As filed with the Securities and Exchange Commission on September 21, 1998
Registration No. 0-20843
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3/A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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Charter Communications International, Inc.
(Exact name of registrant as specified in its charter)
Nevada 84-1097751
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
2839 Paces Ferry Road
Atlanta, Georgia 30339
(770) 432-6800
(Address, including zip code, and telephone number,
including area code, of registrant's principal
executive offices)
---------------------
STEPHEN E. RAVILLE with copy to:
CHIEF EXECUTIVE OFFICER DALLAS PARKER, ESQ.
CHARTER COMMUNICATIONS BROWN, PARKER & LEAHY, L.L.P.
INTERNATIONAL, INC. 1200 SMITH STREET
2839 PACES FERRY ROAD SUITE 3600
ATLANTA, GEORGIA 30339 HOUSTON, TEXAS 77002
(NAME AND ADDRESS OF AGENT FOR SERVICE) (713) 951-5800
(770) 432-6800
(Telephone Number, Including Area Code, of Agent for Service)
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Approximate date of commencement of proposed sale to the public:
From time to time after this registration statement becomes
effective as determined by market conditions.
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<PAGE>
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continued basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF INITIAL REGISTRATION FEE (1)
<TABLE>
<CAPTION>
Title of Securities Amount to Proposed Proposed Amount of
to be Registered be Maximum Maximum Registration
Registered Offering Price Aggregate Fee
Per Share (1) Offering Price (1)
<S> <C> <C> <C> <C>
Common Stock, 450,000 1.6875 759,375 224.02
$.00001 par value
<FN>
(1) This registration fee of was paid in connection with the filing of the
initial registration statement on August 7, 1998. The offering price for such
shares was estimated solely for the purpose of calculating this portion of the
registration fee pursuant to Rule 457(c) based on the average of the closing bid
and asked prices of the Company's Common Stock, as reported by National
Quotation Bureau, Inc., for August 5, 1998.
</TABLE>
CALCULATION OF ADDITIONAL REGISTRATION FEE (2)
<TABLE>
<CAPTION>
Title of Securities Amount to Proposed Proposed Amount of
to be Registered be Maximum Maximum Registration
Registered Offering Price Aggregate Fee
Per Share (2) Offering Price (2)
<S> <C> <C> <C> <C>
Common Stock, 1,143,750 .941 1,076,269 317.50
$.00001 par value
<FN>
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(2) The offering price for the 1,143,750 additional shares set forth in the
table above was estimated solely for the purpose of calculating the additional
registration fee registration fee pursuant to Rule 457(c) based on the average
of the closing bid and asked prices of the Company's Common Stock, as reported
by National Quotation Bureau, Inc., for September 15, 1998.
</TABLE>
The registrant hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
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SUBJECT TO COMPLETION, DATED SEPTEMBER 21, 1998
PROSPECTUS
1,593,750 SHARES
CHARTER COMMUNICATIONS INTERNATIONAL, INC.
COMMON STOCK
All of the 1,593,750 share (the "Shares") of Common Stock, $.00001 par
value per share ("Common Stock"), of Charter Communications International, Inc.,
a Nevada corporation (together with its subsidiaries, "Charter" or the
"Company"), offered hereby are being offered for the account of stockholders of
the Company (the "Selling Shareholders"). The Company will receive none of the
proceeds from sales of the Shares.
The Common Stock is quoted on the NASDAQ Bulletin Board (the "NASDAQ")
under the symbol "CHTD". On August 6, 1998, the closing price of the Common
Stock on the NASDAQ was $1.6875 per share. On September 15, 1998, the closing
price of the Common Stock on the NASDAQ was $1.00 per share.
The Shares may be sold from time to time by the Selling Shareholders. Such
sales may be made on the NASDAQ or otherwise at prices and on terms related to
the then current market price of the Common Stock or in negotiated transactions.
The Shares may be sold by any one or more of the following methods: (a) a block
trade in which the broker or dealer so engaged will attempt to sell the Shares
as agent, but may position and resell a portion of a block as principal to
facilitate the transaction; (b) purchases by a broker or dealer as principal,
and resale by such broker or dealer, for its account pursuant to this
Prospectus; (c) ordinary brokerage transactions and transactions in which the
broker solicits purchasers; and (d) privately negotiated transactions. See
"Plan of Distribution".
The Company has agreed with the Selling Shareholders to register Shares
offered hereby. The Selling Shareholders shall pay all fees and expenses
incident to such registration, inclusive of any underwriting discounts, any
selling commissions payable in respect of sales of the Shares or any expenses
incurred by the Selling Shareholders to retain any counsel, accountant or other
advisor. It is estimated that the fees and expenses payable by the Company in
connection with the registration of the Shares will be approximately $30,000.
The Company has agreed with the Selling Shareholders to keep the Registration
Statement (as hereinafter defined), of which this Prospectus is a part,
effective for a period of 6 months from the effective date of this Prospectus.
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THE SHARES HAVE NOT BEEN REGISTERED FOR SALE UNDER THE SECURITIES LAWS OF
ANY STATE OR JURISDICTION AS OF THE DATE OF THIS PROSPECTUS. BROKERS OR DEALERS
EFFECTING TRANSACTIONS IN THE SHARES SHOULD CONFIRM THE REGISTRATION OF THE
SHARES UNDER THE SECURITIES LAWS OF THE STATES IN WHICH SUCH TRANSACTIONS OCCUR,
OR THE EXISTENCE OF ANY EXEMPTIONS FROM SUCH REGISTRATION.
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THE SHARES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK
FACTORS", BEGINNING ON PAGE 10. --------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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The date of this Prospectus is September 21, 1998
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No person is authorized in connection with the offering made hereby to give
any information or to make any representation not contained or incorporated by
reference in this Prospectus, and any information or representation not
contained or incorporated by reference herein must not be relied upon as having
been authorized by the Company or the Selling Shareholders. This Prospectus
does not constitute an offer to sell or a solicitation of an offer to buy any of
the securities offered hereby in any jurisdiction to any person to whom it is
unlawful to make such offer in such jurisdiction. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that the information herein is correct as of any time subsequent
to the date hereof.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information filed by the Company with the Commission can be inspected
and copied at the public reference facilities maintained by the Commission at
Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's regional offices at 7 World Trade Center, Suite 1300, New York, New
York 10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material can also be obtained from the Commission at prescribed
rates through its Public Reference Section at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Commission maintains a Web site at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding issuers, including the Company, that file
electronically with the Commission.
The Company has filed with the Commission a Registration Statement on Form
S-3 under the Securities Act of 1933, as amended, with respect to the Common
Stock offered hereby (including all amendments or supplements thereto, the
"Registration Statement"). This Prospectus, which forms a part of the
Registration Statement, does not contain all the information set forth in the
Registration Statement, certain parts of which have been omitted in accordance
with the rules and regulations of the Commission. Statements contained herein
concerning the provisions of certain documents are not necessarily complete and,
in each instance, reference is made to the copy of such document filed as an
exhibit to the Registration Statement or otherwise filed with the Commission.
Each such statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission (File No.
33-25129-LA) pursuant to the Exchange Act are incorporated herein by reference:
(1) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed June 11, 1996,
pursuant to Section 12(g) of the Securities Exchange Act of 1934,
as amended, and declared effective on August 10, 1996, including
any amendment or report filed for the purpose of updating such
information;
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(2) The Company's Annual Report on Form 10-KSB and its amendments for
the fiscal year ended December 31, 1997;
(3) The Company's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1998;
(4) The Company's Current Report on Form 8-K dated May 13, 1997 and
amended March 8, 1997 and March 5, 1998;
(5) The Company's Proxy Statement for the 1998 Annual Meeting of
Stockholders to be held August 31, 1998 filed August 7, 1998;
(6) All other documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the termination of the offering of the
Shares.
Any statement contained herein or in documents or information incorporated
or deemed to be incorporated by reference herein shall be deemed to be modified
or suspended for purposes of this Prospectus to the extent that a statement
contained herein or in any subsequently filed document which also is, or is
deemed to be, incorporated by reference herein, modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon the written or oral request of any such person, a
copy of any and all of the foregoing documents or information that has been
incorporated by reference in this Prospectus, other than exhibits to such
documents (unless such exhibits are specifically incorporated by reference into
such documents). All requests should be directed to Patrick Delaney, Chief
Financial Officer, Charter Communications International, Inc., 2839 Paces Ferry
Road, #500 Atlanta, GA 30339, Telephone (770) 432-6800.
THE COMPANY
Charter Communications International, Inc. (the "Company"), was
incorporated in Nevada on April 10, 1996, as a wholly owned subsidiary of Maui
Capital Corporation, a Colorado corporation ("Maui Capital"), which incorporated
on August 8, 1988. On April 21, 1996, Maui Capital and the Company merged with
the Company being the surviving corporation and succeeding to all the business,
properties, assets and liabilities of Maui Capital. The purpose of the merger
of Maui Capital and the Company was to change the name and state of
incorporation of Maui Capital. Maui Capital had no significant business or
assets prior to September 21, 1995, when it acquired TOPS Corporation, a Nevada
corporation ("TOPS") (TOPS was named Charter Communications International, Inc.,
until April 10, 1996, when its names was changed so that the Company could be
formed in Nevada with the same name).
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TOPS was acquired by Maui Capital in exchange for the issuance of 5,798,391
shares of common stock, $.00001 par value per share ("Common Stock"), 550 shares
of Series A Preferred Stock, $.01 par value per share ("Series A Stock") and
warrants to purchase 854,231 shares of Common Stock. Each share of Series A
Stock was converted into 5,177 shares of Common Stock effective March 8, 1996.
At the time of the acquisition, TOPS was the sole stockholder of Charter
Communicaciones Internacionales Grupo, S.A., a Panama corporation ("Charter
Panama"), which was engaged in developing a private line telecommunications
system in Panama and pursuing licenses to provide such services in various other
Latin American countries. Since the acquisition of TOPS, the Company (and Maui
Capital, its predecessor) has endeavored to grow both through the development of
its existing businesses and through the acquisition of complementary businesses.
Accordingly, on January 8, 1996, Maui Capital acquired 90% of the
outstanding shares of Phoenix DataNet, Inc., a Texas corporation ("PDN"), from
Phoenix Data Systems, Inc., a Texas corporation ("PDS"), in exchange for
$525,000 cash. PDN is in the business of providing Internet access and a full
range of Internet services to individual and commercial subscribers,
predominately in the Houston, Texas area. On March 21, 1996, the Company
acquired the remaining 10% of the outstanding shares of PDN from Billie C.
Holbert, Jr., in exchange for the issuance of 150,000 shares of Common Stock.
On March 21, 1996, Maui Capital acquired PDS and issued 1,000,000 shares of
Common Stock to the former stockholders of PDS. The Company also granted
piggyback registration rights covering the shares of Common Stock issued in the
transaction to the former shareholders of PDS, including the 150,000 shares
issued to Billie C. Holbert, Jr., for the remaining 10% of PDN's stock. PDS is
in the business of designing, installing, modifying and managing computer
networks.
On September 21, 1996, the Company acquired Overlook Communications
International Corporation, a North Carolina corporation ("OCI"), and issued
8,999,960 shares of Common Stock to the former stockholders of OCI. The Company
also granted demand registration rights to certain stockholders in connection
with the acquisition of OCI (See "Certain Relationships and Related
Transactions" for a description of such agreement). OCI is in the business of
reselling long-distance services, providing interactive voice response services
and selling prepaid and post-paid calling cards.
On October 5, 1996, the Company acquired WorldLink Communications, Inc., a
Georgia corporation ("WorldLink"), and issued 1,850,000 shares of Common Stock
to the former stockholders of WorldLink. WorldLink is in the business of
reselling long-distance services and selling prepaid and post-paid calling
cards.
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The Company and its subsidiaries provide enhanced telecommunications
products and services, including international private line telecommunications
services, switched voice and data products, Internet access, interactive voice
response, conference calling, enhanced calling cards and call center services,
both domestically and internationally, as well as computer network design,
installation, modification and management. The Company's primary international
focus is in North, Central and South America. Additional information on the
products and services offered by the Company and its subsidiaries is set forth
below.
The Company's principal office is located at 2839 Paces Ferry Road, #500
Atlanta, GA 30339, and its telephone number at such address is (770) 432-6800.
The Company also maintains an additional principal office located at 17100 El
Camino Real, Houston, Texas 77058, and its telephone number at such address is
(281) 486-8337.
RECENT DEVELOPMENTS
On May 28, 1998, David G. Olson resigned from as a Board member, President
and Chief Operating Officer of the Company. Mr. Olson had recently experienced
health problems and expressed his desire to leave the active management of the
Company. On July 31, 1998, the Company hired Gary D. Morgan, the founder and
CEO of Pointe Communications Corporation, to assume the position of President
and Chief Operating Officer of the Company. Mr. Morgan has 22 years of
experience in the telecommunications industry, and for the last 19 years has
held various senior level positions with Lucent Technologies, Siemens, and
Nortel. In conjunction with hiring Mr. Morgan, the Company acquired Pointe
Communications Corporation, which was a private company entering the
telecommunications market as a competitive local exchange carrier (CLEC).
Since March 31, 1998, the Company has completed construction of three new
teleports in Panama, Costa Rica and Nicaragua. In addition, during April and
July of 1998, the Company signed two new agreements with Satmex to provide
satellite services within Mexico and for complete use of the Mexican Solidaridad
satellite systems for ten and five years, respectively. Also since March 31,
1998, the Company was granted the following licenses to provide
telecommunications services in South and Central America: i) El Salvador - on
May 5, 1998, a license to terminate international switched voice traffic and
provide a full range of telecommunications services within the nation was
granted by SIGET; ii) Nicaragua - on July 8, 1998, a license to terminate
international switched voice and provide International Private Line ("IPL"),
Internet and value added services was granted by ENITEL; and iii) Panama -
during July 1998, eight new licenses to provide IPL, internet and various other
telecommunications services were granted by Panama Ente Regulador de los
Servicios.
On June 5, 1998, the Company engaged Credit Suisse First Boston Corporation
to assist in its capital raising efforts.
On August 31, 1998 the Company held a shareholders meeting in which, among
other items, the shareholders voted in favor of changing the name of the Company
to Pointe Communications Corporation. The Company has not yet filed the
necessary documentation to effectuate this change.
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FORWARD-LOOKING STATEMENTS
Certain statements in this Prospectus and the documents incorporated
herein, constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statement involve known and unknown risks, uncertainties and other important
factors that could cause the actual results, performance or achievement of the
Company, or industry results, to differ materially from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Such risks, uncertainties and other important factors include,
among others: general economic and business conditions; industry trends;
competition; equipment costs and availability; the loss of any significant
customers; changes in business strategy or development plans; availability,
terms and deployment of capital; availability of qualified personnel; changes
in, or the failure or inability to comply with, governmental regulation; and
other factors referenced in this Prospectus. See "Risk Factors."
Forward-looking statements speak only as of the date of this Prospectus. The
Company expressly disclaims any obligation or undertaking to disseminate any
updates or revisions to any forward-looking statement contained herein to
reflect any change in the Company's expectations with regard thereto or any
change in events, conditions or circumstances on which any such statement is
based.
RISK FACTORS
Any investment in the Common Stock involves a high degree of risk.
Prospective purchasers of the Common Stock should carefully consider the risk
factors set forth below, as well as the other information contained in this
Prospectus.
This Report on Form S-3 contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Such forward-looking statements include, among
other things, the Company's plans to implement its growth strategy, improve its
financial performance, expand its infrastructure, develop new products and
services, expand its sales force, expand its customer base and enter
international markets. Such forward-looking statements also include the
Company's expectations concerning factors affecting the markets for its
products, such as demand for long-distance telecommunications and Internet
access. Actual results could differ from those projected in any forward-looking
statements for the reasons detailed in the "Risk Factors" below. The
forward-looking statements are made as of the date of this filing, and the
Company assumes no obligation to update the forward-looking statements, or to
update the reasons why actual results could differ from those projected in the
forward-looking statements.
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LIMITED OPERATING HISTORY; OPERATING LOSSES
The Company has only a limited history upon which an evaluation of it and
its prospects can be based. Although the Company has experienced substantial
revenue growth since the inception of its business in April 1995, it has
incurred losses of totaling approximately $23,928,081 as of March 31, 1998. As
of March 31, 1998, the Company had stockholder's equity of $16,553,700. The
Company's current focus is on increasing its customer and subscriber bases, and
the Company continues to hire additional personnel and to increase its expenses
related to product development, marketing, network infrastructure, technical
resources and customer support. As a result, the Company expects that revenue
growth will continue or that the Company will in the future achieve or sustain
profitability on either a quarterly or annual basis.
The Company may implement its strategy to grow its customer and subscriber
bases through methods that may result in increases in costs as a percentage of
revenues, such as expansions of its promotional programs and implementation of
new pricing programs. In addition, an acceleration in the growth of the
Company's subscriber and customer bases or changes in usage patterns among
subscribers that the Company's operating margins will not be adversely affected
in the future by these strategies or events.
NEED FOR ADDITIONAL CAPITAL TO FINANCE GROWTH
AND CAPITAL REQUIREMENTS
The Company must continue to enhance and expand its network in order to
maintain its competitive position and continue to meed the increasing demands
for service quality, availability and competitive pricing. The Company's
ability to grow depends, in part, on its ability to expand its operations
through the establishment of new points of presence ("POPs") and earth stations,
each of which requires significant advance capital equipment expenditures as
well as advance expenditures and commitments for leased telephone company
facilities and circuits and advertising. The Company will need to raise
additional capital from equity or debt sources to fund its anticipated
development. There can be no assurance that the Company will be able to raise
such capital on favorable terms or at all. If the Company is unable to obtain
such additional capital, the Company may be required to reduce the scope of its
anticipated expansion, which could have a material adverse effect on the
Company's business, financial condition or results of operations and its ability
to compete.
RISKS OF GROWTH AND EXPANSION
The number of the Company's employees has grown rapidly and several members
of the Company's current management team have joined the Company recently. The
Company's growth has placed, and is expected to continue to place, a significant
strain on the Company's management, administrative, operational, financial and
technical resources and increased demands on its systems and controls. The
Company believes that it will need, both in the short term and the long term, to
hire additional qualified administrative management personnel in the accounting
and finance areas to manage its financial control systems. In addition, there
can be no assurance that the Company's operating and financial control systems,
infrastructure and existing facilities will be adequate to support the Company's
future operations or maintain and effectively monitor future growth. Failure to
manage the Company's growth properly could have a material adverse effect on the
Company's business, financial condition or results of operations.
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The Company plans to build additional POPs. There can be no assurance that
the Company will be able to add service in new cities at the rate presently
planned by it. In addition, increases in the Internet subscriber base will
result in additional demands on its customer support, sales, marketing,
administrative and technical resources and network infrastructure. Increases in
the Company's telecommunications customer base will also produce increased
demands on its sales, marketing and administrative resources, as well as on its
engineering resources and on its switching and routing capabilities. The
Company anticipates that is continued growth will require it to recruit and hire
a substantial number of new managerial, technical and sales marketing personnel.
The inability to continue to upgrade the networking systems of the operation and
financial control systems, the inability to recruit and hire necessary personnel
or the emergence of unexpected expansion difficulties could have a material
adverse effect on the Company's business, financial condition or results of
operations.
Demands on the Company's network infrastructure and technical staff and
resources have grown rapidly with the Company's expanding customer base, and the
Company has in the past experienced difficulties satisfying the requests for its
Internet access and telecommunications services. The Company expects to
experience even greater strain on its billing and operational systems as it
develops, operates and maintains its network. There can be no assurance that
the Company's finance and technical staff will be adequate to facilitate the
Company's growth. The Company believes that its ability to provide timely
access for subscribers and adequate customer support services will largely
depend upon the Company's ability to attract, identify, train, integrate and
retain qualified personnel. There can be no assurance that the Company will be
able to do this. A failure to effectively manage its customer base and reduce
its subscriber cancellation rate and could therefore have a material adverse
effect on the Company's business, financial condition or results of operations.
DEPENDENCE ON KEY PERSONNEL; NEED TO HIRE
ADDITIONAL QUALIFIED PERSONNEL
The Company is highly dependent on the technical and management skills of
its key employees, including technical, sales, marketing, financial and
executive personnel, and on its ability to identify, hire and retain additional
personnel. Competition for such personnel is intense and there can be no
assurance that the Company will be able to retain existing personnel or identify
or hire additional personnel. In addition, the Company is highly dependent on
the services of each of its executive officers. The loss of the services of any
of them could have a material adverse effect on the Company's business,
financial condition or results of operations.
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SHARES AVAILABLE FOR FUTURE SALE
The Company has financed its operations and acquisitions principally
through the issuance of securities in the "private placements" exempt from
registration under federal and applicable state securities laws. As a
consequence, approximately thirty two percent (32%) of the Company's issued and
outstanding common stock has been issued as "restricted securities" which cannot
be resold except in compliance with similar exemptions from federal and
applicable state securities laws. Under Rule 144 as currently in effect,
restricted securities are generally available for public resale after such
securities have been held by the purchasers thereof for a period of two years;
however the Securities and Exchange Commission has amended Rule 144 effective
April 29, 1997, to provide for the resale of such securities after one year.
After the expiration of the one year holding period, such securities may be sold
in "broker's transactions" provided that certain requirements are met and that
the sales by a holder of such securities during any three month period do not
exceed the greater of one percent (1%) of the then issued and outstanding shares
of the issuer or the average weekly trading volume of such shares in the
over-the-counter market during the four calendar weeks preceding the date on
which a notice of such sale is sent to the Securities and Exchange Commission.
Under the new rules, at the end of two years, persons not "affiliated" with the
issuer may sell restricted securities without regard to the volume limitations
imposed by Rule 144. Persons "affiliated" with the issuer are persons deemed to
be in control of the issuer, including executive officers, directors and ten
percent or greater shareholders; such persons may sell shares only in compliance
with the requirements of Rule 144, including the volume limitations imposed
thereby, regardless of the length of time such securities have been held. Most
of the Common Stock of the Company will be available for public sale within the
next twelve months. The large number of the Company's shares which will become
available for public sale in the near future, along with the demand and
piggyback registration rights granted by the Company (described elsewhere
herein) created the possibility of volatility in the market for the Company's
stock and the possibility of adverse effects on the prevailing market price of
the Company's stock.
DEPENDENCE ON TECHNOLOGICAL DEVELOPMENT
The markets the Company serves are characterized by rapidly changing
technology, evolving industry standards, emerging competition and frequent new
service and product introductions. There can be no assurance that the Company
can successfully identify new service opportunities and develop and bring new
products and services to market in a timely and cost-effective manner, or that
products, services or technologies developed by others will not render the
Company's products, services or technologies noncompetitive or obsolete. In
addition, there can be no assurance that product or service developments or
enhancements introduced by the Company will achieve or sustain market acceptance
or be able to effectively address the compatibility and inoperability issues
raised by technological changes or new industry standards.
The Company is also at risk to fundamental changes in the way Internet
access services are delivered. Currently, Internet services are accessed
primarily by computers through telephone lines. However, several companies have
recently introduced, on an experimental basis, delivery of Internet access
services through cable television lines. If the Internet becomes accessible by
cable modem, screen-based telephones, television or other consumer electronic
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devices, or customer requirements change the way the Internet access is
provided, the Company will need to develop new technology or modify its existing
technology to accommodate these developments. Required technological advances
by the Company as the industry evolves could include compression, full motion
video, and integration of video, voice, data and graphics. The Company's
pursuit of these technological advances may require substantial time and
expense, and there can be no assurance that the Company will succeed in adapting
its Internet service business to alternate access devices and conduits.
The Company's success is dependent in part upon its ability to enhance
existing products and services and to develop new products and services that
meet changing customer requirements on a timely and cost-effective basis. There
can be no assurance that the Company's competitors will not independently
develop technologies that are substantially equivalent or superior to the
Company's technology. In addition, there can be no assurance that licenses for
any intellectual property that might be required for the Company's services or
products would be available on reasonable terms if at all.
DEPENDENCE ON SUPPLIERS
The Company is dependent on third party suppliers of hardware and network
connectivity for many of its products and services and generally does not have
long-term contracts with suppliers. Certain of these suppliers are or may
become competitors of the Company, and such suppliers are not subject to
restrictions upon their ability to compete with the Company. To the extent that
any of these suppliers change their pricing structure or terminate service, as
did Sprint in December 1996, the Company may be adversely affected. The Company
is dependent upon third party providers which are the primary providers to the
Company of data communications facilities and capacity and lease to the Company
physical space for switches, modems and other equipment. If these suppliers are
unable to expand their networks or unwilling to provide or expand their current
level of service to the Company in the future, the Company's operations could be
adversely affected.
The Company has from time to time experienced delays in the receipt of
network access and telecommunications services. In addition, the Company has
also from time to time experienced delays in the receipt of certain hardware
components. A failure by a supplier to deliver quality services or products on
a timely basis, or the inability to develop alternate sources if and as
required, could result in delays which could have a material adverse effect on
the Company. In addition, the Company maintains relationships with certain
equipment suppliers in the design of products which they sell to the Company.
The Company's remedies against suppliers who fail to deliver products on a
timely basis are limited, in many cases, by practical considerations relating to
the Company's desire to maintain relationships with the suppliers. As the
Company's suppliers revise and upgrade the technology of their equipment, the
Company may encounter difficulties in integrating the new technology into its
network.
14
<PAGE>
INTERNATIONAL EXPANSION
The Company's strategy includes expansion of its business into
international markets. There can be no assurance that the Company will be able
to obtain the permits and operating license, if any are required, necessary for
it to operate, to hire and train employees or to market, sell and deliver high
quality services in these markets. In many countries, the Company many need to
enter into a joint venture or other strategic relationship with one or more
third parties in order to successfully conduct its operations. There can be no
assurance that such factors will not have a material adverse effect on the
Company's future international operations and, consequently, on the Company's
business, financial condition or results of operations.
NEW AND UNCERTAIN MARKET
The market for Internet connectivity services and related software products
is in an early stage of growth. Since this market is relatively new and because
current and future competitors are likely to introduce Internet connectivity
and/or online services and products, it is difficult to predict the rate at
which the market will grow or at which new or increased connection will result
in market saturation. The novelty of the market for Internet access services
may also adversely affect the Company's ability to retain new customers, as
customers unfamiliar with the Internet may be more likely to discontinue the
Company's services after an initial trial period than other subscribers. If
demand for Internet services fails to grow, grows more slowly than anticipated,
or becomes saturated with competitors, the Company's business, operating results
and financial condition will be adversely affected.
To continue to realize customer growth in all its markets, the Company must
continue to replace terminating customers and attract additional customers.
However, the sales and marketing expenses and acquisition costs associated with
attracting new customers are substantial. Accordingly, the Company's ability to
improve operating margins will depend in part on the Company's ability to retain
its customers. The Company continues to invest significant resources in its
telecommunications infrastructure and customer support resources in connection
with all its businesses. There can be no assurance that the Company's
investments in telecommunications infrastructure and customer support
capabilities will improve customer retention. Since the Company's markets are
new and the utility of available service is not well understood by new and
potential customers, the Company is unable to predict future customer retention
rates.
RISK OF SYSTEM FAILURE
The success of the Company is largely dependent upon its ability to deliver
high quality, uninterrupted access to the Internet and other telecommunication
services. Any system failure that causes interruptions in the Company's
operations could have a material adverse effect on the Company. The Company has
experienced failure relating to individual POP's and the Company's customers
have experienced difficulties in accessing, and maintaining connection to the
Internet. The backbone of the Company's network, in addition to the Company's
overall telecommunications and Internet network, is currently leased from
certain suppliers, such as MCI, Sprint and Metropolitan Fiber Systems. If these
suppliers are unable to expand their networks or are unwilling to provide or
expand their current level of service to the Company in the future, the
Company's operations could be adversely affected. As the Company attempts to
15
<PAGE>
expand its network and data traffic grows, there will be increased stress on
network hardware and traffic management systems. However, there can be no
assurance that the Company will not experience failures relating to individual
POP's or even failure of the entire network. The Company's operations also are
dependent on its ability to successfully expand its network and integrate new
and emerging technologies and equipment into its network, which are likely to
increase the risk of system failure and cause unforeseen strains upon the
network. The Company attempts to minimize customer inconvenience in the event
of a system disruption by high quality services and redundancy. However,
significant or prolonged system failures, or difficulties for subscribers in
accessing, and maintaining connection with the Internet could damage the
reputation of the Company and result in the loss of subscribers. Such damage or
losses could have a material adverse effect on the Company's ability to obtain
new subscribers and on the Company's business, financial condition or results of
operations.
The Company's operations are dependent on its ability to protect its
software and hardware against damage from fire, earthquake, power loss,
telecommunications failure, natural disaster and similar events. A significant
portion of the Company's computer equipment is located at its facilities in
Houston, Texas. The Company's switches and other telephone equipment are
located in Houston, Panama City, Panama, Caracas, Venezuela and Atlanta,
Georgia. Any damage or failure that causes interruptions in the Company's
operations could have a material adverse effect on the Company's business and
results of operations. While the Company and its subsidiaries carry some
property and business interruption insurance, such coverage may not be adequate
to compensate the Company for all losses that may occur.
SECURITY RISKS
Despite the implementation of network security measures by the Company,
such as limiting physical and network access to its routers, its
telecommunications infrastructure is vulnerable to computer viruses, break-ins
and similar disruptive problems caused by its customers or other Internet users.
Computer viruses, break-ins or other problems caused by third parties could lead
to interruption, delays or cessation in service to not only the Company's
Internet customers, but also the Company's telecommunication users.
Furthermore, such inappropriate use of the voice and data systems by third
parties could also potentially jeopardize the security or confidential
information stored in the computer systems of the Company's customers and other
parties which may deter potential subscribers. Persistent security problems
continue to plague public and private data networks. Recent break-ins reported
in the press and otherwise have reached computers connected to the Internet at
major corporations and Internet access providers and have included incidents
involving hackers by-passing fire-walls by posing as trusted computers and
involving the theft of information. Alleviating problems caused by computer
viruses, break-ins or other problems caused by third parties may require
significant expenditures of capital and resources by the Company, which could
have a material adverse effect on the Company. Moreover, until more
comprehensive security technologies are developed, the security and privacy
concerns of existing and potential customers may inhibit the growth of the
Internet service industry in general and the Company's customer base and
revenues in particular.
16
<PAGE>
POTENTIAL LIABILITY FOR
INFORMATION DISSEMINATED THROUGH NETWORK
Internet service providers face potential liability for uncertain scope for
the actions of subscribers and others using their systems, including liability
for infringement of intellectual property rights, rights of publicity,
defamation, libel and criminal activity under the laws of the U.S. and foreign
jurisdictions. For example, an action against Prodigy alleging libel and
negligence in connection with an electronic message posted by a Prodigy
subscriber through Prodigy's Internet access system presents the potential for
increased focus and attempts to impose liability upon Internet service providers
for information, messages and other materials disseminated across and through
their systems. The Company carries errors and omissions insurance; however,
such insurance may not be adequate to compensate the Company for all liability
that may be imposed. Any imposition of liability in excess of the Company's
coverage could have a material adverse effect on the Company. In addition,
recent legislative enactments and pending legislative proposals aimed at
limiting the use of the Internet to transmit indecent or pornographic materials
could, depending upon their interpretation and application, result in
significant potential liability to internet access and service providers
including the Company, as well as additional costs and technological challenges
in complying with any statutory or regulatory requirements imposed by such
legislation.
FLUCTUATIONS IN QUARTERLY OPERATING RESULTS
The Company's quarterly operating results have fluctuated in the past and
may fluctuate significantly in the future as a result of a variety of factors,
some of which are outside the Company's control. These factors include general
economic conditions, acceptance and use of the Internet, user demand for
long-distance telecommunication service, capital expenditures and other costs
relating to the expansion of operations, the timing of new product announcements
by the Company or its competitors, changes in pricing strategies by the Company
or its competitors, market availability and acceptance of new and enhanced
versions of the Company's or its competitors' products and services and the
rates of new subscriber and customer acquisition and retention. These factors
could also have a material adverse effect on the Company's annual results of
operation and financial condition.
VOLATILITY OF STOCK PRICE
The market price of the Company's Common Stock may be highly volatile. The
"public float" of the Company's Common Stock as a percentage of the total issued
and outstanding shares of Common Stock increased during 1997 due primarily to
the substantial numbers of shares that had been subject to restrictions on
transfer which terminated during 1997. Factors such as variations in the
Company's revenue, earnings and cash flow and announcements of new service
offerings, technological innovations or price reductions by the Company, its
competitors or providers or alternative services could cause the market price of
the Common Stock to fluctuate substantially. In the event that The Company's
operating results are below the expectations of public market analysts and
investors in one or more future quarters, it is likely that the price of the
Common Stock will be materially adversely affected. In addition, the stock
market has experienced significant price and volume fluctuations that have
17
<PAGE>
particularly affected the market prices of equity securities of many
communications, media and technology companies and that often have been
unrelated to the operating performance of such companies. In addition, the
stock markets recently have experienced significant price and volume
fluctuations that particularly have affected companies in the technology sector
and resulted in changes in the market price of the stocks of many companies that
have not been directly related to the operating performance of those companies.
ABILITY OF MANAGEMENT TO DICTATE
CORPORATE POLICY AND THE
COMPOSITION OF THE BOARD OF DIRECTORS
Management and certain members of the Board of Directors of the Company own
or control, directly or indirectly, approximately one-third of the issued and
outstanding shares of the Common Stock of the Company. The Articles of
Incorporation and Bylaws of the Company provide that: (1) the presence of a
majority of the shareholders eligible to vote is required to constitute a quorum
at shareholders' meetings; (2) the vote of the holders of a majority of the
shares present at a meeting where a quorum is constituted is required to adopt
any resolution, unless a greater percentage is required by statute, in which
case a majority of the outstanding shares will be required; (3) shareholder
action may be taken by written consent, without prior notice, signed by the
holder(s) of the number of shares necessary to approve such action; and (4)
voting is noncumulative. As a consequence of the concentrations of stock
ownership in the hands of such persons, they have the ability to influence
corporate policy, the persons elected to the Board of Directors of the Company
and may be able to block certain corporate actions.
NO DIVIDENDS
The Company does not anticipate that it will pay any dividends in the
foreseeable future but plans to reinvest in the Company's business any funds
which might otherwise be available for the payment of dividends. The payment of
dividends out of legally available funds thereafter, if such funds are
available, will be at the discretion of the Company's Board of Directors.
GOVERNMENT REGULATION
The telecommunications and are subject to extensive regulation by federal,
state and local governmental agencies. Existing regulations were substantially
affected by the passage of the Telecommunications Act of 1996 ("1996 Telecom
Act") in February 1996, which allowed cable television companies and telephone
companies both to enter and participate in new lines of business. This
introduced the possibility of new, non-traditional competition for both cable
television and telephone companies and resulted in greater potential competition
for The Company. The outcome of federal and state administrative proceedings
may also affect the nature and extent of competition that will be encountered by
The Company. In addition, future regulations may prevent The Company from
generating revenues from sales of database information about consumers obtained
by The Company from its television and telephone business. BellSouth is also
allowed to terminate its agreement with the Company if it determines that
18
<PAGE>
regulatory changes would impact the Company's ability to perform under such
agreement. These competitive developments, as well as other regulatory
requirements relating to privacy issues, may have a material adverse effect on
The Company's business.
POTENTIAL ADVERSE IMPACT OF ANTI-TAKEOVER PROVISIONS
The Company's certificate of incorporation and by-laws and the provisions
of the Nevada General Corporation Law may have the effect of delaying, deterring
or preventing a change in control or an acquisition of The Company. The
Company's certificate of incorporation authorizes the issuance of "blank check"
preferred stock, which, in the event of issuance, could be utilized by the board
of directors of The Company as a method of discouraging, delaying or preventing
a change in control or an acquisition of The Company, even though such an
attempt might be economically beneficial to the holders of Common Stock. Such
provisions may have an adverse impact from time to time on the price of the
Common Stock.
SELLING SHAREHOLDERS
The following table sets forth, as of the date of this Prospectus, (i) the
name of each Selling Shareholder, (ii) the number of shares of Common Stock
beneficially owned by each Selling Shareholder prior to the offering, (iii) the
number of shares of Common Stock to be sold by each Selling Shareholder pursuant
to this Propsectus and (iv) the number of shares beneficially owned by each
Selling Shareholder after the offering. Except as otherwise indicated, the
Selling Shareholders have sole voting and investment power with respect to all
shares indicated as being beneficially owned by such person.
<TABLE>
<CAPTION>
Ownership of
Ownership of Number of Common Stock
Common Stock Before Shares Being After the
the Offering Offered Offering(1)
Number
of
Name Number of Shares Percent Shares Percent
- --------------------- ---------------- ------- ------ -------
<S> <C> <C> <C> <C> <C>
Equity Merchant 375,000 * 375,000 0 0
Banking Corporation
Connecticut Bank of 75,000 * 75,000 0 0
Commerce
Alan A. McClure 100,000 * 100,000 0 0
Wilkie S. Colyer 100,000 * 100,000 0 0
D. Bailey Izard 100,000 * 100,000 0 0
Larry C. Williams 100,000 * 100,000 0 0
E. Bruce Woodward 100,000 * 100,000 0 0
19
<PAGE>
James A. Patterson 500,000 1.1% 500,000 0 0
Rafael Cardova (2) 71,875 * 71,875 0 0
Francisco Rodriguez 71,875 * 71,875 0 0
<FN>
* Represents less than 1% of outstanding Common Stock.
(1) Assumes that all Shares being offered are sold.
(2) Mr. Cardova is currently an officer of Galatel, Inc., a
subsidiary of the Company.
</TABLE>
PLAN OF DISTRIBUTION
The Shares may be sold from time to time by the Selling Shareholders
(including the Selling Shareholder's pledgees, donees or other successors in
interest). All sales may be made by the Selling Shareholders on the NASDAQ or
otherwise as prices and on terms related to the then current market price of the
Common Stock or in negotiated transactions. The Shares may be sold by any one
or more of the following methods:
(a) a block trade in which the broker or dealer so engaged will
attempt to sell the Shares as agent but may position and resell
a portion of a block as principal to facilitate the transaction;
(b) purchases by a broker or dealer as principal, and resale by such
broker or dealer, for its account pursuant to this Prospectus;
(c) ordinary brokerage transactions and transactions in which the
broker solicits purchasers; and
(d) privately negotiated transactions.
The Selling Shareholders may effect such transactions by selling the Shares
to or through brokers or dealers. Such brokers or dealers will receive
compensation in the form of discounts or commissions from the Selling
Shareholders, and they may also receive commissions from the purchasers of the
Shares for whom they may act as agents. Such discounts or commissions from the
Selling Shareholders or such purchasers are not expected to exceed those
customary in the types of transactions involved.
The Selling Shareholders will pay all fees and expenses incident to the
registration of the Shares, inclusive of any underwriting discounts, any selling
commissions payable in respect of sales of the Shares or any expenses incurred
by the Selling Shareholders to retain any counsel, accountant or other advisor.
20
<PAGE>
It is estimated that the fees and expenses payable by the Selling Shareholders
in connection with the registration of the Shares will be approximately $30,000.
The Company will receive none of the proceeds from sales of the Shares.
In the event the Shares are offered to the public by the Selling
Shareholders, they may be deemed "underwriters" within the meaning of the
Securities Act of 1933. Any broker-dealer selling the Shares as agent for a
Selling Shareholders and any broker-dealer purchasing and reselling the Shares
for its own account may also be deemed an "underwriter".
INDEMNIFICATION OF DIRECTORS AND OFFICERS
As permitted by Section 78.037 of the Nevada Revised Statutes ("NRS"), the
Company's Articles of Incorporation and Bylaws are intended to take full
advantage of the provisions of the NRS with respect to limiting the personal
liability of its officers, directors, employees and agents. The Articles
provide that a director of the Company shall not, to the fullest extent
permitted by the NRS, as the same exist or may hereafter be amended (but in the
case of any such amendment, only to the extent that such amendment permits
broader limitations than permitted prior to such amendment), be liable to the
Company or its shareholders for monetary damages for an act or omission in the
director's capacity as a director. The Articles and Bylaws provide that the
Company shall indemnify current and former directors, officers, employees and
agents, and persons serving in similar capacities in the Company's subsidiaries
or other entities in which the Company has an interest against expenses,
judgments, fines and amounts paid in settlement incurred if such director,
officer, employee or agent acted in good faith and in a manner such person
reasonably believed to be in, or not opposed to, the best interests of the
Company and, with respect to a criminal proceeding, had no reasonable cause to
believe such conduct was unlawful. Such determination shall be made (i) if
there is a quorum of disinterested members of the Board of Directors, by a
majority of such disinterested members of the Board of Directors, (ii) if a
majority of the disinterested members of the Board of Directors so determine or
if a quorum of disinterested members of the Board of Directors cannot be
obtained, by independent legal counsel in a written opinion, or (iii) by the
stockholders of the Company. The Company's Articles and Bylaws further provide
that directors, officers, employees and agents shall receive indemnification
payments in advance of the final disposition of an action upon the receipt by
the Company of a written undertaking by or on behalf of such director, officer,
employee or agent to repay the amounts advanced if it is ultimately determined
by a court of competent jurisdiction that such director, officer, employee or
agent was not entitled to indemnification by the Company. Thus, the Company may
be prevented from recovering damages for certain alleged errors or omissions by
directors, officers, employees and agents of the Company.
The Company maintains Directors' and Officers' Liability Insurance which
insures the Company's current and former directors and officers (and their
estates, heirs, legal representatives or assigns) and the Company and its
majority owned subsidiaries from damages, settlements and the cost of defense
associated with any alleged or actual error, misstatement, misleading statement,
act or omission, neglect or breach of duty by the directors and officers of the
Company in the discharge of their duties as directors or officers of the
Company; provided, that certain standard exclusions apply which limit the
21
<PAGE>
liability of the insurer, including the limitation that no payment shall be made
in connection with a claim that is incident to or contributed to by the
fraudulent, dishonest, or criminal acts of the directors or officers of the
Company.
The Company also has contractual commitments to indemnify certain directors
and officers of the Company the basic terms of which mirror the provisions set
forth in the Articles of Incorporation and Bylaws of the Company.
Insofar as indemnification for liabilities arising under the Securities Act
of 1993 may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.
LEGAL MATTERS
The legality of the Shares offered hereby will be passed upon for the
Company by Brown, Parker & Leahy, L.L.P., Houston, TX.
EXPERTS
The consolidated financial statements of the Company appearing in its
Annual Report on Form 10-KSB for the year ended December 31, 1997, have been
audited by Arthur Andersen LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
22
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the expenses, other than brokerage discounts
and commissions, expected to be incurred in connection with the offering of the
Shares registered hereby. All amounts, except the Securities and Exchange
Commission registration fee, are estimated.
Securities and Exchange Commission Registration Fee $541.52
Accounting Fees and Expenses $4,500
Legal Fees and Expenses $27,000
Miscellaneous Expenses $700
Total $32,741.52
The Selling Shareholders shall pay all fees and expenses incident to such
registration, inclusive of any underwriting discounts, any selling commissions
payable in respect of sales of the Shares or any expenses incurred by the
Selling Shareholders to retain any counsel, accountant or other advisor.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
See "Indemnification of Directors and Officers."
II-1
<PAGE>
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- -----------------------
<C> <S>
4.1 Agreement with Connecticut Bank of Commerce.
4.2 Agreement with Equity Merchant Banking Corporation, L.L.C.
4.3 Form of Agreement with Alan A. McClure, Wilkie S. Colyer, D. Bailey Izard, Larry C. Williams and E. Bruce Woodward
4.4 Agreement with James A. Patterson
4.5 Form of Agreement with Francisco Rodriguez and Rafael Cardona
5.1 Opinion of Brown, Parker & Leahy L.L.P., with respect to the validity of the Company's Common Shares.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Brown, Parker & Leahy, L.L.P. (included in Exhibit 5.1).
24.1 Powers of Attorney (included in the signature page of this Amendment No. 1)
</TABLE>
ITEM 17. UNDERTAKINGS.
(a) Rule 415 Offering
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to the
Registration Statement:
(i) to include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the Prospectus any facts or
events arising after the effective date of the
Registration Statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set forth in
the Registration Statement;
II-2
<PAGE>
(iii) to include any material information with respect
to the plan of distribution not previously
disclosed in the Registration Statement or any
material change to such information in the
Registration Statement; provided, however, that
paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included
in a post-effective amendment by those paragraphs
is contained in periodic reports filed with or
furnished to the Commission by the Registrant
pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are
incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective
amendment shall be deemed to e a new registration statement
relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered, which
remain, unsold at the termination of the offering.
(b) Filings Incorporating Subsequent Exchange Act Documents by
Reference.
The undersigned Registrant hereby undertakes that, for purposes of
Determining any liability under the Securities Act of 1933, each
filing of the Registrant's Annual Report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934
that is incorporated by reference in the Registration Statement
shall be deemed to be a new Registration Statement relating to the
securities offered therewith, and the offering of such securities
at that time shall be deemed to be the initial bona fide
offering thereof.
(c) Acceleration of Effectiveness.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been advised
that, in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this to Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Atlanta, State of Georgia, on the 21st day of
September, 1998.
CHARTER COMMUNICATIONS INTERNATIONAL, INC.
By: /s/ STEPHEN E. RAVILLE
------------------------------------------
STEPHEN E. RAVILLE
CHIEF EXECUTIVE OFFICER
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned directors and officers
of Charter Communications International, Inc., a Nevada corporation, which has
filed a Registration Statement on Form S-3 with the Securities and Exchange
Commission, Washington, D.C. 20549 under the provisions of the Securities Act of
1933, as amended (the "Securities Act") hereby constitute and appoint Stephen E.
Raville and Patrick E. Delaney, and each of them, the individual's true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for the person and in his or her name, place and stead, in any
and all capacities, to sign such Registration Statement and any or all
amendments, including post-effective amendments, to the Registration Statement,
including a Prospectus or an amended Prospectus therein and any registration
statement for the same offering that is to be effective upon filing pursuant to
Rule 462(b) under the Securities Act, and all other documents in connection
therewith to be filed with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact as agents or any of them, or their substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities on the date indicated.
II-4
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
- ---------------------------- --------------------------- ------------------
<S> <C> <C>
____________________________ Chief Executive Officer and September 21, 1998
Stephen E. Raville Chairman of the Board of
Directors
____________________________ President September 21, 1998
Gary D. Morgan
____________________________ Chief Financial Officer September 21, 1998
Patrick E. Delaney and Director
____________________________ Treasurer September 21, 1998
Richard P. Halevy
____________________________ Director September 21, 1998
Robert E. Conn
____________________________ Director September 21, 1998
William P. O'Reilly
____________________________ Director September 21, 1998
F. Scott Yeager
____________________________ Director September 21, 1998
James H. Dorsey, III
____________________________ Director September 21, 1998
Gerald F. Schmidt
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- -------- ------------------------------------------------------------------------------
<C> <S>
4.1 Agreement with Connecticut Bank of Commerce.
4.2 Agreement with Equity Merchant Banking Corporation, L.L.C.
4.3 Form of Agreement with Alan A. McClure, Wilkie S. Colyer, D. Bailey
zard, Larry C. Williams and E. Bruce Woodward
4.4 Agreement with James A. Patterson
4.5 Form of Agreement with Francisco Rodriguez and Rafael Cardona
5.1 Opinion of Brown, Parker & Leahy L.L.P., with respect to the validity of the
Company's Common Shares.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Brown, Parker & Leahy, L.L.P. (included in Exhibit 5.1).
24.1 Powers of Attorney (included in the signature page of this Amendment No.1)
</TABLE>
II-6
<PAGE>
EXHIBIT 4.1
CHARTER COMMUNICATIONS INTERNATIONAL, INC.
January 19, 1998
Via Federal Express
- ---------------------
Mr. Dennis Pollack
President and Chief Executive Officer
612 Bedford Street
Stanford, Connecticut 06901
Dear Mr. Pollack:
This letter shall set forth our mutual understanding and agreement with
regard to the 75,000 shares of Charter Communications International, Inc.
("Charter") common stock (the "Stock") received by Connecticut Bank of Commerce
(the "Bank") as additional compensation for the lease financing and receivable
purchase facility described below provided or to be provided by the Bank in the
future.
The Bank has agreed to provide (i) up to $3 million in full-payout lease
financing to Charter and (ii) a receivable purchase facility in an amount up to
$600,000. The Bank has agreed not to sell any of the Charter Stock for a period
of six months (i.e. June 30, 1998).
In consideration of the foregoing, Charter has agreed to guarantee the
market value (the "Market Value") of the Stock held by the Bank as of June 30,
1998 at $2.33 per share or an aggregate of $174,750.00 (the "Minimum Valuation
Threshold"). In addition, the Bank shall have demand registration rights
covering the Stock (as well as any additional shares of common stock to be
issued pursuant to this letter agreement). The Bank will pay all physical costs
of the registration of the Stock. Charter shall pay any unusual or out of the
ordinary auditing or legal costs or expenses associated with the registration of
the Stock, provided that the Bank exercises its demand registration rights
during such period as to be able to utilize Charter's 10-K and 10-Qs as of or
for the year ended December 31, 1997 in connection with the registration
statement. For purposes of this letter agreement, the Market Value of the Stock
shall be based on the average closing sales price of the Stock for the twenty
trading days immediately preceding June 30, 1998 (inclusive of June 30, 1998, if
a trading day). In the event the Market Value of the Stock does not equal or
exceed the Minimum Valuation Threshold, then Charter, at its option, shall pay
to the Bank cash, additional shares of Charter common stock, or a combination of
both equal to the difference between the Minimum Valuation Threshold and the
Market Value of the Stock. In the event that Charter issues additional shares
of Charter common stock to the Bank, the value of the stock so issued shall be
based on the closing sales price of Charter's common stock on the trading day
immediately preceding the date of issuance and delivery of the additional shares
to the Bank. In addition, the shares shall also be covered by an effective
registration statement.
4.4-1
<PAGE>
If the foregoing accurately reflects our mutual agreement with regard to
the above matters, please execute one copy of this letter in the space provided
below and return it to me at the above address.
Very truly yours,
CHARTER COMMUNICATIONS
INTERNATIONAL, INC.
By: _________________________________
Its: _________________________________
AGREED TO AND ACCEPTED
this ____ day of _________, 1998:
CONNECTICUT BANK OF COMMERCE
By: ___________________________
Its: ___________________________
4.4-2
<PAGE>
EXHIBIT 4.2
CHARTER COMMUNICATIONS INTERNATIONAL, INC.
January 14, 1998
Via Federal Express
- ---------------------
Mr. Ross Walpole
Managing Director
Equity Merchant Banking Corporation, L.C.
2419 East Commercial Boulevard, Suite 304
Fort Lauderdale, Florida 33308
Dear Mr. Walpole:
This letter shall set forth our mutual understanding and agreement with
regard to the 375,000 shares of Charter Communications International, Inc.
("Charter") common stock (the "Stock") received by Equity Merchant Banking
Corporation, L.C. ("EMBC") as compensation for certain investment banking
services provided, or to be provided in the future, to Charter. EMBC has agreed
not to sell any of the Charter Stock for a period of six months (i.e., June 30,
1998).
In consideration of the foregoing, Charter has agreed to guarantee the
market value (the "Market Value") of the Stock held by EMBC as of June 30, 1998
at $2.33 per share or an aggregate of $873,750.00 (the "Minimum Valuation
Threshold"). In addition, the EMBC shall have demand registration rights
covering the Stock (as well as any additional shares of common stock to be
issued pursuant to this letter agreement). EMBC will pay all physical costs of
the registration of the Stock. Charter shall pay any unusual or out-of the
ordinary auditing or legal costs or expenses associated with the registration of
the Stock, provided that EMBC files the registration statement during such
period as to be able to utilize Charter's 10-K and 10-Qs as of or for the year
ended December 31, 1997. For purposes of this letter agreement, the Market
Value of the Stock shall be based on the average closing sales price of the
Stock for the twenty trading days immediately preceding June 30, 1998 (inclusive
of June 30, 1998, if a trading day). In the event the Market Value of the Stock
does not equal or exceed the Minimum Valuation Threshold, then Charter, at its
option, shall pay to EMBC cash, additional shares of Charter common stock, or a
combination of both equal to the difference between the Minimum Valuation
Threshold and the Market Value of the Stock. In the event that Charter issues
additional shares of Charter common stock to EMBC, the value of the stock so
issued shall be based on the closing sales price of Charter's common stock on
the trading day immediately preceding the date of issuance and delivery of the
additional shares to EMBC. In addition, the shares shall also be covered by an
effective registration statement.
If the foregoing accurately reflects our mutual agreement with regard to
the above matters, please execute one copy of this letter in the space provided
below and return it to me at the above address.
4.2-1
<PAGE>
Very truly yours,
CHARTER COMMUNICATIONS
INTERNATIONAL, INC.
By: _________________________________
Its: _________________________________
AGREED TO AND ACCEPTED
this ____ day of _________, 1998:
EQUITY MERCHANT BANKING
CORPORATION, L.C.
By: ___________________________
Its: ___________________________
4.2-2
<PAGE>
EXHIBIT 4.3
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (the "Agreement") dated as of ________,
---------
1998, is entered into by and between Charter Communications International, Inc.,
a Nevada corporation (the "Company"), and ____________________ (herein the
--------
"Holder").
- -------
WHEREAS, this Agreement is intended to grant piggyback registration rights
to the Holder in the event of any registration during the term hereof of the
capital stock of the Company for the sale by shareholders of the Company (herein
"Selling Stockholders").
---------------------
NOW, THEREFORE, in consideration of the premises set forth above, the
mutual covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and confessed, the
parties agree as follows:
1. Registration Rights.
--------------------
1.1 Certain Definitions. As used in this Agreement, the following
--------------------
terms shall have the following respective meanings:
"Commission" shall mean the United States Securities and Exchange
----------
Commission, or any other federal agency at the time administering the Securities
Act and the Exchange Act.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
-------------
amended, and the rules and regulations of the Commission issued under such Act,
as they each may, from time to time, be in effect.
"Registration Statement" shall mean a registration statement filed by
-----------------------
the Company with the Commission for an underwritten public offering for the cash
sale of securities for and on behalf of Selling Stockholders of the Company
(other than a registration statement on Form S-8, or its successor).
"Registration Expenses" shall mean the expenses described in
----------------------
Subsection 1.7.
"Registrable Shares" shall mean (i) all shares- of the common stock of
------------------
the Company, $.00001 par value ("Company Stock"), owned by the Holder and listed
-------------
on the signature page hereof, and (ii) all other shares ' of the Company Stock
issued in respect of the such shares (as a result of stock splits, stock
dividends, reclassifications, recapitalizations or similar events); provided,
--------
however, that the shares of Company Stock owned by Holder shall cease to be
- -------
Registrable Shares when (x) it has been effectively registered under the
Securities Act and disposed of in accordance with the Registration Statement
covering it, (y) it has been distributed to the public pursuant to Rule 144
under the Securities Act, or any similar provision then in effect, or (z) it has
otherwise been transferred to another party and a new certificate or other
evidence of ownership for it not bearing a restrictive legend and not subject to
any stop transfer order with respect to Securities Act matters has been
delivered by or on behalf of the Company.
4.2-3
<PAGE>
"Securities Act" shall mean the Securities Act of 1933, as amended,
---------------
and the rules and regulations of the Commission issued under such Act, as they
each may, from time to time, be in effect.
1.2 "Piggyback" Registration.
------------------------
(a) Whenever, after the date hereof, the Company proposes to file
a Registration Statement to register any equity securities of the Company for
sale by Selling Stockholders, it will, prior to such filing, give written notice
to the Holder of its intention to do so and, upon the written request of the
Holder given within 20 days after the Company provides such notice (which
request shall state the intended method of disposition of such securities), the
Company shall (subject to Section 1.2(c), below) use reasonable best efforts to
cause all Registrable Shares which the Company has been requested by the Holder
to register to be registered under the Securities Act to the extent necessary to
permit the sale or other disposition thereof in accordance with the intended
methods of distribution specified in the request of the Holder ("Piggyback
---------
Registration"); provided, however, that the obligations of the Company pursuant
- ------------
hereto shall be subject to, and shall not impair, the right of the Company to
postpone or withdraw any registration of its securities without obligation to
the Holder, even though such registration includes Registrable Shares pursuant
to this Section 1.2.
(b) The underwriter with respect to the proposed registration of
Registrable Shares shall be chosen in the reasonable discretion of the Company,
and with regard to the inclusion of such Registrable Shares therein, the Holder
must agree (i) to sell such Registrable Shares on the same basis as provided in
the underwriting arrangement approved by the Company and (ii) to complete and
execute, in a timely manner, all questionnaires, powers of attorney,
indemnities, hold-back or lockup agreements, underwriting agreements and other
documents required either under the terms of such arrangement or by the
Commission.
(c) If, in the opinion of the managing underwriter for such
underwritten offering, the registration of all, or part of, the Registrable
Shares which the Holder has requested be included in such public offering,
together with all other shares of Common Stock by all other shareholders having
the right to include shares therein, would, as a result of the total number of
shares proposed to be so offered, have an adverse effect on the proposed
offering by such shareholders, then, the Company shall be required to include in
the underwriting only that number of Registrable Shares,. if any, which the
managing underwriter reasonably believes may be sold without causing such
adverse effect. If the number of shares to be included in the underwriting in
accordance with the foregoing is less than the number of shares which the Holder
and all other persons entitled to participate in the registration have requested
be included pursuant to the exercise of registration rights, the Holder shall
participate in the underwriting pro rata with the holders of all other shares
entitled to participate in tile underwriting pursuant to registration rights,
based upon their respective total ownership of shares of Company Stock, and if
any Selling Stockholder or the Holder would thus be entitled to include more
shares than such holder or the Holder requested to be registered, the excess
shall be allocated among other requesting Holder and the Holder pro rata based
upon their respective total ownership of shares of Company Common Stock. If
requested by any underwriter or underwriters, the Holder shall agree to sell its
Registrable Shares which are subject to the Piggyback Registration to or through
such underwriter or underwriters at the same price to be paid to the Company or
other selling stockholder.
4.2-4
<PAGE>
1.3 Right to Deny Registration. Notwithstanding the provisions of
---------------------------
Section 1.2 above, the Company shall not be required to cause a Registration
Statement to be filed or to remain effective if, within 25 days after its
receipt of a request to register Registrable Shares or at any time a
registration statement is effective, counsel for the Company delivers an opinion
to the Holder, in form and substance reasonably satisfactory to counsel to the
Holder, that the entire amount of Registrable Shares proposed to be sold by each
may be sold pursuant to the provisions of Rule 144 of the Securities Act made
applicable pursuant thereto (or any successor rules) within a period of not more
than 90 days from the date of such opinion. The Company shall not be obligated
to file any registration statement pursuant to Section 1.2 or pursuant to
similar registration rights granted to others, unless the Holder of all such
rights (including the Holder hereof) elect in the aggregate to register 200,000
shares of Company Stock or more.
1.4 Registration Procedures. Inthe case of each registration effected
-----------------------------
by the Company pursuant to this Agreement, the Company will:
(a) keep any Piggyback Registration effective for a period of 90
days or until the distribution contemplated in the Registration Statement is
completed, whichever first occurs;
(b) furnish to the Holder such number of copies of the
Registration Statement, each amendment and supplement thereto, the prospectus
included in the Registration Statement (including the preliminary prospectus)
and such other documents as the Holder may reasonably request to facilitate
disposition of the Registrable Shares; and
(c) use its reasonable efforts to cause the Registrable Shares to
be registered or qualified under the state securities laws or blue sky laws of
such jurisdictions as the Holder may reasonably request and to do any and all
other acts and things which may be necessary or advisable to enable the Holder
to consummate the disposition of the Registrable Shares; provided, however, that
the Company shall not be required to register or qualify Registrable Shares in
any jurisdiction where such registration or qualification would require the
Company to subject itself to taxation in such jurisdiction or to register or
require it to qualify for authority to do business as a foreign corporation or
would subject the Company to general service of process.
It shall be a condition precedent to the obligation of the Company to file
a Registration Statement that the Holder shall furnish promptly to the Company
instruments in writing duly executed containing all such information as the
Company shall reasonably request for use in connection with the preparation of
the Registration Statement or the prospectus or preliminary prospectus included
therein, as well as all undertakings which the Commission may request or the
Company may reasonably request as to compliance with Rule 10b-6 under the
Exchange Act.
In connection with any underwritten registration of shares of Common Stock
solely for sale by the Company, if requested by the underwriter, the Holder will
agree not to sell or otherwise transfer or dispose of any Company Stock for a
period of up to 120 days following completion of such Company offering (except
that this obligation shall not apply to Registrable Shares included in such
underwritten registration).
1.5 Allocation of Expenses. With regard to the registration of
------------------------
Registrable Shares pursuant to the terms of this Agreement, except as otherwise
provided for below, the Company shall bear all usual and customary costs and
4.2-5
<PAGE>
expenses incidental to the preparation of the Registration Statement, including
all registration, filing and qualification fees and expenses of counsel to the
Company, all fees and expenses of the Company's independent auditors, all fees
and expenses of underwriters and all printing costs and all fees and expenses
incidental to complying with the state securities or "blue sky" laws with regard
to the Registrable Shares, provided, however, that the Holder shall bear all
-------- -------
fees and expenses of underwriters that are customarily paid by a selling
stockholder, such as all selling expenses and underwriter discounts and
commissions attributable to the Registrable Shares offered by the Holder, and
all fees and expenses of any special counsel or experts retained by the Holder
plus all out-of-pocket expenses of Holder or an agent who manages the account of
Holder, in connection with the requested registration.
1.6 Indemnification.
---------------
(a) Indemnification by the Company. In the event of any
---------------------------------
registration of any of the Registrable Shares under the Securities Act pursuant
to this Agreement, the Company will indemnify and hold harmless the Holder (the
"Indemnified Person") against any and all losses, claims, damages or
-------------------
liabilities, joint or several, to which the Indemnified Person may become
subject under the Securities Act, the Exchange Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement under which such
Registrable Shares were registered under the Securities Act, any preliminary
prospectus or final prospectus contained in the Registration Statement, or any
amendment or supplement to such Registration Statement, or arise out of or are
based upon the omission or alleged omission to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were made; provided, however, that
-------- -------
the Company will not be liable in any such case to: (i) the Indemnified Person
to the extent that any such loss, claim, damage or liability arises out of or is
based upon any untrue statement or omission made in such Registration Statement,
preliminary prospectus or prospectus, or any such amendment or supplement, in
reliance upon and in conformity with information furnished to the Company by or
on behalf of the Indemnified Person or (ii) the Indemnified Person from whom the
person asserting any such loss, claim, damage or liability purchased the
Registrable Shares if the Indemnified Person failed to send or give a copy of
the final prospectus to the person asserting such loss, claim, damage or
liability, unless such failure is by an underwriter or investment banking firm
which agrees to act on behalf of both the Company and the Indemnified Person in
such registration.
The Company shall also enter into agreements for indemnification with any
underwriter for Registrable Shares on customary and usual terms and conditions.
(b) Indemnification by the Holder. In the event of any
--------------------------------
registration of any of the Registrable Shares under the Securities Act pursuant
to this Agreement, each of the Holder will, to the extent permitted by law,
indemnify and hold harmless the Company, each of its directors and officers,
each underwriter, each officer and director of each underwriter, and each
person, if any, who controls the Company (within the meaning of Section 15 of
the Securities Act) against any and all losses, claims, damages or liabilities,
joint or several, to which the Company, such directors and officers,
underwriter, officers or directors of underwriter, or controlling person may
become subject under the Securities Act Exchange Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in any Registration Statement under which the
Registrable Shares were registered under the Securities Act, any preliminary
4.2-6
<PAGE>
prospectus or final prospectus contained in the Registration Statement, or any
amendment or supplement to the Registration Statement, or arise out of or are
based upon any omission or alleged omission to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
light of the circumstances under which they were under, if the statement or
omission was made in reliance upon and in conformity with information furnished
in writing to the Company by or on behalf of, such Holder specifically for use
in connection with the preparation of such Registration Statement, prospectus,
amendment or supplement.
(c) Indemnification Procedure. Each party entitled to indemnity
--------------------------
under this Section 1.6 (an "Indemnified Party") shall, within 20 days after the
-----------------
receipt of notice of the commencement of any action against such party in
respect of which indemnity made be sought from any other party to this Agreement
(an "Indemnifying Party") on account of an indemnity agreement contained in this
------------------
Section 1.6, notify the Indemnifying Party in writing of the commencement of
such action. The failure of any Indemnified Party to so notify an Indemnifying
Party shall relieve the Indemnifying Party from any liability with respect to
such action that it may have to such Indemnified Party on account of the
indemnity agreement contained in this Section 1.6, to the extent the
Indemnifying Party can establish that it has been prejudiced in its ability to
defend such action or settle such action by such failure. The Indemnifying Party
will be entitled to participate in any action with respect to which indemnity is
being sought to the extent it may wish, jointly with any other Indemnifying
Party similarly notified. Without limiting the generality of the foreaoing, the
Indemnifying Party shall be entitled to assume the defense in any action with
respect to which indemnity is being sought with counsel reasonably satisfactory
to the Indemnified Party by giving to the Indemnified Party notice of its
election to assume the defense thereof and acknowledgement in writing that the
claim in question is one for which the Indemnifying Party is obligated to
indemnify the Indemnified Party.
Thereafter, the Indemnifying Party will not be liable to such Indemnified Party
for any legal or other expenses subsequently incurred by such Indemnified Party
in connection with the defense thereof-, provided, however, that if the
-------- -------
Indemnified Party has a reasonable basis to believe, and does believe, that its
interest in such action conflicts with those of the Indemnifying Party or any
other Indemnified Party, the Indemnified Party may so notify the Indemnifying
Party and the Indemnifying Party will remain liable to the Indemnified Party for
all reasonable legal or other expenses incurred by the Indemnified Party in
connection with the defense of such action. Whether or not the Indemnifying
Party assumes defense of an action, it shall have no obligation to the
Indemnified Party with respect to any settlement effected without the
Indemnifying Party's consent, which shall not be unreasonably withheld and which
may be given without an admission by Indemnifying Party of its obligation to
indemnify any party seeking indemnification.
1.7 Additional Information. At any time during which the delivery of a
-----------------------
prospectus relating to the Registrable Shares is required under the Securities
Act and the Company has a current obligation under this Agreement to maintain
the effectiveness of any registration covering the Registrable Shares any event
occurs as a result of which the prospectus as then supplemented or amended would
include any untrue statement of a material fact, or omit to state a material
fact necessary to make the statements therein not misleading, the Company shall
promptly notify the Holder of such event and (i) to the extent such statement or
omission can be corrected by a supplement, the Company will promptly prepare and
file a supplement with the Commission or (ii) to the extent such statement or
omission can only be corrected by an amendment the Company will notify the
4.2-7
<PAGE>
Holder of the occurrence of such event and will promptly prepare and file an
appropriate amendment with the Commission and will use its reasonable best
efforts to cause such amendment to be declared effective.
1.8 No Prior Rights. The Company agrees that it will not grant any
-----------------
holder of shares of capital stock of the Company a right to participate in any
Piggyback Registration with priority over the rights of the Holder to so
participate.
2. Miscellaneous.
-------------
2.1 Successors and Assigns. Tile Holder may not assign their rights
------------------------
under this Agreement in connection with the transfer or sale of any portion of
the Registrable Shares held by them. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of the parties hereto.
2.2 Notices. All notices, requests, consents and other communications
-------
under this Agreement shall be in writing, and shall be delivered by hand or by
Federal Express or other similar courier or by facsimile transmission
immediately followed by such hand delivery or courier, to the addresses as set
forth on the signature page hereof or such address as a party may direct in a
written notice to the other party hereto.
2.3 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
2.4 Headings. The headings of the section, subsections, and paragraphs
--------
of this Agreement have been added for convenience only and shall not be deemed
to be a part of this Agreement.
2.5 Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Georgia.
2.6 Entire Agreement. All other prior or contemporary representations,
-----------------
warranties, covenants or agreements, if any, between the parties hereto, or
their representatives, with respect to the subject matter hereof are superseded
by and merged into this Agreement, and this Agreement shall constitute the
entire understanding between the parties with respect to the matters included
herein. No waiver, amendment or modification of the terms hereof shall be valid
unless made in a writing signed by the party to be charged and only then to the
extent expressly set forth therein. A party may waive in writing compliance by
another party with any of the terms contained in this Agreement (except such as
may be imposed by law). No waiver, however, shall be a waiver of any other
matter or constitute a continuing waiver.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date set forth on the first page hereof.
Holder: COMPANY:
Charter Communications International, Inc.
4.2-8
<PAGE>
Print Name
By:
Name:
Address for notice: Title:
Address for notice:
2839 Paces Ferry Road
Suite 500
Atlanta, Georgia 30339
Attention:
4.2-9
<PAGE>
EXHIBIT 4.4
RESTRICTED STOCK ACKNOWLEDGMENT
AND
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made as of July
__, 1998 among (i) CHARTER COMMUNICATIONS INTERNATIONAL, INC., a Nevada
corporation with its principal office located at 2839 Paces Ferry Road, Suite
500, Atlanta, Georgia 30339 (the "Company"), and (ii) JAMES A. PATTERSON
("Patterson"), a resident of the Commonwealth of Kentucky, and JP INVESTMENT
CORPORATION ("Investment"), a Kentucky corporation, or its assignee, (each
referred to as a "Stockholder", as applicable, and collectively, as the
"Stockholders").
W I T N E S S E T H:
-------------------
WHEREAS, the Company and Patterson are on the date hereof entering into a
transaction (the "Transaction") whereby Patterson shall acquire 500,000 shares
of the Company's common stock, par value $.00001 per share and Patterson shall
obtain a warrant (the "Warrant") to purchase an additional 500,000 shares of the
Company's common stock.
WHEREAS, the Company and Investment on the date hereof expect to enter into
a transaction in the near future pursuant to a Financing Agreement among the
Company, Investment and Telecommute Solutions GP, Inc. ("Telecommute"), pursuant
to which Investment will have the right to convert certain shares of preferred
stock of Telecommute into shares of the Company's common stock.
NOW, THEREFORE, in consideration of the premises and the mutual
representations and covenants hereinafter set forth, the parties hereto hereby
agree as follows:
I. DEFINITIONS AND RESTRICTED STOCK ACKNOWLEDGMENTS
1.1 Definitions. For purposes of this Agreement, the following
-----------
definitions shall apply:
Common Stock. The term "Common Stock" shall mean all shares of the
-------------
Company's common stock being acquired by Patterson, all of the shares of the
Company's common stock issued pursuant to exercise of the Warrant, and all
shares of the Company's common stock acquired by Investment through the
conversion of Telecommute preferred stock, each as contemplated in the Recitals
above.
The 1933 Act. The term "1993 Act" means the Securities Act of 1933,
--------------
as amended, or any successor legislation thereto.
Register. The terms "register," "registered," and "registration"
--------
refer to a registration effected by preparing and filing a registration
statement of similar documents in compliance with the 1933 Act, and the
declaration or ordering of effectiveness of such registration statement or
document.
4.2-10
<PAGE>
Registrable Securities. The term "Registrable Securities" means the
-----------------------
Common Stock.
1.2 Restricted Stock Acknowledgments.
----------------------------------
(a) No Registration. The Stockholders understand and acknowledge
----------------
that none of the shares of Common Stock have been registered under the 1933 Act
and, therefore, none of them can be resold unless they are registered under the
1933 Act or unless an exemption is available.
(b) Purchase for Investment, Etc. Each of the Stockholders
--------------------------------
represents and warrants to the Company, its representatives and agents that:
(i) Each of the Stockholders is aware that no federal or
state agency has made any finding or determination as to the fairness of an
investment in the Common Stock nor any recommendation nor endorsement with
respect thereto;
(ii) Each of the Stockholders recognize that an investment in
the Common Stock involves a high degree of risk;
(iii) Each of the Stockholders has such knowledge and
experience in financial and business matters as to be capable of evaluating the
risks and merits of participating in the Transaction and protecting
Stockholder's interests in connection with this investment;
(iv) Each of the Stockholders is able to bear the economic
risk of the investment in the Common Stock, including the risk of total loss of
the investment;
(v) Each of the Stockholders has received and has thoroughly
reviewed the Company's most recent reports on Form 10-KSB and 10-QSB (including
the Company's financial statements therein), and no statement, printed material
or inducement given or made by any person is contrary to the information
contained in such "SEC Reports";
(vi) Each of the Stockholders has had an opportunity to ask
questions of the officers and directors of the Company and to receive answers
from them concerning this offering and the Company, and the officers and
directors of the Company have made all relevant information available to
Stockholder, including materials, books and records of the Company;
(vii) Each of the Stockholders is aware that he must bear the
economic risk of his investment in the Company for an indefinite period of time
because the shares of Common Stock have not been registered under the 1933 Act
or the securities laws of any state and, therefore, none of them can be sold
unless subsequently registered under the 1933 Act and any applicable state
securities laws or an exemption from registration is available;
4.2-11
<PAGE>
(viii) Each of the Stockholders acknowledges that a legend
will be placed on the certificates for shares of Common Stock in substantially
the following form:
"THIS SECURITY HAS BEEN ACQUIRED FOR INVESTMENT AND HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE. WITHOUT SUCH REGISTRATION, SUCH SECURITY MAY NOT BE SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED, EXCEPT UPON DELIVERY TO THE ISSUER OF THE
CERTIFICATE OF AN OPINION OF COUNSEL SATISFACTORY TO COUNSEL FOR THE ISSUER THAT
REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION TO COUNSEL FOR
THE ISSUER OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO COUNSEL FOR THE
ISSUER TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS OR ANY
RULE OR REGULATION PROMULGATED THEREUNDER,"; and
(ix) Each of the Stockholders acknowledges that the Company
has placed or will place stop transfer instructions with respect to the shares
of Common Stock to restrict the resale, pledge, hypothecation or other transfer
thereof.
II. REGISTRATION
2.1 Right to Include Registrable Stock. If the Company proposes to register
----------------------------------
any of its securities under the 1933 Act for its own account for sale for cash
(other than a registration on Form S-4 or Form S-8, or any successor or similar
forms) (an "Offering"), it will each such time promptly give written notice to
the Stockholders. Upon the written request of any of the Stockholders made
within 15 days after the receipt of any such notice (which request shall specify
the Registrable Securities intended to be disposed of by such Stockholder), the
Company will use its best efforts to effect the registration under the 1933 Act
of all Registrable Securities which the Company has been requested to register
by the Stockholder; provided that (i) if, at any time after giving written
--------
notice of its intention to register any securities and prior to the effective
date of the registration statement filed in connection with such registration,
the Company determines for any reason not to register such securities, the
Company may, at its election, give written notice of such determination to the
Stockholder and, thereupon, will be relieved of its obligation to register any
Registrable Securities in connection with such registration, (ii) in case of a
determination by the Company to delay registration of its securities, the
Company will be permitted to delay the registration of Registrable Securities
for the same period as the delay in registering such other securities, (iii) the
amount of Registrable Securities of the Stockholder which will be registered may
4.2-12
<PAGE>
be limited by the terms of Section 2.2 hereof, and (iv) the Company shall have
no obligation pursuant to this Section 2.1 to register any Registrable
Securities unless the Stockholder agrees to accomplish the distribution of the
Registrable Securities in the manner and under such conditions as may be
reasonably required in the discretion of the Company including, without
limitation, the execution of appropriate agreements with underwriters,
utilization of specified brokerage firms or limitations on the number of shares
which may be sold on any single day.
2.2 Priority. If the managing underwriter for a registration involving
--------
an underwritten offering advises the Company in writing that, in its opinion,
the number of securities of the Company (including Registrable Securities)
requested to be included in such registration exceeds the number of securities
of the Company (the "Sale Number") which can be sold in an orderly manner in
such offering within a price range acceptable to the Company, the Company will
include (i) first, all securities of the Company that the Company proposes to
register for its own account and (ii) second, to the extent that the number of
securities of the Company to be included by the Company is less than the Sale
Number, a number of the Registrable Securities equal to the number derived by
multiplying (a) the difference between the Sale Number and the securities
proposed to be sold by the Company, and (b) a fraction of the numerator of which
is the number of Registrable Securities originally requested to be registered by
the Stockholder and the denominator of which shall be the aggregate number of
all securities requested to be registered by all stockholders of the Company's
securities (other than securities being registered by the Company itself). By
way of example, if the Stockholder requests registration of 500 shares and only
one other stockholder of shares of Common Stock requests registration and seeks
to register 1,000 shares and the Company seeks to register 3,000 shares and the
Sale Number is 4,200, then the Stockholder will be entitled to register 400
shares of Common Stock.
2.3 Withdrawal or Lapse. Notwithstanding any other provision herein to
-------------------
the contrary, the Company may at any time, at its sole discretion, withdraw or
abandon any registration statement or allow a registration statement to lapse,
without any liability to the Stockholder.
III. INDEMNIFICATION
3.1 To the extent permitted by law, the Stockholder will indemnify and
hold harmless the Company, each of its directors, each of its officers who has
signed the registration statement, each person, if any, who controls the Company
within the meaning of the 1933 Act, any underwriter and any controlling person
of any such underwriter, against any losses, claims, damages, or liabilities
(joint or severally) to which any of the foregoing persons may become subject,
under the 1933 Act or other federal or state law, insofar as such losses,
claims, damages, or liabilities (or action in respect thereto) arise out of or
are based upon false or misleading written information furnished by the
Stockholder expressly for use in connection with such registration; and such
Stockholder will pay, as incurred, any legal or other expenses reasonably
incurred by any person intended to be indemnified pursuant to this Section 3.1,
in connection with investigating or defending any such loss, claim, damage,
liability, or action. In no event will the liability of any Stockholder for
indemnification exceed the proceeds received by such Stockholder in the
Offering.
4.2-13
<PAGE>
3.2 The obligation of the Stockholder under this Article III will
survive the completion of any offering of Registrable Securities in a
registration statement under this Agreement, and otherwise.
IV. EXPENSES OF REGISTRATION
All expenses incurred in connection with any registration, qualification or
compliance pursuant to this Agreement, including, without limitation, all
registration, filing and qualification fees, printing expenses, fees and
disbursements of counsel for the Company and expenses of any special audits
incidental to or required by such registration, qualification or compliance will
be borne by the Company, except that the Stockholder shall be required to pay
underwriters' discounts, commissions, and stock transfer taxes relating to the
Registrable Securities and the fees and disbursements of counsel to the
Stockholder, other than as set forth in this Agreement.
V. MISCELLANEOUS
5.1 Termination. This Agreement shall terminate on December 31, 2002.
-----------
5.2 Notices. Any notice or other communication given hereunder shall
-------
be deemed sufficient if in writing and sent by registered or certified mail,
return receipt requested, or delivered by hand against written receipt therefor,
by facsimile transmission or by overnight courier, addressed as follows:
if to either of the Stockholders,
c/o JP Investment Corporation
Ten Thousand Building
Shelbyville Road
Louisville, Kentucky 40223
Attn: James A. Patterson
with a copy to,
Brown, Todd & Heyburn PLLC
400 West Market Street, 32nd Floor
Louisville, Kentucky 40202
Attn: C. Edward Glasscock
if to the Company,
Charter Communications International, Inc.
2930 Paces Ferry Road
Suite 500
Atlanta, Georgia 30339
Attention: Stephen E. Raville
4.2-14
<PAGE>
with a copy to,
Cushing, Morris, Armbruster & Jones, LLP
229 Peachtree Street, N.E.
Suite 2110, International Tower
Atlanta, Georgia 30303
Attention: Charles M. Cushing, Jr.
Notices shall be deemed to have been given on the third business day after
being so mailed; except notice of change of address and notices not delivered by
mail, which shall be deemed to have been given when received.
5.3 Severability. The holding of any provision of this Agreement to be
------------
invalid or unenforceable by a court of competent jurisdiction shall not affect
any other provision of this Agreement, which shall remain in full force and
effect.
IN WITNESS THEREOF, this Agreement has been executed as of the date first
above written.
CHARTER COMMUNICATIONS
INTERNATIONAL, INC.
By: __________________________________
Its: __________________________________
STOCKHOLDERS:
________________________________________
James Patterson
JP INVESTMENT CORPORATION
By: __________________________________
Title: __________________________________
4.2-15
<PAGE>
EXHIBIT 4.5
RESTRICTED STOCK ACKNOWLEDGEMENT
AND
REGISTRATION RIGHTS AGREEMENT
This RESTRICTED STOCK ACKNOWLEDGEMENT AND REGISTRATION RIGHTS AGREEMENT
(this "Agreement") is made as of June 1, 1998 between CHARTER COMMUNICATIONS
INTERNATIONAL, INC., a Nevada corporation with its principal office located at
2839 Paces Ferry Road, Suite 500, Atlanta, Georgia 30339 (the "Company"), and
________________, a resident of Georgia (the "Stockholder").
W I T N E S S E T H:
-------------------
WHEREAS, the parties hereto, together with certain other parties, are on
the date hereof entering into a transaction (the "Transaction") whereby the
Stockholder shall acquire up to 150,000 shares of the Company's common stock,
par value $.00001 per share (all such shares of common stock acquired or to be
acquired by the Stockholder pursuant to the Transaction being hereinafter
referred to collectively as the "Common Stock").
NOW, THEREFORE, in consideration of the premises and the mutual
representations and covenants hereinafter set forth, the parties hereto hereby
agree as follows:
I. DEFINITIONS AND RESTRICTED STOCK ACKNOWLEDGEMENTS
1.1 Definitions. For purposes of this Agreement, the following
-----------
definitions shall apply:
The 1933 Act. The term "1933 Act" means the Securities Act of 1933, as
--------------
amended, or any successor legislation thereto.
Register. The terms "register," "registered," and "registration" refer to
--------
a registration effected by preparing and filing a registration statement or
similar document in compliance with the 1933 Act, and the declaration or
ordering of effectiveness of such registration statement or document.
Registrable Securities. The term "Registrable Securities" means the Common
----------------------
Stock.
1.2 Restricted Stock Acknowledgments.
----------------------------------
(a) No Registration. Stockholder understands and acknowledges
----------------
that none of the shares of Common Stock have been registered under the 1933 Act
and, therefore, none of them can be resold unless they are registered under the
1933 Act or unless an exemption is available.
(b) Purchase for Investment, Etc. Stockholder represents and
--------------------------------
warrants to the Company, its representatives and agents that:
(i) Stockholder is aware that no federal
or state agency has made any finding or determination as to the fairness of an
investment in the Common Stock nor any recommendation nor endorsement with
respect thereto;
4.2-17
<PAGE>
(ii) Stockholder recognizes that an
investment in the Common Stock involves a high degree of risk;
(iii) Stockholder has such knowledge and
experience in financial and business matters as to be capable of evaluating the
risks and merits of participating in the Transaction and protecting
Stockholder's interests in connection with this investment;
(iv) Stockholder is able to bear the
economic risk of the investment in the Common Stock, including the risk of total
loss of the investment;
(v) Stockholder has received and has
thoroughly reviewed the Company's most recent reports on Form 10-K and 10-Q
(including the Company's financial statements therein) and all other reports and
documents required to be filed by the Company pursuant to the 1933 Act and the
Securities Exchange Act of 1934, as amended, and no statement, printed material
or inducement given or made by any person is contrary to the information
contained in such "SEC Reports";
(vi) Stockholder has had an opportunity
to ask questions of the officers and directors of the Company and to receive
answers from them concerning this offering and the Company, and the officers and
directors of the Company have made all relevant information available to
Stockholder, including materials, books and records of the Company;
(vii) Stockholder is aware that he must
bear the economic risk of his investment in the Company for an indefinite period
of time because the shares of Common Stock have not been registered under the
1933 Act or the securities laws of any state and, therefore, none of them can be
sold unless subsequently registered under the 1933 Act and any applicable state
securities laws or an exemption from registration is available;
(viii) Stockholder acknowledges that a
legend will be placed on the certificates for the shares of Common Stock in
substantially the following form:
"THIS SECURITY HAS BEEN ACQUIRED FOR INVESTMENT AND HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY
STATE. WITHOUT SUCH REGISTRATION, SUCH SECURITY MAY NOT BE SOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED, EXCEPT UPON DELIVERY TO THE ISSUER OF THE
CERTIFICATE OF AN OPINION OF COUNSEL SATISFACTORY TO COUNSEL FOR THE ISSUER THAT
REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR THE SUBMISSION TO COUNSEL FOR
THE ISSUER OF SUCH OTHER EVIDENCE AS MAY BE SATISFACTORY TO COUNSEL FOR THE
ISSUER TO THE EFFECT THAT ANY SUCH TRANSFER SHALL NOT BE IN VIOLATION OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS OR ANY
RULE OR REGULATION PROMULGATED THEREUNDER."; and
(ix) Stockholder acknowledges that the
Company has placed or will place stop transfer instructions with respect to the
shares of Common Stock to restrict the resale, pledge, hypothecation or other
transfer thereof.
II. REGISTRATION
2.1. Right to Include Registrable Stock. If the Company proposes to
-------------------------------------
register any of its securities under the 1933 Act for its own account for sale
for cash (other than a registration on Form S-4 or Form S-8, or any successor or
similar forms (an "Offering")), it will each such time promptly give written
notice to the Stockholder. Upon the written request of the Stockholder made
within 15 days after the receipt of any such notice (which request shall specify
the Registrable Securities intended to be disposed of by such Stockholder), the
Company will use its reasonable efforts to effect the registration under the
1933 Act of all Registrable Securities which the Company has been requested to
register by the Stockholder; provided that (i) if, at any time after giving
--------
written notice of its intention to register any securities and prior to the
effective date of the registration statement filed in connection with such
registration, the Company determines for any reason not to register such
securities, the Company may, at its election, give written notice of such
determination to the Stockholder and, thereupon, will be relieved of its
obligation to register any Registrable Securities in connection with such
registration, (ii) in case of a determination by the Company to delay
registration of its securities, the Company will be permitted to delay the
registration of Registrable Securities for the same period as the delay in
registering such other securities, (iii) the amount of Registrable Securities of
the Stockholder which will be registered may be limited by the terms of Section
2.2 hereof, and (iv) the Company shall have no obligation pursuant to this
Section 2.1 to register any Registrable Securities unless the Stockholder agrees
4.2-18
<PAGE>
to accomplish the distribution of the Registrable Securities in the manner and
under such conditions as may be reasonably required in the discretion of the
Company including, without limitation, the execution of appropriate agreements
with underwriters, utilization of specified brokerage firms or limitations on
the number of shares which may be sold on any single day.
2.2 Priority. If the managing underwriter for a registration involving
--------
an underwritten offering advises the Company in writing that, in its opinion,
the number of securities of the Company (including Registrable Securities)
requested to be included in such registration exceeds the number of securities
of the Company (the "Sale Number") which can be sold in an orderly manner in
such offering within a price range acceptable to the Company, the Company will
include (i) first, all securities of the Company that the Company proposes to
register for its own account and (ii) second, to the extent that the number of
securities of the Company to be included by the Company is less than the Sale
Number, a number of the Registrable Securities equal to the number derived by
multiplying (a) the difference between the Sale Number and the securities
proposed to be sold by the Company, and (b) a fraction of the numerator of which
is the number of Registrable Securities originally requested to be registered by
the Stockholder and the denominator of which shall be the aggregate number of
all securities requested to be registered by all stockholders of the Company's
securities (other than securities being registered by the Company itself). By
way of example, if the Stockholder requests registration of 500 shares and only
one other stockholder of shares of Common Stock requests registration and seeks
to register 1,000 shares and the Company seeks to register 3,000 shares and the
Sale Number is 4,200, then the Stockholder will be entitled to register 400
shares of Common Stock.
2.3 Withdrawal or Lapse. Notwithstanding any other provision herein to
-------------------
the contrary, the Company may at any time, at its sole discretion, withdraw or
abandon any registration statement or allow a registration statement to lapse,
without any liability to the Stockholder.
III. INDEMNIFICATION
3.1 To the extent permitted by law, the Stockholder will indemnify and
hold harmless the Company, each of its directors, each of its officers who has
signed the registration statement, each person, if any, who controls the Company
within the meaning of the 1933 Act, any underwriter and any controlling person
of any such underwriter, against any losses, claims, damages, or liabilities
(joint or several) to which any of the foregoing persons may become subject,
under the 1933 Act or other federal or state law, insofar as such losses,
claims, damages, or liabilities (or action in respect thereto) arise out of or
are based upon false or misleading written information furnished by the
Stockholder expressly for use in connection with such registration; and such
Stockholder will pay, as incurred, any legal or other expenses reasonably
incurred by any person intended to be indemnified pursuant to this Section 3.1,
in connection with investigating or defending any such loss, claim, damage,
liability, or action.
3.2 The obligations of the Stockholder under this Article III will
survive the completion of any offering of Registrable Securities in a
registration statement under this Agreement, and otherwise.
4.2-19
<PAGE>
IV. EXPENSES OF REGISTRATION
All expenses incurred in connection with any registration, qualification or
compliance pursuant to this Agreement, including, without limitation, all
registration, filing and qualification fees, printing expenses, fees and
disbursements of counsel for the Company and expenses of any special audits
incidental to or required by such registration, qualification or compliance will
be borne by the Company, except that the Stockholder shall be required to pay
underwriters' discounts, commissions, and stock transfer taxes relating to the
Registrable Securities and the fees and disbursements of counsel to the
Stockholder, other than as set forth in this Agreement.
V. MISCELLANEOUS
5.1 Termination. This Agreement shall terminate on December 31, 1999.
-----------
5.2 Notices. Any notice or other communication given hereunder shall
-------
be deemed sufficient if in writing and sent by registered or certified mail,
return receipt requested, or delivered by hand against written receipt therefor,
by facsimile transmission or by overnight courier, addressed as follows:
if to the Stockholder,
3137 Chamblee Dunwoody Road
Altanta, Georgia 30341
Attention: Francisco Rodriguez
if to the Company,
Charter Communications International, Inc.
2839 Paces Ferry Road
Suite 500
Atlanta, Georgia 30339
Attention: Stephen E. Raville
with a copy to,
Cushing, Morris, Armbruster & Jones, LLP
229 Peachtree Street, N.E.
Suite 2110
Atlanta, Georgia 30303
Attention: Charles M. Cushing, Jr.
Notices shall be deemed to have been given on the third business day after
being so mailed; except notices of change of address and notices not delivered
by mail, which shall be deemed to have been given when received.
5.3 Severability. The holding of any provision of this Agreement to be
------------
invalid or unenforceable by a court of competent jurisdiction shall not affect
any other provision of this Agreement, which shall remain in full force and
effect.
4.2-20
<PAGE>
IN WITNESS WHEREOF, this Agreement has been executed as of the date first
above written.
CHARTER COMMUNICATIONS
INTERNATIONAL, INC.
By:________________________________________
Its:_______________________________________
[CORPORATE SEAL]
STOCKHOLDER:
(SEAL)
4.2-21
<PAGE>
EXHIBIT 5.1
September 21, 1998
Charter Communications International, Inc.
2839 Paces Ferry Road, #500
Atlanta, GA 30339
Re: Registration Statement on Form S-3
Gentlemen:
We have acted as counsel for Charter Communications International, Inc., a
Nevada corporation (the "Company"), in connection with the preparation of the
Company's Registration Statement on Form S-3 (the "Registration Statement"), to
be filed with the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933, as amended (the "Securities Act"), in connection
with the proposed sale of up to 1,593,750 shares (the "Shares") of Common Stock
of the Company by a certain Shareholders of the Company (the "Selling
Shareholders"). The Shares are proposed to be sold by the Selling Shareholders
in the manner set forth under the caption "Plan of Distribution" in the
Prospectus constituting part I of the Registration Statement.
In connection with the foregoing, we have examined the originals or copies,
certified or otherwise authenticated to our satisfaction, of such corporate
records of the Company, certificates of public officials and other instruments
and documents as we have deemed necessary to require as a basis for the opinions
hereinafter expressed. As to questions of fact material to such opinions, we
have, where relevant facts were not independently established, relied upon
statements of officers of the Company.
On the basis of the foregoing and in reliance thereon, we advise you that
in our opinion the Shares are legally issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion with the Commission as
Exhibit 5.1 of the Registration Statement and to the reference to us in the
Prospectus under the caption "Legal Matters". In giving this consent, we do not
therefore admit that we come within the category of persons whose consent is
required under Section 7 of the Securities Act or the rules or regulations of
the Commission thereunder.
Respectfully submitted,
BROWN, PARKER & LEAHY, L.L.P.
By: /s/
___________________________________
5.1-1
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference of our reports dated March 31, 1998 included in Charter Communications
International, Inc.'s Annual Report on Form 10-K/SB for the year ending
December 31, 1997 into this Registration Statement.
Arthur Andersen LLP
Atlanta, Georgia
August 7, 1998h{ Act"), in co
5.1-2
<PAGE>
