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Exhibit 2.6(f)
AMENDMENT TO
ASSET EXCHANGE AGREEMENT
THIS AMENDMENT TO ASSET EXCHANGE AGREEMENT (this "Amendment") is made
as of October 1, 1999, by and among InterMedia Partners Southeast, a California
general partnership ("IPSE"), on the one hand, and Charter Communications, LLC,
a Delaware limited liability company, Charter Communications Properties, LLC, a
Delaware limited liability company, and Marcus Cable Associates, L.L.C., a
Delaware limited liability company (each, a "Charter Party" and collectively,
"Charter"), on the other hand.
RECITALS
A. The Parties have entered into that Asset Exchange Agreement dated as
of April 20, 1999 (the "Original Agreement", and as amended by this Amendment,
the "Agreement"), pursuant to which (i) the Charter Parties have agreed to
convey, or cause to be conveyed, to IPSE substantially all of the assets
comprising or used or useful in connection with Charter's Cable Businesses and
(ii) IPSE has agreed to convey, or cause to be conveyed, to the Charter Parties
substantially all of the assets comprising or used or useful in connection with
IPSE's Cable Business, all in such a manner as to effect, to the extent
reasonably possible, a like-kind exchange of such assets under Section 1031 of
the Code.
B. IPSE, Charter and certain of their respective Affiliates have
entered into that Amended and Restated Common Agreement dated as of June 29,
1999 (the "Common Agreement") pursuant to which they have agreed to certain
issues common to each of the transfers made pursuant to this Agreement and to
certain other related transactions (each as more fully described in the Common
Agreement). The common issues addressed include revenue and working capital
adjustments, closing conditions, and indemnification for breaches of
representations, warranties, covenants and agreements.
C. The Parties wish to amend the Original Agreement, and to the extent
applicable, the Common Agreement as more fully set forth in this Amendment to
reflect Charter's retention of that Charter System in Indiana described on
SCHEDULE A-1 to this Amendment and deemed attached to the Original Agreement as
SCHEDULE A-1.
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AGREEMENTS
In consideration of the covenants and agreements set forth herein and
for other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereby agree as follows:
1. DEFINITIONS. Capitalized terms used and not defined in this Amendment
will have the meaning given to them in the Original Agreement. Article
1 of the Original Agreement is hereby amended to include the following
definitions:
Charter Retained Assets. All of the Charter Assets, other than Charter
Excluded Assets, that are owned, leased, held for, used or useful in,
or otherwise related to Charter's Cable Business conducted through the
Retained System and not used or useful in any other Charter System
along with the portion of the Charter Shared Assets related to the
Retained System.
Charter Shared Assets. That CATV Pole Lease Agreement between Charter
and GTE North Incorporated, dated February 8, 1990 and related to
Columbus and New Albany, Indiana.
Charter Transferred Assets. All of the Charter Assets other than the
Charter Excluded Assets, Charter Retained Assets and Charter Shared
Assets.
Charter Retained Franchises. The Charter Systems Franchises granted to
Charter by the Retained Franchise Authorities.
Retained Franchise Areas. The following political subdivisions of the
State of Indiana: the City of Columbus, the County of Xxxxxxxxxxx, and
the City of Seymour.
Retained Franchise Authorities. The local Governmental Authorities in
each of the Retained Franchise Areas.
Retained System. The Charter System encompassing the headends and
communities described on SCHEDULE A-1.
2. MANAGEMENT OF INDIANA SYSTEMS.
(1) Following the Closing, Charter will continue from Closing through
December 1, 1999, to manage each of the Charter Systems located in Indiana and
transferred to IPSE
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at the Closing, pursuant to the terms of the Management Agreement attached to
this Amendment and deemed attached to the Original Agreement as EXHIBIT A-1. If
the Second Closing occurs prior to December 1, 1999, Charter will manage the
Charter Retained Systems pursuant to the terms of said Management Agreement from
the date of the Second Closing through December 1, 1999.
(2) Section 7.3 of the Original Agreement is hereby amended and
restated in its entirety to read as follows:
7.3 Employees.
7.3.1 Except as set forth in this Section 7.3.1, each Party
may, but shall have no obligation to employ or offer employment to, any
employee of the other Party's Cable Business. Within 30 days after the
date of execution of this Agreement, each Party shall provide to the
other a list of all employees of its Systems (collectively for each
Party, its "System Employees") as of a recent date, showing the
original hire date, the then-current positions and rates of
compensation and whether the employee is subject to an employment
agreement, a collective bargaining agreement or represented by a labor
organization. Within 60 days after the date of execution of this
Agreement (but in no event less than 30 days after receipt of such
list), or such other date as the Parties may agree, the Party receiving
such list will provide to the other in writing a list of the other's
System Employees such Party or its Affiliates will employ following the
Closing or, in the case of Charter's System Employees in Indiana,
following the termination of the Management Agreement (the Closing
Date, or in the context of Charter's System Employees in Indiana, the
date of termination of the Management Agreement is referred to herein
as the "Transfer Cutoff Date"), subject only to the evaluations
permitted by this Section. Each Party agrees, and shall cause its
appropriate Affiliates, to cooperate in all reasonable respects with
the other Party to allow the other Party or its Affiliates to evaluate
its System Employees to make hiring decisions. In this regard, each
Party shall have the opportunity to make such appropriate prehire
investigation of each of such other Party's System Employees, as it
deems necessary, including, subject to obtaining the consent of such
System Employee, the right to review personnel files and conduct
background checks and the right to interview such employees during
normal working hours so long as such interviews are conducted after
notice to the other Party and do not unreasonably interfere with the
other Party's operations. Each Party will use its good faith efforts to
obtain the consent of each of its System Employees to allow the other
Party to review personnel files and to conduct background checks in
connection with the foregoing. Each Party or its Affiliates may, if it
wishes, condition any offer of employment upon the employee's passing a
pre-placement physical examination
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(including drug screening test) and the completion of a satisfactory
background check. The Party requesting such examination shall bear the
expense of such examination but the other Party shall, upon reasonable
notice, cooperate in the scheduling of such examinations so long as the
examinations do not unreasonably interfere with the other Party's
operations. As of the Transfer Cutoff Date, each Party shall have no
obligation to the other Party, its Affiliates or to the other Party's
employees, with regard to any employee it has determined not to hire.
Notwithstanding any of the foregoing, each Party agrees not to solicit
for employment, without the written consent of the other, any employee
listed on SCHEDULE 7.3 or any other employee of the other Party whose
position is System manager or higher.
7.3.2 Each Party, or its appropriate Affiliate, will pay to
all of its System Employees all compensation, including salaries,
commissions, bonuses, deferred compensation, severance (to the extent
applicable), insurance, vacation (except for accrued vacation time (not
to exceed four weeks) and sick time (not to exceed 10 days) included in
the calculation of such Party's Adjusted Value under the Common
Agreement), and other compensation or benefits to which they are
entitled for periods prior to the Transfer Cutoff Date, including all
amounts, if any, payable on account of the termination of their
employment.
7.3.3 Each Party, or its appropriate Affiliate, will be
responsible for maintenance and distribution of benefits accrued under
any employee benefit plan (as defined in ERISA) maintained by such
Party, or its appropriate Affiliate, pursuant to the provisions of such
plan and any Legal Requirements. Neither Party will assume any
obligation or liability for any such accrued benefits or any fiduciary
or administrative responsibility to account for or dispose of any such
accrued benefits under any employee benefit plans maintained by the
other Party or any Affiliate. In the event that a transferor Party
determines that the transactions contemplated by this Agreement will
not permit a distribution to be made to a Hired Employee (as defined
below) from the transferor Party's tax qualified plan in accordance
with Section 401(k)(10) of the Code then the other Party may accept a
plan-to-plan transfer of Hired Employees' plan benefits to its own tax
qualified plan. If there is no plan-to-plan transfer, in order to
permit a transferor Party, or its appropriate Affiliate, to make
distributions to any former System Employee of such Party who becomes a
Hired Employee of the other Party of the balance of such employee's
401(k) account in the transferor Party's or its Affiliate's tax
qualified plan, if any, as soon as legally permitted, each transferee
Party shall notify the other Party of the date of termination of such
employee's employment with the transferee Party for any reason.
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7.3.4 All claims and obligations under, pursuant to or in
connection with any welfare, medical, insurance, disability or other
employee benefit plans of a Party or any Affiliate or arising under any
Legal Requirement affecting employees of such Party or any Affiliate
incurred on or before the Transfer Cutoff Date or resulting from or
arising from events or occurrences occurring or commencing on or before
the Transfer Cutoff Date will remain the responsibility of such Party,
or the appropriate Affiliate, whether or not such employees are hired
by the other Party as of or after the Transfer Cutoff Date. Neither
Party will have or assume any obligation or liability under or in
connection with any such plan of the other Party or any Affiliate of
the other Party.
7.3.5 Each Party, or its appropriate Affiliate, will remain
solely responsible for, and will indemnify and hold harmless the other
from and against all Losses arising from or with respect to, all
salaries and all severance, vacation (except for accrued vacation time
and sick time included in the calculation of such Party's Adjusted
Value under the Common Agreement), medical, holiday, continuation
coverage and other compensation or benefits to which its employees may
be entitled, whether or not such employees may be hired by the other
Party or any Affiliate of the other Party, as a result of their
employment by such Party or any Affiliate of such Party on or prior to
the Transfer Cutoff Date, the termination of their employment on or
prior to the Transfer Cutoff Date, the consummation of the transactions
contemplated hereby or pursuant to any applicable Legal Requirement or
otherwise relating to their employment prior to the Transfer Cutoff
Date. Any liability under WARN with regard to any employee terminated
on or prior to the Transfer Cutoff Date, or not hired by the other
Party on or after the Transfer Cutoff Date, shall, as a matter of
contract between the Parties, be the responsibility of the Party or its
Affiliates by which the employee was employed prior to the Transfer
Cutoff Date. Each Party and its Affiliates shall cooperate with the
other Party and its Affiliates, if requested, in the giving of WARN
notices on behalf of the other.
7.3.6 Notwithstanding anything to the contrary herein, each
Party shall:
(a) credit each System Employee of the other Party
who is offered on or prior to the Transfer Cutoff Date employment by
such Party and becomes an employee of such Party after the Transfer
Cutoff Date (a "Hired Employee") the amount of vacation time (to a
maximum of four weeks) and sick time (to a maximum of 10 days) accrued
by him or her as a System Employee of the transferor Party through and
including the Transfer Cutoff Date to the extent the transferor Party's
System Value is decreased pursuant to Section 2.2(c)(ii) of the Common
Agreement in the case of IPSE System Employees who become employees of
any Charter Party
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or its Affiliates and Section 2.2(c)(ii) of the Common Agreement in the
case of Charter System Employees who become employees of IPSE or its
Affiliates, provided, however, that if any Hired Employee has accrued
vacation time and/or sick time in excess of four weeks or 10 days,
respectively, then the transferor Party shall, and shall cause its
appropriate Affiliate to, pay to such employee the amount of such
excess and the transferee Party shall not assume any liability or
obligation in respect of such excess;
(b) permit each Hired Employee to participate in
such Party's employee benefit plans to the same extent as similarly
situated employees of such Party and their dependents are permitted to
participate;
(c) given each Hired Employee credit for such
employee's past service with the other Party and its Affiliates as of
the Transfer Cutoff Date (including past service with any prior owner
or operator of the other Party's Systems or Cable Business) for
purposes of eligibility and vesting under such Party's employee benefit
and other plans to the same extent as other similarly situated
employees of such Party;
(d) not subject any Hired Employee to any waiting
periods or limitations on benefits for pre-existing conditions under
such Party's employee benefit plans, including any group health and
disability plans, except to the extent such employees were subject to
such limitations under the employee benefit plans of such other Party
or any Affiliate of such other Party; and
(e) credit each Hired Employee under any group
health plan for any deductible amount previously met by such Hired
Employee as of the Transfer Cutoff Date under any of the group health
plans of the transferor Party or any of its Affiliates.
7.3.7 If a transferee Party discharges any Hired Employee
without cause within one hundred twenty days after Transfer Cutoff
Date, then such transferee Party shall pay severance benefits to such
Hired Employee in accordance with such transferor Party's severance
benefit plan. For purposes of this SECTION 7.3.7, "cause" shall have
the meaning set forth in the transferee Party's employment policies,
procedures or agreements applicable to such transferee Party's
employees who are situated similarly to the discharged Hired Employee.
7.3.8 If a transferor Party has, or acquires, a duty to
bargain with any labor organization, then such transferor Party will
(i) give prompt written notice of such
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development to the other Party, including notice of the date and place
of any negotiating sessions as they are planned or contemplated and
permit the other Party to have a representative present at all
negotiating sessions with such labor organization and at all meetings
preparatory thereto (including making the transferee Party's
representative a representative of the transferor Party's delegation if
required by the labor organization) and (ii) not, without the
transferee Party's written consent, enter into any Contract with such
labor organization that purports to bind the transferee Party,
including any successor clause or other clause which would have this
purpose or effect. Each Party (as a transferor Party) acknowledges and
agrees that the other Party has not agreed to be bound, and will not be
bound, without an explicit assumption of such liability or
responsibility by the transferee Party, by any provision of any
collective bargaining agreement or similar Contract with any labor
organization to which the transferor Party or any of its Affiliates is
or may become bound.
7.3.9 Nothing in this SECTION 7.3 or elsewhere in this
Agreement shall be deemed to make any employee of either Party a third
party beneficiary of this Agreement.
7.3.10 Notwithstanding any other provision of this Agreement,
in respect of wages paid with respect to the calendar year in which the
Transfer Cutoff Date falls to employees of Charter who after the
Transfer Cutoff Date become employees of IPSE, or vice versa, IPSE and
Charter agree to comply, and to cause their respective affiliates to
comply, with the alternative procedures set forth in Section 5 of
Revenue Procedure 96-60 and shall cooperate, and shall cause their
respective affiliates to cooperate, with each other in complying with
such procedures.
(3) Section 7.11 (Use of Name and Logo) of the Original Agreement is
hereby amended to add the following sentence as the penultimate sentence
thereof:
Such 180-day period will be extended with respect to the Charter
Systems located in Indiana to expire 180 days after the termination of
the Management Agreement.
(4) Section 7.12 of the Original Agreement is hereby amended and
restated in its entirety to read as follows:
7.12 Transitional Billing Services. Charter will provide to IPSE, upon
written request delivered a reasonable amount of time in advance and to
the extent reasonably practicable, access to and the right to use its
billing system computers, software and related fixed assets in
connection with the Systems acquired by IPSE
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for a period of up to 150 days following the Closing (or in the case of
the Charter Systems in Indiana, for a period of up to 150 days
following termination of the Management Agreement) to allow for
conversion of existing billing arrangements, including billing and
related arrangements regarding internet access services being provided
to customers of a Charter System prior to the assumption by IPSE of the
day-to-day management of such System ("Transitional Billing Services").
All Transitional Billing Services will be provided on terms and
conditions reasonably satisfactory to each Party; provided, however,
that the amount to be paid by IPSE will not exceed the out-of-pocket
cost to Charter of providing such Transitional Billing Services.
(5) Section 9.2 of the Original Agreement is hereby amended to add the
following subsection 9.2.11:
9.2.11 Management Agreement. The Management Agreement in the
form of EXHIBIT A-1 (the "Management Agreement").
(6) Section 9.3 of the Original Agreement is hereby amended to add the
following subsection 9.3.11:
9.3.11 Management Agreement. The Management Agreement in the
form of EXHIBIT A-1.
3. OWNERSHIP AND OPERATION OF CHARTER RETAINED ASSETS. Charter will retain
ownership and risk of loss of the Charter Retained Assets until the Second
Closing, at which time, subject to the terms of this Amendment, Charter will
transfer the Charter Retained Assets to IPSE. The provisions of the Original
Agreement, including Sections 2.1 and 12.14, are deemed amended to reflect such
delay in transfer of ownership and risk of loss. To the extent applicable to the
Charter Retained Assets, Charter will continue to comply with the provisions of
Section 7.2 of the Original Agreement until consummation of the Second Closing.
4. FRANCHISE CONSENTS. Section 7.5.5 of the Original Agreement is hereby deleted
in its entirety.
5. THE CLOSING AND THE SECOND CLOSING.
(1) At the Closing, (i) Charter will transfer and assign to IPSE all of
the Charter Transferred Assets, (ii) Charter will partially assign to IPSE all
Charter Shared Assets to the
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extent necessary to permit IPSE or its agents to operate the Charter Transferred
Assets and conduct Charter's Cable Businesses with respect to the Charter
Transferred Assets as they are being operated and conducted on the Closing Date,
and (iii) IPSE will assume all of IPSE's Assumed Obligations and Liabilities
other than those obligations arising under the Charter Retained Franchises or
with respect to the Charter Retained Assets or the Retained System (the "Charter
Retained Liabilities"). IPSE hereby waives its conditions to Closing relating to
the delivery of the Charter Retained Assets and the obtaining of Required
Consents for the transfer of the Charter Retained Franchises and consents to the
partial assignment of the Charter Shared Assets at the Closing as contemplated
in this Agreement.
(2) Article 8 of the Original Agreement is hereby amended to add the
following Sections 8.3 and 8.4:
8.3 Conditions of IPSE's Obligations under the Second Closing. The
obligations of IPSE to consummate the transactions contemplated by this
Agreement to be consummated at the Second Closing will be subject to
the satisfaction, at or before the Second Closing, of the following
conditions, one or more of which may be waived by IPSE:
8.3.1 Accuracy of Representations and Warranties. The
representations and warranties of Charter in this Agreement and in the
Transaction Documents delivered at the Second Closing regarding the
Charter Retained Assets, without giving effect to any materiality
qualification contained therein, are true, complete and accurate on and
as of the date hereof and at and as of the Second Closing with the same
effect as if made at and as of the Second Closing, except to the extent
that all misstatements, omissions and inaccuracies, in the aggregate,
do not have material adverse effect on the Charter Assets, Charter's
Cable Businesses, the operations, condition (financial or otherwise) or
results of operations of the Charter Systems taken as a whole, or on
the ability of any Charter Party to perform its obligations under this
Agreement.
8.3.2 Performance of Agreements. Charter shall have performed
in all material respects all obligations and agreements and complied in
all material respects with all covenants in this Agreement and in any
Transaction Document to be performed and complied with by it at or
before the Second Closing.
8.3.3. Deliveries. Charter shall have delivered the items and
documents required to be delivered by it pursuant to this Agreement,
including those required to be delivered to IPSE under SECTION 9.5.
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8.3.4 Legal Proceedings. No Legal Requirement of any
Governmental Authority (including any temporary Legal Requirement)
shall be in effect which would prevent or make illegal the consummation
of any of the transactions contemplated by this Agreement or any
Transaction Document to occur at the Second Closing.
8.3.5 Consents. Required Consents relating to all Charter
Retained Franchises shall have been obtained in form and substance
reasonably satisfactory to IPSE, or the consent of the appropriate
Retained Franchise Authority shall be deemed to have been received in
accordance with Section 617 of the Communications Act (47 U.S.C.
Section 537).
8.3.6 No Material Adverse Changes. There shall not have been
any material adverse change in the Charter Retained Assets or the
condition (financial or otherwise) or operations of Charter's Cable
Business conducted through the Retained System or the Retained Systems,
taken as a whole, since the Closing resulting in a material adverse
effect on the Charter Assets, Charter's Cable Businesses, the
operations, condition (financial or otherwise) or results of operations
of the Charter Systems taken as a whole, or on the ability of any
Charter Party to perform its obligations under this Agreement.
8.4. Conditions of Charter's Obligations under the Second Closing. The
obligations of Charter to consummate the transactions contemplated by
this Agreement to be consummated at the Second Closing will be subject
to the satisfaction, at or before the Second Closing, of the following
conditions, one or more of which may be waived by Charter:
8.4.1 Performance of Agreements. IPSE shall have performed in
all material respects all obligations and agreements and complied in
all material respects with all covenants in this Agreement and in any
Transaction Document to be performed and complied with by it at or
before the Second Closing.
8.4.2 Deliveries. IPSE shall have delivered the items and
documents required to be delivered by it pursuant to this Agreement,
including those required to be delivered to Charter under SECTION 9.6.
8.4.3 Legal Proceedings. No Legal Requirement of any
Governmental Authority (including any temporary Legal Requirement)
shall be in effect which would prevent or make illegal the consummation
of any of the transactions
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contemplated by this Agreement or any Transaction Document to occur at
the Second Closing.
(3) Article 9 of the Original Agreement is hereby amended to add the
following Sections 9.4, 9.5 and 9.6:
9.4 The Second Closing. The transfer, assignment and assumption of the
Charter Retained Assets (the "Second Closing") shall be effected by
overnight delivery of the documents described in SECTIONS 9.5 AND 9.6
within ten days following the satisfaction or waiver of all of the
conditions set forth in SECTIONS 8.3 AND 8.4 (other than SECTIONS 8.3.3
AND 8.4.2). The transactions to be consummated at the Second Closing
shall be deemed to have been consummated at the time (the "Second
Closing Time") on the date (the "Second Closing Date") as mutually
agreed upon by the Parties.
9.5 Charter's Delivery Obligations at the Second Closing. At the Second
Closing, Charter will deliver or cause to be delivered to IPSE the
following:
9.5.1 Xxxx of Sale and Assignment and Assumption Agreement. A
Xxxx of Sale and Assignment and Assumption Agreement for the Charter
Retained Assets in a form mutually acceptable to the parties.
9.5.2 Deeds. Special warranty deeds in recordable form
conveying to IPSE each parcel of Charter Owned Property included in the
Charter Retained Assets, and assignments of leases and easements in
recordable form, with respect to the Charter Leased Property and
Charter Other Real Property Interests included in the Charter Retained
Assets as to which prior assignments into the applicable Charter Party
were recorded in the applicable real estate records.
9.5.3 Lien Releases. Evidence reasonably satisfactory to IPSE
that all Liens (other than Permitted Liens) affecting or encumbering
the Charter Retained Assets have been terminated, released or waived,
as appropriate, or original, executed instruments in form reasonably
satisfactory to IPSE effecting such terminations, releases or waivers.
9.5.4 Vehicle Titles. Title certificates to all vehicles
included among the Charter Retained Assets, endorsed for transfer of
title to IPSE, and separate bills of sale therefor or other transfer
documentation, if required by the laws of the States in which such
vehicles are titled.
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9.5.5 Officer's Certificate. IPSE will have received a
certificate executed by an executive officer of Charter dated the date
of the Second Closing, reasonably satisfactory in form and substance to
IPSE certifying that the conditions specified in SECTIONS 8.3.1 AND
8.3.2 have been satisfied.
9.5.6 Opinion of FCC Counsel. An opinion of Wiley, Rein &
Fielding dated as of the Second Closing and substantially in the form
of EXHIBIT C.5 of the Common Agreement and rendered with respect to the
Retained System.
9.5.7 Other. Such other documents and instruments as may be
necessary to effect the intent of this Agreement and to consummate the
transactions contemplated hereby and as are comparable to those
delivered with respect to the transactions consummated at the Closing.
9.6 IPSE's Delivery Obligations at the Second Closing. At the Second
Closing, IPSE will deliver or cause to be delivered to Charter the
following:
9.6.1 Xxxx of Sale and Assignment and Assumption Agreement. A
Xxxx of Sale and Assignment and Assumption Agreement for the Charter
Retained Assets in a form mutually acceptable to the parties.
9.6.2 Officer's Certificate. Charter will have received a
certificate executed by an executive officer of IPSE dated the date of
the Second Closing, reasonably satisfactory in form and substance to
Charter certifying that the conditions specified in SECTION 8.4.1 have
been satisfied.
9.6.3 Other. Such other documents and instruments as may be
necessary to effect the intent of this Agreement and to consummate the
transactions contemplated hereby and as are comparable to those
delivered with respect to the transactions consummated at the Closing.
6. CLOSING ADJUSTMENTS WITH RESPECT TO THE RETAINED SYSTEM. All of the
adjustments made to the Base Values (as defined in the Common Agreement) of the
Retained System pursuant to the Common Agreement shall be made to reflect the
principle that all expenses and income attributable to Charter's Cable Business
conducted through the Retained System for the period through and including the
Second Closing Date are for the account of Charter, and all expenses and income
attributable to such Cable Business for the period after the Second Closing Date
are for the account of IPSE. Notwithstanding the foregoing, solely for purposes
of calculating the Charter Actual Revenues and the Charter Shortfall Adjustment
Amount, each as described in the Common Agreement, the Charter Retained Assets
shall be
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deemed to have been transferred to IPSE as of the Closing. The Preliminary
Report (as defined in the Common Agreement) delivered with respect to the
Charter Systems will not include any adjustments related to the working capital,
liabilities, capital expenditures and other assets and liabilities of the
Retained System. If the Second Closing occurs prior to the delivery of the Final
Report (as defined in the Common Agreement) related to the Charter Systems, then
the Final Report will include all adjustments to the Base Value of the Retained
Systems as of the Second Closing Date, to the extent such adjustments are
required to be made under the Common Agreement. If the Second Closing has not
occurred prior to the delivery of the Final Report with respect to the Charter
Systems, then such Final Report will not include any adjustments related to the
working capital, liabilities, capital expenditures and other assets and
liabilities of the Retained System, and Charter will prepare and deliver to IPSE
a Final Report with respect to the Retained System no later than 90 days after
the Second Closing, which Final Report will be prepared in accordance with the
requirements set forth in the Common Agreement.
7. FAILURE OF SECOND CLOSING.
(1) If the City of Columbus, Indiana, and the County of Xxxxxxxxxxx,
Indiana, each have not consented to the transactions contemplated by the
Agreement on or before November 5, 1999, IPSE may elect by written notice to
Charter to receive, in lieu of the Charter Retained Assets, such other property
as may be mutually acceptable to the Parties (the "Charter Replacement Assets").
The Parties agree to negotiate in good faith the terms of an amendment to the
Agreement pursuant to which IPSE will acquire the Charter Replacement Assets on
terms substantially equivalent to the terms upon which IPSE has agreed to
acquire the Charter Retained Assets; provided that subject to the terms and
conditions of such amendment, the Second Closing will occur not later than the
earlier of (i) 180 days from the date of the Closing and (ii) the due date
(including extensions) for the federal Tax return for IPSE for the taxable year
in which the Closing occurs (the "Replacement Date"). Such amendment will
provide that, if the Second Closing has not occurred on or before the
Replacement Date, IPSE may elect to receive from Charter cash in an amount equal
to $88,202,130 in lieu of the Charter Replacement Assets.
(2) Notwithstanding the foregoing, IPSE will not be required to acquire
the Charter Replacement Assets or to amend the Agreement as described in Section
7(a) unless IPSE is satisfied in its reasonable discretion following due
diligence of the Charter Replacement Assets that as of a common date on or after
the Closing Date the Charter Replacement Assets are substantially equivalent in
value to the Charter Retained Assets by "asset class" as defined under Section
1031 of the Code and the Treasury Regulations promulgated thereunder. In the
event that IPSE is not so satisfied, it may elect to receive from Charter cash
in an amount equal to $88,202,130 in lieu of the Charter Retained Assets.
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If IPSE makes such an election to receive cash, Charter shall pay such amount by
one or more wire transfers of immediately available funds to the Qualified
Intermediary or such other payee and at such account as may be designated in
written instructions delivered to Charter by IPSE, within three Business Days
after receipt of such election and wire instructions.
(3) In the event IPSE makes an election to receive the Charter
Replacement Assets or cash under this Section 7,
1. IPSE, at its discretion, may elect to require
Charter to assign to IPSE at no additional cost that
portion of the Charter Retained Assets that
constitute Charter Shared Assets; and
2. the Charter Parties shall, jointly and severally,
indemnify and hold harmless each of IPSE and its
Affiliates, and their respective shareholders,
officers, directors, partners, employees, agents,
successors and assigns and any Person claiming by or
through any of them, as the case may be, from and
against 50% of all taxes, interest, penalties and
related costs of defense (including reasonable
attorneys' fees), but not including any taxes
resulting from payments made pursuant to the
indemnification obligations set forth in this
paragraph (collectively, "Tax Losses") incurred by
such indemnified parties and arising out of or
resulting from any claim, allegation or
determination (whether administrative or judicial)
that there will result any incremental Tax Losses in
excess of those computed under Section 1031 of the
Code as if all of the Charter Assets had been
transferred at the Closing; provided, however, that
the foregoing indemnification shall not apply if
IPSE elects to receive Charter Replacement Assets
and such receipt does not qualify as a tax-deferred
exchange under Section 1031 of the Code unless such
failure to qualify arises solely from a breach by a
Charter Party. For the avoidance of doubt, the
indemnification provided by this section shall not
apply to Tax Losses incurred upon the receipt of
Charter Assets transferred at the Closing. Such
indemnification shall be separate from any
indemnification provided under the Common Agreement
and will not be subject to any threshold, cap or
other limitation, and any amounts paid by Charter
pursuant to this indemnification obligation will not
be counted for purposes of determining the
application of any limitations on Charter's
indemnification obligations under the Common
Agreement.
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8. NOTICE OF ASSIGNMENT TO QUALIFIED INTERMEDIARY. IPSE hereby gives notice to
Charter that, pursuant to Section 12.1 of the Original Agreement, IPSE has
assigned all of its rights, but none of its obligations, under the Agreement
with respect to the IPSE Assets to Norwest Bank Colorado, National Association,
in its capacity as a "qualified intermediary" engaged by IPSE to effectuate a
deferred like-kind exchange under Section 1031 of the Code (the "Qualified
Intermediary"). IPSE further gives notice to Charter that, pursuant to Section
12.1 of the Original Agreement, IPSE has assigned all of its rights, but none of
its obligations, under the Agreement to acquire the Charter Assets (including
the Charter Retained Assets and Charter Replacement Assets, as applicable) to
the Qualified Intermediary.
9. COUNTERPARTS. This Amendment may be executed in counterparts, each of which
may be delivered by facsimile transmission and will be deemed an original.
10. GOVERNING LAW. The validity, performance and enforcement of this Amendment
will be governed by the laws of the State of Delaware, without giving effect to
the principles of conflicts of law of such state.
11. SEVERABILITY. Any term or provision of this Amendment that is invalid or
unenforceable will be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable any other provisions
of this Amendment.
12. CONSTRUCTION OF AMENDMENT. This Amendment has been negotiated by the
undersigned and their respective legal counsel, and legal or equitable
principles that might require the construction of this Amendment or any
provision of this Amendment against the party drafting this Amendment will not
apply in any construction or interpretation of this Amendment. As used in this
Amendment, the words "include," "includes" and "including" shall be deemed to be
followed by the phrase "without limitation."
13. EFFECT OF AMENDMENT. Except as amended by this Amendment, all terms and
provisions of the Agreement will remain unchanged and in full force.
[The remainder of this page has intentionally been left blank]
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The parties have executed this Amendment to Asset Exchange Agreement as
of the day and year first above written.
CHARTER COMMUNICATIONS, LLC
By: /s/ Xxxx Xxxxxx
----------------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
CHARTER COMMUNICATIONS PROPERTIES,
LLC
By: /s/ Xxxx Xxxxxx
----------------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
MARCUS CABLE ASSOCIATES, L.L.C.
By: /s/ Xxxx Xxxxxx
----------------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
INTERMEDIA PARTNERS SOUTHEAST
By: InterMedia Capital Management, LLC,
its managing general partner
By: InterMedia Management, Inc.,
its managing member
By: /s/ Xxxxxx X. Xxxxx
-------------------------
Xxxxxx X. Xxxxx,
Vice President
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The following parties to the Amended and Restated Common Agreement dated June
29, 1999 hereby consent to Sections 5, 6 and 7 of this Amendment to Asset
Exchange Agreement to the extent that such sections amend or modify said Amended
and Restated Common Agreement.
CHARTER RMG, LLC
By: /s/ Xxxx Xxxxxx
-------------------------------------------
Name: Xxxx Xxxxxx
Title: Vice President
INTERMEDIA PARTNERS,
A CALIFORNIA LIMITED PARTNERSHIP
By: InterMedia Capital Management I, LLC,
its managing general partner
By: InterMedia Management, Inc.,
its managing member
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------------
Xxxxxx X. Xxxxx, Vice President
BRENMOR CABLE PARTNERS, L.P.,
a California limited partnership
By: InterMedia Partners, a California
Limited Partnership, its general partner
By: InterMedia Capital Management I, LLC,
its managing general partner
By: InterMedia Management, Inc.,
its managing member
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------------
Xxxxxx X. Xxxxx, Vice President
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INTERMEDIA PARTNERS OF WEST
TENNESSEE, L.P.
By: InterMedia Capital Management, LLC,
its managing general partner
By: InterMedia Management, Inc.,
its managing member
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------------
Xxxxxx X. Xxxxx, Vice President
INTERMEDIA PARTNERS IV, L.P.
By: InterMedia Capital Management, LLC,
its managing general partner
By: InterMedia Management, Inc.,
its managing member
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------------
Xxxxxx X. Xxxxx, Vice President
INTERMEDIA CAPITAL PARTNERS
IV, L.P.
By: InterMedia Capital Management, LLC,
its managing general partner
By: InterMedia Management, Inc.,
its managing member
By: /s/ Xxxxxx X. Xxxxx
-------------------------------------------
Xxxxxx X. Xxxxx, Vice President
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TCID-IP V, INC.
By: /s/ Xxxxx Xxxxx
-------------------------------------------
Name: Xxxxx Xxxxx
Title: Vice President
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SCHEDULE A-1
RETAINED SYSTEM
Headend Communities
Columbus Xxxxxxxxxxx County
Elizabethtown
Xxxxxxxx
Xxxxxxxx
Sunnybrook Trailer Park
Xxxxxxx Xxxxxxxx County
Xxxxxx
North Xxxxxx
Xxxxxxx County
Seymour
Westport Decatur County
Westport
Elizabethtown Xxxxxxxxxxx County
(Apollo) Elizabethtown
Jonesville
Xxxxxxxx County
Hartsville
Xxxxxxx County
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EXHIBIT A-1
FORM OF MANAGEMENT AGREEMENT
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