Exhibit 1.1
EXECUTION COPY
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INTERMEDIA COMMUNICATIONS INC.
13 1/2% Series A Redeemable Exchangeable Preferred Stock due 2009
Purchase Agreement
March 4, 1997
BEAR, XXXXXXX & CO. INC.
XXXXXX XXXXXXX & CO. INCORPORATED
SALOMON BROTHERS INC
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INTERMEDIA COMMUNICATIONS INC.
13 1/2% Series A Redeemable Exchangeable Preferred Stock due 2009
PURCHASE AGREEMENT
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March 4, 1997
New York, New York
BEAR, XXXXXXX & CO. INC.
XXXXXX XXXXXXX & CO. INCORPORATED
SALOMON BROTHERS INC
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies & Gentlemen:
Intermedia Communications Inc., a Delaware corporation (the "Company"),
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proposes to issue and sell to Bear, Xxxxxxx & Co. Inc., Xxxxxx Xxxxxxx & Co.
Incorporated and Salomon Brothers Inc (together, the "Initial Purchasers")
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30,000 shares of its 13 1/2% Series A Redeemable Exchangeable Preferred Stock
due 2009, liquidation preference $10,000 per share (the "Series A Preferred
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Stock"). The Series A Preferred Stock is to be authorized and issued pursuant
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to the provisions of a Certificate of Designation of the Voting Power,
Designation Preferences and Relative, Participating, Optional or Other Special
Rights and Qualifications, Limitations and Restrictions (the "Certificate of
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Designation") to be filed with the Secretary of State of the State of Delaware.
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Continental Stock Transfer & Trust Company will be transfer agent and registrar
for the Series A Preferred Stock. The Series A Preferred Stock and the New
Preferred Stock (as defined below) issuable in exchange therefor are
collectively referred to herein as the "Securities." Under certain
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circumstances set forth in the Certificate of Designation, the Securities may be
exchanged for the Company's 13 1/2% Senior Subordinated Debentures due 2009 (the
"Exchange Debentures"). The Exchange Debentures and the New Exchange Debentures
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(as defined below) issuable in exchange therefor are collectively referred to
herein as the "Debentures."
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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 an aggregate of $300,000,000 liquidation preference of Series A
Preferred Stock. Capitalized terms used but not otherwise defined herein shall
have the meanings given to such terms in the Certificate of Designation.
Upon original issuance thereof, and until such time as the same is no
longer required under the applicable requirements of the Act, the Series A
Preferred Stock (and all securities issued in exchange therefor, in substitution
thereof or upon conversion thereof) shall bear the following legend:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER XXXXXXX 0 XX XXX XXXXXX XXXXXX SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY
IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (1)(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 Series A Preferred Stock will be offered and sold to
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the Initial Purchasers pursuant to an exemption from the registration
requirements under the Securities Act of 1933, as amended (the "Act"). The
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Company has prepared a preliminary offering memorandum, dated February 24, 1997
(the "Preliminary Offering Memorandum"), and a final offering memorandum, dated
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March 4, 1997 (the "Offering Memorandum"), relating to the Company and the
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Series A Preferred Stock.
The Initial Purchasers have advised the Company that the Initial Purchasers
will make offers (the "Exempt Resales") of the Series A Preferred Stock on the
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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 Company
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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 A Preferred Stock to
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such QIBs and Accredited Investors initially at a price of $10,000.00 per share.
Such price may be changed at any time without notice.
Holders (including subsequent transferees) of the Series A Preferred Stock
will have the registration rights set forth in the registration rights agreement
relating thereto (the "Registration Rights Agreement") in substantially the form
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of Exhibit A hereto, to be dated the Closing Date (as defined), for so long as
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such Series A Preferred Stock 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, (i) a registration statement under the Act (the "Exchange Offer
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Registration Statement")
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relating to the 13 1/2% Series B Redeemable Exchangeable Preferred Stock due
2009 (the "New Preferred Stock") to be offered in exchange for the Series A
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Preferred Stock or, if the Series A Preferred Stock has been exchanged for the
Exchange Debentures, the Company's 13 1/2% Senior Subordinated Debentures due
2009 (the "New Exchange Debentures") to be offered in exchange for the Exchange
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Debentures (in either case such offer to exchange being referred to as the
"Exchange Offer") and, if necessary, (ii) a shelf registration statement
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pursuant to Rule 415 under the Act (the "Shelf Registration Statement") relating
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to the resale by certain holders of the Series A Preferred Stock or Exchange
Debentures, as the case may be, and to use its best efforts to cause such
Registration Statements to be declared effective and consummate the Exchange
Offer. This Agreement, the Certificate of Designation, the indenture pursuant
to which the Exchange Debentures will be issued (the "Indenture"), the
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Securities, the Debentures and the Registration Rights Agreement are hereinafter
sometimes referred to collectively as the "Operative Documents."
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3. Purchase, Sale and Delivery. (a) On the basis of the representations,
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warranties and covenants contained in this Agreement, and subject to its terms
and conditions, the Company agrees to issue and sell to each Initial Purchaser,
and each Initial Purchaser agrees severally and not jointly to purchase from the
Company, that number of shares set forth opposite its name on Schedule I hereto.
The purchase price for the Series A Preferred Stock shall be $9,629.17 per
share.
(b) Delivery of, and payment of the purchase price for, the Series A
Preferred Stock shall be made, against payment of the purchase price, at the
offices of Kronish, Lieb, Weiner & Xxxxxxx LLP ("Kronish, Xxxx") at 1114 Avenue
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of the Americas, Xxx Xxxx, Xxx Xxxx 00000, or such other location as may be
mutually acceptable. Such delivery and payment shall be made at 9:00 A.M. New
York time, on March 7, 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 are herein called the "Closing Date."
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(c) The Series A Preferred Stock shall initially be issued in the form of
one or more Global Securities (the "Global Securities"), registered in the name
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of Cede & Co., as nominee of the Depository Trust Company ("DTC"), having a
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liquidation preference corresponding to the aggregate liquidation preference of
the Series A Preferred Stock. 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 same-day
funds to the order of the Company. The Global Securities shall be made
available to the Initial Purchasers for inspection not later than 9:30 a.m., New
York City time, on the business day immediately preceding the Closing Date.
4. Agreements of the Company. The Company covenants and agrees with each
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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 Series A
Preferred Stock 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
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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 A Preferred Stock 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 Series A Preferred Stock under
any state securities or Blue Sky laws, the Company shall use its best
efforts to obtain the withdrawal or lifting of such order at the earliest
possible time.
(b) To furnish the Initial Purchasers and those persons identified by
the Initial Purchasers to the Company, without charge, as many copies of
the Preliminary Offering Memorandum and the Offering Memorandum, and any
amendments or supplements thereto, as the Initial Purchasers may reasonably
request. The Company consents to the use of the Preliminary Offering
Memorandum and the Offering Memorandum, and any amendments and supplements
thereto required pursuant hereto, by the Initial Purchasers in connection
with Exempt Resales.
(c) Not to amend or supplement the Preliminary Offering Memorandum or
the Offering Memorandum prior to the Closing Date unless the Initial
Purchasers shall previously have been advised thereof and shall not have
objected thereto within a reasonable time after being furnished a copy
thereof. The Company shall promptly prepare, upon the Initial Purchasers'
request, any amendment or supplement to the Preliminary Offering Memorandum
or the Offering Memorandum that may be necessary or advisable in connection
with Exempt Resales.
(d) If, after the date hereof and prior to consummation of any Exempt
Resale, any event shall occur as a result of which, in the judgment of the
Company or in the reasonable opinion of either counsel to the Company or
counsel to the Initial Purchasers, it becomes necessary or advisable to
amend or supplement the Preliminary Offering Memorandum or Offering
Memorandum in order to make the statements therein, in the light of the
circumstances when such Offering Memorandum is delivered to an Eligible
Purchaser which is a prospective purchaser, not misleading, or if it is
necessary or advisable to amend or supplement the Preliminary Offering
Memorandum or Offering Memorandum to comply with applicable law, (i) 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 Series A Preferred Stock 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:
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(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 and, if issued, the Debentures to the Initial
Purchasers, (iv) the qualification or registration of the Securities for
offer and sale under the securities or Blue Sky laws of the several states
(including, without limitation, the reasonable fees and disbursements of
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 Series A Preferred Stock in the
National Association of Securities Dealers, Inc. ("NASD") Automated
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Quotation System - PORTAL ("PORTAL"), (ix) all fees and expenses (including
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fees and expenses of counsel 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 Series A Preferred Stock
in the manner described in the Offering Memorandum under the caption "Use
of Proceeds."
(h) If the Debentures are issued, not to voluntarily claim, and to
resist actively any attempts to claim, the benefit of any usury laws
against the holders of the Debentures.
(i) To do and perform all things required to be done and performed
under this Agreement by it prior to or after the Closing Date and to
satisfy all conditions precedent on its part to the delivery of the Series
A Preferred Stock.
(j) Not to sell, offer for sale or solicit offers to buy or otherwise
negotiate in respect of any security (as defined in the Act) that would be
integrated with the sale of the Series A Preferred Stock in a manner that
would require the registration under the Act of the sale to the Initial
Purchasers or Eligible Purchasers of the Series A Preferred Stock or to
take any other action that would result in the Exempt Resales not being
exempt from registration under the Act.
(k) For so long as any of the Securities remain outstanding and
during any period in which the Company is not subject to Section 13 or
15(d) of the Securities Act of 1934, as amended (the "Exchange Act"), to
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make available to any holder of the Series A Preferred Stock in connection
with any sale thereof and any prospective purchaser of such Series A
Preferred Stock from such holder, the information required by Rule
144A(d)(4) under the Act.
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(l) To cause the Exchange Offer to be made in the appropriate form to
permit registered New Preferred Stock or New Exchange Debentures to be
offered in exchange for the Series A Preferred Stock or Exchange
Debentures, as the case may be, and to comply with all applicable federal
and state securities laws in connection with the Exchange Offer.
(m) To comply with all of its agreements set forth in the
Registration Rights Agreement and all agreements set forth in the
representation letters of the Company to DTC relating to the approval of
the Securities by DTC for "book-entry" transfer.
(n) To use its best efforts to effect the inclusion of the Series A
Preferred Stock in PORTAL and to obtain approval of the Securities by DTC
for "book-entry" transfer.
(o) During a period of five years following the Closing Date, to
deliver without charge to each of the Initial Purchasers, as they may
reasonably request, promptly upon their becoming available, copies of (i)
all reports or other publicly available information that the Company shall
mail or otherwise make available to its stockholders and (ii) all reports,
financial statements and proxy or information statements filed by the
Company with the Commission or any national securities exchange and such
other publicly available information concerning the Company or its
subsidiaries, including without limitation, press releases.
(p) Prior to the Closing Date, to furnish to each of the Initial
Purchasers, as soon as they have been publicly disclosed by the Company, a
copy of any consolidated financial statements of the Company for any period
subsequent to the period covered by the financial statements appearing in
the Offering Memorandum.
(q) Neither the Company nor any of its subsidiaries will take,
directly or indirectly, any action designed to, or that might reasonably be
expected to, cause or result in stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of the
Series A Preferred Stock. 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
Series A Preferred Stock.
(r) 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 and
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warrants to each of the Initial Purchasers that:
(i) The Preliminary Offering Memorandum and the Offering Memorandum
have been prepared in connection with the Exempt Resales. The Preliminary
Offering Memorandum and the Offering Memorandum do not, and any supplement
or amendment to them will not, contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties
contained in this paragraph shall not apply to statements in or omissions
from the Preliminary Offering Memorandum and the Offering Memorandum (or
any supplement or amendment thereto) made in reliance upon and in
conformity with information relating to the Initial Purchasers furnished to
the Company in writing by the Initial Purchasers expressly for use therein.
No stop order preventing the use of the
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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 Series A Preferred Stock is issued and delivered
pursuant to this Agreement, no Series A Preferred Stock 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 (each, a "Subsidiary"
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and, collectively, the "Subsidiaries") (A) has been duly organized, is
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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 December 31, 1996, on a combined basis, after giving effect to
the issuance and sale of the Series A Preferred Stock pursuant hereto, 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
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attached hereto, there are not currently, and will not be as a result of
the Offering, any outstanding subscriptions, rights, warrants, calls,
commitments of sale or options to acquire, or instruments convertible into
or exchangeable for, any capital stock or other equity interest of the
Company or any Subsidiary.
(vi) The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement and the
other Operative Documents, and to consummate the transactions contemplated
hereby and thereby, including, 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
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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 A Preferred Stock 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 A Preferred Stock will not be subject to any
preemptive or similar rights. The Series A Preferred Stock will conform in
all material respects with the description thereof in the Offering
Memorandum.
(ix) The shares of New Preferred Stock have been duly and validly
authorized by the Company and, when issued and delivered in accordance with
the terms of the Certificate of Designation and the Exchange Offer, 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 New Preferred Stock will not be subject to
any preemptive or similar rights. The New Preferred Stock will conform in
all material respects to the description thereof in the Offering
Memorandum.
(x) The Exchange Debentures have been duly and validly authorized
by the Company and, if and when issued by the Company will conform in all
material respects to the description thereof in the Offering Memorandum.
When the Exchange Debentures are issued and delivered in accordance with
the Indenture, the Exchange Debentures will constitute legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms and entitled to the benefits of the Indenture,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors generally
and subject to general principles of equity. The Exchange Debentures will
conform in all material respects to the description thereof in the Offering
Memorandum.
(xi) The New Exchange Debentures have been duly and validly
authorized by the Company and, if and when issued and delivered by the
Company in accordance with the terms of the Indenture and the Exchange
Offer, will constitute legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms and entitled
to the benefits of the Indenture, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or similar laws affecting
the rights of creditors generally and subject to general principles of
equity. The New Exchange Debentures will conform in all material respects
to the description thereof in the Offering Memorandum.
(xii) 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.
(xiii) The Indenture has been duly and validly authorized by the
Company, will conform to the description thereof in the Offering Memorandum
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,
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fraudulent conveyance, reorganization or similar laws affecting the rights
of creditors generally and subject to general principles of equity.
(xiv) The Registration Rights Agreement has been duly and validly
authorized by the Company and, when duly executed and delivered by the
Company, will be the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency, fraudulent conveyance, reorganization or
similar laws affecting the rights of creditors generally and subject to
general principles of equity 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.
(xv) 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 could not reasonably be expected to have a Material Adverse
Effect. 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.
(xvi) 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 A Preferred Stock, (C) the issuance of the
New Preferred Stock in exchange for the Series A Preferred Stock, (D) the
performance by the Company of its obligations under this Agreement and the
other Operative Documents and (E) 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 would not singly, or in the
aggregate, have a Material Adverse Effect. 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
9
the Company of this Agreement and the other Operative Documents, or (2) the
issuance and sale of the Securities and the transactions contemplated
hereby and thereby, except (x) such as have been obtained and made (or, in
the case of the Registration Rights Agreement, will be obtained and made)
under the Act, the Trust Indenture Act of 1939, as amended (the "Trust
-----
Indenture Act") and state securities or Blue Sky laws and regulations or
-------------
such as may be required by the NASD or (y) where the failure to obtain any
such consent, approval, authorization or order of, or filing registration,
qualification, license or permit would not reasonably be expected to result
in a Material Adverse Effect.
(xvii) 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, (w) is required to be
disclosed in the Preliminary Offering Memorandum and the Offering
Memorandum and that is not so disclosed, or (x) could reasonably be
expected to individually or in the aggregate, result in a Material Adverse
Effect.
(xviii) 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 A Preferred Stock 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 A
Preferred Stock or prevents or suspends the sale of the Series A Preferred
Stock in any jurisdiction referred to in Section 5(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.
(xix) Except as set forth in the Offering Memorandum, there is (i)
no significant unfair labor practice complaint pending against the Company
or any Subsidiary nor, to the best knowledge of the Company, threatened
against any of them, before the National Labor Relations Board, any state
or local labor relations board or any foreign labor relations board, and no
significant grievance or significant arbitration proceeding arising out of
or under any collective bargaining agreement is so pending against the
Company or any Subsidiary or, to the best knowledge of the Company,
threatened against any of them, (ii) no significant strike, labor dispute,
slowdown or stoppage pending against the Company or any Subsidiary nor, to
the best knowledge of the Company, threatened against the Company or any
Subsidiary and (iii) to the best knowledge of the Company, no union
representation question existing with respect to the employees of the
Company or any Subsidiary that, in the case of clauses (i), (ii) or (iii),
could reasonably be expected to result in a Material Adverse Effect. To the
best knowledge of the Company, no collective bargaining organizing
activities are taking place with respect to the Company and the
Subsidiaries that could reasonably be expected to result in a Material
Adverse Effect. None of the Company or any Subsidiary has violated (A) any
federal, state or local law or foreign law relating to discrimination in
hiring, promotion or pay of employees (except as set
10
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.
(xx) 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.
(xxi) 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.
(xxii) Except as could not reasonably be expected to result in a
Material Adverse Effect, each of the Company and the Subsidiaries owns,
possesses or has the right to employ all patents, patent rights, licenses
(including all FCC, state, local or other jurisdictional regulatory
licenses), inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, software, systems or procedures), trademarks, service marks
and trade names, inventions, computer programs, technical data and
information (collectively, the "Intellectual Property") presently employed
---------------------
by it or its Subsidiaries in connection with the businesses now operated by
it or which are proposed to be operated by it or its Subsidiaries free and
clear of and without violating any right, claimed right, charge,
encumbrance, pledge, security interest, restriction or lien of any kind of
any other person and none of the Company or any Subsidiary has received any
notice of infringement of or conflict with asserted rights of others with
respect to any of the foregoing. The use of the Intellectual Property in
connection with the business and operations of the Company and the
Subsidiaries does
11
not infringe on the rights of any person, except as could not reasonably be
expected to have a Material Adverse Effect.
(xxiii) 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.
(xxiv) 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.
(xxv) 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.
(xxvi) Except as disclosed in the Offering Memorandum, 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.
(xxvii) 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.
12
(xxviii) 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.
(xxix) 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 A Preferred Stock or
(B) paid or agreed to pay to any person any compensation for soliciting
another to purchase any other securities of the Company.
(xxx) No registration under the Act of the Series A Preferred Stock
is required for the sale of the Series A Preferred Stock to the Initial
Purchasers as contemplated hereby or for the Exempt Resales assuming (i)
that the purchasers who buy the Series A Preferred Stock 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 in connection with the sale of Series A Preferred Stock 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 A Preferred Stock 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. No securities of the same class as the Series A Preferred
Stock have been issued and sold by the Company within the six-month period
immediately prior to the date hereof.
(xxxi) 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 A Preferred Stock 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."
(xxxii) 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.
13
(xxxiii) 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.
(xxxiv) None of the Company or any Subsidiary or any agent thereof
acting on the 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.
(xxxv) 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.
(xxxvi) 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 A Preferred Stock, 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
14
liabilities) of the Company on a consolidated basis as they become absolute
and matured. Upon the issuance of the Series A Preferred Stock, the assets
of the Company on a consolidated basis will not constitute unreasonably
small capital to carry out its businesses as now conducted, including the
capital needs of the Company on a consolidated basis, taking into account
the projected capital requirements and capital availability.
(xxxvii) 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.
(xxxviii) 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 Series A Preferred
Stock.
(ii) Such Initial Purchaser (A) is not acquiring the Series A
Preferred Stock 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
Series A Preferred Stock 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 Series
A Preferred Stock, including, but not limited to, articles, notices or
other communications published in any newspaper, magazine, or similar
medium or broadcast over television or radio, or any seminar or meeting
whose attendees have been invited by any general solicitation or general
advertising.
(iv) Each of the Initial Purchasers agrees that, in connection with
the Exempt Resales, it will solicit offers to buy the Series A Preferred
Stock only from, and will offer to sell the Series A Preferred Stock only
to, Eligible Purchasers. The Initial Purchasers further agree (A) that
they will offer to sell the Series A Preferred Stock only to, and will
solicit offers to buy the Series A Preferred Stock only from (1) QIB's who
in purchasing such Series A Preferred Stock will be deemed to have
represented and agreed that they are purchasing the Series A Preferred
Stock for their own accounts or accounts with respect to which they
exercise sole investment
15
discretion and that they or such accounts are QIBs and (2) Accredited
Institutions 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 Series A
Preferred Stock 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, (III) outside the United States to a foreign
person in a transaction meeting the requirements of Rule 904 under the Act
or (IV) 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 or any
other applicable jurisdiction and (C) that the holder will, and each
subsequent holder is required to, notify any purchaser of the security
evidenced thereby of the resale restrictions set forth in (B) above.
(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 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 Series A Preferred
Stock which are the subject thereof if it is finally judicially determined
16
that such loss, liability, claim, damage or expense resulted solely from
the fact that the Initial Purchaser sold Series A Preferred Stock 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.
(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
17
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 Series A Preferred Stock or, if such
allocation is not permitted by applicable law or indemnification is not
available as a result of the indemnifying party not having received notice as
provided in Section 6, in such proportion as is appropriate to reflect not only
the relative benefits referred to above but also the relative fault of the
Company and the Initial Purchasers in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Initial Purchasers shall be deemed to
be in the same proportion as (x) the total proceeds from the offering of Series
A Preferred Stock (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 Series A Preferred Stock 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
18
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 Series A
Preferred Stock, as provided herein, shall be subject to the satisfaction of the
following conditions:
(a) All of the representations and warranties of the Company
contained in this Agreement shall be true and correct on the date hereof
and on the Closing Date with the same force and effect as if made on and as
of the date hereof and the Closing Date, respectively. The Company shall
have performed or complied 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
Series A Preferred Stock 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
Series A Preferred Stock; 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 could
reasonably be expected to result in a Material Adverse Effect; 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, (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
19
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 and (iii) neither the Company nor any Subsidiary shall have incurred
any liabilities or obligations, direct or contingent, that are material,
individually or in the aggregate, to the Company and the Subsidiaries,
taken as a whole, and that are required to be disclosed on a balance sheet
or notes thereto in accordance with generally accepted accounting
principles and are not disclosed on the latest balance sheet or notes
thereto included in the Offering Memorandum. Since the date hereof and
since the dates as of which information is given in the Offering
Memorandum, there shall not have occurred any material adverse change, or
any development which may reasonably be expected to involve a material
adverse change, in the properties, business, results of operations,
condition (financial or otherwise), affairs or prospects of the Company and
the Subsidiaries taken as a whole.
(e) The Initial Purchasers shall have received a certificate, dated
the Closing Date, signed on behalf of the Company by (i) Xxxxx X. Xxxxxx,
Chairman of the Board, President and Chief Executive Officer and (ii)
Xxxxxx X. Xxxxxxx, Senior Vice President and Chief Financial Officer, in
form and substance reasonably satisfactory to the Initial Purchasers,
confirming, as of the Closing Date, the matters set forth in paragraphs
(a), (b), (c) and (d) of this Section 8 and that, as of the Closing Date,
the obligations of the Company to be performed hereunder on or prior
thereto have been duly performed in all material respects.
(f) The Initial Purchasers shall have received on the Closing Date an
opinion, dated the Closing Date, in form and substance satisfactory to the
Initial Purchasers and counsel to the Initial Purchasers, of Kronish, Lieb,
counsel for the Company, to the effect set forth in Exhibit 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 Xxxxxx Xxxx &
Xxxxxx 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 Xxxxxx & Xxxxxxx, counsel to the Initial Purchasers,
covering such matters as are customarily covered in such opinions.
(i) At the time this Agreement is executed and at the Closing Date
the Initial Purchasers shall have received from Ernst & Young LLP,
independent public accountants for the Company, dated as of the date of
this Agreement and as of the Closing Date, customary comfort letters
addressed to the Initial Purchasers and in form and substance satisfactory
to the Initial Purchasers and counsel to the Initial Purchasers with
respect to the financial statements and certain financial information of
the Company contained in the Offering Memorandum.
(j) Xxxxxx & Xxxxxxx shall have been furnished with such documents,
in addition to those set forth above, as they may reasonably require for
the purpose of enabling them to review or pass upon the matters referred to
in this Section 8 and in order to evidence the accuracy, completeness or
satisfaction in all material respects of any of the representations,
warranties or conditions herein contained.
20
(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 the Registration Rights
Agreement and the Initial Purchasers shall have received counterparts,
conformed as executed, thereof.
(n) 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 A Preferred Stock set forth in the last paragraph of the
cover page, the third paragraph and the sixth and seventh sentences of the
fourth paragraph 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 any controlling person thereof or by or on behalf of the Company or
any controlling person thereof, and shall survive delivery of and payment for
the Series A Preferred Stock to and by the Initial Purchasers. The
representations contained in Section 6 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,
21
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 Series A Preferred Stock 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 Series A Preferred Stock as contemplated hereby.
(c) Any notice of termination pursuant to this Section 11 shall be by
telephone, telex, telephonic facsimile, or telegraph, confirmed in writing
by letter.
(d) If this Agreement shall be terminated pursuant to any of the
provisions hereof (otherwise than pursuant to any of clauses (iii) or (iv)
of Section 11(b), in which case each party will be responsible for its own
expenses), or if the sale of the Series A Preferred Stock provided for
herein is not consummated because any condition to the obligations of the
Initial Purchasers set forth herein is not satisfied or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof, the Company will,
subject to demand by the Initial Purchasers, reimburse the Initial
Purchasers for all out-of-pocket expenses (including the reasonable fees
and expenses of Initial Purchasers' counsel), incurred by the Initial
Purchasers in connection herewith.
12. Notice. All communications hereunder, except as may be otherwise
------
specifically provided herein, shall be in writing and, if sent to the Initial
Purchasers shall be mailed, delivered, or telexed, telegraphed or telecopied and
confirmed in writing to Bear, Xxxxxxx & Co. Inc., Xxxxxx Xxxxxxx & Co.
Incorporated and Salomon Brothers Inc, c/o Bear, Xxxxxxx & Co. Inc., 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Finance Department,
telecopy number: (000) 000-0000; and if sent to the Company, shall be mailed,
delivered or telexed, telegraphed or telecopied and confirmed in writing to
Intermedia Communications Inc., 0000 Xxxxx Xxxx Xxxxx, Xxxxx, Xxxxxxx 00000,
Attention:
22
Xxxxxx X. Xxxxxxx, Chief Financial Officer, telecopy number: (000) 000-0000,
with a copy to Kronish, Lieb, Weiner & Xxxxxxx LLP, 1114 Avenue of the Xxxxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx X. Xxxxxxxxx, telecopy
number (000) 000-0000; provided, however, that any notice pursuant to Section 7
shall be mailed, delivered or telexed, telegraphed or telecopied and confirmed
in writing.
13. Parties. This Agreement shall inure solely to the benefit of, and
-------
shall be binding upon, the Initial Purchasers and the Company and the
controlling persons and agents referred to in Sections 6 and 7, and their
respective successors and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained.
The term "successors and assigns" shall not include a purchaser, in its capacity
as such, of Series A Preferred Stock from the Initial Purchasers.
14. Construction. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
------------
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK AS APPLIED TO
CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK. TIME IS OF
THE ESSENCE IN THIS AGREEMENT.
15. Captions. The captions included in this Agreement are included solely
--------
for convenience of reference and are not to be considered a part of this
Agreement.
16. Counterparts. This Agreement may be executed in various counterparts
------------
which together shall constitute one and the same instrument.
[Signature page to follow]
23
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, Xxxxxxx & Co. Inc.
By:
-----------------------------
Name:
Title:
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:
-----------------------------
Name:
Title:
By: Salomon Brothers Inc
By:
-----------------------------
Name:
Title:
Schedule I
Number of Shares of
Series A Preferred
Initial Purchaser Stock to be Purchased
----------------- ---------------------
Bear, Xxxxxxx & Co. Inc................................................. 16,500
Xxxxxx Xxxxxxx & Co. Incorporated....................................... 7,500
Salomon Brothers Inc.................................................... 6,000
==========
Total 30,000
Sched I-1
Exhibit A
Form of Registration Rights Agreement
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 & Xxxxxxx LLP
1. Each of the Company and the Subsidiaries is duly organized and
validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, and has all requisite corporate power and
authority to carry on its business as it is being conducted and as
described in the Offering Memorandum and to own, lease and operate its
properties, and is duly qualified and in good standing as a foreign
corporation authorized to do business in each jurisdiction in which the
nature of its business or its ownership or leasing of property requires
such qualification, except where the failure to be so qualified would not,
singly or in the aggregate, have a Material Adverse Effect. All of the
issued and outstanding shares of capital stock of, or other ownership
interests in, each Subsidiary have been duly authorized and validly issued,
are fully paid and non-assessable and were not issued in violation of or
subject to any preemptive or similar rights under the Delaware General
Corporation Law or known to such counsel, after reasonable inquiry, and,
except as set forth in the Offering Memorandum or on Schedule A hereto, are
owned by the Company of record, and to the knowledge of such counsel, after
reasonable inquiry, beneficially, directly or through subsidiaries, free
and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or other restriction on transferability or voting.
2. All of the outstanding shares of capital stock of the Company have
been duly authorized, validly issued, and are fully paid and nonassessable
and were not issued in violation of any preemptive or similar rights. The
authorized, issued and outstanding capital stock of the Company conforms in
all respects to the description thereof set forth in the Offering
Memorandum. Except as set forth in the Offering Memorandum or on Schedule
A hereto, there are no outstanding subscriptions, rights, warrants, calls,
commitments of sale or options to acquire, or instruments convertible into
or exercisable or exchangeable for, any capital stock or other equity
interest in the Company or any of its Subsidiaries known to such counsel
after reasonable inquiry.
3. When the Series A Preferred Stock are issued and delivered
pursuant to this Agreement, no Series A Preferred Stock 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 Indenture, the Registration Rights
Agreement and the other Operative Documents, as applicable, and to
consummate the transactions contemplated thereby, including, without
limitation, the corporate power and authority to issue, sell and deliver
the 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. The Registration Rights Agreement has been duly and validly
authorized, executed and delivered by the Company and 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 A Preferred Stock 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 A Preferred Stock will not be subject to any preemptive or similar
rights.
9. The Series B Preferred Stock have been duly and validly authorized
for issuance by the Company and, when issued and delivered in accordance
with the terms of the Exchange Offer and the Certificate of Designation,
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 B Preferred Stock
will not be subject to any preemptive or similar rights.
10. The Exchange Debentures have been duly and validly authorized for
issuance and, if and when issued and delivered by the Company in accordance
with the terms of the Indenture and the Certificate of Designation, the
Exchange Debentures will constitute legal, valid and binding obligations of
the Company, enforceable against the Company in accordance with their terms
and entitled to the benefits of the Indenture, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization or similar
laws affecting the rights of creditors generally and subject to general
principles of equity.
11. The New Exchange Debentures have been duly and validly authorized
for issuance and, if and when the New Exchange Debentures are issued and
delivered by the Company in accordance with the terms of the Indenture, the
Certificate of Designation and the Exchange Offer, the New Exchange
Debentures will constitute legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms and
entitled to the benefits of the Indenture, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization or similar
laws affecting the rights of creditors generally and subject to general
principles of equity.
12. The Indenture has been duly and validly authorized and, if and
when the Indenture is executed and delivered in accordance with the terms
of the Certificate of Designation and Preferred Stock, (assuming the due
authorization, execution and delivery thereof by the Trustee), the
Indenture will constitute a valid and legally binding agreement of the
Company, enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy,
C-2
insolvency, fraudulent conveyance, reorganization or similar laws affecting
the rights of creditors generally and subject to general principles of
equity.
13. The Offering Memorandum contains a fair summary of each of the
Series A Preferred Stock, the Certificate of Designation, the New Preferred
Stock, the Exchange Debentures, the New Debentures, the Indenture and the
Registration Rights Agreement.
14. No registration under the Act of the Series A Preferred Stock is
required for the sale of the Series A Preferred Stock 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 Series A Preferred Stock 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 Series A Preferred
Stock 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), (xxiii),(xxx) last sentence only and (xxxii) 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.
-------
15. The Offering Memorandum, as of its date (except for the financial
statements, including the notes thereto, and supporting schedules and other
financial, statistical and accounting data included therein or omitted
therefrom, as to which no opinion need be expressed), and each amendment or
supplement thereto, as of its date, contains all the information specified
in, and meets the requirements of, Rule 144A(d)(4) under the Act.
16. 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 A Preferred Stock, (C) the issuance of the New Preferred
Stock in exchange for the Series A Preferred Stock, (D) the performance by
the Company of its obligations under this Agreement and the other Operative
Documents and (E) the consummation of the transactions contemplated by this
Agreement and the other Operative Documents violates, conflicts with or
constitutes a breach of any of the terms or provisions of, or a default
under (or an event that with notice or the lapse of time, or both, would
constitute a default), or require consent under, or result in the
imposition of a lien or encumbrance on any properties of the Company or any
Subsidiary, or an acceleration of any indebtedness of the Company or any
Subsidiary pursuant to, (i) the charter or bylaws of the Company or any
Subsidiary, (ii) any bond, debenture, note, indenture, mortgage, deed of
trust or other agreement or instrument to which the Company or any
Subsidiary is a party or by which any of them or their property is or may
be bound identified to such counsel by the Company as material (assuming
all of such agreements are governed by New York law), (iii) any local,
state, federal or administrative statute, rule or regulation applicable to
the Company or any Subsidiary or any of their assets or properties (except
such counsel shall express no opinion as to the matters addressed in the
opinion of Xxxxxx Xxxx & Xxxxxx LLP), or (iv) any judgment, order or decree
of any court or governmental agency or authority having jurisdiction over
the Company or any Subsidiary or any of their assets or properties known to
such counsel, except in the case of clauses (ii), (iii) and (iv) for such
violations, conflicts, breaches, defaults, consents, impositions of liens
or accelerations that (x) would not, singly or in the aggregate, have a
Material Adverse Effect or (y) are disclosed in the Offering
C-3
Memorandum. Assuming compliance with applicable state securities and Blue
Sky laws, as to which such counsel need express no opinion, and except for
the filing of a registration statement under the Act and qualification of
the Indenture under the Trust Indenture Act of 1939, as amended, in
connection with the Registration Rights Agreement, no consent, approval,
authorization or order of, or filing, registration, qualification, license
or permit of or with, any court or governmental agency, body or
administrative agency is required for (1) the execution, delivery and
performance by the Company of this Agreement and the other Operative
Documents, (2) the issuance and sale of the Securities or (3) consummation
by the Company and the Subsidiaries of the transactions described in the
Offering Memorandum under the caption "Use of Proceeds," except (i) such as
have been obtained and made or have been disclosed in the Offering
Memorandum, (ii) where the failure to obtain such consents or waivers would
not, singly or in the aggregate, have a Material Adverse Effect and (iii)
such counsel shall express no opinion as to the matters addressed in the
opinion of Xxxxxx Xxxx & Xxxxxx LLP. To such counsel's knowledge, after
reasonable inquiry, no consents or waivers from any other person are
required for the execution, delivery and performance by the Company of this
Agreement and the other Operative Documents or the issuance and sale of the
Securities, other than such consents and waivers as have been obtained.
17. 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.
18. Except as set forth in this Agreement or in the Registration
Rights Agreement, to such counsel's knowledge, after reasonable inquiry,
there are no holders of any securities of the Company who, by reason of the
execution by the Company of this Agreement or any other Operative Document
to which it is a party or the consummation by the Company of the
transactions contemplated thereby, have the right to request or demand that
the Company register under the Act securities held by them.
19. 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.
20. 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
C-4
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 or (z) might interfere with, adversely
affect or in any manner question the validity of the issuance and sale of
the Series A Preferred Stock or any of the other transactions contemplated
by this Agreement or any of the other Operative Documents, except that such
counsel shall express no opinion as to the matters addressed in the opinion
of Xxxxxx Xxxx & Xxxxxx LLP.
21. The statements under the caption "Description of Preferred Stock"
and "Description of the Exchange Debentures" 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 and the Indenture conform to the descriptions thereof contained
in the Offering Memorandum.
22. The statements contained in the Offering Memorandum under the
caption "Certain Federal Income Tax Considerations" are a fair and accurate
summary of the matters discussed therein.
We have participated in conferences with officers and other representatives
of the Company, representatives of the independent certified public accountants
of the Company and the Initial Purchasers and their representatives at which the
contents of the Preliminary Offering Memorandum and the Offering Memorandum and
related matters were discussed and, although we have not undertaken to
investigate or verify independently, and do not assume any responsibility for,
the accuracy, completeness or fairness of the statements contained in the
Preliminary Offering Memorandum or the Offering Memorandum (except as indicated
above), on the basis of the foregoing, no facts have come to our attention which
led us to 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 D
Form of Opinion of Xxxxxx Xxxx & Xxxxxx LLP
D-1
Exhibit E
Subsidiaries of Intermedia Communications Inc.
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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.
---------------------
1. AT&T Credit Corporation own warrants to purchase 10% of the outstanding
capital stock of FiberNet North Carolina, Inc.
E-1
