indemnity agreement shall be in addition to any liability which the Company may
otherwise have.
(b) If any action, suit or proceeding shall be brought against any Manager
or any person controlling any Manager in respect of which indemnity may be
sought against the Company, such Manager or such controlling person shall
promptly notify the Company, and the Company shall assume the defense thereof,
including the employment of counsel and payment of all fees and expenses. Such
Manager or any such controlling person shall have the right to employ separate
counsel in any such action, suit or proceeding and to participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Manager or such controlling person unless (i) the Company has agreed in
writing to pay such fees and expenses, (ii) the Company has failed to assume the
defense and employ counsel, or (iii) the named parties to any such action, suit
or proceeding (including any impleaded parties) include both such Manager or
such controlling person, and the Company and such Manager or such controlling
person shall have been advised by its counsel that representation of such
indemnified party and the Company by the same counsel would be inappropriate
under applicable standards of professional conduct (whether or not such
representation by the same counsel has been proposed) due to actual or potential
differing interests between them (in which case the Company shall not have the
right to assume the defense of such action, suit or proceeding on behalf of such
Manager or such controlling person). It is understood, however, that the
Company shall, in connection with any one such action, suit or proceeding or
separate but substantially similar or related actions, suits or proceedings in
the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of only one
separate firm of attorneys (in addition to any local counsel) at any time for
all such Managers and controlling persons not having actual or potential
differing interests with you or among themselves, which firm shall be designated
in writing by Smith Barney Inc., and that all such fees and expenses shall be
reimbursed as they are incurred. The Company shall not be liable for any
settlement of any such action, suit or proceeding effected without its written
consent, but if settled with such written consent, or if there be a final
judgment for the plaintiff in any such action, suit or proceeding, the Company
agrees to indemnify and hold harmless any Manager, to the extent provided in the
preceding paragraph, and any such controlling person from and against any loss,
claim, damage, liability or expense by reason of such settlement or judgment.
13
(c) Each Manager agrees, severally and not jointly, to indemnify and hold
harmless the Company, its directors, its officers who sign the Registration
Statement, and any person who controls the Company within the meaning of Section
15 of the Act or Section 20(a) of the Exchange Act, to the same extent as the
foregoing indemnity from the Company to each Manager, but only with respect to
information relating to such Manager furnished in writing by or on behalf of
such Manager through the Lead Managers expressly for use in the Registration
Statement, the International Prospectus or any International Prepricing
Prospectus, or any amendment or supplement thereto. If any action, suit or
proceeding shall be brought against the Company, any of its directors, any such
officer, or any such controlling person based on the Registration Statement, the
International Prospectus or any International Prepricing Prospectus, or any
amendment or supplement thereto, and in respect of which indemnity may be sought
against any Manager pursuant to this paragraph (c), such Manager shall have the
rights and duties given to the Company by paragraph (b) above (except that if
the Company shall have assumed the defense thereof such Manager shall not be
required to do so, but may employ separate counsel therein and participate in
the defense thereof, but the fees and expenses of such counsel shall be at such
Manager's expense), and the Company, its directors, any such officer, and any
such controlling person shall have the rights and duties given to the Managers
by paragraph (b) above. The foregoing indemnity agreement shall be in addition
to any liability which the Managers may otherwise have.
(d) If the indemnification provided for in this Section 7 is unavailable to
an indemnified party under paragraphs (a) or (c) hereof in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then an
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or expenses (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and the Managers on the other hand from the offering of the Shares,
or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company on the one hand and the Managers on the other in connection with the
statements or omissions that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the Managers
on the other shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Company
bear to the total underwriting discounts and commissions received by the
Managers, in each case as set forth in the table on the cover page of the
International Prospectus. The relative fault of the Company on the one hand and
the Managers on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or by the Managers on the other hand and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
(e) The Company and the Managers agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by a pro
rata allocation (even if the Managers were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in paragraph (d) above. The amount paid or
payable by an indemnified party as a result of the losses, claims, damages,
liabilities and expenses referred to in paragraph (d) above shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
any claim or defending any such action, suit or proceeding. Notwithstanding the
provisions of this Section 7, no Manager shall be required to contribute any
amount in excess of the amount by which the total price of the Shares
underwritten by it and distributed to the public exceeds the amount of any
damages which such Manager has otherwise been
14
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Managers' obligations to contribute pursuant to this Section 7 are several in
proportion to the respective numbers of Shares set forth opposite their names in
Schedule I hereto (or such numbers of Shares increased as set forth in Section
10 hereof) and not joint.
(f) No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened action,
suit or proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 7 shall be paid by the indemnifying party to the indemnified party as
such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Manager or any person controlling any
Manager, the Company, its directors or officers, or any person controlling the
Company, (ii) acceptance of any Shares and payment therefor hereunder, and (iii)
any termination of this Agreement. A successor to any Manager or any person
controlling any Manager, or to the Company, its directors or officers, or any
person controlling the Company, shall be entitled to the benefits of the
indemnity, contribution, and reimbursement agreements contained in this Section
7.
8. Conditions of Managers' Obligations. The several obligations of the
-----------------------------------
Managers to purchase the Shares hereunder are subject to the following
conditions:
(a) All of the representations and warranties of the Company contained
in this Agreement shall be true and correct on the Closing Date with the same
force and effect as if made on and as of the Closing Date.
(b) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
(including pursuant to Rule 462(b)) to be declared effective before the offering
of the Shares may commence, the Registration Statement or such post-effective
amendment shall have become effective not later than 5:30 P.M., New York City
time, on the date hereof, or at such later date and time as shall be consented
to in writing by you, and all filings, if any, required by Rules 424 and 430A
under the Act shall have been timely made; no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceeding for that purpose shall have been instituted or, to the knowledge of
the Company or any Manager, threatened by the Commission, and any request of the
Commission for additional information (to be included in the Registration
Statement or the Prospectuses or otherwise) shall have been complied with to
your satisfaction.
(c) Subsequent to the effective date of this Agreement, there shall
not have occurred (i) any change, or any development involving a prospective
change, that would have a Material Adverse Effect on the Company, the
Subsidiaries and the Joint Ventures, taken as a whole, not contemplated by the
Prospectuses, which in your opinion, as Lead Managers for the several Managers,
would materially adversely affect the market for the Shares, or (ii) any event
or development relating to or involving the Company, the Subsidiaries, the Joint
Ventures or any officer or director of the Company which makes any
15
statement made in the Prospectuses untrue or which, in the opinion of the
Company and its counsel or the Managers and their counsel, requires the making
of any addition to or change in the Prospectuses in order to state a material
fact required by the Act or any other law to be stated therein or necessary in
order to make the statements therein not misleading, if amending or
supplementing the Prospectuses to reflect such event or development would, in
your opinion, as Lead Managers for the several Managers, materially adversely
affect the market for the Shares.
(d) You shall have received a certificate, dated the Closing Date,
signed on behalf of the Company by (i) the President or a Vice Chairman and (ii)
a Vice President, Vice Chairman, Secretary or Assistant Secretary, in form and
substance reasonably satisfactory to you, confirming, as of the Closing Date,
the matters set forth in paragraphs (a), (b), and (c) of this Section 8, certain
incumbency matters and that, as of the Closing Date, the obligations of the
Company to be performed hereunder on or prior thereto have been duly performed.
(e) You shall have received on the Closing Date, an opinion, dated the
Closing Date, in form and substance satisfactory to you, of Buchanan Ingersoll,
counsel for the Company, to the effect set forth in Exhibit B hereto.
---------
(f) You shall have received on the Closing Date an opinion, dated the
Closing Date, in form and substance satisfactory to you, of Swidler & Berlin,
special regulatory counsel to the Company, to the effect set forth in Exhibit C
---------
hereto.
(g) You shall have received an opinion, dated the Closing Date, in
form and substance reasonably satisfactory to you, of Latham & Watkins, counsel
to the Lead Managers for the Managers, covering such matters as are customarily
covered in such opinions.
(h) At the time this Agreement is executed and at the Closing Date,
you shall have received from Deloitte & Touche, independent public accountants
for the Company dated as of the date of this Agreement and of the Closing Date,
respectively, a customary comfort letter addressed to the you and in form and
substance satisfactory to you with respect to the financial statements and
certain financial information of the Company, the Subsidiaries and the Joint
Ventures contained in the Registration Statement and the Prospectuses.
(i)(i) No stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been taken or, to the knowledge of the Company, shall be contemplated by the
Commission at or prior to the Closing Date; (ii) there shall not have been any
change in the capital stock of the Company nor any material increase in the
short-term or long-term debt of the Company (other than in the ordinary course
of business) from that set forth or contemplated in the Registration Statement
or the Prospectuses; (iii) there shall not have been, since the respective dates
as of which information is given in the Registration Statement and the
Prospectuses, except as may otherwise be stated in the Registration Statement
and, any material adverse change in the condition (financial or other),
business, prospects, properties, net worth or results of operations of the
Company and the Subsidiaries taken as a whole; and (iv) the Company and the
Subsidiaries shall not have any liabilities or obligations, direct or contingent
(whether or not in the ordinary course of business), that are material to the
Company and the Subsidiaries, taken as a whole, other than those reflected in
the Registration Statement or the Prospectuses.
16
(j) The Company shall not have failed at or prior to the Closing Date
to have performed or complied with any of its agreements herein contained and
required to be performed or complied with by it hereunder at or prior to the
Closing Date.
(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) The Shares shall have been listed or approved for listing upon
notice of issuance on the Nasdaq National Market.
(m) The closing under the U.S. Underwriting Agreement shall have
occurred concurrently with the closing hereunder on the Closing Date.
(n) The Adelphia Share Purchase shall have occurred in accordance with
the terms and conditions set forth in the letter agreement by which the Parent
and the Company have agreed to effectuate the Adelphia Share Purchase (the
"Adelphia Share Purchase Agreement") and the Adelphia Note Contribution shall
have occurred in accordance with the terms and conditions set forth in the
letter agreement by which the Parent and the Company have agreed to effectuate
the Adelphia Note Contribution (the "Adelphia Note Contribution Agreement").
(o) In accordance with that certain letter of understanding dated
April , 1998, among the Company, the Parent and MCI (the "MCI Agreement"):
---
(i) the MCI Warrant (as defined in the Prospectuses) and the Additional MCI
Warrants shall been issued to MCI (as defined in the Prospectuses), (ii) the MCI
Warrant and the Additional MCI Warrants shall have been purchased from MCI by
the Parent and (iii) the Company shall have issued the Adelphia Warrant (as
defined in the Prospectuses) to the Parent.
(p) Prior to the Closing Date, the Company, the Subsidiaries and the
Joint Ventures shall have furnished or caused to be furnished to you such
further certificates and documents as you shall have requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you and your counsel.
Any certificate or document signed by any officer of the Company and
delivered to you, as Lead Managers for the Managers, or to counsel for the
Managers, shall be deemed a representation and warranty by the Company to each
Manager as to the statements made therein.
9. Expenses. The Company agrees to pay the following costs and
--------
expenses and all other costs and expenses incident to the performance by it of
its obligations hereunder: (i) the preparation, printing or reproduction, and
filing with the Commission of the Registration Statement (including financial
statements and exhibits thereto), the Prepricing Prospectuses, the Prospectuses,
and each amendment or supplement to any of them; (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and charges
for counting and packaging) of such copies of the Registration Statement, the
Prepricing Prospectuses, the Prospectuses, and all amendments or supplements to
any of them as may be reasonably requested for use in connection with the
offering and sale of the Shares; (iii) the preparation, printing,
authentication, issuance and delivery of certificates for the Shares, including
any stamp taxes in
17
connection with the original issuance and sale of the Shares; (iv) the
printing (or reproduction) and delivery of this Agreement, the U.S. Underwriting
Agreement, the Supplemental Agreement Among U.S. Underwriters, the Agreement
Among Managers, the Agreement Between U.S. Underwriters and Managers, the
International Selling Agreement, the Managers' Questionnaire, the Blue Sky
Memorandum and all other agreements or documents printed (or reproduced) and
delivered in connection with the offering of the Shares; (v) the registration of
the Class A Common Stock under the Exchange Act and the listing of the Shares on
the Nasdaq National Market; (vi) the registration or qualification of the Shares
for offer and sale under the securities or Blue Sky laws of the several states
as provided in Section 5(g) hereof (including the reasonable fees, expenses and
disbursements of counsel for the U.S. Underwriters and Managers relating to the
preparation, printing or reproduction, and delivery of the Blue Sky Memorandum
and such registration and qualification); (vii) the filing fees and the fees and
expenses of counsel for the U.S. Underwriters and Managers in connection with
any filings required to be made with the National Association of Securities
Dealers, Inc.; (viii) the transportation and other expenses incurred by or on
behalf of Company Lead Managers in connection with presentations to prospective
purchasers of the Shares; (ix) the fees and expenses of the Company's
accountants and the fees and expenses of counsel (including local and special
counsel) for the Company.
10. Effective Date of Agreement. This Agreement shall become
---------------------------
effective: (i) upon the execution and delivery hereof by the parties hereto; or
(ii) if, at the time this Agreement is executed and delivered, it is necessary
for the Registration Statement or a post-effective amendment thereto to be
declared effective before the offering of the Shares may commence, when
notification of the effectiveness of the Registration Statement or such post-
effective amendment has been released by the Commission. Until such time as
this Agreement shall have become effective, it may be terminated by the Company,
by notifying you, or by you, as Lead Managers for the several Managers, by
notifying the Company.
If any one or more of the Managers shall fail or refuse to purchase
Shares which it or they are obligated to purchase hereunder on the Closing Date,
and the aggregate number of Shares which such defaulting Manager or Managers are
obligated but fail or refuse to purchase is not more than one-tenth of the
aggregate number of Shares which the Managers are obligated to purchase on the
Closing Date, each non-defaulting Manager shall be obligated, severally, in the
proportion which the number of Shares set forth opposite its name in Schedule I
hereto bears to the aggregate number of Shares set forth opposite the names of
all non-defaulting Managers or in such other proportion as you may specify in
accordance with Section 20 of the Master Agreement Among Underwriters of Smith
Barney Inc., to purchase the Shares which such defaulting Manager or Managers
are obligated, but fail or refuse, to purchase. If any one or more of the
Managers shall fail or refuse to purchase Shares which it or they are obligated
to purchase on the Closing Date and the aggregate number of Shares with respect
to which such default occurs is more than one-tenth of the aggregate number of
Shares which the Managers are obligated to purchase on the Closing Date and
arrangements satisfactory to you and the Company for the purchase of such Shares
by one or more non-defaulting Managers or other party or parties approved by you
and the Company are not made within 36 hours after such default, this Agreement
will terminate without liability on the part of any non-defaulting Manager or
the Company. In any such case which does not result in termination of this
Agreement, either you or the Company shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and the Prospectus or
any other documents or arrangements may be effected. Any action taken under
this paragraph shall not relieve any defaulting Manager from liability in
respect of any such default of any such Manager under this Agreement. The term
"Manager" as used in this Agreement includes, for all purposes of this
Agreement, any party not listed in Schedule I hereto who, with your approval and
the approval of the Company, purchases Shares which a defaulting Manager is
obligated, but fails or refuses, to purchase.
18
Any notice under this Section 10 may be given by telegram, telecopy or
telephone but shall be subsequently confirmed by letter.
11. Termination of Agreement. This Agreement shall be subject to
------------------------
termination in your absolute discretion, without liability on the part of any
Manager to the Company, by notice to the Company, if prior to the Closing Date,
(i) 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, (ii) a general moratorium on commercial banking activities
in New York or Philadelphia shall have been declared by either federal or state
authorities, or (iii) there shall have occurred any outbreak or escalation of
hostilities or other U.S. or domestic calamity, crisis or change in political,
financial or economic conditions, the effect of which on the financial markets
of the United States is such as to make it, in your judgment, impracticable or
inadvisable to commence or continue the offering of the Shares at the offering
price to the public set forth on the cover page of the International Prospectus
or to enforce contracts for the resale of the Shares by the Managers. Notice of
such termination may be given to the Company by telegram, telecopy or telephone
and shall be subsequently confirmed by letter.
12. Information Furnished by the Managers. The statements set forth in
-------------------------------------
the last paragraph on the cover page, the stabilization legend on the inside
cover page, and the statements in the first, third, seventh, eighth, ninth and
fifteenth paragraphs under the caption "Underwriting" in any International
Prepricing Prospectus and in the International Prospectus, constitute the only
information furnished by or on behalf of the Managers through you as such
information is referred to in Sections 6(b) and 7 hereof.
13. Miscellaneous. Except as otherwise provided in Sections 5, 10 and
-------------
11 hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Company, at the office of the
Company at Hyperion Telecommunications, Inc., Main at Water Street, Coudersport,
Pennsylvania 16915, Attention: Edward E. Babcock, Jr., Vice President, Finance;
or (ii) if to you, as Lead Managers for the several Managers, care of Smith
Barney Inc., 388 Greenwich Street, New York, New York 10013, Attention: Manager,
Investment Banking Division.
This Agreement has been and is made solely for the benefit of the
several Managers, the Company, its directors and officers, and the other
controlling persons referred to in Section 7 hereof and their respective
successors and assigns, to the extent provided herein, and no other person shall
acquire or have any right under or by virtue of this Agreement. Neither the
term "successor" nor the term "successors and assigns" as used in this Agreement
shall include a purchaser from any Manager of any of the Shares in his status as
such purchaser.
14. Applicable Law; Counterparts. This Agreement shall be governed by
----------------------------
and construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
19
Please confirm that the foregoing correctly sets forth the agreement
between the Company and the several Managers.
Very truly yours,
HYPERION TELECOMMUNICATIONS, INC.
By:
-----------------------------------------
Name:
Title:
Confirmed as of the date first
above mentioned on behalf of
themselves and the other several
Managers named in Schedule I
hereto.
SMITH BARNEY INC.
CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
NATIONSBANC MONTGOMERY SECURITIES LLC
As Lead Managers for the Several Managers
By: SMITH BARNEY INC.
By:
-----------------------------------------
Name:
Title:
20
SCHEDULE I
HYPERION TELECOMMUNICATIONS INC.
Manager Number of Shares
- ------- ----------------
Smith Barney Inc.
Credit Suisse First Boston (Europe) Limited
NationsBanc Montgomery Securities LLC ________________
TOTAL
21
SCHEDULE II
Daniel R. Milliard
Charles R Drenning
Paul D. Fajerski
Randolph S. Fowler
22
SCHEDULE III
------------
SUBSIDIARIES
------------
23
SCHEDULE IV
------------
JOINT VENTURES
--------------
24
EXHIBIT A
---------
LIST OF EMPLOYEE PENSION AND BENEFIT
------------------------------------
PLANS OF HYPERION TELECOMMUNICATIONS, INC.
------------------------------------------
AND ITS SUBSIDIARIES
--------------------
25
EXHIBIT B
---------
FORM OF OPINION OF BUCHANAN INGERSOLL
-------------------------------------
1. Each of the Company and the Subsidiaries is duly organized and validly
existing as a corporation or a limited liability company in good standing under
the laws of its jurisdiction of formation, as applicable, and has all requisite
corporate power and authority to carry on its business as it is being conducted
and as described in the Registration Statement and the Prospectuses and to own,
lease and operate its properties, and is duly qualified and in good standing as
a foreign corporation or limited liability company, as applicable, authorized to
do business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except 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 and the Subsidiaries, taken as a whole (a "Material
Adverse Effect").
2. Each of the Joint Ventures has been duly incorporated or formed as a
corporation, general partnership, limited partnership or limited liability
company under the laws of its jurisdiction of incorporation or formation, as
applicable, and has all requisite power and authority to own, lease, and operate
its properties and to conduct its business as described in the Prospectuses, and
is duly qualified to transact business as a foreign corporation, general
partnership, limited partnership or limited liability company, as applicable, in
each jurisdiction in which the character of the business being conducted by it
or the location of the property owned by it makes such qualification necessary,
except where the failure to so qualify, singly or in the aggregate, would not
have a Material Adverse Effect. Each Joint Venture that is a corporation,
limited partnership or limited liability company is validly existing and is in
good standing under the laws of its jurisdiction of incorporation or formation,
as applicable.
3. All of the outstanding shares of capital stock of the Company have been
duly authorized, validly issued, and are fully paid and nonassessable and were
not issued in violation of any preemptive or similar rights. All of the
outstanding shares of capital stock of the Company is as set forth in the
Prospectuses under the caption "Capitalization." The authorized capital stock
of the Company conforms in all material respects as to legal matters to the
description thereof contained in the Prospectuses under the caption "Description
of Capital Stock."
4. All the shares of capital stock of the Company outstanding prior to the
issuance of the Shares to be issued and sold by the Company pursuant to the
Underwriting Agreements have been duly authorized and validly issued, and are
fully paid and nonassessable.
5. The Underwritten Shares to be issued and sold to the U.S. Underwriters and
Managers by the Company under the U.S. Underwriting Agreement and the
International Underwriting Agreement have been duly authorized and when issued
and delivered to the U.S. Underwriters and Managers against payment therefor in
accordance with the terms of the U.S. Underwriting Agreement and the
International Underwriting Agreement, will be validly issued, fully paid and
nonassessable and free of any (A) preemptive rights or (B) to the best knowledge
of such counsel after reasonable inquiry, similar rights that entitle or will
entitle any person to acquire any shares of Class A Common Stock upon the
issuance thereof by the Company.
6. The Adelphia New Shares (as defined in the Prospectuses) have been duly
authorized and when issued and delivered to the Parent against payment therefor
in accordance with the terms of the Adelphia Share Purchase Agreement or the
Adelphia Note Contribution Agreement, as the case may be, will be validly
issued, fully paid and nonassessable and free of (A) preemptive rights or (B) to
the
26
best knowledge of such counsel after reasonable inquiry, similar rights that
entitle or will entitle any person to acquire any shares of Class A Common Stock
upon the issuance thereof by the Company.
7. The Additional MCI Warrants (as defined in the Prospectuses) have been
duly authorized and, when executed and delivered pursuant to the terms of the
Warrant Agreement (the "MCI Warrant Agreement"), dated June 13, 1997, between
the Company and MCImetro Access Transmission Services, Inc. ("MCI"), will be
valid and binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as enforcement may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting the enforceability of creditors' rights generally and by general
principles of equity (whether arising under a proceeding at law or in equity).
8. The maximum number of Shares issuable upon exercise of the Additional MCI
Warrants has been duly authorized and reserved for issuance by the Company at
the time and in the manner required by the MCI Warrant Agreement and, upon (i)
due exercise of the Additional MCI Warrants and (ii) delivery of Shares upon
such exercise, in each case, in accordance with the terms of the Additional MCI
Warrants and the MCI Warrant Agreement, such Shares will be validly issued,
fully paid and nonassessable.
9. Upon due issuance of the Additional MCI Warrants, the Company will have
satisfied its obligation to issue "Additional Initial Warrants" (as such term is
defined in the MCI Warrant Agreement) under Section 2.2 of the MCI Warrant
-----------
Agreement.
10. The Adelphia Warrant (as defined in the Prospectuses) has been duly
authorized and, when executed and delivered pursuant to the terms of the MCI
Agreement, will be valid and binding obligations of the Company, enforceable
against the Company in accordance with its terms, except as enforcement may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other similar laws affecting the enforceability of creditors' rights generally
and by general principles of equity (whether arising under a proceeding at law
or in equity).
11. The maximum number of Shares issuable upon exercise of the Adelphia
Warrant has been duly authorized and reserved for issuance by the Company and,
upon (i) due exercise of the Adelphia Warrant and (ii) delivery of Shares upon
such exercise, in each case, in accordance with the terms of the Adelphia
Warrant, such Shares will be validly issued, fully paid and nonassessable.
12. The form of certificates for the Underwritten Shares and the Adelphia New
Shares conforms to the requirements of the Nasdaq National Market and the
Delaware General Corporation Law.
13. The Registration Statement and all post-effective amendments, if any,
have become effective under the Act and, to the best knowledge of such counsel
after reasonable inquiry, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose are
pending before or contemplated by the Commission; and any required filing of the
Prospectuses pursuant to Rule 424(b) has been made in accordance with Rule
424(b).
14. The Company has the corporate power and authority to enter into the U.S.
Underwriting Agreement and the International Underwriting Agreement and to
issue, sell and deliver the Shares to be sold by it to the U.S. Underwriters and
Managers as provided therein, and each of the U.S. Underwriting Agreement and
the International Underwriting Agreement have been duly authorized, executed and
delivered by the Company and is a legal, valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except
that (A) enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws not or hereafter in
27
effect relating to creditors' rights generally, (B) the remedy of specific
performance and other forms of equitable relief may be subject to certain
equitable defenses and to the discretion of the court before which the
proceedings may be brought and (C) rights to indemnity and contribution
thereunder may be limited by Federal or state securities laws or the public
policy underlying such laws.
15. All of the Joint Venture's limited partnership and limited liability
company interests owned by each Subsidiary have been duly authorized and validly
issued and, except for matters referenced by the Prospectuses, all of the
partnership and limited liability company interests owned in the Joint Ventures
which are owned of record by each respective Subsidiary are, to the best of our
knowledge, owned free and clear of any security interest, lien or other
encumbrance.
16. All of the outstanding capital stock of each Subsidiary is owned by the
Company, free and clear of any security interest, claim, lien, limitation on
voting rights or encumbrance. There are not, to our knowledge, other than as
set forth in the Prospectuses, currently, and will not be following the issuance
and sale of the Shares, 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.
17. The Registration Statement and the Prospectuses and any supplements or
amendments thereto (except for the financial statements, schedules, and notes
thereto and other financial and statistical data included therein, as to which
such counsel need not express any opinion) comply as to form in all material
respects with the requirements of the Act.
18. Neither the issuance, sale or delivery of the Underwritten Shares, nor
the execution, delivery or performance of the U.S. Underwriting Agreement or the
International Underwriting Agreement, or compliance by the Company with all
provisions of the U.S. Agreement and the International Underwriting Agreement,
nor consummation by the Company of the transactions contemplated in the U.S.
Underwriting Agreement or by the International Underwriting Agreement violates,
conflicts with or constitutes a breach of any of the terms or provisions of, or
a default under (or an event that with notice or the lapse of time, or both,
would constitute a default), or require consent under, or result in the
imposition of a lien or encumbrance on any properties of the Company or any
Subsidiary, or an acceleration of any indebtedness of the Company or any
Subsidiary pursuant to, (i) the charter or bylaws of the Company or any
Subsidiary, (ii) any bond, debenture, note, indenture, mortgage, deed of trust
or other agreement or instrument to which the Company or any Subsidiary 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 or any Subsidiary or its assets or properties (except with respect to
the matters set forth in the opinion of Swidler & Berlin, 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 or any
Subsidiary or its assets or properties known to such counsel, except in the case
of clauses (ii), (iii) and (iv) for such violations, conflicts, breaches,
defaults, consents, impositions of liens or accelerations that (x) would not,
singly or in the aggregate, have a Material Adverse Effect or (y) are disclosed
in the Prospectuses. 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, 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 International Underwriting Agreement and the International
Underwriting Agreement, (2) the issuance and sale of the Shares or (3)
consummation by the Company, the Subsidiaries and the Joint Ventures of the
transactions described in the Prospectuses, except
28
such as have been obtained and made or have been disclosed in the Prospectuses,
and except where the failure to obtain such consents or waivers would not,
singly or in the aggregate, have a Material Adverse Effect. To the best of such
counsel's knowledge, no consents or waivers from any other person are required
for the execution, delivery and performance by the Company of the International
Underwriting Agreement and the International Underwriting Agreement or the
issuance and sale of the Underwritten Shares, other than such consents and
waivers as have been obtained.
19. None of the Company, its 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.
20. Except as set forth in the Prospectuses, there are no holders of
securities of the Company who, by reason of the execution by the Company of the
International Underwriting Agreement or the International Underwriting Agreement
or the consummation by the Company of the transactions contemplated thereby,
have the right to request or demand that the Company register under the Act
securities held by them.
21. None of (A) the execution, delivery and performance of the International
Underwriting Agreement or the U.S. Underwriting Agreement, (B) the issuance and
sale of the Shares and the application of the proceeds from the issuance and
sale of the Shares or (C) the consummation of the transactions contemplated in
connection with any of the foregoing as set forth in the Prospectuses, will
violate Regulations G, T, U or X promulgated by the Board of Governors of the
Federal Reserve System.
22. To the knowledge of such counsel, there is (i) no action, suit,
investigation or proceeding before or by any court, arbitrator or governmental
agency, body or official, domestic or foreign, now pending, or threatened or
contemplated to which any of the Company or any Subsidiary is or may be a party
or to which the business or property of any of the Company or any Subsidiary is
or may be subject, (ii) no statute, rule, regulation or order that has been
enacted, adopted or issued by any governmental agency, or (iii) no injunction,
restraining order or order of any nature by a federal or state court of
competent jurisdiction to which any of the Company or any Subsidiary is or may
be subject has been issued that, in the case of clauses (i), (ii) and (iii)
above, (x) is required to be disclosed in the Prospectuses and that is not so
disclosed and, (y) could reasonably be expected to have, either individually or
in the aggregate, a Material Adverse Effect, it being understood that for
purposes of this opinion, such counsel need express no opinion with respect to
(i) actions, suits investigation or proceedings before the FCC or any similar
state regulatory commission or body, (ii) statutes, rules, regulations or orders
by any FCC or any similar state regulatory commission or (iii) injunctions,
restraining orders or other orders by the FCC or any similar state regulatory
commission or body.
Although we have not undertaken, except as otherwise indicated in our opinion,
to determine independently, and do not assume any responsibility for, the
accuracy, completeness or fairness of the statements in the Registration
Statement, we have participated in the preparation of the Registration Statement
and the Prospectuses, including general review and discussion of the contents
thereof but have made no independent check or verification thereof, and no facts
have come to our attention that would lead us to believe that the Registration
Statement at the time the Registration Statement became effective, or the
Prospectuses, as of their respective dates and as of the Closing Date, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated in the Prospectuses or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading or that any amendment or supplement to the Prospectuses, as of their
respective dates, and as of the Closing
29
Date, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated in the Prospectuses or necessary in order to
make the statements in the Prospectuses, in the light of the circumstances under
which they were made, not misleading (it being understood that such counsel need
express no opinion with respect to the financial statements, schedules, pro
forma financial statements and the notes thereto and other financial data
included in the Registration Statement and the Prospectuses.
30
EXHIBIT C
---------
FORM OF OPINION OF REGULATORY COUNSEL
-------------------------------------
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.
3. The statements in the Prospectuses under the heading of "Risk Factors -
Regulation" and "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 Underwriting Agreements 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 Underwriting Agreements nor the
issuance of the Shares 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.
31