EXHIBIT 1.1
EXECUTION COPY
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INTERMEDIA COMMUNICATIONS INC.
8,000,000 Depositary Shares Each Representing a One-Hundredth Interest in a
Share of 7% Series F Junior Convertible Preferred Stock
Depositary Share Purchase Agreement
August 12, 1998
BEAR, XXXXXXX & CO. INC.
XXXXX XXXXXX INC.
XXXXXXX XXXXX & CO.
WARBURG DILLON READ LLC
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INTERMEDIA COMMUNICATIONS INC.
8,000,000 Depositary Shares Each Representing a One-Hundredth Interest in a
Share of 7% Series F Junior Convertible Preferred Stock
DEPOSITARY SHARE PURCHASE AGREEMENT
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August 12, 1998
New York, New York
BEAR, XXXXXXX & CO. INC.
XXXXX XXXXXX INC.
XXXXXXX XXXXX & CO.
XXXXXXX XXXXXX READ LLC
c/o Bear, Xxxxxxx & Co. Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies & Gentlemen:
Intermedia Communications Inc., a Delaware corporation (the "Company"),
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proposes to issue and sell to Bear, Xxxxxxx & Co. Inc., Xxxxx Xxxxxx Inc.,
Xxxxxxx Xxxxx & Co. and Warburg Dillon Read LLC (together, the "Initial
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Purchasers") 8,000,000 Depositary Shares (the "Depositary Shares"), each
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representing a one-hundredth interest in a share of its 7% Series F Junior
Convertible Preferred Stock, par value $1.00 per share (the "Series F Preferred
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Stock"). The Series F Preferred Stock and the related Depositary Shares are to
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be authorized and issued pursuant to the provisions of a Certificate of
Designation of Voting Power, Designation Preferences and Relative,
Participating, Optional or Other Special Rights and Qualifications, Limitations
and Restrictions (the "Certificate of Designation") to be filed with the
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Secretary of State of the State of Delaware. Continental Stock Transfer & Trust
Company will be transfer agent and registrar for the Series F Preferred Stock
and will act as the "Depositary" for the Depositary Shares.
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1. Issuance of Securities. The Company proposes to, upon the terms and
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subject to the conditions set forth herein, issue and sell to the Initial
Purchasers 8,000,000 Depositary Shares (the "Firm Shares"). The Company also
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proposes to sell to the Initial Purchasers, upon the terms and conditions set
forth herein, up to an additional 1,200,000 Depositary Shares (the "Additional
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Shares", and together with the Firm Shares, the "Company Shares"). The Firm
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Shares, the Additional Shares, and the Series F Preferred Stock are collectively
referred to herein as the "Securities."
For purposes of this Purchase Agreement (this "Agreement"), the term
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"Subsidiaries" shall mean the entities listed on Exhibit D hereto. Capitalized
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terms used but not otherwise defined herein shall have the meanings given to
such terms in the Certificate of Designation. Upon original issuance thereof,
and until such time as the same is no longer required under the applicable
requirements of the Act, the Series F Preferred Stock and the Company Shares
(and all securities issued in exchange therefor, in substitution thereof or upon
conversion thereof) shall bear the following legend:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER
XXXXXXX 0 XX XXX XXXXXX XXXXXX SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE
SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT
(A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY
(1) TO THE COMPANY, (2) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS
BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (3) TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (4)
TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT (AN
"IAI") THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO
THE TRANSFER OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED
FROM THE TRUSTEE) OR (5) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT (AND BASED ON AN
OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), SUBJECT IN EACH OF THE
FOREGOING CASES TO APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET
FORTH IN (A) ABOVE."
2. Offering. The Company Shares, will be offered and sold to the
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Initial Purchasers pursuant to an exemption from the registration requirements
under the Securities Act of 1933, as amended (the "Act"). The Company has
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prepared a preliminary offering memorandum, dated August 4, 1998 (the
"Preliminary Offering Memorandum"), and a final offering memorandum, dated
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August 12, 1998 (the "Offering Memorandum"), relating to the Company and the
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Series F Preferred Stock (and the related Depositary Shares).
The Initial Purchasers have advised the Company that the Initial
Purchasers will make offers of sale (the "Exempt Resales") of the Company
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Shares, on the terms set forth in the Offering Memorandum, as amended or
supplemented, solely (i) 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 (ii) to a limited number of persons who have
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represented to the Company that they are institutional "Accredited Investors"
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referred to in Rule 501(a)(1), (2), (3) or (7) under the Act (each, an
"Accredited Investor"). The QIBs and Accredited Investors are referred to herein
as the "Eligible Purchasers." The Initial Purchasers will offer the Series F
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Preferred Stock (and the related Depositary Shares) to such Eligible Purchasers
initially at a price of $2,500.00 (and $25.00 for the related Depositary Shares)
per share. Such price may be changed at any time
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without notice.
Holders (including subsequent transferees) of the Series F Preferred
Stock (and the related Depositary Shares) will have the registration rights set
forth in the registration rights agreement relating thereto (the "Registration
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Rights Agreement") to be dated the Closing Date (as defined), for so long as
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such Series F Preferred Stock (and the related Depositary Shares) constitute
"Transfer Restricted Securities" (as defined in the Registration Rights
Agreement). Pursuant to the Registration Rights Agreement, the Company will
agree to file with the Securities and Exchange Commission (the "Commission"),
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under the circumstances set forth therein, (i) a shelf registration statement
pursuant to Rule 415 under the Act (the "Shelf Registration Statement") relating
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to the resale by certain holders of the Series F Preferred Stock and the related
Depositary Shares, and (ii) a registration statement (the "Common Registration
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Statement") relating to the sale by certain holders of Common Stock of the
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Company received in connection with conversion of the Series F Preferred Stock
and dividends on the Series F Preferred Stock paid as Common Stock, and to use
its best efforts to cause the Shelf Registration Statement and the Common
Registration Statement to be declared effective. This Agreement, the Certificate
of Designation, the Securities, and the Registration Rights Agreement are
hereinafter sometimes referred to collectively as the "Operative Documents."
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3. Purchase, Sale and Delivery.
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(a) On the basis of the representations, warranties and
covenants contained in this Agreement, and subject to its terms and conditions,
the Company agrees to issue and sell to each Initial Purchaser, and each Initial
Purchaser agrees severally and not jointly to purchase from the Company, the
number of Firm Shares set forth opposite its name on Schedule I hereto. The
purchase price for the Firm Shares, shall be $24.25 per share.
The Company also agrees, subject to all the terms and conditions set
forth herein, to sell to the Initial Purchasers, and, upon the basis of the
representations, warranties and agreements of the Company herein contained and
subject to all the terms and conditions set forth herein, the Initial Purchasers
shall have the right to purchase from the Company, solely for the purpose of
covering over-allotments in connection with sales of the Firm Shares, at the
purchase price per Depositary Share of $24.25, pursuant to an option (the
"over-allotment option") which may be exercised at any time and from time to
time prior to 10:00 p.m., New York City time, on the 30th day after the date of
the Offering Memorandum (or, if such 30th day shall be a Saturday or Sunday or a
holiday, on the next business day thereafter when the New York Stock Exchange is
open for trading), up to an aggregate of 1,200,000 Additional Shares. Upon any
exercise of the over-allotment option, each Initial Purchaser, severally and not
jointly, agrees to purchase from the Company the number of Additional Shares
(subject to such adjustments as the Initial Purchasers may determine in order to
avoid fractional Depositary Shares) that bears the same proportion to the
aggregate number of Additional Shares to be purchased by the Initial Purchasers
as the number of Firm Shares set forth opposite the name of such Initial
Purchaser on Schedule I hereto bears to the aggregate number of Firm Shares.
(b) Delivery of, and payment of the purchase price for, the
Firm Shares shall be made, against payment of the purchase price, at the offices
of Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, or such other
location as may be mutually acceptable. Such delivery and payment shall be made
at 9:00 A.M. New York time, on August 18, 1998 or at such other time as shall be
agreed upon by the Initial Purchasers and the Company. The time and date of such
delivery and payment of the Firm Shares are herein called the "Closing Date."
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(c) Delivery of, and payment of the purchase price for any
Additional Shares to be purchased by the Initial Purchasers shall be made at the
offices of Xxxxxx & Xxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, or such other
location as may be mutually acceptable, at such time and on such date (the
"Option Closing Date"), which may be the same as the Closing Date but shall in
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no event be earlier than the Closing Date nor later than ten business days after
the giving of the notice hereinafter referred to, as shall be specified in a
written notice from Bear, Xxxxxxx & Co. Inc., on behalf of the Initial
Purchasers to purchase a number, specified in such notice, of Additional Shares.
(d) The Firm Shares and any Additional Shares to be purchased
hereunder shall initially be issued in the form of one or more Global Securities
(the "Global Securities"), registered in the name of Cede & Co., as nominee of
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the Depositary Trust Company ("DTC"), having a liquidation preference
corresponding to the aggregate liquidation preference of the Firm Shares and the
Additional Shares, as the case may be. The Global Securities shall be delivered
by the Company to the Initial Purchasers (or as the Initial Purchasers direct)
in each case with any transfer taxes payable upon initial issuance thereof duly
paid by the Company against payment of the purchase price by wire transfer of
immediately available funds to the order of the Company. The Global Securities
shall be made available to the Initial Purchasers for inspection not later than
9:30 a.m., New York City time, on the business day immediately preceding the
Closing Date.
4. Agreements of the Company. The Company covenants and agrees
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with each of the Initial Purchasers as follows:
(a) To advise the Initial Purchasers promptly and, if
requested by the Initial Purchasers, confirm such advice in writing, (i) of the
issuance by any state securities commission of any stop order suspending the
qualification or exemption from qualification of any of the Company Shares for
offering or sale in any jurisdiction, or the initiation of any proceeding for
such purpose by any state securities commission or other regulatory authority
and (ii) of the happening of any event that, in the reasonable opinion of either
counsel to the Company or counsel to the Initial Purchasers, makes any statement
of a material fact made in the Preliminary Offering Memorandum or the Offering
Memorandum untrue or that requires the making of any additions to or changes in
the Preliminary Offering Memorandum or the Offering Memorandum in order to make
the statements therein, in the light of the circumstances under which they are
made, not misleading. The Company shall use its best efforts to prevent the
issuance of any stop order or order suspending the qualification or exemption of
any of the Series F Preferred Stock (and the related Depositary Shares) under
any state securities or Blue Sky laws and, if at any time any state securities
commission or other regulatory authority shall issue an order suspending the
qualification or exemption of any of the Company Shares, under any state
securities or Blue Sky laws, the Company shall use its best efforts to obtain
the withdrawal or lifting of such order at the earliest possible time.
(b) To furnish the Initial Purchasers and those persons
identified by the Initial Purchasers to the Company, without charge, as many
copies of the Preliminary Offering Memorandum and the Offering Memorandum, and
any amendments or supplements thereto, as the Initial Purchasers may reasonably
request. The Company consents to the use of the Preliminary Offering Memorandum
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
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advised thereof and shall not have objected thereto within a reasonable time
after being furnished a copy thereof. The Company shall promptly prepare, upon
the Initial Purchasers' request, any amendment or supplement to the Preliminary
Offering Memorandum or the Offering Memorandum that may be necessary or
advisable in connection with Exempt Resales.
(d) If, after the date hereof and prior to consummation of any
Exempt Resale, any event shall occur as a result of which, in the judgment of
the Company or in the reasonable opinion of either counsel to the Company or
counsel to the Initial Purchasers, it becomes necessary or advisable to amend or
supplement the Preliminary Offering Memorandum or Offering Memorandum in order
to make the statements therein, in the light of the circumstances when such
Offering Memorandum is delivered to an Eligible Purchaser which is a prospective
purchaser, not misleading, or if it is necessary or advisable to amend or
supplement the Preliminary Offering Memorandum or Offering Memorandum to comply
with applicable law, (i) to notify the Initial Purchasers and (ii) forthwith to
prepare an appropriate amendment or supplement to such Offering Memorandum so
that the statements therein as so amended or supplemented will not, in the light
of the circumstances when it is so delivered, be misleading, or so that such
Offering Memorandum will comply with applicable law.
(e) To cooperate with the Initial Purchasers and counsel to
the Initial Purchasers in connection with the qualification or registration of
the Company Shares under the securities or Blue Sky laws of such jurisdictions
as the Initial Purchasers may reasonably request and to continue such
qualification in effect so long as required for the Exempt Resales; provided,
however, that the Company shall not be required in connection therewith to
register or qualify as a foreign corporation where it is not now so qualified or
to take any action that would subject it to service of process in suits or
taxation, in each case, other than as to matters and transactions relating to
the Preliminary Offering Memorandum, the Offering Memorandum or Exempt Resales,
in any jurisdiction where it is not now so subject.
(f) Whether or not the transactions contemplated hereby are
consummated or this Agreement becomes effective or is terminated, to pay all
costs, expenses, fees and taxes incident to the performance of the obligations
of the Company hereunder, including in connection with: (i) the preparation,
printing, filing and distribution of the Preliminary Offering Memorandum and the
Offering Memorandum (including, without limitation, financial statements) and
all amendments and supplements thereto required pursuant hereto, (ii) the
preparation (including, without limitation, duplication costs) and delivery of
all preliminary and final Blue Sky memoranda prepared and delivered in
connection herewith and with the Exempt Resales, (iii) the issuance, transfer
and delivery by the Company of the Securities to the Initial Purchasers, (iv)
the qualification or registration of the Securities for offer and sale under the
securities or Blue Sky laws of the several states (including, without
limitation, the reasonable fees and disbursements of counsel to the Initial
Purchasers relating thereto), (v) furnishing such copies of the Preliminary
Offering Memorandum and the Offering Memorandum, and all amendments and
supplements thereto, as may be requested for use in connection with Exempt
Resales, (vi) the preparation of certificates for the Securities (including,
without limitation, printing and engraving thereof), (vii) the fees,
disbursements and expenses of the Company's counsel and accountants, (viii) all
expenses and listing fees in connection with the application for quotation of
the Company Shares in the National Association of Securities Dealers, Inc.
("NASD") Automated Quotation System - PORTAL ("PORTAL"), (ix) all fees and
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expenses (including 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
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and other expenses incurred in connection with the marketing and sale of the
Securities (other than out-of-pocket expenses incurred by the Initial Purchasers
for travel, meals and lodgings).
(g) To use the proceeds from the sale of the Company Shares in
the manner described in the Offering Memorandum under the caption "Use of
Proceeds."
(h) To do and perform all things required to be done and
performed under this Agreement by it prior to or after the Closing Date and to
satisfy all conditions precedent on its part to the delivery of the Company
Shares.
(i) Not to sell, offer for sale or solicit offers to buy or
otherwise negotiate in respect of any security (as defined in the Act) that
would be integrated with the sale of the Company Shares, in a manner that would
require the registration under the Act of the sale to the Initial Purchasers or
Eligible Purchasers of the Company Shares, or to take any other action that
would result in the Exempt Resales not being exempt from registration under the
Act.
(j) For so long as any of the Securities remain outstanding
and during any period in which the Company is not subject to Section 13 or 15(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), to make
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available to any holder of the Company Shares, in connection with any sale
thereof and any prospective purchaser of such Company Shares from such holder,
the information required by Rule 144A(d)(4) under the Act.
(k) To comply with all of its agreements set forth in the
Registration Rights Agreement and all agreements set forth in the representation
letters of the Company to DTC relating to the approval of the Company Shares, by
DTC for "book-entry" transfer.
(l) To use its best efforts to effect the inclusion of the
Company Shares, in PORTAL and to obtain approval of the Company Shares, by DTC
for "book-entry" transfer.
(m) During a period of five years following the Closing Date,
to deliver without charge to each of the Initial Purchasers, as they may
reasonably request, promptly upon their becoming available, copies of (i) all
reports or other publicly available information that the Company shall mail or
otherwise make available to its stockholders and (ii) all reports, financial
statements and proxy or information statements filed by the Company with the
Commission or any national securities exchange and such other publicly available
information concerning the Company or its Subsidiaries, including without
limitation, press releases.
(n) Prior to the Closing Date, to furnish to each of the
Initial Purchasers, as soon as they have been publicly disclosed by the Company,
a copy of any consolidated financial statements and any unaudited interim
financial statements of the Company for any period subsequent to the period
covered by the financial statements appearing in the Offering Memorandum.
(o) Neither the Company nor any of its Subsidiaries will take,
directly or indirectly, any action designed to, or that might reasonably be
expected to, cause or result in stabilization or manipulation of the price of
any security of the Company to facilitate the sale or resale of the Company
Shares. Except as permitted by the Act, the Company will not distribute any
preliminary offering memorandum, offering memorandum or other offering material
in connection with the offering and sale of the Company Shares.
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(p) To comply with the agreements in the Certificate of
Designation, the Registration Rights Agreement and any other Operative Document.
(q) During the period of 90 days from the date of the Offering
Memorandum, the Company will not offer, sell, contract to sell, grant any option
to purchase, establish a put equivalent position (as defined in Rule 16a-1(h)
under the Exchange Act), pledge or otherwise dispose of, directly or indirectly,
any shares of Common Stock of the Company, or any securities that are
substantially similar to the Common Stock, including, but not limited to any
securities that are convertible into or exercisable or exchangeable for, or that
represent the right to receive, Common Stock or any substantially similar
securities or publicly disclose the intention to make any such offer, sale,
pledge or disposal, without the prior written consent of Bear, Xxxxxxx & Co.
Inc. except (i) for private sales so long as the purchaser thereof enters into a
corresponding lockup agreement with Bear, Xxxxxxx & Co. Inc. for the then
unexpired portion of the 90-day period, (ii) for grants of employee stock
options, restricted stock and other incentive awards in the ordinary course of
business, issuances of Common Stock pursuant to the exercise of such options or
awards or the exercise of any other employee stock options outstanding on the
date hereof, (iii) issuances in connection with the acquisition by the Company
or any of its subsidiaries of Telecommunications Related Assets or a
Telecommunications Business and (iv) dividends on securities outstanding on the
Issue Date in accordance with the terms thereof or issuances in connection with
the exercise of any convertible securities, warrants or option securities
existing on the Issue Date or that are required to be issued pursuant to any
agreement in existence on the Issue Date.
5. Representations and Warranties. (a) The Company represents and
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warrants to each of the Initial Purchasers that:
(i) The Preliminary Offering Memorandum and the Offering
Memorandum have been prepared in connection with the Exempt Resales. The
Preliminary Offering Memorandum and the Offering Memorandum do not, and any
supplement or amendment to them will not, contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties contained
in this paragraph shall not apply to statements in or omissions from the
Preliminary Offering Memorandum and the Offering Memorandum (or any supplement
or amendment thereto) made in reliance upon and in conformity with information
relating to the Initial Purchasers furnished to the Company in writing by the
Initial Purchasers expressly for use therein. No stop order preventing the use
of the Preliminary Offering Memorandum or the Offering Memorandum, or any
amendment or supplement thereto, or any order asserting that any of the
transactions contemplated by this Agreement are subject to the registration
requirements of the Act, has been issued.
(ii) When the Company Shares are issued and delivered pursuant
to this Agreement, neither the Series F Preferred Stock nor the Company Shares
will be of the same class (within the meaning of Rule 144A under the Act) as
securities of the Company that are listed on a national securities exchange
registered under Section 6 of the Exchange Act, or that are quoted in a United
States automated inter-dealer quotation system.
(iii) The Company and each of its Subsidiaries (A) has been
duly organized, is validly existing as a corporation in good standing under the
laws of its respective jurisdiction of incorporation, (B) has all requisite
corporate power and authority to carry on its business as it is currently being
conducted and as described in the Offering Memorandum and to own, lease and
operate its properties, and (C) is duly qualified and in good standing as a
foreign corporation authorized to do
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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"). The Company has no direct
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or indirect subsidiaries as of the Closing Date other than the Subsidiaries.
(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. All of the outstanding capital stock of the Subsidiaries is owned by the
Company, free and clear of any security interest, claim, lien, limitation on
voting rights or encumbrance. At June 30, 1998 on a combined basis, after giving
effect to the issuance and sale of the Series F Preferred Stock (and the related
Depositary Shares) pursuant hereto and to the events stated therein, the Company
had an authorized and outstanding consolidated capitalization as set forth in
the Offering Memorandum under the caption "Capitalization."
(v) Except as set forth in the Offering Memorandum, there are
not currently, and will not be as a result of the Offering, any outstanding
subscriptions, rights, warrants, calls, commitments of sale or options to
acquire, or instruments convertible into or exchangeable for, any capital stock
or other equity interest of the Company or any Subsidiary.
(vi) The Company has all requisite corporate power and
authority to execute, deliver and perform its obligations under this Agreement
and the other Operative Documents, and to consummate the transactions
contemplated hereby and thereby, including, without limitation, the corporate
power and authority to issue, sell and deliver the Securities as provided herein
and therein.
(vii) This Agreement has been duly and validly authorized,
executed and delivered by the Company and is the legal, valid and binding
agreement of the Company, enforceable against it in accordance with its terms,
except insofar as indemnification and contribution provisions may be limited by
applicable law or equitable principles and subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or similar laws affecting the
rights of creditors generally and subject to general principles of equity.
(viii) The shares of Series F Preferred Stock (and the related
Depositary Shares) have been duly and validly authorized for issuance and sale
to the Initial Purchasers by the Company pursuant to this Agreement and, when
issued, delivered and paid for in accordance with the terms of this Agreement,
will be validly issued, fully paid and non-assessable and entitled to the
rights, privileges and preferences set forth in the Certificate of Designation,
and the issuance of such shares of Series F Preferred Stock (and the related
Depositary Shares) will not be subject to any preemptive or similar rights. The
Series F Preferred Stock (and the related Depositary Shares) will conform in all
material respects with the description thereof in the Offering Memorandum.
(ix) The Certificate of Designation has been duly authorized
by all necessary corporate and any necessary stockholder action and, on the
Closing Date will have been duly executed by
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the Company and filed with the Secretary of State of the State of Delaware and
will conform in all material respects to the description thereof in the Offering
Memorandum.
(x) Each of the Registration Rights Agreement and the Deposit
Agreement has been duly and validly authorized by the Company and, when duly
executed and delivered by the Company, will be the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting the rights of creditors generally and
subject to general principles of equity and limitations on the validity or
enforceability of provisions relating to rights of indemnity and contribution
set forth therein. The Offering Memorandum contains a fair summary of the terms
of the Registration Rights Agreement and the Deposit Agreement.
(xi) None of the Company or any Subsidiary is and, after
giving effect to the Offering, will not be (A) in violation of its charter or
bylaws, (B) in default in the performance of any bond, debenture, note,
indenture, mortgage, deed of trust or other agreement or instrument to which it
is a party or by which it is bound or to which any of its properties is subject,
or (C) in violation of any local, state or Federal law, statute, ordinance,
rule, regulation, requirement, judgment or court decree (including, without
limitation, the Communications Act and the rules and regulations of the FCC and
environmental laws, statutes, ordinances, rules, regulations, judgments or court
decrees) applicable to the Company or any Subsidiary or any of their assets or
properties (whether owned or leased) other than, in the case of clauses (B) and
(C), any default or violation that (1) could not reasonably be expected to have
a Material Adverse Effect or (2) which is disclosed in the Offering Memorandum.
There exists no condition that, with notice, the passage of time or otherwise,
would constitute a default under any such document or instrument, except as
disclosed in the Offering Memorandum.
(xii) None of (A) the execution, delivery or performance by
the Company of this Agreement and the other Operative Documents, (B) the
issuance and sale of the Series F Preferred Stock (and the related Depositary
Shares), (C) the performance by the Company of its obligations under this
Agreement and the other Operative Documents and (D) the consummation of the
transactions contemplated by this Agreement and the other Operative Documents
violate, conflict with or constitute a breach of any of the terms or provisions
of, or a default under (or an event that with notice or the lapse of time, or
both, would constitute a default), or require consent under, or result in the
imposition of a lien or encumbrance on any properties of the Company or any
Subsidiary, or an acceleration of any indebtedness of the Company or any
Subsidiary pursuant to, (i) the charter or bylaws of the Company or any
Subsidiary, (ii) any bond, debenture, note, indenture, mortgage, deed of trust
or other agreement or instrument to which the Company or any Subsidiary is a
party or by which any of them or their property is or may be bound, (iii) any
statute, rule or regulation applicable to the Company or any Subsidiary or any
of their respective assets or properties or (iv) any judgment, order or decree
of any court or governmental agency or authority having jurisdiction over the
Company or the Subsidiaries or any of their assets or properties, except in the
case of clauses (ii), (iii) and (iv) for such violations conflicts, breaches,
defaults, consents, impositions of liens or accelerations that (1) would not
singly, or in the aggregate, have a Material Adverse Effect or (2) are disclosed
in the Offering Memorandum. Other than as described in the Offering Memorandum,
no consent, approval, authorization or order of, or filing, registration,
qualification, license or permit of or with, (A) any court or governmental
agency, body or administrative agency (including, without limitation, the FCC)
or (B) any other person is required for (1) the execution, delivery and
performance by the Company of this Agreement and the other Operative Documents,
or (2) the issuance and sale of the Securities and the transactions contemplated
hereby and thereby, except (x) such as have been obtained and made (or, in the
case of the Registration Rights
9
Agreement, will be obtained and made) under the Act and state securities or Blue
Sky laws and regulations or such as may be required by the NASD or (y) where the
failure to obtain any such consent, approval, authorization or order of, or
filing registration, qualification, license or permit would not reasonably be
expected to result in a Material Adverse Effect.
(xiii) There is (i) no action, suit or proceeding before or by
any court, arbitrator or governmental agency, body or official, domestic or
foreign, now pending or, to the best knowledge of the Company or any Subsidiary,
threatened or contemplated to which the Company or any of the Subsidiaries is or
may be a party or to which the business or property of the Company or any
Subsidiary is subject, (ii) no statute, rule, regulation or order that has been
enacted, adopted or issued by any governmental agency or that has been proposed
by any governmental body or (iii) no injunction, restraining order or order of
any nature by a federal or state court or foreign court of competent
jurisdiction to which the Company or any Subsidiary is or may be subject or to
which the business, assets, or property of the Company or any Subsidiary are or
may be subject, that, in the case of clauses (i), (ii) and (iii) above, (x) is
required to be disclosed in the Preliminary Offering Memorandum and the Offering
Memorandum and that is not so disclosed, or (y) could reasonably be expected to
individually or in the aggregate, result in a Material Adverse Effect.
(xiv) No action has been taken and no statute, rule,
regulation or order has been enacted, adopted or issued by any governmental
agency that prevents the issuance of the Series F Preferred (and the related
Depositary Shares) or prevents or suspends the use of the Offering Memorandum;
no injunction, restraining order or order of any nature by a federal or state
court of competent jurisdiction has been issued that prevents the issuance of
the Series F Preferred Stock (and the related Depositary Shares) or prevents or
suspends the sale of the Series F Preferred Stock (and the related Depositary
Shares) in any jurisdiction referred to in Section 4(e) hereof; and every
request of any securities authority or agency of any jurisdiction for additional
information has been complied with in all material respects.
(xv) Except as set forth in the Offering Memorandum, there
is (i) no significant unfair labor practice complaint pending against the
Company or any Subsidiary nor, to the best knowledge of the Company, threatened
against any of them, before the National Labor Relations Board, any state or
local labor relations board or any foreign labor relations board, and no
significant grievance or significant arbitration proceeding arising out of or
under any collective bargaining agreement is so pending against the Company or
any Subsidiary or, to the best knowledge of the Company, threatened against any
of them, (ii) no significant strike, labor dispute, slowdown or stoppage pending
against the Company or any Subsidiary nor, to the best knowledge of the Company,
threatened against the Company or any Subsidiary and (iii) to the best knowledge
of the Company, no union representation question existing with respect to the
employees of the Company or any Subsidiary that, in the case of clauses (i),
(ii) or (iii), could reasonably be expected to result in a Material Adverse
Effect. To the best knowledge of the Company, no collective bargaining
organizing activities are taking place with respect to the Company or the
Subsidiaries. None of the Company or any Subsidiary has violated (A) any
federal, state or local law or foreign law relating to discrimination in hiring,
promotion or pay of employees (except as set forth in the Offering Memorandum),
(B) any applicable wage or hour laws or (C) any provision of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or the rules and
regulations thereunder, which in the case of clause (A), (B) or (C) above could
reasonably be expected to result in a Material Adverse Effect.
(xvi) None of the Company or any Subsidiary has violated any
environmental, safety
10
or similar law or regulation applicable to it or its business or property
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), lacks any permit, license or other approval required of
------------------
it under applicable Environmental Laws or is violating any term or condition of
such permit, license or approval which could reasonably be expected to, either
individually or in the aggregate, have a Material Adverse Effect.
(xvii) Each of the Company and the Subsidiaries has (i) good
and marketable title to all of the properties and assets described in the
Offering Memorandum as owned by it, free and clear of all liens, charges,
encumbrances and restrictions, except such as are described in the Offering
Memorandum or as would not have a Material Adverse Effect, (ii) peaceful and
undisturbed possession under all material leases to which 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, except as described
in the Offering Memorandum or where failure to hold such Authorizations would
not, individually or in the aggregate, have a Material Adverse Effect and (iv)
no reason to believe that any governmental body or agency is considering
limiting, suspending or revoking any such Authorization. Except where the
failure to be in full force and effect would not have a Material Adverse Effect,
all such Authorizations are valid and in full force and effect and each of the
Company and the Subsidiaries is in compliance in all material respects with the
terms and conditions of all such Authorizations and with the rules and
regulations of the regulatory authorities having jurisdiction with respect
thereto. Except as could not reasonably be expected to result in a Material
Adverse Effect, all material leases to which the Company and the Subsidiaries is
a party are valid and binding and no default by the Company or any Subsidiary
has occurred and is continuing thereunder and, to the best knowledge of the
Company and the Subsidiaries, no material defaults by the landlord are existing
under any such lease.
(xviii) Except as could not reasonably be expected to result
in a Material Adverse Effect, each of the Company and the Subsidiaries owns,
possesses or has the right to employ all patents, patent rights, licenses
(including all FCC, state, local or other jurisdictional regulatory licenses),
inventions, copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, software, systems
or procedures), trademarks, service marks and trade names, inventions, computer
programs, technical data and information (collectively, the "Intellectual
------------
Property") presently employed by it or its Subsidiaries in connection with the
--------
businesses now operated by it or which are proposed to be operated by it or its
Subsidiaries free and clear of and without violating any right, claimed right,
charge, encumbrance, pledge, security interest, restriction or lien of any kind
of any other person and none of the Company or any Subsidiary has received any
notice of infringement of or conflict with asserted rights of others with
respect to any of the foregoing. The use of the Intellectual Property in
connection with the business and operations of the Company and the Subsidiaries
does not infringe on the rights of any person, except as could not reasonably be
expected to have a Material Adverse Effect.
(xix) None of the Company or any Subsidiary, or to the best
knowledge of the Company, any of their respective officers, directors, partners,
employees, agents or affiliates or any other person acting on behalf of the
Company or any Subsidiary has, directly or indirectly, given or agreed to give
any money, gift or similar benefit (other than legal price concessions to
customers in the ordinary course of business) to any customer, supplier,
employee or agent of a customer or supplier, official or employee of any
governmental agency (domestic or foreign), instrumentality of any government
11
(domestic or foreign) or any political party or candidate for office (domestic
or foreign) or other person who was, is or may be in a position to help or
hinder the business of the Company or any Subsidiary (or assist the Company or
any Subsidiary in connection with any actual or proposed transaction) which (i)
might subject the Company or any Subsidiary, or any other individual or entity
to any damage or penalty in any civil, criminal or governmental litigation or
proceeding (domestic or foreign), (ii) if not given in the past, might have had
a material adverse effect on the assets, business or operations of the Company
or any Subsidiary or (iii) if not continued in the future, might have a Material
Adverse Effect.
(xx) All material tax returns required to be filed by the
Company and each of the Subsidiaries in all jurisdictions have been so filed.
All taxes, including withholding taxes, penalties and interest, assessments,
fees and other charges due or claimed to be due from such entities or that are
due and payable have been paid, other than those being contested in good faith
and for which adequate reserves have been provided or those currently payable
without penalty or interest. To the knowledge of the Company, there are no
material proposed additional tax assessments against the Company, the assets or
property of the Company or any Subsidiary.
(xxi) None of the Company or any Subsidiary is (i) an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended, or (ii) a
"holding company" or a "subsidiary company" or an "affiliate" of a holding
company within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
(xxii) Except as disclosed in the Offering Memorandum, there
are no holders of securities of the Company or the Subsidiaries who, by reason
of the execution by the Company of this Agreement or any other Operative
Document to which it is a party or the consummation by the Company of the
transactions contemplated hereby and thereby, have the right to request or
demand that the Company or any of the Subsidiaries register under the Act or
analogous foreign laws and regulations securities held by them.
(xxiii) Each of the Company and the Subsidiaries maintains a
system of internal accounting controls sufficient to provide reasonable
assurance that: (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as necessary
to permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management's general or
specific authorization and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect thereto.
(xxiv) Each of the Company and the Subsidiaries maintains
insurance covering its properties, operations, personnel and businesses. Such
insurance insures against such losses and risks as are adequate in accordance
with customary industry practice to protect the Company and the Subsidiaries and
their respective businesses. None of the Company or any Subsidiary has received
notice from any insurer or agent of such insurer that substantial capital
improvements or other expenditures will have to be made in order to continue
such insurance. All such insurance is outstanding and duly in force on the date
hereof, subject only to changes made in the ordinary course of business,
consistent with past practice, which do not, singly or in the aggregate,
materially alter the coverage thereunder or the risks covered thereby.
(xxv) None of the Company or any Subsidiary has (i) taken,
directly or indirectly, any
12
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 F Preferred Stock (and the related Depositary Shares) or (B) paid or
agreed to pay to any person any compensation for soliciting another to purchase
any other securities of the Company.
(xxvi) No registration under the Act of the Series F Preferred
Stock (and the related Depositary Shares) is required for the sale of the Series
F Preferred Stock (and the related Depositary Shares) to the Initial Purchasers
as contemplated hereby or for the Exempt Resales assuming (i) that the
purchasers who buy the Series F Preferred Stock (and the related Depositary
Shares) in the Exempt Resales are Eligible Purchasers and (ii) the accuracy of
the Initial Purchasers' representations regarding the absence of general
solicitation in connection with the sale of Series F Preferred Stock (and the
related Depositary Shares) to the Initial Purchasers and the Exempt Resales
contained herein. No form of general solicitation or general advertising was
used by the Company or any of its representatives (other than the Initial
Purchasers, as to which the Company makes no representation or warranty) in
connection with the offer and sale of any of the Series F Preferred Stock (and
the related Depositary Shares) or in connection with Exempt Resales, including,
but not limited to, articles, notices or other communications published in any
newspaper, magazine, or similar medium or broadcast over television or radio, or
any seminar or meeting whose attendees have been invited by any general
solicitation or general advertising.
(xxvii) Set forth on Exhibit A hereto is a list of each
employee pension or benefit plan with respect to which the Company or any
corporation considered an affiliate of the Company within the meaning of Section
407(d)(7) of ERISA is a party in interest or disqualified person. The execution
and delivery of this Agreement, the other Operative Documents and the sale of
the Series F Preferred Stock (and the related Depositary Shares) to be purchased
by the Eligible Purchasers will not involve any prohibited transaction within
the meaning of Section 406 of ERISA or Section 4975 of the Internal Revenue Code
of 1986. The representation made by the Company in the preceding sentence is
made in reliance upon and subject to the accuracy of, and compliance with, the
representations and covenants made or deemed made by the Eligible Purchasers as
set forth in the Offering Memorandum under the caption "Notice to Investors."
(xxviii) Each of the Preliminary Offering Memorandum and the
Offering Memorandum, as of its date, and each amendment or supplement thereto,
as of its date, contains the information specified in, and meets the
requirements of, Rule 144A(d)(4) under the Act.
(xxix) Subsequent to the respective dates as of which
information is given in the Offering Memorandum and up to the Closing Date,
except as set forth in the Offering Memorandum, (i) none of the Company or any
Subsidiary has incurred any liabilities or obligations, direct or contingent,
which are material, individually or in the aggregate, to the Company and the
Subsidiaries taken as a whole, nor entered into any transaction not in the
ordinary course of business, (ii) none of the Company or any Subsidiary has
incurred any liabilities or obligations, direct or contingent, which will be
material to the Company and the Subsidiaries taken as a whole, (iii) there has
not been, singly or in the aggregate, any change or development, which could
reasonably be expected to result in a Material Adverse Effect and (iv) there has
been no dividend or distribution of any kind declared, paid or made by the
Company or any of its Subsidiaries on any class of its capital stock, except for
dividends paid in respect of the Series B Preferred Stock, the Series D Junior
Convertible Preferred Stock or the Series E Junior Convertible Preferred Stock
(collectively, the "Preferred Stock").
13
(xxx) None of the Company or any Subsidiary or any agent
thereof acting on behalf of them has taken, and none of them will take, any
action that might cause this Agreement or the issuance or sale of the Securities
to violate Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R. Part 220),
Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of the
Board of Governors of the Federal Reserve System or analogous foreign laws and
regulations.
(xxxi) To the best knowledge of the Company, the accountants
who have certified or will certify the financial statements included or to be
included as part of the Offering Memorandum are independent accountants. The
consolidated historical financial statements, together with related schedules
and notes, set forth in the Offering Memorandum comply as to form in all
material respects with the requirements applicable to registration statements on
Form S-1 under the Act and present fairly in all material respects the financial
position and results of operations of the Company and the Subsidiaries at the
respective dates and for the respective periods indicated. Such financial
statements have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods presented. The
pro forma financial statements included in the Offering Memorandum have been
prepared on a basis consistent with such historical statements, except for the
pro forma adjustments specified therein, and give effect to assumptions made on
a reasonable basis and present fairly in all material respects the historical
and proposed transactions contemplated by this Agreement and the other Operative
Documents; and such pro forma financial statements comply as to form in all
material respects with the requirements applicable to pro forma financial
statements included in registration statements on Form S-1 under the Act. The
other financial and statistical information and data included in the Offering
Memorandum, historical and pro forma, are accurately presented in all material
respects and prepared on a basis consistent with the financial statements,
historical and pro forma, included in the Offering Memorandum and the books and
records of the Company and the Subsidiaries, as applicable.
(xxxii) The Company does not intend to, nor does it believe
that it will, incur debts beyond its ability to pay such debts as they mature.
The present fair saleable value of the assets of the Company on a consolidated
basis exceeds the amount that will be required to be paid on or in respect of
the existing debts and other liabilities (including contingent liabilities) of
the Company on a consolidated basis as they become absolute and matured. The
assets of the Company on a consolidated basis do not constitute unreasonably
small capital to carry out the business of the Company and the Subsidiaries,
taken as a whole, as conducted or as proposed to be conducted. Upon the issuance
of the Series F Preferred Stock (and the related Depositary Shares), the present
fair saleable value of the assets of the Company on a consolidated basis will
exceed the amount that will be required to be paid on or in respect of the
existing debts and other liabilities (including contingent liabilities) of the
Company on a consolidated basis as they become absolute and matured. Upon the
issuance of the Series F Preferred Stock (and the related Depositary Shares),
the assets of the Company on a consolidated basis will not constitute
unreasonably small capital to carry out its businesses as now conducted,
including the capital needs of the Company on a consolidated basis, taking into
account the projected capital requirements and capital availability.
(xxxiii) Except pursuant to this Agreement, there are no
contracts, agreements or understandings between the Company and its Subsidiaries
and any other person that would give rise to a valid claim against the Company
or either of the Initial Purchasers for a brokerage commission, finder's fee or
like payment in connection with the issuance, purchase and sale of the
Securities.
(xxxiv) Each certificate signed by any officer of the Company
and delivered to the Initial
14
Purchasers or counsel for the Initial Purchasers shall be deemed to be a
representation and warranty by the Company to the Initial Purchasers as to the
matters covered thereby.
(xxxv) Each of the Company and its Subsidiaries have
implemented Year 2000 compliance programs designed to ensure that each
respective company's computer systems and applications will function properly
beyond 1999. The Company believes that adequate resources have been allocated
for this purpose and expects the Company's and its Subsidiaries' Year 2000 date
conversion program to be completed on a timely basis.
The Company acknowledges that each of the Initial Purchasers
and, for purposes of the opinions to be delivered to the Initial Purchasers
pursuant to Section 8 hereof, counsel to the Company and counsel to the Initial
Purchasers, will rely upon the accuracy and truth of the foregoing
representations and hereby consents to such reliance.
(b) Each of the Initial Purchasers, severally and not jointly,
represents, warrants and covenants to the Company and agrees that:
(i) Such Initial Purchaser is a QIB, with such knowledge and
experience in financial and business matters as are necessary in order to
evaluate the merits and risks of an investment in the Company Shares.
(ii) Such Initial Purchaser (A) is not acquiring the Company
Shares with a view to any distribution thereof that would violate the Act or the
securities laws of any state of the United States or any other applicable
jurisdiction and (B) will be reoffering and reselling the Company Shares only to
QIBs in reliance on the exemption from the registration requirements of the Act
provided by Rule 144A and to Accredited Investors in a private placement exempt
from the registration requirements of the Act.
(iii) No form of general solicitation or general advertising
has been or will be used by either of the Initial Purchasers or any of their
representatives in connection with the offer and sale of any of the Company
Shares, including, but not limited to, articles, notices or other communications
published in any newspaper, magazine, or similar medium or broadcast over
television or radio, or any seminar or meeting whose attendees have been invited
by any general solicitation or general advertising.
(iv) Each of the Initial Purchasers agrees that, in
connection with the Exempt Resales, it will solicit offers to buy the Company
Shares, only from, and will offer to sell the Company Shares, only to, Eligible
Purchasers. The Initial Purchasers further agree (A) that they will offer to
sell the Company Shares, only to, and will solicit offers to buy the Company
Shares, only from (1) QIBs who in purchasing such Company Shares will be deemed
to have represented and agreed that they are purchasing the Company Shares, for
their own accounts or accounts with respect to which they exercise sole
investment discretion and that they or such accounts are QIBs and (2) Accredited
Investors who make the representations contained in, and execute and return to
one of the Initial Purchasers, a certificate in the form of Annex C attached to
-------
the Offering Memorandum and (B) that such Eligible Purchasers shall acknowledge
and agree that such Company Shares will not have been registered under the Act
and may be resold, pledged or otherwise transferred only (i) to the Company,
(ii) pursuant to a registration statement which has been declared effective
under the Securities Act, (iii) to a person it reasonably believes is a QIB in a
transaction meeting the requirements of Rule 144A under the Securities Act, (iv)
to an institutional "accredited investor" (as defined in Rule 501(a) (1), (2),
(3) or (7) of Regulation D under the Securities Act that, prior to such
transfer, furnishes to the trustee a signed letter
15
containing certain representations and agreements relating to the transfer of
the Securities (the form of which letter can be obtained from the Trustee) or
(v) pursuant to any other available exemption from the registration requirements
of the Securities Act (and based on an opinion of counsel if the Company so
requests), subject in each of the foregoing cases to the applicable state
securities laws of any State of the United States or any other applicable
jurisdiction and (C) that the holder will, and each subsequent holder is
required to, notify any purchaser of the security evidenced thereby of the
resale restrictions set forth in (B) above.
(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 Company Shares, which
are the subject thereof if it is finally judicially determined that such loss,
liability, claim, damage or expense resulted solely from the fact that the
Initial Purchaser sold the Company Shares, to a person to whom there was not
sent or given, at or prior to the written confirmation of such sale, a copy of
the Offering Memorandum, as amended or supplemented, and (x) the Company shall
have previously and timely furnished sufficient copies of the Offering
Memorandum, as so amended or supplemented, to such Initial Purchaser in
accordance with this Agreement and (y) the Offering Memorandum, as so amended or
supplemented, would have corrected such untrue statement or omission of a
material fact. This indemnity agreement will be in addition to any liability
which the Company may otherwise have, including, under this Agreement.
16
(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 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
17
party shall not be liable for any settlement of any claim or action effected
without its prior written consent; provided, however, that such consent was not
unreasonably withheld.
7. Contribution. In order to provide for contribution in circumstances
------------
in which the indemnification provided for in Section 6 is for any reason held to
be unavailable from the Company or is insufficient to hold harmless a party
indemnified thereunder, the Company and the Initial Purchasers shall contribute
to the aggregate losses, claims, damages, liabilities and expenses of the nature
contemplated by such indemnification provision (including any investigation,
legal and other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claims asserted, but after
deducting in the case of losses, claims, damages, liabilities and expenses
suffered by the Company, any contribution received by the Company from persons,
other than the Initial Purchasers, who may also be liable for contribution,
including persons who control the Company within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act) to which the Company and one or
more of the Initial Purchasers may be subject, in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Initial Purchasers from the offering of the Company Shares, or, if such
allocation is not permitted by applicable law or indemnification is not
available as a result of the indemnifying party not having received notice as
provided in Section 6, in such proportion as is appropriate to reflect not only
the relative benefits referred to above but also the relative fault of the
Company and the Initial Purchasers in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Initial Purchasers shall be deemed to
be in the same proportion as (x) the total proceeds from the offering of Company
Shares, (net of discounts but before deducting expenses) received by the Company
and (y) the discounts received by the Initial Purchasers, respectively, in each
case as set forth in the table on the cover page of the Offering Memorandum. The
relative fault of the Company and of the Initial Purchasers shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or the Initial
Purchasers and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company
and the Initial Purchasers agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
or by any other method of allocation which does not take into account the
equitable considerations referred to above. Notwithstanding the provisions of
this Section 7, (i) in no case shall any of the Initial Purchasers be required
to contribute any amount in excess of the amount by which the discount
applicable to the Company Shares, purchased by such Initial Purchaser pursuant
to this Agreement exceeds the amount of any damages which such Initial Purchaser
has otherwise been required to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission and (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 7, (A) each person,
if any, who controls any of the Initial Purchasers within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act and (B) the
respective officers, directors, partners, employees, representatives and agents
of any of the Initial Purchasers or any controlling person shall have the same
rights to contribution as such Initial Purchaser, and each person, if any, who
controls the Company within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act shall have the same rights to contribution as
the Company, subject in each case to clauses (i) and (ii) of this Section 7. Any
party entitled to contribution will, promptly after receipt of notice of
commencement of any action, suit or proceeding against such party in respect of
which a claim for contribution may be made against another party or parties
under this Section 7, notify such party or
18
parties from whom contribution may be sought, but the failure to so notify such
party or parties shall not relieve the party or parties from whom contribution
may be sought from any obligation it or they may have under this Section 7 or
otherwise. No party shall be liable for contribution with respect to any action
or claim settled without its prior written consent; provided, however, that such
written consent was not unreasonably withheld.
8. Conditions of Initial Purchasers' Obligations. The several
---------------------------------------------
obligations of the Initial Purchasers to purchase and pay for the Firm Shares
and the Additional Shares, as provided herein, shall be subject to the
satisfaction of the following conditions, except that with respect to the
Additional Shares, references to the Closing Date shall mean the Option Closing
Date:
(a) All of the representations and warranties of the Company
contained in this Agreement shall be true and correct on the date hereof and on
the Closing Date with the same force and effect as if made on and as of the date
hereof and the Closing Date, respectively. The Company shall have performed or
complied in all material respects with all of the agreements herein contained
and required to be performed or complied with by it at or prior to the Closing
Date.
(b) The Offering Memorandum shall have been printed and copies
distributed to the Initial Purchasers not later than 10:00 a.m., New York City
time, on the day following the date of this Agreement or at such later date and
time as to which the Initial Purchasers may agree, and no stop order suspending
the qualification or exemption from qualification of the Company Shares in any
jurisdiction referred to in Section 4(e) shall have been issued and no
proceeding for that purpose shall have been commenced or shall be pending or
threatened.
(c) No action shall have been taken and no statute, rule,
regulation or order shall have been enacted, adopted or issued by any
governmental agency which would, as of the Closing Date prevent the issuance of
the Company Shares; no action, suit or proceeding shall have been commenced and
be pending against or affecting or, to the best knowledge of the Company,
threatened against, the Company or the Subsidiaries before any court or
arbitrator or any governmental body, agency or official that (1) could
reasonably be expected to result in a Material Adverse Effect or (2) has not
been disclosed in the Offering Memorandum; and no stop order shall have been
issued preventing the use of the Offering Memorandum, or any amendment or
supplement thereto, or which could reasonably be expected to have a Material
Adverse Effect.
(d) Since the dates as of which information is given in the
Offering Memorandum and except as contemplated by the Offering Memorandum,
(i) there shall not have been any material adverse change, or any development
that is reasonably likely to result in a material adverse change, in the capital
stock or the long-term debt, or material increase in the short-term debt, of the
Company and the Subsidiaries from that set forth in the Offering Memorandum,
(ii) no dividend or distribution of any kind shall have been declared, paid or
made by the Company or any Subsidiary (other than any dividends or distributions
paid to the Company) on any class of its capital stock, except for regular
dividends paid in respect of the Preferred Stock and (iii) neither the Company
nor any Subsidiary shall have incurred any liabilities or obligations, direct or
contingent, that are material, individually or in the aggregate, to the Company
and the Subsidiaries, taken as a whole, and that are required to be disclosed on
a balance sheet or notes thereto in accordance with generally accepted
accounting principles and are not disclosed on the latest balance sheet or notes
thereto included in the Offering Memorandum. Since the date hereof and since the
dates as of which information is given in the Offering Memorandum, there shall
not have occurred any Material Adverse Effect.
19
(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 Xxxx
Xxxxxx & Xxxxxxx LLP, counsel for the Company, to the effect set forth in
Exhibit B hereto.
---------
(g) The Initial Purchasers shall have received on the Closing
Date an opinion, dated the Closing Date, in form and substance satisfactory to
the Initial Purchasers and counsel to the Initial Purchasers, of Xxxxxx Xxxx &
Xxxxxx LLP, special regulatory counsel to the Company, to the effect set forth
in Exhibit C hereto.
---------
(h) The Initial Purchasers shall have received an opinion, dated
the Closing Date, in form and substance reasonably satisfactory to the Initial
Purchasers, of Xxxxxx & Xxxxxxx, counsel to the Initial Purchasers, covering
such matters as are customarily covered in such opinions.
(i) At the time this Agreement is executed and at the Closing Date
the Initial Purchasers shall have received from Ernst & Young LLP, independent
public accountants for the Company and its Subsidiaries, dated as of the date of
this Agreement and as of the Closing Date, customary comfort letters addressed
to the Initial Purchasers and in form and substance satisfactory to the Initial
Purchasers and counsel to the Initial Purchasers with respect to the financial
statements and certain financial information of the Company and its Subsidiaries
contained in the Offering Memorandum.
(j) Xxxxxx & Xxxxxxx shall have been furnished with such
documents, in addition to those set forth above, as they may reasonably require
for the purpose of enabling them to review or pass upon the matters referred to
in this Section 8 and in order to evidence the accuracy, completeness or
satisfaction in all material respects of any of the representations, warranties
or conditions herein contained.
(k) Prior to the Closing Date, the Company and the Subsidiaries
shall have furnished to the Initial Purchasers such further information,
certificates and documents as the Initial Purchasers may reasonably request.
(l) The Company shall have authorized, executed and filed the
Certificate of Designation in accordance with Delaware law and each of the
Initial Purchasers shall have received an original, duly executed by the
Company.
(m) The Company shall have entered into each of the Registration
Rights Agreement and the Deposit Agreement and the Initial Purchasers shall have
received counterparts, conformed as executed, thereof.
20
(n) The Company shall have deposited the Series F Preferred
Stock with the Depositary.
(o) At or prior to the Closing Date, all FCC or state approvals
required in connection with the Offering shall have been obtained or
applications for such approvals submitted or prepared for submission promptly
following the Closing Date and the Company shall have delivered to the Initial
Purchasers evidence satisfactory to the Initial Purchasers that such FCC or
state approvals have been obtained or applications thereof have been made or
prepared for submission promptly following the Closing Date.
All opinions, certificates, letters and other documents required by this
Section 8 to be delivered by the Company will be in compliance with the
provisions hereof only if they are reasonably satisfactory in form and substance
to the Initial Purchasers. The Company will furnish the Initial Purchasers with
such conformed copies of such opinions, certificates, letters and other
documents as it shall reasonably request.
9. Initial Purchasers' Information. The Company and the Initial
-------------------------------
Purchasers severally acknowledge that the statements with respect to the
offering of the Series F Preferred Stock (and the related Depositary Shares) set
forth in the last paragraph of the cover page and the third, eighth, eleventh
and twelfth paragraphs under the caption "Plan of Distribution" in such Offering
Memorandum constitute the only information furnished in writing by the Initial
Purchasers expressly for use in the Offering Memorandum.
10. Survival of Representations and Agreements. All representations and
------------------------------------------
warranties, covenants and agreements of the Initial Purchasers and the Company
contained in this Agreement, including the agreements contained in Sections 4(f)
and 11(d), the indemnity agreements contained in Section 6 and the contribution
agreements contained in Section 7, shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the Initial
Purchasers or any controlling person thereof or by or on behalf of the Company
or any controlling person thereof, and shall survive delivery of and payment for
the Series F Preferred Stock (and the related Depositary Shares) to and by the
Initial Purchasers. The representations contained in Section 5 and the
agreements contained in Sections 4(f), 6, 7 and 11(d) shall survive the
termination of this Agreement, including any termination pursuant to Section 11.
11. Effective Date of Agreement; Termination.
----------------------------------------
(a) This Agreement shall become effective upon execution and
delivery of a counterpart hereof by each of the parties hereto.
(b) The Initial Purchasers shall have the right to terminate this
Agreement at any time prior to the Closing Date by notice to the Company from
the Initial Purchasers, without liability (other than with respect to Sections 6
and 7) on the Initial Purchasers' part to the Company if, on or prior to such
date, (i) the Company shall have failed, refused or been unable to perform in
any material respect any agreement on its part to be performed hereunder,
(ii) any other condition to the obligations of the Initial Purchasers hereunder
as provided in Section 8 is not fulfilled when and as required in any material
respect, (iii) in the reasonable judgment of the Initial Purchasers any material
adverse change shall have occurred since the respective dates as of which
information is given in the Offering Memorandum in the condition (financial or
otherwise), business, properties, assets, liabilities, prospects, net worth,
results of operations or cash flows of the Company and the Subsidiaries taken as
a whole, other than as set forth in
21
the Offering Memorandum, or (iv)(A) any domestic or international event or act
or occurrence has materially disrupted, or in the opinion of the Initial
Purchasers will in the immediate future materially disrupt, the market for the
Company's securities or for securities in general; or (B) trading in securities
generally on the New York or American Stock Exchanges shall have been suspended
or materially limited, or minimum or maximum prices for trading shall have been
established, or maximum ranges for prices for securities shall have been
required, on such exchange, or by such exchange or other regulatory body or
governmental authority having jurisdiction; or (C) a banking moratorium shall
have been declared by Federal or state authorities, or a moratorium in foreign
exchange trading by major international banks or persons shall have been
declared; or (D) there is an outbreak or escalation of armed hostilities
involving the United States on or after the date hereof, or if there has been a
declaration by the United States of a national emergency or war, the effect of
which shall be, in the Initial Purchasers' judgment, to make it inadvisable or
impracticable to proceed with the offering or delivery of the Company Shares on
the terms and in the manner contemplated in the Offering Memorandum; or
(E) there shall have been such a material adverse change in general economic,
political or financial conditions or if the effect of international conditions
on the financial markets in the United States shall be such as, in the Initial
Purchasers' judgment, makes it inadvisable or impracticable to proceed with the
delivery of the Company Shares as contemplated hereby.
(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 F Preferred Stock (and the related
Depositary Shares) provided for herein is not consummated because any condition
to the obligations of the Initial Purchasers set forth herein is not satisfied
or because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or comply with any provision hereof, the Company
will, subject to demand by the Initial Purchasers, reimburse the Initial
Purchasers for all out-of-pocket expenses (including the reasonable fees and
expenses of Initial Purchasers' counsel), incurred by the Initial Purchasers in
connection herewith.
12. Notice. All communications hereunder, except as may be otherwise
------
specifically provided herein, shall be in writing and, if sent to the Initial
Purchasers shall be mailed, delivered, or telexed, telegraphed or telecopied and
confirmed in writing to the Initial Purchasers, x/x Xxxx, Xxxxxxx & Xx. Xxx.,
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Finance
Department, telecopy number: (000) 000-0000; and if sent to the Company, shall
be mailed, delivered or telexed, telegraphed or telecopied and confirmed in
writing to Intermedia Communications Inc., 0000 Xxxxx Xxxx Xxxxx, Xxxxx, Xxxxxxx
00000, Attention: 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
22
capacity as such, of Series F Preferred Stock (and the related Depositary
Shares) from the Initial Purchasers.
14. Construction. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
------------
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK AS APPLIED TO
CONTRACTS MADE AND PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK. TIME IS OF
THE ESSENCE IN THIS AGREEMENT.
15. Captions. The captions included in this Agreement are included solely
--------
for convenience of reference and are not to be considered a part of this
Agreement.
16. Counterparts. This Agreement may be executed in various counterparts
------------
which together shall constitute one and the same instrument.
[Signature Page Follows]
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:
BEAR, XXXXXXX & CO. INC.
By:
-----------------------------
Name:
Title:
XXXXX XXXXXX INC.
By:
-----------------------------
Name:
Title:
XXXXXXX XXXXX & CO.
By:
-----------------------------
Name:
Title:
WARBURG DILLON READ LLC
By:
-----------------------------
Name:
Title:
24
SCHEDULE I
Number of
Firm Shares
Initial Purchaser to be Purchased
----------------- ---------------
Bear, Xxxxxxx & Co. Inc. ....................................................4,400,000
Xxxxx Xxxxxx Inc. ...........................................................1,600,000
Xxxxxxx Xxxxx Xxxxxx Xxxxxx and Xxxxx Incorporated ..........................1,600,000
Warburg Dillon Read LLC .......................................................400,000
Total 8,000,000
Sched-I
EXHIBIT A
List of Employee Pension and Benefit Plans
of Intermedia Communications Inc.
and its Subsidiaries
1. Intermedia Communications Inc. 401(k) Profit Sharing Plan.
A-1
EXHIBIT B
Form of Opinion of Kronish Xxxx Xxxxxx & Xxxxxxx LLP
1. Each of the Company and the Company's material subsidiaries set
forth on Schedule A (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.
2. All of the outstanding shares of capital stock of the Company have
been duly authorized, validly issued, and are fully paid and nonassessable and
were not issued in violation of any preemptive or similar rights under the
Delaware General Corporation Law. The authorized, issued and outstanding capital
stock of the Company conforms in all respects to the description thereof set
forth in the Offering Memorandum.
3. To such counsel's knowledge, after reasonable inquiry, all of the
issued and outstanding capital stock of the Company's Subsidiaries have been
duly authorized and validly issued, are fully paid and non-assessable and were
not issued in violation of or subject to any preemptive or similar rights under
the Delaware General Corporation Law or known to us, after reasonable inquiry,
and, is owned by the Company of record, free and clear of any security interest,
claim, lien, limitation on voting rights or encumbrance. Except as set forth on
Schedule A hereto, there are not, to our knowledge, currently, and will not be
following the Offering, any outstanding subscriptions, rights, warrants, calls,
commitments of sale or options to acquire (other than options issued pursuant to
the Company's stock option plans, the 160,000 warrants each to purchase 2.19
shares of Common Stock, the 7% Series D Junior Convertible Preferred Stock and
the 7% Series E Junior Convertible Preferred Stock, and noting that at present
rights trade with the Common Stock), or instruments convertible into or
exchangeable for, any capital stock or other equity interest of the Company or
any Subsidiary.
4. When the Company Shares are issued and delivered pursuant to this
Agreement, no Company Shares will be of the same class (within the meaning of
Rule 144A under the Act) as securities of the Company that are listed on a
national securities exchange registered under Section 6 of the Exchange Act or
that are quoted in a United States automated inter-dealer quotation system.
5. The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement, the
Certificate of Designation, the Deposit Agreement, the Registration Rights
Agreement and the other Operative Documents, as applicable, and to consummate
the transactions contemplated thereby, including, without limitation, the
corporate power and authority to issue, sell and deliver the Securities as
provided herein and therein.
B-1
6. 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.
7. 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.
8. Each of the Deposit Agreement and the Registration Rights Agreement
has been duly and validly authorized, executed and delivered by the Company and,
assuming due execution by the other parties thereto, is the legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except that we express no opinion as to the validity or
enforceability of rights of indemnity or contribution, or both and except as
such enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization or similar laws affecting the rights of creditors
generally and subject to general principles of equity.
9. The Series F Preferred Stock (and the related Depositary Shares) have
been duly and validly authorized for issuance and sale to the Initial Purchasers
by the Company pursuant to this Agreement and, when issued, delivered and paid
for in accordance with the terms of this Agreement, will be validly issued,
fully paid and non-assessable and entitled to the rights, privileges and
preferences set forth in the Certificate of Designation, and the issuance of
such shares of Series F Preferred Stock (and the related Depositary Shares) will
not be subject to any preemptive or similar rights.
10. The Offering Memorandum contains a fair summary of each of the Series
F Preferred Stock, the Certificate of Designation, the Company Shares, the
Deposit Agreement and the Registration Rights Agreement.
11. No registration under the Act of the Series F Preferred Stock (and
the related Depositary Shares) is required for the sale of the Company Shares,
to the Initial Purchasers as contemplated by this Agreement or for the Exempt
Resales assuming (i) that the Initial Purchasers are Qualified Institutional
Buyers, as defined in Rule 144A under the Act ("QIB"), (ii) that the purchasers
---
who buy the Company Shares, in the Exempt Resales are Eligible Purchasers,
(iii) the accuracy of the Initial Purchasers' and the Company's representations
regarding the absence of general solicitation in connection with the sale of
Company Shares, to the Initial Purchasers and the Exempt Resales contained in
this Agreement, (iv) the accuracy of the Company's representations in
Sections 5(a)(ii), (xxv), (xxvi) (last sentence only) and (xxviii) of this
Agreement and (v) with respect to Accredited Investors, the accuracy of the
representations made by each Accredited Investor as set forth in the letters of
representation executed by such Accredited Investor in the form of Annex C to
-------
the Offering Memorandum.
12. The Offering Memorandum, as of its date (except for the financial
statements, including the notes thereto, and supporting schedules and other
financial, statistical and accounting data included therein or omitted
therefrom, as to which no opinion need be expressed), and each amendment or
B-2
supplement thereto, as of its date, contains all the information specified in,
and meets the requirements of, Rule 144A(d)(4) under the Act.
13. None of (A) the execution, delivery or performance by the Company of
this Agreement and the other Operative Documents, (B) the issuance and sale of
the Series F Preferred Stock (and the related Depositary Shares), (C) the
performance by the Company of its obligations under this Agreement and the other
Operative Documents and (D) the consummation of the transactions contemplated by
this Agreement and the other Operative Documents violates, conflicts with or
constitutes a breach of any of the terms or provisions of, or a default under
(or an event that with notice or the lapse of time, or both, would constitute a
default), or require consent under, or result in the imposition of a lien or
encumbrance on any properties of the Company or any Subsidiary, or an
acceleration of any indebtedness of the Company or any Subsidiary pursuant to,
(i) the charter or bylaws of the Company or any Subsidiary, (ii) any bond,
debenture, note, indenture, mortgage, deed of trust or other agreement or
instrument to which the Company or any Subsidiary is a party or by which any of
them or their property is or may be bound identified to such counsel by the
Company as material (assuming all of such agreements are governed by New York
law), (iii) any local, state, federal or administrative statute, rule or
regulation applicable to the Company or any Subsidiary or any of their assets or
properties (except such counsel shall express no opinion as to the matters
addressed in the opinion of Xxxxxx, Xxxx & Xxxxxx LLP), or (iv) any judgment,
order or decree of any court or governmental agency or authority having
jurisdiction over the Company or any Subsidiary or any of their assets or
properties known to such counsel, except in the case of clauses (ii), (iii) and
(iv) for such violations, conflicts, breaches, defaults, consents, impositions
of liens or accelerations that (x) would not, singly or in the aggregate, have a
Material Adverse Effect or (y) are disclosed in the Offering Memorandum.
Assuming compliance with applicable state securities and Blue Sky laws, as to
which such counsel need express no opinion, and except for the filing of a
registration statement under the Act 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 by the opinion of
Xxxxxx, Xxxx & Xxxxxx LLP. To the best of such counsel's knowledge, after
reasonable inquiry, no consents or waivers from any other person are required
for the execution, delivery and performance by the Company of this Agreement and
the other Operative Documents for the issuance and sale of the Securities, other
than such consents and waivers as have been obtained or are being applied for.
14. None of the Company or the Subsidiaries is (i) an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, or (ii) a "holding company"
or a "subsidiary company" or an "affiliate" of a holding company within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
B-3
15. Except as set forth in this Agreement or 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.
16. None of the execution, delivery and performance of this Agreement,
the issuance and sale of the Securities, the application of the proceeds from
the issuance and sale of the Securities and the consummation of the transactions
contemplated thereby as set forth in the Offering Memorandum, will violate
Regulations G, T, U or X promulgated by the Board of Governors of the Federal
Reserve System.
17. To the knowledge of such counsel, after reasonable inquiry, no search
of courts having been made, there is (i) no action, suit, investigation or
proceeding before or by any court, arbitrator or governmental agency, body or
official, domestic or foreign, now pending, or threatened or contemplated to
which any of the Company or any Subsidiary is or may be a party or to which the
business or property of the Company or any Subsidiary is or may be subject, (ii)
no statute, rule, regulation or order that has been enacted, adopted or issued
by any governmental agency or that has been proposed by any governmental body,
or (iii) no injunction, restraining order or order of any nature by a federal or
state court of competent jurisdiction to which any of the Company or any
Subsidiary is or may be subject has been issued that, in the case of clauses
(i), (ii) and (iii) above, (x) is required to be disclosed in the Preliminary
Offering Memorandum and the Offering Memorandum and that is not so disclosed,
(y) could reasonably be expected to have, either individually or in the
aggregate, a Material Adverse Effect, except as disclosed in the Offering
Memorandum or (z) might interfere with, adversely affect or in any manner
question the validity of the issuance and sale of the Series F Preferred Stock
(and the related Depositary Shares) or any of the other transactions
contemplated by this Agreement or any of the other Operative Documents, except
that such counsel shall express no opinion as to the matters addressed in the
opinion of Xxxxxx, Xxxx & Xxxxxx LLP.
18. The statements under the captions "Description of Preferred Stock"
and "Description of the Depositary Shares" in the Offering Memorandum, insofar
as such statements constitute a summary of documents referred to therein present
a fair summary thereof. The terms of the Certificate of Designation conform to
the descriptions thereof contained in the Offering Memorandum.
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
B-4
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (except as to financial
statements and related notes, the financial statement schedules and other
financial and statistical data included therein).
B-5
EXHIBIT C
Form of Opinion of Xxxxxx Xxxx & Xxxxxx LLP
C-1
EXHIBIT D
Subsidiaries of Intermedia Communications Inc.
----------------------------------------------
Intermedia Communications Inc., a Virginia corporation
EMI Telecommunications Inc.
Eastern Message Communications Inc.
Intermedia Licensing Company
Intermedia Capital Inc.
DIGEX Incorporated
Shared Technologies Xxxxxxxxx, Inc.
Shared Technologies Xxxxxxxxx Telecom, Inc.
Shared Technologies Xxxxxxxxx Communications Corp.
Access Network Services, Inc.
STF Canada Inc.
Access Virginia, Inc.
Long Distance Savers, Inc. (Florida)
Long Distance Savers, Inc. (Louisiana)
LDS-Natchez, Inc.
Long Distance Savers - Longview, Inc.
Netwave Systems, Inc.
LDS - Oklahoma City, Inc.
Long Distance Savers of the Metroplex, Inc.
LDS Communications, Inc.
LDS - Ventures, Inc.
LDS I - America, Inc. (Delaware)
LDS I - America, Inc. (Louisiana)
Express Communications, Inc.
National Telecommunications of Florida, Inc.
NTC, Inc.
LDS of Tulsa (Limited Partnership)
