EXHIBIT 2.01
STOCK PURCHASE AGREEMENT
THIS AGREEMENT, dated April 9, 1999 by and between the Shareholders of
Xxxxxx Communications Corp. ("Xxxxxx") listed on the signature page hereto
(individually a "Shareholder" and collectively "Shareholders"), and Adelphia
Communications Corporation, a Delaware corporation ("Buyer").
W I T N E S S E T H :
WHEREAS, Shareholders are the owners of all the stock (the "Stock") of
Xxxxxx which, together with the Operating Subsidiaries (as hereinafter defined),
is the owner and operator of the cable television system (the "CATV System"),
and businesses in respect thereof, located in the cities and/or townships listed
on Schedule 4.5 attached hereto (the CATV System, and the businesses of Xxxxxx
and the Operating Companies in respect thereof (other than with respect to the
Excluded Assets), are herein referred to collectively as the "Business"); and
WHEREAS, Shareholders desire to sell, and Buyer desires to purchase, on
the terms and subject to the conditions contained in this Agreement, the Stock,
free and clear of all liens, claims, pledges, restrictions, rights of others,
voting agreements, charges or other encumbrances of any kind or nature
whatsoever, all in accordance with and subject to the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the mutual promises each to the
other made herein, the parties hereto, intending to be legally bound hereby,
agree as follows:
1. Definitions. As used herein, the following terms shall, except where the
context otherwise requires, have the meanings specified in this Section 1 (such
definitions to be equally applicable to the singular and plural forms of the
term defined):
"Agreement" - This Stock Purchase Agreement, as the same may be amended
or modified in accordance with the terms hereof.
"Accounts Receivable" - All accounts receivable of the Cable Companies.
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"Additional Escrow Fund" - As defined in Section 7.1.
"Additional Subscribers" - As defined in Section 2.3.
"Authorizations" - All Governmental Permits and other approvals,
authorizations or agreements necessary to own and operate the Business lawfully
and in the manner in which it is now being operated.
"Authority" - any federal, state or local governmental authority or
entity having regulatory or other authority or jurisdiction over the Xxxxxx
Companies, or any of them.
"Bank Debt" - Obligations of the Cable Companies referenced in a
certain Amended and Restated Revolving Credit and Term Loan Agreement dated June
3, 1998, as amended, with First Union N.A., and the other banks party thereto.
"Benefit Arrangement" means each plan, arrangement, program, agreement
or commitment (written or oral) providing for insurance coverage (including,
without limitation, any self-insured arrangements), workers' compensation,
disability benefits, supplemental unemployment benefits, vacation benefits,
retirement benefits, life, health or accident benefits (including, without
limitation, any "voluntary employees' beneficiary association" as defined in
Section 501(c)(9) of the Code) or for deferred compensation, profit-sharing,
bonuses, stock options, stock appreciation rights, stock purchase or other forms
of incentive compensation or post-retirement insurance, compensation or benefits
which (a) is not a Welfare Plan, Pension Plan or Multiemployer Plan, (b) is
entered into, maintained, contributed to or required to be contributed to, as
the case may be, by Xxxxxx or any ERISA Affiliate or under which Xxxxxx or any
ERISA Affiliate may incur any liability, and (c) covers any Employee or former
employee of Xxxxxx or any ERISA Affiliate (with respect to their relationship
with such entity).
"Business" - As defined in the first WHEREAS paragraph.
"Business Assets" - As described in Section 4.10.
"Buyer" - As defined in the first paragraph of this Agreement, its
successors and assigns.
"Cable Companies" - Xxxxxx and the Operating Subsidiaries.
"Cash Balance" - As defined in Section 2.3.
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"CATV" - cable television.
"CATV System" - As defined in the first WHEREAS paragraph.
"Closing and Closing Date" - As defined in Section 3.
"Code" - The Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.
"Communications Act" - The Communications Act of 1934, as amended,
including all provisions of the Cable Communications Policy Act of 1984, the
Cable Television Consumer Protection and Competition Act of 1992, and the
provisions of the Telecommunications Act of 1996.
"Copyright Act" - As defined in Section 4.6.
"Damage Notice" - As defined in Section 12.
"Employees" mean all persons employed by Xxxxxx or the Business as of
the date specified or, if no date is specified, as of the date hereof.
"Employee Plan" means all Benefit Arrangements, Multiemployer Plans,
Pension Plans and Welfare Plans.
"Encumbrances" - Collectively, all debts, claims, liabilities,
obligations, Taxes, liens, mortgages, security interests, claims, pledges,
restrictions, voting agreements, title exceptions, rights of others or other
encumbrances of any kind or nature whatsoever.
"Environmental Laws" - Any statute, ordinance, code, law (common or
otherwise), rule, regulation or order pertaining to land use, air, soil, surface
water, groundwater (including the protection, cleanup, removal, remediation or
damage thereof), or to the protection of public health and safety or any other
environmental matter, including the following laws as amended and if effect from
time to time up to the date hereof: (A) Clean Air Act (42 U.S.C. SS7401, et
seq.); (B) Clean Water Act (33 U.S.C. SS1251, et seq.); (C) Resource
Conservation and Recovery Act (42 U.S.C. SS6901, et seq.); (D) Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. SS9601, et
seq.); (E) Safe Drinking Water Act (42 U.S.C. SS300f, et seq.); and (F) Toxic
Substance Control Act (15 U.S.C. SS2601, et seq.).
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the regulations promulgated thereunder.
"ERISA Affiliate" means any entity which is (or at any relevant time
was) a member of a "controlled group of corporations" with, under "common
control" with, or a member of an "affiliated service group" with, or otherwise
required to be aggregated with, Xxxxxx, as set forth in Section 414(b), (c), (m)
or (o) of the Code.
"Escrow Agreement" - The form of Escrow Agreement attached as Exhibit
A.
"Estimate Statement" - As defined in Section 2.3.
"Existing Employment Agreements" - As defined in Section 4.14.
"Excluded Assets" - As defined in Section 6.2.
"Excluded Liabilities" - As defined in Section 6.2.
"Family Loans" - All loans from the Xxxxxx Companies to the lineal
descendants of Xxxxxxxx X. Xxxxxx, as reflected on the Financial Statements and
as made by the Xxxxxx Companies prior to the Closing Date.
"FAA" - The Federal Aviation Administration.
"FCC" - The Federal Communications Commission.
"Final Statement" - As defined in Section 2.3.
"Financial Statements" - As defined in Section 4.13.
"FTC" - The Federal Trade Commission.
"Governmental Permits" - All franchises and related agreements,
approvals, authorizations, permits, licenses, easements, registrations,
qualifications, leases, variances and similar rights obtained from any
Authority.
"Hazardous Substances" - Any pollutant, contaminant, hazardous or toxic
substance, material, constituent or waste or any pollutant or any release
thereof that is labeled or regulated as such by any Authority pursuant to an
Environmental Law, including, without limitation, petroleum or petroleum
compounds, radioactive materials, asbestos or any asbestos-containing material,
or polychlorinated biphenyl's.
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"Xxxxxx" - As defined in the first WHEREAS clause hereof.
"Xxxxxx Companies" - Xxxxxx, the Operating Subsidiaries and all other
subsidiaries (direct or indirect) of Xxxxxx.
"HSR Act" - As defined in Section 4.12.
"Indemnitor" - As defined in Section 13.4.
"Indemnitee" - As defined in Section 13.4.
"Knowledge" - Whenever the phrases "knowledge of Shareholders" or
"known to Shareholders" is used, Shareholders shall be deemed to know of all
information of which any officer or general manager of any of the Cable
Companies is aware.
"Listed Contracts" - As defined in Section 4.11.
"Material Adverse Effect" - A material adverse effect on the condition,
financial or otherwise, results of operations or prospects of the Business or
the Business Assets. For purposes hereof, changes applicable to the CATV
business generally, federal or other governmental rate regulation,
"over-building", the offering of CATV service by another person within the
municipalities served by the CATV System, or the issuance to another person of a
franchise in a territory served by the CATV System, shall not be considered to
have a Material Adverse Effect.
"Material Business Contract" - Any contract, other than Excluded Assets
and Excluded Liabilities, requiring payments by or to any of the Cable Companies
of, in the aggregate, $50,000.00 or more during the current term of such
contract, and all headend, tower and microwave site leases and fiber leases.
"Multiemployer Plan" means any "multiemployer plan," as defined in
Section 4001(a)(3) or 3(37) of ERISA, which (a) Xxxxxx or any ERISA Affiliate
maintains, administers, contributed to or was required to contribute to, or
under which Xxxxxx or any ERISA Affiliate may incur any liability and (b) covers
any employee or former employee of Xxxxxx or any ERISA Affiliate (with respect
to their relationship with any such entity).
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"Non-competition Agreement" - As defined in Section 9.9.
"Non-consenting Authorizations" - As defined in Section 7.1.
"Officer Agreement" - As defined in Section 9.10.
"Operating Subsidiaries" - The subsidiaries of Xxxxxx listed on
Exhibit B.
"Pension Plan" means any "employee pension benefit plan" as defined in
Section 3(2) of ERISA (other than a Multiemployer Plan) which (a) Xxxxxx or any
ERISA Affiliate maintains, administers, contributes to or is required to
contribute to or, within the five years prior to the Closing Date, maintained,
administered, contributed to or was required to contribute to, or under which
Xxxxxx or any ERISA Affiliate may incur any liability (including, without
limitation, any contingent liability); and (b) covers any employee or former
employee of Xxxxxx or any ERISA Affiliate (with respect to their relationship
with any such entity).
"Permitted Encumbrances" - Liens for Taxes not yet due and payable,
defects or encumbrances of title which, either individually or in the aggregate,
do not materially interfere with the use or ownership of property, liens to be
released immediately after, at or prior to Closing, leases for Real Property, to
the extent disclosed in Schedule 4.8 or Schedule 4.11, municipal, zoning and
other ordinances, standard title exceptions, easements for utilities, recorded
building and use restrictions and covenants which, either individually or in the
aggregate, do not materially interfere with the use or ownership of property.
"Purchase Price" - As defined in Section 2.2.
"Real Property" - As defined in Section 4.8.
"Severance Arrangements" - As defined in 6.1.
"Shareholder" - As defined in the first paragraph of this Agreement.
"Shareholders" - As defined in the first paragraph hereof.
"Stock" - As defined in the first WHEREAS paragraph.
"Tangible Personal Property" - As defined in Section 4.10.
"Tax" - Any federal, state, local or foreign income, gross receipts,
windfall profits, property, production, sales, use, license, excise, franchise,
capital, transfer, employment, withholding, or other tax or governmental
assessment, together with any interest, additions, or penalties with respect
thereto and any interest in respect of such additions or penalties.
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"Tax Return" - Any tax return, declaration of estimated tax, tax report
or other tax statement, or any other similar filing required to be submitted to
any Authority with respect to any Tax.
"Welfare Plan" means any "employee welfare benefit plan" as defined in
Section 3(1) of ERISA, other than a Multiemployer Plan, which (a) Xxxxxx or any
ERISA Affiliate maintains, administers, contributes to or is required to
contribute to, or under which Xxxxxx or any ERISA Affiliate may incur any
liability and (b) covers any employee or former Employee of Xxxxxx or any ERISA
Affiliate (with respect to their relationship with any such entity).
2. Stock Purchased/Purchase Price.
2.1 Stock Purchase. Shareholders agree to sell, assign
and convey, and Buyer agrees to buy, as of the Closing Date, all the Stock.
2.2. Purchase Price. In consideration of the sale, assignment and
conveyance to Buyer of the Stock, and for entering into this Agreement, Buyer
agrees to pay to Shareholders the sum of $1,200,000,000.00, subject to reduction
or addition as hereinafter set forth (collectively the "Purchase Price"), to be
paid at Closing by wire transfer to a bank or banks designated by Shareholders.
2.3. Adjustments to Purchase Price. The Purchase Price shall be
adjusted as follows:
a. Acquisition Adjustments. In the event that the Cable
Companies fail to acquire, through the acquisition of CATV systems not owned by
the Cable Companies, at least 2,200 subscribers (other than subscribers of the
CATV systems being acquired pursuant to that certain Asset Purchase Agreement
dated February, 1999, with X. Xxxxxx Associates, Inc. (the "Xxxxxx Agreement"))
(the "Additional Subscribers"), the Purchase Price shall be decreased by (i) the
excess of 2,200 over the number of subscribers so acquired, times (ii)
$1,500.00; provided, however, notwithstanding the foregoing provisions of this
Section 2.3(a), in the event any of the Cable Companies enters into a purchase
agreement relative to all or any portion of the Additional Subscribers, and the
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transactions contemplated by such purchase agreement(s) do not close until after
the Closing Date, then the number of subscribers to be purchased pursuant to
such purchase agreement(s) will not be included in the calculation contemplated
by this Section 2.3(a), and any amounts payable after the Closing Date pursuant
to such purchase agreement(s) (less purchase price deposits made in connection
therewith) will be included as a liability in Section 2.3(c). In addition, with
respect to the Xxxxxx Agreement: (i) in the event such transaction does not
close until after the Closing Date, any amounts payable after the Closing Date
pursuant to the Xxxxxx Agreement (less purchase price deposits made in
connection therewith) will be included as a liability in Section 2.3(c); and
(ii) in the event the Xxxxxx Agreement is terminated for any reason on or prior
to the Closing Date, then the Purchase Price shall be reduced by the purchase
price (less the purchase price deposits, if any made thereunder) payable
thereunder.
b. Cash Balance. The Purchase Price shall be increased by the
sum of all cash and cash equivalents held by the Cable Companies on the Closing
Date (including the funds to be realized on the Closing Date in connection with
the payment of all amounts outstanding under the Family Loans (the "Cash
Balance")).
c. Accrued Liabilities/Accounts Payable. The Purchase Price
shall be decreased by the amount of all liabilities of the Cable Companies,
determined in accordance with generally accepted accounting principles,
allocable to the period ending as of the day before the Closing Date, including
the principal balance of the Bank Debt and costs due on account of the
prepayment thereof (including any amounts necessary to satisfy any interest rate
swap agreements), accounts payable, any Tax payments due and payable by any of
the Cable Companies for all Tax periods ending prior to the Closing Date
(including, without limitation, Tax liabilities attributable to the distribution
or other disposition of the Excluded Assets and the Excluded Liabilities), and
any amounts payable on or after the Closing Date with respect to Additional
Subscribers or pursuant to the Xxxxxx Agreement, but excluding deferred income
taxes.
d. Payments for Services/Expenses/Other Income. Without
duplication with Section 2.3(c) hereof, the Purchase Price shall be increased or
decreased to take into account a pro ration of all income and expense such that
all income and expense of the Cable Companies attributable to the period ending
on the day before the Closing Date shall be for the benefit (or detriment) of
Shareholders, and all income and expense of the Cable Companies attributable to
the period beginning on the Closing Date shall be for the benefit (or detriment)
of Buyer.
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e. Pre-payments. The Purchase Price shall be increased for all
deposits and prepaid expenses of the Business.
f. Accounts Receivable. The Purchase Price shall be
increased by the Business' Accounts Receivable aged 90 days or less.
g. Launch Fees. The Purchase Price shall be decreased by the
sum of all programmer "launch" fees received by the Cable Companies during 1997,
1998 and 1999 which, if amortized over the period during which the Cable
Companies are contractually obligated to carry the subject programming, would be
allocated to the period beginning on the Closing Date.
h. Capital Expenditures. The Purchase Price shall be decreased
by the amount by which the sums paid or accrued with respect to capital
expenditures fail to include the following sums during the 1999 calendar year:
Southeast Michigan and Southeast Pennsylvania cable plant rebuilds:
$30,000,000.00; and,
Capital Expenditures other than the rebuilds of cable plant in
Southeast Michigan and Southeast Pennsylvania:
$12,000,000.00.
For purposes of determining the Purchase Price adjustment under this Section
2.3(h), in the event the Closing Date is prior to December 31, 1999, the
foregoing decrease in the Purchase Price shall be determined on an annualized
basis (e.g., if the Closing occurs on September 30, the foregoing requirement
will be met if 75% of such sums have been accrued).
i. Application of Adjustments. All adjustments to the Purchase
Price shall increase (or decrease) the Purchase Price paid for each share of
Stock on a proportionate basis.
Attached hereto as Schedule 2.3 is an example of the calculation of the Purchase
Price adjustments contemplated by this Section 2.3, for illustrative purposes
only, prepared by the Shareholders as a good faith estimate of the items set
forth in this Section 2.3 as if the Closing Date was February 28, 1999. It is
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the intention of the parties that, without duplication and without limitation,
the preceding paragraphs result in an adjustment to the Purchase Price to
reflect a pro ration of all expenses incurred by the Cable Companies, and all
payments made on account of services to be provided by the Cable Companies to:
(x) the period up to but not including the Closing Date; or (y) the period
beginning on the Closing Date. Such pro rations shall include, without
limitation and without duplication, interest accrued on the Bank Debt, all
payments received for CATV services to be rendered in whole or in part on or
after the Closing Date, prepayments relating to periods of time on or after the
Closing Date, property and other Taxes and assessments, payroll, accrued
vacation, copyright royalties and fees, rents, pole rents, franchise fees,
license fees, power and utility expenses, deposits and prepaid expenses. The
Shareholders shall prepare and deliver to Buyer, at least five business days
prior to the Closing Date, a statement (the "Estimate Statement") showing, as of
the latest date reasonably possible, the amount reasonably estimated by
Shareholders, in good faith, to be the amount of the Purchase Price adjustments
provided for in this Section 2.3. The Purchase Price adjustments reflected in
the Estimate Statement shall be used in determining the Purchase Price at
Closing. However, such adjustments (and the Purchase Price) shall be
recalculated subsequent to the Closing in accordance with this section. Within
120 days after the Closing Date, the Buyer shall prepare a statement (the "Final
Statement") showing, as of the Closing Date, the Purchase Price adjustments
provided for in this Section 2.3, and the Purchase Price shall be recalculated
to reflect such Purchase Price adjustments. Within 30 days of receipt of the
Final Statement, Shareholders may object thereto. All matters contained within
the Final Statement for which no objection is proposed within such 30 days shall
be deemed accepted. Buyer and Shareholders shall have 60 days from the date of
the preparation and delivery of any objection to the Final Statement by
Shareholders to agree on the resolution thereof. In the event they have not so
agreed within such time, it is agreed that such shall be submitted for
resolution to a national accounting firm to be appointed by Shareholders and
approved by Buyer (provided, if the amount in controversy exceeds the sum of
$5,000,000.00, Shareholders or Buyer may require that such accounting firm
appoint three accountants practicing within such accounting firm to act as a
panel to resolve such dispute). Buyer hereby approves of any "Big Five"
accounting firm selected by Shareholders so long as such firm does not then
serve as the independent auditor of any of the Xxxxxx Companies, Shareholders or
Buyer. The determination by the designated accounting firm of the amounts
properly to be taken into account as Purchase Price adjustments under this
Section 2.3 shall be binding and non-appealable by either party. Within ten days
of an agreement by the parties to an adjustment to the Final Statement, or the
binding determination thereof in accordance with the foregoing, the net amount
owed as a Purchase Price adjustment shall be paid by the obligor thereof to the
other party or parties, together with interest at the rate of 7% per annum,
calculated from the Closing Date. All costs and expenses of the selected
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accounting firm and its services rendered pursuant to this Section 2 shall be
borne by Buyer, on the one hand, and Shareholders, on the other hand, as nearly
as possible in proportion to the amount by which the determination of all
matters related to such costs and expenses varies from the positions of Buyer
and Shareholders on all such matters.
3. Closing. The date of closing ("Closing") hereunder (the "Closing Date") shall
be the later of September 30, 1999, or as specified by Buyer in writing no less
than five nor more than 30 days following the date on which the conditions set
forth in Section 7 and 8 have been satisfied; provided, however, either party
may terminate this Agreement in accordance with the terms of Section 14 on
account of a Closing not having occurred on or before March 31, 2000, and any
such termination shall be preceded by 60 days advance notice thereof in
accordance with Section 14, in which case the Closing Date shall not be later
than May 30, 2000. Notwithstanding the foregoing; (a) Shareholders shall have
the right to delay closing to March 31, 2000, in order to obtain the consents of
the FCC, Xxxxxxxx Communications Group, Inc. and Xxxxxx Xxxxx (or entities
controlled by him), with respect to the transfer of the broadcast interests
included in the Excluded Assets as provided for herein; (b) in no event shall
Closing occur other than on the last day of a calendar month; (c) in no event
shall Closing occur in the month of December; and (d) in the event Closing does
not occur on or before October 31, 1999, Shareholders shall have the right to
extend the Closing Date until January 31, 2000.
4. Shareholders' Representations, Warranties and Covenants. Each of the
Shareholders hereby jointly and severally represent, warrant and covenant to
Buyer that:
4.1 Organization of Shareholders/Authority and Enforcement. Each
Shareholder is a duly formed trust, formed under the laws of the Commonwealth of
Pennsylvania.
4.2 Authority to Execute and Consummate Agreement. The execution,
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delivery and performance of this Agreement have been duly and validly authorized
by all necessary action on the part of Shareholders. This Agreement has been
duly executed and delivered by Shareholders and constitutes, and each contract
or written undertaking delivered by Shareholders to Buyer pursuant hereto will
constitute, the legal, valid and binding obligation of Shareholders enforceable
in accordance with its terms, except to the extent such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or
equitable principles of general application relating to or limiting creditors'
rights. Assuming the receipt of the consents referenced in Schedule 4.12, the
execution, delivery and performance of this Agreement by Shareholders does not
and, as of the Closing, will not, result in a breach or violation of, or
constitute a default (or an event which, with or without the passage of time or
the giving of notice, or both, will constitute a breach or default) under, any
trust or other agreement, instrument, statute, ordinance, rule, regulation or
order to which any of the Xxxxxx Companies or Shareholders is a party or is
bound.
4.3 Organization and Good Standing of the Cable Companies. The Cable
Companies are duly organized corporations, validly existing, and in good
standing under the laws of their respective states of incorporation, and have
all requisite power and authority to own and operate their respective assets and
to carry on the Business at the places and in the manner owned and operated.
Schedule 4.3 lists all directors and officers of the Cable Companies.
4.4 Ownership of Capital Stock of Company; Capitalization. Each
Shareholder owns the number of shares of Stock set forth opposite such
Shareholder's name on Schedule 4.4, free and clear of all liens, security
interests, pledges, claims, options, restrictions, voting agreements, and rights
of others. Xxxxxx has 48,168.46 issued and outstanding shares of stock, all of
which are validly issued, fully paid and non-assessable and held of record by
the Shareholders. Except for the rights of certain Shareholders to purchase
additional shares of Xxxxxx, there are no outstanding options or other similar
rights to purchase any shares of stock of Xxxxxx or the Operating Subsidiaries.
All existing options or warrants to purchase additional shares of stock of
Xxxxxx shall be exercised or extinguished before the Closing Date. Any
additional shares of Xxxxxx stock issued prior to the Closing Date on account of
the exercise of an option or warrant to purchase such shares shall be
transferred to Buyer on the Closing Date in accordance with the terms hereof.
Between the date hereof and the Closing Date, no transfer of record ownership
of, or beneficial interest in, any of the Stock will be made (other than to
Xxxxxx, among the Shareholders or to trusts formed for lineal descendants of
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beneficiaries of the Shareholders, provided all such transfers are subject to
the terms of this Agreement and the transferees have agreed in writing to be
bound by, and a party to, this Agreement) and no liens, security interests,
pledges, claims, options, restrictions, voting agreements and rights of others
with respect to the Stock will be created.
4.5 Permits and Authorizations.
(a) The Cable Companies have all Authorizations from the FCC
and any Authority granting a franchise necessary to own and operate the Business
lawfully and in the manner in which it is now operated.
(b) Schedule 4.5 contains a true and complete list of all
Authorizations issued to the Cable Companies by the FCC and any Authority
granting any franchise, together with the expiration date thereof.
(c) Shareholders have delivered to Buyer true and complete
copies of all Authorizations issued to the Cable Companies by the FCC and any
Authority granting any franchise in effect on the date hereof. All such
Authorizations are in full force and effect (subject to expiration at the end of
their current term or as indicated on Schedule 4.5) and are valid, binding and
enforceable upon the Cable Company that is a party thereto and, to the
Shareholders' knowledge, the other parties thereto, in accordance with their
terms, except to the extent such enforceability may be affected by bankruptcy,
insolvency, or similar laws affecting creditor's rights generally and by
judicial discretion in the enforcement of equitable remedies. Except as
disclosed in Schedule 4.5, the Cable Companies are in material compliance with
the terms of the Authorizations granted by the FCC and any Authority granting a
franchise, and as of the date of this Agreement none of the Cable Companies has
received any written notice (or to the Shareholders' knowledge, after due
inquiry of the regional managers of the CATV System, oral notice from such
regional managers) from an Authority to the effect that any of the Cable
Companies are not currently in material compliance with the terms of the
Authorization granted by the FCC and any Authority granting a franchise.
(d) Except as disclosed on Schedule 4.5, there exists no fact
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or matter known to Shareholders which would constitute a legally valid basis for
revocation, suspension or termination of an Authorization, or elimination of any
rights under an Authorization.
(e) Schedule 4.5 contains a list of all municipalities which
have granted a franchise to the Cable Companies and which, to the knowledge of
Shareholders, have also granted a franchise to any other person such that such
other person has the right to offer CATV services in competition with the Cable
Companies within the geographical area governed by a franchise issued by such
Authority.
(f) Provided all consents specified in Schedule 4.12 are
obtained, the execution, delivery and performance of this Agreement will not
entitle any person or entity to cancel, suspend, terminate or diminish the
rights of any of the Cable Companies under any Authorization by the FCC or an
Authority granting a franchise.
(g) All commitments or obligations to any Authority issuing to
the Cable Companies a franchise in New York, Pennsylvania and Southeast
Michigan, relative to the upgrade or rebuild of the CATV System, have been met
or will be met upon completion of rebuilds presently in progress.
4.6 FCC and Other Regulatory Matters.
(a) During the three year period ending on the Closing Date,
the Cable Companies have submitted all material reports and filings required by
the Communications Act and the FCC's rules, the Copyright Act of 1976, as
amended (the "Copyright Act") and the rules of the Copyright office. All factual
statements made by the Cable Companies in any and all such reports and filings
made by the Cable Companies within the past 36 months are, in all material
respects, accurate and complete.
(b) The Cable Companies maintain appropriate public files as
required by FCC rules. The Cable Companies are providing syndicated exclusivity
and network non-duplication protection to stations entitled thereto which have
requested such protection, and have followed the requirements governing
commercial leased access, origination cablecasting, equal time and personal
attack obligations, obscenity, sponsorship identifications and sponsorship
lists, as specified by FCC rules.
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(c) Except as disclosed on Schedule 4.6, to the knowledge of
the Shareholders, there are no facts, and the Cable Companies have received no
notice or other communication, indicating that the Cable Companies are not in
compliance with all requirements of the FCC's rules or the Communications Act,
or applicable state and local statutes, regulations and ordinances, or that any
FCC license has been revoked, suspended, has expired, or is otherwise not in
full force and effect.
(d) There are no must-carry complaints pending at the FCC
against the Cable Companies. In any case where the FCC has granted a must-carry
complaint against any of the Cable Companies, the television broadcast station
that filed the complaint has been added on the affected CATV System.
(e) All required certificates, permits, and clearances from
Authorities with respect to the CATV System's plant, antenna towers, CARS
stations, microwave transmitters, earth stations, and business radios used by
the Cable Companies have been obtained. All aeronautical frequencies in use in
the CATV System have been properly registered with the FCC, and on the Closing
Date only aeronautical frequencies eligible under 47 C.F.R. SS76.612 shall be in
use. The Cable Companies monitor signal leakage, maintain applicable signal
leakage logs, conduct the cumulative leakage test, demonstrate compliance with
the cumulative criteria by showing a passing cumulative leakage index or a
successful flyover, and comply with the frequency separation standards, all in
compliance with the requirements set forth in 47 C.F.R. SS76.610 through
SS76.619.
(f) Schedule 4.5 sets forth the CATV System's communities
where basic rates are currently regulated. In such communities, rates for basic
service were set by FCC Form 1200 or 1230, as brought forward by Form 1210's.
There are no CPST rate complaints pending against any of the Cable Companies,
nor have any CPST rate complaints been resolved adversely to the Cable Companies
within the last year.
(g) Except as set forth on Schedule 4.12, no Authority or
other person has any right to purchase the CATV System or any portion thereof,
and no Authority for any of the communities served by the CATV System has
15
expressed to the Cable Companies any intention to provide cable television
service, nor are the Cable Companies aware of any such intention.
(h) The Cable Companies have timely made all filings relating
to the CATV System in order to preserve their respective rights under Section
626 of the Communications Act of 1934, as amended.
(i) Schedule 4.6 lists all definitive purchase and sale
agreements pursuant to which the CATV Systems were acquired or sold during the
1997, 1998 and 1999 calendar years. Except as disclosed in Schedule 4.6, no
Cable Company is bound by any contractual non-compete or similar restrictive
covenant. The Cable Companies have paid all amounts that are due and payable
under the purchase and sale agreements referred to above, or such have been
properly accrued as liabilities under Section 2.3(a) hereof.
(j) The Cable Companies have paid all franchise fees that are
due and payable with respect to the operation by the Cable Companies of the CATV
System, or such have been properly accrued as liabilities under Section 2.3(a)
hereof.
(k) The Cable Companies have paid all pole attachment fees
that are due and payable with respect to the operation by the Cable Companies of
the CATV System. As of the date of this Agreement, except as disclosed in
Schedule 4.6, no pole attachment audits are pending and the Cable Companies have
not received written notice of any pending pole attachment audits.
(l) Except for such rearrangements or rehabilitations of cable
trunk of the CATV System as may be necessary in the ordinary course of business,
to the Shareholders' knowledge, none of the Cable Companies has any contractual
obligation to rearrange any of such cable trunk.
4.7 Insurance. All insurance policies pertaining to the Business are in
full force and effect on the date hereof, are valid and enforceable in
accordance with their terms, and are issued by financially sound and reputable
insurance companies.
4.8 Real Property. Schedule 4.8 contains a complete and correct list of
all real property, other than Excluded Assets, in which the Cable Companies have
a fee or leasehold interest (the "Real Property"), specifying whether the Cable
Companies own or lease such property. The Cable Companies have not received any
notice of any condemnation proceeding or other proceeding in the nature of
16
eminent domain in connection with the Real Property. To the knowledge of the
Shareholders, except as disclosed on Schedule 4.19, the Real Property is in
material compliance with all applicable federal, state and local laws, rules,
regulations and ordinances.
4.9 Accounts Receivable. Each Account Receivable is (i) a valid
obligation of the account debtor enforceable in accordance with its terms; and
(ii) in all material respects, a true and correct statement of the account for
merchandise actually sold and delivered to, or for actual services performed for
and accepted by, such account debtor.
4.10 Tangible Personal Property; Business Assets. The tangible personal
property of the Cable Companies (the "Tangible Personal Property"), together
with the other assets used in connection with the Business (the "Business
Assets"), other than certain of the Excluded Assets which relate to the
"corporate" offices of the Business located at 00 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxx, collectively constitute all assets and rights necessary to enable
Buyer to operate the Business as it is currently being operated. Changes in such
assets from the date hereof will consist only of changes made in the ordinary
course of business. The Cable Companies have good and marketable title to all
the Business Assets, free and clear of all Encumbrances, except for Permitted
Encumbrances. None of the Excluded Assets relate to the Business (other than the
"corporate" office of the Business located at 00 Xxxx Xxxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxx). All of the Xxxxxx Companies, other than the Cable Companies,
constitute part of the Excluded Assets.
4.11 Contracts; No Defaults. Schedule 4.11 contains a true and correct
list of all Material Business Contracts, as well as the pole attachment
agreements and retransmission agreements of the Cable Companies (the "Listed
Contracts"). Except as disclosed on Schedule 4.11, each of the Listed Contracts
is in full force and effect and constitutes a valid and binding obligation of,
and is legally enforceable in accordance with its terms against, the parties
thereto. Except as disclosed on Schedule 4.11, there has not been (i) any
failure of any Cable Company which is party to any such Listed Contract (or, to
the knowledge of Shareholders, any other party to any such Listed Contract) to
comply with all material provisions of such Listed Contract, (ii) any material
default by any Cable Company thereunder (or, to the knowledge of Shareholders,
any other party to any such Listed Contract), (iii) any threatened cancellation
17
thereof, (iv) any outstanding dispute thereunder, or (v) any basis for any claim
of material breach or material default thereunder by any Cable Company which is
party to any such Listed Contract (or, to the knowledge of Shareholders, any
other party to any such Listed Contract).
4.12 Approvals and Consents. Except for filings with the FTC and the
U.S. Department of Justice pursuant to the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), and the expiration of the
applicable waiting period thereunder, and the FCC, Xxxxxxxx Communications
Group, Inc. and Xxxxxx Xxxxx (or entities controlled by him) (with respect to
the transfer of the broadcast interests included in the Excluded Assets to the
Shareholders as provided for herein) the only persons whose approval of or
consent to the execution, delivery or performance of this Agreement by
Shareholders is legally or contractually required, or is necessary to preclude
any cancellation, suspension, or termination of or diminution of rights under
any of the Authorizations, are specified on Schedule 4.12. Schedule 4.12
includes any persons with rights of first refusal with respect to transfers or
assignments of any of the Business Assets.
4.13 Financial Information; Change in Condition of Assets; Liabilities.
Attached hereto as Schedule 4.13 are: (a) true and complete copies of audited
statements of income of the Xxxxxx Companies for the twelve months ended
December 31, 1997 and December 31, 1998, statements of cash flows for the same
periods, the related balance sheets as of such dates, and the related schedules
and notes thereto, each of which was prepared from books and records of account
of the Xxxxxx Companies kept in the normal course of business and in accordance
with generally accepted accounting principles, consistently applied in
accordance with the Xxxxxx Companies' past practices, and together present
fairly the financial position of the Xxxxxx Companies as at such dates and the
results of their operations for the periods covered thereby; (b) true and
complete copies of unaudited statements of income of the Business for the twelve
months ended December 31, 1997 and December 31, 1998, the related balance sheets
as of such dates, each of which was prepared from books and records of account
of the Cable Companies kept in the normal course of business and in accordance
with generally accepted accounting principles, consistently applied in
accordance with the Cable Companies' past practices, and together present fairly
the financial position of the Business as at such dates and the results of their
operations for the periods covered thereby (the foregoing information related to
the Business being referred to herein as the "Financial Statements"); and (c) a
18
true and complete report, prepared from the books and records of the Cable
Companies, showing the number of subscribers of the Cable Companies as at the
dates indicated thereon. Since December 31, 1998 the Cable Companies have:
(i) not borrowed any money (other than as allowed under the Bank Debt);
(ii) paid all obligations as they have become due; and
(iii) not knowingly waived any right of material value.
Except as set forth on the Financial Statements, there are no material
liabilities, debts, or obligations of the Cable Companies except for:
obligations under Authorizations; contractual obligations; Permitted
Encumbrances; obligations arising in the ordinary course of business; and
Excluded Liabilities. Except as set forth in Schedule 4.13, since January 1,
1999, there have been no changes to the condition of the Business Assets the
result of which would have a Material Adverse Effect, and no material portion of
the Business Assets has been removed from the Business except for Business
Assets disposed of or consumed in the ordinary course of business, or Business
Asset (other than any portion of the CATV System) replaced by replacement
property of substantially equivalent kind and use. For purposes hereof, the
accrual as income of the receipt of launch fees from programmers in the year of
receipt shall be deemed to be in accordance with generally accepted accounting
principles.
4.14 Employees.
(a) Schedule 4.14 contains a complete list of Employees,
including such Employee's location, position, current salary or hourly wages and
other cash compensation payable to each Employee. Except as set forth in
Schedule 4.14, none of the Cable Companies is a party to any labor agreement
with respect to its Employees with any labor organization, group or association
and, except as disclosed on such schedule, within the three years preceding the
date hereof, none of the Cable Companies has experienced any attempt by
organized labor or its representatives to enter into a binding agreement with
organized labor that would cover the Employees of such Cable Company not
otherwise so covered. Except as set forth in Schedule 4.14 or Schedule 4.19,
there is no unfair labor practice charge or complaint against any of the Cable
Companies pending before the National Labor Relations Board or any other
governmental agency arising out of any such Cable Company's activities; there is
no labor strike or labor disturbance pending against any of the Cable Companies
19
nor is any material grievance currently being asserted against any such entity;
and, none of the Cable Companies has experienced a work stoppage within the past
three years.
(b) Except as set forth in Schedule 4.19, the Cable Companies
are in material compliance with all applicable legal requirements respecting
employment practices, terms and conditions of employment, wages and hours, equal
employment opportunity, and the payment of social security and similar taxes,
and none of them are engaged in any unfair labor practice. Except as set forth
in Schedules 4.14 and 4.19, none of the Cable Companies are liable for any
claims for past due wages or any penalties for failure to comply with any of the
foregoing which will not be included in the Purchase Price adjustment set forth
in Section 2.3.
(c) Except with respect to the employment agreements set forth
on Schedule 4.11 and Schedule 4.14 (including agreements with any labor
organization reflected on Schedule 4.14) (the "Existing Employment Agreements"),
none of the Cable Companies entered into any severance or similar arrangement in
respect of any present or former Employee that will result in any obligations
(absolute or contingent) of Buyer or any of the Cable Companies to make any
payment to any present or former Employee following termination of employment
subsequent to the Closing Date or upon consummation of the transactions
contemplated by this Agreement. Neither the execution and delivery of this
Agreement or any related agreement nor the consummation of the transaction
contemplated hereby or thereby will automatically result in the acceleration or
vesting of any rights of any person to benefits under any Employee Plans.
(d) The Cable Companies have provided Buyer with copies of all
employment contracts, consulting contracts and severance agreements to which any
of the Cable Companies and any Employee or independent contractor providing
services to or on behalf of any of the Cable Companies are parties, other than
those which will be terminated on or before the Closing Date.
(e) Schedule 4.14 contains a complete list of each Employee
Plan. True and complete copies of each of the following documents have been
delivered (or will be delivered within two weeks of the date hereof) by Xxxxxx
to Buyer: (i) each Benefit Arrangement, Pension Plan and Welfare Plan (and, if
20
applicable, related trust agreements, annuity contracts or other funding
instruments) which covers Employees or former employees of the Cable Companies
(with respect to their relationship with each such Company) and all amendments
thereto, all summary plan descriptions, summary of material modifications (as
defined in ERISA) and all written interpretations and descriptions thereof which
have been distributed to participants therein, and a complete description of any
Benefit Arrangement which is not in writing, (ii) the most recent determination
letter issued by the Internal Revenue Service with respect to each Pension Plan
and each voluntary employees' beneficiary association as defined under Section
501(c)(9) of the Code (other than a Multiemployer Plan) which covers Employees
or former employees of any of the Cable Companies (with respect to their
relationship with each such Company), (iii) for the three most recent plan
years, Annual Reports on Form 5500 Series required to be filed with any
governmental agency for each Pension Plan or Welfare Plan which covers Employees
or former employees of the Cable Companies (with respect to their relationship
with each such Company), (iv) all actuarial reports prepared for the last three
years for each Pension Plan which covers Employees or former employees of the
Cable Companies (with respect to their relationship with each such Company), and
(v) a description setting forth the amount of any liability of the Cable
Companies as of the Closing Date for payments more than thirty calendar days
past due with respect to any Welfare Plan.
(f) No Pension Plan is subject to the minimum funding
requirements of Part 3 of Title I of ERISA, or the plan termination insurance
provisions of Title IV of ERISA. None of Xxxxxx or any ERISA Affiliate have
incurred any liability (contingent or otherwise) to Pension Benefit Guaranty
Corporation other than for the payment of annual premiums for plans heretofore
terminated.
(g) Each Pension Plan and each related trust agreement,
annuity contract or other funding instrument which covers or has covered
employees or former employees of any of the Cable Companies or any ERISA
Affiliate (with respect to their relationship with such entity) which has been
operated as a qualified plan has received a favorable determination letter from
the Internal Revenue Service.
(h) Except for amendments for which a remedial amendment
period is available under Section 401(b) of the Code, each Pension Plan and each
21
related trust agreement, annuity contract or other funding instrument which
covers Employees or former employees of any of the Cable Companies or any ERISA
Affiliate (with respect to their relationship with such entity) currently
complies in all material respects, both as to form and in operation, with the
requirements prescribed by any and all statutes, orders, rules and regulations
which are applicable to such plans, including, without limitations, ERISA and
the Code.
(i) Except as disclosed on Schedule 4.14, neither any of the
Cable Companies nor any ERISA Affiliate has any withdrawal liability (contingent
or otherwise) with respect to a Multiemployer Plan.
(j) Each Welfare Plan which covers or has covered employees or
former employees of any of the Cable Companies (with respect to their
relationship with each such entity) currently complies in all material respects,
both as to form and operation, with the requirements prescribed by any and all
statues, orders, rules and regulations which are applicable to such Welfare
Plan, including, without limitation, ERISA and the Code.
(k) Except as disclosed on Schedule 4.14, and except as
required by Section 4980B of the Code or Part 6 of Title 1, Subtitle B of ERISA,
no Welfare Plan provides for benefits for retirees or has any obligation to
provide such benefits in the future.
(l) Each Welfare Plan which is a "group health plan", as
defined in Section 607(1) of ERISA, presently complies in all material respects
with and has been operated in compliance in all material respects with
provisions of Part 6 of Title I, Subtitle B of ERISA and Sections 162(k) and
4980B of the Code at all times.
(m) Each Benefit Arrangement presently complies and has been
maintained in compliance in all material respects with its terms and with the
requirements prescribed by any all statues, orders, rules and regulations which
are applicable to such Benefit Arrangement, including, without limitation, the
Code. Except as provided by law or in any employment agreement set forth on
Schedule 4.14, the employment of all persons presently employed or retained by
any of the Cable Companies is terminated at will.
(n) No Employee Plan (or trust or other funding vehicle
22
pursuant thereto) has incurred any liability under Code Section 511. Neither any
Cable Company nor any ERISA Affiliate has any liability for unpaid contributions
under Section 515 of ERISA with respect to any Multiemployer Plan.
(o) There is no contract, agreement, plan or arrangement
covering any employee or former employee of any of the Cable Companies (with
respect to such employee's relationship with each such entity) that individually
or collectively requires the payment by any of the Cable Companies of any amount
(i) that is not deductible under Section 162(a)(1) or 404 of the Code or (ii)
that is an "excess parachute payment" pursuant to Section 280G of the Code.
(p) To the knowledge of the Shareholders, none of the Cable
Companies has engaged in, or has any liability in respect of, any transaction in
violation of Sections 406 of ERISA or any "prohibited transaction," as defined
in Section 4975(c)(1) of the Code, for which no exemption exists under Section
408 of ERISA or Section 4975(c)(2) or (d) of the Code, or has otherwise violated
the provisions of Part 4 of Title I, Subtitle B or ERISA so as to create any
material liability of the Cable Companies.
(q) There is no action, order, writ, injunction, judgment or
decree outstanding or claim (other than routine claims for benefits), suit,
litigation, proceeding, arbitration proceeding, governmental audit or
investigation relating to or seeking benefits under any Employee Plan that is
pending or, to the knowledge of any of the Cable Companies, threatened against
any of the Cable Companies, any ERISA Affiliate or any Employee Plan, other than
a Multiemployer Plan.
(r) Except as evidenced in any collective bargaining agreement
referenced in Schedule 4.14 hereof, neither any of the Cable Companies nor any
ERISA Affiliates has announced to employees, former employees, consultants or
directors an intention to create, or otherwise created, a legally binding
commitment to adopt any additional Employee Plan which is intended to cover
employees or former employees of any of the Cable Companies (with respect to
their relationship with each such entity) or to amend or modify any existing
Employee Plan which covers or has covered employees or former employees of any
of the Cable Companies (with respect to their relationship with each such
entity).
(s) No Pension Plan or Welfare Plan holds as an asset any
23
interest in any annuity contract, guaranteed investment contract or any other
investment or insurance contract issued by an insurance company that is the
subject to bankruptcy, conservatorship or rehabilitation proceedings as of the
date hereof.
(t) Except with respect to the Existing Employment Agreements,
neither the execution and delivery of this Agreement or any related agreements
by any of the Cable Companies nor the consummation of the transactions
contemplated hereby or the related transactions will result in the acceleration
or creation of any rights of any person to benefits under any Employee Plan
(including, without limitations, the acceleration of the vesting or
exercisability of any stock options, the acceleration of the vesting of any
restricted stock, the acceleration of the accrual or vesting of any benefits
under any Pension Plan or the acceleration or creation of any rights under any
severance, parachute or change in control agreement).
(u) No event has occurred in connection with which any of the
Cable Companies, or any Employee Plan (other than a Multiemployer Plan),
directly or indirectly, could be subject to any material liability (A) under any
statute, regulation or governmental order relating thereto or (B) pursuant to
any obligation of any of the Cable Companies to indemnify any person against
liability incurred under any such statute, regulation or order as they relate
thereto.
4.15 Payment of Taxes. The Xxxxxx Companies have paid and discharged
all Taxes for which they or any of them are obligated. True, correct and
complete copies of the federal and state Tax Returns of the Xxxxxx Companies for
all income and gross receipts Taxes for the Xxxxxx Companies' for 1996 and 1997
have been delivered to Buyer. Except as set forth in Schedule 4.15, there are no
unassessed Tax deficiencies, proposed or threatened, against any of the Xxxxxx
Companies, nor are there any agreements, waivers or other arrangements providing
for extension of time with respect to the assessment or collection of any Tax
against any of the Xxxxxx Companies, or any actions, suits, proceedings,
investigations or claims now pending against any of the Xxxxxx Companies with
respect to any Tax, or any matter under discussion with any federal, state,
local or foreign authority relating to Taxes. Except as disclosed on Schedule
4.15, none of the Xxxxxx Companies is a party to or bound by any Tax sharing or
similar agreements. Xxxxxx properly elected to be treated as a Subchapter S
Corporation for federal and certain state tax purposes as of January 1, 1998.
24
The Cable Companies have filed qualified Subchapter S subsidiary elections for
federal tax purposes.
4.16 Technical and other Information. Schedule 4.16 sets forth true and
complete technical and business information relating to the operation of the
CATV System as of the date indicated thereon with respect to: (a) rates for
basic services by category, and stations or signals carried on the CATV System;
(b) miles of plant, as reflected on the Cable Companies' books and records; (c)
FAA tower clearances and approvals; (d) a description of the CATV System's
channel and megahertz capacity by headend, and (e) the number of subscribers
(including the approximate number of subscribers served in each franchise area
and served by each headend).
4.17 Compliance with Laws, Regulations and Reporting. Each of the Cable
Companies is in compliance in all material respects with all applicable laws,
rules, regulations, ordinances, requirements, standards and guidelines of all
federal, state and local authorities or agencies having jurisdiction over the
CATV System's franchises, licenses, property, Business or affairs, and with the
terms and provisions of any mortgage, lease, license, indenture, or agreement
relating to the Business. None of the Cable Companies is in default or in
violation with respect to any judgment, order, injunction or decree of any
court, administrative agency or other governmental authority. This Section 4.17
shall not apply to the compliance by the Cable Companies with laws, rules,
regulations, requirements, standards and guidelines of all federal, state and
local authorities with respect to any subject matter specifically governed by
any other section of this Article IV.
4.18 Environmental Matters. To the knowledge of Shareholders, except as
set forth on Schedule 4.18, none of the Xxxxxx Companies own Real Property upon
which there is located any underground fuel storage tanks, and they are in
material compliance with all Environmental Laws. In addition, no written notice,
notification, demand, request for information, citation, summons or order has
been issued to the Xxxxxx Companies, no written complaint has been filed against
the Xxxxxx Companies, no penalty has been assessed and no investigation or
review is pending or, to the knowledge of Shareholders, threatened by any
governmental authority or other entity, with respect to any alleged failure by
the Xxxxxx Companies to have any environmental, health or safety permit, license
or other authorization required under any applicable Environmental Laws. Except
as set forth on Schedule 4.18, no Hazardous Substances have been generated or
25
produced at, or disposed of or in connection with, any of the Real Property
owned by the Xxxxxx Companies, during the period of the Xxxxxx Companies'
ownership thereof. No Hazardous Substances have been generated or produced at,
or disposed on or in connection with, any of the Real Property leased by the
Xxxxxx Companies or, to the Shareholders' knowledge, any other person, during
the period of the Xxxxxx Companies' use thereof.
4.19 Claims and Litigation. Except as set forth on Schedule 4.19, there
is no material action, suit, investigation, claim, arbitration, administrative
or other proceeding pending or, to the knowledge of Shareholders, threatened
against or involving any of the Shareholders, the Cable Companies, the Business,
or the Business Assets, at law or in equity, which would prevent or adversely
affect in any material respect the ownership, use or operation of any of the
same by Buyer.
5. Buyer's Representations. Buyer hereby represents, warrants and covenants to
Shareholders that:
5.1 Organization and Standing of Buyer. Buyer is a corporation duly
organized and validly existing and in good standing under the laws of the State
of Delaware, is duly qualified to transact business in the State of Delaware,
and has all requisite corporate power and authority to execute, deliver, and
perform this Agreement.
5.2 Authority to Execute and Consummate Agreement. The execution,
delivery and performance of this Agreement have been duly authorized by all
necessary corporate action on the part of Buyer. This Agreement has been duly
executed and delivered by Buyer and constitutes, and each contract or written
undertaking delivered by Buyer to Shareholders pursuant hereto will constitute,
the legal, valid, and binding obligation of Buyer enforceable in accordance with
its terms, except to the extent such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws or equitable principles
of general application relating to or limiting creditor's rights. The execution,
delivery and performance of this Agreement by Buyer does not and, as of the
Closing, will not, result in a breach or violation of, or constitute a default
(or an event which, with or without the passage of time or the giving of notice,
or both, will constitute a breach or default) under, any agreement, instrument,
charter or by-law provision, statute, ordinance, rule, regulation or order to
which Buyer is a party or by which Buyer is bound.
5.3 Approvals and Consents. Except for filings with the FTC and the
26
U.S. Department of Justice pursuant to the HSR Act, and the expiration of the
applicable waiting period thereunder, the only persons whose approval of or
consent to the execution, delivery or performance of this Agreement by Buyer is
legally or contractually required are specified on Schedule 5.3.
5.4 Buyer's Ability to Consummate. Buyer has the financial ability to
consummate the transactions contemplated herein, and the Buyer has available to
it sufficient funds to pay the Purchase Price at Closing. Buyer has no knowledge
of any fact or condition that will impede Buyer's ability to consummate the
transactions contemplated by this Agreement at the times and in the manner
contemplated by this Agreement.
5.5 FCC Cross Ownership. Buyer does not now, nor will it on the Closing
Date, own any assets, or own any interest, equitable or otherwise, or otherwise
have an affiliation with any person such that FCC restrictions on
"cross-ownership" of media and related business will be violated upon
consummation of the transactions provided for herein.
5.6 Investment. Buyer is a sophisticated person with extensive
knowledge and experience in the CATV business. Buyer is financially able to take
the risk of purchasing the Stock, has been given adequate opportunity to
investigate the Business and to discuss all aspects of the Business with
Xxxxxx'x management. Buyer is acquiring the Stock for its own account and not
with an intent to sell the Stock, understands that the Stock has not been
registered under any securities laws, and that the transactions contemplated
herein involve a substantial degree of risk.
5.7 Existing Contracts/Employee Terminations. Buyer will, in connection
with any liquidation, merger or other alteration to the corporate status of the
Cable Companies, honor its obligations under the Listed Contracts in connection
therewith. In addition, Buyer has no intention of terminating such number of
employees as would subject Xxxxxx to WARN, 29 U.S.C. SS2101, et seq.
6. Additional Covenants.
6.1 Negative Covenants of Shareholders. From the date of this Agreement
until the Closing, Shareholders will cause each of the Cable Companies to not,
without the prior written consent of Buyer (which consent will not be
27
unreasonably withheld, delayed or otherwise conditioned), do or agree to do any
of the following:
(a) Sell, assign, lease, swap or otherwise transfer or dispose
of any of the Business Assets, other than the consumption or disposition of
Business Assets in the ordinary course of business, or merge or consolidate with
or into any other entity or enter into any agreements relating thereto;
(b) Other than with respect to converting customers to new
channel line-ups introduced in systems currently being rebuilt, consistent with
historical practice, voluntarily change the channel line-up of the CATV System,
or delete, substitute or add any additional channels or programming service on
the CATV System, enter into any contract, agreement, commitment, license or
understanding therefor;
(c) Outside the ordinary course of Business, and except as
contemplated herein: enter into any material contracts, leases, commitments,
understandings, licenses, or other agreements that are not terminable on 30 days
or less prior notice, or that involve post-Closing obligations in excess of
$25,000.00 in any one case, or in excess of $50,000.00 in the aggregate, or
incur any other obligation or liability (contingent or absolute) relating to the
Business; or, amend, alter or modify to the detriment of the Business any
material provision of any of the Authorizations (other than renewal and
extensions thereof on existing terms) or the Listed Contracts;
(d) Incur any additional indebtedness for borrowed money
except to the extent consented to by Buyer, or indebtedness which will be repaid
on or before the Closing date, or advances under the Bank Debt which will be
included in the adjustments to the Purchase Price under Section 2.3(c);
(e) Create, assume or permit to exist any Encumbrances upon
the Business Assets except for the Permitted Encumbrances;
(f) With respect to the employees of the Business, other than
agreements providing for incentive or severance arrangements in connection with
the transactions contemplated hereby ("Severance Arrangements"), enter into or
become subject to any employment, labor or union contract, any professional
28
service contract not terminable at will, or any bonus, pension, insurance,
profit sharing, deferred compensation, retirement, hospitalization, employee
benefit, or other similar plan;
(g) Take any action or fail to take any action which would
cause any of the representations and warranties contained herein to be untrue or
incorrect on the Closing Date;
(h) Enter into any commitments affecting the Business which,
when judged in relationship to past business operations of the Business, are
unusual or extraordinary or outside the scope of the normal course of routine
operations; or
(i) Fail to use commercially reasonable efforts to renew on
substantially the same or on other commercially reasonable terms consented to by
Buyer (which consent will not be unreasonably withheld, delayed or otherwise
conditioned) any Authorization from the FCC and any Authority which granted a
franchise that will expire after the date hereof and prior to the Closing Date.
Notwithstanding the foregoing, and without limitation, Xxxxxx shall be free to:
(i) reduce the amount outstanding under the Bank Debt from
time to time, including by using funds distributed to it from the Xxxxxx
Companies;
(ii) cause the lenders of the Bank Debt to release the Xxxxxx
Companies (other than Xxxxxx) from guaranties thereof;
(iii) with the other Xxxxxx Companies, contribute cash to the
capital of, or receive distributions or loans from, the other Xxxxxx Companies
so as to satisfy and discharge any "inter-company" indebtedness and receivables;
and
(iv) make distributions or loans to the Shareholders.
6.2 Affirmative Pre-Closing Covenants of Shareholders. Pending
and prior to the Closing Date, Shareholders will cause the Cable Companies to:
(a) Preserve their corporate existence and business
organizations intact and use their reasonable best efforts to preserve
relationships with suppliers, customers, employees and others having business
relationships with them;
(b) Operate the Business in the normal and usual manner;
29
provided, however: (i) the non-Cable Companies may merge or otherwise transfer
their assets and liabilities with or to other Xxxxxx Companies, convert
non-Cable companies into limited liability companies by merger or otherwise, or
contribute Excluded Assets to one or more non-Cable Companies (provided,
notwithstanding the foregoing, no non-Cable Company will be merged with a Cable
Company, or transfer liabilities to a Cable Company, unless the liabilities of
such non-Cable Company are paid and discharged in full on or prior to the
Closing Date); (ii) the Cable Companies shall distribute, sell or otherwise
transfer to the Shareholders (or their beneficiaries or assignors), directly or
indirectly (such as by contribution to new entities and distribution of the new
entities) all of the assets listed on Schedule 6.2 hereto (the "Excluded
Assets"), subject to the liabilities listed on Schedule 6.2 (the "Excluded
Liabilities"); and (iii) the Cable Companies shall discuss with Buyer a proper
strategy, pending Closing, for the Cable Companies to develop internet and
digital capabilities;
(c) Use commercially reasonable efforts to maintain the
validity of the Authorizations, renew Authorizations on a timely basis, and
comply with all material requirements of the Authorizations;
(d) Maintain in full force and effect all of their existing
casualty, liability, and other insurance in amounts not less than those in
effect on the date hereof;
(e) Take all necessary action to comply with all applicable
laws, rules and regulations of the FCC, the United States Copyright Office and
any other Authority (including any necessary filings, reports, statements,
applications of), in connection with the Business, the Business Assets and
operations thereof, and the transactions contemplated by this Agreement and the
agreements and instruments called for hereunder.
(f) Provide Buyer with reasonable access during normal
business hours to the Business Assets and the Cable Companies' books and
records;
(g) Increase subscriber rates in the ordinary course of
business, consistent with past practices;
(h) Promptly furnish Buyer with copies of such documents and
with such information with respect to the Business and their operations as Buyer
30
may, from time to time, reasonably request;
(i) Use its commercially reasonable efforts to obtain all
authorizations, consents, orders and approvals of all federal, state and local
regulatory bodies and officials and other third parties that may be or become
necessary for the performance of this Agreement; and
(j) Use commercially reasonable efforts to acquire at
least 2,200 additional subscribers in the State of New York.
(k) Cause the Xxxxxx Companies to contribute cash to the
capital of, or receive dividends or loans from, the other Xxxxxx Companies so as
to satisfy or discharge any "inter-company" indebtedness or receivables.
6.3 Affirmative Post-Closing Covenants of Shareholders.
(a) On and subsequent to the Closing Date, Shareholders
covenant to discharge and satisfy or cause other persons to discharge and
satisfy all of the Excluded Liabilities without cost to Buyer or the Cable
Companies.
(b) On the Closing Date, the Shareholders shall cause all
obligors under the Family Loans to satisfy all such loans in full and to execute
and deliver to Buyer the Release described in Section 9.2.
6.4 Affirmative Covenants of Buyer. Buyer covenants that:
(a) Pending and prior to the Closing Date, Buyer will exercise
reasonable efforts and due diligence in vigorously assisting and cooperating
with Shareholders in their efforts to obtain all authorizations, consents,
orders and approvals of all federal, state and local regulatory bodies and
officials and other third parties that may be or become necessary for the
performance of this Agreement. Buyer acknowledges that time is of the essence in
connection with its obligations under this Section 6.4.
(b) Buyer will preserve and make available (including the
right to inspect and copy) to Shareholders, their attorneys and accountants, for
a seven year period from and after the Closing Date and during normal business
hours after reasonable notice, such of the books, records, files,
correspondence, memoranda and other documents of the Cable Companies as
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Shareholders may reasonably require in connection with any legitimate purpose,
including, but not limited to, the preparation of Tax reports and Tax Returns,
the preparation of financial statements, and the completion of the calculation
of adjustments to the Purchase Price.
(c) On the Closing Date, and immediately following
Closing, Buyer shall cause Xxxxxx to pay in full the Bank Debt.
(d) Buyer agrees that Shareholders shall be entitled to
receive, and Buyer shall pay to Shareholders, all sums received in connection
with any audit or other reconciliation of the Xxxxxx Companies' insurance
programs attributable to the period ending on the Closing Date, and that Buyer
will allow Shareholders to control such audit or reconciliation.
6.5 Notification. Each party will promptly notify the other in writing
upon becoming aware of any order or decree or any complaint praying for an order
or decree restraining or enjoining the consummation of this Agreement or the
transactions contemplated hereby, or upon receiving any notice from any
governmental department, court, agency or commission of its intention to
institute an investigation into, or institute a suit or proceeding to restrain
or enjoin the consummation of this Agreement or such transactions, or to nullify
or render ineffective this Agreement or such transactions if consummated, or
upon the occurrence of, or upon becoming aware of the impending or threatened
occurrence of, any event which would cause or constitute a breach or would have
caused a breach had such event occurred or been known to such party prior to the
date hereof, of any of the respective representations and warranties contained
in or referred to in this Agreement or in any schedule hereto.
6.6 Closing Conditions. Shareholders and Buyer will diligently exert
their commercially reasonable efforts, in good faith, to cause the Closing
conditions set forth in Sections 7 and 8 to be met on or before the Closing
Date.
6.7 No Sale. While this Agreement remains in force, neither the
Shareholders nor any other officer, director or shareholder of Xxxxxx or the
Operating Subsidiaries will contract or negotiate with any potential buyers for
the sale of the Business, the Business Assets or the Stock, in whole or in part,
whether by stock sale, asset sale, merger or otherwise.
6.8 HSR Notification. As soon as practicable after the execution of
this Agreement, and in no event more than 30 days after the date hereof,
Shareholders and Buyer will each complete and file, or cause to be completed and
32
filed, any notification and report required to be filed under the HSR Act. Each
of the parties will take additional action that may be necessary, proper or
advisable, will cooperate to prevent inconsistencies between their respective
filings, and will furnish to each other such necessary information and
reasonable assistance as the other may reasonably request in connection with its
preparation of necessary filings or submissions under the HSR Act. Buyer and
Shareholders shall use commercially reasonable efforts (including the filing of
a request for early termination) to obtain the early termination of the waiting
period under the HSR Act. Buyer will be responsible for one-half of the filing
fees required under the HSR Act and the Shareholders will require Xxxxxx to be
responsible for the other one-half of the filing fees.
6.9 Publicity. Prior and subsequent to Closing, all press releases or
public announcements concerning this Agreement or the transactions contemplated
herein shall be made by a party hereto only following the obtaining of the
consent of the other parties hereto, except to the extent required by applicable
law (including any legal obligation imposed upon Buyer in connection with its
status as a public company), after reasonable notice to the other parties
hereto. For purpose hereof, the consent of Shareholders shall be deemed given
upon the receipt of consent from one individual designated by the Shareholders
in writing.
6.10 Transition. In connection with the transactions contemplated
herein, and notwithstanding anything herein to the contrary, it is agreed that:
(a) Except as otherwise provided in this Section 6.10, subject
to the obligations of the Xxxxxx Companies under the Listed Contracts, nothing
herein shall require Buyer to continue the employment of any employee of the
Cable Companies for any period of time following the Closing. Not less than
forty-five days before Closing, Buyer shall provide to Shareholders written
notice of which of the employees of the Cable Companies Buyer intends to retain
following the Closing, which list shall contain not less than 65% of the
non-"corporate" employees (the "Assumed Employees"). Shareholders shall cause
the Cable Companies to terminate the employment of all employees that are not
Assumed Employees prior to or as of the Closing. Buyer shall assume all of
Shareholders' liability in connection with providing any notice under the WARN
Act. Buyer shall be solely responsible for and shall indemnify and hold
Shareholders harmless from any liability arising under the WARN Act arising out
33
of the failure to provide adequate advanced notice. Buyer shall continue to
employ the Assumed Employees for a period of at least one year following the
Closing, or provide to such employees severance of nine months' base pay (which
base pay will be at least equal the base pay in place on the Closing Date),
except for such employees who voluntarily terminate employment, retire or are
discharged for cause. Subject to the obligations of the Cable Companies under
the Listed Contracts, Buyer shall have no obligation to provide any severance
benefits to any employee discharged for cause. Buyer shall have no obligation to
provide severance to any employee whose employment is terminated before Closing
except for liabilities and obligations accrued by the Xxxxxx Companies before
the Closing Date and included in the Purchase Price adjustments set forth in
Section 2.3. As of and immediately after the Closing, each Assumed Employee
shall be employed in a position which is commensurate with their experience in
the CATV System with respect to which such employee is presently employed, and
on the same terms and conditions as are afforded comparably situated employees
of Buyer, and each Assumed Employee who continues his employment after the
Closing shall receive credit for past service with any of the Cable Companies
and their predecessors for all purposes of eligibility and vesting under Buyer's
Employee Plans, and for all other purposes under Buyer's vacation, sick leave or
other benefit programs or arrangements. Subject to the obligations of the Cable
Companies under the Listed Contracts, Buyer shall not otherwise be required by
Shareholders, to maintain any particular level of benefits for any of the
Assumed Employees. Upon Buyer's request, the Shareholders will coordinate with
Buyer to permit Buyer to meet with any of the "corporate" level employees to
discuss employment opportunities following the Closing, including position,
salary and other employment benefits (and the requirement that such employees
must continue employment in the same position and on the same terms and
conditions shall not apply to any "corporate" level Assumed Employees). Buyer
shall assume full responsibility and liability for offering and providing
"continuation coverage" to any "qualified beneficiary" who is covered by a
"group health plan" sponsored or contributed to by any Cable Company or any of
their ERISA Affiliates and who has experienced a "qualifying event" or is
receiving "continuation coverage" on or prior to the Closing. "Continuation
coverage," "qualified beneficiary", "qualifying event" and "group health plan"
all shall have the meanings given such terms under Section 4980B of the Code and
Section 601 et seq. of ERISA. Buyer shall hold the Cable Companies and any
34
entity required to be combined with the Cable Companies (within the meaning of
Sections 414(b), (c), (m),or (o) of the Code) harmless from and fully indemnify
them against any costs, expenses, losses, damages and liabilities incurred or
suffered by them directly or indirectly, including, but not limited to,
reasonable attorneys' fees and expenses, which relate to continuation coverage
and arise as a result of any action or omission by any Cable Company or any of
their ERISA Affiliates, or because Buyer is deemed to be a successor employer to
any Cable Company or any of their ERISA Affiliates.
(b) The Xxxxxx Companies shall be free, until the Closing
Date, to not accrue certain corporate expenses which will not be paid prior to
the Closing Date, such as employee bonuses, legal expenses, accounting and audit
fees, and other similar items which will not be paid.
(c) On or before the first anniversary of the Closing Date,
Buyer shall cease using the name "Xxxxxx" for any purpose, and shall cause the
Cable Companies to cease using such name, including by changing the names of all
such companies to eliminate the name "Xxxxxx".
6.11 Tax Matters. Each of the Xxxxxx Companies will timely and properly
file or cause to be filed all Tax Returns which it is or will be required to
file on or before the Closing Date, all such Tax Returns to be true, correct and
complete in all respects to the knowledge of the Shareholders, and will pay or
cause to be paid in full when due all Taxes, if any, which become due and
payable pursuant to such Tax Returns or assessments received by it on or before
the Closing Date, subject to the right of the taxpayer to, in good faith,
contest such assessments. The Shareholders and the Buyer acknowledge and agree
that Xxxxxx is a corporation subject to the provisions of Subchapter S of the
Code and, as such, the day immediately prior to the Closing Date will be the
last day of Xxxxxx'x S tax year. Buyer agrees that the Shareholders shall
prepare, for Buyer's review and reasonable approval, the Tax Returns for such
period and for all periods ending on or before the Closing Date. All federal and
state Taxes due in connection with such period, including with respect to the
transfer of the Excluded Assets to the Shareholders (or their assignees), shall
constitute a liability taken into account under Section 2.3(c) hereof. All
federal and state tax refunds with respect to any tax period ending prior to the
Closing Date shall, if received after the Closing Date, be paid by Xxxxxx to the
Shareholders. Buyer agrees that the Tax Returns of the Xxxxxx Companies filed
with respect to the period ending prior to the Closing Date, and all prior Tax
35
Returns, shall not be amended without the consent of Shareholders. On or before
the Closing Date the Xxxxxx Companies will execute a termination and release
agreement terminating the existing Tax Sharing Agreement and certifying that
there is and will be no liability or obligation by any of the Xxxxxx Companies
to any other person or to each other thereunder. Buyer acknowledges that
Shareholders will not join in a Code Section 338(h)(10) election.
6.12 Capitalization of the Shareholders. The Shareholders agree that
they will not, through distributions, liquidations or otherwise, within the
period ending three years after the Closing Date, allow the balance of cash and
marketable securities held by them to equal, in the aggregate as to all
Shareholders, not less than the sum of $75,000,000.00.
7. Conditions of Buyer's Obligations. The obligations of Buyer to purchase the
Business Assets and to proceed with the Closing are subject to the satisfaction
at or prior to the Closing of each of the following conditions, any one or more
of which may be waived in whole or in part by Buyer by giving written notice to
Shareholders to that effect:
7.1 Consents.
(a) Shareholders shall, with the reasonable cooperation of
Buyer, have obtained all consents required under the Authorizations set forth in
Section 7.1 in connection with the transactions contemplated hereby in the form
attached hereto as Exhibit C. Shareholders shall use their reasonable efforts to
cause all consents to include a provision permitting Buyer to transfer the Stock
to a direct or indirect subsidiary of Buyer; provided, however, that (i) such
person agrees in writing to be bound by any obligations of Buyer in connection
therewith; and (ii) the inclusion of such a provision regarding transfer does
not otherwise cause such consent to be withheld, delayed or otherwise
conditioned. In the event that Shareholders are unable to obtain all consents
required under the Authorizations necessary pursuant to this Section 7.1(a)
(such Authorizations for which consent is not obtained being referred to as
"Non-Consenting Authorizations") by the Closing Date, but Shareholders have
obtained consents with respect to Authorizations which authorize service to that
number of subscribers which, when added to the number of subscribers serviced
under Authorizations for which no consent is necessary for the transactions
contemplated herein, represent at least 95% of the total number of subscribers
36
for the CATV System set forth in Schedule 4.16, then Shareholders shall have the
option of requiring Buyer to proceed with Closing with no Purchase Price
adjustment required to be made at Closing; provided, however, on the Closing
Date, Shareholders shall deposit into escrow, under and subject to an Escrow
Agreement in substantially the form of Exhibit A, subject to the terms of this
Section 7.1, and provided the funds deposited therein shall be used solely in
accordance with this Section 7.1, an amount equal to the product of (i) the
number of subscribers as of the Closing Date, less the number of subscribers set
forth on Schedule 4.16, times (ii) $4,000.00 (together with all earnings
thereof, the "Additional Escrow Fund"). During the 365 days following the
Closing Date, Buyer shall use best efforts to assist Shareholders in obtaining
consents for the Non-Consenting Authorizations, and the Additional Escrow Fund
shall be released to Shareholders at the rate of $4,000.00 for each subscriber
serviced on the Closing Date under Non-Consenting Authorizations for which a
consent is obtained subsequent to the Closing Date, up to the Additional Escrow
Fund. On the 366th day following the Closing Date, the sum of the Additional
Escrow Fund, less the amount so released, shall be paid to Buyer as an
adjustment to the Purchase Price. Except as provided in this Section 7.1,
following Closing, Shareholders shall have no liability in connection with the
failure to obtain consents for the transactions contemplated herein in
connection with the Non-Consenting Authorizations.
(b) Shareholders shall have obtained the consents, approvals
and waivers of rights of first refusal of such persons or parties as may be
required for the assignment to Buyer of the contracts listed on Schedule 7.1, if
any.
7.2 No Material Adverse Changes. Between the date of this Agreement and
the Closing Date, there shall have been no change to the Business or to the
Business Assets which would have a Material Adverse Effect, and the Business
Assets shall not have suffered any damage (not covered by insurance) by fire or
other casualty which has not been substantially repaired or replaced, or
provision for repair or replacement made, as provided in Section 12, the
consequences of which would have a Material Adverse Effect.
7.3 Representations Warranties and Covenants. The representations,
warranties and covenants of Shareholders set forth in this Agreement, or in any
agreement, instrument, schedule, exhibit or other documents to be delivered by
Shareholders pursuant hereto, shall be true and correct in all material
37
respects, and Shareholders shall have performed and complied in all material
respects with all covenants and agreements required by this Agreement to be
performed or complied with on or before the Closing Date.
7.4 Legal Proceedings. No action, suit or proceeding shall have been
instituted against any of the parties to this Agreement before any court or
governmental department, agency or commission which might restrain, prohibit or
otherwise invalidate this Agreement or the consummation of the transactions
contemplated hereby (other than an action or proceeding instituted or threatened
by Buyer or Shareholders).
7.5 HSR Act. All filings required under the HSR Act shall have been
made and the applicable waiting period shall have expired or been earlier
terminated without the commencement of any litigation by a governmental
authority of competent jurisdiction to restrain the consummation of the
transactions contemplated by this Agreement.
7.6 Deliveries at Closing. Shareholders shall have delivered to Buyer
on or before the Closing, all agreements, instruments and documents required to
be delivered pursuant to Section 9 below.
8. Conditions of Shareholders' Obligations. The obligations of Shareholders to
be performed under this Agreement on the Closing Date are subject to the
conditions hereinafter set forth, any one or more of which may be waived in
whole or in part by Shareholders by giving written notice to Buyer to that
effect:
8.1 Representations Warranties and Covenants. The representations,
warranties and covenants of Buyer set forth in this Agreement or in any
agreement, instrument, schedule, exhibit or other document to be delivered by
Buyer pursuant hereto shall be true and correct in all material respects, and
Buyer shall have performed and complied with all material covenants and
agreements required by this Agreement to be performed or complied with on or
before the Closing Date.
8.2 Deliveries at Closing. Buyer shall have delivered to Shareholders
on or before the Closing, all agreements, instruments and documents required to
be delivered pursuant to Section 10 below.
38
8.3 HSR Act. All filings required under the HSR Act shall have been
made and the applicable waiting period shall have expired or been earlier
terminated without the commencement of any litigation by a governmental
authority of competent jurisdiction to restrain the consummation of the
transactions contemplated by this Agreement.
9. Shareholders' Deliveries at Closing. On or prior to the Closing, Shareholders
shall deliver to Buyer:
9.1 Stock Certificates. Stock Certificates representing all of the
Stock duly endorsed for transfer or accompanied by stock powers duly executed in
blank.
9.2 Release. A Confirmation and Release in the form of Exhibit D
whereby each Shareholder confirms that such Shareholder is the owner of the
number of shares of Stock shown on Schedule 4.4, and each Shareholder, officer,
director and obligor under the Family Loans releases any and all claims against
the Xxxxxx Companies.
9.3 Opinion - General. An Opinion of Counsel for Shareholders and the
Cable Companies dated as of the Closing Date, substantially in the form of
Exhibit E.
9.4 Opinion - FCC. An Opinion of FCC Counsel for the Cable Companies,
dated as of the Closing Date, substantially in the form of Exhibit F.
9.5 Delivery of Documents. To the extent in the Cable Companies
possession and not otherwise held at offices located at the Real Property, all
existing blueprints, schematics, working drawings, plans, specifications,
projections, statistics, engineering records, CATV System maps, copies of all
executed assignments of Authorizations and Listed Contracts not previously
delivered, customer lists, files and records used by the Cable Companies in
connection with the operation of the Business, and any other lists reasonably
necessary to continue the operation of the Business as a going enterprise.
9.6 Subscriber/Accounts Receivable Certificate. A certificate of
Shareholders estimating, in good faith, the Accounts Receivable, and a statement
as to the number of subscribers accompanied by materials sufficient to show how
such numbers were determined, each certified as being true and correct and
prepared in accordance with the terms of this Agreement.
39
9.7 Certificate. A Certificate of Shareholders in the form of Exhibit G
certifying that all the conditions set forth in Section 7 have been satisfied.
9.8 Resignations. Resignations of all officers and directors of
the Cable Companies in a form reasonably acceptable to Buyer.
9.9 Non-competition Agreement. A Non-competition Agreement duly
executed by Xxxx X. Xxxxxx, Xx. and dated as at the Closing Date, substantially
in the form of Exhibit H.
9.10 Officer Agreements. An Agreement duly executed by each of Xxxx X.
Xxxxxxx, III and Xxxxxxx Xxxxxxx, dated as at the Closing Date, substantially in
the form of Exhibit I.
9.11 Stock Books. The corporate stock and minute books of the
Cable Companies.
9.12 Good Standing Certificates. Good standing certificates for the
Cable Companies from their jurisdiction of incorporation and from the
jurisdictions in which they do business.
10. Buyer's Performance at Closing. At the Closing, Buyer shall deliver to
Shareholders:
10.1 Certificate of Officer. A Certificate of Buyer signed by its Chief
Financial Officer that the conditions set forth in Section 8 have been satisfied
substantially in the form attached hereto as Exhibit J.
10.2 Opinion of Counsel. An Opinion of Buyer's counsel dated as of
the Closing Date substantially in the form of Exhibit K.
10.3 Payment. Payment of the Purchase Price as set forth in
Section 2.3.
11. Brokerage Fees. Except for the services of Communications Equity Associates,
which shall be paid for by one of the Xxxxxx Companies immediately before the
Closing, each party represents and warrants to the other that it has not entered
into any agreement with any person, firm or corporation, or become indirectly a
party to any such agreement, nor has it taken any action nor is it aware of any
facts which would result in the assertion of any liability or claim for the
payment of any commission, brokerage or finder's fee in connection with the
execution of this Agreement or the consummation of the transactions contemplated
herein.
12. Risk of Loss and Casualty Damage. The risk of loss or damage by fire or
other casualty to the Business Assets shall be upon Shareholders until Closing.
40
In the event of any substantial casualty damage prior to Closing, Shareholders
shall promptly notify Buyer of such damage by delivery of written notice (a
"Damage Notice"). In such event, Buyer shall have the right to require
Shareholders to cause the Cable Companies to either: (i) diligently repair,
replace and restore (collectively "repair") the damaged property to its former
condition, in which case the Closing Date shall be delayed to allow for such
repair; or (ii) make such repairs as Buyer directs with all applicable excess
insurance proceeds being assigned to Buyer.
13. Indemnification by Shareholders and Buyer.
13.1 Shareholders' Indemnification Liability. Notwithstanding the
Closing, and regardless of any investigation made at any time by or on behalf of
Buyer, or any information Buyer may have, Shareholders jointly and severally
agree to indemnify, defend and hold Buyer and the Cable Companies harmless from
and against and in respect of any and all claims, losses, actions, suits,
proceedings, assessments, demands, judgments, damages, liabilities, costs and
expenses (including, without limitation, reasonable attorney's fees and costs of
suit) resulting from or associated with:
(a) any misrepresentation, breach of warranty, or
non-fulfillment of any agreement or covenant on the part of Shareholders under
this Agreement (whether to be performed prior or subsequent to the Closing
Date);
(b) any Tax cost associated with the distribution of the
Excluded Assets and the Excluded Liabilities;
(c) any or all of the Excluded Liabilities or the
Excluded Assets;
(d) any and all liability in connection with the
litigation referenced on Schedule 4.19 as Xxxxxx Xxxx vs. Xxxxxx Communications
Corp. and Xxxxxx Xxxxxx vs. Xxxxxx Communications Corp.; and
(e) any liability for subscriber fee refunds due in connection
with the Massachusetts Refund Order referenced on Schedule 4.19, for the period
through the Closing Date (which shall be the Shareholders' sole liability in
connection therewith).
13.2 Limitations on Shareholders' Indemnification Liability.
Notwithstanding Section 13.1, Buyer's claims and Shareholders' liability shall
41
be subject to the following:
(a) All representations and warranties made by Shareholders in
this Agreement, or pursuant hereto, and any covenants required to be performed
at or prior to Closing, shall survive the Closing Date for a period of one year;
provided that:
(i) the representations and warranties made by Shareholders in Sections
4.19 and Sections 4.14 (a), (b) and (c) of this Agreement shall survive
the Closing Date for a period of two years; and
(ii) the representations and warranties made by Shareholders in
Sections 4.1, 4.4, 4.5(a), 4.14 (f), (i), (l) and (m), 4.15 (with
respect to federal and state income taxes) and 4.18 of this Agreement
shall survive the Closing Date for the applicable statute of
limitations.
No claims for indemnification for a breach of a representation or warranty may
be asserted after the expiration of the foregoing periods; provided, however,
the written assertion of a specific claim by Buyer against Shareholders with
respect to any specific matter subject to indemnification prior to the foregoing
period shall not be precluded as a result of the foregoing time period
limitations.
(b) With respect to any matter resulting in a claim hereunder
by Buyer, Buyer will use commercially reasonable efforts to mitigate Buyer's
damages, or the amount of Buyer's Claim.
(c) Except with respect to any claim made under Sections 4.4,
4.14 (f), (l) and (m), 4.15, 4.18 and 13.1(b) - (e), Shareholders shall have no
liability until the aggregate of all items for which indemnity is sought exceeds
$5,000,000.00, however, in the event the aggregate for all items for which
indemnity is sought exceeds $5,000,000.00, the Shareholders shall be liable for
all such items in excess of the first $2,500,000.00; provided, further, in the
event the aggregate for all items for which indemnity is sought exceeds
$10,000,000.00, the Shareholders shall be liable for all such items from the
first dollar.
(d) Shareholders shall have no tax liability or
indemnification or other obligation to Buyer, and there shall be no adjustment
to the Purchase Price under Section 2.3, in connection with the making by Buyer
42
or any affiliated company of an election under Section 338 of the Code, or under
similar state or local income tax provisions, in connection with the
transactions contemplated hereunder, or in connection with any other transaction
effected by Buyer involving the Xxxxxx Companies.
13.3 Buyer's Indemnification Liability. Notwithstanding the Closing,
and regardless of any investigation made at any time by or on behalf of
Shareholders or any information Shareholders may have, Buyer agrees to
indemnify, defend and hold Shareholders harmless from and against and in respect
of any loss, damage or liability resulting from:
(a) any misrepresentation, breach of warranty, or
non-fulfillment of any agreement or covenant on the part of Buyer under this
Agreement (whether to be performed prior or subsequent to the Closing Date);
(b) any contract, liability or other obligation of the Cable
Companies, except to the extent of Shareholders' liability in connection
therewith hereunder;
(c) all costs and expense (including reasonable attorneys'
fees) incurred by Shareholders in connection with any claim, action, suit,
proceeding, demand, assessment or judgment incident to any of the matters
Shareholders are indemnified against by Buyer in this Agreement; and
(d) all costs and expense, including Taxes, to Shareholders in
connection with the making by Buyer or any affiliated company of an election
under Section 338 of the Code, or under similar state or local income tax
provisions, in connection with the transactions contemplated hereunder, or in
connection with any other transaction effected by Buyer involving the Xxxxxx
Companies.
13.4 Indemnification Procedures. Promptly upon any party entitled to
indemnity hereunder becoming aware of any basis for a claim for indemnity
hereunder, including the receipt of notice of any claim, demand or assessment
made by any third party, or the commencement of any suit, action or proceeding
brought by any third party, the party seeking indemnification (the "Indemnitee")
will give prompt written notice thereof to the party from whom indemnification
is sought (the "Indemnitor") and, in any event, within sufficient time to enable
43
the Indemnitor to respond to such claim or answer or otherwise plead in any such
action. The failure or omission of such Indemnitee to so notify promptly the
Indemnitor of any such third party claim or action shall not relieve such
Indemnitor from any liability which it may have to such Indemnitee in connection
therewith, except to the extent that the Indemnitor shall have been actually
prejudiced thereby. In case any third party claim, demand or assessment shall be
asserted or third party suit, action or proceeding commenced against an
Indemnitee, and such Indemnitee shall notify the Indemnitor of the commencement
thereof, the Indemnitor shall be entitled to participate therein and, to the
extent that it may wish, to assume the defense or settlement thereof, with
counsel reasonably satisfactory to the Indemnitee, by providing the Indemnitee
with written notice within ten days after receipt of the Indemnitee's notice of
the claim, demand or assessment. After notice from the Indemnitor to the
Indemnitee of its election to assume the defense or settlement thereof within
such 10-day period, the Indemnitor will not be liable to the Indemnitee for any
legal or other expenses subsequently incurred by the Indemnitee in connection
therewith. The Indemnitee will cooperate with the Indemnitor in connection with
any such claim, and make personnel, books and records relevant to the claim
available to the Indemnitor. The Indemnitee will not settle such claim, demand,
or assessment without the consent of the Indemnitor, which shall not be
unreasonably withheld. In addition to, and not in limitation of, the foregoing,
Buyer agrees that Shareholders shall be promptly notified in the event that any
of the Cable Companies becomes the subject of an audit, examination or other
proceeding by the Internal Revenue Service or any other authority with respect
to Taxes for any tax year for which Buyer may seek an indemnity against
Shareholders or for any S year. With respect to any such audit or proceeding,
the Shareholders shall be given the right to participate in and, at their
election, control such audit, with any settlement or compromise made in
connection therewith shall be subject to the reasonable consent of Buyer.
Shareholders shall assume the defense and all liability in connection with the
litigation referenced on Schedule 4.19 as Xxxxxx Xxxx vs. Xxxxxx Communications
Corp. and Xxxxxx Xxxxxx vs. Xxxxxx Communications Corp.
14. Termination.
14.1 Termination by Agreement. This Agreement may be terminated at any
time prior to the Closing by Agreement between Shareholders and Buyer.
14.2 Termination by Shareholders. This Agreement may be terminated at
44
any time prior to the Closing by Shareholders, and the purchase and sale of the
Stock abandoned upon written notice to Buyer, if on any date determined for the
Closing in accordance with Section 3 each condition set forth in Section 7 has
been satisfied (or will be satisfied by the delivery of documents at the
Closing) or waived in writing on such date and either a condition set forth in
Section 8 has not been satisfied (or will not be satisfied by the delivery of
documents at the Closing) or waived in writing on such date, or Buyer has
nonetheless refused to consummate the Closing. Notwithstanding the foregoing,
Shareholders may not rely on the failure of any conditions set forth in Section
8 to be satisfied if such failure was principally caused by any Shareholder's
failure to act in good faith or a breach of or failure to perform any of its
representations, warranties, covenants or other obligations in accordance with
terms of this Agreement.
14.3 Termination by Buyer. This Agreement may be terminated at any time
prior to the Closing by Buyer, and the purchase and sale of the Stock abandoned
upon written notice to Shareholders, if on any date determined for the Closing
in accordance with Section 3 each condition set forth in Section 8 has been
satisfied (or will be satisfied by the delivery of documents at the Closing) or
waived in writing on such date and either a condition set forth in Section 7 has
not been satisfied (or will not be satisfied by the delivery of documents at the
Closing) or waived in writing on such date (provided Shareholders shall have 60
days from the date of such notice to satisfy such conditions), or Shareholders
have nonetheless refused to consummate the Closing. Notwithstanding the
foregoing, Buyer may not rely on the failure of any condition set forth in
Section 7 to be satisfied if such failure was principally caused by Buyer's
failure to act in good faith or a breach of or failure to perform any of its
representations, warranties, covenants or other obligations in accordance with
the terms of this Agreement.
14.4 Effect of Termination. If this Agreement is terminated as provided
in this Article 14, then this Agreement will forthwith become null and void and
there will be no liability on the part of any party to any other party or any
other person in respect thereof, provided that:
(a) The obligations of the parties described in Sections 15.1
and 15.2 (and all other provisions of this Agreement relating to expenses) will
survive any such termination.
(b) All filings, applications and other submissions relating
to the transfer of the Stock shall, to the extent practicable, be withdrawn from
45
the Authority or other person to whom made.
(c) No such termination will relieve Buyer from liability for
a breach of this Agreement, and in such event Shareholders shall have all rights
and remedies available at law or equity, including the remedy of specific
performance.
(d) No such termination will relieve Shareholders from
liability for a breach of this Agreement, and in such event Buyer shall have all
rights and remedies available at law or equity, including the remedy of specific
performance.
14.5 Attorney's Fees. Notwithstanding any provision in this Agreement
that may limit or qualify a party's remedies, in the event of a default by any
party that results in a lawsuit or other proceedings for any remedy available
under this Agreement, the prevailing party shall be entitled to reimbursement
from the defaulting party of its reasonable legal fees and expenses (whether
incurred in arbitration, at trial, or on appeal.)
15. Miscellaneous.
15.1 Confidentiality. Except as provided in Section 6.9, the parties
hereto agree to hold in strict confidence all the terms and conditions of this
Agreement, and agree not to disclose or otherwise provide, directly or
indirectly, the terms hereof to third parties without the prior written consent
of the other party hereto, other than to its directors, employees and advisers
(such as bankers, accountants and lawyers) who are advised of the terms of this
Agreement and who need to know such information.
15.2 Controlling Law. This Agreement and all questions relating to its
validity, interpretation, performance and enforcement (including, without
limitation, provisions concerning limitations of actions), shall be governed by
and construed in accordance with the laws of the Commonwealth of Pennsylvania,
notwithstanding any conflict-of-laws doctrines of such state or other
jurisdiction to the contrary, and without the aid of any canon, custom or rule
of law requiring construction against the draftsman.
15.3 Notices. All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been duly given, made and received only when delivered
46
(personally, by courier service such as Federal Express, by other messenger or
by telecopy (with automatic machine confirmation)) to the address set forth
below:
(i) If to Shareholders:
The Shareholders of Xxxxxx Communications Corp.
c/o Xxxx X. Xxxxxx, Xx.
00 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Telecopy Number 000 000-0000
with a copy, given in the manner prescribed above, to:
Xxxxx X. XxXxxxx, III
Xxxx, Xxxxxx & XxXxxxxx, P.C.
00 Xxxx Xxxxxx Xx.
X.X. Xxx 000
Xxxx Xxxxxxx, XX 00000-0000
Telecopy Number 000 000-0000
(ii) If to Buyer:
Xxxxx X. Xxxx
Vice President, Corporate Development
Adelphia Communications Corporation
Main at Water
Xxxxxxxxxxx, XX 00000
Telecopy Number 000 000-0000
with a copy, given in the manner prescribed above, to:
Xxxxx X. Xxxxxx, Esq.
47
Xxxxxxxx Ingersoll Professional Corporation
One Oxford Centre
21st Floor
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Telecopy Number 000 000-0000
Any party may alter the address to which communications or copies are to be sent
by giving notice of such change of address in conformity with the provisions of
this section for the giving of notice.
15.4 Exhibits and Schedules. All exhibits and schedules attached hereto
are hereby incorporated by reference into, and made a part of, this Agreement.
15.5 Binding Nature of Agreement; No Assignment. This Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. No party may assign or transfer its rights or
obligations under this Agreement without the prior written consent of the other
party hereto; provided, however, notwithstanding the foregoing provisions of
this sentence, Buyer may assign all or any portion of its rights under this
Agreement to one or more affiliates of Buyer provided Buyer remains personally
liable to fully perform the terms of this Agreement and Buyer give notice to
Shareholders.
15.6 Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories.
15.7 Severability. Unless material hereto, if any provision of this
Agreement is held illegal, invalid or unenforceable, such illegality, invalidity
or unenforceability shall not affect any other provision hereof. Such provision
48
and the remainder of this Agreement shall, in such circumstances, be deemed
modified to the extent necessary to render enforceable the remaining provisions
hereof.
15.8 Entire Agreement. This Agreement, including the schedules and
exhibits hereto and other instruments and documents referred to herein or
delivered pursuant hereto, or concurrent herewith, and represents the entire
understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written,
except as herein contained. The express terms hereof control and supersede any
course of performance and/or usage of the trade inconsistent with any of the
terms hereof. This Agreement may not be modified or amended other than by an
agreement in writing signed by each of the parties hereto. Notwithstanding the
foregoing, the Confidentiality Agreement executed by Buyer and Xxxxxx dated
March 18, 1999, shall survive the execution of this Agreement.
15.9 Section Headings. The section headings in this Agreement are for
convenience only; they form no part of this Agreement and shall not affect its
interpretation.
15.10 Number of Days. In computing the number of days for purposes of
this Agreement, all days shall be counted, including Saturdays, Sundays and
holidays; provided, however, that if the final day of any time period falls on a
Saturday, Sunday or holiday on which federal banks are or may elect to be
closed, then the final day shall be deemed to be the next day which is not a
Saturday, Sunday or such holiday.
15.11 No Third Party Rights. Nothing in this Agreement, express or
implied, shall be construed to confer upon any person, other than the parties
hereto, their successors and permitted assigns, any legal or equitable rights,
remedies, claims, obligations or liabilities under or by reason of this
Agreement.
15.12 Expenses. Except as otherwise expressly provided herein, each
party hereto shall pay its own expenses incident to this Agreement and the
transactions contemplated hereunder, including all legal and accounting fees and
disbursements, and costs of obtaining all necessary consents.
15.13 Further Assurances. The parties hereto will use their best
efforts to comply with all legal requirements imposed on them with respect to
49
the transactions contemplated by this Agreement. Each party agrees to execute
and deliver any and all further agreements, documents or instruments necessary
to effectuate this Agreement and the transactions referred to herein,
contemplated hereby or reasonably requested by the other party to perfect or
evidence its rights hereunder. Each of Shareholders and Buyer will use its
diligent efforts to effect the transaction as promptly as practicable, and will
promptly notify the other party of any information delivered to or obtained by
such party concerning an event that would prevent the consummation of the
transactions contemplated by this Agreement.
15.14 Cable Companies' Financial Statements. Shareholders hereby
consent to the inclusion by Buyer of the Cable Companies' financial statements,
if required to be so included by Buyer, in any report required to be filed by
Buyer with the Securities and Exchange Commission ("SEC"), National Association
of Securities Dealers' Automated Quotations ("NASDAQ") System or any stock
exchange pursuant to applicable law, rule or regulation, including the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended. All accounting costs and fees incurred by reason of the reformatting of
the Cable Companies' financial statements in connection with the inclusion by
Buyer of the Cable Companies' financial statements in any such report shall be
borne by Buyer. Upon the request of Buyer, Shareholders agree to cause the Cable
Companies to promptly prepare (not later than thirty (30) days after the date of
such request) such financial statements relating to the Cable Companies as may
be required to be filed by Buyer with SEC, NASDAQ or any stock exchange. All
accounting costs and fees incurred by reason of the preparation of such
financial statements shall be borne by Buyer. Shareholders agree to obtain the
consent of the independent public accountants of the Cable Companies to the
inclusion of the Cable Companies' financial statements in any report required to
be filed by Buyer with the SEC, NASDAQ System or stock exchange.
50
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.
By: /s/ Xxxxxxxx X. Xxxxxx By: /s/ Xxxxxxxx X. Xxxxxx
Xxxxxxxx X. Xxxxxx Xxxxxxxx X. Xxxxxx
Trustee of Intervivos Trust of Xxxxxxxx X. Xxxxxx, Trust Trustee of Intervivos Trust of Xxxxxxxx X. Xxxxxx,
U/W of Xxxx X. Xxxxxx, Intervivos Trust of Xxxx X. Xxxxxx, Intervivos Trust of Xxxxxxxx X. Xxxxxx, Intervivos
Jr., Intervivos Trust of Xxxxxxxx X. Xxxxxx, Intervivos Trust of Xxxxx X. Xxxxxx, Xx., Intervivos Trust of
Trust of Xxxxxxxx X. Xxxxxx, Intervivos Trust of Xxxxx X. Xxxxxxxx Xxxx Xxxxx, Intervivos Trust of Xxxxxxxx
Xxxxxx, Xx., Intervivos Trust of Xxxxxxxx Xxxx Xxxxx, Xxxxx Xxxxxx, GST Exempt Trust, Xxxxxx Xxxxxx and
Intervivos Trust of Xxxxxxxx Xxxxx Xxxxxx, GST Exempt Appointment Trust, Xxxxxx Xxxxxx.
Trust, Xxxxxx Xxxxxx and Appointment Trust, Xxxxxx Xxxxxx
Adelphia Communications Corporation
By: /s/ Xxxx X. Xxxxxx, Xx.
Xxxx X. Xxxxxx, Xx. By: /s/ Xxxxxxx X. Xxxxx
Trustee of Intervivos Trust of Xxxxxxxx X. Xxxxxx, Trust Name: Xxxxxxx X. Xxxxx
U/W of Xxxx X. Xxxxxx, Intervivos Trust of Xxxx X. Xxxxxx,
Xx., Intervivos Trust of Xxxxxxxx X. Xxxxxx, Intervivos Title: Executive Vice President
Trust of Xxxxx X. Xxxxxx, Xx., Intervivos Trust of
Xxxxxxxx Xxxx Xxxxx, Intervivos Trust of Xxxxxxxx Xxxxx
Xxxxxx, GST Exempt Trust, Xxxxxx Xxxxxx and Appointment
Trust, Xxxxxx Xxxxxx
51
Exhibits/Schedules
[any of which will be filed if requested by the staff of the Commission]
A. Escrow Agreement
B. Operating Subsidiaries
C. Form of Authorization
D. Release
E. Opinion - Seller
F. Opinion - FCC
G. Certificate of Shareholders
H. Non-competition Agreement
I. Officer's Agreement
J. Certificate of Buyer
K. Opinion - Buyer
2.3 Estimate of Purchase Price Adjustments
4.3 Officers and Directors of Cable Companies Complete
4.4 Shareholder/Options Complete
4.5 Authorizations Complete
4.6 FCC Filings. Complete
4.8 Real Property Complete
4.10 Tangible Personal Property/Business Assets
52
4.11 Listed Contracts
4.12 Consents/First Refusal Rights
4.13 Financial Statements/Adverse Changes
4.14 Employees
4.15 Tax Proceedings
4.16 Technical Information
4.18 Environmental Matters
4.19 Claims and Litigation
4.20 List Employees/Labor Matters
5.3 Approvals and Consents - Buyer
6.2 Excluded Assets/Liabilities
7.1 Contracts requiring consent (to be prepared by Buyer)
