Exhibit 1.1
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INTERMEDIA COMMUNICATIONS INC.
7,000,000 Depositary Shares Each Representing a One-Hundredth Interest in a
Share of 7% Series E Junior Convertible Preferred Stock
Depositary Share Purchase Agreement
October 24, 1997
BEAR, XXXXXXX & CO. INC.
SALOMON BROTHERS INC
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INTERMEDIA COMMUNICATIONS INC.
7,000,000 Depositary Shares Each Representing a One-Hundredth Interest in a
Share of 7% Series E Junior Convertible Preferred Stock
DEPOSITORY SHARE PURCHASE AGREEMENT
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October 24, 1997
New York, New York
BEAR, XXXXXXX & CO. INC.
SALOMON BROTHERS INC
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies & Gentlemen:
Intermedia Communications Inc., a Delaware corporation (the "Company"),
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proposes to issue and sell to Bear, Xxxxxxx & Co. Inc. and Salomon Brothers Inc
(together, the "Initial Purchasers") 7,000,000 Depositary Shares (the
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"Depositary Shares"), each representing a one-hundredth interest in a share of
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its 7% Series E Junior Convertible Preferred Stock, par value $1.00 per share
(the "Series E Preferred Stock"). The Series E Preferred Stock and the related
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Depositary Shares are to be authorized and issued pursuant to the provisions of
a Certificate of Designation of Voting Power, Designation Preferences and
Relative, Participating, Optional or Other Special Rights and Qualifications,
Limitations and Restrictions (the "Certificate of Designation") to be filed with
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the Secretary of State of the State of Delaware. Continental Stock Transfer &
Trust Company will be transfer agent and registrar for the Series E Preferred
Stock and will act as the "Depositary" for the Depositary Shares.
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1. Issuance of Securities. The Company proposes to, upon the terms and
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subject to the conditions set forth herein, issue and sell to the Initial
Purchasers 7,000,000 Depositary Shares (the "Firm Shares"). The Company also
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proposes to sell to the Initial Purchasers, upon the terms and conditions set
forth herein, up to an additional 1,750,000 Depositary Shares (the "Additional
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Shares", and together with the Firm Shares, the "Company Shares"). The Firm
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Shares, the Additional Shares, and the Series E Preferred Stock are collectively
referred to herein as the "Securities."
For purposes of this Purchase Agreement (this "Agreement"), the term
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"Subsidiaries" shall mean the entities listed on Exhibit D hereto. Capitalized
terms used but not otherwise defined herein shall have the meanings given to
such terms in the Certificate of Designation. Upon original issuance thereof,
and until such time as the same is no longer required under the applicable
requirements of the Act, the Series E Preferred Stock, the Company Shares (and
all securities issued in exchange therefor, in substitution thereof or upon
conversion thereof) shall bear the following legend:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER XXXXXXX 0 XX XXX
XXXXXX XXXXXX SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE
EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS
HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (1) TO THE COMPANY, (2) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (3) TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (4) PURSUANT TO OFFERS AND SALES TO NON-
U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (5) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS
DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT (AN "IAI") THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE TRANSFER OF THIS SECURITY (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM THE TRUSTEE) OR (6) PURSUANT TO ANY OTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE
SECURITIES ACT (AND BASED ON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), SUBJECT IN EACH OF THE FOREGOING CASES TO APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY
EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE."
2. Offering. The Company Shares, will be offered and sold to the
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Initial Purchasers pursuant to an exemption from the registration requirements
under the Securities Act of 1933, as amended (the "Act"). The Company has
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prepared a preliminary offering memorandum, dated October 22, 1997 (including
the information in the Exhibits included in the exhibit volume delivered
therewith, the "Preliminary Offering Memorandum"), and a final offering
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memorandum, dated October 24, 1997 (including the information in the Exhibits
attached thereto, the "Offering Memorandum"), relating to the Company and the
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Series E Preferred Stock (and the related Depositary Shares) and the issuance of
the Senior Notes due 2007.
The Initial Purchasers have advised the Company that the Initial
Purchasers will make offers of sale (the "Exempt Resales") of the Company
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Shares, on the terms set forth in the Offering Memorandum, as amended or
supplemented, solely (i) to persons whom any of the Initial Purchasers
reasonably believe to be "qualified institutional buyers," as defined in Rule
144A under the Act
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("QIBs"), (ii) to a limited number of persons who have represented to the
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Company that they are institutional "Accredited Investors" referred to in Rule
501(a)(1), (2), (3) or (7) under the Act (each, an "Accredited Investor") and
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(iii) pursuant to offers and sales that occur outside the United States within
the meaning of Regulation S under Securities Act. The QIBs, Accredited Investors
and the purchasers pursuant to Regulation S are referred to herein as the
"Eligible Purchasers." The Initial Purchasers will offer the Series E Preferred
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Stock (and the related Depositary Shares) to such Eligible Purchasers initially
at a price of $2,500.00 (and $25.00 for the related Depositary Shares) per
share. Such price may be changed at any time without notice.
Holders (including subsequent transferees) of the Series E Preferred
Stock (and the related Depositary Shares) will have the registration rights set
forth in the registration rights agreement relating thereto (the "Registration
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Rights Agreement") to be dated the Closing Date (as defined), for so long as
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such Series E Preferred Stock (and the related Depositary Shares) constitute
"Transfer Restricted Securities" (as defined in the Registration Rights
Agreement). Pursuant to the Registration Rights Agreement, the Company will
agree to file with the Securities and Exchange Commission (the "Commission"),
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under the circumstances set forth therein, (i) a shelf registration statement
pursuant to Rule 415 under the Act (the "Shelf Registration Statement") relating
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to the resale by certain holders of the Series E Preferred Stock and the related
Depositary Shares, and (ii) a registration statement (the "Common Registration
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Statement") relating to the sale by certain holders of Common Stock of the
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Company received in connection with conversion of the Series E Preferred Stock,
and to use its best efforts to cause the Shelf Registration Statement and the
Common Registration Statement to be declared effective. This Agreement, the
Certificate of Designation, the Securities, and the Registration Rights
Agreement are hereinafter sometimes referred to collectively as the "Operative
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Documents."
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3. Purchase, Sale and Delivery. (a) On the basis of the
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representations, warranties and covenants contained in this Agreement, and
subject to its terms and conditions, the Company agrees to issue and sell to
each Initial Purchaser, and each Initial Purchaser agrees severally and not
jointly to purchase from the Company, the number of Firm Shares set forth
opposite its name on Schedule I hereto. The purchase price for the Firm Shares,
shall be $24.25 per share.
The Company also agrees, subject to all the terms and conditions set
forth herein, to sell to the Initial Purchasers, and, upon the basis of the
representations, warranties and agreements of the Company herein contained and
subject to all the terms and conditions set forth herein, the Initial Purchasers
shall have the right to purchase from the Company, solely for the purpose of
covering over-allotments in connection with sales of the Firm Shares, at the
purchase price per Depository Share of $24.25, pursuant to an option (the
"over-allotment option") which may be exercised at any time and from time to
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time prior to 10:00 p.m., New York City time, on the 30th day after the date of
the Offering Memorandum (or, if such 30th day shall be a Saturday or Sunday or a
holiday, on the next business day thereafter when the New York Stock Exchange is
open for trading), up to an aggregate of 1,750,000 Additional Shares. Upon any
exercise of the over-allotment option, each Initial Purchaser, severally and not
jointly, agrees to purchase from the Company the number of Additional Shares
(subject to such adjustments as the Initial Purchasers may determine in order to
avoid fractional Depository Shares) that bears the same proportion to the
aggregate number of Additional Shares to be purchased by the Initial Purchasers
as the number of Firm Shares set forth opposite the name of such Initial
Purchaser on Schedule I hereto bears to the aggregate number of Firm Shares.
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(b) Delivery of, and payment of the purchase price for, the Firm
Shares shall be made, against payment of the purchase price, at the offices of
Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, or such other location
as may be mutually acceptable. Such delivery and payment shall be made at 9:00
A.M. New York time, on October 30, 1997, or at such other time as shall be
agreed upon by the Initial Purchasers and the Company. The time and date of such
delivery and payment of the Firm Shares are herein called the "Closing Date."
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(c) Delivery of, and payment of the purchase price for any Additional
Shares to be purchased by the Initial Purchasers shall be made at the offices of
Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, or such other location
as may be mutually acceptable, at such time and on such date (the "Option
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Closing Date"), which may be the same as the Closing Date but shall in no event
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be earlier than the Closing Date nor later than ten business days after the
giving of the notice hereinafter referred to, as shall be specified in a written
notice from Bear, Xxxxxxx & Co. Inc., on behalf of the Initial Purchasers to
purchase a number, specified in such notice, of Additional Shares.
(d) The Firm Shares and any Additional Shares to be purchased
hereunder shall initially be issued in the form of one or more Global Securities
(the "Global Securities"), registered in the name of Cede & Co., as nominee of
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the Depository Trust Company ("DTC"), having a liquidation preference
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corresponding to the aggregate liquidation preference of the Firm Shares and the
Additional Shares, as the case may be. The Global Securities shall be delivered
by the Company to the Initial Purchasers (or as the Initial Purchasers direct)
in each case with any transfer taxes payable upon initial issuance thereof duly
paid by the Company against payment of the purchase price by wire transfer of
immediately available funds to the order of the Company. The Global Securities
shall be made available to the Initial Purchasers for inspection not later than
9:30 a.m., New York City time, on the business day immediately preceding the
Closing Date.
4. Agreements of the Company. The Company covenants and agrees with
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each of the Initial Purchasers as follows:
(a) To advise the Initial Purchasers promptly and, if requested
by the Initial Purchasers, confirm such advice in writing, (i) of the issuance
by any state securities commission of any stop order suspending the
qualification or exemption from qualification of any of the Company Shares for
offering or sale in any jurisdiction, or the initiation of any proceeding for
such purpose by any state securities commission or other regulatory authority
and (ii) of the happening of any event that, in the reasonable opinion of either
counsel to the Company or counsel to the Initial Purchasers, makes any statement
of a material fact made in the Preliminary Offering Memorandum or the Offering
Memorandum untrue or that requires the making of any additions to or changes in
the Preliminary Offering Memorandum or the Offering Memorandum in order to make
the statements therein, in the light of the circumstances under which they are
made, not misleading. The Company shall use its best efforts to prevent the
issuance of any stop order or order suspending the qualification or exemption of
any of the Series E Preferred Stock (and the related Depositary Shares) under
any state securities or Blue Sky laws and, if at any time any state securities
commission or other regulatory authority shall issue an order suspending the
qualification or exemption of any of the Company Shares, under any state
securities or Blue Sky laws, the Company shall use its best efforts to obtain
the withdrawal or lifting of such order at the earliest possible time.
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(b) To furnish the Initial Purchasers and those persons
identified by the Initial Purchasers to the Company, without charge, as many
copies of the Preliminary Offering Memorandum and the Offering Memorandum, and
any amendments or supplements thereto, as the Initial Purchasers may reasonably
request. The Company consents to the use of the Preliminary Offering Memorandum
and the Offering Memorandum, and any amendments and supplements thereto required
pursuant hereto, by the Initial Purchasers in connection with Exempt Resales.
(c) Not to amend or supplement the Preliminary Offering
Memorandum or the Offering Memorandum prior to the Closing Date unless the
Initial Purchasers shall previously have been advised thereof and shall not have
objected thereto within a reasonable time after being furnished a copy thereof.
The Company shall promptly prepare, upon the Initial Purchasers' request, any
amendment or supplement to the Preliminary Offering Memorandum or the Offering
Memorandum that may be necessary or advisable in connection with Exempt Resales.
(d) If, after the date hereof and prior to consummation of any
Exempt Resale, any event shall occur as a result of which, in the judgment of
the Company or in the reasonable opinion of either counsel to the Company or
counsel to the Initial Purchasers, it becomes necessary or advisable to amend or
supplement the Preliminary Offering Memorandum or Offering Memorandum in order
to make the statements therein, in the light of the circumstances when such
Offering Memorandum is delivered to an Eligible Purchaser which is a prospective
purchaser, not misleading, or if it is necessary or advisable to amend or
supplement the Preliminary Offering Memorandum or Offering Memorandum to comply
with applicable law, (i) to notify the Initial Purchasers and (ii) forthwith to
prepare an appropriate amendment or supplement to such Offering Memorandum so
that the statements therein as so amended or supplemented will not, in the light
of the circumstances when it is so delivered, be misleading, or so that such
Offering Memorandum will comply with applicable law.
(e) To cooperate with the Initial Purchasers and counsel to the
Initial Purchasers in connection with the qualification or registration of the
Company Shares under the securities or Blue Sky laws of such jurisdictions as
the Initial Purchasers may reasonably request and to continue such qualification
in effect so long as required for the Exempt Resales; provided, however, that
the Company shall not be required in connection therewith to register or qualify
as a foreign corporation where it is not now so qualified or to take any action
that would subject it to service of process in suits or taxation, in each case,
other than as to matters and transactions relating to the Preliminary Offering
Memorandum, the Offering Memorandum or Exempt Resales, in any jurisdiction where
it is not now so subject.
(f) Whether or not the transactions contemplated hereby are
consummated or this Agreement becomes effective or is terminated, to pay all
costs, expenses, fees and taxes incident to the performance of the obligations
of the Company hereunder, including in connection with: (i) the preparation,
printing, filing and distribution of the Preliminary Offering Memorandum and the
Offering Memorandum (including, without limitation, financial statements) and
all amendments and supplements thereto required pursuant hereto, (ii) the
preparation (including, without limitation, duplication costs) and delivery of
all preliminary and final Blue Sky memoranda prepared and delivered in
connection herewith and with the Exempt Resales, (iii) the issuance, transfer
and delivery by the Company of the Securities to the Initial Purchasers, (iv)
the qualification or registration of the Securities for offer and sale under the
securities or Blue Sky laws of the several states (including, without
limitation, the reasonable fees and disbursements of
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counsel to the Initial Purchasers relating thereto), (v) furnishing such copies
of the Preliminary Offering Memorandum and the Offering Memorandum, and all
amendments and supplements thereto, as may be requested for use in connection
with Exempt Resales, (vi) the preparation of certificates for the Securities
(including, without limitation, printing and engraving thereof), (vii) the fees,
disbursements and expenses of the Company's counsel and accountants, (viii) all
expenses and listing fees in connection with the application for quotation of
the Company Shares in the National Association of Securities Dealers, Inc.
("NASD") Automated Quotation System - PORTAL
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("PORTAL"), (ix) all fees and expenses (including fees and expenses of counsel
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to the Company) of the Company in connection with the approval of the Securities
by DTC for "book-entry" transfer, (x) rating the Securities by rating agencies,
(xi) the reasonable fees and expenses of the Transfer Agent and its counsel in
connection with the Certificate of Designation, (xii) the performance by the
Company of its other obligations under this Agreement and the other Operative
Documents and (xiii) "roadshow" travel and other expenses incurred in connection
with the marketing and sale of the Securities (other than out-of-pocket expenses
incurred by the Initial Purchasers for travel, meals and lodgings).
(g) To use the proceeds from the sale of the Company Shares in
the manner described in the Offering Memorandum under the caption "Use of
Proceeds."
(h) To do and perform all things required to be done and
performed under this Agreement by it prior to or after the Closing Date and to
satisfy all conditions precedent on its part to the delivery of the Company
Shares.
(i) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act) that
would be integrated with the sale of the Company Shares, in a manner that would
require the registration under the Act of the sale to the Initial Purchasers or
Eligible Purchasers of the Company Shares, or to take any other action that
would result in the Exempt Resales not being exempt from registration under the
Act.
(j) For so long as any of the Securities remain outstanding and
during any period in which the Company is not subject to Section 13 or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), to make
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available to any holder of the Company Shares, in connection with any sale
thereof and any prospective purchaser of such Company Shares from such holder,
the information required by Rule 144A(d)(4) under the Act.
(k) To comply with all of its agreements set forth in the
Registration Rights Agreement and all agreements set forth in the representation
letters of the Company to DTC relating to the approval of the Company Shares, by
DTC for "book-entry" transfer.
(l) To use its best efforts to effect the inclusion of the
Company Shares, in PORTAL and to obtain approval of the Company Shares, by DTC
for "book-entry" transfer.
(m) During a period of five years following the Closing Date,
to deliver without charge to each of the Initial Purchasers, as they may
reasonably request, promptly upon their becoming available, copies of (i) all
reports or other publicly available information that the Company shall mail or
otherwise make available to its stockholders and (ii) all reports, financial
statements and proxy or information statements filed by the Company with the
Commission or any national securities exchange and such other publicly available
information concerning the Company or its Subsidiaries, including without
limitation, press releases.
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(n) Prior to the Closing Date, to furnish to each of the
Initial Purchasers, as soon as they have been publicly disclosed by the Company,
a copy of any consolidated financial statements and any unaudited interim
financial statements of the Company for any period subsequent to the period
covered by the financial statements appearing in the Offering Memorandum.
(o) Neither the Company nor any of its Subsidiaries will take,
directly or indirectly, any action designed to, or that might reasonably be
expected to, cause or result in stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Company
Shares. Except as permitted by the Act, the Company will not distribute any
preliminary offering memorandum, offering memorandum or other offering material
in connection with the offering and sale of the Company Shares.
(p) To comply with the agreements in the Certificate of
Designation, the Indenture, the Registration Rights Agreement and any other
Operative Document.
(q) Not to engage in any directed selling efforts with respect
to the Company Shares within the meaning of Regulation S, and that the Company
and each person acting on behalf of the Company has complied and will comply
with the offering restrictions requirement of Regulation S.
(r) During the period of 90 days from the date of the Offering
Memorandum, the Company will not offer, sell, contract to sell, grant any option
to purchase, establish a put equivalent position (as defined in Rule 16a-1(h)
under the Exchange Act), pledge or otherwise dispose of, directly or indirectly,
any shares of Common Stock of the Company, or any securities that are
substantially similar to the Common Stock, including, but limited to any
securities that are convertible into or exercisable or exchangeable for, or that
represent the right to receive, Common Stock or any substantially similar
securities or publicly disclose the intention to make any such offer, sale,
pledge or disposal, without the prior written consent of Bear, Xxxxxxx & Co.
Inc. except (i) for private sales so long as the purchaser thereof enters into a
corresponding lockup agreement with Bear, Xxxxxxx & Co. Inc. for the then
unexpired portion of the 90-day period, (ii) for grants of employee stock
options, restricted stock and other incentive awards in the ordinary course of
business, issuances of Common Stock pursuant to the exercise of such options or
awards or the exercise of any other employee stock options outstanding on the
date hereof, (iii) issuances in connection with the acquisition by the Company
or any of its subsidiaries of Telecommunications Related Assets or a
Telecommunications Business and (iv) dividends on securities outstanding on the
Issue Date in accordance with the terms thereof or issuances in connection with
the exercise of any convertible securities, warrants or option securities
existing on the Issue Date or that are required to be issued pursuant to any
agreement in existence on the Issue Date.
5. Representations and Warranties. (a) The Company represents and
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warrants to each of the Initial Purchasers that:
(i) The Preliminary Offering Memorandum and the Offering
Memorandum have been prepared in connection with the Exempt Resales. The
Preliminary Offering Memorandum and the Offering Memorandum do not, and any
supplement or amendment to them will not, contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances
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under which they were made, not misleading, except that the representations and
warranties contained in this paragraph shall not apply to statements in or
omissions from the Preliminary Offering Memorandum and the Offering Memorandum
(or any supplement or amendment thereto) made in reliance upon and in conformity
with information relating to the Initial Purchasers furnished to the Company in
writing by the Initial Purchasers expressly for use therein. No stop order
preventing the use of the Preliminary Offering Memorandum or the Offering
Memorandum, or any amendment or supplement thereto, or any order asserting that
any of the transactions contemplated by this Agreement are subject to the
registration requirements of the Act, has been issued.
(ii) When the Company Shares are issued and delivered pursuant
to this Agreement, neither the Series E Preferred Stock nor the Company Shares
will be of the same class (within the meaning of Rule 144A under the Act) as
securities of the Company that are listed on a national securities exchange
registered under Section 6 of the Exchange Act, or that are quoted in a United
States automated inter-dealer quotation system.
(iii) The Company and each of its Subsidiaries (A) has been duly
organized, is validly existing as a corporation in good standing under the laws
of its respective jurisdiction of incorporation, (B) has all requisite corporate
power and authority to carry on its business as it is currently being conducted
and as described in the Offering Memorandum and to own, lease and operate its
properties, and (C) is duly qualified and in good standing as a foreign
corporation authorized to do business in each jurisdiction in which the nature
of its business or its ownership or leasing of property requires such
qualification except, with respect to this clause (C), where the failure to be
so qualified or in good standing does not and could not reasonably be expected
to (x) individually or in the aggregate, result in a material adverse effect on
the properties, business, results of operations, condition (financial or
otherwise), affairs or prospects of the Company and the Subsidiaries, taken as a
whole, (y) interfere with or adversely affect the issuance or marketability of
the Securities pursuant hereto or (z) in any manner draw into question the
validity of this Agreement or any other Operative Document or the transactions
described in the Offering Memorandum under the caption "Use of Proceeds" (any of
the events set forth in clauses (x), (y) or (z), a "Material Adverse Effect").
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(iv) All of the outstanding shares of capital stock of the
Company have been duly authorized, validly issued, and are fully paid and
nonassessable and were not issued in violation of any preemptive or similar
rights. At June 30, 1997 on a combined basis, after giving effect to the
issuance and sale of the Series E Preferred Stock (and the related Depositary
Shares) pursuant hereto, and to the offering of the Senior Notes due 2007 being
issued concurrently herewith and the events stated therein, the Company had an
authorized and outstanding consolidated capitalization as set forth in the
Offering Memorandum under the caption "Capitalization."
(v) Except as set forth in the Offering Memorandum, there are
not currently, and will not be as a result of the Offering, any outstanding
subscriptions, rights, warrants, calls, commitments of sale or options to
acquire, or instruments convertible into or exchangeable for, any capital stock
or other equity interest of the Company or any Subsidiary.
(vi) The Company has all requisite corporate power and authority
to execute, deliver and perform its obligations under this Agreement and the
other Operative Documents, and to consummate the transactions contemplated
hereby and thereby, including,
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without limitation, the corporate power and authority to issue, sell and deliver
the Securities as provided herein and therein.
(vii) This Agreement has been duly and validly authorized,
executed and delivered by the Company and is the legal, valid and binding
agreement of the Company, enforceable against it in accordance with its terms,
except insofar as indemnification and contribution provisions may be limited by
applicable law or equitable principles and subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or similar laws affecting the
rights of creditors generally and subject to general principles of equity.
(viii) The shares of Series E Preferred Stock (and the related
Depositary Shares) have been duly and validly authorized for issuance and sale
to the Initial Purchasers by the Company pursuant to this Agreement and, when
issued, delivered and paid for in accordance with the terms of this Agreement,
will be validly issued, fully paid and non-assessable and entitled to the
rights, privileges and preferences set forth in the Certificate of Designation,
and the issuance of such shares of Series E Preferred Stock (and the related
Depositary Shares) will not be subject to any preemptive or similar rights. The
Series E Preferred Stock (and the related Depositary Shares) will conform in all
material respects with the description thereof in the Offering Memorandum.
(ix) The Certificate of Designation has been duly authorized by
all necessary corporate and any necessary stockholder action and, on the Closing
Date will have been duly executed by the Company and filed with the Secretary of
State of the State of Delaware and will conform in all material respects to the
description thereof in the Offering Memorandum.
(x) Each of the Registration Rights Agreement and the Deposit
Agreement has been duly and validly authorized by the Company and, when duly
executed and delivered by the Company, will be the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors generally and
subject to general principles of equity and limitations on the validity or
enforceability of provisions relating to rights of indemnity and contribution
set forth therein. The Offering Memorandum contains a fair summary of the terms
of the Registration Rights Agreement and the Deposit Agreement.
(xi) None of the Company or any Subsidiary is and, after giving
effect to the Offering, will not be (A) in violation of its charter or bylaws,
(B) in default in the performance of any bond, debenture, note, indenture,
mortgage, deed of trust or other agreement or instrument to which it is a party
or by which it is bound or to which any of its properties is subject, or (C) in
violation of any local, state or Federal law, statute, ordinance, rule,
regulation, requirement, judgment or court decree (including, without
limitation, the Communications Act and the rules and regulations of the FCC and
environmental laws, statutes, ordinances, rules, regulations, judgments or court
decrees) applicable to the Company or any Subsidiary or any of their assets or
properties (whether owned or leased) other than, in the case of clauses (B) and
(C), any default or violation that (1) could not reasonably be expected to have
a Material Adverse Effect or (2) which was disclosed in the Offering Memorandum.
To the best knowledge of the Company, there exists no condition that, with
notice, the passage of time or otherwise, would constitute a default under any
such document or
9
instrument that could reasonably be expected to result in a Material Adverse
Effect, except as disclosed in the Offering Memorandum.
(xii) None of (A) the execution, delivery or performance by the
Company of this Agreement and the other Operative Documents, (B) the issuance
and sale of the Series E Preferred Stock (and the related Depositary Shares),
(C) the performance by the Company of its obligations under this Agreement and
the other Operative Documents and (D) the consummation of the transactions
contemplated by this Agreement and the other Operative Documents violate,
conflict with or constitute a breach of any of the terms or provisions of, or a
default under (or an event that with notice or the lapse of time, or both, would
constitute a default), or require consent under, or result in the imposition of
a lien or encumbrance on any properties of the Company or any Subsidiary, or an
acceleration of any indebtedness of the Company or any Subsidiary pursuant to,
(i) the charter or bylaws of the Company or any Subsidiary, (ii) any bond,
debenture, note, indenture, mortgage, deed of trust or other agreement or
instrument to which the Company or any Subsidiary is a party or by which any of
them or their property is or may be bound, (iii) any statute, rule or regulation
applicable to the Company or any Subsidiary or any of their respective assets or
properties or (iv) any judgment, order or decree of any court or governmental
agency or authority having jurisdiction over the Company or the Subsidiaries or
any of their assets or properties, except in the case of clauses (ii), (iii) and
(iv) for such violations conflicts, breaches, defaults, consents, impositions of
liens or accelerations that (1) would not singly, or in the aggregate, have a
Material Adverse Effect or (2) were disclosed in the Offering Memorandum. Other
than as described in the Offering Memorandum, no consent, approval,
authorization or order of, or filing, registration, qualification, license or
permit of or with, (A) any court or governmental agency, body or administrative
agency (including, without limitation, the FCC) or (B) any other person is
required for (1) the execution, delivery and performance by the Company of this
Agreement and the other Operative Documents, or (2) the issuance and sale of the
Securities and the transactions contemplated hereby and thereby, except (x) such
as have been obtained and made (or, in the case of the Registration Rights
Agreement, will be obtained and made) under the Act, the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act") and state securities or Blue Sky
-------------------
laws and regulations or such as may be required by the NASD or (y) where the
failure to obtain any such consent, approval, authorization or order of, or
filing registration, qualification, license or permit would not reasonably be
expected to result in a Material Adverse Effect.
(xiii) There is (i) no action, suit or proceeding before or by any
court, arbitrator or governmental agency, body or official, domestic or foreign,
now pending or, to the best knowledge of the Company or any Subsidiary,
threatened or contemplated to which the Company or any of the Subsidiaries is or
may be a party or to which the business or property of the Company or any
Subsidiary is subject, (ii) no statute, rule, regulation or order that has been
enacted, adopted or issued by any governmental agency or that has been proposed
by any governmental body or (iii) no injunction, restraining order or order of
any nature by a federal or state court or foreign court of competent
jurisdiction to which the Company or any Subsidiary is or may be subject or to
which the business, assets, or property of the Company or any Subsidiary are or
may be subject, that, in the case of clauses (i), (ii) and (iii) above, (x) is
required to be disclosed in the Preliminary Offering Memorandum and the Offering
Memorandum and that is not so disclosed, or (y) could reasonably be expected to
individually or in the aggregate, result in a Material Adverse Effect.
10
(xiv) No action has been taken and no statute, rule, regulation
or order has been enacted, adopted or issued by any governmental agency that
prevents the issuance of the Series E Preferred (and the related Depositary
Shares) or prevents or suspends the use of the
Offering Memorandum; no injunction, restraining order or order of any nature by
a federal or state court of competent jurisdiction has been issued that prevents
the issuance of the Series E Preferred Stock (and the related Depositary Shares)
or prevents or suspends the sale of the Series E Preferred Stock (and the
related Depositary Shares) in any jurisdiction referred to in Section 4(e)
hereof; and every request of any securities authority or agency of any
jurisdiction for additional information has been complied with in all material
respects.
(xv) Except as set forth in the Offering Memorandum, there is
(i) no significant unfair labor practice complaint pending against the Company
or any Subsidiary nor, to the best knowledge of the Company, threatened against
any of them, before the National Labor Relations Board, any state or local labor
relations board or any foreign labor relations board, and no significant
grievance or significant arbitration proceeding arising out of or under any
collective bargaining agreement is so pending against the Company or any
Subsidiary or, to the best knowledge of the Company, threatened against any of
them, (ii) no significant strike, labor dispute, slowdown or stoppage pending
against the Company or any Subsidiary nor, to the best knowledge of the Company,
threatened against the Company or any Subsidiary and (iii) to the best knowledge
of the Company, no union representation question existing with respect to the
employees of the Company or any Subsidiary that, in the case of clauses (i),
(ii) or (iii), could reasonably be expected to result in a Material Adverse
Effect. To the best knowledge of the Company, no collective bargaining
organizing activities are taking place with respect to the Company and the
Subsidiaries that could reasonably be expected to result in a Material Adverse
Effect. None of the Company or any Subsidiary has violated (A) any federal,
state or local law or foreign law relating to discrimination in hiring,
promotion or pay of employees (except as set forth in the Offering Memorandum),
(B) any applicable wage or hour laws or (C) any provision of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or the rules and
-----
regulations thereunder, which in the case of clause (A), (B) or (C) above could
reasonably be expected to result in a Material Adverse Effect.
(xvi) None of the Company or any Subsidiary has violated any
environmental, safety or similar law or regulation applicable to it or its
business or property relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), lacks any permit, license or other approval
------------------
required of it under applicable Environmental Laws or is violating any term or
condition of such permit, license or approval which could reasonably be expected
to, either individually or in the aggregate, have a Material Adverse Effect.
(xvii) Each of the Company and the Subsidiaries has (i) good and
marketable title to all of the properties and assets described in the Offering
Memorandum as owned by it, free and clear of all liens, charges, encumbrances
and restrictions, (ii) peaceful and undisturbed possession under all material
leases to which any of them is a party as lessee, (iii) all licenses,
certificates, permits, authorizations, approvals, franchises and other rights
from, and has made all declarations and filings with, all federal, state and
local authorities (including, without limitation, the FCC), all self-regulatory
authorities and all courts and other tribunals (each an "Authorization")
-------------
necessary to engage in the business conducted by any of them in the manner
described in the Offering Memorandum and (iv) no reason to believe that any
governmental body or agency is considering limiting, suspending or revoking any
such Authorization, except
11
with respect to clauses (i) through (iv) as described in the Offering Memorandum
or as could not reasonably be expected to result in a Material Adverse Effect.
Except where the failure to be in full force and effect would not have a
Material Adverse Effect, all such Authorizations are valid and in full force and
effect and each of the Company and the Subsidiaries is in compliance in all
material respects with the terms and conditions of all such Authorizations and
with the rules and regulations of the regulatory authorities having jurisdiction
with respect thereto. Except as could not reasonably be expected to result in a
Material Adverse Effect, all material leases to which the Company and the
Subsidiaries is a party are valid and binding and no default by the Company or
any Subsidiary has occurred and is continuing thereunder and, to the best
knowledge of the Company and the Subsidiaries no material defaults by the
landlord are existing under any such lease.
(xviii) Except as could not reasonably be expected to result in a
Material Adverse Effect, each of the Company and the Subsidiaries owns,
possesses or has the right to employ all patents, patent rights, licenses
(including all FCC, state, local or other jurisdictional regulatory licenses),
inventions, copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, software, systems
or procedures), trademarks, service marks and trade names, inventions, computer
programs, technical data and information (collectively, the "Intellectual
------------
Property") presently employed by it or its Subsidiaries in connection with the
--------
businesses now operated by it or which are proposed to be operated by it or its
Subsidiaries free and clear of and without violating any right, claimed right,
charge, encumbrance, pledge, security interest, restriction or lien of any kind
of any other person and none of the Company or any Subsidiary has received any
notice of infringement of or conflict with asserted rights of others with
respect to any of the foregoing. The use of the Intellectual Property in
connection with the business and operations of the Company and the Subsidiaries
does not infringe on the rights of any person, except as could not reasonably be
expected to have a Material Adverse Effect.
(xix) None of the Company or any Subsidiary, or to the best
knowledge of the Company, any of their respective officers, directors, partners,
employees, agents or affiliates or any other person acting on behalf of the
Company or any Subsidiary has, directly or indirectly, given or agreed to give
any money, gift or similar benefit (other than legal price concessions to
customers in the ordinary course of business) to any customer, supplier,
employee or agent of a customer or supplier, official or employee of any
governmental agency (domestic or foreign), instrumentality of any government
(domestic or foreign) or any political party or candidate for office (domestic
or foreign) or other person who was, is or may be in a position to help or
hinder the business of the Company or any Subsidiary (or assist the Company or
any Subsidiary in connection with any actual or proposed transaction) which (i)
might subject the Company or any Subsidiary, or any other individual or entity
to any damage or penalty in any civil, criminal or governmental litigation or
proceeding (domestic or foreign), (ii) if not given in the past, might have had
a material adverse effect on the assets, business or operations of the Company
or any Subsidiary or (iii) if not continued in the future, might have a Material
Adverse Effect.
(xx) All material tax returns required to be filed by the
Company and each of the Subsidiaries in all jurisdictions have been so filed.
All taxes, including withholding taxes, penalties and interest, assessments,
fees and other charges due or claimed to be due from such entities or that are
due and payable have been paid, other than those being contested in good faith
and for which adequate reserves have been provided or those currently payable
12
without penalty or interest. To the knowledge of the Company, there are no
material proposed additional tax assessments against the Company, the assets or
property of the Company or any Subsidiary.
(xxi) None of the Company or any Subsidiary is (i) an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, or (ii) a "holding company"
or a "subsidiary company" or an "affiliate" of a holding company within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
(xxii) Except as disclosed in the Offering Memorandum, and except
with respect to the holders of certain shares of Common Stock issued pursuant to
an Asset Acquisition Agreement dated as of December 6, 1996 among Universal
Telecom, Inc., Intermedia Communications, Inc. and certain individuals, there
are no holders of securities of the Company or the Subsidiaries who, by reason
of the execution by the Company of this Agreement or any other Operative
Document to which it is a party or the consummation by the Company of the
transactions contemplated hereby and thereby, have the right to request or
demand that the Company or any of the Subsidiaries register under the Act or
analogous foreign laws and regulations securities held by them.
(xxiii) Each of the Company and the Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that: (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect thereto.
(xxiv) Each of the Company and the Subsidiaries maintains
insurance covering its properties, operations, personnel and businesses. Such
insurance insures against such losses and risks as are adequate in accordance
with customary industry practice to protect the Company and the Subsidiaries and
their respective businesses. None of the Company or any Subsidiary has received
notice from any insurer or agent of such insurer that substantial capital
improvements or other expenditures will have to be made in order to continue
such insurance. All such insurance is outstanding and duly in force on the date
hereof, subject only to changes made in the ordinary course of business,
consistent with past practice, which do not, singly or in the aggregate,
materially alter the coverage thereunder or the risks covered thereby.
(xxv) None of the Company or any Subsidiary has (i) taken,
directly or indirectly, any action designed to, or that might reasonably be
expected to, cause or result in stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Securities
or (ii) since the date of the Preliminary Offering Memorandum (A) sold, bid for,
purchased or paid any person (other than the Initial Purchasers) any
compensation for soliciting purchases of the Series E Preferred Stock (and the
related Depositary Shares) or (B) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities of the
Company.
13
(xxvi) No registration under the Act of the Series E Preferred
Stock (and the related Depositary Shares) is required for the sale of the Series
E Preferred Stock (and the related Depositary Shares) to the Initial Purchasers
as contemplated hereby or for the Exempt Resales assuming (i) that the
purchasers who buy the Series E Preferred Stock (and the related Depositary
Shares) in the Exempt Resales are Eligible Purchasers and (ii) the accuracy of
the Initial Purchasers' representations regarding the absence of general
solicitation in connection with the sale of Series E Preferred Stock (and the
related Depositary Shares) to the Initial Purchasers and the Exempt Resales
contained herein. No form of general solicitation or general advertising was
used by the Company or any of its representatives (other than the Initial
Purchasers, as to which the Company makes no representation or warranty) in
connection with the offer and sale of any of the Series E Preferred Stock (and
the related Depositary Shares) or in connection with Exempt Resales, including,
but not limited to, articles, notices or other communications published in any
newspaper, magazine, or similar medium or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.
(xxvii) Set forth on Exhibit A hereto is a list of each employee
---------
pension or benefit plan with respect to which the Company or any corporation
considered an affiliate of the Company within the meaning of Section 407(d)(7)
of ERISA is a party in interest or disqualified person. The execution and
delivery of this Agreement, the other Operative Documents and the sale of the
Series E Preferred Stock (and the related Depositary Shares) to be purchased by
the Eligible Purchasers will not involve any prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Internal Revenue Code of
1986. The representation made by the Company in the preceding sentence is made
in reliance upon and subject to the accuracy of, and compliance with, the
representations and covenants made or deemed made by the Eligible Purchasers as
set forth in the Offering Memorandum under the caption "Notice to Investors."
(xxviii) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its date, and each amendment or supplement thereto,
as of its date, contains the information specified in, and meets the
requirements of, Rule 144A(d)(4) under the Act.
(xxix) Subsequent to the respective dates as of which
information is given in the Offering Memorandum and up to the Closing Date,
except as set forth in the Offering Memorandum, (i) none of the Company or any
Subsidiary has incurred any liabilities or obligations, direct or contingent,
which are material, individually or in the aggregate, to the Company and the
Subsidiaries taken as a whole, nor entered into any transaction not in the
ordinary course of business, (ii) there has not been, singly or in the
aggregate, any change or development, which could reasonably be expected to
result in a Material Adverse Effect and (iii) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class of
its capital stock, except for dividends paid in respect of the Series B
Preferred Stock or the Series D Junior Convertible Preferred Stock.
(xxx) None of the Company or any Subsidiary or any agent
thereof acting on behalf of them has taken, and none of them will take, any
action that might cause this Agreement or the issuance or sale of the Securities
to violate Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R. Part 220),
Regulation U (12 C.F.R. Part 221) or Regulation X
14
(12 C.F.R. Part 224) of the Board of Governors of the Federal Reserve System or
analogous foreign laws and regulations.
(xxxi) To the best knowledge of the Company, the accountants
who have certified or will certify the financial statements included or to be
included as part of the Offering Memorandum are independent accountants. The
consolidated historical financial statements, together with related schedules
and notes, set forth in the Offering Memorandum comply as to form in all
material respects with the requirements applicable to registration statements on
Form S-1 under the Act and present fairly in all material respects the financial
position and results of operations of the Company and the Subsidiaries at the
respective dates and for the respective periods indicated. Such financial
statements have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods presented. The
pro forma financial statements included in the Offering Memorandum have been
prepared on a basis consistent with such historical statements, except for the
pro forma adjustments specified therein, and give effect to assumptions made on
a reasonable basis and present fairly in all material respects the historical
and proposed transactions contemplated by this Agreement and the other Operative
Documents; and such pro forma financial statements comply as to form in all
material respects with the requirements applicable to pro forma financial
statements included in registration statements on Form S-1 under the Act. The
other financial and statistical information and data included in the Offering
Memorandum, historical and pro forma, are accurately presented in all material
respects and prepared on a basis consistent with the financial statements,
historical and pro forma, included in the Offering Memorandum and the books and
records of the Company and the Subsidiaries, as applicable.
(xxxii) The Company does not intend to, nor does it believe that
it will, incur debts beyond its ability to pay such debts as they mature. The
present fair saleable value of the assets of the Company on a consolidated basis
exceeds the amount that will be required to be paid on or in respect of the
existing debts and other liabilities (including contingent liabilities) of the
Company on a consolidated basis as they become absolute and matured. The assets
of the Company on a consolidated basis do not constitute unreasonably small
capital to carry out the business of the Company and the Subsidiaries, taken as
a whole, as conducted or as proposed to be conducted. Upon the issuance of the
Series E Preferred Stock (and the related Depositary Shares), the present fair
saleable value of the assets of the Company on a consolidated basis will exceed
the amount that will be required to be paid on or in respect of the existing
debts and other liabilities (including contingent liabilities) of the Company on
a consolidated basis as they become absolute and matured. Upon the issuance of
the Series E Preferred Stock (and the related Depositary Shares), the assets of
the Company on a consolidated basis will not constitute unreasonably small
capital to carry out its businesses as now conducted, including the capital
needs of the Company on a consolidated basis, taking into account the projected
capital requirements and capital availability.
(xxxiii) Except pursuant to this Agreement, there are no
contracts, agreements or understandings between the Company and any other person
that would give rise to a valid claim against the Company or either of the
Initial Purchasers for a brokerage commission, finder's fee or like payment in
connection with the issuance, purchase and sale of the Securities.
15
(xxxiv) Each certificate signed by any officer of the Company and
delivered to the Initial Purchasers or counsel for the Initial Purchasers shall
be deemed to be a representation and warranty by the Company to the Initial
Purchasers as to the matters covered thereby.
(xxxv) None of the Company, its Subsidiaries or any of its or
their affiliates or any person acting on its or their behalf has engaged or will
engage in any directed selling efforts within the meaning of Regulation S with
respect to the Company Shares, and the Company, its Subsidiaries and its or
their affiliates and all persons acting on its or their behalf have complied
with and will comply with the offering restrictions requirements of Regulation S
in connection with the offering of the Company Shares outside the United States.
The Company acknowledges that each of the Initial Purchasers and,
for purposes of the opinions to be delivered to the Initial Purchasers pursuant
to Section 8 hereof, counsel to the Company and counsel to the Initial
Purchasers, will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.
(b) Each of the Initial Purchasers, severally and not jointly,
represents, warrants and covenants to the Company and agrees that:
(i) Such Initial Purchaser is a QIB, with such knowledge and
experience in financial and business matters as are necessary in order to
evaluate the merits and risks of an investment in the Company Shares.
(ii) Such Initial Purchaser (A) is not acquiring the Company
Shares with a view to any distribution thereof that would violate the Act or the
securities laws of any state of the United States or any other applicable
jurisdiction and (B) will be reoffering and reselling the Company Shares only to
QIBs in reliance on the exemption from the registration requirements of the Act
provided by Rule 144A, to Accredited Investors in a private placement exempt
from the registration requirements of the Act and pursuant to offers and sales
that occur outside the United States in reliance upon the exemption from the
registration requirements of the Act provided by Regulation S.
(iii) No form of general solicitation or general advertising has
been or will be used by either of the Initial Purchasers or any of their
representatives in connection with the offer and sale of any of the Company
Shares, including, but not limited to, articles, notices or other communications
published in any newspaper, magazine, or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have been invited
by any general solicitation or general advertising.
(iv) Each of the Initial Purchasers agrees that, in connection
with the Exempt Resales, it will solicit offers to buy the Company Shares, only
from, and will offer to sell the Company Shares, only to, Eligible Purchasers.
The Initial Purchasers further agree (A) that they will offer to sell the
Company Shares, only to, and will solicit offers to buy the Company Shares, only
from (1) QIBs who in purchasing such Company Shares will be deemed to have
represented and agreed that they are purchasing the Company Shares, for their
own accounts or accounts with respect to which they exercise sole investment
discretion and that they or such accounts are QIBs, (2) Accredited Investors who
make the representations contained in, and execute and return to one of the
Initial Purchasers, a certificate in the form
16
of Annex B attached to the Offering Memorandum and (3) pursuant to offers and
sales that occur outside the United States within the meaning of Regulation S
under the Securities Act and (B) that such Eligible Purchasers acknowledge and
agree that such Company Shares will not have been registered under the Act and
may be resold, pledged or otherwise transferred only (i) to the Company, (ii)
pursuant to a registration statement which has been declared effective under the
Securities Act, (iii) to a person it reasonably believes is a QIB in a
transaction meeting the requirements of Rule 144A under the Securities Act, (iv)
pursuant to offers and sales to non-U.S. persons that occur outside the United
States in a transaction meeting the requirements of Rule 904 of Regulation S
under the Securities Act, (v) to an institutional "accredited investor" (as
defined in Rule 501(a) (1), (2), (3) or (7) of Regulation D under the Securities
Act (an "IAI") that, prior to such transfer, furnishes to the trustee a signed
letter containing certain representations and agreements relating to the
transfer of the Securities (the form of which letter can be obtained from the
Trustee) or (vi) pursuant to any other available exemption from the registration
requirements of the Securities Act (and based on an opinion of counsel if the
Company so requests), subject in each of the foregoing cases to the applicable
state securities laws of any State of the United States or any other applicable
jurisdiction and (C) that the holder will, and each subsequent holder is
required to, notify any purchaser of the security evidenced thereby of the
resale restrictions set forth in (B) above. Accordingly, each of the Initial
Purchasers agrees that neither it, its affiliates nor any persons acting on its
behalf has engaged or will engage in any directed selling efforts within the
meaning of Rule 902 of Regulation S with respect to the Company Shares, and it,
its affiliates and all persons acting on its or their behalf have complied and
will comply with the offering restrictions requirements of Regulation S.
(v) Each of the Initial Purchasers represents and agrees that
the Company Shares offered and sold in reliance on Regulation S have been and
will be offered and sold only in offshore transactions and that such securities
have been and will be represented upon issuance by a global security that may be
exchanged for definitive securities only upon certification of beneficial
ownership of the securities by a non-U.S. person or a U.S. person who purchases
such securities in a transaction that was exempt from the registration
requirements of the Securities Act.
(vi) Each of the Initial Purchasers understands that the Company
and, for purposes of the opinions to be delivered to the Initial Purchasers
pursuant to Section 8 hereof, counsel to the Company and counsel to the Initial
Purchasers will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.
Terms used in this Section 5 that have meanings assigned to them in
Regulation S are used herein as so defined.
6. Indemnification.
---------------
(a) The Company agrees to indemnify and hold harmless (i) each
of the Initial Purchasers, (ii) each person, if any, who controls any of the
Initial Purchasers within the meaning of Section 15 of the Act or Section 20(a)
of the Exchange Act and (iii) the respective officers, directors, partners,
employees, representatives and agents of any of the Initial Purchasers or any
controlling person to the fullest extent lawful, from and against any and all
losses, liabilities, claims, damages and expenses whatsoever (including but not
limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any
17
investigation or litigation, commenced or threatened, or any claim whatsoever,
and any and all amounts paid in settlement of any claim or litigation), joint or
several, to which they or any of them may become subject under the Act, the
Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages
or expenses (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in the
Preliminary Offering Memorandum or the Offering Memorandum, or in any supplement
thereto or amendment thereof, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the Company
will not be liable in any such case to the extent, but only to the extent, that
(i) any such loss, liability, claim, damage or expense arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Initial Purchasers
expressly for use therein and (ii) the foregoing indemnity with respect to any
untrue statement contained in or omitted from a preliminary offering memorandum
shall not inure to the benefit of any Initial Purchaser (or any person
controlling such Initial Purchaser), from whom the person asserting any such
loss, liability, claim, damage or expense purchased any of the Company Shares,
which are the subject thereof if it is finally judicially determined that such
loss, liability, claim, damage or expense resulted solely from the fact that the
Initial Purchaser sold the Company Shares, to a person to whom there was not
sent or given, at or prior to the written confirmation of such sale, a copy of
the Offering Memorandum, as amended or supplemented, and (x) the Company shall
have previously and timely furnished sufficient copies of the Offering
Memorandum, as so amended or supplemented, to such Initial Purchaser in
accordance with this Agreement and (y) the Offering Memorandum, as so amended or
supplemented, would have corrected such untrue statement or omission of a
material fact. This indemnity agreement will be in addition to any liability
which the Company may otherwise have, including, under this Agreement.
(b) Each Initial Purchaser, severally and not jointly, agrees
to indemnify and hold harmless the Company and each person, if any, who controls
the Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, against any losses, liabilities, claims, damages and expenses
whatsoever (including but not limited to attorneys' fees and any and all
expenses whatsoever incurred in investigating, preparing or defending against
any investigation or litigation, commenced or threatened, or any claim
whatsoever and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Offering Memorandum or the Offering
Memorandum, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, in
each case to the extent, but only to the extent, that any such loss, liability,
claim, damage or expense arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Initial Purchaser expressly for use therein;
provided, however, that in no case shall any Initial Purchaser be liable or
responsible for any amount in excess of the discounts and commissions received
by such Initial Purchaser, as set forth on the cover page of
18
the Offering Memorandum. This indemnity agreement will be in addition to any
liability which any Initial Purchaser may otherwise have, including, under this
Agreement.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 6 except to the extent that it
has been prejudiced in any material respect by such failure or from any
liability which it may otherwise have). In case any such action is brought
against any indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by one of the indemnifying
parties in connection with the defense of such action, (ii) the indemnifying
parties shall not have employed counsel to take charge of the defense of such
action within a reasonable time after notice of commencement of the action, or
(iii) such indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from or
additional to those available to one or all of the indemnifying parties (in
which case the indemnifying party or parties shall not have the right to direct
the defense of such action on behalf of the indemnified party or parties), in
any of which events such fees and expenses of counsel shall be borne by the
indemnifying parties; provided, however, that the indemnifying party under
subsection (a) or (b) above, shall only be liable for the legal expenses of one
counsel (in addition to any local counsel) for all indemnified parties in each
jurisdiction in which any claim or action is brought. Anything in this
subsection to the contrary notwithstanding, an indemnifying party shall not be
liable for any settlement of any claim or action effected without its written
consent; provided, however, that such consent was not unreasonably withheld.
7. Contribution. In order to provide for contribution in
------------
circumstances in which the indemnification provided for in Section 6 is for any
reason held to be unavailable from the Company or is insufficient to hold
harmless a party indemnified thereunder, the Company and the Initial Purchasers
shall contribute to the aggregate losses, claims, damages, liabilities and
expenses of the nature contemplated by such indemnification provision (including
any investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claims
asserted, but after deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Company, any contribution received by
the Company from persons, other than the Initial Purchasers, who may also be
liable for contribution, including persons who control the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act) to which
the Company and one or more of the Initial Purchasers may be subject, in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Initial Purchasers from the offering of the Company Shares, or,
if such allocation is not permitted by applicable law or indemnification is not
available as a result of the indemnifying party not having received notice as
provided in Section 6, in such proportion as is appropriate to reflect not only
the relative benefits referred to above but also the relative fault of the
Company and the Initial Purchasers in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant
19
equitable considerations. The relative benefits received by the Company and the
Initial Purchasers shall be deemed to be in the same proportion as (x) the total
proceeds from the offering of Company Shares, (net of discounts but before
deducting expenses) received by the Company and (y) the discounts received by
the Initial Purchasers, respectively, in each case as set forth in the table on
the cover page of the Offering Memorandum. The relative fault of the Company and
of the Initial Purchasers shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Initial Purchasers and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Initial Purchasers agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to above.
Notwithstanding the provisions of this Section 7, (i) in no case shall any of
the Initial Purchasers be required to contribute any amount in excess of the
amount by which the discount applicable to the Company Shares, purchased by such
Initial Purchaser pursuant to this Agreement exceeds the amount of any damages
which such Initial Purchaser has otherwise been required to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission and (ii) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 7, (A)
each person, if any, who controls any of the Initial Purchasers within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and (B)
the respective officers, directors, partners, employees, representatives and
agents of any of the Initial Purchasers or any controlling person shall have the
same rights to contribution as such Initial Purchaser, and each person, if any,
who controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act shall have the same rights to contribution as the
Company, subject in each case to clauses (i) and (ii) of this Section 7. Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties
under this Section 7, notify such party or parties from whom contribution may be
sought, but the failure to so notify such party or parties shall not relieve the
party or parties from whom contribution may be sought from any obligation it or
they may have under this Section 7 or otherwise. No party shall be liable for
contribution with respect to any action or claim settled without its prior
written consent; provided, however, that such written consent was not
unreasonably withheld.
8. Conditions of Initial Purchasers' Obligations. The several
---------------------------------------------
obligations of the Initial Purchasers to purchase and pay for the Firm Shares
and the Additional Shares, as provided herein, shall be subject to the
satisfaction of the following conditions, except that with respect to the
Additional Shares, references to the Closing Date shall mean the Option Closing
Date:
(a) All of the representations and warranties of the Company
contained in this Agreement shall be true and correct on the date hereof and on
the Closing Date with the same force and effect as if made on and as of the date
hereof and the Closing Date, respectively. The Company shall have performed or
complied in all material respects with all of the agreements herein contained
and required to be performed or complied with by it at or prior to the Closing
Date.
(b) The Offering Memorandum shall have been printed and copies
distributed to the Initial Purchasers not later than 10:00 a.m., New York City
time, on the day following the date of this Agreement or at such later date and
time as to which the Initial Purchasers may agree, and no stop order suspending
the qualification or exemption from qualification of the Company Shares in any
jurisdiction referred to in Section 4(e) shall have been issued and no
proceeding for that purpose shall have been commenced or shall be pending or
threatened.
(c) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency which would, as of the
20
Closing Date prevent the issuance of the Company Shares; no action, suit or
proceeding shall have been commenced and be pending against or affecting or, to
the best knowledge of the Company, threatened against, the Company or the
Subsidiaries before any court or arbitrator or any governmental body, agency or
official that (1) could reasonably be expected to result in a Material Adverse
Effect or (2) has not been disclosed in the Offering Memorandum; and no stop
order shall have been issued preventing the use of the Offering Memorandum, or
any amendment or supplement thereto, or which could reasonably be expected to
have a Material Adverse Effect.
(d) Since the dates as of which information is given in the
Offering Memorandum and except as contemplated by the Offering Memorandum, (i)
there shall not have been any material adverse change, or any development that
is reasonably likely to result in a material adverse change, in the capital
stock or the long-term debt, or material increase in the short-term debt, of the
Company and the Subsidiaries from that set forth in the Offering Memorandum,
(ii) no dividend or distribution of any kind shall have been declared, paid or
made by the Company or any Subsidiary (other than any dividends or distributions
paid to the Company) on any class of its capital stock, except for regular
dividends paid in respect of the Series B Preferred Stock or Series D Preferred
Stock and (iii) neither the Company nor any Subsidiary shall have incurred any
liabilities or obligations, direct or contingent, that are material,
individually or in the aggregate, to the Company and the Subsidiaries, taken as
a whole, and that are required to be disclosed on a balance sheet or notes
thereto in accordance with generally accepted accounting principles and are not
disclosed on the latest balance sheet or notes thereto included in the Offering
Memorandum. Since the date hereof and since the dates as of which information is
given in the Offering Memorandum, there shall not have occurred any material
adverse change, or any development which may reasonably be expected to involve a
material adverse change, in the properties, business, results of operations,
condition (financial or otherwise), affairs or prospects of the Company and the
Subsidiaries taken as a whole.
(e) The Initial Purchasers shall have received a certificate,
dated the Closing Date, signed on behalf of the Company by (i) Xxxxx X. Xxxxxx,
Chairman of the Board, President and Chief Executive Officer and (ii) Xxxxxx X.
Xxxxxxx, Senior Vice President and Chief Financial Officer, in form and
substance reasonably satisfactory to the Initial Purchasers, confirming, as of
the Closing Date, the matters set forth in paragraphs (a), (b), (c) and (d) of
this Section 8 and that, as of the Closing Date, the obligations of the Company
to be performed hereunder on or prior thereto have been duly performed in all
material respects.
(f) The Initial Purchasers shall have received on the Closing
Date an opinion, dated the Closing Date, in form and substance satisfactory to
the Initial Purchasers and counsel to the Initial Purchasers, of Kronish, Lieb,
counsel for the Company, to the effect set forth in Exhibit B hereto.
---------
(g) The Initial Purchasers shall have received on the Closing
Date an opinion, dated the Closing Date, in form and substance satisfactory to
the Initial Purchasers and counsel to the Initial Purchasers, of Xxxxxx Xxxx &
Xxxxxx LLP, special regulatory counsel to the Company, to the effect set forth
in Exhibit C hereto.
---------
(h) The Initial Purchasers shall have received an opinion,
dated the Closing Date, in form and substance reasonably satisfactory to the
Initial Purchasers, of Xxxxxx & Xxxxxxx, counsel to the Initial Purchasers,
covering such matters as are customarily covered in such opinions.
21
(i) At the time this Agreement is executed and at the Closing
Date the Initial Purchasers shall have received from Ernst & Young LLP,
independent public accountants for the Company, dated as of the date of this
Agreement and as of the Closing Date, customary comfort letters addressed to the
Initial Purchasers and in form and substance satisfactory to the Initial
Purchasers and counsel to the Initial Purchasers with respect to the financial
statements and certain financial information of the Company contained in the
Offering Memorandum.
(j) Xxxxxx & Xxxxxxx shall have been furnished with such
documents, in addition to those set forth above, as they may reasonably require
for the purpose of enabling them to review or pass upon the matters referred to
in this Section 8 and in order to evidence the accuracy, completeness or
satisfaction in all material respects of any of the representations, warranties
or conditions herein contained.
(k) Prior to the Closing Date, the Company and the Subsidiaries
shall have furnished to the Initial Purchasers such further information,
certificates and documents as the Initial Purchasers may reasonably request.
(l) The Company shall have authorized, executed and filed the
Certificate of Designation in accordance with Delaware law and each of the
Initial Purchasers shall have received an original, duly executed by the
Company.
(m) The Company shall have entered into each of the
Registration Rights Agreement and the Deposit Agreement and the Initial
Purchasers shall have received counterparts, conformed as executed, thereof.
(n) The Company shall have deposited the Series E Preferred
Stock with the Depositary.
(o) At or prior to the Closing Date, all FCC or state approvals
required in connection with the Offering shall have been obtained or
applications for such approvals submitted or prepared for submission promptly
following the Closing Date and the Company shall have delivered to the Initial
Purchasers evidence satisfactory to the Initial Purchasers that such FCC or
state approvals have been obtained or applications thereof have been made or
prepared for submission promptly following the Closing Date.
All opinions, certificates, letters and other documents required by
this Section 8 to be delivered by the Company will be in compliance with the
provisions hereof only if they are reasonably satisfactory in form and substance
to the Initial Purchasers. The Company will furnish the Initial Purchasers with
such conformed copies of such opinions, certificates, letters and other
documents as it shall reasonably request.
22
9. Initial Purchasers' Information. The Company and the Initial
-------------------------------
Purchasers severally acknowledge that the statements with respect to the
offering of the Series E Preferred Stock (and the related Depositary Shares) set
forth in the last paragraph of the cover page and the third, eighth, eleventh
and twelfth paragraphs under the caption "Plan of Distribution" in such Offering
Memorandum constitute the only information furnished in writing by the Initial
Purchasers expressly for use in the Offering Memorandum.
10. Survival of Representations and Agreements. All representations
------------------------------------------
and warranties, covenants and agreements of the Initial Purchasers and the
Company contained in this Agreement, including the agreements contained in
Sections 4(f) and 11(d), the indemnity agreements contained in Section 6 and the
contribution agreements contained in Section 7, shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
the Initial Purchasers or any controlling person thereof or by or on behalf of
the Company or any controlling person thereof, and shall survive delivery of and
payment for the Series E Preferred Stock (and the related Depositary Shares) to
and by the Initial Purchasers. The representations contained in Section 5 and
the agreements contained in Sections 4(f), 6, 7 and 11(d) shall survive the
termination of this Agreement, including any termination pursuant to Section 11.
11. Effective Date of Agreement; Termination.
----------------------------------------
(a) This Agreement shall become effective upon execution and
delivery of a counterpart hereof by each of the parties hereto.
(b) The Initial Purchasers shall have the right to terminate
this Agreement at any time prior to the Closing Date by notice to the Company
from the Initial Purchasers, without liability (other than with respect to
Sections 6 and 7) on the Initial Purchasers' part to the Company if, on or prior
to such date, (i) the Company shall have failed, refused or been unable to
perform in any material respect any agreement on its part to be performed
hereunder, (ii) any other condition to the obligations of the Initial Purchasers
hereunder as provided in Section 8 is not fulfilled when and as required in any
material respect, (iii) in the reasonable judgment of the Initial Purchasers any
material adverse change shall have occurred since the respective dates as of
which information is given in the Offering Memorandum in the condition
(financial or otherwise), business, properties, assets, liabilities, prospects,
net worth, results of operations or cash flows of the Company and the
Subsidiaries taken as a whole, other than as set forth in the Offering
Memorandum, or (iv)(A) any domestic or international event or act or occurrence
has materially disrupted, or in the opinion of the Initial Purchasers will in
the immediate future materially disrupt, the market for the Company's securities
or for securities in general; or (B) trading in securities generally on the New
York or American Stock Exchanges shall have been suspended or materially
limited, or minimum or maximum prices for trading shall have been established,
or maximum ranges for prices for securities shall have been required, on such
exchange, or by such exchange or other regulatory body or governmental authority
having jurisdiction; or (C) a banking moratorium shall have been declared by
Federal or state authorities, or a moratorium in foreign exchange trading by
major international banks or persons shall have been declared; or (D) there is
an outbreak or escalation of armed hostilities involving the United States on or
after the date hereof, or if there has been a declaration by the United States
of a national emergency or war, the effect of which shall be, in the Initial
Purchasers' judgment, to make it inadvisable or impracticable to proceed with
the offering or delivery of the Company Shares on the terms and in the manner
contemplated in the Offering Memorandum; or (E) there shall have been such a
material adverse change in general economic, political or financial conditions
or if the effect of
23
international conditions on the financial markets in the
United States shall be such as, in the Initial Purchasers' judgment, makes it
inadvisable or impracticable to proceed with the delivery of the Company Shares
as contemplated hereby.
(c) Any notice of termination pursuant to this Section 11 shall
be by telephone, telex, telephonic facsimile, or telegraph, confirmed in writing
by letter.
(d) If this Agreement shall be terminated pursuant to any of
the provisions hereof (otherwise than pursuant to any of clauses (iii) or (iv)
of Section 11(b), in which case each party will be responsible for its own
expenses), or if the sale of the Series E Preferred Stock (and the related
Depositary Shares) provided for herein is not consummated because any condition
to the obligations of the Initial Purchasers set forth herein is not satisfied
or because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or comply with any provision hereof, the Company
will, subject to demand by the Initial Purchasers, reimburse the Initial
Purchasers for all out-of-pocket expenses (including the reasonable fees and
expenses of Initial Purchasers' counsel), incurred by the Initial Purchasers in
connection herewith.
12. Notice. All communications hereunder, except as may be otherwise
------
specifically provided herein, shall be in writing and, if sent to the Initial
Purchasers shall be mailed, delivered, or telexed, telegraphed or telecopied and
confirmed in writing to Bear, Xxxxxxx & Co. Inc. and Salomon Brothers Inc, c/o
Bear, Xxxxxxx & Co. Inc., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Corporate Finance Department, telecopy number: (000) 000-0000; and if sent to
the Company, shall be mailed, delivered or telexed, telegraphed or telecopied
and confirmed in writing to Intermedia Communications Inc., 0000 Xxxxx Xxxx
Xxxxx, Xxxxx, Xxxxxxx 00000, Attention: Xxxxxx X. Xxxxxxx, Chief Financial
Officer, telecopy number: (000) 000-0000, with a copy to Kronish, Lieb, Weiner &
Xxxxxxx LLP, 1114 Avenue of the Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxx X. Xxxxxxxxx, telecopy number (000) 000-0000; provided,
however, that any notice pursuant to Section 7 shall be mailed, delivered or
telexed, telegraphed or telecopied and confirmed in writing.
13. Parties. This Agreement shall inure solely to the benefit of, and
-------
shall be binding upon, the Initial Purchasers and the Company and the
controlling persons and agents referred to in Sections 6 and 7, and their
respective successors and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained. The
term "successors and assigns" shall not include a purchaser, in its capacity as
such, of Series E Preferred Stock (and the related Depositary Shares) from the
Initial Purchasers.
14. Construction. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
------------
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK AS APPLIED TO
CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK. TIME IS OF
THE ESSENCE IN THIS AGREEMENT.
15. Captions. The captions included in this Agreement are included
--------
solely for convenience of reference and are not to be considered a part of this
Agreement.
16. Counterparts. This Agreement may be executed in various
------------
counterparts which together shall constitute one and the same instrument.
24
If the foregoing correctly sets forth the understanding among the
Initial Purchasers and the Company, please so indicate in the space provided
below for that purpose, whereupon this letter shall constitute a binding
agreement between us.
Very truly yours,
INTERMEDIA COMMUNICATIONS INC.
By:/s/ Xxxxxx X. Xxx
-------------------------
Name: Xxxxxx X. Xxx
Title: Senior Vice President
Accepted and agreed to as of
the date first above written:
BEAR, XXXXXXX & CO. INC.
By:/s/ Xxxxxxx Parish
----------------------------
Name: Xxxxxxx Parish
Title: Senior Managing Director
SALOMON BROTHERS INC
By:/s/ Xxxxx Xxxxxxx
----------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
25
SCHEDULE I
Number of
Firm Shares
Initial Purchaser to be Purchased
----------------- ---------------
Bear, Xxxxxxx & Co. Inc. .............................................3,500,000
Salomon Brothers Inc. ................................................3,500,000
-------------
Total 7,000,000
Sched-I
EXHIBIT A
List of Employee Pension and Benefit Plans
of Intermedia Communications Inc.
and its Subsidiaries
1. Intermedia Communications Inc. 401(k) Profit Sharing Plan
A-1
EXHIBIT B
Form of Opinion of Kronish, Lieb, Weiner & Xxxxxxx LLP
1. Each of the Company and the Subsidiaries is duly organized and
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, and has all requisite corporate power and
authority to carry on its business as it is being conducted and as described in
the Offering Memorandum and to own, lease and operate its properties, and is
duly qualified and in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where the
failure to be so qualified would not, singly or in the aggregate, have a
Material Adverse Effect. All of the issued and outstanding shares of capital
stock of, or other ownership interests in, each Subsidiary have been duly
authorized and validly issued, are fully paid and non-assessable and were not
issued in violation of or subject to any preemptive or similar rights under the
Delaware General Corporation Law or known to such counsel, after reasonable
inquiry, and, except as set forth in the Offering Memorandum or on Schedule A
hereto, are owned by the Company of record, and to the knowledge of such
counsel, after reasonable inquiry, beneficially, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or other restriction on transferability or voting.
2. All of the outstanding shares of capital stock of the Company have
been duly authorized, validly issued, and are fully paid and nonassessable and
were not issued in violation of any preemptive or similar rights. The
authorized, issued and outstanding capital stock of the Company conforms in all
respects to the description thereof set forth in the Offering Memorandum. Except
as set forth in the Offering Memorandum or on Schedule A hereto, there are no
outstanding subscriptions, rights, warrants, calls, commitments of sale or
options to acquire, or instruments convertible into or exercisable or
exchangeable for, any capital stock or other equity interest in the Company or
any of its Subsidiaries known to such counsel after reasonable inquiry.
3. When the Company Shares, are issued and delivered pursuant to this
Agreement, no Company Shares will be of the same class (within the meaning of
Rule 144A under the Act) as securities of the Company that are listed on a
national securities exchange registered under Section 6 of the Exchange Act or
that are quoted in a United States automated inter-dealer quotation system.
4. The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement, the
Certificate of Designation, the Deposit Agreement, the Registration Rights
Agreement and the other Operative Documents, as applicable, and to consummate
the transactions contemplated thereby, including, without limitation, the
corporate power and authority to issue, sell and deliver the Securities as
provided herein and therein.
5. This Agreement has been duly and validly authorized, executed and
delivered by the Company and, assuming due execution by the other parties
thereto, is the legally valid and binding agreement of the Company.
B-1
6. The Certificate of Designation has been duly authorized by all
necessary corporate and stockholder action, executed by the Company and filed
with the Secretary of State of the State of Delaware.
7. Each of the Deposit Agreement and the Registration Rights Agreement
has been duly and validly authorized, executed and delivered by the Company and,
assuming due execution by the other parties thereto, is the legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except that we express no opinion as to the validity or
enforceability of rights of indemnity or contribution, or both and except as
such enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity.
8. The Series E Preferred Stock (and the related Depositary Shares) have
been duly and validly authorized for issuance and sale to the Initial Purchasers
by the Company pursuant to this Agreement and, when issued, delivered and paid
for in accordance with the terms of this Agreement, will be validly issued,
fully paid and non-assessable and entitled to the rights, privileges and
preferences set forth in the Certificate of Designation, and the issuance of
such shares of Series E Preferred Stock (and the related Depositary Shares) will
not be subject to any preemptive or similar rights.
9. The Offering Memorandum contains a fair summary of each of the Series
E Preferred Stock, the Certificate of Designation, the Company Shares, the
Deposit Agreement and the Registration Rights Agreement.
10. No registration under the Act of the Series E Preferred Stock (and
the related Depositary Shares) is required for the sale of the Company Shares,
to the Initial Purchasers as contemplated by this Agreement or for the Exempt
Resales assuming (i) that the Initial Purchasers are Qualified Institutional
Buyers, as defined in Rule 144A under the Act ("QIB"), (ii) that the purchasers
---
who buy the Company Shares, in the Exempt Resales are Eligible Purchasers (iii)
the accuracy of the Initial Purchasers' and the Company's representations
regarding the absence of general solicitation in connection with the sale of
Company Shares, to the Initial Purchasers and the Exempt Resales contained in
this Agreement, (iv) the accuracy of the Company's representations in Sections
5(a)(ii), (xxv),(xxvi) last sentence only and (xxviii) of this Agreement and (v)
with respect to Accredited Investors, the accuracy of the representations made
by each Accredited Investor as set forth in the letters of representation
executed by such Accredited Investor in the form of Annex B to the Offering
-------
Memorandum.
11. The Offering Memorandum, as of its date (except for the financial
statements, including the notes thereto, and supporting schedules and other
financial, statistical and accounting data included therein or omitted
therefrom, as to which no opinion need be expressed), and each amendment or
supplement thereto, as of its date, contains all the information specified in,
and meets the requirements of, Rule 144A(d)(4) under the Act.
B-2
12. None of (A) the execution, delivery or performance by the Company of
this Agreement and the other Operative Documents, (B) the issuance and sale of
the Series E Preferred Stock (and the related Depositary Shares), (C) the
performance by the Company of its obligations under this Agreement and the other
Operative Documents and (D) the consummation of the transactions contemplated by
this Agreement and the other Operative Documents violates, conflicts with or
constitutes a breach of any of the terms or provisions of, or a default under
(or an event that with notice or the lapse of time, or both, would constitute a
default), or require consent under, or result in the imposition of a lien or
encumbrance on any properties of the Company or any Subsidiary, or an
acceleration of any indebtedness of the Company or any Subsidiary pursuant to,
(i) the charter or bylaws of the Company or any Subsidiary, (ii) any bond,
debenture, note, indenture, mortgage, deed of trust or other agreement or
instrument to which the Company or any Subsidiary is a party or by which any of
them or their property is or may be bound identified to such counsel by the
Company as material (assuming all of such agreements are governed by New York
law), (iii) any local, state, federal or administrative statute, rule or
regulation applicable to the Company or any Subsidiary or any of their assets or
properties (except such counsel shall express no opinion as to the matters
addressed in the opinion of Xxxxxx Xxxx & Xxxxxx LLP), or (iv) any judgment,
order or decree of any court or governmental agency or authority having
jurisdiction over the Company or any Subsidiary or any of their assets or
properties known to such counsel, except in the case of clauses (ii), (iii) and
(iv) for such violations, conflicts, breaches, defaults, consents, impositions
of liens or accelerations that (x) would not, singly or in the aggregate, have a
Material Adverse Effect or (y) are disclosed in the Offering Memorandum.
Assuming compliance with applicable state securities and Blue Sky laws, as to
which such counsel need express no opinion, and except for the filing of a
registration statement under the Act and qualification of the Indenture under
the Trust Indenture Act of 1939, as amended, in connection with the Registration
Rights Agreement, no consent, approval, authorization or order of, or filing,
registration, qualification, license or permit of or with, any court or
governmental agency, body or administrative agency is required for (1) the
execution, delivery and performance by the Company of this Agreement and the
other Operative Documents, (2) the issuance and sale of the Securities or (3)
consummation by the Company and the Subsidiaries of the transactions described
in the Offering Memorandum under the caption "Use of Proceeds," except (i) such
as have been obtained and made or have been disclosed in the Offering
Memorandum, (ii) where the failure to obtain such consents or waivers would not,
singly or in the aggregate, have a Material Adverse Effect and (iii) such
counsel shall express no opinion as to the matters addressed in the opinion of
Xxxxxx Xxxx & Xxxxxx LLP. To such counsel's knowledge, after reasonable inquiry,
no consents or waivers from any other person are required for the execution,
delivery and performance by the Company of this Agreement and the other
Operative Documents for the issuance and sale of the Securities, other than such
consents and waivers as have been obtained.
13. None of the Company or the Subsidiaries is (i) an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, or (ii) a "holding company"
or a "subsidiary company" or an "affiliate" of a holding company within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
14. Except as set forth in this Agreement, the Registration Rights
Agreement or the Registration Rights Agreement in respect of the Senior Notes
due 2007, and except with respect to the holders of certain shares of Common
Stock issued pursuant to an Asset Acquisition Agreement dated as of December 6,
1996 among Universal Telecom, Inc., Intermedia Communications, Inc. and certain
B-3
individuals, to such counsel's knowledge, after reasonable inquiry, there are no
holders of any securities of the Company who, by reason of the execution by the
Company of this Agreement or any other Operative Document to which it is a party
or the consummation by the Company of the transactions contemplated thereby,
have the right to request or demand that the Company register under the Act
securities held by them.
15. None of the execution, delivery and performance of this Agreement,
the issuance and sale of the Securities, the application of the proceeds from
the issuance and sale of the Securities and the consummation of the transactions
contemplated thereby as set forth in the Offering Memorandum, will violate
Regulations G, T, U or X promulgated by the Board of Governors of the Federal
Reserve System.
16. To the knowledge of such counsel, no search of court records having
been made, there is (i) no action, suit, investigation or proceeding before or
by any court, arbitrator or governmental agency, body or official, domestic or
foreign, now pending, or threatened or contemplated to which any of the Company
or any Subsidiary is or may be a party or to which the business or property of
the Company or any Subsidiary is or may be subject, (ii) no statute, rule,
regulation or order that has been enacted, adopted or issued by any governmental
agency or that has been proposed by any governmental body, or (iii) no
injunction, restraining order or order of any nature by a federal or state court
of competent jurisdiction to which any of the Company or any Subsidiary is or
may be subject or to which the business, assets or property of the Company or
any of the Subsidiaries are or may be subject has been issued that, in the case
of clauses (i), (ii) and (iii) above, (x) is required to be disclosed in the
Preliminary Offering Memorandum and the Offering Memorandum and that is not so
disclosed, (y) could reasonably be expected to have, either individually or in
the aggregate, a Material Adverse Effect, except as disclosed in the Offering
Memorandum or (z) might interfere with, adversely affect or in any manner
question the validity of the issuance and sale of the Series E Preferred Stock
(and the related Depositary Shares) or any of the other transactions
contemplated by this Agreement or any of the other Operative Documents, except
that such counsel shall express no opinion as to the matters addressed in the
opinion of Xxxxxx Xxxx & Xxxxxx LLP.
17. The statements under the captions "Description of Preferred Stock"
and "Description of the Depositary Shares" in the Offering Memorandum, insofar
as such statements constitute a summary of documents referred to therein present
a fair summary thereof. The terms of the Certificate of Designation conform to
the descriptions thereof contained in the Offering Memorandum.
18. The statements contained in the Offering Memorandum under the caption
"Certain Federal Income Tax Consequences" are a fair and accurate summary of the
matters discussed therein.
We have participated in conferences with officers and other
representatives of the Company, representatives of the independent certified
public accountants of the Company and the Initial Purchasers and their
representatives at which the contents of the Preliminary Offering Memorandum and
the Offering Memorandum and related matters were discussed and, although we have
not undertaken to investigate or verify independently, and do not assume any
responsibility for, the accuracy, completeness or fairness of the statements
contained in the Preliminary Offering Memorandum or the Offering Memorandum
(except as indicated above), on the basis of the foregoing, no facts have come
to our attention which led us to
B-4
believe that the Preliminary Offering Memorandum or the Offering Memorandum, as
of its date or the Closing Date, contained an untrue statement of a material
fact or omitted to state any fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading (except we express no opinion as to financial
statements and related notes, the financial statement schedules and other
financial and statistical data included therein).
B-5
EXHIBIT C
[Form of Opinion of Xxxxxx Xxxx & Xxxxxx LLP]
C-1
[Xxxxxx Xxxx & Xxxxxx LLP Letterhead]
October 30, 1997
Bear, Xxxxxxx & Co. Inc.
Salomon Brothers Inc
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, X.X. 00000
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Section 8(g) of the Purchase
Agreements dated October 24, 1997 (the "Agreements"), between Intermedia
Communications Inc. (the "Company") and Bear, Xxxxxxx & Co. Inc., and Salomon
Brothers Inc (together, the "Initial Purchasers"), relating to the sale by the
Company of (i) 7,000,000 depositary shares (the "Depositary Shares")
representing a one-hundredth interest in a share of the Company's 7% Series E
Junior Convertible Preferred Stock (the "Series E Preferred Stock"), and (ii)
$250,000,000 aggregate principal amount at maturity of 8 7/8% Senior Discount
Notes due 2007 (the "Notes").
This firm has acted as special telecommunications counsel for the Company
and our representation has been limited to federal and state telecommunications
regulatory matters, and this opinion is accordingly limited to such matters.
We express no opinion as to the laws of any jurisdiction or agency except
the Telecommunications Laws of the Federal Communications Commission (the "FCC")
and State Telecommunications Agencies of those states in which the Company is
providing intrastate service. For purposes of this opinion, the term "State
Telecommunications Agencies" means "state commissions" as defined in Section 3
of the Communications Act of 1934, as amended. The term "Telecommunications
Laws" means the statutes governing the FCC and State Telecommunications Agencies
and the rules and regulations promulgated by them.
To the extent this opinion concerns state Telecommunications Laws, you are
advised that the attorneys in our Firm are not admitted to practice in all of
the states covered by this opinion and, for the purpose of this opinion, we
should not be considered to be experts in the Telecommunications Laws of any
such states. However, in connection with the previous opinion provided to you
Bear, Xxxxxxx & Co.
Xxxxxxx Xxxxxxxx Inc
October 30, 1997
Page 2
dated July 9, 1997, concerning a similar transaction by the Company, we
conducted a review of statutes and regulations relating to state
Telecommunications Laws which we deemed relevant and as they appear in standard
compilations and, in some cases, had direct communications with the staff of
State Telecommunications Agencies. To the best of our knowledge, nothing has
occurred subsequent to this earlier review and those conversations which would
change our understanding of these State Telecommunications Laws with respect to
any matter we deem relevant to this opinion. Our opinion as to state
Telecommunications Laws is based solely upon that earlier review and those
conversations, as supplemented by us in connection with states in which the
Company commenced intrastate service subsequent to July 9, 1997.
In rendering this opinion, we have examined and relied upon relevant
documents in our files, certificates and other information in the publicly
available files and records of the FCC and State Telecommunications Agencies and
appropriate portions of the Offering Memorandum for the Notes and Depositary
Shares (the "Offering Memorandum") prepared in connection with this transaction.
With your permission, as to all matters of fact concerning the Company and its
operations (including factual conclusions and characterizations), we have relied
entirely upon the relevant statements contained in the Offering Memorandum,
including the exhibits thereto, and in the certificate of Xxxxx X. Xxxxxx,
President and CEO, dated October 29, 1997, attached hereto. We have assumed,
without independent inquiry, the accuracy of the representations in the
certificate and have made no independent review of the operations or the
business of the Company for the purpose of rendering this opinion.
We have assumed the genuineness of all signatures, the conformity to the
originals of all documents reviewed by us as copies, the authenticity and
completeness of all original documents reviewed by us in original or copy form
and the legal competence of each individual executing any document.
Bear, Xxxxxxx & Co.
Salomon Brothers Inc
October 30, 1997
Page 3
When an opinion set forth below is given to the best of our knowledge or
with another similar qualification, the relevant knowledge is limited to the
actual knowledge of the individual attorneys currently in the firm who have
devoted substantive legal attention to representation of the Company as its
telecommunications counsel and we have undertaken no independent inquiry or
investigation in rendering this opinion.
In reliance upon the foregoing and subject to the qualifications and
limitations set forth herein, we are of the opinion that:
All of the licenses, permits and authorizations required by the FCC for the
provision of telecommunications services by the Company, as we understand those
services to be provided currently based on the attached certificate, have been
issued to and are validly held by the Company and its subsidiaries and are in
full force and effect. All of the licenses, permits and authorizations required
by the State Telecommunications Agencies for the provision of telecommunications
services by the Company, as we understand those services to be provided
currently based on the attached certificate, have been issued to and, to the
best of our knowledge, are validly held by the Company and its subsidiaries,
where the failure to obtain or hold such license, permit or authority would have
a material adverse effect, as defined in the attached certificate, on the
Company and the subsidiaries, taken as a whole. All such licenses, permits and
authorizations are in full force and effect.
Neither the Company nor its subsidiaries is the subject of any proceeding
(including a rulemaking proceeding), pending complaint or investigation, or, to
the best of our knowledge, any threatened complaint or investigation, before the
FCC, or, to the best of our knowledge after oral inquiry made in connection with
our opinion to you of July 9, 1997, and supplemented currently as indicated
above, of any proceeding (including a rulemaking proceeding), pending complaint
or investigation, or any threatened complaint or investigation, before State
Telecommunications Agencies based, in each case, on any alleged violation of
Telecommunications Laws by the Company or any subsidiary in connection with
their provision of or failure to provide telecommunications services of a
character required to be disclosed in the Offering Memoranda which is not
disclosed in the Offering Memoranda.
Bear, Xxxxxxx & Co.
Xxxxxxx Xxxxxxxx Inc
October 30, 1997
Page 4
The statements in the Offering Memoranda under the headings of "The Company
- Recent Developments - Regulatory Changes," "Risk Factors - Regulatory Approval
of the Offering" regarding the Telecommunications Laws of the FCC or any State
Telecommunications Agencies fairly and accurately summarize the matters therein
described.
Except as discussed below, the Company and its subsidiaries have the
consents, approvals, authorizations, licenses, certificates, permits, or orders
of the FCC or any State Telecommunications Agency, if any is required, for the
consummation of the transactions contemplated in the Offering Memoranda, except
where the failure to obtain the consents, approvals, authorizations, licenses,
certificates, permits or orders would not have a Material Adverse Effect, as
defined in the attached certificate, on the Company and its subsidiaries, taken
as a whole.
In ten states where the Company holds certificates to provide intrastate
toll service and, in some cases, local exchange service, the applicable statute
or regulations provide for prior notification and/or approval for the issuance
of debt or equity securities by certificate holders. In some of these states,
approval has been obtained for the issuance of Depositary Shares in an amount
sufficient to cover the proposed transaction. However, additional approval will
be required from those states for the issuance of the Notes. Due to time
constraints, the Company will not have received all such approvals prior to the
consummation of the proposed transaction. Based on our firm's experience in
similar situations involving intrastate interexchange services, we believe that
it is unlikely that these states would take any action against the Company for
issuing the Depositary Shares and the related Series E Preferred Stock or the
Notes prior to approval which would have a Material Adverse Effect, as defined
in the attached certificate, on the Company and its subsidiaries, taken as a
whole.
Except as discussed above, neither the execution and delivery of the
Purchase Agreements nor the sale of the securities contemplated thereby will
conflict with or result in a violation of any order or regulation of the FCC or
any State Telecommunications Agency applicable to the Company or its
subsidiaries, except where the conflict with or the violation of which would not
have a
Bear, Xxxxxxx & Co.
Salomon Brothers Inc
October 30, 1997
Page 5
Material Adverse Effect, as defined in the attached certificate, on the
Company and its subsidiaries, taken as a whole.
The opinions stated above are limited to the matters set forth herein. No
opinion may be inferred or implied beyond the matters expressly stated in this
opinion letter, and the opinions stated above must be read in conjunction with
the assumptions, exceptions and qualifications set forth in this opinion letter.
We assume no obligation to advise you of changes of fact or law, whether or not
deemed material which may be brought to our attention after the date hereof.
This opinion is being delivered for your use in connection with the
transactions contemplated by the Offering Memoranda pursuant to the Agreements
and may not be referred to or used for any other purpose or relied upon or
delivered to any other person without our prior written consent.
Very truly yours,
Xxxxxx Xxxx & Xxxxxx LLP
EXHIBIT D
Subsidiaries of Intermedia Communications Inc.
----------------------------------------------
FiberNet North Carolina, Inc
FiberNet Huntsville, Inc.
FiberNet St. Louis, Inc.
FiberNet Telecommunications Cincinnati, Inc.
Phone One, Inc.
FiberNet USA, Inc.
EMI Telecommunications Inc.
Eastern Message Communications Inc.
Intermedia Licensing Company
DIGEX, Incorporated
D-1
