EXECUTION COPY
LENFEST COMMUNICATIONS, INC.
$300,000,000
10.50% Senior Subordinated Notes Due 2006
PURCHASE AGREEMENT
New York, New York
June 20, 1996
To: SALOMON BROTHERS INC
TORONTO DOMINION SECURITIES (USA) INC.
CIBC WOOD GUNDY SECURITIES CORP.
NATIONSBANC CAPITAL MARKETS, INC.
In care of:
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Dear Sirs:
Lenfest Communications, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to you (the "Purchaser") $300,000,000
principal amount of its 10.50% Senior Subordinated Notes Due 2006 (the
"Securities"), to be issued under an indenture (the "Indenture") to be dated as
of June 15, 1996, between the Company and The Bank of New York, as trustee (the
"Trustee").
The sale of the Securities to you will be made without
registration of the Securities under the Securities Act of 1933, as amended (the
"Act"), in reliance upon the exemption from the registration requirements of the
Act provided by Section 4(2) thereof. You have advised the Company that you will
make an offering of the Securities purchased by you hereunder in accordance with
Section 4
hereof on the terms set forth in the Final Memorandum (as defined below), as
soon as you deem advisable after this Agreement has been executed and delivered.
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum, dated June 11, 1996 (the
"Preliminary Memorandum"), and a final offering memorandum, dated June 20, 1996
(the "Final Memorandum"). Each of the Preliminary Memorandum and the Final
Memorandum sets forth certain information concerning the Company and the
Securities. The Company hereby confirms that it has authorized the use of the
Preliminary Memorandum and the Final Memorandum in connection with the offering
and resale by the Purchaser of the Securities. Any references herein to the
Preliminary Memorandum or the Final Memorandum shall be deemed to include all
exhibits thereto and all documents incorporated by reference therein which were
filed under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), on or before the Execution Time (as defined below); and any reference
herein to the terms "amend", "amendment" or "supplement" with respect to the
Final Memorandum shall be deemed to refer to and include the filing of any
document under the Exchange Act after the Execution Time which is incorporated
by reference therein.
1. Representations and Warranties. The Company
represents and warrants to, and agrees with, the Purchaser
as set forth below in this Section 1.
(a) Each of the Preliminary Memorandum and the Final
Memorandum as of its date did not, and the Final Memorandum (as the
same may have been amended or supplemented) as of the Closing Date will
not, contain any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations or
warranties as to the information contained in or omitted from the
Preliminary Memorandum or the Final Memorandum in reliance upon and in
conformity with information furnished in writing to the Company by the
Purchasers specifically for inclusion in the Preliminary Memorandum or
the Final Memorandum (and any amendment or supplement thereof or
thereto). All documents incorporated by reference in the Preliminary
Memorandum or the Final Memorandum which were filed under the Exchange
Act on or before the Execution Time
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complied, and all such documents which are filed under the Exchange Act
after the Execution Time and on or before the Closing Date will comply,
in all material respects with the applicable requirements of the
Exchange Act and the rules thereunder.
(b) The Company has not taken and will not take, directly or
indirectly, any action prohibited by Rule 10b-6 under the Exchange Act
in connection with the offering of the Securities.
(c) Neither the Company nor any affiliate (as defined in Rule
501(b) of Regulation D under the Act ("Regulation D")) of the Company
has directly, or through any agent, (i) sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any
security (as defined in the Act) which is or will be integrated with
the sale of the Securities in a manner that would require the
registration of the Securities under the Act or (ii) engaged in any
form of general solicitation or general advertising (within the meaning
of Regulation D) in connection with the offering of the Securities.
(d) It is not necessary in connection with the offer, sale and
delivery of the Securities in the manner contemplated by this Agreement
and the Final Memorandum to register the Securities under the Act or to
qualify the Indenture under the Trust Indenture Act of 1939, as amended
(the "Trust Indenture Act").
(e) None of the Company, its affiliates or any person acting
on behalf of the Company or its affiliates has engaged in any directed
selling efforts (as that term is defined in Regulation S under the Act
("Regulation S")) with respect to the Securities, and the Company and
its affiliates and any person acting on its or their behalf have
complied with the offering restrictions requirement of Regulation S.
(f) The Company is subject to the reporting
requirements of Section 13 or Section 15(d) of the
Exchange Act.
(g) The Securities satisfy the requirements set
forth in Rule 144A(d)(3) under the Act. The Company
has been advised by the National Association of Securities
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Dealers, Inc. PORTAL Market that the Securities have or will be
designated PORTAL eligible securities in accordance with the rules and
regulations of the National Association of Securities Dealers, Inc.
(h) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with power and authority (corporate and other) to own its properties
and conduct its business as described in the Final Memorandum; and the
company is duly qualified to do business as a foreign corporation in
good standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such
qualification, other than where the failure to so qualify could not,
individually or in the aggregate, have a material adverse effect on the
financial condition or business, properties, net worth or results of
operations of the Company and its subsidiaries taken as a whole.
(i) Each Significant Subsidiary (as defined in Rule 1-02(a) of
Regulation S-X promulgated under the Act) of the Company has been duly
incorporated or formed and is an existing corporation or partnership in
good standing under the laws of the jurisdiction of its incorporation
or organization, with power and authority (corporate and other) to own
its properties and conduct its business as described in the Final
Memorandum; and each Significant Subsidiary of the Company is duly
qualified to do business as a foreign corporation in good standing in
all other jurisdictions in which its ownership or lease of property or
the conduct of its business required such qualification, other than
when the failure to qualify could not, individually or in the
aggregate, have a material adverse effect on the financial condition or
business, properties, net worth or results of operations of the Company
and its Significant Subsidiaries taken as a whole; all of the issued
and outstanding capital stock of each Significant Subsidiary of the
Company has been duly authorized and validly issued and is fully paid
and nonassessable; and the capital stock or partnership interest of
each Significant Subsidiary owned by the Company, directly or through
Significant Subsidiaries, is owned free from liens, encumbrances and
defects, except for such proxies, liens, encumbrances and options
disclosed in the Final Memorandum.
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(j) The Indenture has been duly authorized; the Securities
have been duly authorized; and when the Securities are delivered and
paid for pursuant to this Agreement on the Closing Date, the Indenture
will be duly executed, authenticated, issued and delivered and will
conform to the description thereof contained in the Final Memorandum
and the Indenture and the Securities will constitute valid and legally
binding obligations of the Company, enforceable in accordance with
their respective terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles.
(k) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is required
for the consummation of the transactions contemplated by this Agreement
in connection with the issuance and sale of the Securities by the
Company, except such as have been obtained and made under the Act and
such as may be required under state securities laws.
(l) The execution, delivery and performance of the Indenture
and this Agreement, and the issuance and sale of the Securities and
compliance with the terms and provisions thereof will not result in a
breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, any rule, regulation or order
of any governmental agency or body or any court, domestic or foreign,
having jurisdiction over the Company or any subsidiary of the Company
or any of their properties, or any agreement or instrument to which the
Company or any such subsidiary is a party or by which the Company or
any such subsidiary is bound or to which any of the properties of the
Company or any such subsidiary is subject, or the charter or by-laws
(or, if applicable, the partnership agreement) of the Company or any
such subsidiary, and the Company has full power and authority to
authorize, issue and sell the securities as contemplated by this
Agreement.
(m) This Agreement has been duly authorized,
executed and delivered by the Company.
(n) Except as disclosed in the Final Memorandum,
the Company and its subsidiaries have good and
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marketable title to all material real properties and all other
properties and assets owned by them, in each case free from liens,
encumbrances and defects that could materially affect the value thereof
or materially interfere with the use made or presently contemplated to
be made thereof by them; and except as disclosed in the Final
Memorandum, the Company and its subsidiaries hold any leased real or
personal property under valid and enforceable leases with no exceptions
that are material or could materially interfere with the use made or
presently contemplated to be made thereof by them.
(o) The Company and its Significant Subsidiaries possess
adequate certificates, authorities or permits issued by appropriate
governmental agencies or bodies necessary to conduct the business now
operated by them other than those the absence of which could not
reasonably be expected to, individually or in the aggregate, have a
material adverse effect on the financial condition or business,
properties, net worth or results of operations of the Company and its
Significant Subsidiaries taken as a whole and have not received any
notice of proceedings relating to the revocation or modification of any
such certificate, authority or permit that, if determined adversely to
the Company or any of its Significant Subsidiaries, could reasonably be
expected to individually or in the aggregate have a material adverse
effect on the financial condition or business, properties, net worth or
results of operations of the Company and its subsidiaries taken as a
whole.
(p) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent that
could reasonably be expected to, individually or in the aggregate, have
a material adverse effect on the financial condition or business,
properties, net worth or results of operations of the Company and its
subsidiaries taken as a whole.
(q) The Company and its Significant Subsidiaries own, possess
or can acquire on reasonable terms, adequate trademarks, trade names
and other rights to inventions, know-how, patents, copyrights,
confidential information and other intellectual property necessary to
conduct the business now operated by them, other
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than those the absence of which could not, individually or in the
aggregate, have a material adverse effect on the financial condition or
business, properties, net worth or results of operations of the Company
and its Significant Subsidiaries taken as a whole, or presently
employed by them, and have not received any notice of infringement of
or conflict with asserted rights of others with respect to any
trademarks, trade names or other rights to inventions, know-how,
patents, copyrights, confidential information or other intellectual
property that, if determined adversely to the Company or any of its
subsidiaries, could individually or in the aggregate have a material
adverse effect on the financial condition or business, properties, net
worth or results of operations of the Company and its Significant
Subsidiaries taken as a whole.
(r) Except as disclosed in the Final Memorandum, there are no
pending actions, suits or proceedings against or affecting the company,
any of its subsidiaries or any of their respective properties that, if
determined adversely to the Company or any of it subsidiaries, could
reasonably be expected to individually or in the aggregate have a
material adverse effect on the financial condition or business,
properties, net worth or results of operations of the Company and its
subsidiaries taken as a whole, or would materially and adversely affect
the ability of the Company to perform its obligations under the
Indenture or this Agreement, or which are otherwise material in the
context of the sale of the Securities; and, to the Company's knowledge,
no such actions, suits or proceedings are threatened.
(s) The financial statements included in the Final Memorandum
present fairly the financial position of the Company and its
consolidated subsidiaries as of the dates shown and their results of
operations and cash flows for the periods shown, and such financial
statements have been prepared in conformity with the generally accepted
accounting principles in the United States applied on a consistent
basis, except as otherwise stated therein; and the schedules included
in the Final Memorandum present fairly in all material respects the
information required to be stated therein.
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(t) Except as disclosed in the Final Memorandum, since the
date of the latest audited financial statements included in the Final
Memorandum there has been no material adverse change, nor any
development or event which could reasonably be expected to result in a
material adverse change, in the financial condition or business,
properties, net worth or results of operations of the Company and its
subsidiaries taken as a whole, and, except as disclosed in the Final
Memorandum, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital
stock.
(u) Except to the extent set forth in the Final Memorandum,
the Company has not received any notice of, nor does it have any actual
knowledge of, any failure by it or any of its Significant Subsidiaries
to be in substantial compliance with all existing statutes and
regulations applicable to it or such subsidiaries, which failure could
materially and adversely affect the financial condition or business,
properties, net worth or results of operations of the Company and its
subsidiaries taken as a whole.
2. Purchase and Sale. Subject to the terms and conditions and
in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to the Purchasers, and the Purchasers agree to purchase
from the Company, at a purchase price of 98.00% of the principal amount thereof,
plus accrued interest, if any, from June 27, 1996, to the Closing Date, the
principal amount of the Securities.
3. Delivery and Payment. Delivery of and payment for the
Securities shall be made at 10:00 AM, New York City time, on June 27, 1996, or
such later date (not later than July 3, 1996) as the Purchasers designate, which
date and time may be postponed by agreement between the Purchasers and the
Company or as provided in Section 9 hereof (such date and time of delivery and
payment for the Securities being herein called the "Closing Date"). Delivery of
the Securities shall be made to the Purchasers against payment by the Purchasers
of the purchase price thereof to or upon the order of the Company by certified
or official bank check or checks drawn on or by a New York Clearing House bank
and payable in same day funds. Delivery of the Securities shall be made at such
location as the Purchasers shall reasonably designate at least one business day
in advance of the
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Closing Date and payment for the Securities shall be made at the office of
Cravath, Swaine & Moore, 825 Eighth Avenue, New York, New York. Certificates for
the Securities shall be registered in such names and in such denominations as
the Purchasers may request not less than three full business days in advance of
the Closing Date.
The Company agrees to have the Securities available for
inspection, checking and packaging by the Purchaser in New York, New York, not
later than 1:00 PM on the business day prior to the Closing Date.
4. Offering of Securities; Restrictions on Transfer. (a) The
Purchasers represent and warrant to and agree with the Company that (i) they
have not solicited and will not solicit any offer to buy or offer to sell the
Securities by means of any form of general solicitation or general advertising
(within the meaning of Regulation D) or in any manner involving a public
offering within the meaning of Section 4(2) of the Act or, with respect to
Securities sold in reliance on Regulation S, by means of any directed selling
efforts and (ii) they have solicited and will solicit offers to buy the
Securities only from, and have offered and will offer, sell or deliver the
Securities only to, (A) persons who they reasonably believe to be qualified
institutional buyers (as defined in Rule 144A under the Act) or, if any such
person is buying for one or more institutional accounts for which such person is
acting as fiduciary or agent, only when such person has represented to them that
each such account is a qualified institutional buyer, to whom notice has been
given that such sale or delivery is being made in reliance on Rule 144A, and, in
each case, in transactions under Rule 144A, (B) persons who they reasonably
believe to be institutional "accredited investors" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D), and who provide to them a letter in
the form of Exhibit A hereto or (C) persons to whom, and under circumstances
which, they reasonably believe offers and sales of Securities may be made
without registration of the Securities under the Act in reliance upon Regulation
S thereunder and have complied or will comply with the offering restriction
requirements of Regulation S. The Purchasers also represent and warrant and
agree that they have offered and will offer to sell the Securities only to, and
have solicited and will solicit offers to buy the Securities only from, persons
that in purchasing such Securities will be deemed to have represented and agreed
as
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provided under "Investor Representations and Restrictions on
Resale" in Exhibit B hereto.
(b) The Purchasers represent and warrant that (i) they have
not offered or sold, and will not offer or sell, in the United Kingdom, by means
of any document, any Securities other than to persons whose ordinary business it
is to buy or sell shares or debentures, whether as principal or agent, or in
circumstances which do not constitute an offer to the public within the meaning
of the United Kingdom Companies Act 1985, (ii) they have complied and will
comply with all applicable provisions of the Financial Services Act 1986 of the
United Kingdom with respect to anything done by them in relation to the
Securities in, from or otherwise involving the United Kingdom and (iii) they
have only issued or passed on, and will only issue or pass on, in the United
Kingdom any document received by them in connection with the issue of the
Securities to a person who is of the kind described in Article 9(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1988
or is a person to whom the document may otherwise lawfully be issued or passed
on.
5. Agreements. The Company agrees with the
Purchaser that:
(a) The Company will furnish to the Purchaser, without charge,
during the period mentioned in paragraph (c) below, as many copies of
the Final Memorandum and any supplements and amendments thereof or
thereto as the Purchasers may reasonably request. The Company will pay
the expenses of printing or other production of all documents relating
to the offering.
(b) The Company will not amend or supplement the Final
Memorandum, other than by filing documents under the Exchange Act which
are incorporated by reference therein, without prior consent of the
Purchasers. Prior to the completion of the sale of the Securities by
the Purchasers, the Company will not file any document under the
Exchange Act which is incorporated by reference in the Final Memorandum
unless the Company has furnished you a copy for your review prior to
filing and will not file any such document to which you reasonably and
timely object.
(c) The Company will promptly advise the
Purchasers when, prior to the completion of the sale of
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the Securities by the Purchasers, any document filed under the Exchange
Act which is incorporated by reference in the Final Memorandum shall
have been filed with the Securities and Exchange Commission (the
"Commission").
(d) If at any time prior to the completion of the sale of the
Securities by the Purchasers, any event occurs as a result of which the
Final Memorandum as then amended or supplemented would include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall
be necessary to amend or supplement the Final Memorandum (including any
document incorporated by reference therein which was filed under the
Exchange Act) to comply with the Exchange Act or the rules thereunder
or other applicable law, the Company promptly will notify the
Purchasers of the same and, subject to paragraph (b) of this Section 5,
will prepare and provide to the Purchasers pursuant to paragraph (a) of
this Section 5 an amendment or supplement which will correct such
statement or omission or effect such compliance and, in the case of
such an amendment or supplement which is to be filed under the Exchange
Act and which is incorporated by reference in the Final Memorandum,
will file such amendment or supplement with the Commission.
(e) The Company will arrange for the qualification of the
Securities for sale under the laws of such jurisdictions as the
Purchasers may designate, will maintain such qualifications in effect
so long as required for the sale of the Securities and will arrange for
the determination of the legality of the Securities for purchase by
institutional investors. The Company will promptly advise the Purchaser
of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose.
(f) Neither the Company nor any affiliate (as defined in Rule
501(b) of Regulation D) of the Company will solicit any offer to buy or
offer or sell the Securities by means of any form of general
solicitation or general advertising (within the meaning of Regulation
D).
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(g) None of the Company, its affiliates nor any person acting
on behalf of the Company or its affiliates will engage in any directed
selling efforts with respect to the Securities within the meaning of
Regulation S, and the Company, its affiliates and each such person
acting on its or their behalf will comply with the offering
restrictions requirement of Regulation S.
(h) The Company shall, during any period in the three years
after the Closing Date in which the Company is not subject to Section
13 or 15(d) of the Exchange Act, make available, upon request, to any
holder of such Securities in connection with any sale thereof and any
prospective purchaser of Securities from such holder the information
("Rule 144A Information") specified in Rule 144A(d)(4) under the Act.
(i) The Company will not, and will not permit any of its
affiliates (as defined in Rule 501(b) of Regulation D) to, resell any
Securities which constitute "restricted securities" under Rule 144 that
have been reacquired by any of them.
(j) Neither the Company nor any affiliate (as defined in Rule
501(b) of Regulation D) will sell, offer for sale or solicit offers to
buy or otherwise negotiate in respect of any security (as defined in
the Act) the offering of which security will be integrated with the
sale of the Securities in a manner which would require the registration
of the Securities under the Act.
(k) The Company shall include information substantially in the
form set forth in Exhibit B in each Final Memorandum.
(l) The Company shall use its best efforts in cooperation with
the Purchaser to permit the Securities to be eligible for clearance and
settlement through The Depository Trust Company.
(m) The Company will not, for a period of 90 days following
the Execution Time without prior written consent of Salomon Brothers
Inc, offer, sell or contract to sell, or otherwise dispose of, directly
or indirectly, or announce the offering of, any debt securities issued
or guaranteed by the Company (other than the Securities).
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(n) The Company will apply the net proceeds from the sale of
the Notes sold by it substantially in accordance with its statements
under the caption "Use of Proceeds" in the Final Memorandum.
6. Conditions to the Obligations of the Purchasers. The
obligations of the Purchasers to purchase the Securities shall be subject to the
accuracy of the representations and warranties on the part of the Company
contained herein as of the date and time that this Agreement is executed and
delivered by the parties hereto (the "Execution Time") and the Closing Date, to
the accuracy of the statements of the Company made in any certificates pursuant
to the provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) The Company shall have furnished to the Purchasers the
opinion of Saul, Ewing, Remick & Saul, counsel for the Company, dated
the Closing Date, to the effect that:
(i) each of the Company, Suburban Cable TV Co. Inc.,
LenComm, Inc., Lenfest West, Inc., Lenfest Atlantic, Inc.,
Lenfest South Jersey Investments, Inc., South Jersey
Cablevision Associates, Lenfest Newcastle County, Lenfest
Newcastle County, Inc. and CAH, Inc. (individually a "Cable
Television Subsidiary" and collectively the "Cable Television
Subsidiaries"), has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the jurisdiction in which it is chartered or organized, with
full corporate power and authority to own its properties and
conduct its business as described in the Final Memorandum, and
is duly qualified to do business as a foreign corporation and
is in good standing under the laws of each jurisdiction which
requires such qualification wherein it owns or leases material
properties or conducts material business;
(ii) all the outstanding shares of capital stock of
each Cable Television Subsidiary have been duly and validly
authorized and issued and are fully paid and nonassessable,
and, except as otherwise set forth in the Final Memorandum,
all
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outstanding shares of capital stock of the Cable Television
Subsidiaries are owned by the Company either directly or
through wholly owned subsidiaries free and clear of any
perfected security interest and, to the knowledge of such
counsel, after due inquiry, any other security interests,
claims, liens or encumbrances;
(iii) the Company's authorized equity capitalization
is as set forth in the Final Memorandum; and the Securities
conform to the description thereof contained in the Final
Memorandum;
(iv) the Indenture has been duly authorized, executed
and delivered, and constitutes a legal, valid and binding
instrument enforceable against the Company in accordance with
its terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, arrangement,
insolvency, moratorium or other laws affecting creditors'
rights generally from time to time in effect and subject, as
to enforceability, to general principles of equity, regardless
of whether such enforceability is considered in a proceeding
in equity or at law); and the Securities have been duly
authorized and, when executed and authenticated in accordance
with the provisions of the Indenture and delivered to and paid
for by the Purchasers pursuant to this Agreement, will
constitute legal, valid and binding obligations of the Company
entitled to the benefits of the Indenture;
(v) such counsel has no reason to believe that as of
the Execution Time the Final Memorandum contained any untrue
statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading or that the Final Memorandum
includes any untrue statement of a material fact or omits to
state a material fact necessary to make the statements
therein, in the light of the circumstances under which they
were made, not misleading;
(vi) this Agreement has been duly authorized,
executed and delivered by the Company;
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(vii) no consent, approval, authorization or order of
any court or governmental agency or body is required for the
consummation of the transactions contemplated herein, except
such as may be required under the blue sky laws of any
jurisdiction in connection with the purchase and distribution
of the Securities by the Purchasers and such other approvals
(specified in such opinion) as have been obtained;
(viii) neither the issue and sale of the Securities,
the execution and delivery of the Indenture, the consummation
of any other of the transactions herein contemplated nor the
fulfillment of the terms hereof will conflict with, result in
a breach or violation of, or constitute a default under any
law or the charter or by-laws of the Company or the terms of
any indenture or other agreement or instrument known to such
counsel and to which the Company or any of its subsidiaries is
a party or bound or any judgment, order or decree known to
such counsel to be applicable to the Company or any of its
subsidiaries of any court, regulatory body, administrative
agency, governmental body or arbitrator having jurisdiction
over the Company or any of its subsidiaries; and
(ix) it is not necessary in connection with the
offer, sale and delivery of the Securities in the manner
contemplated by this Agreement to register the Securities
under the Act or to qualify the Indenture under the Trust
Indenture Act.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
State of Pennsylvania or the United States, to the extent they deem
proper and specified in such opinion, upon the opinion of other counsel
of good standing whom they believe to be reliable and who are
satisfactory to counsel for the Purchasers and (B) as to matters of
fact, to the extent they deem proper, on certificates of responsible
officers of the Company and public officials. References to the Final
Memorandum in this paragraph (a) include any amendments or supplements
thereof or thereto at the Closing Date.
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(b) The Company shall have furnished to the Purchasers the
opinion of Fleischman and Walsh, L.L.P., special counsel for the
Company, dated the Closing Date, to the effect that:
(i) the Company and its subsidiaries have been
granted and presently hold the Federal Communications
Commission (the "FCC") authorizations necessary for the
Company and its subsidiaries to conduct their respective
businesses as presently conducted or proposed to be conducted
other than those that could not reasonably be expected to,
individually or in the aggregate, have a material adverse
effect on the Company and its subsidiaries taken as a whole;
to the knowledge of such counsel such FCC authorizations are
in full force and effect; and to the knowledge of such
counsel, except as set forth in a schedule to such opinion, no
proceedings to revoke such FCC authorizations are pending or
threatened;
(ii) to the knowledge of such counsel after due
inquiry, such counsel is of the opinion that the Company and
its subsidiaries are not, nor with the passage of time or the
giving of notice or both would be, in violation of any
judgement, injunction, order or decree of the FCC relating
specifically to the Company or its subsidiaries or to any
properties of the Company or its subsidiaries other than those
that cold not reasonably be expected to, individually or in
the aggregate, have a material adverse effect on the Company
and its subsidiaries taken as a whole;
(iii) the execution and delivery of this Agreement
and the Securities by the Company, and the performance by the
Company of its obligations under this Agreement and the
Securities, do not violate the Communications Act of 1934, as
amended, or any rules or the regulation thereunder binding on
the Company or its subsidiaries or any order, writ, judgement,
injunction, decree or award of the FCC binding on the Company
or its subsidiaries of which such counsel has knowledge after
due inquiry:
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(iv) there is no proceeding or investigation pending
before the FCC, or, to the knowledge of such counsel, any
investigation pending or threatened by the FCC against the
Company or its subsidiaries which, if adversely determined,
could have a material adverse effect on the Company and its
subsidiaries taken as a whole;
(v) the execution, delivery and performance of this
Agreement does not constitute the transfer or assignment,
directly or indirectly, or any license existing as of the
Closing Date issued by the FCC in connection with the
operations of the Company or its subsidiaries or the transfer
of control of the Company or its subsidiaries within the
meaning of Section 310(d) of the Communications Act of 1934,
as amended; and
(vi) the statements in the Final Memorandum under the
heading "Legislation and Regulation" fairly summarize the
matters therein described.
(c) The Purchasers shall have received an opinion, dated the
Closing Date, of Samuel W. Morris, Jr., Esq., Vice President--General
Counsel of the Company, to the effect that, (i) to the best knowledge
of such counsel after due inquiry, no franchising authority has claimed
in writing that the Company or any subsidiary is in default under any
franchise that, if revoked, would have a material adverse effect,
individually or in the aggregate, on the Company and its subsidiaries
taken as a whole and (ii) to the best knowledge of such counsel, there
is no pending or threatened action, suit or proceeding before any court
or governmental agency, authority or body or any arbitrator involving
the Company or any of its subsidiaries of a character that would be
required to be disclosed in a registration statement filed under the
Act which is not adequately disclosed in the Final Memorandum, and
there is no franchise, contract or other document of a character
required to be described in a registration statement filed under the
Act, or required to be filed as an exhibit to such a registration
statement, which is not described in the Final Memorandum; and the
statements in the Final Memorandum under the heading "Legal Matters"
fairly summarize the matters therein described.
17
(d) The Purchasers shall have received from Cravath, Swaine &
Moore, counsel for the Purchasers, such opinion or opinions, dated the
Closing Date, with respect to the issuance and sale of the Securities,
the Indenture, the Final Memorandum (together with any amendment or
supplement thereof or thereto) and other related matters as the
Purchasers may reasonably require, and the Company shall have furnished
to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(e) The Company shall have furnished to the Purchasers a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Final Memorandum, any amendment
or supplement to the Final Memorandum and this Agreement and that:
(i) the representations and warranties of the Company
in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as
if made on the Closing Date and the Company has complied with
all the agreements and satisfied all the conditions on its
part to be performed or satisfied at or prior to the Closing
Date; and
(ii) since the date of the most recent financial
statements included in the Final Memorandum (exclusive of any
amendment or supplement thereof or thereto), there has been no
material adverse change in the condition (financial or other),
earnings, business or properties of the Company and its
subsidiaries, whether or not arising from transactions in the
ordinary course of business, except as set forth in or
contemplated in the Final Memorandum (exclusive of any
amendment or supplement thereof or thereto).
(f) At the Execution Time and at the Closing Date, Pressman
Ciocca & Smith shall have furnished to the Purchasers a letter or
letters, dated respectively as of the Execution Time and as of the
Closing Date, in form and substance satisfactory to the Purchasers,
confirming that they are independent accountants within the meaning of
the Exchange Act and the applicable
18
published rules and regulations thereunder and that they have performed
a review of the unaudited interim financial information of the Company
for the three-month period ended March 31, 1996 in accordance with
Statement of Accounting Standards No. 71 and stating in effect that:
(i) in their opinion the audited financial statements
and financial statement schedules and pro forma financial
statements included or incorporated in the Final Memorandum
and reported on by them comply in form in all material
respects with the applicable accounting requirements of the
Exchange Act and the related published rules and regulations;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by the Company
and its subsidiaries; carrying out certain specified
procedures (but not an examination in accordance with
generally accepted auditing standards) which would not
necessarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of
the meetings of the stockholders and directors of the Company
and its subsidiaries; and inquiries of certain officials of
the Company who have responsibility for financial and
accounting matters of the Company and its subsidiaries as to
transactions and events subsequent to December 31, 1995,
nothing came to their attention which caused them to believe
that:
(1) any unaudited financial statements
included or incorporated in the Final Memorandum do
not comply in form in all material respects with
applicable accounting requirements and with the
published rules and regulations of the Commission
with respect to financial statements included or
incorporated in quarterly reports on Form 10-Q under
the Exchange Act; and said unaudited financial
statements are not in conformity with generally
accepted accounting principles applied on a basis
substantially consistent with that of the audited
financial statements included or incorporated in the
Final Memorandum; or
19
(2) with respect to the period subsequent to
March 31, 1996, there were any changes, at a
specified date not more than five business days prior
to the date of the letter, in the Notes and Mortgages
Payable or decreases in the Stockholders' Equity of
the Company as compared with the amounts shown on the
March 31, 1996, consolidated balance sheet included
or incorporated in the Final Memorandum, or for the
period from April 1, 1996 to such specified date
there were any decreases, as compared with the
corresponding period in the preceding year in Net
Income (Loss) or Income (Loss) Before Income Taxes or
in Operating Income, except in all instances for
changes or decreases set forth in such letter, in
which case the letter shall be accompanied by an
explanation by the Company as to the significance
thereof unless said explanation is not deemed
necessary by the Purchasers; and
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Company and its subsidiaries) set forth in the Final
Memorandum, including the information set forth under the
captions "Offering Memorandum Summary", "Summary Consolidated
Financial and Operating Data", "Risk Factors", "Use of
Proceeds", "Capitalization", "Pro Forma Financial
Information", "Selected consolidated Financial Data",
"Management's Discussion and Analysis of Results of Operations
and Financial Condition", Business", "Management", "Certain
Transactions", "Description of Other Debt Obligations" and
"Description of Notes" in the Final Memorandum, agrees with
the accounting records of the Company and its subsidiaries,
excluding any questions of legal interpretation.
References to the Final Memorandum in this paragraph (f)
include any amendment or supplement thereof or thereto at the date of
the letter.
20
The Purchasers shall have also received from Pressman, Ciocca
& Smith a letter stating that the Company's system of internal
accounting controls taken as a whole is sufficient to meet the broad
objectives of internal accounting control insofar as those objectives
pertain to the prevention or detection of errors or irregularities in
amounts that would be material in relation to the financial statements
of the Company and its subsidiaries.
(g) At the Execution Time and at the Closing Date, Pressman
Ciocca & Smith shall have furnished to the Purchasers a letter or
letters, dated respectively as of the Execution Time and as of the
Closing Date, in form and substance satisfactory to the Purchasers,
confirming that they are independent accountants within the meaning of
the Act and the applicable published rules and regulations thereunder
and that they have performed a review of the unaudited statements of
operations of The Wilmington, Delaware System (the "Wilmington System")
for the 3-month period ended March 31, 1995 and the period ended
February 12, 1996, in accordance with Statement on Accounting Standards
No. 71 and stating in effect that:
(i) in their opinion the audited financial statements
and financial statement schedules included in the Final
Memorandum and reported on by them comply in form in all
material respects with the applicable accounting requirements
of the Act and the Exchange Act and the related published
rules and regulations;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Wilmington System;
carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of
significance with respect to the comments set forth in such
letter; a reading of the minutes of the meetings of the
stockholders and directors of the Wilmington System; and
inquiries of certain officials of the Wilmington System who
have responsibility for financial and accounting matters of
the Wilmington System as to transactions and events subsequent
to December 31,
21
1995, nothing came to their attention which caused them to
believe that any unaudited financial statements of the
Wilmington System included in the Final Memorandum do not
comply in form in all material respects with applicable
accounting requirements of the Act and with the published
rules and regulations of the Commission with respect to
financial statements included or incorporated in quarterly
reports on Form 10-Q under the Exchange Act; and said
unaudited financial statements are not in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial
statements included in the Final Memorandum; and
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Wilmington System) set forth in the Final Memorandum,
including the information set forth under the captions
"Offering Memorandum Summary", "Pro Forma Financial
Information" and "Business" in the Final Memorandum, agrees
with the accounting records of the Wilmington System,
excluding any questions of legal interpretation.
References to the Final Memorandum in this paragraph (g)
include any amendment or supplement thereof or thereto at the date of
the letter.
(h) At the Execution Time and at the Closing Date, Coopers &
Lybrand L.L.P. shall have furnished to the Purchasers a letter or
letters, dated respectively as of the Execution Time and as of the
Closing Date, in form and substance satisfactory to the Purchasers,
confirming that they are independent accountants within the meaning of
the Act and the applicable published
22
rules and regulations thereunder and that they have performed a review
of the unaudited combined statements of income of Sammons Cable for the
3-month period ended March 31, 1995, and the 2-month period ended
February 29, 1996, in accordance with Statement on Accounting Standards
No. 71 and stating in effect that:
(i) in their opinion the audited financial statements
and financial statement schedules included in the Final
Memorandum and reported on by them comply in form in all
material respects with the applicable accounting requirements
of the Act and the Exchange Act and the related published
rules and regulations;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by Sammons Cable; carrying
out certain specified procedures (but not an examination in
accordance with generally accepted auditing standards) which
would not necessarily reveal matters of significance with
respect to the comments set forth in such letter; a reading of
the minutes of the meetings of the stockholders and directors
of Sammons Communications, Inc.; and inquiries of certain
officials of Sammons Communications, Inc. who have
responsibility for financial and accounting matters of Sammons
Cable as to transactions and events subsequent to December 31,
1995, nothing came to their attention which caused them to
believe that any unaudited financial statements of Sammons
Cable included in the Final Memorandum do not comply in form
in all material respects with applicable accounting
requirements of the Act and with the published rules and
regulations of the Commission with respect to financial
statements included or incorporated in quarterly reports on
Form 10-Q under the Exchange Act; and said unaudited financial
statements are not in conformity with generally accepted
accounting principles applied on a basis substantially
consistent with that of the audited financial statements
included in the Final Memorandum; and
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited
23
to accounting, financial or statistical information derived
from the general accounting records of Sammons Communications,
Inc. and its subsidiaries) set forth in the Final Memorandum
to, including the information set forth under the captions
"Offering Memorandum Summary", "Pro Forma Financial
Information" and "Business" in the Final Memorandum, agrees
with the accounting records of Sammons Communications, Inc.,
excluding any questions of legal interpretation.
References to the Final Memorandum in this paragraph (h)
include any amendment or supplement thereof or thereto at the date of
the letter.
(i) At the Execution Time and at the Closing Date, Arthur
Andersen LLP shall have furnished to the Purchasers a letter or
letters, dated respectively as of the Execution Time and as of the
Closing Date, in form and substance satisfactory to the Purchasers,
confirming that they are independent accountants within the meaning of
the Act and the applicable published rules and regulations thereunder
and that they have performed a review of the unaudited interim
financial information of Garden State Cablevision L.P. for the 3-month
period ended and as of March 31, 1996, in accordance with Statement on
Accounting Standards No. 71 and stating in effect that:
(i) in their opinion the audited financial statements
and financial statement schedules included in the Final
Memorandum and reported on by them comply in form in all
material respects with the applicable accounting requirements
of the Act and the Exchange Act and the related published
rules and regulations;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by Garden State
Cablevision L.P.; carrying out certain specified procedures
(but not an examination in accordance with generally accepted
auditing standards) which would not necessarily reveal matters
of significance with respect to the comments set forth in such
letter; a reading of the minutes of the meetings of the
partners of Garden State Cablevision L.P.; and inquiries of
certain officials of Garden State Cablevision L.P.
24
who have responsibility for financial and accounting matters
of Garden State Cablevision L.P. as to transactions and events
subsequent to December 31, 1995, nothing came to their
attention which caused them to believe that:
(1) any unaudited financial statements of
Garden State Cablevision L.P. included in the Final
Memorandum do not comply in form in all material
respects with applicable accounting requirements of
the Act and with the published rules and regulations
of the Commission with respect to financial
statements included or incorporated in quarterly
reports on Form 10-Q under the Exchange Act; and said
unaudited financial statements are not in conformity
with generally accepted accounting principles applied
on a basis substantially consistent with that of the
audited financial statements included in the Final
Memorandum; or
(2) with respect to the period subsequent to
March 31, 1996, there were any changes, at a
specified date not more than five business days prior
to the date of the letter, in the Long-Term Debt or
increases in the Partners' Deficit of Garden State
Cablevision L.P. as compared with the amounts shown
on the March 31, 1996, consolidated balance sheet
included in the Final Memorandum, or for the period
from April 1, 1996, to such specified date there were
any decreases, as compared with the corresponding
period in the preceding year in Net Loss or in
Operating Income, except in all instances for changes
or decreases set forth in such letter, in which case
the letter shall be accompanied by an explanation by
Garden State Cablevision L.P. as to the significance
thereof unless said explanation is not deemed
necessary by the Purchasers.
References to the Final Memorandum in this paragraph (i)
include any amendment or supplement thereof or thereto at the date of
the letter.
25
(j) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Final Memorandum (exclusive of
any amendment or supplement thereof or thereto), there shall not have
been (i) any change or decrease specified in the letter or letters
referred to in paragraphs (f), (g), (h) or (i) of this Section 6 or
(ii) any change, or any development involving a prospective change, in
or affecting the business or properties of the Company and its
subsidiaries the effect of which, in any case referred to in clause (i)
or (ii) above, is, in the judgment of the Purchasers, so material and
adverse as to make it impractical or inadvisable to market the
Securities as contemplated by the Final Memorandum (exclusive of any
amendment or supplement thereof or thereto).
(k) Subsequent to the Execution Time, there shall not have
been any decrease in the rating of any of the Company's debt securities
by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act) or any notice given
of any intended or potential decrease in any such rating or of a
possible change in any such rating that does not indicate the direction
of the possible change.
(l) Prior to the Closing Date, the Company shall have
furnished to the Purchasers evidence that it has obtained all consents
or waivers necessary under the Private Placement Notes (as defined in
the Final Memorandum) to consummate the purchase and sale of the
Securities as herein contemplated.
(m) Prior to the Closing Date, the Company shall have
furnished to the Purchasers such further information, certificates and
documents as the Purchasers may reasonably request.
(n) Concurrently with or prior to the issue and sale of the
Securities by the Company, the Company shall have entered into the New
Bank Credit Facility (as defined in the Final Memorandum) and the
initial borrowings thereunder shall have occurred. The Initial
Purchasers shall have received conformed counterparts thereof and all
other documents and agreements entered into and received thereunder in
connection with the closing of the New Bank Credit Facility. There
shall exist at and as of the Closing Date (after giving
26
effect to the transactions contemplated by this Agreement) no condition
that would constitute a default (or an event that with notice or lapse
of time, or both, would constitute a default) under the agreement
governing the New Bank Credit Facility.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Purchasers and counsel for the
Purchasers, this Agreement and all obligations of the Purchasers hereunder may
be canceled at, or at any time prior to, the Closing Date by the Purchasers.
Notice of such cancelation shall be given to the Company in writing or by
telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section 6 shall
be delivered at the office of Cravath, Swaine & Moore, counsel for the
Purchasers, at Worldwide Plaza, 825 Eighth Avenue, New York, New York, on the
Closing Date.
7. Reimbursement of Purchasers' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Purchasers set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof 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 other than by reason of a
default by the Purchasers, the Company will reimburse the Purchasers upon demand
for all out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been incurred by it in connection with the proposed
purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Purchaser, the directors, officers, employees
and agents of each Purchaser and each person who controls any Purchaser within
the meaning of either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities, joint or several, to which they or any of them
may become subject under the Act, the Exchange Act or other Federal or state
statutory law or regulation, at common law or otherwise,
27
insofar as such losses, claims, damages or liabilities (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 Memorandum, the Final
Memorandum or any Rule 144A Information provided by the Company to any holder or
prospective purchaser of Securities pursuant to Section 5(h), 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 not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made in
the Preliminary Memorandum or the Final Memorandum, or in any amendment thereof
or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of the Purchasers
specifically for inclusion therein. This indemnity agreement will be in addition
to any liability which the Company may otherwise have.
(b) Each Purchaser severally agrees to indemnify and hold
harmless the Company, its directors, its officers, and each person who controls
the Company within the meaning of either the Act or the Exchange Act, to the
same extent as the foregoing indemnity from the Company to each Purchaser, but
only with reference to written information relating to such Purchaser furnished
to the Company by or on behalf of such Purchaser specifically for inclusion in
the Preliminary Memorandum or the Final Memorandum, or in any amendment thereof
or supplement thereto. This indemnity agreement will be in addition to any
liability which any Purchaser may otherwise have. The Company acknowledges that
the statements set forth in the last paragraph of the cover page and under the
heading "Plan of Distribution" in the Preliminary Memorandum and the Final
Memorandum constitute the only information furnished in writing by or on behalf
of the several Purchasers for inclusion in the Preliminary Memorandum or the
Final Memorandum, and you, as the Representatives, confirm that such statements
are correct.
28
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be
29
sought hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Purchasers agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company and one or more of
the Purchasers may be subject in such proportion as is appropriate to reflect
the relative benefits received by the Company and by the Purchasers from the
offering of the Securities; provided, however, that in no case shall the
Purchasers (except as may be provided in any agreement among Purchasers relating
to the offering of the Securities) be responsible for any amount in excess of
the purchase discount or commission applicable to the Securities purchased by
the Purchasers hereunder. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Company and the Purchasers
shall contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and of the
Purchasers in connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. Benefits received
by the Company shall be deemed to be equal to the total net proceeds from the
offering (before deducting expenses), and benefits received by the Purchasers
shall be deemed to be equal to the total purchase discounts and commissions, in
each case as set forth on the cover page of the Final Memorandum. Relative fault
shall be determined by reference to whether any alleged untrue statement or
omission relates to information provided by the Company or the Purchasers. The
Company and the Purchasers agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (d), 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
30
misrepresentation. For purposes of this Section 8, each person who controls a
Purchaser within the meaning of either the Act or the Exchange Act and each
director, officer, employee and agent of a Purchaser shall have the same rights
to contribution as such Purchaser, and each person who controls the Company
within the meaning of either the Act or the Exchange Act and each officer and
director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (d).
9. Default by a Purchaser. If any one or more Purchasers shall
fail to purchase and pay for any of the Securities agreed to be purchased by
such Purchaser or Purchasers hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Purchasers shall be obligated severally to take up and
pay for (in the respective proportions which the principal amount of Securities
set forth opposite their names in Schedule I hereto bears to the aggregate
principal amount of Securities set forth opposite the names of all the remaining
Purchasers) the Securities which the defaulting Purchaser or Purchasers agreed
but failed to purchase; provided, however, that in the event that the aggregate
principal amount of Securities which the defaulting Purchaser or Purchasers
agreed but failed to purchase shall exceed 10% of the aggregate principal amount
of Securities set forth in Schedule I hereto, the remaining Purchasers shall
have the right to purchase all, but shall not be under any obligation to
purchase any, of the Securities, and if such nondefaulting Purchasers do not
purchase all the Securities, this Agreement will terminate without liability to
any nondefaulting Purchaser or the Company. In the event of a default by any
Purchaser as set forth in this Section 9, the Closing Date shall be postponed
for such period, not exceeding seven days, as the Purchasers shall determine in
order that the required changes in the Final Memorandum or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Purchaser of its liability, if any, to the Company
and any nondefaulting Purchaser for damages occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Purchasers, by notice given to the
Company prior to delivery of and payment for the Securities, if prior to such
time
31
(i) trading in securities generally on the New York Stock Exchange shall have
been suspended or limited or minimum prices shall have been established on such
Exchange, (ii) a banking moratorium shall have been declared either by Federal
or New York State authorities or (iii) there shall have occurred any outbreak or
escalation of hostilities, declaration by the United States of a national
emergency or war or other calamity or crisis the effect of which on financial
markets is such as to make it, in the judgment of the Purchasers, impracticable
or inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Final Memorandum (exclusive of any amendment or supplement
thereof or thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Purchasers set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of the Purchasers or the Company or any of
the officers, directors or controlling persons referred to in Section 8 hereof,
and will survive delivery of and payment for the Securities. The provisions of
Sections 7 and 8 hereof shall survive the termination or cancelation of this
Agreement.
12. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Purchasers, will be mailed,
delivered or telegraphed and confirmed to it, at Seven World Trade Center, New
York, New York, 10048; or, if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it at 200 Cresson Boulevard, Oaks, PA 19456,
attention of Samuel W. Morris, Jr., Esq.
13. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8 hereof,
and no other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
32
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
between the Company and the several Purchasers.
Very truly yours,
LENFEST COMMUNICATIONS, INC.
By:_____________________________
Name: Harry F. Brooks
Title: Executive Vice
President
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
SALOMON BROTHERS INC
By:______________________________
Name:
Title:
For itself and the other several
Purchasers named in Schedule I
to the foregoing Agreement.
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SCHEDULE I
Principal Amount
of Notes
Underwriter to be Purchased
----------- ----------------
Salomon Brothers Inc............................... $165,000,000
Toronto Dominion Securities (USA) Inc. 105,000,000
CIBC Wood Gundy Securities Corp.................... 15,000,000
NationsBanc Capital Markets, Inc................... 15,000,000
------------
Total..................................... $300,000,000
============
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EXHIBIT A
Form of Investment Letter
for Institutional Accredited Investors
Lenfest Communications, Inc.
c/o The Bank of New York
101 Barclay Street
New York, NY 10286
Dear Sirs:
In connection with our proposed purchase of $ aggregate
principal amount of 10.50% Senior Subordinated Notes Due 2006 (the "Notes") of
Lenfest Communications, Inc., a Delaware corporation (the "Company"), we confirm
that:
1. We understand that the Notes have not been registered under
the Securities Act of 1933 (the "Securities Act"), and may not be sold
except as permitted in the following sentence. We understand and agree,
on our own behalf and on behalf of any accounts for which we are acting
as hereinafter stated, (x) that such Notes are being offered only in a
transaction not involving any public offering within the meaning of the
Securities Act, (y) that if we decide to resell, pledge or otherwise
transfer such Notes within three years after the date of the original
issuance of the Notes or, thereafter, if within three months after we
cease to be an affiliate (within the meaning of Rule 144 under the
Securities Act) of the Company, such Notes may be resold, pledged or
transferred only (i) to the Company, (ii) so long as the Notes are
eligible for resale pursuant to Rule 144A under the Securities Act
("Rule 144A"), to a person whom we reasonably believe is a "qualified
institutional buyer" (as defined in Rule 144A) ("QIB") that purchases
for its own account or for the account of another QIB and to whom
notice is given that the resale, pledge or transfer is being made in
reliance on Rule 144A (as indicated by the box checked by the
transferor on the Certificate of Transfer on the reverse of the
certificate for the Notes), (iii) in an offshore transaction in
accordance with Rule 903 or 904 under the Securities Act, (iv) pursuant
to an exemption from registration under the Securities Act provided by
Rule 144 (if applicable) under the Securities Act, or (v) pursuant to
an effective registration statement under the Securities Act, in each
case in accordance with any applicable securities laws of any state of
the United States. We further understand that in connection with any
transfer of the Notes by us that the Company and the Trustee
may request, and if so requested we will furnish, such certificates,
legal opinions and other information as they may reasonably require to
confirm that any such transfer complies with the foregoing
restrictions.
2. We are able to fend for ourselves in the transactions
contemplated by this Offering Memorandum, we have knowledge and
experience in financial and business matters as to be capable of
evaluating the merits and risks of our investment in the Notes, and we
and any accounts for which we are acting are each able to bear the
economic risk of our or its investment and can afford the complete loss
of such investment.
3. We understand that the minimum principal amount of Notes
that may be purchased by an institutional accredited investor is
$100,000.
4. We understand that the Company, Salomon Brothers Inc,
Toronto Dominion Securities (USA) Inc., CIBC Wood Gundy Securities
Corp. and NationsBanc Capital Markets, Inc., as the initial purchasers
of the Notes ("Initial Purchasers"), and others will rely upon the
truth and accuracy of the foregoing acknowledgements, representations
and agreements, and we agree that if any of the acknowledgements,
representations and warranties made by us in connection with our
purchase of Notes, for our own account or of one or more accounts as to
each of which we exercise sole investment discretion, are no longer
accurate, we shall promptly notify the Company and the Initial
Purchasers.
5. We are acquiring the Notes purchased by us for investment
purposes and not for distribution, for our own account or for one or
more accounts as to each of which we exercise sole investment
discretion, and we are or such account is an institutional "accredited
investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation
D under the Securities Act).
6. We have received a copy of the Offering Memorandum relating
to the Offering of the Notes and acknowledge that we have had access to
such financial and other information, and have been afforded the
opportunity to ask questions of the Company and receive answers
thereto, as we deem necessary in connection with our decision to
purchase Notes.
7. You are entitled to rely upon this letter and you are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any
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administrative or legal proceeding or official inquiry with respect to
the matters covered hereby.
Very truly yours,
------------------------------
(Name of Purchaser)
By:
---------------------------
Date:
-------------------------
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EXHIBIT B
NOTICE TO INVESTORS
Offers and Sales by the Initial Purchasers
- ------------------------------------------
The Notes have not been registered under the Securities Act
and may not be offered or sold in the United States or to, or for the account or
benefit of, U.S. persons except in accordance with an applicable exemption from
the registration requirements thereof. Accordingly, the Notes are being offered
and sold only (1) in the United States to qualified institutional buyers
("Qualified Institutional Buyers") under Rule 144A under the Securities Act and
other institutional "accredited investors" (as defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act) ("Institutional Accredited Investors") in a
private sale exempt from the registration requirements of the Securities Act,
and (2) outside the United States to non-U.S. persons ("foreign purchasers") in
reliance upon Regulation S under the Securities Act. Each Institutional
Accredited Investor that is a purchaser of Notes from an Initial Purchaser will
be required to sign a certificate in the form provided by an Initial Purchaser.
Investor Representations and Restrictions on Resale
- ---------------------------------------------------
Each purchaser of the Notes will be deemed to have represented
and agreed as follows:
(1) it is acquiring the Notes for its own account or for an
account with respect to which it exercises sole investment discretion,
and that it or such account is a Qualified Institutional Buyer, an
Institutional Accredited Investor acquiring the Notes for investment
purposes and not for distribution or a foreign purchaser outside the
United States;
(2) it acknowledges that the Notes have not been registered
under the Securities Act and may not be sold except as permitted below;
(3) it understands and agrees (x) that such Notes are being
offered only in a transaction not involving any public offering within
the meaning of the Securities Act, and (y) that (A) if within three
years after the date of original issuance of the Notes or, thereafter,
if within three months after it ceases to be an affiliate (within the
meaning of Rule 144A under the Securities Act) of the Company, it
decides to resell, pledge or otherwise transfer such Notes on which the
legend set forth below appears, such Notes may be resold, pledged or
transferred only (i) to the Company, (ii) so long as such security is
eligible for resale pursuant to Rule 144A, to a person whom the seller
reasonably believes is a Qualified Institutional Buyer that purchases
for its own account or for the account of a Qualified Institutional
Buyer to whom notice is given that the resale, pledge or transfer is
being made in reliance on Rule 144A (as
indicated by the box checked by the transferor on the Certificate of
Transfer on the reverse of the Note if such Note is not in book-entry
form), (iii) in a transaction complying with the provisions of Rule 904
under the Securities Act, (iv) pursuant to an exemption from the
registration under the Securities Act provided by Rule 144 (if
applicable) under the Securities Act, or (v) pursuant.to an effective
registration statement under the Securities Act, in each case in
accordance with any applicable securities laws of any state of the
United States, (B) the purchaser will, and each subsequent holder is
required to, notify any purchaser of Notes from it of the resale
restrictions referred to in (A) above, if then applicable, and (C) with
respect to any transfer of Notes by an Institutional Accredited
Investor, such holder will deliver to the Company and the Trustee such
certificates and other information as they may reasonably require to
confirm that the transfer by it complies with the foregoing
restrictions including, without limitation, a certificate in the form
of Exhibit A;
(4) it understands that the Notes will, until the third
anniversary of their date of original issue, unless otherwise agreed by
the Company and the holder thereof, bear a legend substantially to the
following effect:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER
HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF
THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED (X) PRIOR TO THE THIRD ANNIVERSARY OF
THE ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY HERETO) OR
(Y) BY ANY HOLDER THAT WAS AN AFFILIATE OF THE COMPANY AT ANY
TIME DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH
TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE COMPANY, (2) SO
LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER
TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED
BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF
TRANSFER ON THE REVERSE OF THIS SECURITY), (3) IN A
TRANSACTION COMPLYING WITH THE PROVISIONS OF RULE 903 OR 904
UNDER THE SECURITIES ACT, (4) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF
APPLICABLE) UNDER THE SECURITIES ACT, OR (5) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
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EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES. AN INSTITUTIONAL ACCREDITED
INVESTOR HOLDING THIS SECURITY AGREES THAT IT WILL FURNISH TO
THE COMPANY AND THE TRUSTEE SUCH CERTIFICATES AND OTHER
INFORMATION AS THEY MAY REASONABLY REQUIRE TO CONFIRM THAT ANY
TRANSFER BY IT OF THIS SECURITY COMPLIES WITH THE FOREGOING
RESTRICTIONS. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT
IS (1) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF
RULE 144A OR (2) AN INSTITUTION THAT IS AN "ACCREDITED
INVESTOR" AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER
THE SECURITIES ACT AND THAT IS HOLDING THIS SECURITY FOR
INVESTMENT PURPOSES AND NOT FOR DISTRIBUTION OR (3) A NON-U.S.
PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR AN
ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH (0)(2) OF
RULE 902 UNDER) REGULATION S UNDER THE SECURITIES ACT."
(5) it (i) is able to fend for itself in the transactions
contemplated by this Offering Memorandum; (ii) has such knowledge and
experience in financial and business matters as to be capable of
evaluating the merits and risks of it prospective investment in the
Notes; and (iii) has the ability to bear the economic risks of its
prospective investment and can afford the complete loss of such
investment;
(6) It has received a copy of the Offering Memorandum relating
to the offering of the Notes and acknowledges that it has had access to
such financial and other information, and has been afforded the
opportunity to ask questions of the Company and receive answers
thereto, as it deems necessary in connection with its decision to
purchase Notes; and
(7) it understands that the Company, the Initial Purchasers
and other will rely upon the truth and accuracy of the foregoing
acknowledgements, representations and agreements and agrees that if any
of the acknowledgements, representations and warranties deemed to have
been made by it by its purchase of Notes are no longer accurate, it
shall promptly notify the Company and the Initial Purchaser. If it is
acquiring the Notes as a fiduciary or agent for one or more investor
accounts, it represents that it has sole investment discretion with
respect to each such account and it has full power to make the
foregoing acknowledgements, representations and agreements on behalf of
such account.
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