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EXHIBIT 1.2
EXECUTION COPY
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INTERMEDIA COMMUNICATIONS INC.
$364,000,000
12 1/4% Senior Subordinated Discount Notes due 2009
Senior Subordinated Note Purchase Agreement
February 19, 1999
BEAR, XXXXXXX & CO. INC.
XXXXXXX XXXXX & CO.
XXXXXXX XXXXX BARNEY
NATIONSBANC XXXXXXXXXX SECURITIES LLC
WARBURG DILLON READ LLC
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INTERMEDIA COMMUNICATIONS INC.
$364,000,000
12 1/4% Senior Subordinated Discount Notes Due 2009
SENIOR SUBORDINATED NOTE PURCHASE AGREEMENT
February 19, 1998
New York, New York
BEAR, XXXXXXX & CO. INC.
XXXXXXX XXXXX & CO.
XXXXXXX XXXXX XXXXXX
NATIONSBANC XXXXXXXXXX SECURITIES LLC
WARBURG DILLON READ LLC
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies & Gentlemen:
Intermedia Communications Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to Bear, Xxxxxxx & Co. Inc., Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated, Xxxxxxx Xxxxx Barney Inc.,
NationsBanc Xxxxxxxxxx Securities LLC and Warburg Dillon Read LLC (each, an
"Initial Purchaser" and collectively, the "Initial Purchasers") $364,000,000
aggregate principal amount at maturity of 12 1/4% Senior Subordinated Discount
Notes due 2009 subject to the terms and conditions set forth herein, which will
be issued pursuant to an indenture (the "Indenture"), to be dated the Closing
Date (as defined below), between the Company and SunTrust Bank, Central
Florida, National Association, as trustee (the "Trustee").
1. Issuance of Senior Subordinated Notes. The Company proposes
to, upon the terms and subject to the conditions set forth herein, issue and
sell to the Initial Purchasers $364,000,000 aggregate principal amount at
maturity of 12 1/4% Senior Subordinated Discount Notes due 2009 (the "Senior
Subordinated Notes"). The Senior Subordinated Notes are more fully described in
the Offering Memorandum referred to below. For purposes of this Purchase
Agreement (this "Agreement"), the term "Subsidiaries" shall mean the entities
listed on Schedules 1 and 2 hereto. The Subsidiaries listed on Schedule 2 are
in the process of being merged with and into the Company. Capitalized terms
used but not otherwise defined herein shall have the meanings given to such
terms in the Indenture.
The proceeds to the Company from the sale to the Initial Purchasers of
the Senior Subordinated Notes will be used for general corporate purposes,
including working capital and operating losses, and to fund a portion of the
cost of the acquisition or construction of Telecommunications Related Assets
(as described in the Offering Memorandum).
Upon original issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Securities Act of
1933, as amended (the "Act"), the Senior Subordinated Notes shall bear the
following legend:
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"THE SECURITY (OR ITS PREDECESSORS) EVIDENCED HEREBY
HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933 (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY OR ANY INTEREST OR PARTICIPATION HEREIN MAY
NOT BE OFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR
NOT SUBJECT TO, REGISTRATION. THE HOLDER OF THIS SECURITY BY
ITS ACCEPTANCE HEREOF AGREES (A) TO OFFER, SELL, PLEDGE OR
OTHERWISE TRANSFER THIS SECURITY 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 UNDER THE
SECURITIES ACT, (5) TO AN INSTITUTIONAL "ACCREDITED INVESTOR"
(AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144 UNDER THE SECURITIES ACT OR (6) PURSUANT TO ANY
OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
UNDER THE SECURITIES ACT (AND IN THE CASE OF A TRANSFER
PURSUANT TO CLAUSE (5) OR (6), 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)
THAT IT 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 Senior Subordinated Notes will be offered and
sold to the Initial Purchasers pursuant to an exemption from the registration
requirements under the Act. The Company has prepared a preliminary offering
memorandum, dated February 8, 1999 (the "Preliminary Offering Memorandum"), and
a final offering memorandum, dated February 19, 1999 the "Offering Memorandum"),
relating to the Company and the Senior Subordinated Notes.
The Initial Purchasers have advised the Company that the Initial
Purchasers will make offers (the "Exempt Resales") of the Senior Subordinated
Notes on the terms set forth in the Offering Memorandum, as amended or
supplemented, solely to persons whom any of the Initial Purchasers reasonably
believe to be "qualified institutional buyers," as defined in Rule 144A under
the Act ("QIBs"). Such QIBs shall be referred to herein as the "Eligible
Purchasers." The Initial Purchasers will offer the Senior Subordinated Notes to
such Eligible Purchasers initially at a purchase price of 55.057% of the
principal amount at maturity of such Senior Subordinated Notes. Such price may
be changed at any time without notice.
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Holders (including subsequent transferees) of the Senior Subordinated
Notes will have the registration rights set forth in the registration rights
agreement relating thereto (the "Registration Rights Agreement"), to be dated
the Closing Date, for so long as such Senior Subordinated Notes constitute
"Transfer Restricted Securities" (as defined in such agreement). Pursuant to
the Registration Rights Agreement, the Company will agree to file with the
Securities and Exchange Commission (the "Commission"), under the circumstances
set forth therein, (i) a registration statement under the Act (the "Exchange
Offer Registration Statement") with respect to an offer to exchange (the
"Exchange Offer") the Senior Subordinated Notes for a new issue of 12 1/4%
Senior Subordinated Discount Notes due 2009 (the "Exchange Notes") to be
offered in exchange for the Senior Subordinated Notes and/or (ii) a shelf
registration statement pursuant to Rule 415 under the Act (the "Shelf
Registration Statement") relating to the resale by certain holders of the
Senior Subordinated Notes, and to use its best efforts to cause such
Registration Statements to be declared effective and consummate the Exchange
Offer. This Agreement, the Senior Subordinated Notes, the Indenture, and the
Registration Rights Agreement are hereinafter sometimes referred to
collectively as the "Operative Documents."
3. Purchase, Sale and Delivery.
(a) On the basis of the 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, that amount of Senior Subordinated Notes set forth opposite its name
on Schedule 3 hereto. The purchase price for the Senior Subordinated Notes
shall be 53.818% of the principal amount at maturity thereof.
(b) Delivery to the Initial Purchasers of, and payment
by the Initial Purchasers for, the Senior Subordinated Notes 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. Such delivery and payment shall
be made at 9:00 a.m. New York time, on February 24, 1999 or at such other time
as shall be agreed upon by the Initial Purchasers and the Company. The time and
date of such delivery and payment are herein called the "Closing Date."
(c) One or more Senior Subordinated Notes in global
form, (the "Global Securities"), registered in the name of Cede & Co. (the
"Global Security Holder"), as nominee of the Depository Trust Company ("DTC"),
having an aggregate principal amount at maturity corresponding to the aggregate
principal amount at maturity of the Senior Subordinated Notes sold shall be
delivered by the Company to the Initial Purchasers (or as the Initial
Purchasers direct), against payment by the Initial Purchasers of the purchase
price therefor, by wire transfer of immediately available funds to an account
specified by the Company or as the Company may direct in writing, provided that
the Company shall give at least two business days' prior written notice to the
Initial Purchasers of the information required to effect such wire transfers.
The Global 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 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 Senior Subordinated
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Notes 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 Senior Subordinated Notes
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 Senior Subordinated Notes
under any state securities or Blue Sky laws, the Company shall use its best
efforts to obtain the withdrawal or lifting of such order at the earliest
possible time.
(b) To furnish the Initial Purchasers and those persons
identified by the Initial Purchasers to the Company, without charge, as many
copies of the Preliminary Offering Memorandum and the Offering Memorandum, and
any amendments or supplements thereto, as the Initial Purchasers may reasonably
request. The Company consents to the use of the Preliminary Offering Memorandum
and the Offering Memorandum, and any amendments and supplements thereto
required pursuant hereto, by the Initial Purchasers in connection with Exempt
Resales.
(c) Not to amend or supplement the Preliminary Offering
Memorandum or the Offering Memorandum prior to the Closing Date unless the
Initial Purchasers shall previously have been advised thereof and shall not
have objected thereto within a reasonable time after being furnished a copy
thereof. The Company shall promptly prepare, upon the Initial Purchasers'
request, any amendment or supplement to the Preliminary Offering Memorandum or
the Offering Memorandum that may be necessary or 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) 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 Senior Subordinated Notes 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.
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(f) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement becomes effective or is terminated,
to pay all costs, expenses, fees and taxes incident to the performance of the
obligations of the Company hereunder, including in connection with: (i) the
preparation, printing, filing and distribution of the Preliminary Offering
Memorandum and the Offering Memorandum (including, without limitation,
financial statements) and all amendments and supplements thereto required
pursuant hereto, (ii) the preparation (including, without limitation,
duplication costs) and delivery of all preliminary and final Blue Sky memoranda
prepared and delivered in connection herewith and with the Exempt Resales,
(iii) the issuance, transfer and delivery by the Company of the Senior
Subordinated Notes to the Initial Purchasers, (iv) the qualification or
registration of the Senior Subordinated Notes for offer and sale under the
securities or Blue Sky laws of the several states (including, without
limitation, the cost of printing and mailing a preliminary and final Blue Sky
Memorandum and the reasonable fees and disbursements of counsel to the Initial
Purchasers relating 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 Senior Subordinated Notes
(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 Senior Subordinated Notes in the National Association of
Securities Dealers, Inc. ("NASD") Automated Quotation System - PORTAL
("PORTAL"), (ix) all fees and expenses (including fees and expenses of counsel
to the Company) of the Company in connection with the approval of the Senior
Subordinated Notes by DTC for "book-entry" transfer, (x) rating the Senior
Subordinated Notes by rating agencies, (xi) the reasonable fees and expenses of
the Trustee and its counsel in connection with the Indenture and the Senior
Subordinated Notes, (xii) the performance by the Company of its other
obligations under this Agreement and the other Operative Documents and (ix)
"roadshow" travel and other expenses incurred in connection with the marketing
and sale of the Senior Subordinated Notes (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 Senior
Subordinated Notes in the manner described in the Offering Memorandum under the
caption "Use of Proceeds."
(h) Not to voluntarily claim, and to resist actively any
attempts to claim, the benefit of any usury laws against the holders of any
Senior Subordinated Notes.
(i) To do and perform all things required to be done and
performed under this Agreement by it prior to or after the Closing Date and to
satisfy all conditions precedent on its part to the delivery of the Senior
Subordinated Notes.
(j) Not to sell, offer for sale or solicit offers to buy
or otherwise negotiate in respect of any security (as defined in the Act) that
would be integrated with the sale of the Senior Subordinated Notes in a manner
that would require the registration under the Act of the sale to the Initial
Purchasers or the Eligible Purchasers of the Senior Subordinated Notes or to
take any other action that would result in the Exempt Resales not being exempt
from registration under the Act.
(k) For so long as any of the Senior Subordinated Notes
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 available to any QIB or beneficial owner of Senior
Subordinated Notes in connection with any sale thereof and any prospective
purchaser
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of such Senior Subordinated Notes from such QIB or beneficial owner,
the information required by Rule 144A(d)(4) under the Act.
(l) In accordance with the terms of the Registration
Rights Agreement, to cause the Exchange Offer to be made in the appropriate
form to permit registered Senior Subordinated Notes to be offered in exchange
for the Senior Subordinated Notes and to comply with all applicable federal and
state securities laws in connection with the Exchange Offer.
(m) To comply with all of its agreements set forth in
the Registration Rights Agreement and all agreements set forth in the
representation letters of the Company to DTC relating to the approval of the
Senior Subordinated Notes by DTC for "book-entry" transfer.
(n) To use its best efforts to effect the inclusion of
the Senior Subordinated Notes in PORTAL and to obtain approval of the Senior
Subordinated Notes by DTC for "book-entry" transfer.
(o) During a period of five years following the Closing
Date, to deliver without charge to each of the Initial Purchasers, as they may
reasonably request, promptly upon their becoming available, copies of (i) all
reports or other publicly available information that the Company shall mail or
otherwise make available to its 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.
(p) Prior to the Closing Date, to furnish to each of the
Initial Purchasers, as soon as they have been prepared in the ordinary course
by the Company, copies of any consolidated financial statements or any
unaudited interim financial statements of the Company for any period subsequent
to the periods covered by the financial statements appearing in the Offering
Memorandum.
(q) Neither the Company nor any of its subsidiaries 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 Senior
Subordinated Notes. 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 Senior
Subordinated Notes.
(r) To comply with the agreements in the Indenture, the
Registration Rights Agreement, and any other Operative Document.
(s) Not to engage in any directed selling efforts with
respect to the Senior Subordinated Notes 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.
5. Representations and Warranties.
(a) The Company represents and warrants to each of the
Initial Purchasers that:
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(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 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 Senior Subordinated Notes are
issued and delivered pursuant to this Agreement, no Senior Subordinated Notes
will be of the same class (within the meaning of Rule 144A under the Act) as
securities of the Company that are listed on a national securities exchange
registered under Section 6 of the Exchange Act or that are quoted in a United
States automated inter-dealer quotation system.
(iii) Each of the Company and the Subsidiaries
listed on Schedule 1 (A) has been duly organized and 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 clauses (A) (as it relates to good standing) and (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 Senior Subordinated Notes 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").
(iv) Each of the Subsidiaries listed on Schedule
2 (A) has been duly organized and 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 clauses (A) and
(C), where the failure to be validly existing, qualified or in good standing
does not and could not reasonably be expected to individually or in the
aggregate, result in a Material Adverse Effect.
(v) The Company has no direct or indirect
subsidiaries as of the Closing Date other than the Subsidiaries. No Subsidiary
listed on Schedule 2 hereto is material to the
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business and operations of the Company or is a "significant subsidiary" as
defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the
Act, as such Regulation is in effect on the date hereof.
(vi) 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. As of the dates specified in the Offering Memorandum under the
caption "Capitalization," on a combined basis, after giving effect to the
issuance and sale of the Senior Subordinated Notes pursuant hereto and to the
events stated therein, the Company had an authorized and outstanding
consolidated capitalization as set forth therein.
(vii) All of the outstanding capital stock of, or
other ownership interests in, the Subsidiaries is owned by the Company, free
and clear of any security interest, claim, lien, limitation on voting rights or
encumbrance. Except as disclosed in the Offering Memorandum there are not
currently, and will not be as a result of the Offering, any outstanding
subscriptions, rights, warrants, calls, commitments of sale or options to
acquire or instruments convertible into or exchangeable for, any capital stock
or other equity interest of the Company or any Subsidiary (other than options
issued pursuant to the Company's stock option plans, the 153,500 warrants each
to purchase 4.38 shares of Common Stock, a warrant to purchase 200,000 shares
of Common Stock, the 7% Series D Junior Convertible Preferred Stock (the
"Series D Preferred Stock"), the 7% Series E Junior Convertible Preferred Stock
(the "Series E Preferred Stock") and the 7% Series F Junior Convertible
Preferred Stock (the "Series F Preferred Stock"), and noting that at present
rights trade with the Common Stock).
(viii) The Company has all requisite corporate
power and authority to execute, deliver and perform its obligations under this
Agreement, the Indenture, the Registration Rights Agreement, and the other
Operative Documents and to consummate the transactions contemplated hereby and
thereby, including, without limitation, the corporate power and authority to
issue, sell and deliver the Senior Subordinated Notes as provided herein and
therein.
(ix) This Agreement has been duly and validly
authorized, executed and delivered by the Company and is the legal, valid and
binding agreement of the Company, enforceable against the Company in accordance
with its terms, except insofar as indemnification and contribution provisions
may be limited by applicable law or 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.
(x) The Indenture has been duly and validly
authorized by the Company and, when duly executed and delivered by the Company,
will be the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization or similar laws
affecting the rights of creditors generally and subject to general principles
of equity. The Offering Memorandum contains a fair summary of the terms of the
Indenture.
(xi) The Senior Subordinated Notes have been
duly and validly authorized by the Company, and have been duly and validly
authorized for issuance and sale to the Initial Purchasers by the Company
pursuant to this Agreement and, when issued and authenticated in accordance
with the terms of the Indenture and delivered against payment therefor in
accordance with the terms hereof and thereof, will be the legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms and entitled to the benefits of the Indenture,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar
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laws affecting the rights of creditors generally and subject to general
principles of equity. The Offering Memorandum contains a fair summary of the
terms of the Senior Subordinated Notes.
(xii) The Exchange Notes have been duly and
validly authorized for issuance by the Company and, when issued and
authenticated in accordance with the terms of the Exchange Offer and the
Indenture, will be the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms and entitled to
the benefits of the Indenture, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization or similar laws affecting the rights of
creditors generally and subject to general principles of equity. The Offering
Memorandum contains a fair summary of the terms of the Exchange Notes.
(xiii) The Registration Rights Agreement has been
duly and validly authorized by the Company and, when duly executed and
delivered by the Company, will be the legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors generally and
subject to general principles of equity. The Offering Memorandum contains a
fair summary of the terms of the Registration Rights Agreement.
(xiv) 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 (i) could not reasonably be
expected to have a Material Adverse Effect or (2) which is disclosed in the
Offering Memorandum. There exists no condition that, with notice, the passage
of time or otherwise, would constitute a default under any such document or
instrument, except as disclosed in the Offering Memorandum.
(xv) 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 Senior Subordinated Notes and (C) the
consummation by the Company and the Subsidiaries of the transactions described
in the Offering Memorandum under the caption "Use of Proceeds" 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 any Subsidiary 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 (x) would not,
singly or in the aggregate, have a Material Adverse Effect or (y) are disclosed
in the Offering Memorandum. Other than as described in the Offering Memorandum,
no consent, approval, authorization or order of, or
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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, (2) the issuance and sale of the Senior Subordinated Notes
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.
(xvi) 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
Subsidiary is 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, (w) is
required to be disclosed in the Preliminary Offering Memorandum and the
Offering Memorandum and that is not so disclosed, or (x) could reasonably be
expected to, individually or in the aggregate, result in a Material Adverse
Effect.
(xvii) 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 Senior Subordinated Notes
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 Senior
Subordinated Notes or prevents or suspends the sale of the Senior Subordinated
Notes 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.
(xviii) 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 nor, 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 or any Subsidiary. 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
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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.
(xix) 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.
(xx) 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, except such as are described in the Offering
Memorandum or as would not have a Material Adverse Effect, (ii) peaceful and
undisturbed possession under all material leases to which it 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 it
in the manner described in the Offering Memorandum, except as described in the
Offering Memorandum or where failure to hold such Authorizations would not,
individually or in the aggregate, have a Material Adverse Effect and (iv) no
reason to believe that any governmental body or agency is considering limiting,
suspending or revoking any such Authorization. Except where the failure to be
in full force and effect would not have a Material Adverse Effect, all such
Authorizations are valid and in full force and effect, and each of the Company
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. All
material leases to which the Company and any Subsidiary 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 that could reasonably be expected to result in a Material Adverse Effect.
(xxi) 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, except as could not reasonably be expected to
have a Material Adverse Effect. The use of the Intellectual Property in
connection with the business and operations of the Company 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.
(xxii) 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
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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 and 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.
(xxiii) 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 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.
(xxiv) 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
(the "Investment Company Act"), or (ii) a "holding company" or a "subsidiary
company" or an "affiliate" of a holding company within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
(xxv) Except as disclosed in the Offering
Memorandum, there are no holders of securities of the Company or any Subsidiary
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 Subsidiary registers under the Act or analogous
foreign laws and regulations securities held by them.
(xxvi) 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.
(xxvii) 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
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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.
(xxviii) 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
Senior Subordinated Notes or (ii) other than to the Initial Purchasers in
connection with the transactions contemplated hereby, since the date of the
Preliminary Offering Memorandum (A) sold, bid for, purchased or paid any person
any compensation for soliciting purchases of, the Senior Subordinated Notes or
(B) paid or agreed to pay to any person any compensation for soliciting another
to purchase any other securities of the Company.
(xxix) No registration under the Act of the Senior
Subordinated Notes is required for the sale thereof to the Initial Purchasers
as contemplated hereby or for the Exempt Resales assuming (i) that the
purchasers who buy the Senior Subordinated Notes 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 Senior Subordinated Notes 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 Senior
Subordinated Notes 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.
(xxx) Set forth on Schedule 4 hereto is a list of
each employee pension plan with respect to which the Company, or any
corporation considered an affiliate of the Company within the meaning of
Section 407(d)(7) of ERISA (an "ERISA Affiliate"), is a party in interest or
disqualified person. The execution and delivery of this Agreement, the other
Operative Documents and the sale of the Senior Subordinated Notes 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."
(xxxi) 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.
(xxxii) 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, that 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) none of the Company or any Subsidiary has
incurred any liabilities or obligations, direct or contingent, that will be
material to the Company and the Subsidiaries taken as a whole, (iii) there has
not been, singly or in the aggregate, any change or development that could
reasonably be expected to result in a
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Material Adverse Effect and (iv) there has been no dividend or distribution of
any kind declared, paid or made by the Company or any Subsidiary on any class
of its capital stock, except for dividends paid in respect of the Series B
Redeemable Exchangeable Preferred Stock due 2009 (the "Series B Preferred
Stock") the Series D Preferred Stock, the Series E Preferred Stock or the
Series F Preferred Stock.
(xxxiii) None of the execution, delivery and
performance of this Agreement, the issuance and sale of the Senior Subordinated
Notes, the application of the proceeds from the issuance and sale of the Senior
Subordinated Notes and the consummation of the transactions contemplated thereby
as set forth in the Offering Memorandum will violate Regulations T, U or X
promulgated by the Board of Governors of the Federal Reserve System or analogous
foreign laws and regulations.
(xxxiv) To the best knowledge of the Company, each
of the accountants who have certified or will certify the financial statements
included or to be included as part of the Offering Memorandum are independent
accountants. The historical financial statements of the Company and its
Subsidiaries comply as to form in all material respects with the requirements
applicable to registration statements on Form S-1 under the Act and present
fairly in all material respects the financial position and results of
operations of the Company and its Subsidiaries at the respective dates and for
the respective periods indicated. Such financial statements have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods presented. The 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 its Subsidiaries, as applicable.
(xxxv) 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 Senior Subordinated Notes, 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 Senior Subordinated Notes, 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.
(xxxvi) Except pursuant to this Agreement, there
are no contracts, agreements or understandings between the Company and its
Subsidiaries and any other person that would give rise to a valid claim against
the Company or any Initial Purchaser for a brokerage
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commission, finder's fee or like payment in connection with the issuance,
purchase and sale of the Senior Subordinated Notes.
(xxxvii) 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.
(xxxviii)Each of the Company and the Subsidiaries
have implemented Year 2000 compliance programs designed to ensure that each
respective company's computer systems and applications will function properly
beyond 1999. The Company believes that adequate resources have been allocated
for this purpose and expects the Company's and the Subsidiaries' Year 2000 date
conversion programs to be completed on a timely basis.
(xxxix) The Company acknowledges that each Initial
Purchaser 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 Initial Purchaser 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 Senior
Subordinated Notes.
(ii) Such Initial Purchaser (A) is not acquiring
the Senior Subordinated Notes 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 Senior Subordinated Notes only to QIBs in reliance on the exemption from
the registration requirements of the Act provided by Rule 144A.
(iii) No form of general solicitation or general
advertising has been or will be used by any Initial Purchaser or any of their
representatives in connection with the offer and sale of any of the Senior
Subordinated Notes, 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 Initial Purchaser agrees that, in
connection with the Exempt Resales, it will solicit offers to buy the Senior
Subordinated Notes only from, and will offer to sell the Senior Subordinated
Notes only to, Eligible Purchasers. Each Initial Purchaser further agrees that
(A) it will offer to sell the Senior Subordinated Notes only to, and will
solicit offers to buy the Senior Subordinated Notes only from, QIBs who in
purchasing such Senior Subordinated Notes will be deemed to have represented
and agreed that they are purchasing the Senior Subordinated Notes for their own
accounts or accounts with respect to which they exercise sole investment
discretion and that they or such accounts are QIBs, (B) such Eligible
Purchasers will acknowledge and agree that such Senior Subordinated Notes 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
that has been declared effective under the Act, (iii) to a person it reasonably
believes is a QIB in a transaction meeting the
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requirements of Rule 144A under the Act, (iv) to an institutional "accredited
investor" (as defined in Rule 501(a) (1), (2), (3) or (7) of Regulation D under
the Act that, prior to such transfer, furnishes to the trustee a signed letter
containing certain representations and agreements relating to the transfer of
the Senior Subordinated Notes (the form of which letter can be obtained from
the Trustee) or (v) pursuant to any other available exemption from the
registration requirements of the 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) 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 Initial Purchaser 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 Senior Subordinated Notes 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 Initial Purchaser 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.
6. Indemnification.
(a) The Company agrees to indemnify and hold harmless
(i) each Initial Purchaser, (ii) each person, if any, who controls any Initial
Purchaser within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act and (iii) the respective officers, directors, partners, employees,
representatives and agents of any Initial Purchaser or any controlling person
to the fullest extent lawful, from and against any and all losses, liabilities,
claims, damages and expenses whatsoever (including, but not limited to,
attorneys' fees and any and all expenses whatsoever incurred in investigating,
preparing or defending against any investigation or litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), joint or several, to which they or any of them may
become subject under the Act, the Exchange Act or otherwise, insofar as such
losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Preliminary Offering Memorandum
or the Offering Memorandum, or in any supplement thereto or amendment thereof,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, 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 Senior Subordinated
Notes 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 Senior Subordinated Notes 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
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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 the
Offering Memorandum. This indemnity 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 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
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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 prior 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 any Initial Purchaser 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 Senior Subordinated
Notes or, if such allocation is not permitted by applicable law or
indemnification is not available as a result of the indemnifying party not
having received notice as provided in Section 6, in such proportion as is
appropriate to reflect not only the relative benefits referred to above but
also the relative fault of the Company and the Initial Purchasers in connection
with the statements or omissions which resulted in such losses, claims,
damages, liabilities or expenses, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the Initial
Purchasers shall be deemed to be in the same proportion as (x) the total
proceeds from the offering of Senior Subordinated Notes (net of discounts but
before deducting expenses) received by the Company and (y) the discounts
received by the Initial Purchasers, respectively. The relative fault of the
Company and of the Initial Purchasers shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Initial Purchasers and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company and the Initial
Purchasers agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation or by any
other method of allocation which does not take into account the equitable
considerations referred to above. Notwithstanding the provisions of this
Section 7, (i) in no case shall any Initial Purchaser be required to contribute
any amount in excess of the amount by which the discount applicable to the
Senior Subordinated Notes purchased by such Initial Purchaser pursuant to this
Agreement exceeds the amount of any damages which such Initial Purchaser has
otherwise been required to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission and (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 7, (A) each person,
if any, who controls any Initial Purchaser within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act and (B) the respective officers,
directors, partners, employees, representatives and agents of any Initial
Purchaser or any controlling person shall have the same rights to contribution
as such Initial Purchaser, and each person, if any, who controls the Company
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange
Act shall have the same rights to contribution as the Company, subject in each
case to clauses (i) and (ii) of this Section 7. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under this Section 7,
notify such party or
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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 Senior
Subordinated Notes, as provided herein, shall be subject to the satisfaction of
the following conditions:
(a) All of the representations and warranties of the
Company contained in this Agreement shall be true and correct on the date
hereof and on the Closing Date with the same force and effect as if made on and
as of the date hereof and the Closing Date, respectively. The Company shall
have performed or complied with all of the agreements herein contained and
required to be performed or complied with by it at or prior to the Closing
Date.
(b) The Offering Memorandum shall have been printed and
copies distributed to the Initial Purchasers not later than 10:00 a.m., New
York City time, on the day following the date of this Agreement or at such
later date and time as to which the Initial Purchasers may agree, and no stop
order suspending the qualification or exemption from qualification of the
Senior Subordinated Notes 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 Closing Date, prevent the issuance
of the Senior Subordinated Notes; 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 or 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 on any class of its
capital stock, except for dividends paid in respect of the Series B Preferred
Stock, the Series D Preferred Stock, the Series E Preferred Stock or the Series
F Preferred Stock, (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 Effect.
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21
(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, Weiner & Xxxxxxx LLP, counsel for the Company, to the effect
set forth in Exhibit A 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, special regulatory counsel to the Company, to the
effect set forth in Exhibit B 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.
(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 and its Subsidiaries, 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 and its Subsidiaries 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 and the Trustee shall have entered into
the Indenture and the Initial Purchasers shall have received counterparts,
conformed as executed, thereof.
(m) The Company shall have entered into the Registration
Rights Agreement and the Initial Purchasers shall have received counterparts,
conformed as executed, thereof.
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
20
22
Purchasers with such conformed copies of such opinions, certificates, letters
and other documents as it shall reasonably request.
9. Initial Purchasers' Information. The Company and the Initial
Purchasers severally acknowledge that the statements with respect to the
offering of the Senior Subordinated Notes set forth in the last two sentences
of the second paragraph and the sixth and seventh 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 Senior Subordinated
Notes 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 Senior
Subordinated Notes 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
21
23
or financial conditions or if the effect of 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 Senior Subordinated Notes 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 Senior Subordinated Notes 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 the Initial Purchasers, x/x Xxxx,
Xxxxxxx & Xx. Xxx., 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: 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; 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 Senior Subordinated Notes from the Initial Purchasers.
14. Construction. This Agreement shall be construed in accordance
with the internal laws of the State of New York. TIME IS OF THE ESSENCE IN THIS
AGREEMENT.
15. Captions. The captions included in this Agreement are
included solely for convenience of reference and are not to be considered a
part of this Agreement.
16. Counterparts. This Agreement may be executed in various
counterparts which together shall constitute one and the same instrument.
[Signature pages to follow]
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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:
----------------------------------------
Name:
Title:
Accepted and agreed to as of
the date first above written:
BEAR, XXXXXXX & CO. INC.
By:
--------------------------------
Name:
Title:
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX
INCORPORATED
By:
--------------------------------
Name:
Title:
XXXXXXX XXXXX BARNEY INC.
By:
--------------------------------
Name:
Title:
25
NATIONSBANC XXXXXXXXXX SECURITIES LLC
By:
--------------------------------
Name:
Title:
WARBURG DILLON READ LLC
By:
--------------------------------
Name:
Title:
26
SCHEDULE 1
Intermedia Communications Inc., a Virginia corporation
Intermedia Licensing Company
Intermedia Capital Inc.
DIGEX Incorporated
Shared Technologies Xxxxxxxxx, Inc.
Shared Technologies Xxxxxxxxx Telecom, Inc.
Shared Technologies Xxxxxxxxx Communications Corp.
Access Network Services, Inc.
STF Canada Inc.
Access Virginia, Inc.
Netwave Systems, Inc.
Express Communications, Inc.
National Telecommunications of Florida, Inc.
NTC, Inc.
27
SCHEDULE 2
Long Distance Savers of the Metroplex, Inc.
LDS of Tulsa (Limited Partnership)
S-2
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SCHEDULE 3
Principal Amount at
Maturity of
Senior Subordinated
Initial Purchaser Notes to
----------------- be Purchased
-------------------
Bear, Xxxxxxx & Co. Inc. $ 218,400,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated 72,800,000
Xxxxxxx Xxxxx Barney Inc. 36,400,000
NationsBanc Xxxxxxxxxx Securities LLC 18,200,000
Warburg Dillon Read LLC 18,200,000
-------------
Total $ 364,000,000
S-3
29
SCHEDULE 4
1. Intermedia Communications Inc. 401(k) Profit Sharing Plan
30
EXHIBIT A
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 or in good standing would not, singly or in the
aggregate, have a Material Adverse Effect.
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 under the
Delaware General Corporation Law. The authorized, issued and outstanding
capital stock of the Company conforms in all respects to the description
thereof set forth in the Offering Memorandum.
3. All of the issued and outstanding capital stock of, or other
ownership interests in, the Company's Subsidiaries 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 us, after reasonable inquiry, and, are
owned by the Company of record and, to our knowledge, after reasonable inquiry,
free and clear of any security interest, claim, lien, limitation on voting
rights or encumbrance. There are not, to our knowledge, currently, and will not
be following the Offering, any outstanding subscriptions, rights, warrants,
calls, commitments of sale or options to acquire or instruments convertible
into or exchangeable for, any capital stock or other equity interest of the
Company or any Subsidiary (other than options issued pursuant to the Company's
stock option plans, the 153,500 warrants each to purchase 4.38 shares of Common
Stock, a warrant to purchase 200,000 shares of Common Stock, the Series D
Preferred Stock, the Series E Preferred Stock and the Series F Preferred Stock,
and noting that at present rights trade with the Common Stock).
4. When the Senior Subordinated Notes are issued and delivered
pursuant to this Agreement, no Senior Subordinated Notes 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.
5. The Company has all requisite corporate power and authority
to execute, deliver and perform its obligations under this Agreement, the
Indenture, the Registration Rights Agreement, and the other Operative
Documents, as applicable, and to consummate the transactions contemplated
thereby, including, without limitation, the corporate power and authority to
issue, sell and deliver the Senior Subordinated Notes as provided herein and
therein.
6. This Agreement has been duly and validly authorized, executed
and delivered by the Company and, assuming due execution by the other parties
hereto, is the legally valid and binding agreement of the Company.
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31
7. Each of the Indenture 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 Senior Subordinated Notes have been duly and validly
authorized for issuance and sale to the Initial Purchasers by the Company
pursuant to this Agreement and, when issued and authenticated in accordance
with the terms of the Indenture and delivered against payment therefor in
accordance with the terms of this Agreement and the Indenture, assuming due
execution by the other parties thereto, will be the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms and entitled to the benefits of the Indenture, 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.
9. The Exchange Notes have been duly and validly authorized for
issuance by the Company and, when issued and authenticated in accordance with
the terms of the Indenture, assuming due execution by the other parties
thereto, will be the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms and entitled to
the benefits of the Indenture, 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.
10. The Offering Memorandum contains a fair summary of each of
the Senior Subordinated Notes, the Indenture, and the Registration Rights
Agreement.
11. No registration under the Act of the Senior Subordinated
Notes is required for the sale of the Senior Subordinated Notes 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 Senior
Subordinated Notes in the Exempt Resales are Eligible Purchasers, (iii) the
accuracy of the Initial Purchasers' representations regarding the absence of
general solicitation in connection with the sale of Senior Subordinated Notes
to the Initial Purchasers and the Exempt Resales contained in this Agreement
and (iv) the accuracy of the Company's representations in Sections 5(a)(ii),
(xxviii), (xxix) (other than with respect to the first sentence) and (xxxi) of
this Agreement.
12. 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.
13. Prior to the effectiveness of the Exchange Offer Registration
Statement or the Shelf Registration Statement, the Indenture is not required to
be qualified under the Trust Indenture Act.
X-0
00
00. 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 Senior Subordinated Notes or (C) the consummation by the
Company and the Subsidiaries of the transactions described in the Offering
Memorandum under the caption "Use of Proceeds" 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 requires consent under, or will 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 as
material (assuming all of such agreements are governed by New York law), (iii)
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 that we express no opinion as to
the matters addressed by the opinion of Xxxxxx, Xxxx & Xxxxxx LLP, and except
in the case of clauses (ii) and (iii) 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 Senior Subordinated Notes 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) we express no
opinion as to the matters addressed by the opinion of Xxxxxx, Xxxx & Xxxxxx
LLP. To the best of 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, the issuance and sale of the Senior Subordinated Notes,
other than such consents and waivers as have been obtained or are being applied
for, except that we express no opinion as to the matters addressed by the
opinion of Xxxxxx, Xxxx & Xxxxxx LLP.
15. 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.
16. Except as set forth in this Agreement or in the Registration
Rights Agreement, 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.
17. None of the execution, delivery and performance of this
Agreement, the issuance and sale of
A-3
33
the Senior Subordinated Notes, the application of the proceeds from the
issuance and sale of the Senior Subordinated Notes and the consummation of the
transactions contemplated thereby as set forth in the Offering Memorandum, will
violate Regulations T, U or X promulgated by the Board of Governors of the
Federal Reserve System.
18. To the knowledge of such counsel, after reasonable
inquiry, no search of courts 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 any of the Company or any Subsidiary is
or may be subject, (ii) no statute, rule, regulation or order that has been
enacted, adopted or issued by any governmental agency or 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 has been issued that, in
the case of clauses (i), (ii) and (iii) above, (w) is required to be disclosed
in the Preliminary Offering Memorandum and the Offering Memorandum and that is
not so disclosed or, (x) could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect, except as
disclosed in the Offering Memorandum; or (y) might interfere with, adversely
affect or in any manner question the validity of the issuance and sale of the
Senior Subordinated Notes 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.
19. 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 herein.
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 believe that the Preliminary
Offering Memorandum or the Offering Memorandum, as of its date or the Closing
Date, contained an untrue statement of a material fact or omitted to state any
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading
(except as to financial statements and related notes, the financial statement
schedules and other financial and statistical data included therein).
For purposes of this opinion, Subsidiaries means the subsidiaries of
the Company listed on Schedule 1 to this Agreement.
A-4
34
EXHIBIT B
Form of Opinion of Xxxxxx, Xxxx & Xxxxxx
B-1
