EXHIBIT 1.1
_______________________________________________________________________________
INTERMEDIA COMMUNICATIONS INC.
6,000,000 Depositary Shares Each Representing a One-Hundredth Interest in a
Share of 7% Series D Junior Convertible Preferred Stock
Purchase Agreement
July 2, 1997
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
SALOMON BROTHERS INC
_______________________________________________________________________________
INTERMEDIA COMMUNICATIONS INC.
6,000,000 Depositary Shares Each Representing a One-Hundredth Interest in a
Share of 7% Series D Junior Convertible Preferred Stock
PURCHASE AGREEMENT
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July 2, ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
SALOMON BROTHERS INC
c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies & Gentlemen:
Intermedia Communications Inc., a Delaware corporation (the "Company"),
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proposes to issue and sell to Bear, ▇▇▇▇▇▇▇ & Co. Inc. and Salomon Brothers Inc
(together, the "Initial Purchasers") 6,000,000 Depositary Shares (the
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"Depositary Shares"), each representing a one-hundredth interest in a share of
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its 7% Series D Junior Convertible Preferred Stock, par value $1.00 per share
(the "Series D Preferred Stock"). The Series D Preferred Stock and the related
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Depositary Shares are to be authorized and issued pursuant to the provisions of
a Certificate of Designation of Voting Power, Designation Preferences and
Relative, Participating, Optional or Other Special Rights and Qualifications,
Limitations and Restrictions (the "Certificate of Designation") to be filed with
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the Secretary of State of the State of Delaware. Continental Stock Transfer &
Trust Company will be transfer agent and registrar for the Series D Preferred
Stock and will act as the "Depositary" for the Depositary Shares.
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1. Issuance of Securities. The Company proposes to, upon the terms and
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subject to the conditions set forth herein, issue and sell to the Initial
Purchasers 6,000,000 Depositary Shares (the "Firm Shares"). The Company also
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proposes to sell to the Initial Purchasers, upon the terms and conditions set
forth herein, up to an additional 900,000 Depositary Shares (the "Additional
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Shares", and together with the Firm Shares, the "Company Shares"). The Firm
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Shares, the Additional Shares, and the Series D Preferred Stock are collectively
referred to herein as the "Securities."
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For purposes of this Purchase Agreement (this "Agreement"), the term
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"Subsidiaries" shall mean the entities listed on Exhibit E hereto. Capitalized
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terms used but not otherwise defined herein shall have the meanings given to
such terms in the Certificate of Designation. Upon original issuance thereof,
and until such time as the same is no longer required under the applicable
requirements of the Act (as defined herein), the Series D Preferred Stock, the
Company Shares (and all securities issued in exchange therefor, in substitution
thereof or upon conversion thereof) shall bear the following legend:
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"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
▇▇▇▇▇▇▇ ▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE
SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT
(A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY
(1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT, OR (c) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE
WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A)
ABOVE."
2. Offering. The Company Shares will be offered and sold to the Initial
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Purchasers pursuant to an exemption from the registration requirements under the
Securities Act of 1933, as amended (the "Act"). The Company has prepared a
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preliminary offering memorandum, dated June 25, 1997 (the "Preliminary Offering
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Memorandum"), and a final offering memorandum, dated July 2, 1997 (the "Offering
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Memorandum"), relating to the Company and the Series D Preferred Stock (and the
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related Depositary Shares).
The Initial Purchasers have advised the Company that the Initial
Purchasers will make offers of sale (the "Exempt Resales") of the Company
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Shares, on the terms set forth in the Offering Memorandum, as amended or
supplemented, solely to persons whom any of the Initial Purchasers reasonably
believe to be "qualified institutional buyers," as defined in Rule 144A under
the Act ("QIBs"), and to a limited number of persons who have represented to the
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Company that they are institutional "Accredited Investors" referred to in Rule
501(a)(1), (2), (3) or (7) under the Act (each, an "Accredited Investor"). The
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QIBs and the Accredited Investors are referred to herein as the "Eligible
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Purchasers." The Initial Purchasers will offer the Series D Preferred Stock (and
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the related Depositary Shares) to such QIBs and Accredited Investors initially
at a price of $2500.00 (and $25.00 for the related Depositary Shares) per share.
Such price may be changed at any time without notice.
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Holders (including subsequent transferees) of the Series D Preferred
Stock (and the related Depositary Shares) will have the registration rights set
forth in the registration rights agreement relating thereto (the "Registration
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Rights Agreement") in substantially the form of Exhibit A hereto, to be dated
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the Closing Date (as defined), for so long as such Series D Preferred Stock (and
the related Depositary Shares) constitute "Transfer Restricted Securities" (as
defined in the Registration Rights Agreement). Pursuant to the Registration
Rights Agreement, the Company will agree to file with the Securities and
Exchange Commission (the "Commission"), under the circumstances set forth
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therein, a shelf registration statement pursuant to Rule 415 under the Act (the
"Shelf Registration Statement") relating to the resale by certain holders of the
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Series D Preferred Stock and the related Depositary Shares, and to the sale by
certain holders of Common Stock of the Company received in connection with
conversion of the Series D Preferred Stock, and to use its best efforts to cause
the Shelf Registration Statement to be declared effective. This Agreement, the
Certificate of Designation, the Securities, and the Registration Rights
Agreement are hereinafter sometimes referred to collectively as the "Operative
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Documents."
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3. Purchase, Sale and Delivery. (a) On the basis of the
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representations, warranties and covenants contained in this Agreement, and
subject to its terms and conditions, the Company agrees to issue and sell to
each Initial Purchaser, and each Initial Purchaser agrees severally and not
jointly to purchase from the Company, the number of Firm Shares set forth
opposite its name on Schedule I hereto. The purchase price for the Firm Shares
shall be $25.00 per share.
The Company also agrees, subject to all the terms and conditions set
forth herein, to sell to the Initial Purchasers, and, upon the basis of the
representations, warranties and agreements of the Company herein contained and
subject to all the terms and conditions set forth herein, the Initial Purchasers
shall have the right to purchase from the Company, solely for the purpose of
covering over-allotments in connection with sales of the Firm Shares, at the
purchase price per Depository Share, pursuant to an option (the "over-allotment
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option") which may be exercised at any time and from time to time prior to 10:00
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p.m., New York City time, on the 30th day after the date of the Offering
Memorandum (or, if such 30th day shall be a Saturday or Sunday or a holiday, on
the next business day thereafter when the New York Stock Exchange is open for
trading), up to an aggregate of 900,000 Additional Shares. Upon any exercise of
the over-allotment option, each Initial Purchaser, severally and not jointly,
agrees to purchase from the Company the number of Additional Shares (subject to
such adjustments as the Initial Purchasers may determine in order to avoid
fractional Depository Shares) that bears the same proportion to the aggregate
number of Additional Shares to be purchased by the Initial Purchasers as the
number of Firm Shares set forth opposite the name of such Initial Purchaser on
Schedule I hereto bears to the aggregate number of Firm Shares.
(b) Delivery of, and payment of the purchase price for, the
Firm Shares shall be made, against payment of the purchase price, at the offices
of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, 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 July 9, 1997, or at such other time as shall be
agreed upon by the Initial Purchasers and the Company. The time and date of such
delivery and payment of the Firm Shares are herein called the "Closing Date."
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(c) Delivery of, and payment of the purchase price for any
Additional Shares to be purchased by the Initial Purchasers shall be made at the
offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, or such other location as may be mutually
acceptable, at such time and on such date (the "Option Closing Date"), which may
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be the same as the Closing Date but shall in no event be earlier than the
Closing Date nor later than ten business days after the giving of the notice
hereinafter referred to, as shall be specified in a written notice from Bear,
▇▇▇▇▇▇▇ & Co, Inc., on behalf of the Initial Purchasers to purchase a number,
specified in such notice, of Additional Shares.
(d) The Firm Shares and any Additional Shares to be purchased
hereunder shall initially be issued in the form of one or more Global Securities
(the "Global Securities"), registered in the name of Cede & Co., as nominee of
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the Depository Trust Company ("DTC"), having a liquidation preference
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corresponding to the aggregate liquidation preference of the Firm Shares and the
Additional Shares, as the case may be. The Global Securities shall be delivered
by the Company to the Initial Purchasers (or as the Initial Purchasers direct)
in each case with any transfer taxes payable upon initial issuance thereof duly
paid by the Company against payment of the purchase price by wire transfer of
immediately available funds to the order of the Company. The Global Securities
shall be made available to the Initial Purchasers for inspection not later than
9:30 a.m., New York City time, on the business day immediately preceding the
Closing Date.
4. Agreements of the Company. The Company covenants and agrees
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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 of the Company Shares for
offering or sale in any jurisdiction, or the initiation of any proceeding for
such purpose by any state securities commission or other regulatory authority
and (ii) of the happening of any event that, in the reasonable opinion of either
counsel to the Company or counsel to the Initial Purchasers, makes any statement
of a material fact made in the Preliminary Offering Memorandum or the Offering
Memorandum untrue or that requires the making of any additions to or changes in
the Preliminary Offering Memorandum or the Offering Memorandum in order to make
the statements therein, in the light of the circumstances under which they are
made, not misleading. The Company shall use its best efforts to prevent the
issuance of any stop order or order suspending the qualification or exemption of
any of the Series D Preferred Stock (and the related Depositary Shares) under
any state securities or Blue Sky laws and, if at any time any state securities
commission or other regulatory authority shall issue an order suspending the
qualification or exemption of any of the Company Shares, under any state
securities or Blue Sky laws, the Company shall use its best efforts to obtain
the withdrawal or lifting of such order at the earliest possible time.
(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
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and the Offering Memorandum, and any amendments and supplements thereto required
pursuant hereto, by the Initial Purchasers in connection with Exempt Resales.
(c) Not to amend or supplement the Preliminary Offering
Memorandum or the Offering Memorandum prior to the Closing Date unless the
Initial Purchasers shall previously have been advised thereof and shall not have
objected thereto within a reasonable time after being furnished a copy thereof.
The Company shall promptly prepare, upon the Initial Purchasers' request, any
amendment or supplement to the Preliminary Offering Memorandum or the Offering
Memorandum that may be necessary or advisable in connection with Exempt Resales.
(d) If, after the date hereof and prior to consummation of any
Exempt Resale, any event shall occur as a result of which, in the judgment of
the Company or in the reasonable opinion of either counsel to the Company or
counsel to the Initial Purchasers, it becomes necessary or advisable to amend or
supplement the Preliminary Offering Memorandum or Offering Memorandum in order
to make the statements therein, in the light of the circumstances when such
Offering Memorandum is delivered to an Eligible Purchaser which is a prospective
purchaser, not misleading, or if it is necessary or advisable to amend or
supplement the Preliminary Offering Memorandum or Offering Memorandum to comply
with applicable law, (i) to notify the Initial Purchasers and (ii) forthwith to
prepare an appropriate amendment or supplement to such Offering Memorandum so
that the statements therein as so amended or supplemented will not, in the light
of the circumstances when it is so delivered, be misleading, or so that such
Offering Memorandum will comply with applicable law.
(e) To cooperate with the Initial Purchasers and counsel to
the Initial Purchasers in connection with the qualification or registration of
the Company Shares under the securities or Blue Sky laws of such jurisdictions
as the Initial Purchasers may reasonably request and to continue such
qualification in effect so long as required for the Exempt Resales; provided,
however, that the Company shall not be required in connection therewith to
register or qualify as a foreign corporation where it is not now so qualified or
to take any action that would subject it to service of process in suits or
taxation, in each case, other than as to matters and transactions relating to
the Preliminary Offering Memorandum, the Offering Memorandum or Exempt Resales,
in any jurisdiction where it is not now so subject.
(f) Whether or not the transactions contemplated hereby are
consummated or this Agreement becomes effective or is terminated, to pay all
costs, expenses, fees and taxes incident to the performance of the obligations
of the Company hereunder, including in connection with: (i) the preparation,
printing, filing and distribution of the Preliminary Offering Memorandum and the
Offering Memorandum (including, without limitation, financial statements) and
all amendments and supplements thereto required pursuant hereto, (ii) the
preparation (including, without limitation, duplication costs) and delivery of
all preliminary and final Blue Sky memoranda prepared and delivered in
connection herewith and with the Exempt Resales, (iii) the issuance, transfer
and delivery by the Company of the Securities to the Initial Purchasers, (iv)
the qualification or registration of the Securities for offer and sale under the
securities or Blue Sky laws of the several states (including, without
limitation, the
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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 Securities (including, without limitation, printing and
engraving thereof), (vii) the fees, disbursements and expenses of the Company's
counsel and accountants, (viii) all expenses and listing fees in connection with
the application for quotation of the Company Shares in the National Association
of Securities Dealers, Inc. ("NASD") Automated Quotation System - PORTAL
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("PORTAL"), (ix) all fees and expenses (including fees and expenses of counsel
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to the Company) of the Company in connection with the approval of the Securities
by DTC for "book-entry" transfer, (x) rating the Securities by rating agencies,
(xi) the reasonable fees and expenses of the Transfer Agent and its counsel in
connection with the Certificate of Designation, (xii) the performance by the
Company of its other obligations under this Agreement and the other Operative
Documents and (xiii) "roadshow" travel and other expenses incurred in connection
with the marketing and sale of the Securities (other than out-of-pocket expenses
incurred by the Initial Purchasers for travel, meals and lodgings).
(g) To use the proceeds from the sale of the Company Shares in
the manner described in the Offering Memorandum under the caption "Use of
Proceeds."
(h) To do and perform all things required to be done and
performed under this Agreement by it prior to or after the Closing Date and to
satisfy all conditions precedent on its part to the delivery of the Company
Shares.
(i) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act) that
would be integrated with the sale of the Company Shares, in a manner that would
require the registration under the Act of the sale to the Initial Purchasers or
Eligible Purchasers of the Company Shares, or to take any other action that
would result in the Exempt Resales not being exempt from registration under the
Act.
(j) For so long as any of the Securities remain outstanding
and during any period in which the Company is not subject to Section 13 or 15(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), to make
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available to any holder of the Company Shares, in connection with any sale
thereof and any prospective purchaser of such Company Shares from such holder,
the information required by Rule 144A(d)(4) under the Act.
(k) To comply with all of its agreements set forth in the
Registration Rights Agreement and all agreements set forth in the representation
letters of the Company to DTC relating to the approval of the Company Shares, by
DTC for "book-entry" transfer.
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(l) To use its best efforts to effect the inclusion of the
Company Shares, in PORTAL and to obtain approval of the Company Shares, by DTC
for "book-entry" transfer.
(m) During a period of five years following the Closing Date,
to deliver without charge to each of the Initial Purchasers, as they may
reasonably request, promptly upon their becoming available, copies of (i) all
reports or other publicly available information that the Company shall mail or
otherwise make available to its stockholders and (ii) all reports, financial
statements and proxy or information statements filed by the Company with the
Commission or any national securities exchange and such other publicly available
information concerning the Company or its Subsidiaries, including without
limitation, press releases.
(n) Prior to the Closing Date, to furnish to each of the
Initial Purchasers, as soon as they have been publicly disclosed by the Company,
a copy of any consolidated financial statements and any unaudited interim
financial statements of the Company for any period subsequent to the period
covered by the financial statements appearing in the Offering Memorandum.
(o) Neither the Company nor any of its Subsidiaries will take,
directly or indirectly, any action designed to, or that might reasonably be
expected to, cause or result in stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Company
Shares. Except as permitted by the Act, the Company will not distribute any
preliminary offering memorandum, offering memorandum or other offering material
in connection with the offering and sale of the Company Shares.
(p) To comply with the agreements in the Certificate of
Designation, the Indenture, the Registration Rights Agreement and any other
Operative Document.
5. Representations and Warranties. (a) The Company represents
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and warrants to each of the Initial Purchasers that:
(i) The Preliminary Offering Memorandum and the Offering
Memorandum have been prepared in connection with the Exempt Resales. The
Preliminary Offering Memorandum and the Offering Memorandum do not, and any
supplement or amendment to them will not, contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances 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
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therein. No stop order preventing the use of the Preliminary Offering Memorandum
or the Offering Memorandum, or any amendment or supplement thereto, or any order
asserting that any of the transactions contemplated by this Agreement are
subject to the registration requirements of the Act, has been issued.
(ii) When the Company Shares, are issued and delivered
pursuant to this Agreement, neither the Series D Preferred Stock nor the Company
Shares will be of the same class (within the meaning of Rule 144A under the Act)
as securities of the Company that are listed on a national securities exchange
registered under Section 6 of the Exchange Act, or that are quoted in a United
States automated inter-dealer quotation system.
(iii) The Company and each of its Subsidiaries (A) has been
duly organized, is validly existing as a corporation in good standing under the
laws of its respective jurisdiction of incorporation, (B) has all requisite
corporate power and authority to carry on its business as it is currently being
conducted and as described in the Offering Memorandum and to own, lease and
operate its properties, and (C) is duly qualified and in good standing as a
foreign corporation authorized to do business in each jurisdiction in which the
nature of its business or its ownership or leasing of property requires such
qualification except, with respect to this clause (C), where the failure to be
so qualified or in good standing does not and could not reasonably be expected
to (x) individually or in the aggregate, result in a material adverse effect on
the properties, business, results of operations, condition (financial or
otherwise), affairs or prospects of the Company and the Subsidiaries, taken as a
whole, (y) interfere with or adversely affect the issuance or marketability of
the Securities pursuant hereto or (z) in any manner draw into question the
validity of this Agreement or any other Operative Document or the transactions
described in the Offering Memorandum under the caption "Use of Proceeds" (any of
the events set forth in clauses (x), (y) or (z), a "Material Adverse Effect").
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(iv) All of the outstanding shares of capital stock of the
Company have been duly authorized, validly issued, and are fully paid and
nonassessable and were not issued in violation of any preemptive or similar
rights. At March 31, 1997 on a combined basis, after giving effect to the
issuance and sale of the Series D Preferred Stock (and the related Depositary
Shares) pursuant hereto, and to the offering of 11 1/4% Senior Discount Notes
due 2007 being issued concurrently herewith and the retirement of the 13 1/2%
Senior Notes due 2005 (the "13 1/2% Notes"), the Company had an authorized and
outstanding consolidated capitalization as set forth in the Offering Memorandum
under the caption "Capitalization."
(v) Except as set forth in the Offering Memorandum and on
Exhibit E attached hereto, there are not currently, and will not be as a result
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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.
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(vi) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under this Agreement
and the other Operative Documents, and to consummate the transactions
contemplated hereby and thereby, including, without limitation, the corporate
power and authority to issue, sell and deliver the Securities as provided herein
and therein.
(vii) This Agreement has been duly and validly authorized,
executed and delivered by the Company and is the legal, valid and binding
agreement of the Company, enforceable against it in accordance with its terms,
except insofar as indemnification and contribution provisions may be limited by
applicable law or equitable principles and subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or similar laws affecting the
rights of creditors generally and subject to general principles of equity.
(viii) The shares of Series D Preferred Stock (and the related
Depositary Shares) have been duly and validly authorized for issuance and sale
to the Initial Purchasers by the Company pursuant to this Agreement and, when
issued, delivered and paid for in accordance with the terms of this Agreement,
will be validly issued, fully paid and non-assessable and entitled to the
rights, privileges and preferences set forth in the Certificate of Designation,
and the issuance of such shares of Series D Preferred Stock (and the related
Depositary Shares) will not be subject to any preemptive or similar rights. The
Series D Preferred Stock (and the related Depositary Shares) will conform in all
material respects with the description thereof in the Offering Memorandum.
(ix) The Certificate of Designation has been duly authorized
by all necessary corporate and any necessary stockholder action and, on the
Closing Date will have been duly executed by the Company and filed with the
Secretary of State of the State of Delaware and will conform in all material
respects to the description thereof in the Offering Memorandum.
(x) Each of the Registration Rights Agreement and the Deposit
Agreement has been duly and validly authorized by the Company and, when duly
executed and delivered by the Company, will be the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors generally and
subject to general principles of equity and limitations on the validity or
enforceability of provisions relating to rights of indemnity and contribution
set forth therein. The Offering Memorandum contains a fair summary of the terms
of the Registration Rights Agreement and the Deposit Agreement.
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(xi) None of the Company or any Subsidiary is and, after
giving effect to the Offering, will not be (A) in violation of its charter or
bylaws, (B) in default in the performance of any bond, debenture, note,
indenture, mortgage, deed of trust or other agreement or instrument to which it
is a party or by which it is bound or to which any of its properties is subject,
or (C) in violation of any local, state or Federal law, statute, ordinance,
rule, regulation, requirement, judgment or court decree (including, without
limitation, the Communications Act and the rules and regulations of the FCC and
environmental laws, statutes, ordinances, rules, regulations, judgments or court
decrees) applicable to the Company or any Subsidiary or any of their assets or
properties (whether owned or leased) other than, in the case of clauses (B) and
(C), any default or violation that (1) could not reasonably be expected to have
a Material Adverse Effect or (2) which was disclosed in the Offering Memorandum.
To the best knowledge of the Company, there exists no condition that, with
notice, the passage of time or otherwise, would constitute a default under any
such document or instrument that could reasonably be expected to result in a
Material Adverse Effect, except as disclosed in the Offering Memorandum.
(xii) None of (A) the execution, delivery or performance by
the Company of this Agreement and the other Operative Documents, (B) the
issuance and sale of the Series D Preferred Stock (and the related Depositary
Shares), (C) the performance by the Company of its obligations under this
Agreement and the other Operative Documents and (D) the consummation of the
transactions contemplated by this Agreement and the other Operative Documents
violate, conflict with or constitute a breach of any of the terms or provisions
of, or a default under (or an event that with notice or the lapse of time, or
both, would constitute a default), or require consent under, or result in the
imposition of a lien or encumbrance on any properties of the Company or any
Subsidiary, or an acceleration of any indebtedness of the Company or any
Subsidiary pursuant to, (i) the charter or bylaws of the Company or any
Subsidiary, (ii) any bond, debenture, note, indenture, mortgage, deed of trust
or other agreement or instrument to which the Company or any Subsidiary is a
party or by which any of them or their property is or may be bound, (iii) any
statute, rule or regulation applicable to the Company or any Subsidiary or any
of their respective assets or properties or (iv) any judgment, order or decree
of any court or governmental agency or authority having jurisdiction over the
Company or the Subsidiaries or any of their assets or properties, except in the
case of clauses (ii), (iii) and (iv) for such violations conflicts, breaches,
defaults, consents, impositions of liens or accelerations that (1) would not
singly, or in the aggregate, have a Material Adverse Effect or (2) were
disclosed in the Offering Memorandum. Other than as described in the Offering
Memorandum, no consent, approval, authorization or order of, or filing,
registration, qualification, license or permit of or with, (A) any court or
governmental agency, body or administrative agency (including, without
limitation, the FCC) or (B) any other person is required for (1) the execution,
delivery and performance by the Company of this Agreement and the other
Operative Documents, or (2) the issuance and sale of the Securities and the
transactions contemplated hereby and thereby, except (x) such as have been
obtained and made (or, in the case of the Registration Rights Agreement, will be
obtained and made) under the Act, the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act") and state securities or Blue Sky laws and
-------------------
regulations or such as may be required by the NASD or (y) where the failure to
obtain any such consent, approval, authorization or order of, or filing
10
registration, qualification, license or permit would not reasonably be expected
to result in a Material Adverse Effect.
(xiii) There is (i) no action, suit or proceeding before or by
any court, arbitrator or governmental agency, body or official, domestic or
foreign, now pending or, to the best knowledge of the Company or any Subsidiary,
threatened or contemplated to which the Company or any of the Subsidiaries is or
may be a party or to which the business or property of the Company or any
Subsidiary is subject, (ii) no statute, rule, regulation or order that has been
enacted, adopted or issued by any governmental agency or that has been proposed
by any governmental body or (iii) no injunction, restraining order or order of
any nature by a federal or state court or foreign court of competent
jurisdiction to which the Company or any Subsidiary is or may be subject or to
which the business, assets, or property of the Company or any Subsidiary are or
may be subject, that, in the case of clauses (i), (ii) and (iii) above, (x) is
required to be disclosed in the Preliminary Offering Memorandum and the Offering
Memorandum and that is not so disclosed, or (y) could reasonably be expected to
individually or in the aggregate, result in a Material Adverse Effect.
(xiv) No action has been taken and no statute, rule,
regulation or order has been enacted, adopted or issued by any governmental
agency that prevents the issuance of the Series D Preferred (and the related
Depositary Shares) or prevents or suspends the use of the Offering Memorandum;
no injunction, restraining order or order of any nature by a federal or state
court of competent jurisdiction has been issued that prevents the issuance of
the Series D Preferred Stock (and the related Depositary Shares) or prevents or
suspends the sale of the Series D Preferred Stock (and the related Depositary
Shares) in any jurisdiction referred to in Section 4(e) hereof; and every
request of any securities authority or agency of any jurisdiction for additional
information has been complied with in all material respects.
(xv) Except as set forth in the Offering Memorandum, there is
(i) no significant unfair labor practice complaint pending against the Company
or any Subsidiary nor, to the best knowledge of the Company, threatened against
any of them, before the National Labor Relations Board, any state or local labor
relations board or any foreign labor relations board, and no significant
grievance or significant arbitration proceeding arising out of or under any
collective bargaining agreement is so pending against the Company or any
Subsidiary or, to the best knowledge of the Company, threatened against any of
them, (ii) no significant strike, labor dispute, slowdown or stoppage pending
against the Company or any Subsidiary nor, to the best knowledge of the Company,
threatened against the Company or any Subsidiary and (iii) to the best knowledge
of the Company, no union representation question existing with respect to the
employees of the Company or any Subsidiary that, in the case of clauses (i),
(ii) or (iii), could reasonably be expected to result in a Material Adverse
Effect. To the best knowledge of the Company, no collective bargaining
organizing activities are taking place with respect to the Company and the
Subsidiaries that could reasonably be expected to result in a Material Adverse
Effect. None of the Company or any Subsidiary has violated (A) any federal,
state or local law or foreign law relating to discrimination in hiring,
promotion or pay
11
of employees (except as set forth in the Offering Memorandum), (B) any
applicable wage or hour laws or (C) any provision of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or the rules and regulations
-----
thereunder, which in the case of clause (A), (B) or (C) above could reasonably
be expected to result in a Material Adverse Effect.
(xvi) None of the Company or any Subsidiary has violated any
environmental, safety or similar law or regulation applicable to it or its
business or property relating to the protection of human health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), lacks any permit, license or other approval
------------------
required of it under applicable Environmental Laws or is violating any term or
condition of such permit, license or approval which could reasonably be expected
to, either individually or in the aggregate, have a Material Adverse Effect.
(xvii) Each of the Company and the Subsidiaries has (i) good
and marketable title to all of the properties and assets described in the
Offering Memorandum as owned by it, free and clear of all liens, charges,
encumbrances and restrictions, (ii) peaceful and undisturbed possession under
all material leases to which any of them is a party as lessee, (iii) all
licenses, certificates, permits, authorizations, approvals, franchises and other
rights from, and has made all declarations and filings with, all federal, state
and local authorities (including, without limitation, the FCC), all
self-regulatory authorities and all courts and other tribunals (each an
"Authorization") necessary to engage in the business conducted by any of them in
-------------
the manner described in the Offering Memorandum and (iv) no reason to believe
that any governmental body or agency is considering limiting, suspending or
revoking any such Authorization, except with respect to clauses (i) through (iv)
as described in the Offering Memorandum or as could not reasonably be expected
to result in a Material Adverse Effect. Except where the failure to be in full
force and effect would not have a Material Adverse Effect, all such
Authorizations are valid and in full force and effect and each of the Company
and the Subsidiaries is in compliance in all material respects with the terms
and conditions of all such Authorizations and with the rules and regulations of
the regulatory authorities having jurisdiction with respect thereto. Except as
could not reasonably be expected to result in a Material Adverse Effect, all
material leases to which the Company and the Subsidiaries is a party are valid
and binding and no default by the Company or any Subsidiary has occurred and is
continuing thereunder and, to the best knowledge of the Company and the
Subsidiaries no material defaults by the landlord are existing under any such
lease.
(xviii) Except as could not reasonably be expected to result
in a Material Adverse Effect, each of the Company and the Subsidiaries owns,
possesses or has the right to employ all patents, patent rights, licenses
(including all FCC, state, local or other jurisdictional regulatory licenses),
inventions, copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, software, systems
or procedures), trademarks, service marks and trade names, inventions, computer
programs, technical data and information (collectively, the "Intellectual
------------
Property") presently employed by it or its Subsidiaries in connection with the
--------
businesses now operated by it or which are
12
proposed to be operated by it or its Subsidiaries free and clear of and without
violating any right, claimed right, charge, encumbrance, pledge, security
interest, restriction or lien of any kind of any other person and none of the
Company or any Subsidiary has received any notice of infringement of or conflict
with asserted rights of others with respect to any of the foregoing. The use of
the Intellectual Property in connection with the business and operations of the
Company and the Subsidiaries does not infringe on the rights of any person,
except as could not reasonably be expected to have a Material Adverse Effect.
(xix) None of the Company or any Subsidiary, or to the best
knowledge of the Company, any of their respective officers, directors, partners,
employees, agents or affiliates or any other person acting on behalf of the
Company or any Subsidiary has, directly or indirectly, given or agreed to give
any money, gift or similar benefit (other than legal price concessions to
customers in the ordinary course of business) to any customer, supplier,
employee or agent of a customer or supplier, official or employee of any
governmental agency (domestic or foreign), instrumentality of any government
(domestic or foreign) or any political party or candidate for office (domestic
or foreign) or other person who was, is or may be in a position to help or
hinder the business of the Company or any Subsidiary (or assist the Company or
any Subsidiary in connection with any actual or proposed transaction) which (i)
might subject the Company or any Subsidiary, or any other individual or entity
to any damage or penalty in any civil, criminal or governmental litigation or
proceeding (domestic or foreign), (ii) if not given in the past, might have had
a material adverse effect on the assets, business or operations of the Company
or any Subsidiary or (iii) if not continued in the future, might have a Material
Adverse Effect.
(xx) All material tax returns required to be filed by the
Company and each of the Subsidiaries in all jurisdictions have been so filed.
All taxes, including withholding taxes, penalties and interest, assessments,
fees and other charges due or claimed to be due from such entities or that are
due and payable have been paid, other than those being contested in good faith
and for which adequate reserves have been provided or those currently payable
without penalty or interest. To the knowledge of the Company, there are no
material proposed additional tax assessments against the Company, the assets or
property of the Company or any Subsidiary.
(xxi) None of the Company or any Subsidiary is (i) an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended, or (ii) a
"holding company" or a "subsidiary company" or an "affiliate" of a holding
company within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
(xxii) Except as disclosed in the Offering Memorandum, and
except with respect to the holders of certain shares of Common Stock issued
pursuant to an Asset Acquisition Agreement dated as of December 6, 1996 among
Universal Telecom, Inc.,
13
Intermedia Communications, Inc. and certain individuals, there are no holders of
securities of the Company or the Subsidiaries who, by reason of the execution by
the Company of this Agreement or any other Operative Document to which it is a
party or the consummation by the Company of the transactions contemplated hereby
and thereby, have the right to request or demand that the Company or any of the
Subsidiaries register under the Act or analogous foreign laws and regulations
securities held by them.
(xxiii) Each of the Company and the Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that: (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect thereto.
(xxiv) Each of the Company and the Subsidiaries maintains
insurance covering its properties, operations, personnel and businesses. Such
insurance insures against such losses and risks as are adequate in accordance
with customary industry practice to protect the Company and the Subsidiaries and
their respective businesses. None of the Company or any Subsidiary has received
notice from any insurer or agent of such insurer that substantial capital
improvements or other expenditures will have to be made in order to continue
such insurance. All such insurance is outstanding and duly in force on the date
hereof, subject only to changes made in the ordinary course of business,
consistent with past practice, which do not, singly or in the aggregate,
materially alter the coverage thereunder or the risks covered thereby.
(xxv) None of the Company or any Subsidiary has (i) taken,
directly or indirectly, any action designed to, or that might reasonably be
expected to, cause or result in stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Securities
or (ii) since the date of the Preliminary Offering Memorandum (A) sold, bid for,
purchased or paid any person (other than the Initial Purchasers) any
compensation for soliciting purchases of the Series D Preferred Stock (and the
related Depositary Shares) or (B) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities of the
Company.
(xxvi) No registration under the Act of the Series D Preferred
Stock (and the related Depositary Shares) is required for the sale of the Series
D Preferred Stock (and the related Depositary Shares) to the Initial Purchasers
as contemplated hereby or for the Exempt Resales assuming (i) that the
purchasers who buy the Series D Preferred Stock (and the related Depositary
Shares) in the Exempt Resales are either QIBs or Accredited Investors and (ii)
the accuracy of the Initial Purchasers' representations regarding the absence of
general solicitation
14
in connection with the sale of Series D Preferred Stock (and the related
Depositary Shares) to the Initial Purchasers and the Exempt Resales contained
herein. No form of general solicitation or general advertising was used by the
Company or any of its representatives (other than the Initial Purchasers, as to
which the Company makes no representation or warranty) in connection with the
offer and sale of any of the Series D Preferred Stock (and the related
Depositary Shares) or in connection with Exempt Resales, including, but not
limited to, articles, notices or other communications published in any
newspaper, magazine, or similar medium or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising. Except for the 13 1/2% Series A Redeemable
Exchangeable Preferred Stock due 2009 and the 13 1/2% Series B Redeemable
Exchangeable Preferred Stock due 2009 (the "Series B Preferred Stock"), no
securities of the same class as the Series D Preferred Stock (and the related
Depositary Shares) have been issued and sold by the Company within the six-month
period immediately prior to the date hereof.
(xxvii) Set forth on Exhibit B hereto is a list of each
---------
employee pension or benefit plan with respect to which the Company or any
corporation considered an affiliate of the Company within the meaning of Section
407(d)(7) of ERISA is a party in interest or disqualified person. The execution
and delivery of this Agreement, the other Operative Documents and the sale of
the Series D Preferred Stock (and the related Depositary Shares) to be purchased
by the Eligible Purchasers will not involve any prohibited transaction within
the meaning of Section 406 of ERISA or Section 4975 of the Internal Revenue Code
of 1986. The representation made by the Company in the preceding sentence is
made in reliance upon and subject to the accuracy of, and compliance with, the
representations and covenants made or deemed made by the Eligible Purchasers as
set forth in the Offering Memorandum under the caption "Notice to Investors."
(xxviii) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its date, and each amendment or supplement thereto,
as of its date, contains the information specified in, and meets the
requirements of, Rule 144A(d)(4) under the Act.
(xxix) Subsequent to the respective dates as of which
information is given in the Offering Memorandum and up to the Closing Date,
except as set forth in the Offering Memorandum, (i) none of the Company or any
Subsidiary has incurred any liabilities or obligations, direct or contingent,
which are material, individually or in the aggregate, to the Company and the
Subsidiaries taken as a whole, nor entered into any transaction not in the
ordinary course of business, (ii) there has not been, singly or in the
aggregate, any change or development, which could reasonably be expected to
result in a Material Adverse Effect and (iii) there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class of
its capital stock, except for dividends paid in respect of the Series B
Preferred Stock.
15
(xxx) None of the Company or any Subsidiary or any agent
thereof acting on behalf of them has taken, and none of them will take, any
action that might cause this Agreement or the issuance or sale of the Securities
to violate Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R. Part 220),
Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the
Board of Governors of the Federal Reserve System or analogous foreign laws and
regulations.
(xxxi) To the best knowledge of the Company, the accountants
who have certified or will certify the financial statements included or to be
included as part of the Offering Memorandum are independent accountants. The
consolidated historical financial statements, together with related schedules
and notes, set forth in the Offering Memorandum comply as to form in all
material respects with the requirements applicable to registration statements on
Form S-1 under the Act and present fairly in all material respects the financial
position and results of operations of the Company and the Subsidiaries at the
respective dates and for the respective periods indicated. Such financial
statements have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods presented. The
pro forma financial statements included in the Offering Memorandum have been
prepared on a basis consistent with such historical statements, except for the
pro forma adjustments specified therein, and give effect to assumptions made on
a reasonable basis and present fairly in all material respects the historical
and proposed transactions contemplated by this Agreement and the other Operative
Documents; and such pro forma financial statements comply as to form in all
material respects with the requirements applicable to pro forma financial
statements included in registration statements on Form S-1 under the Act. The
other financial and statistical information and data included in the Offering
Memorandum, historical and pro forma, are accurately presented in all material
respects and prepared on a basis consistent with the financial statements,
historical and pro forma, included in the Offering Memorandum and the books and
records of the Company and the Subsidiaries, as applicable.
(xxxii) The Company does not intend to, nor does it believe
that it will, incur debts beyond its ability to pay such debts as they mature.
The present fair saleable value of the assets of the Company on a consolidated
basis exceeds the amount that will be required to be paid on or in respect of
the existing debts and other liabilities (including contingent liabilities) of
the Company on a consolidated basis as they become absolute and matured. The
assets of the Company on a consolidated basis do not constitute unreasonably
small capital to carry out the business of the Company and the Subsidiaries,
taken as a whole, as conducted or as proposed to be conducted. Upon the issuance
of the Series D Preferred Stock (and the related Depositary Shares), the present
fair saleable value of the assets of the Company on a consolidated basis will
exceed the amount that will be required to be paid on or in respect of the
existing debts and other liabilities (including contingent liabilities) of the
Company on a consolidated basis as they become absolute and matured. Upon the
issuance of the Series D Preferred Stock (and the related Depositary Shares),
the assets of the Company on a consolidated basis will not constitute
unreasonably small capital to carry out its businesses as
16
now conducted, including the capital needs of the Company on a consolidated
basis, taking into account the projected capital requirements and capital
availability.
(xxxiii) Except pursuant to this Agreement, there are no
contracts, agreements or understandings between the Company and any other person
that would give rise to a valid claim against the Company or either of the
Initial Purchasers for a brokerage commission, finder's fee or like payment in
connection with the issuance, purchase and sale of the Securities.
(xxxiv) Each certificate signed by any officer of the Company
and delivered to the Initial Purchasers or counsel for the Initial Purchasers
shall be deemed to be a representation and warranty by the Company to the
Initial Purchasers as to the matters covered thereby.
The Company acknowledges that each of the Initial Purchasers
and, for purposes of the opinions to be delivered to the Initial Purchasers
pursuant to Section 8 hereof, counsel to the Company and counsel to the Initial
Purchasers, will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.
(b) Each of the Initial Purchasers, severally and not jointly,
represents, warrants and covenants to the Company and agrees that:
(i) Such Initial Purchaser is a QIB, with such knowledge and
experience in financial and business matters as are necessary in order to
evaluate the merits and risks of an investment in the Company Shares.
(ii) Such Initial Purchaser (A) is not acquiring the Company
Shares with a view to any distribution thereof that would violate the Act or the
securities laws of any state of the United States or any other applicable
jurisdiction and (B) will be reoffering and reselling the Company Shares only to
QIBs in reliance on the exemption from the registration requirements of the Act
provided by Rule 144A and to Accredited Investors in a private placement exempt
from the registration requirements of the Act.
(iii) No form of general solicitation or general advertising
has been or will be used by either of the Initial Purchasers or any of their
representatives in connection with the offer and sale of any of the Company
Shares, including, but not limited to, articles, notices or other communications
published in any newspaper, magazine, or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have been invited
by any general solicitation or general advertising.
17
(iv) Each of the Initial Purchasers agrees that, in connection
with the Exempt Resales, it will solicit offers to buy the Company Shares, only
from, and will offer to sell the Company Shares, only to, Eligible Purchasers.
The Initial Purchasers further agree (A) that they will offer to sell the
Company Shares, only to, and will solicit offers to buy the Company Shares, only
from (1) QIB's who in purchasing such Company Shares will be deemed to have
represented and agreed that they are purchasing the Company Shares, for their
own accounts or accounts with respect to which they exercise sole investment
discretion and that they or such accounts are QIBs and (2) Accredited Investors
who make the representations contained in, and execute and return to one of the
Initial Purchasers, a certificate in the form of Annex B attached to the
-------
Offering Memorandum and (B) that, in the case of such Eligible Purchasers,
acknowledges and agrees that such Company Shares, will not have been registered
under the Act and may be resold, pledged or otherwise transferred only (x)(I) to
a person who the seller reasonably believes is a QIB in a transaction meeting
the requirements of Rule 144A, (II) in a transaction meeting the requirements of
Rule 144 under the Act, or (III) in accordance with another exemption from the
registration requirements of the Act (and based upon an opinion of counsel if
the Company so requests), (y) to the Company, (z) pursuant to an effective
registration statement under the Act and, in each case, in accordance with any
applicable securities laws of any state of the United States and (C) that the
holder will, and each subsequent holder is required to, notify any purchaser of
the security evidenced thereby of the resale restrictions set forth in (B)
above.
(v) Each of the Initial Purchasers understands that the
Company and, for purposes of the opinions to be delivered to the Initial
Purchasers pursuant to Section 8 hereof, counsel to the Company and counsel to
the Initial Purchasers will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.
6. Indemnification.
---------------
(a) The Company agrees to indemnify and hold harmless (i) each
of the Initial Purchasers, (ii) each person, if any, who controls any of the
Initial Purchasers within the meaning of Section 15 of the Act or Section 20(a)
of the Exchange Act and (iii) the respective officers, directors, partners,
employees, representatives and agents of any of the Initial Purchasers or any
controlling person to the fullest extent lawful, from and against any and all
losses, liabilities, claims, damages and expenses whatsoever (including but not
limited to attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any 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
18
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the Company will not be liable in any such case to the extent, but only to
the extent, that (i) any such loss, liability, claim, damage or expense arises
out of or is based upon any such untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in conformity
with written information furnished to the Company by or on behalf of the Initial
Purchasers expressly for use therein and (ii) the foregoing indemnity with
respect to any untrue statement contained in or omitted from a preliminary
offering memorandum shall not inure to the benefit of any Initial Purchaser (or
any person controlling such Initial Purchaser), from whom the person asserting
any such loss, liability, claim, damage or expense purchased any of the Company
Shares, which are the subject thereof if it is finally judicially determined
that such loss, liability, claim, damage or expense resulted solely from the
fact that the Initial Purchaser sold the Company Shares, to a person to whom
there was not sent or given, at or prior to the written confirmation of such
sale, a copy of the Offering Memorandum, as amended or supplemented, and (x) the
Company shall have previously and timely furnished sufficient copies of the
Offering Memorandum, as so amended or supplemented, to such Initial Purchaser in
accordance with this Agreement and (y) the Offering Memorandum, as so amended or
supplemented, would have corrected such untrue statement or omission of a
material fact. This indemnity agreement will be in addition to any liability
which the Company may otherwise have, including, under this Agreement.
(b) Each Initial Purchaser, severally and not jointly, agrees
to indemnify and hold harmless the Company and each person, if any, who controls
the Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, against any losses, liabilities, claims, damages and expenses
whatsoever (including but not limited to attorneys' fees and any and all
expenses whatsoever incurred in investigating, preparing or defending against
any investigation or litigation, commenced or threatened, or any claim
whatsoever and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Offering Memorandum or the Offering
Memorandum, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, in
each case to the extent, but only to the extent, that any such loss, liability,
claim, damage or expense arises out of or is based upon any untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of any Initial Purchaser expressly for use therein;
provided, however, that in no case shall any Initial Purchaser be liable or
responsible for any amount in excess of the discounts and commissions received
by such Initial Purchaser, as set forth on the cover page of the Offering
Memorandum. This indemnity agreement will be in addition to any liability which
any Initial Purchaser may otherwise have, including, under this Agreement.
19
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement thereof (but the
failure so to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section 6 except to the extent that it
has been prejudiced in any material respect by such failure or from any
liability which it may otherwise have). In case any such action is brought
against any indemnified party, and it notifies an indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. Notwithstanding the foregoing, the
indemnified party or parties shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless (i) the employment of
such counsel shall have been authorized in writing by one of the indemnifying
parties in connection with the defense of such action, (ii) the indemnifying
parties shall not have employed counsel to take charge of the defense of such
action within a reasonable time after notice of commencement of the action, or
(iii) such indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from or
additional to those available to one or all of the indemnifying parties (in
which case the indemnifying party or parties shall not have the right to direct
the defense of such action on behalf of the indemnified party or parties), in
any of which events such fees and expenses of counsel shall be borne by the
indemnifying parties; provided, however, that the indemnifying party under
subsection (a) or (b) above, shall only be liable for the legal expenses of one
counsel (in addition to any local counsel) for all indemnified parties in each
jurisdiction in which any claim or action is brought. Anything in this
subsection to the contrary notwithstanding, an indemnifying party shall not be
liable for any settlement of any claim or action effected without its written
consent; provided, however, that such consent was not unreasonably withheld.
7. Contribution. In order to provide for contribution in circumstances
------------
in which the indemnification provided for in Section 6 is for any reason held to
be unavailable from the Company or is insufficient to hold harmless a party
indemnified thereunder, the Company and the Initial Purchasers shall contribute
to the aggregate losses, claims, damages, liabilities and expenses of the nature
contemplated by such indemnification provision (including any investigation,
legal and other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted, but after
deducting in the case of losses, claims, damages, liabilities and expenses
suffered by the Company, any contribution received by the Company from persons,
other than the Initial Purchasers, who may also be liable for contribution,
including persons who control the Company within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act) to which the Company and one or
more of the Initial Purchasers may be subject, in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Initial Purchasers from the offering of the Company Shares, or, if such
allocation is not permitted by applicable law or indemnification is not
available as a result of the indemnifying party not having received notice as
provided in Section 6, in
20
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 Company Shares, (net of discounts but before
deducting expenses) received by the Company and (y) the discounts received by
the Initial Purchasers, respectively, in each case as set forth in the table on
the cover page of the Offering Memorandum. The relative fault of the Company and
of the Initial Purchasers shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Initial Purchasers and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Initial Purchasers agree that it
would not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to above.
Notwithstanding the provisions of this Section 7, (i) in no case shall any of
the Initial Purchasers be required to contribute any amount in excess of the
amount by which the discount applicable to the Company Shares, purchased by such
Initial Purchaser pursuant to this Agreement exceeds the amount of any damages
which such Initial Purchaser has otherwise been required to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission and (ii) no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 7, (A)
each person, if any, who controls any of the Initial Purchasers within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and (B)
the respective officers, directors, partners, employees, representatives and
agents of any of the Initial Purchasers or any controlling person shall have the
same rights to contribution as such Initial Purchaser, and each person, if any,
who controls the Company within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act shall have the same rights to contribution as the
Company, subject in each case to clauses (i) and (ii) of this Section 7. Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties
under this Section 7, notify such party or parties from whom contribution may be
sought, but the failure to so notify such party or parties shall not relieve the
party or parties from whom contribution may be sought from any obligation it or
they may have under this Section 7 or otherwise. No party shall be liable for
contribution with respect to any action or claim settled without its prior
written consent; provided, however, that such written consent was not
unreasonably withheld.
8. Conditions of Initial Purchasers' Obligations. The several
---------------------------------------------
obligations of the Initial Purchasers to purchase and pay for the Firm Shares
and the Additional Shares, as provided herein, shall be subject to the
satisfaction of the following conditions, except that with respect to the
Additional Shares, references to the Closing Date shall mean the Option Closing
Date:
(a) All of the representations and warranties of the Company
contained in this Agreement shall be true and correct on the date hereof and on
the Closing Date with the same force and effect as if made on and as of the date
hereof and the Closing Date,
21
respectively. The Company shall have performed or complied in all material
respects with all of the agreements herein contained and required to be
performed or complied with by it at or prior to the Closing Date.
(b) The Offering Memorandum shall have been printed and copies
distributed to the Initial Purchasers not later than 10:00 a.m., New York City
time, on the day following the date of this Agreement or at such later date and
time as to which the Initial Purchasers may agree, and no stop order suspending
the qualification or exemption from qualification of the Company Shares in any
jurisdiction referred to in Section 4(e) shall have been issued and no
proceeding for that purpose shall have been commenced or shall be pending or
threatened.
(c) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency which would, as of the Closing Date prevent the issuance of
the Company Shares; no action, suit or proceeding shall have been commenced and
be pending against or affecting or, to the best knowledge of the Company,
threatened against, the Company or the Subsidiaries before any court or
arbitrator or any governmental body, agency or official that (1) could
reasonably be expected to result in a Material Adverse Effect or (2) has not
been disclosed in the Offering Memorandum; and no stop order shall have been
issued preventing the use of the Offering Memorandum, or any amendment or
supplement thereto, or which could reasonably be expected to have a Material
Adverse Effect.
(d) Since the dates as of which information is given in the
Offering Memorandum and except as contemplated by the Offering Memorandum, (i)
there shall not have been any material adverse change, or any development that
is reasonably likely to result in a material adverse change, in the capital
stock or the long-term debt, or material increase in the short-term debt, of the
Company and the Subsidiaries from that set forth in the Offering Memorandum,
(ii) no dividend or distribution of any kind shall have been declared, paid or
made by the Company or any Subsidiary (other than any dividends or distributions
paid to the Company) on any class of its capital stock, except for dividends
paid in respect of the Series B Preferred Stock and (iii) neither the Company
nor any Subsidiary shall have incurred any liabilities or obligations, direct or
contingent, that are material, individually or in the aggregate, to the Company
and the Subsidiaries, taken as a whole, and that are required to be disclosed on
a balance sheet or notes thereto in accordance with generally accepted
accounting principles and are not disclosed on the latest balance sheet or notes
thereto included in the Offering Memorandum. Since the date hereof and since the
dates as of which information is given in the Offering Memorandum, there shall
not have occurred any material adverse change, or any development which may
reasonably be expected to involve a material adverse change, in the properties,
business, results of operations, condition (financial or otherwise), affairs or
prospects of the Company and the Subsidiaries taken as a whole.
22
(e) The Initial Purchasers shall have received a certificate,
dated the Closing Date, signed on behalf of the Company by (i) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Chairman of the Board, President and Chief Executive Officer and (ii) ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Senior Vice President and Chief Financial Officer, in form and
substance reasonably satisfactory to the Initial Purchasers, confirming, as of
the Closing Date, the matters set forth in paragraphs (a), (b), (c) and (d) of
this Section 8 and that, as of the Closing Date, the obligations of the Company
to be performed hereunder on or prior thereto have been duly performed in all
material respects.
(f) The Initial Purchasers shall have received on the Closing
Date an opinion, dated the Closing Date, in form and substance satisfactory to
the Initial Purchasers and counsel to the Initial Purchasers, of Kronish, Lieb,
counsel for the Company, to the effect set forth in Exhibit C 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 ▇▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇ LLP, special regulatory counsel to the Company, to the effect set forth
in Exhibit D 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 ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, 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, dated as of the date of this
Agreement and as of the Closing Date, customary comfort letters addressed to the
Initial Purchasers and in form and substance satisfactory to the Initial
Purchasers and counsel to the Initial Purchasers with respect to the financial
statements and certain financial information of the Company contained in the
Offering Memorandum.
(j) ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ 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.
23
(k) Prior to the Closing Date, the Company and the
Subsidiaries shall have furnished to the Initial Purchasers such further
information, certificates and documents as the Initial Purchasers may reasonably
request.
(l) The Company shall have authorized, executed and filed the
Certificate of Designation in accordance with Delaware law and each of the
Initial Purchasers shall have received an original, duly executed by the
Company.
(m) The Company shall have entered into each of the
Registration Rights Agreement and the Deposit Agreement and the Initial
Purchasers shall have received counterparts, conformed as executed, thereof.
(n) The Company shall have deposited the Series D Preferred
Stock with the Depositary.
(o) At or prior to the Closing Date, all FCC or state
approvals required in connection with the Offering shall have been obtained or
applications for such approvals submitted or prepared for submission promptly
following the Closing Date and the Company shall have delivered to the Initial
Purchasers evidence satisfactory to the Initial Purchasers that such FCC or
state approvals have been obtained or applications thereof have been made or
prepared for submission promptly following the Closing Date.
All opinions, certificates, letters and other documents
required by this Section 8 to be delivered by the Company will be in compliance
with the provisions hereof only if they are reasonably satisfactory in form and
substance to the Initial Purchasers. The Company will furnish the Initial
Purchasers with such conformed copies of such opinions, certificates, letters
and other documents as it shall reasonably request.
9. Initial Purchasers' Information. The Company and the Initial
-------------------------------
Purchasers severally acknowledge that the statements with respect to the
offering of the Series D Preferred Stock (and the related Depositary Shares) set
forth in the last paragraph of the cover page and the third, fourth, 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
24
shall survive delivery of and payment for the Series D Preferred Stock (and the
related Depositary Shares) to and by the Initial Purchasers. The representations
contained in Section 5 and the agreements contained in Sections 4(f), 6, 7 and
11(d) shall survive the termination of this Agreement, including any termination
pursuant to Section 11.
11. Effective Date of Agreement; Termination.
----------------------------------------
(a) This Agreement shall become effective upon execution and
delivery of a counterpart hereof by each of the parties hereto.
(b) The Initial Purchasers shall have the right to terminate
this Agreement at any time prior to the Closing Date by notice to the Company
from the Initial Purchasers, without liability (other than with respect to
Sections 6 and 7) on the Initial Purchasers' part to the Company if, on or prior
to such date, (i) the Company shall have failed, refused or been unable to
perform in any material respect any agreement on its part to be performed
hereunder, (ii) any other condition to the obligations of the Initial Purchasers
hereunder as provided in Section 8 is not fulfilled when and as required in any
material respect, (iii) in the reasonable judgment of the Initial Purchasers any
material adverse change shall have occurred since the respective dates as of
which information is given in the Offering Memorandum in the condition
(financial or otherwise), business, properties, assets, liabilities, prospects,
net worth, results of operations or cash flows of the Company and the
Subsidiaries taken as a whole, other than as set forth in the Offering
Memorandum, or (iv)(A) any domestic or international event or act or occurrence
has materially disrupted, or in the opinion of the Initial Purchasers will in
the immediate future materially disrupt, the market for the Company's securities
or for securities in general; or (B) trading in securities generally on the New
York or American Stock Exchanges shall have been suspended or materially
limited, or minimum or maximum prices for trading shall have been established,
or maximum ranges for prices for securities shall have been required, on such
exchange, or by such exchange or other regulatory body or governmental authority
having jurisdiction; or (C) a banking moratorium shall have been declared by
Federal or state authorities, or a moratorium in foreign exchange trading by
major international banks or persons shall have been declared; or (D) there is
an outbreak or escalation of armed hostilities involving the United States on or
after the date hereof, or if there has been a declaration by the United States
of a national emergency or war, the effect of which shall be, in the Initial
Purchasers' judgment, to make it inadvisable or impracticable to proceed with
the offering or delivery of the Company Shares on the terms and in the manner
contemplated in the Offering Memorandum; or (E) there shall have been such a
material adverse change in general economic, political or financial conditions
or if the effect of international conditions on the financial markets in the
United States shall be such as, in the Initial Purchasers' judgment, makes it
inadvisable or impracticable to proceed with the delivery of the Company Shares
as contemplated hereby.
25
(c) Any notice of termination pursuant to this Section 11
shall be by telephone, telex, telephonic facsimile, or telegraph, confirmed in
writing by letter.
(d) If this Agreement shall be terminated pursuant to any of
the provisions hereof (otherwise than pursuant to any of clauses (iii) or (iv)
of Section 11(b), in which case each party will be responsible for its own
expenses), or if the sale of the Series D Preferred Stock (and the related
Depositary Shares) provided for herein is not consummated because any condition
to the obligations of the Initial Purchasers set forth herein is not satisfied
or because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or comply with any provision hereof, the Company
will, subject to demand by the Initial Purchasers, reimburse the Initial
Purchasers for all out-of-pocket expenses (including the reasonable fees and
expenses of Initial Purchasers' counsel), incurred by the Initial Purchasers in
connection herewith.
12. Notice. All communications hereunder, except as may be
------
otherwise specifically provided herein, shall be in writing and, if sent to the
Initial Purchasers shall be mailed, delivered, or telexed, telegraphed or
telecopied and confirmed in writing to Bear, ▇▇▇▇▇▇▇ & Co. Inc. and Salomon
Brothers Inc, c/o Bear, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Attention: Corporate Finance Department, telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇;
and if sent to the Company, shall be mailed, delivered or telexed, telegraphed
or telecopied and confirmed in writing to Intermedia Communications Inc., ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chief
Financial Officer, telecopy number: (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to Kronish,
Lieb, Weiner & ▇▇▇▇▇▇▇ LLP, 1114 Avenue of the ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, telecopy number (▇▇▇) ▇▇▇-▇▇▇▇;
provided, however, that any notice pursuant to Section 7 shall be mailed,
delivered or telexed, telegraphed or telecopied and confirmed in writing.
13. Parties. This Agreement shall inure solely to the benefit of, and
-------
shall be binding upon, the Initial Purchasers and the Company and the
controlling persons and agents referred to in Sections 6 and 7, and their
respective successors and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained. The
term "successors and assigns" shall not include a purchaser, in its capacity as
such, of Series D Preferred Stock (and the related Depositary Shares) from the
Initial Purchasers.
14. Construction. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
------------
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK AS APPLIED TO
CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK. TIME IS OF
THE ESSENCE IN THIS AGREEMENT.
26
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 page to follow]
27
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:
By: BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By:_____________________________
Name:
Title:
By: SALOMON BROTHERS INC
By:_____________________________
Name:
Title:
SCHEDULE I
Number of
Firm Shares
Initial Purchaser to be Purchased
----------------- ---------------
Bear, ▇▇▇▇▇▇▇ & Co. Inc. ........................................ 3,000,000
Salomon Brothers Inc ............................................ 3,000,000
=========
Total 6,000,000
Sched I-1
EXHIBIT A
[Form of Registration Rights Agreement. See Exhibit 4.4 to this
Registration Statement.]
A-1
EXHIBIT B
List of Employee Pension and Benefit Plans
of Intermedia Communications Inc.
and its Subsidiaries
1. Intermedia Communications Inc. 401(k) Profit Sharing Plan
B-1
EXHIBIT C
[Form of Opinion of Kronish, Lieb, Weiner & ▇▇▇▇▇▇▇ LLP]
1. Each of the Company and the Subsidiaries is duly organized
and validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, and has all requisite corporate power and
authority to carry on its business as it is being conducted and as described in
the Offering Memorandum and to own, lease and operate its properties, and is
duly qualified and in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business or its
ownership or leasing of property requires such qualification, except where the
failure to be so qualified would not, singly or in the aggregate, have a
Material Adverse Effect. All of the issued and outstanding shares of capital
stock of, or other ownership interests in, each Subsidiary have been duly
authorized and validly issued, are fully paid and non-assessable and were not
issued in violation of or subject to any preemptive or similar rights under the
Delaware General Corporation Law or known to such counsel, after reasonable
inquiry, and, except as set forth in the Offering Memorandum or on Schedule A
hereto, are owned by the Company of record, and to the knowledge of such
counsel, after reasonable inquiry, beneficially, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or other restriction on transferability or voting.
2. All of the outstanding shares of capital stock of the
Company have been duly authorized, validly issued, and are fully paid and
nonassessable and were not issued in violation of any preemptive or similar
rights. The authorized, issued and outstanding capital stock of the Company
conforms in all respects to the description thereof set forth in the Offering
Memorandum. Except as set forth in the Offering Memorandum or on Schedule A
hereto, there are no outstanding subscriptions, rights, warrants, calls,
commitments of sale or options to acquire, or instruments convertible into or
exercisable or exchangeable for, any capital stock or other equity interest in
the Company or any of its Subsidiaries known to such counsel after reasonable
inquiry.
3. When the Company Shares, are issued and delivered pursuant
to this Agreement, no Company Shares will be of the same class (within the
meaning of Rule 144A under the Act) as securities of the Company that are listed
on a national securities exchange registered under Section 6 of the Exchange Act
or that are quoted in a United States automated inter-dealer quotation system.
4. The Company has all requisite corporate power and authority
to execute, deliver and perform its obligations under this Agreement, the
Certificate of Designation, the Deposit Agreement, the Registration Rights
Agreement and the other Operative Documents, as applicable, and to consummate
the transactions contemplated thereby, including, without limitation, the
corporate power and authority to issue, sell and deliver the Securities as
provided herein and therein.
5. This Agreement has been duly and validly authorized,
executed and delivered by the Company and, assuming due execution by the other
parties thereto, is the legally valid and binding agreement of the Company.
C-1
6. The Certificate of Designation has been duly authorized by
all necessary corporate and stockholder action, executed by the Company and
filed with the Secretary of State of the State of Delaware.
7. Each of the Deposit Agreement and the Registration Rights
Agreement has been duly and validly authorized, executed and delivered by the
Company and, assuming due execution by the other parties thereto, is the legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except that we express no opinion as to the validity
or enforceability of rights of indemnity or contribution, or both and except as
such enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity.
8. The Series D Preferred Stock (and the related Depositary
Shares) have been duly and validly authorized for issuance and sale to the
Initial Purchasers by the Company pursuant to this Agreement and, when issued,
delivered and paid for in accordance with the terms of this Agreement, will be
validly issued, fully paid and non-assessable and entitled to the rights,
privileges and preferences set forth in the Certificate of Designation, and the
issuance of such shares of Series D Preferred Stock (and the related Depositary
Shares) will not be subject to any preemptive or similar rights.
9. Intentionally Omitted.
10. The Offering Memorandum contains a fair summary of each of
the Series D Preferred Stock, the Certificate of Designation, the Company
Shares,, the Deposit Agreement and the Registration Rights Agreement.
11. No registration under the Act of the Series D Preferred
Stock (and the related Depositary Shares) is required for the sale of the
Company Shares, to the Initial Purchasers as contemplated by this Agreement or
for the Exempt Resales assuming (i) that the Initial Purchasers are Qualified
Institutional Buyers, as defined in Rule 144A under the Act ("QIB"), (ii) that
the purchasers who buy the Company Shares, in the Exempt Resales are either QIBs
or Accredited Investors, (iii) the accuracy of the Initial Purchasers' and the
Company's representations regarding the absence of general solicitation in
connection with the sale of Company Shares, to the Initial Purchasers and the
Exempt Resales contained in this Agreement, (iv) the accuracy of the Company's
representations in Sections 5(a)(ii), (xxv),(xxvi) last sentence only and
(xxviii) of this Agreement and (v) with respect to Accredited Investors, the
accuracy of the representations made by each Accredited Investor as set forth in
the letters of representation executed by such Accredited Investor in the form
of Annex B to the Offering Memorandum.
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
C-2
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. None of (A) the execution, delivery or performance by the
Company of this Agreement and the other Operative Documents, (B) the issuance
and sale of the Series D Preferred Stock (and the related Depositary Shares),
(C) the performance by the Company of its obligations under this Agreement and
the other Operative Documents and (D) the consummation of the transactions
contemplated by this Agreement and the other Operative Documents violates,
conflicts with or constitutes a breach of any of the terms or provisions of, or
a default under (or an event that with notice or the lapse of time, or both,
would constitute a default), or require consent under, or result in the
imposition of a lien or encumbrance on any properties of the Company or any
Subsidiary, or an acceleration of any indebtedness of the Company or any
Subsidiary pursuant to, (i) the charter or bylaws of the Company or any
Subsidiary, (ii) any bond, debenture, note, indenture, mortgage, deed of trust
or other agreement or instrument to which the Company or any Subsidiary is a
party or by which any of them or their property is or may be bound identified to
such counsel by the Company as material (assuming all of such agreements are
governed by New York law), (iii) any local, state, federal or administrative
statute, rule or regulation applicable to the Company or any Subsidiary or any
of their assets or properties (except such counsel shall express no opinion as
to the matters addressed in the opinion of ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇ LLP), or (iv)
any judgment, order or decree of any court or governmental agency or authority
having jurisdiction over the Company or any Subsidiary or any of their assets or
properties known to such counsel, except in the case of clauses (ii), (iii) and
(iv) for such violations, conflicts, breaches, defaults, consents, impositions
of liens or accelerations that (x) would not, singly or in the aggregate, have a
Material Adverse Effect or (y) are disclosed in the Offering Memorandum.
Assuming compliance with applicable state securities and Blue Sky laws, as to
which such counsel need express no opinion, and except for the filing of a
registration statement under the Act and qualification of the Indenture under
the Trust Indenture Act of 1939, as amended, in connection with the Registration
Rights Agreement, no consent, approval, authorization or order of, or filing,
registration, qualification, license or permit of or with, any court or
governmental agency, body or administrative agency is required for (1) the
execution, delivery and performance by the Company of this Agreement and the
other Operative Documents, (2) the issuance and sale of the Securities or (3)
consummation by the Company and the Subsidiaries of the transactions described
in the Offering Memorandum under the caption "Use of Proceeds," except (i) such
as have been obtained and made or have been disclosed in the Offering
Memorandum, (ii) where the failure to obtain such consents or waivers would not,
singly or in the aggregate, have a Material Adverse Effect and (iii) such
counsel shall express no opinion as to the matters addressed in the opinion of
▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇ LLP. Except with respect to the retirement of the 13 1/2
Notes as described in the Offering Memorandum, to such counsel's knowledge,
after reasonable inquiry, no consents or waivers from any other person are
required for the execution, delivery and performance by the Company of this
Agreement and the other Operative Documents for the issuance and sale of the
Securities, other than such consents and waivers as have been obtained.
14. None of the Company or the Subsidiaries is (i) an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended, or (ii) a
"holding company" or a "subsidiary company" or an "affiliate" of a holding
company within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
C-3
15. Except as set forth in this Agreement or in the
Registration Rights Agreement (and if the Concurrent Offering is consummated,
the Registration Rights Agreement in respect of the 11 1/4 1/4% Senior Discount
Notes due 2007), and except with respect to the holders of certain shares of
Common Stock issued pursuant to an Asset Acquisition Agreement dated as of
December 6, 1996 among Universal Telecom, Inc., Intermedia Communications, Inc.
and certain individuals, to such counsel's knowledge, after reasonable inquiry,
there are no holders of any securities of the Company who, by reason of the
execution by the Company of this Agreement or any other Operative Document to
which it is a party or the consummation by the Company of the transactions
contemplated thereby, have the right to request or demand that the Company
register under the Act securities held by them.
16. None of the execution, delivery and performance of this
Agreement, the issuance and sale of the Securities, the application of the
proceeds from the issuance and sale of the Securities and the consummation of
the transactions contemplated thereby as set forth in the Offering Memorandum,
will violate Regulations G, T, U or X promulgated by the Board of Governors of
the Federal Reserve System.
17. To the knowledge of such counsel, no search of court
records having been made, there is (i) no action, suit, investigation or
proceeding before or by any court, arbitrator or governmental agency, body or
official, domestic or foreign, now pending, or threatened or contemplated to
which any of the Company or any Subsidiary is or may be a party or to which the
business or property of the Company or any Subsidiary is or may be subject, (ii)
no statute, rule, regulation or order that has been enacted, adopted or issued
by any governmental agency or that has been proposed by any governmental body,
or (iii) no injunction, restraining order or order of any nature by a federal or
state court of competent jurisdiction to which any of the Company or any
Subsidiary is or may be subject or to which the business, assets or property of
the Company or any of the Subsidiaries are or may be subject has been issued
that, in the case of clauses (i), (ii) and (iii) above, (x) is required to be
disclosed in the Preliminary Offering Memorandum and the Offering Memorandum and
that is not so disclosed, (y) could reasonably be expected to have, either
individually or in the aggregate, a Material Adverse Effect, except as disclosed
in the Offering Memorandum or (z) might interfere with, adversely affect or in
any manner question the validity of the issuance and sale of the Series D
Preferred Stock (and the related Depositary Shares) or any of the other
transactions contemplated by this Agreement or any of the other Operative
Documents, except that such counsel shall express no opinion as to the matters
addressed in the opinion of ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇ LLP.
18. The statements under the caption "Description of Preferred
Stock" and "Description of the Depositary Shares" in the Offering Memorandum,
insofar as such statements constitute a summary of documents referred to therein
present a fair summary thereof. The terms of the Certificate of Designation
conform to the descriptions thereof contained in the Offering Memorandum.
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 therein.
We have participated in conferences with officers and other
representatives of the Company, representatives of the independent certified
public accountants of the Company and the Initial Purchasers
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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 we express no opinion as to financial statements and related notes, the
financial statement schedules and other financial and statistical data included
therein).
C-5
EXHIBIT E
Subsidiaries of Intermedia Communications Inc.
---------------------------------------------
Daylight Acquisition Corp.
FiberNet North Carolina, Inc.1/
FiberNet Huntsville, Inc.
FiberNet St. Louis, Inc.
FiberNet Telecommunications Cincinnati, Inc.
Phone One, Inc.
FiberNet USA, Inc.
EMI Telecommunications Inc.
Eastern Message Communications Inc.
Intermedia Licensing Company
-----------------------------
1. AT&T Credit Corporation own warrants to purchase 10% of the outstanding
capital stock of FiberNet North Carolina, Inc.
E-1
