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Exhibit 2.6(c)
RMG PURCHASE AGREEMENT
dated as of April 20, 1999
between
XXXXX MEDIA GROUP, INC.,
INTERMEDIA PARTNERS OF WEST TENNESSEE, L.P.
and
CHARTER RMG, LLC
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TABLE OF CONTENTS
Page
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1. DEFINITIONS.......................................................... 1
1.1 1992 Cable Act................................................. 1
1.2 Affiliate...................................................... 1
1.3 Agreement...................................................... 2
1.4 ............................................................... 2
1.5 Assets......................................................... 2
1.6 Basic Services................................................. 2
1.7 Books and Records.............................................. 2
1.8 Business Day................................................... 2
1.9 Cable Act...................................................... 2
1.10 Cable Business................................................. 3
1.11 Closing........................................................ 3
1.12 Closing Time................................................... 3
1.13 Code........................................................... 3
1.14 Communications Act............................................. 3
1.15 Contract....................................................... 3
1.16 Environmental Law.............................................. 3
1.17 ERISA.......................................................... 3
1.18 ERISA Affiliate................................................ 3
1.19 Expanded Basic Services........................................ 3
1.20 FCC............................................................ 3
1.21 Governmental Authority......................................... 3
1.22 Hazardous Substances........................................... 3
1.23 HSR Act........................................................ 4
1.24 Intellectual Property.......................................... 4
1.25 Judgment....................................................... 4
1.26 Knowledge...................................................... 4
1.27 Leased Property................................................ 4
1.28 Legal Requirement.............................................. 4
1.29 Lien........................................................... 5
1.30 Litigation..................................................... 5
1.31 Losses......................................................... 5
1.32 MVPD........................................................... 5
1.33 Other Intangibles.............................................. 5
1.34 Other Real Property Interests.................................. 5
1.35 Owned Property................................................. 5
1.36 Party.......................................................... 5
1.37 Pay TV......................................................... 6
1.38 Permitted Liens................................................ 6
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1.39 Person......................................................... 6
1.40 Required Consents.............................................. 6
1.41 Six-Month Date................................................. 6
1.42 Statements..................................................... 6
1.43 Systems Contracts.............................................. 6
1.44 Systems Franchises............................................. 7
1.45 Systems Licenses............................................... 7
1.46 Tangible Personal Property..................................... 7
1.47 Taxes.......................................................... 7
1.48 Third Party.................................................... 7
1.49 Transaction Documents.......................................... 7
1.50 Other Definitions.............................................. 7
1.51 Usage.......................................................... 9
2. CONTRIBUTION AND PURCHASE............................................ 9
2.1 Contribution................................................... 9
2.2 Purchase....................................................... 9
3.1 Base and Adjusted Value........................................ 9
3.2 Allocation of Purchase Price................................... 10
4. EXCLUDED ASSETS AND.................................................. 10
4.1 Excluded Assets................................................ 10
4.2 Assumed Obligations and Liabilities............................ 11
5. IPWT'S REPRESENTATIONS AND WARRANTIES................................ 12
5.1 Organization and Qualification of IPWT and RMG................. 12
5.2 Authority and Validity......................................... 12
5.3 No Conflict; Required Consents................................. 12
5.4 Assets......................................................... 13
5.5 System Franchises, Systems Licenses, Systems Contracts and
Other Real Property Interests.................................. 13
5.6 Real Property.................................................. 15
5.7 Environmental.................................................. 15
5.8 Compliance with Legal Requirements............................. 16
5.9 Intellectual Property.......................................... 18
5.10 Financial Statements........................................... 18
5.11 Absence of Certain Changes or Events........................... 19
5.12 Litigation..................................................... 19
5.13 Tax Returns; Other Reports..................................... 19
5.14 Employment Matters............................................. 19
5.15 Systems Information............................................ 21
5.16 Taxpayer Identification Number................................. 21
5.17 Finder and Brokers............................................. 21
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5.18 Related Party Transactions..................................... 22
6. CHARTER'S REPRESENTATIONS AND WARRANTIES............................. 22
6.1 Organization and Qualification of Charter...................... 22
6.2 Authority and Validity......................................... 22
6.3 No Conflict; Required Consents................................. 22
6.4 Taxpayer Identification Number................................. 23
6.5 Finder and Brokers............................................. 23
6.6 Litigation..................................................... 23
6.7 Qualification.................................................. 23
6.8 Securities Law Matters......................................... 23
7. ADDITIONAL COVENANTS................................................. 23
7.1 Access to Premises and Records................................. 23
7.2 Continuity and Maintenance of Operations, Certain Deliveries
and Notice..................................................... 24
7.3 Employees...................................................... 26
7.4 Leased Vehicles; Other Capital Leases.......................... 29
7.5 Required Consents; Franchise Renewal........................... 29
7.6 Title Commitments and Surveys.................................. 31
7.7 HSR Notification............................................... 32
7.8 Sales and Transfer Taxes....................................... 32
7.9 Programming.................................................... 32
7.10 Updated Schedules.............................................. 33
7.11 Use of Name and Logo........................................... 33
7.12 Transitional Billing Services.................................. 34
7.13 Confidentiality and Publicity.................................. 34
7.14 Bulk Transfer.................................................. 35
7.15 Lien Searches.................................................. 35
7.16 Further Assurances............................................. 35
7.17 Post-Closing Cooperation as to Rates........................... 35
7.18 Distant Broadcast Signals...................................... 36
7.19 Environmental Assessment....................................... 37
7.20 Year 2000 Matters.............................................. 38
7.21 Satisfaction of Conditions..................................... 40
7.22 Offers......................................................... 40
7.23 Retention of Books and Records................................. 40
7.24 Formation of Tennessee LLC..................................... 41
7.25 Tax Return Cooperation......................................... 41
8. CONDITIONS PRECEDENT................................................. 41
8.1 Conditions to Charter's Obligations............................ 41
8.2 Conditions to RMG's Obligations................................ 42
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9. THE CLOSING.......................................................... 43
9.1 The Closing; Time and Place.................................... 43
9.2 RMG's Delivery Obligations..................................... 43
9.3 Charter's Delivery Obligations................................. 44
10. TERMINATION AND DEFAULT.............................................. 45
10.1 Termination Events............................................. 45
10.2 Effect of Termination.......................................... 45
11. SURVIVAL; REMEDIES................................................... 46
11.1 Survival of Representations, Warranties Covenants and
Agreements .................................................... 46
11.2 Exclusive Remedy............................................... 46
12. MISCELLANEOUS PROVISIONS............................................. 46
12.1 Parties Obligated and Benefitted............................... 46
12.2 Notices........................................................ 46
12.3 Right to Specific Performance.................................. 47
12.4 Waiver......................................................... 47
12.5 Captions....................................................... 47
12.6 Governing Law.................................................. 47
12.7 Time........................................................... 47
12.8 Late Payments.................................................. 47
12.9 Counterparts................................................... 47
12.10 Entire Agreement............................................... 47
12.11 Severability................................................... 47
12.12 Construction................................................... 47
12.13 Expenses....................................................... 48
12.14 Risk of Loss................................................... 48
12.15 Tax Consequences............................................... 48
12.16 Commercially Reasonable Efforts................................ 48
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Exhibits:
Exhibit 9.2.1 - Xxxx of Sale and Assignment and Assumption Agreement and
Xxxx of Sale and General Assignment
Schedules:
Schedule 1.28 - Leased Property
Schedule 1.35 - Other Real Property Interests
Schedule 1.36 - Owned Property
Schedule 1.43 - Systems Contracts
Schedule 1.44 - Systems Franchises
Schedule 1.45 - Systems Licenses
Schedule 1.46 - Tangible Personal Property
Schedule 4.1(a) - Excluded Assets
Schedule 4.1(b) - Exceptions to Excluded Assets
Schedule 5.3 - RMG Required Consents
Schedule 5.4.1 - Liens and Permitted Liens
Schedule 5.4.3 - Other Operators
Schedule 5.5.2 - Franchise Matters
Schedule 5.5.3 - Contract Matters
Schedule 5.6 - Real Property Matters
Schedule 5.7 - Environmental Matters
Schedule 5.8 - Compliance with Legal Requirements
Schedule 5.10 - Statements of Income
Schedule 5.11 - Changes and Events
Schedule 5.12 - RMG Litigation
Schedule 5.13 - Tax Matters
Schedule 5.14 - Plans; Employee Matters
Schedule 5.15.1 - Systems Information
Schedule 5.15.2 - Systems
Schedule 5.18 - Related Party Transactions
Schedule 6.3 - Charter Required Consents
Schedule 6.6 - Charter Litigation
Schedule 7.2 - Exceptions to Ordinary Course
Schedule 7.2.1 - Capital and Operating Budgets
Schedule 7.2.4 - Form of Monthly Report
Schedule 7.20.1(b) - Year 2000 High-Level Inventories, Assessments and
Remediation Decisions
Schedule 7.20.1(c) - Year 2000 Plan
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RMG PURCHASE AGREEMENT
THIS RMG PURCHASE AGREEMENT is made as of the 20th day of April, 1999, by
and among Xxxxx Media Group, Inc., a Nevada corporation ("RMG"), and InterMedia
Partners of West Tennessee, L.P., a California limited partnership ("IPWT"), on
the one hand, and Charter RMG, LLC, a Delaware limited liability company
("Charter"), on the other hand.
RECITALS
A. RMG owns and operates cable television systems which are franchised or
hold other operating authority and operate in and around the municipalities
listed on Schedule 5.15.2 (collectively, the "Systems").
B. This Agreement sets forth the terms upon which RMG will convey, or
cause to be conveyed, to a Delaware limited liability company wholly owned by
RMG ("Tennessee LLC") the assets comprising or used or useful in connection with
the Cable Business associated with the Systems located in East Tennessee, but
excluding any assets relating to RMG's cable television business in Brentwood,
Tennessee, and RMG will transfer to Charter at the Closing a percentage of the
issued and outstanding membership interests in Tennessee LLC as set forth
herein.
C. IPWT, Charter and certain of their respective Affiliates have entered
into that certain Common Agreement (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.
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. In addition to the terms defined elsewhere in this
Agreement, the following capitalized terms or terms otherwise defined in this
Section 1 shall have the meanings set forth below:
1.1 1992 Cable Act. The Cable Television Consumer Protection and
Competition Act of 1992, as amended, and the FCC rules and regulations
promulgated thereunder.
1.2 Affiliate. With respect to any Person, any other Person controlling,
controlled by
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or under common control with such Person. As used in this Agreement, "control"
means the ownership, directly or indirectly, of voting securities representing
the right generally to elect a majority of the directors (or similar officials)
of a Person or the possession, by contract or otherwise, of the authority to
direct the management and policies of a Person. Notwithstanding the foregoing,
prior to the Closing Date, (a) neither AT&T Corporation, Tele-Communications,
Inc., not any of their direct or indirect subsidiaries (collectively, the "AT&T
Affiliates"), shall be considered Affiliates of RMG for any purpose herein or
hereunder; (b) neither Xxxx Xxxxx, Vulcan Cable, Inc., Vulcan Cable II, Inc.,
Marcus Cable Properties, L.L.C. nor any other Person directly or indirectly
controlled by Xxxx Xxxxx that is not engaged in the cable television business
(collectively, the "Xxxxx Affiliates") shall be considered Affiliates of Charter
for any purpose herein or hereunder; (c) RMG and Tennessee LLC shall not be
considered Affiliates of IPWT following the Closing; and (d) InterMedia
Partners, a California limited partnership, Brenmor Cable Partners, L.P., and
TCID IP-V, Inc., on the one hand, and InterMedia Partners Southeast, a
California general partnership, IPWT, InterMedia Partners IV, L.P., and RMG, on
the other hand, shall not be deemed Affiliates of each other.
1.3 Agreement. This Asset Purchase Agreement.
1.4 Intentionally omitted
1.5 Assets. All of the assets, privileges, contracts, licenses, permits,
franchises, authorizations, rights, interests, claims and other properties, real
and personal, tangible and intangible, of every type and description (a) which
are owned, leased, held for, used or useful in, or otherwise related to, the
Cable Business, (b) in which RMG or any Affiliate of RMG has any right, title or
interest or in which RMG or any Affiliate of RMG acquires any right, title or
interest on or before the Closing Time, and (c) which are not Excluded Assets.
The Assets include the Tangible Personal Property, Owned Property, Leased
Property, Other Real Property Interests, Systems Franchises, Systems Licenses,
Systems Contracts, Books and Records and Other Intangibles.
1.6 Basic Services. The lowest tier of service offered to subscribers of a
System.
1.7 Books and Records. All engineering records, files, data, drawings,
blueprints, schematics, reports, lists, plans and procedures and all other files
of correspondence, lists, records and reports concerning the Cable Business,
including subscribers and prospective subscribers of the Systems, signal and
program carriage and dealings with Governmental Authorities with respect to the
Systems, including all reports filed with respect to the Systems by or on behalf
of RMG or any Affiliate of RMG with the FCC and statements of account filed with
respect to the Systems by or on behalf of RMG or any Affiliate of RMG with the
U.S. Copyright Office, but excluding all documents, reports and records relating
to any employee of the Systems who has not given consent to disclosure of such
documents, reports and records.
1.8 Business Day. Any day other than a Saturday, Sunday or a day on which
the
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banking institutions in New York, New York, Denver, Colorado, San Francisco,
California or St. Louis, Missouri are required or authorized to be closed.
1.9 Cable Act. The Cable Communications Policy Act of 1984, as amended,
and the FCC rules and regulations promulgated thereunder.
1.10 Cable Business. The cable television businesses and other
revenue-generating businesses and operations relating to the Systems conducted
by RMG or an Affiliate of RMG through the Systems.
1.11 Closing. The closing of the transactions contemplated by this
Agreement.
1.12 Closing Time. 11:59 p.m., Eastern time, on the Closing Date.
1.13 Code. United States Internal Revenue Code, as amended.
1.14 Communications Act. The Communications Act of 1934, as amended, and
the FCC rules and regulations promulgated thereunder.
1.15 Contract. Any contract, mortgage, deed of trust, bond, indenture,
lease, license, note, franchise, certificate, option, warrant, right or other
instrument, document, obligation or agreement, whether written or oral.
1.16 Environmental Law. Any Legal Requirement relating to pollution or the
protection of public health, safety, welfare or the environment, including
CERCLA, OSHA and RCRA and including Legal Requirements relating to emissions,
discharges, releases or threatened releases of Hazardous Substances into the
environment (including ambient air, surface water, ground water or land) or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Substances.
1.17 ERISA. The Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder and published
interpretations with respect thereto.
1.18 ERISA Affiliate. As to any Person, any trade or business, whether or
not incorporated, which together with such Person would be deemed a single
employer within the meaning of Section 4001 of ERISA.
1.19 Expanded Basic Services. Any video programming provided over a cable
television system, regardless of service tier, other than Basic Services and Pay
TV.
1.20 FCC. The Federal Communications Commission.
1.21 Governmental Authority. The United States of America, any state,
commonwealth,
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territory or possession of the United States of America and any political
subdivision or quasi-governmental authority of any of the same, including any
court, tribunal, department, commission, board, bureau, agency, body, county,
municipality, province, parish or other instrumentality of any of the foregoing.
1.22 Hazardous Substances. Any pollutant, contaminant, chemical,
industrial, toxic, hazardous or noxious substance or waste which is regulated by
a Governmental Authority, including (a) any petroleum or petroleum compounds
(refined or crude), flammable substances, explosives, radioactive materials or
any other materials or pollutants which pose a significant hazard or potential
significant hazard to the Owned Property or Other Real Property Interests or to
Persons in or about the Owned Property or Other Real Property Interests or cause
the Owned Property or Other Real Property Interests to be in violation of any
Legal Requirements; (b) any "hazardous waste" as defined by the Resource
Conservation and Recovery Act of 1976 (RCRA) (42 U.S.C. ss.ss.6901) and the
rules and regulations promulgated thereunder; (c) any "hazardous substance" as
defined by the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 (42 U.S.C. 9601 et seq.) (CERCLA), as amended, and the rules and
regulations promulgated thereunder; (d) any substance regulated by the Toxic
Substances Control Act (TSCA) (42 U.S.C. ss.2601 et seq.) or the Insecticide,
Fungicide and Rodenticide Act (IFRA) (7 U.S.C. ss.136 et seq.), each, as
amended, and the rules and regulations promulgated thereunder; (e) asbestos or
asbestos-containing material of any kind or character; (f) polychlorinated
biphenyls; (g) any substances regulated under the provisions of Subtitle I of
RCRA relating to underground storage tanks; (h) any materials or substances
designated as "hazardous substances" pursuant to the Clean Water Act (33 U.S.C.
ss.1251 et seq.); (i) "economic poison," as defined in the Federal Insecticide,
Fungicide and Rodenticide Act (7 U.S.C. ss.135 et seq.); (j) any substance the
presence, use, handling, treatment, storage or disposal of which on the Owned
Property or Leased Property is regulated or prohibited by any Environmental Law;
and (k) any other substance which by any Environmental Law requires special
handling, reporting or notification of any Governmental Authority in its
collection, storage, use, treatment or disposal.
1.23 HSR Act. The Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder.
1.24 Intellectual Property. With respect to the Cable Business, any (a)
trademarks, trade dress, trade names, service marks, logos and other similar
proprietary rights, (b) domain names, (c) copyrights and (d) patents and
patentable know-how, inventions and processes, in each case used in the Cable
Business.
1.25 Judgment. Any judgment, writ, order, injunction, award or decree of
any court, judge, justice or magistrate, including any bankruptcy court or judge
or the arbitrator in any binding arbitration, and any order of or by any
Governmental Authority.
1.26 Knowledge. The actual knowledge of a particular matter of Xxxxx X.
Xxxxxxxx, Xxxxxx X. Xxxxx, Xxxxxx X. Xxxxx, Xxxx X. Xxxxx or Xxxxxx X.
Xxxxxxxxx, and in addition to
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those Persons described above, the general manager or one or more of the
managers of the Systems.
1.27 Leased Property. The leaseholds of real property included among the
Assets and described as Leased Property on Schedule 1.27.
1.28 Legal Requirement. Applicable common law and any statute, ordinance,
code or other law, rule, regulation, order, technical or other written standard,
requirement or procedure enacted, adopted, promulgated, applied or followed by
any Governmental Authority, including any Judgment.
1.29 Lien. Any security interest, security agreement, financing statement
filed with any Governmental Authority, conditional sale or other title retention
agreement, any lease, consignment or bailment given for purposes of security,
any mortgage, lien (including any lien for Taxes), indenture, pledge, option,
encumbrance, adverse interest, constructive trust or other trust, claim,
attachment, exception to, defect in, or other condition adversely affecting
title or other ownership interest (including reservations, rights of entry,
possibilities of reverter, encroachments, protrusions, easements, rights-of-way,
rights of first refusal, restrictive covenants, leases and licenses) of any
kind, which constitutes an interest in or claim against property, whether
arising pursuant to any Legal Requirement, Systems License, Systems Franchise,
Systems Contract or otherwise.
1.30 Litigation. Any claim, action, suit, proceeding, arbitration,
investigation or hearing that could result in a Judgment, any other activity or
procedure that could reasonably be expected to result in a Judgment, or any
notice of any of the foregoing.
1.31 Losses. Any claims, losses, liabilities, damages, penalties, costs
and expenses, including interest that may be imposed in connection therewith,
expenses of investigation, reasonable fees and disbursements of counsel and
other experts, and, as applicable, the cost to any Person making a claim or
seeking indemnification under this Agreement with respect to funds expended by
such Person by reason of the occurrence of any event or the existence or
assertion of any Liens (other than Permitted Liens) with respect to which
indemnification is sought.
1.32 MVPD. A distributor of cable television services, multichannel multi
point distribution service, direct broadcast satellite service or television
receive-only satellite programming, who makes available for purchase, by
subscribers or customers, multiple channels of video programming, other than
Persons distributing such services only to multiple dwelling unit or other
commercial customers (including hotels, motels, resorts, hospitals, dormitories,
prisons, restaurants, bars and similar establishments).
1.33 Other Intangibles. All intangible assets, other than the Systems
Franchises, Systems Licenses and Systems Contracts, including subscriber lists,
claims (excluding any claims relating to Excluded Assets), and Intellectual
Property, if any, included among the Assets.
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1.34 Other Real Property Interests. The easements and rights of access
(other than those relating to multiple dwelling units) and other interests in
real property held by RMG or any Affiliate of RMG in connection with the Cable
Business, including those interests described as Other Real Property Interests
on Schedule 1.34, but not including Leased Property or Owned Property.
1.35 Owned Property. The fee interests in the real property included among
the Assets and described as Owned Property on Schedule 1.35 and all improvements
and towers thereon and appurtenances thereto.
1.36 Party. Charter, IPWT or RMG, as the context requires.
1.37 Pay TV. Premium programming services selected by and sold to
subscribers on a per channel or per program basis.
1.38 Permitted Liens. (a) Liens for Taxes, assessments and governmental
charges, in each case not yet due and payable, (b) zoning laws or ordinances or
any similar Legal Requirements, (c) rights reserved to any Governmental
Authority to regulate the affected property, (d) Liens described on Schedule
5.4.1, (e) as to Leased Property or Tangible Personal Property that is leased,
the interests of the lessors thereof, and (f) as to Owned Property, Leased
Property and Other Real Property Interests, any easements, rights-of-way,
servitudes, conditions, covenants, restrictions and minor imperfections or
irregularities in title, in each case, which are reflected in the public records
and which do not individually or in the aggregate interfere with the right or
ability of the applicable Party to own, use, enjoy or operate the Owned
Property, Leased Property or Other Real Property Interests in the manner
currently used or to convey good, marketable and indefeasible fee simple title
to the same; provided that "Permitted Liens" will not include any Lien which
could prevent or inhibit in any way (other than as permitted under clause (f))
the conduct of the business of the affected System, and provided further that
classification of any Lien as a "Permitted Lien" will not affect any liability
which a Party may have for any such Lien, including pursuant to any indemnity
obligation under this Agreement.
1.39 Person. Any natural person, Governmental Authority, corporation,
general or limited partnership, limited liability company, joint venture, trust,
association or unincorporated entity of any kind.
1.40 Required Consents. Any and all consents, authorizations and approvals
under or in connection with the Assets (including the Systems Franchises,
Systems Licenses, and Systems Contracts) or any Contract, Lien or Legal
Requirement by which RMG, any of its Affiliates or their respective Assets are
bound, required (a) for RMG to transfer the Assets to Tennessee LLC or the LLC
Interest to Charter pursuant to this Agreement, (b) for Tennessee LLC to operate
the Systems and to own, lease, use and operate the Assets and the Systems at the
places and in the manner in which the Assets are used and the Systems are
operated as of the date of this Agreement
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and as of the Closing, or (c) for Tennessee LLC to assume and perform the
Systems Franchises, the Systems Licenses, the Systems Contracts and the Assumed
Obligations and Liabilities.
1.41 Six-Month Date. The date that is six (6) months after the Closing
Date.
1.42 Statements of Income. Statements of Income of the Systems attached
hereto as Schedule 5.10.
1.43 Systems Contracts. All Contracts (other than Systems Franchises and
Systems Licenses) that are included among the Assets, including the lease
agreements for Tangible Personal Property, pole attachment agreements,
underground conduit agreements, crossing agreements, retransmission consent
agreements, multiple dwelling, bulk billing or commercial service agreements and
other Contracts described on Schedule 1.43 and the Contracts documenting Leased
Property and Other Real Property Interests described on Schedules 1.34 and 1.35.
1.44 Systems Franchises. The franchises, permits and similar
authorizations included among the Assets (other than Systems Licenses) described
on Schedule 1.44, and all rights and benefits of RMG and its Affiliates
pertaining thereto, including the rights and benefits arising under Section 626
of the Communications Act (47 U.S.C. 546) to the extent applicable to a Systems
Franchise.
1.45 Systems Licenses. The intangible cable television channel
distribution rights, cable television relay service (CARS), business radio and
other licenses, earth station registrations, authorizations, consents or permits
issued by the FCC or any other Governmental Authority included among the Assets
and described on Schedule 1.45 (other than the Systems Franchises and Systems
Contracts) and all rights and benefits of RMG and its Affiliates pertaining
thereto.
1.46 Tangible Personal Property. All tangible personal property included
among the Assets, including towers (other than towers on Owned Property which
are fixtures thereon and a part thereof), tower equipment, aboveground and
underground cable, distribution systems, headend amplifiers, line amplifiers,
microwave equipment, converters, testing equipment, motor vehicles, office
equipment, computers and billing equipment, furniture, fixtures, supplies,
inventory and other physical assets, the principal items of which are identified
and described on Schedule 1.46.
1.47 Taxes. Levies and assessments of any kind or nature imposed by any
Governmental Authority, including all income, sales, use, ad valorem, value
added, franchise, severance, net or gross proceeds, withholding, payroll,
employment, excise or property taxes and levies or assessments related to
unclaimed property, together with any interest thereon and any penalties,
additions to tax or additional amounts applicable thereto. For purposes of
determining any Tax cost or Tax benefit to any Person, such amount will be the
actual cost or benefit recognized by such Person at the time of actual payment
of the additional Tax or actual receipt of the Tax benefit. In the event that
any Loss, payment or other amount is required to be
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determined on an after-Tax basis, such payment or other amount will be
determined without regard to any Tax cost or Tax benefit not actually recognized
at the time of the determination, and appropriate adjustments will be made when
and to the extent that such Tax cost or Tax benefit is actually recognized.
1.48 Third Party. Any Person other than RMG and its Affiliates, IPWT and
its Affiliates or Charter and its Affiliates.
1.49 Transaction Documents. The Common Agreement and all instruments and
documents described in Sections 9.2 and 9.3 which are being executed and
delivered by or on behalf of Charter, IPWT or RMG in connection with this
Agreement or the transactions contemplated hereby.
1.50 Other Definitions. The following terms have the meanings set forth in
the sections indicated in the table below:
Term Section
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Agent's Fees 5.17
ALTA 7.6
Antitrust Division 7.7
Assumed Obligations and Liabilities 4.2
AT&T Affiliates 1.2
Base Price 3.1
Charter First Paragraph
Closing Date 9.1
Code 5.14.2
Commercially reasonable efforts 12.16
Common Agreement Recital C
Computer and Other Systems 7.20.1(a)
Confidential Information 7.13.1
Copyright Act 5.9
Cost of Service Election 5.8.4
Excluded Assets 4.1
FCC Rate Forms 5.8.4
FTC 7.7
Hired Employee 7.3.6(a)
IPWT First Paragraph
New Properties 7.10(b)
Nonrecourse 11.3
Operating Agreements 7.5.5(a)
Phase I Assessment 7.19.1
Phase II Assessment 7.19.1
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Primary Transfer 7.5.5(b)
Prime Rate 12.8
Purchase 2.1
Retained Franchise 7.5.5(a)
RMG First Paragraph
Sales Taxes 7.8
Subsequent Transfer 7.5.5(c)
Surveys 7.6
Survival Period 11.1
System Employees 7.3.1
Systems Recital A
Taking 12.14
Tennessee LLC Recital B
Third Party Testing 7.20.2(b)
Title Commitments 7.6
Title Company 7.6
Title Defect 7.6
Transfer Tax Returns 7.8
Transfer Taxes 7.8
Transitional Billing Services 7.12
WARN 5.14.1
Year 2000 High-Level Inventory,
Assessment and Remediation Decisions 7.20.1(b)
Year 2000 Plan 7.20.1(c)
1.51 Usage. The definitions in Article 1 shall apply equally to both the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. All references herein to Articles, Sections, Exhibits and
Schedules shall be deemed to be references to Articles and Sections of, and
Exhibits and Schedules to, this Agreement unless the context shall otherwise
require. All Exhibits and Schedules attached hereto shall be deemed incorporated
herein as if set forth in full herein and, unless otherwise defined therein, all
terms used in any Exhibit or Schedule shall have the meaning ascribed to such
term in this Agreement. The words "include," "includes" and "including" shall be
deemed to be followed by the phrase "without limitation." The words "hereof,"
"herein" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement. Unless otherwise expressly provided herein, any agreement,
instrument or statute defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, instrument or
statute as from time to time amended, modified or supplemented, including (in
the case of agreements or instruments) by waiver or consent and (in the case of
statutes) by succession of comparable successor statutes and references to all
attachments thereto and instruments incorporated therein. All accounting terms
not otherwise defined in this Agreement will have the meanings ascribed to them
under generally acceptable accounting
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principles as in effect from time to time in the United States, consistently
applied.
2. CONTRIBUTION AND PURCHASE.
2.1 Contribution. Upon the terms and subject to the conditions set forth
in this Agreement, RMG and Charter agree that prior to the Closing, RMG shall
transfer to Tennessee LLC the Assets, free and clear of all Liens (except
Permitted Liens), including the assignment and transfer of all interests in
Leased Property which are Assets and leased Tangible Personal Property which are
Assets, and RMG shall cause Tennessee LLC to assume the Assumed Obligations and
Liabilities.
2.2 Purchase. Upon the terms and subject to the conditions set forth in
this Agreement, at the Closing, RMG shall sell to Charter, and Charter shall
purchase from RMG, a portion (or all) of the outstanding membership interests in
Tennessee LLC (the "LLC Interest"). No later than twenty (20) days prior to the
Closing, Charter shall notify RMG of the portion of the LLC Interest which it
shall purchase at the Closing.
3. CONSIDERATION. Each Party agrees that cash consideration will be paid
at Closing by Charter to RMG, and that such amount will be determined as
follows:
3.1 Base and Adjusted Value. For the purposes of this Agreement, the base
purchase price of the LLC Interest shall be an amount equal to (x) the
percentage of the outstanding ownership interests in Tennessee LLC purchased by
Charter pursuant to Section 2.2 ("Purchase Percentage"), times (y) one hundred
eighty four million dollars ($184,000,000) (the "Base Value"). At the Closing,
Charter (or its permitted assignees) will pay to RMG (or its permitted assignee)
an amount in cash equal to the Purchase Percentage times the Adjusted Value as
determined pursuant to the Common Agreement, which payment shall then be deemed
made pursuant and subject to this Agreement. Preliminary and final
determinations of the Adjusted Value will be made in accordance with the Common
Agreement.
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3.2 Allocation of Purchase Price. The product of the Purchase Percentage
times the sum of (i) the Final Adjusted Value of the Assets and (ii) the Assumed
Obligations and Liabilities ("the Purchase Consideration") shall be allocated
among the Assets in accordance with a schedule (the "Allocation Schedule") to be
prepared by Charter and delivered within ninety (90) days after the
determination of the Final Adjusted Value under the Common Agreement to RMG for
the approval of RMG. RMG and Charter shall cooperate and use commercially
reasonable efforts to reach a mutually satisfactory agreement regarding the
Allocation Schedule. The final Allocation Schedule, determined in the manner
described in this Section 3.2, shall comply with the provisions of Section 1060
of the Code and each of RMG and Charter shall timely file any forms required to
be filed under Section 1060 of the Code and any corresponding provision of state
of local Tax law in accordance with the final Allocation Schedule. Charter and
RMG each agree (i) to reflect the Assets on their respective books for tax
reporting purposes in accordance with the Allocation Schedule, (ii) to file all
Tax Returns and determine all Taxes (including, without limitation, for purposes
of Section 1060 of the Code) in accordance with and based upon the Allocation
Schedule and (iii) not to take any position inconsistent with such Allocation
Schedule in any audit or judicial or administrative proceeding or otherwise.
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4. EXCLUDED ASSETS AND ASSUMED LIABILITIES
4.1 Excluded Assets. "Excluded Assets" means all: (a) programming
Contracts (including music programming Contracts), cable guide Contracts, and
Contracts to which RMG and one or more Affiliates of RMG or other cable systems
of RMG or its Affiliates are parties (including master retransmission consent
agreements and master billing, collection and related agreements), other than
any such Contracts (such as local programming agreements) listed on Schedule
4.1(b); (b) except as set forth on Schedule 4.1(b), each employee benefit plan
(as defined in Section 3(3) of ERISA) or any multiemployer plan (as defined in
Section 3(37) of ERISA) with respect to which RMG or any of its ERISA Affiliates
has any liability or in which any employees or agents, or any former employees
or agents, of RMG or any of its ERISA Affiliates participate; (c) except as
provided in Section 12.14, insurance policies and rights and claims thereunder;
(d) bonds, letters of credit, surety instruments and other similar items; (e)
cash and cash equivalents, including cash relating to subscriber prepayments and
deposits, and notes receivable; (f) except as set forth on Schedule 4.1(b) and
subject to Section 7.11, Intellectual Property held by RMG or any of its
Affiliates; (g) except as set forth on Schedule 4.1(b), subscriber billing
Contracts and related equipment if not owned by RMG or any Affiliate of RMG; (h)
assets, rights or properties of RMG or its Affiliates used or held for use other
than principally in connection with the Systems; (i) except for any items for
which the Adjusted Value of the Systems is increased under Section 2.2 of the
Common Agreement, claims, rights, and interest in and to any refunds of Taxes or
fees of any nature, or other claims against third parties, relating to the
operation of the Systems prior to the Closing Time; (j) account books of
original entry, general ledgers, financial records, minute books, stock ledgers,
organizational documents and, to the extent not included in the Books and
Records, personnel files and records, in each case used in connection with the
Systems; (k) except for the leases described on Schedule 4.1(b), capital and
vehicle leases; (l) advertising sales agency or representation Contracts
providing any Third Party or Affiliate of RMG the right to sell available
advertising time for a System other than any such Contract listed on Schedule
4.1(b); (m) to the extent licensed pursuant to a master license agreement or not
otherwise transferable, software of RMG or any Affiliate of RMG and licenses
relating to Third Party software; (n) Contracts for any fiber or fiber capacity
lease or use arrangements that provide to any Third Party or Affiliate of RMG
the right to use any fiber or capacity of a System other than any such Contract
listed on Schedule 4.1(b); (o) except as set forth on Schedule 4.1(b), Contracts
for any internet access or on-line services arrangements that provide to any
Third Party or Affiliate of RMG the right to use the transmission capacity of a
System to provide internet access or other on-line services over such System;
(p) except as set forth on Schedule 4.1(b), Contracts between RMG and its
Affiliates; (q) except as set forth on Schedule 4.1(b), any assets relating to
RMG's cable television business in Brentwood, Tennessee; and (r) other rights,
assets and properties described on Schedule 4.1(a).
4.2 Assumed Obligations and Liabilities. At the Closing and effective as
of the Closing Time, RMG shall cause Tennessee LLC to assume, and after the
Closing Date, Charter will cause Tennessee LLC to pay, discharge and perform,
the following (collectively, "Assumed Obligations and Liabilities"): (a) those
obligations and liabilities accruing and relating to periods
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after the Closing Time under or with respect to the Assets assigned and
transferred to Tennessee LLC at the Closing; (b) those obligations and
liabilities of RMG for subscriber prepayments and deposits related to the
Systems transferred to Tennessee LLC existing at the Closing Time; (c) other
obligations and liabilities of RMG relating to the Systems transferred to
Tennessee LLC only to the extent that the Adjusted Value of the Systems, was
decreased with respect thereto pursuant to Section 2.2 of the Common Agreement;
and (d) all other obligations and liabilities accruing and relating to periods
after the Closing Time and arising out of Tennessee LLC's ownership, use or
operation of the Assets (including those items listed or described on Schedule
4.1(b)) or its operation of, or the conduct of business through, the Systems
after the Closing (including with respect to late fees that may be charged by
Tennessee LLC after the Closing to subscribers of the Systems), except to the
extent that such obligations or liabilities relate to any Excluded Asset. All
obligations and liabilities arising out of or relating to the Assets, the
Systems or the Cable Business other than Assumed Obligations and Liabilities
will remain and be the obligations and liabilities solely of RMG, including any
obligation, liability or claims relating to or arising pursuant to (w) Taxes
(including franchise fees) with respect to periods or portions thereof ending on
or prior to the Closing Date, (x) refunds of rates, charges or late fees with
respect to periods through and including the Closing Date, (y) Litigation
commenced, or related to an event occurring, on or prior to the Closing Date, or
(z) credit, loan or other agreements pursuant to which RMG has created,
incurred, assumed or guaranteed indebtedness for borrowed money or under which
any Lien securing such indebtedness has been or may be imposed on any Asset.
5. IPWT'S REPRESENTATIONS AND WARRANTIES.
IPWT represents and warrants to Charter as of the date of this Agreement
and as of the Closing, as follows:
5.1 Organization and Qualification of IPWT and RMG.
5.1.1 RMG is a corporation which has been duly formed under the laws
of the State of Nevada. RMG has all requisite power and authority to own, lease
and use the Assets owned, leased or used by it and to conduct the Cable Business
as it is currently being conducted.
5.1.2 IPWT is a limited partnership, duly formed, validly existing
and in good standing under the laws of the State of California.
5.1.3 When formed, Tennessee LLC shall be a limited liability
company duly formed, validly existing and in good standing under the laws of the
State of Delaware, and will be treated for federal income tax purposes as a
disregarded entity with respect to RMG under Treasury Regulations
ss.301.7701-3(b)(1)(ii).
5.2 Authority and Validity. RMG and IPWT have all requisite power and
authority to execute and deliver, and to perform their obligations under, and to
consummate the transactions
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contemplated by, this Agreement and the Transaction Documents. The execution and
delivery by RMG and IPWT of, the performance of RMG and IPWT under, and the
consummation by RMG and IPWT of the transactions contemplated by, this Agreement
and the Transaction Documents to which RMG or IPWT is a party have been duly and
validly authorized by all action by or on behalf of RMG and IPWT. This Agreement
has been, and when executed and delivered by RMG and IPWT the Transaction
Documents to which RMG or IPWT is a party will be, duly and validly executed and
delivered by RMG and IPWT and the valid and binding obligations of RMG and IPWT,
enforceable against RMG and IPWT in accordance with their terms, except as the
same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect relating to the
enforcement of creditors' rights generally or by principles governing the
availability of equitable remedies.
5.3 No Conflict; Required Consents. Except as set forth on Schedule 5.3,
and assuming any consents referenced on Schedule 6.3 have been obtained and the
expiration or earlier termination of the waiting period under the HSR Act has
occurred, the execution and delivery by RMG and IPWT, the performance of RMG and
IPWT under, and the consummation by RMG and IPWT of the transactions
contemplated by, this Agreement and the Transaction Documents to which RMG or
IPWT is a party do not and will not: (a) conflict with or violate any provision
of the organizational documents of RMG or IPWT; (b) violate any provision of any
Legal Requirement; (c) require any consent, approval or authorization of, or
filing of any certificate, notice, application, report or other document with,
any Governmental Authority or other Person; or (d) (i) conflict with, violate,
result in a breach of or constitute a default under (without regard to
requirements of notice, lapse of time or elections of other Persons or any
combination thereof), (ii) permit or result in the termination, suspension or
modification of, (iii) result in the acceleration of (or give any Person the
right to accelerate) the performance of RMG or IPWT under, or (iv) result in the
creation or imposition of any Lien under any Systems Contract, Systems
Franchise, Systems License, or other instrument evidencing any of the Assets or
by which RMG or any of the Assets is bound or affected, except for purposes of
clauses (c) and (d) such consents, approvals, authorizations and filings that,
if not obtained or made, would not, and such violations, conflicts, breaches,
defaults, terminations, suspensions, modifications and accelerations as would
not, individually or in the aggregate, have an adverse effect on any System, the
Cable Business or RMG, or on the ability of RMG or IPWT to perform their
obligations under this Agreement or the Transaction Documents to which RMG or
IPWT is a party.
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5.4 Assets.
5.4.1 RMG has good and marketable title to (or, in the case of
Assets that are leased, valid leasehold interests in) the Assets, and at the
Closing, Tennessee LLC will have good and marketable title to (or in the case of
Assets that are leased, valid leasehold interests in) the Assets. None of the
AT&T Affiliates has any right, title or interest in or to any of the Assets. The
Assets are free and clear of all Liens, except Permitted Liens and rights of
first refusal which will be waived by the Person holding such right at or prior
to Closing. All of the Liens described on Schedule 5.4.1 (except for those
marked with an asterisk on Schedule 5.4.1) will be terminated, released or, in
the case of rights of first refusal (except for those listed on Schedule 5.4.1),
waived, as appropriate at or prior to Closing. Except as described on Schedule
1.46, the Tangible Personal Property, as an integrated system and in its
component parts, is in good operating condition and repair (ordinary wear and
tear and routine failures excepted) and is usable and adequate for the operation
of the Cable Business.
5.4.2 Except for items included in the Excluded Assets, the Assets
constitute substantially all the assets necessary (a) to conduct the Cable
Business as it is being conducted on the date of this Agreement and in
compliance with all applicable Legal Requirements, (b) to operate the Systems as
they are being operated on the date of this Agreement and in compliance with all
applicable Legal Requirements and (c) to perform all of the Assumed Obligations
and Liabilities.
5.4.3 Except as described on Schedule 5.4.3 and other than direct
broadcast satellite and satellite master antenna television, with respect to
each area in which the Systems currently provide cable television service, (i)
no Person is operating a cable television system or other non-satellite MVPD
other than a System in such area; (ii) no local franchising authority has
awarded a cable television franchise in such area to any Person other than RMG;
and (iii) to the Knowledge of RMG, no MVPD has applied for a cable television
franchise to serve such area.
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5.5 System Franchises, Systems Licenses, Systems Contracts and Other
Real Property Interests.
5.5.1 Except as described on Schedules 1.28, 1.35, 1.43, 1.44 and
1.45, and except for the Excluded Assets, RMG is not bound or affected by any of
the following that relate primarily or in whole to the Cable Business: (a)
leases of real property or capital leases of personal property; (b) operating
leases of personal property that are terminable upon more than thirty (30) days'
notice and that contemplate annual lease payments in excess of twenty thousand
dollars ($20,000); (c) franchises for the construction or operation of cable
television systems or System Contracts of substantially equivalent effect; (d)
licenses, authorizations, consents or permits of the FCC; (e) other licenses,
authorizations, consents or permits of any other Governmental Authority,
individually or in the aggregate, material to the Systems; (f) easements or
rights of access, individually or in the aggregate, material to the Systems; (g)
pole attachment agreements, underground conduit agreements, crossing agreements,
retransmission consent agreements, or bulk or commercial service agreements,
individually or in the aggregate, material to the Systems; or (h) Systems
Contracts other than those described in any other clause of this Section 5.5.1
which contemplate payments by or to RMG in any 12-month period exceeding
twenty-five thousand dollars ($25,000) under any single contract or one hundred
thousand dollars ($100,000) in the aggregate.
5.5.2 Complete and correct copies of the Systems Franchises and
Systems Licenses have been provided to Charter. Except as set forth on Schedule
5.5.2, (a) the Systems Franchises contain all of the commitments and obligations
of RMG to the applicable Governmental Authority granting such Franchises with
respect to the construction, ownership and operation of the Systems, and (b)
other than as set forth in the Systems Franchises, RMG has not made any
commitment to any local franchising authority to make any material expenditure
or capital addition or betterment to any System or the Assets that will not be
fulfilled or satisfied prior to the Closing Time. The Systems Franchises and
Systems Licenses are currently in full force and effect, are not in default and
are valid under all applicable Legal Requirements according to their terms. No
event has occurred that, with notice or lapse of time or both, would constitute
a breach, violation or default by RMG, and to RMG's Knowledge, no event has
occurred that, with notice or lapse of time or both, would constitute a breach,
violation or default by any other Person, of any material obligations under any
such Systems Franchises or Systems Licenses. Except for routine filings with
Governmental Authorities and as described on Schedule 5.5.2, there are no
applications relating to any Systems Franchise or Systems License pending before
any Governmental Authority which are material to any System or the Cable
Business. Except where a request for renewal has been timely filed under Section
626(a) of the Cable Act, since December 31, 1998, no Systems Franchise or
Systems License has been surrendered by RMG or has expired or otherwise
terminated without the issuance of a replacement Systems Franchise or Systems
License. There is no legal action, governmental proceeding or investigation
pending or, to RMG's Knowledge, threatened to terminate, suspend or modify any
Systems Franchise or Systems License. Except as set forth on Schedule 5.5.2, RMG
is, or will be as of the Closing Date, in material compliance with the terms and
conditions of all the Systems Franchises and
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Systems Licenses and other applicable requirements of all Governmental
Authorities (including the FCC and the U.S. Copyright Office) relating to the
Systems Franchises and Systems Licenses, including all requirements for
notification, filing, reporting, posting and maintenance of logs and records.
5.5.3 RMG has delivered to Charter true and complete copies of all
Systems Contracts (including each Contract relating to Leased Property and Other
Real Property Interests), including any amendments thereto (or, in the case of
oral Contracts, true and complete written summaries thereof) and each document
evidencing RMG's ownership of the Owned Property. Except as described in
Schedule 5.5.3, RMG has fulfilled when due, or has taken all action necessary to
enable it to fulfill when due, all of its obligations under each of its
Contracts and, to the Knowledge of RMG, there has not occurred any default
(without regard to requirements of notice, lapse of time, elections of other
Persons, or any combination thereof) by any other Person of any material
obligations under any of its Contracts or Other Real Property Interests.
5.6 Real Property. All the Assets consisting of Owned Property, Leased
Property and material Other Real Property Interests are described on Schedules
1.28, 1.35 and 1.36. Except for ordinary wear and tear and routine repairs and
as set forth on Schedule 5.6, all of the improvements, leasehold improvements
and the premises of the Owned Property and the premises demised under the leases
and other documents evidencing the Leased Property are in good condition and
repair and are suitable for the purposes used. Each parcel of Owned Property and
each parcel of Leased Property and any improvements thereon (a) has access to
and over public streets or private streets for which RMG has a valid right of
ingress and egress, (b) except as set forth on Schedule 1.28 or 1.35, conforms
in its current use and occupancy to all material zoning requirements without
reliance upon a variance issued by a Governmental Authority or a classification
of the parcel in question as a nonconforming use, (c) conforms in all material
respects in its current use to all restrictive covenants, if any, or other Liens
affecting all or part of such parcel (of record, with respect to Owned Property,
or of record or as set forth in an agreement listed on Schedule 1.28 or 1.35,
with respect to Leased Property or Other Real Property Interests), and (d) is
available for immediate use in the conduct of the business or operations of the
Systems. There are no pending condemnation, expropriation, eminent domain or
similar proceedings of which RMG has received notice or RMG has Knowledge
affecting, in any material respect, all or any portion of the Owned Property,
Leased Property, or Other Real Property Interests. RMG has good and marketable
title to, and at the Closing, Tennessee LLC will have good and marketable title
to, each such parcel of real property included in the Owned Property and in all
buildings, structures and improvements thereon, in each case free and clear of
all Liens except for Permitted Liens.
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5.7 Environmental.
5.7.1 Except as described on Schedule 5.7, RMG is in material
compliance with all Environmental Laws, insofar as they relate to its Owned
Property or Leased Property. Except as described on Schedule 5.7, RMG has not
received any notice of, and has no Knowledge of, any alleged, actual, or
potential responsibility for, or any inquiry regarding, (i) any release or
threatened release of any Hazardous Substances from or on its Owned Property or
Leased Property, or (ii) any material violation of any Environmental Laws
associated with its Owned Property or Leased Property. Except as described on
Schedule 5.7, to RMG's Knowledge, its own operations on its Other Real Property
Interests do not violate any Environmental Laws in any material respect, and RMG
has received no notice of any such violation. Except as described on Schedule
5.7, RMG has not received any notice of, and has no Knowledge of circumstances
relating to, any past, present or future events, conditions, circumstances,
activities, practices or incidents (including the presence, use, generation,
manufacture, disposal, release or threatened release of any Hazardous Substances
from or on its Owned Property or Leased Property), which could interfere with or
prevent continued compliance, or which are reasonably likely to give rise to any
liability, based upon or related to the processing, distribution, use,
treatment, storage, disposal, transport or handling, or the emission, discharge,
release or threatened release into the environment, of any Hazardous Substance
from or attributable to its Owned Property or Leased Property.
5.7.2 Except as described on Schedule 5.7, to RMG's Knowledge, (a)
no aboveground or underground storage tanks are currently or have been located
on any Owned Property or Leased Property and (b) no Owned Property or Leased
Property has been used at any time as a gasoline service station or any other
facility for storing, pumping, dispensing or producing gasoline or any other
petroleum products or wastes.
5.7.3 Complete and correct copies of (a) all studies, reports,
surveys or other similar written materials in RMG's possession or to which RMG,
to its Knowledge, has access relating to the presence or alleged presence of
Hazardous Substances at, on, under or affecting the Owned Property or Leased
Property, (b) all notices (other than general notices made by general
publication) in RMG's possession or to which RMG, to its Knowledge, has access
that were received from any Governmental Authority having the power to
administer or enforce any Environmental Laws relating to current or past
ownership, use or operation of the Owned Property or Leased Property or
activities at the Owned Property or Leased Property and (c) all notices and
related materials in RMG's possession or to which RMG, to its Knowledge, has
access relating to any Litigation concerning any Environmental Law to which RMG
is a party or written allegation by any private Third Party concerning any
Environmental Law and RMG, have been provided to Charter (other than those
materials constituting attorney-client privileged communications).
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5.8 Compliance with Legal Requirements.
5.8.1 Except as set forth on Schedule 5.8, the operation of each
System as currently conducted does not violate or infringe any Legal Requirement
currently in effect in any material respect (other than Legal Requirements
described in Sections 5.7, 5.8.3 and 5.8.4, as to which the representations and
warranties set forth in those subsections will apply) or the grounding
requirements of the National Electrical Safety Code. Except as set forth on
Schedule 5.8, RMG has not received any notice and RMG has no Knowledge of any
material violation by it or any System of any Legal Requirement applicable to
the installation, ownership and operation of the Systems as currently conducted,
and knows of no basis for the allegation of any such violation.
5.8.2 Except as set forth on Schedule 5.8, without limiting the
generality of the foregoing, since RMG's acquisition of the Systems: RMG has
submitted to the FCC all filings, including cable television registration
statements, annual reports and aeronautical frequency usage notices and paid all
regulatory fees, that are required under the rules and regulations of the FCC;
the operation of the Systems has been and is in material compliance with the
rules and regulations of the FCC, and RMG has not received any notice from the
FCC of any violation of its rules and regulations; RMG is and since 1986 (or
since its acquisition, if later) has been certified as in compliance with the
FCC's equal employment opportunity rules; the Systems are in material compliance
with all signal leakage criteria prescribed by the FCC; and for each relevant
semi-annual reporting period since its acquisition of a System, RMG has timely
filed with the United States Copyright Office all required Statements of Account
in true and correct form, has paid when due all required copyright royalty fee
payments in correct amount, relating to the Systems' carriage of television
broadcast signals and is otherwise in material compliance with all applicable
rules and regulations of the Copyright Office. Except as set forth on Schedule
5.8, RMG has no Knowledge, with respect to any System acquired since January 1,
1996, of any previous owner's failure to comply with the copyright licensing
requirements with respect to such System or any written claim or inquiry from
any Person which questions such System's failure to comply. RMG has delivered to
Charter copies of: (i) all reports, filings and correspondence made or filed by
RMG with the FCC or pursuant to the FCC rules and regulations for the past year;
and (ii) all reports, filings and correspondence made or filed by RMG with the
Copyright Office or pursuant to Copyright Office rules and regulations for the
past three (3) years. Except as set forth on Schedule 5.8, (i) a request for
renewal has been timely filed under Section 626(a) of the Cable Act with the
proper Governmental Authority with respect to each Franchise expiring within
thirty-six (36) months after the date of this Agreement; and (ii) RMG has
received no written notice from any Governmental Authority that it has
determined or intends to deny renewal of any Systems Franchise.
5.8.3 Except as set forth on Schedule 5.8 and as otherwise provided
in this Section, RMG has used commercially reasonable efforts to comply in all
material respects with the provisions of the Cable Act and the 1992 Cable Act
pertaining to the carriage of television broadcast signals, as such Legal
Requirements relate to the operation of the Systems. RMG has
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complied in all material respects with the must carry and retransmission consent
provisions of the 1992 Cable Act, including (i) duly and timely notifying "local
commercial television stations" of inadequate signal strength or increased
copyright liability, if applicable, (ii) duly and timely notifying
non-commercial educational stations of the location of the Systems' principal
headend, (iii) duly and timely notifying subscribers of changes in the channel
alignment on the Systems, (iv) duly and timely notifying "local commercial and
non-commercial television stations" of the broadcast signals carried on the
Systems and their channel positions, (v) maintaining the requisite public file
identifying broadcast signal carriage, (vi) carrying the broadcast signals after
June 1, 1993, on the Systems for all "local commercial television stations"
which elected must carry status and, if required, up to two "qualified low power
stations" and (vii) obtaining retransmission consents for all broadcast signals
carried on the Systems after October 5, 1993, except for the non-exempt signals
carried pursuant to a must carry election. No must carry complaint is pending
against any System at the FCC, nor, to RMG's Knowledge, is any threatened except
as set forth in Schedule 5.8. RMG has delivered to Charter copies of any pending
petitions it has on file with the FCC, including requests for market
modifications or petitions for special relief or any market modification
requests or special relief petitions affecting any System that have been served
on RMG. The FCC has not issued any decision with respect to a must carry
complaint finding any System in violation of the must carry rules except as set
forth on Schedule 5.8.
5.8.4 RMG has used commercially reasonable efforts to establish
rates charged and a la carte packages provided to subscribers, effective as of
September 1, 1993, that would be allowable under rules and regulations
promulgated by the FCC under the 1992 Cable Act, and any authoritative
interpretation thereof, whether or not such rates or packages were subject to
regulation at that date by any Governmental Authority, including any state
regulatory agency, local franchising authority and/or the FCC. Notwithstanding
the foregoing, RMG makes no representation or warranty that either the rates
charged to subscribers or the a la carte packages provided would be allowable
under any rules and regulations of the FCC, or any authoritative interpretation
thereof, promulgated after the date of the Closing. RMG has delivered to Charter
complete and correct copies of (i) the most recent FCC Forms 328, 329, 393,
1200, 1205, 1210, 1215, 1220, 1235 and 1240 and other FCC rate forms
(collectively, the "FCC Rate Forms") filed with the local franchising authority
and/or the FCC and will deliver as soon as available all such FCC forms that are
prepared with respect to the Systems, (ii) all historical FCC Rate Forms with
respect to any System in which there is currently a rate issue pending,
including any accounting order or any rate order on appeal, (iii) copies of all
complaints, petitions, answers, responses and other filings made with or by any
Governmental Authority in connection with any rate orders issued by such
Governmental Authority or any appeal therefrom, and (iv) any documentation
supporting an exemption from the rate regulation provisions of the 1992 Cable
Act claimed by RMG with respect to the Systems. Except as set forth on Schedule
5.8, RMG has not made any election with respect to any cost of service
proceeding conducted in accordance with Part 76.922 of Title 47 of the Code of
Federal Regulations or any similar proceeding (a "Cost of Service Election")
with respect to any of the Systems.
5.8.5 Except as set forth on Schedule 5.8, all necessary FAA
approvals have been
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obtained and all necessary FCC tower registrations have been filed with respect
to the height and location of towers used in connection with the operation of
the Systems, and such towers are being operated in compliance in all material
respects with applicable FCC and FAA rules. The ownership, height (with and
without appurtenances), location (address, latitude, longitude and ground
elevation), structure type and FCC call signs of each tower used in connection
with the operation of the Systems are correctly described on Schedule 5.8. To
the extent applicable, RMG has delivered to Charter true and correct copies of
the FAA final determinations that are available and FCC registrations for all
such towers.
5.9 Intellectual Property. Except for Intellectual Property which
constitutes Excluded Assets and the Intellectual Property described on Schedule
4.1(b), RMG does not possess any Intellectual Property related to or material to
the operation of the Systems and RMG is not a party to any license or royalty
agreement with respect to any such Intellectual Property, except for licenses
respecting program material, licenses incidental to any Systems Contracts and
obligations under the Copyright Act of 1976, as amended, including all rules,
regulations, orders and policies of the U.S. Copyright Office thereunder (the
"Copyright Act") applicable to cable television systems generally. To the
Knowledge of RMG, the Systems and the Cable Business have been operated in such
a manner so as not to violate or infringe upon the rights, or give rise to any
rightful claim of any Person for copyright, trademark, service xxxx, patent or
license infringement or the like.
5.10 Financial Statements. Statements of income of the Systems for the
years ended December 31, 1997 and 1998, attached hereto as Schedule 5.10, are in
accordance with the books and records of each System, were prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods covered thereby and, except as may be described
therein, present fairly the operating results of the respective Systems on a
System-by-System basis, for the periods indicated, subject only to standard
year-end adjustments and the omission of footnotes thereto.
5.11 Absence of Certain Changes or Events. Except as set forth on Schedule
5.11, since December 31, 1998, there has been no (i) material adverse change in,
nor has any event or events (other than any affecting the cable television
industry generally) occurred that, individually or in the aggregate, are
reasonably likely to result in a material adverse change in the Assets, the
Cable Business, the operations, condition (financial or otherwise) or results of
operations of the Systems, taken as a whole and (ii) material change in
accounting principles or practices with respect to the Systems or revaluation by
RMG of the Assets for financial reporting, property tax or other purposes. From
December 31, 1998 to the date of this Agreement, the Cable Business has been
conducted only in the usual, regular and ordinary course, except as disclosed on
Schedule 5.11 and except where the failure to conduct business in such manner
would not have a material adverse effect on the Assets, the Cable Business, the
operations, condition (financial or otherwise) or results of operations of the
Systems taken as a whole or on the ability of RMG to perform its obligations
under this Agreement.
5.12 Litigation. Except as set forth on Schedule 5.12: (a) there is no
Litigation
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pending or, to RMG's Knowledge, threatened against RMG or any Affiliate of RMG
which, if adversely determined, would (i) materially and adversely affect the
financial condition or operations of the Cable Business, any of the Systems, the
Assets or the ability of RMG to perform its obligations under this Agreement or
(ii) result in the modification, revocation, termination, suspension or other
limitation of any of the System Franchises, Systems Licenses, or Systems
Contracts; and (b) there is not in existence any Judgment requiring RMG or any
Affiliate of RMG to take any action of any kind with respect to the Assets or
the operation of any of the Systems, or to which RMG (with respect to the
Systems), any of the Systems or the Assets are subject or by which they are
bound or affected, that has not been fully complied with by RMG.
5.13 Tax Returns; Other Reports. RMG has duly and timely filed in correct
form all federal, state, local and foreign Tax returns and other Tax reports
required to be filed by RMG, and has timely paid all Taxes which have become due
and payable, whether or not so shown on any such return or report, the failure
of which to be filed or paid could affect or result in the imposition of a Lien
upon the Assets or create any transferee or other liability upon Tennessee LLC
or upon Charter, except such amounts as are being contested diligently and in
good faith and are not in the aggregate material. Except as set forth on
Schedule 5.13, RMG has not received any notice of, nor does RMG have any
Knowledge of, any deficiency, assessment or audit, or proposed deficiency,
assessment or audit from any taxing Governmental Authority which could affect,
or result in the imposition of a Lien upon, any of the Assets or transferee or
other liability upon Tennessee LLC or upon Charter.
5.14 Employment Matters.
5.14.1 RMG has complied in all material respects with all applicable
Legal Requirements relating to the employment of labor, including the Worker
Adjustment and Retraining Notification Act, 29 U.S.C. ss.2101 et seq. ("WARN"),
continuation coverage requirements with respect to group health plans and those
relating to wages, hours, collective bargaining, unemployment insurance,
workers' compensation, equal employment opportunity, age, sex, race and
disability discrimination, immigration control and the payment and withholding
of Taxes.
5.14.2 There are no Liens against the Assets under Section 412(n) of
the Code or Sections 302(f) or 4068 of ERISA. At the Closing, Charter and its
ERISA Affiliates will have no obligation to contribute to, or any liability in
respect of, (i) any employee benefit plan within the meaning of Section 3(3) of
ERISA, or (ii) any similar employment, severance or other arrangement or policy
(whether written or oral) providing for insurance coverage (including
self-insured arrangements), workers' compensation, disability benefits,
supplemental unemployment benefits, vacation benefits, fringe benefits or
retirement benefits, or for profit sharing, deferred compensation, bonuses,
stock options, stock appreciation or other forms of incentive compensation or
post-retirement insurance, compensation or benefits, sponsored or maintained by
RMG or any of its ERISA Affiliates, or to which RMG or any of its ERISA
Affiliates was obligated to contribute. RMG will not, in connection with the
transactions contemplated by this
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Agreement, cease to provide any group health plan coverage to its employees in a
manner which would cause Charter or any of its ERISA Affiliates to be deemed a
successor employer of RMG within the meaning of Proposed Treasury Regulations
Section 54.4980B-9 Q&A8(c). With respect to any multi-employer plan within the
meaning of Section 3(37) of ERISA, or any plan subject to Title IV of ERISA, to
which RMG or any of its ERISA Affiliates is or ever was obligated to contribute,
(a) there has been no material "reportable event" described in Sections
4043(c)(1), (2), (3), (5), (6), (7), (10), or (13) of ERISA, (b) no "accumulated
funding deficiency" (as defined in Section 302 of ERISA) or "withdrawal
liability" (as determined under Section 4201 et seq. of ERISA) has occurred,
exists or is continuing with respect to any such plan other than a
multi-employer plan (as defined in Section 3(37) of ERISA), or, to the Knowledge
of RMG or any of its ERISA Affiliates, with respect to any such plan which is a
multi-employer plan (as defined in Section 3(37) of ERISA), (c) no such plan has
been terminated other than in accordance with ERISA or at a time when such plan
was not sufficiently funded, and (d) there has been no (i) withdrawal by RMG or
any of its ERISA Affiliates that is a substantial employer from a
single-employer plan and that has two or more contributing sponsors at least two
of whom are not under common control, as referred to in Section 4063(b) of
ERISA, or (ii) cessation by RMG or any of its ERISA Affiliates of operations at
a facility causing more than twenty percent (20%) of plan participants to be
separated from employment, as referred to in Section 4062(e) of ERISA. With
respect to any plan maintained, sponsored by, or contributed to by RMG, which is
intended to comply with the provisions of Section 401(k) of the Code, and from
which any similar plan maintained or sponsored by Charter or any of its ERISA
Affiliates accepts a plan-to- plan transfer under Section 7.3.3, (i) such plan
has received a favorable determination letter from Internal Revenue Service, and
neither RMG nor any of its ERISA Affiliates has any Knowledge of any fact which
could adversely affect the qualified status of such plan, and (ii) such plan has
been administered and maintained in material compliance with ERISA, the Code and
all other applicable laws.
5.14.3. Except as set forth on Schedule 5.14, there are no
collective bargaining agreements applicable to any Person employed by RMG that
renders services in connection with the Systems and RMG has no duty to bargain
with any labor organization with respect to any such Person. Except as set forth
on Schedule 5.14, there are not pending any unfair labor practice charges
against RMG, any demand for recognition or any other request or demand from a
labor organization for representative status with respect to any Person employed
by RMG that renders services in connection with the Systems. Except as described
on Schedule 5.14, RMG has no employment agreements, either written or oral, with
any employee of the Systems and none of the employment agreements listed on
Schedule 5.14 requires RMG, or will require Tennessee LLC, Charter or any of
their respective Affiliates, to employ any Person after the Closing.
5.15 Systems Information.
5.15.1 Schedule 5.15.1 sets forth a materially true and accurate
description, on a System-by-System basis, of the following information relating
to the Systems as of December 31, 1998:
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(a) the approximate number of aerial and underground miles of
plant included in the Assets and served by each headend;
(b) the approximate number of single family homes and
residential multiple dwelling units passed by the Systems;
(c) the MHZ capacity and channel capacity of each headend; and
(d) the number of subscribers served by the Systems and a
description of the calculation methodology used by RMG to calculate such
subscribers.
5.15.2 Schedule 5.15.2 sets forth a materially true and accurate
description of the following information relating to the Systems as of the date
of this Agreement:
(a) a description of the Basic Services, the Expanded Basic
Services, Pay TV and a la carte services available from the Systems, and the
rates charged by RMG therefor, including all rates, tariffs and other charges
for cable television or other services provided by each System;
(b) the stations and signals carried by the Systems and the
channel position of each such signal and station; and
(c) the cities, towns, villages, boroughs and counties served
by the Systems.
5.15.3 Each System is capable of providing all channels, stations
and signals reflected as being carried on such System on Schedule 5.15.2.
5.16 Taxpayer Identification Number. The U.S. Taxpayer Identification
Number for RMG is 00-0000000.
5.17 Finder and Brokers. RMG has not entered into any Contract with any
person which will result in the obligation of Charter to pay any finder's fees,
brokerage or agent's commissions or other like payments (collectively, "Agent's
Fees") in connection with the negotiations leading to this Agreement or the
consummation of the transactions contemplated hereby.
5.18 Related Party Transactions. Set forth on Schedule 5.18 hereto, are
the Contracts, agreements, arrangements or understandings between RMG and any of
its Affiliates and between RMG and any AT&T Affiliates included in or related to
the Assets.
6. CHARTER'S REPRESENTATIONS AND WARRANTIES. Charter represents
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and warrants to RMG and to IPWT as of the date of this Agreement and as of the
Closing as follows:
6.1 Organization and Qualification of Charter. Charter is a limited
liability company duly formed, validly existing and in good standing under the
laws of the State of Delaware. Charter has all requisite power and authority to
own, lease and use the assets owned, leased or used by it and to conduct its
business as it is currently being conducted by it. As of the date of this
Agreement, Charter is duly qualified to do business and is in good standing
under the laws of each jurisdiction in which the ownership, leasing or use of
the assets owned, leased or used by it or the nature of its activities in
connection with its business makes such qualification necessary.
6.2 Authority and Validity. Charter has all requisite corporate power and
authority to execute and deliver, to perform its obligations under, and to
consummate the transactions contemplated by, this Agreement and the Transaction
Documents. The execution and delivery by Charter of, its performance under, and
its consummation of the transactions contemplated by, this Agreement and the
Transaction Documents have been duly and validly authorized by all action by or
on behalf of Charter. This Agreement has been, and when executed and delivered
by Charter the Transaction Documents will be, duly and validly executed and
delivered by Charter and the valid and binding obligations of Charter,
enforceable against it in accordance with their terms, except as the same may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws now or hereafter in effect relating to the enforcement of
creditors' rights generally or by principles governing the availability of
equitable remedies.
6.3 No Conflict; Required Consents. Except as set forth on Schedule 6.3,
and assuming all Required Consents have been obtained and the expiration or
earlier termination of the waiting period under the HSR Act has occurred, the
execution and delivery by Charter of, its performance under, and its
consummation of the transactions contemplated by, this Agreement and the
Transaction Documents do not and will not: (a) conflict with or violate any
provision of the organizational documents of Charter; (b) violate any provision
of any Legal Requirement; (c) require any consent, approval or authorization of,
or filing of any certificate, notice, application, report or other document
with, any Governmental Authority or other Person; or (d) (i) conflict with,
violate, result in a breach of or constitute a default under (without regard to
requirements of notice, lapse of time or elections of other Persons or any
combination thereof), (ii) permit or result in the termination, suspension or
modification of, (iii) result in the acceleration of (or give any Person the
right to accelerate) the performance of Charter under, or (iv) result in the
creation or imposition of any Lien under any instrument or other agreement to
which Charter is a party or by which Charter or any of its assets is bound or
affected, except for purposes of clauses (c) and (d) such consents, approvals,
authorizations and filings that, if not obtained or made, would not, and such
violations, conflicts, breaches, defaults, terminations, suspensions,
modifications and accelerations as would not, individually or in the aggregate,
have an adverse effect on its ability to perform its obligations under this
Agreement or the Transaction Documents.
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6.4 Taxpayer Identification Number. The Taxpayer Identification Number for
Charter is 00-0000000.
6.5 Finder and Brokers. Charter has not entered into any Contract with any
person which will result in the obligation of RMG or IPWT to pay any Agent's
Fees in connection with the negotiations leading to this Agreement or the
consummation of the transactions contemplated hereby.
6.6 Litigation. Except as set forth on Schedule 6.6, there is no
Litigation pending or, to Charter's Knowledge, threatened against Charter or any
Affiliate of Charter which, if adversely determined, would materially and
adversely affect the ability of Charter to perform its obligations under this
Agreement.
6.7 Qualification. Charter knows of no facts which would disqualify it
from holding the LLC Interest under any Legal Requirement.
6.8 Securities Law Matters. Charter understands and acknowledges that the
LLC Interest has not been registered or qualified under the federal or
applicable state securities laws and the LLC Interest is being sold to and
purchased by Charter in reliance upon applicable exemptions from such
registration and qualification requirements. Charter is an "accredited investor"
within the meaning of the federal securities laws and acknowledges it has been
furnished with or afforded access to, and has had the opportunity to ask
questions and receive answers concerning, all information pertaining to the LLC
Interest. The LLC Interest is being acquired by Charter for investment only and
not with a view to any public distribution thereof. Charter understands that the
LLC Interest is a "restricted security" within the meaning of the federal
securities laws and agrees that it will not offer to sell or otherwise dispose
of the LLC Interest in violation of the registration and qualification
requirements of the federal and applicable state securities laws. All
certificates to be delivered at Closing evidencing ownership of the LLC Interest
will contain appropriate legends incorporating these applicable securities laws
restrictions.
7. ADDITIONAL COVENANTS.
7.1 Access to Premises and Records. Between the date of this Agreement and
the Closing Date, RMG (a) will give to Charter and its counsel, accountants and
other representatives reasonable access during normal business hours and upon
reasonable advance notice to the premises and books and records of the Cable
Business and to all of the Assets and the personnel engaged in the management or
operation of the Systems; and (b) will furnish to Charter and such
representatives all such documents, financial information and other information
regarding the Cable Business and the Assets as Charter from time to time
reasonably may request; provided that no investigation will affect or limit the
scope of any of the representations, warranties, covenants and indemnities of
the other in this Agreement or in any Transaction Document or limit liability
for any breach of any of the foregoing.
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7.2 Continuity and Maintenance of Operations, Certain Deliveries and
Notice. Except as set forth on Schedule 7.2, in the 1999 operating budgets set
forth on Schedule 7.2.1, or as Charter may otherwise consent in writing, between
the date of this Agreement and the Closing, RMG:
7.2.1 will conduct the Cable Business in good faith and operate the
Systems only in the usual, regular and ordinary course (including making routine
capital expenditures and operating substantially in accordance with the 1999
capital and operating budgets with respect to each such System (copies of which
are set forth on Schedule 7.2.1), completing ongoing and planned line
extensions, placing conduit or cable in new developments, fulfilling
installation requests, completing disconnection work orders and disconnecting
and discontinuing service to customers whose accounts are delinquent) and, to
the extent consistent with such conduct and operation, use its commercially
reasonable efforts to (a) preserve its current business intact in all material
respects, including preserving existing relationships with franchising
authorities, suppliers, customers and others having business dealings with the
Systems, (b) keep available the services of its employees and agents providing
services in connection with the Cable Business, (c) continue budgeted marketing,
advertising and promotional expenditures with respect to the Cable Business, (d)
enter into written agreements with respect to all multiple dwelling unit and
bulk billed accounts having greater than 200 individual units, and (e) operate
the Cable Business in material compliance with all Legal Requirements;
7.2.2 will maintain the Assets in good operating repair, order and
condition, ordinary wear and tear excepted; will maintain equipment and
inventory for the Systems at normal historical levels consistent with its past
practices (as adjusted to account for abnormally high inventory levels related
to periodic rebuild activity); will maintain in full force and effect policies
of insurance with respect to the Cable Business in such amounts and with respect
to such risks as are currently in effect for the Systems; and will maintain its
books, records and accounts with respect to the Assets and the operation of the
Systems in the usual, regular and ordinary manner on a basis consistent with its
past practices;
7.2.3 will not, outside the ordinary course of business or to the
extent inconsistent with past practice or the 1999 operating budget included in
Schedule 7.2.1 (a) modify, terminate, renew, suspend or abrogate any System
Contract (other than retransmission consent System Contracts, System Contracts
evidencing Leased Property or Other Real Property Interests and lease agreements
for Tangible Personal Property); (b) modify, terminate, renew, suspend or
abrogate any retransmission consent System Contract, System Franchise, System
Contract evidencing Leased Property or Other Real Property Interests, lease
agreements for Tangible Personal Property or System License except for renewals
(other than renewals of System Franchises) on terms that are not materially
different from those which currently exist and renewals of System Franchises as
otherwise required or permitted under this Agreement; (c) engage in any
marketing, subscriber installation, collection or disconnection practices; (d)
make any Cost of Service Election; (e) other than as set forth on Schedule
7.2.1, enter into
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any agreement with or commitment to any competitive access provider and/or local
exchange company or any internet access or on-line services provider with
respect to the use or lease of any of the Assets; (f) sell, transfer or assign
any portion of the Assets other than sales in the ordinary course of business or
permit the creation of a Lien (other than Permitted Liens) on any of the Assets;
(g) decrease the rate charged for any level of Basic Services, Expanded Basic
Services or any Pay TV or, except as expressly permitted by Schedule 7.2.1, add,
delete, retier or repackage any analog programming services, in each case except
to the extent required under the 1992 Cable Act or any other Legal Requirement;
provided, however, that if rates are decreased in order to so comply, RMG will
provide Charter with copies of any FCC forms (even if not filed with any
Governmental Authority) used to determine that the new rates were required; (h)
convert any of the Systems to any billing system or otherwise change billing
arrangements for any of the Systems; (i) enter into any Contract of any kind
relating to the Cable Business to be assumed by Charter hereunder that
individually or in the aggregate call for payments pursuant to such Contract's
terms or otherwise involving expenditures in excess of one hundred thousand
dollars ($100,000), except for the renewal of Contracts that would, but for such
renewal, terminate in accordance with their terms prior to Closing; (j) except
pursuant to or required by plans, agreements or arrangements already in effect
on the date hereof, make any material increase in compensation or benefits
payable or to become payable to employees or make any material change in
personnel policies; (k) take any action with respect to the grant or increase of
severance or termination pay payable after the Closing Date; (l) engage in any
material transaction with respect to the Cable Business; or (m) agree to do any
of the foregoing;
7.2.4 will promptly deliver to Charter (i) true and complete copies
of all monthly statements of income and such other information with respect to
the Systems or the operation of the Cable Business in a format consistent with
the form of report attached hereto as Schedule 7.2.4 for the period from January
1, 1999, through the Closing, and if the Closing occurs as of the end of a
month, as soon as practicable after Closing and (ii) such financial information
reasonably requested by Charter;
7.2.5 will give or cause to be given to Charter, as soon as
reasonably possible but in any event within five (5) Business Days after the
date of submission to the appropriate Governmental Authority, copies of all FCC
Forms 1200, 1205, 1210, 1215, 1220, 1225, 1235 and 1240 or any other FCC forms
required to be filed with any Governmental Authority under the 1992 Cable Act
with respect to rates and prepared with respect to any of the Systems;
7.2.6 will duly and timely file a valid notice of renewal under
Section 626 of the Cable Act with the appropriate Governmental Authority with
respect to any System Franchise that will expire within thirty-six (36) months
after any date between the date of the Agreement and the Closing Date;
7.2.7 will promptly notify Charter of any fact, circumstance, event
or action by it or otherwise (a) which, if known at the date of this Agreement,
would have been required to be disclosed by it in or pursuant to this Agreement
or (b) the existence, occurrence or taking of
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which would result in the conditions of Charter in Section 8.1.1 (with respect
to the representations and warranties of RMG) not being satisfied at any time
prior to or on the Closing, and, with respect to clause (b), use its
commercially reasonable efforts to remedy the same and to satisfy such condition
to Charter's obligation to consummate the transactions contemplated by this
Agreement;
7.2.8 will use its commercially reasonable efforts to challenge and
contest any Litigation brought against or otherwise involving RMG that could
result in the imposition of Legal Requirements that could cause the conditions
to the Closing not to be satisfied; and
7.2.9 will cause its appropriate Affiliates to be bound by and
comply with the provisions of this Section 7.2 to the extent such Affiliates
own, operate or manage any of the Assets or Systems.
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7.3 Employees.
7.3.1 Except as set forth in this Section 7.3.1, Charter may, but
shall have no obligation to, employ or offer employment to any employee of the
Cable Business. Within thirty (30) days after the date of execution of this
Agreement, RMG shall provide to Charter a list of all employees of the Systems
(the "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 sixty (60) days after the date of
execution of this Agreement (but in no event less than thirty (30) days after
receipt of such list), or such other date as the Parties may agree, Charter will
provide to RMG in writing a list of the System Employees which Tennessee LLC
will employ following the Closing, subject only to the evaluations permitted by
this Section. RMG agrees, and shall cause its appropriate Affiliates, to
cooperate in all reasonable respects with Charter to allow Charter or its
Affiliates to evaluate the System Employees to make hiring decisions. In this
regard, Charter shall have the opportunity to make such appropriate prehire
investigation of each of the 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 RMG and do not unreasonably interfere with RMG's operations. RMG
will use its good-faith efforts to obtain the consent of each of the System
Employees to allow Charter to review personnel files and to conduct background
checks in connection with the foregoing. Charter or its Affiliates may, if they
wish, condition any offer of employment upon the employee's passing a
pre-placement physical examination (including drug screening test) and the
completion of a satisfactory background check. Charter shall bear the expense of
such examination but RMG shall, upon reasonable notice, cooperate in the
scheduling of such examinations so long as the examinations do not unreasonably
interfere with RMG's operations. As of the Closing Date, neither Charter nor
Tennessee LLC shall have any obligation to RMG, its Affiliates or to RMG's
employees, with regard to any employee it has determined not to hire.
Notwithstanding any of the foregoing, prior to the Closing Charter agrees not to
solicit for employment, without the written consent of RMG, any employee of RMG
whose position is System manager or higher.
7.3.2 To the extent not included in the calculation of the Base
Value or the Adjusted Value in accordance with the Common Agreement, IPWT will
pay to all of the 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 ten (10) days) included in the
calculation of the Adjusted Value of the Systems under the Common Agreement),
and other compensation or benefits to which they are entitled for periods prior
to the Closing, including all amounts, if any, payable on account of the
termination of their employment.
7.3.3 IPWT or its appropriate Affiliate will be responsible for
maintenance and distribution of benefits accrued under any employee benefit plan
(as defined in ERISA) maintained
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by RMG, or its appropriate Affiliate, pursuant to the provisions of such plan
and any Legal Requirements. Charter will not 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 RMG or any Affiliate. In the event that RMG
determines that the transactions contemplated by this Agreement will not permit
a distribution to be made to a Hired Employee (as defined below) from RMG's tax
qualified plan in accordance with Section 401(k)(10) of the Code then Charter
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
IPWT or its appropriate Affiliate to make distributions to any former System
Employee of RMG who becomes a Hired Employee of Tennessee LLC or Charter of the
balance of such employee's 401(k) account in RMG's or its Affiliate's tax
qualified plan, if any, as soon as legally permitted, Charter shall notify IPWT
of the date of termination of such employee's employment with Tennessee LLC or
Charter for any reason.
7.3.4 To the extent not included in the calculation of the Base
Value or the Adjusted Value in accordance with the Common Agreement, all claims
and obligations under, pursuant to or in connection with any welfare, medical,
insurance, disability or other employee benefit plans of RMG or any Affiliate or
arising under any Legal Requirement affecting employees of RMG or any Affiliate
incurred on or before the Closing Date or resulting from or arising from events
or occurrences occurring or commencing on or before the Closing Date will remain
the responsibility of IPWT, or the appropriate Affiliate, whether or not such
employees are hired by Charter as of or after the Closing. Neither Charter nor
Tennessee LLC will have or assume any obligation or liability under or in
connection with any such plan of RMG or any Affiliate of RMG.
7.3.5 To the extent not included in the calculation of the Adjusted
Value in accordance with the Common Agreement, IPWT will remain solely
responsible for all salaries and all severance, vacation (except for accrued
vacation time and sick time included in the calculation of the Adjusted Value of
the Systems 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 Tennessee LLC, Charter or any of
their Affiliates, as a result of their employment by RMG or any Affiliate of RMG
on or prior to the Closing Date, the termination of their employment on or prior
to the Closing Date, the consummation of the transactions contemplated hereby or
pursuant to any applicable Legal Requirement or otherwise relating to their
employment prior to the Closing Date. Any liability under WARN with regard to
any employee terminated on or prior to the Closing Date, or not hired by
Tennessee LLC or Charter on or after the Closing Date, shall, as a matter of
contract between the Parties, be the responsibility of IPWT. Charter and its
Affiliates shall cooperate with RMG, IPWT and their other Affiliates, if
requested, in the giving of WARN notices on behalf of the other.
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7.3.6 Notwithstanding anything to the contrary herein, Charter
shall:
(a) credit each System Employee who is offered on or prior to
the Closing employment by Tennessee LLC, Charter or any of their Affiliates and
becomes an employee of Tennessee LLC, Charter or any of their Affiliates after
the Closing Date (a "Hired Employee") the amount of vacation time (to a maximum
of four (4) weeks) and sick time (to a maximum of ten (10) days) accrued by him
or her as a System Employee through and including the Closing Date to the extent
the Adjusted Value is decreased pursuant to Section 2.2(c) of the Common
Agreement in the case of System Employees who become employees of Charter or its
Affiliates; provided, however, that if any Hired Employee has accrued vacation
time and/or sick time in excess of four (4) weeks or ten (10) days,
respectively, then RMG shall, and shall cause its appropriate Affiliate to, pay
to such employee the amount of such excess and Charter shall not assume any
liability or obligation in respect of such excess;
(b) permit each Hired Employee to participate in Charter's
employee benefit plans to the same extent as similarly situated employees of
Charter and their dependents are permitted to participate;
(c) give each Hired Employee credit for such employee's past
service with RMG and its Affiliates as of the Closing Date (including past
service with any prior owner or operator of the Systems or the Cable Business)
for purposes of eligibility and vesting under Charter's employee benefit and
other plans to the same extent as other similarly situated employees of Charter;
(d) not subject any Hired Employee to any waiting periods or
limitations on benefits for pre-existing conditions under Charter'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 RMG or any Affiliate of RMG; and
(e) credit each Hired Employee under any group health plan for
any deductible amount previously met by such Hired Employee as of the Closing
Date under any of the group health plans of RMG or any of its Affiliates.
7.3.7 If Tennessee LLC, Charter or any of their Affiliates
discharges any Hired Employee without cause within one hundred twenty (120) days
after Closing, then Charter shall pay severance benefits to such Hired Employee
in accordance with IPWT's severance benefit plan. For purposes of this Section
7.3.7, "cause" shall have the meaning set forth in Charter's employment
policies, procedures or agreements applicable to Charter's employees who are
situated similarly to the discharged Hired Employee.
7.3.8 If RMG has, or acquires, a duty to bargain with any labor
organization, then RMG will (i) give prompt written notice of such development
to Charter, including notice of the date and place of any negotiating sessions
as they are planned or contemplated and permit Charter
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to have a representative present at all negotiating sessions with such labor
organization and at all meetings preparatory thereto (including making Charter's
representative a representative of RMG's delegation if required by the labor
organization) and (ii) not, without Charter's written consent, enter into any
Contract with such labor organization that purports to bind Charter, including
any successor clause or other clause which would have this purpose or effect.
RMG acknowledges and agrees that Charter has not agreed to be bound, and will
not be bound, without an explicit assumption of such liability or responsibility
by Charter, by any provision of any collective bargaining agreement or similar
Contract with any labor organization to which RMG 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 the Systems 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 1999 calendar year to employees of RMG
who after the Closing become employees of Tennessee LLC or Charter, the Parties
agree to comply, and to cause their respective Affiliates to comply, with the
alternative procedure 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.
7.4 Leased Vehicles; Other Capital Leases. To the extent not included in
the calculation of the Base Value or the Adjusted Value in accordance with the
terms of the Common Agreement, except for leases described in Schedule 4.1(b),
IPWT will pay the remaining balances on any leases for vehicles or capital
leases included in the Tangible Personal Property and will deliver title to such
vehicles and other Tangible Personal Property, free and clear of all Liens, to
Tennessee LLC at the Closing.
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7.5 Required Consents; Franchise Renewal.
7.5.1 RMG will use its commercially reasonable efforts to (i) obtain
in writing as promptly as possible and at its expense, all of the Required
Consents and any other consent, authorization or approval required to be
obtained by RMG in connection with the transactions contemplated by this
Agreement, and deliver to Charter copies of such Required Consents and such
other consents, authorizations or approvals promptly after they are obtained by
RMG and (ii) give any required written notice in connection with the
transactions; provided, that RMG will afford Charter the opportunity to review,
approve and revise the form of letter or application proposed to request the
Required Consent or form of written notice prior to delivery to the Third Party
or the Affiliate of RMG whose consent is sought or to whom such notification is
required. All documents delivered or filed with any Governmental Authority or
any Person by or on behalf of RMG pursuant to this Section 7.5.1, when so
delivered or filed, will be correct, current and complete in all material
respects. Charter will cooperate with RMG to obtain all Required Consents and
Charter shall not intentionally take any action or steps that would prejudice or
jeopardize the obtaining of any Required Consent. RMG will not accept or agree
or accede to any modifications or amendments to, or the imposition of any
condition to the transfer of, any of the System Franchises, System Licenses or
System Contracts of the Cable Business that are not acceptable to Charter.
Notwithstanding the foregoing, as soon as practicable after the date of this
Agreement (and in no event more than fifteen (15) Business Days hereafter),
Charter will cooperate with RMG to complete, execute and deliver, or cause to be
completed, executed and delivered, to the appropriate Governmental Authority, a
FCC Form 394 with respect to each System Franchise other than any such
Governmental Authority that the Parties have agreed will not initially receive
FCC Form 394; provided, that if RMG subsequently requests that FCC Form 394 be
completed, executed and delivered to any appropriate Governmental Authority that
did not initially receive a FCC Form 394 for any System Franchise, then the
Parties will cooperate to complete, execute and deliver a FCC Form 394 to such
Governmental Authority as soon as practicable but in any event within fifteen
(15) Business Days after RMG has made such request. Without the prior consent of
the Charter, RMG shall not agree with any Governmental Authority to extend or to
toll the time limits applicable to such Governmental Authority's consideration
of any FCC Form 394 filed with such Governmental Authority.
7.5.2 RMG will use commercially reasonable efforts to obtain and
cooperate with Charter to obtain a renewal or extension of any System Franchise
(for a period expiring no earlier than three (3) years after the Closing Date)
for which a valid notice of renewal pursuant to the formal renewal procedures
established by Section 626 of the Cable Act has not been timely delivered to the
appropriate Governmental Authority and no written confirmation has been received
from such Governmental Authority that the procedures established by Section 626
nonetheless will be applicable with respect to the renewal or extension of such
System Franchise.
7.5.3 Notwithstanding the provisions of Section 7.5.1, neither RMG
nor IPWT will have any further obligation to obtain Required Consents: (a) with
respect to license agreements relating to pole attachments where the licensing
authority will not consent to an
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assignment of such license agreement but requires that Tennessee LLC or Charter
enter into a new agreement with such licensing authority, in which case Charter
shall use its commercially reasonable efforts to enter into such agreement prior
to Closing or as soon as practicable thereafter and RMG will cooperate with and
assist Charter in obtaining such agreements; (b) for any business radio license
or any private operational fixed service (POFS) microwave license which RMG
reasonably expects can be obtained within one hundred twenty (120) days after
the Closing and so long as a conditional temporary authorization (for a business
radio license) or a special temporary authorization (for a POFS license) is
obtained by Charter under FCC rules with respect thereto; (c) with respect to
Contracts evidencing Leased Property, if, with the consent of Charter, RMG
obtains and makes operational prior to Closing substitute Leased Property that
is reasonably satisfactory to Charter; (d) with respect to Contracts evidencing
leased Tangible Personal Property that is material to the Cable Business, if,
with the consent of Charter, RMG obtains and makes operational prior to Closing
substitute Tangible Personal Property that is reasonably satisfactory to
Charter; and (e) with respect to Contracts which are not identified with an
asterisk (*) on Schedule 5.3, if RMG uses its commercially reasonable efforts to
obtain the Required Consent to such Contract but fails to obtain such consent on
or prior to Closing.
7.5.4 If and to the extent that RMG fails to obtain all Required
Consents identified with an asterisk (*) on Schedule 5.3 (except Required
Consents for the transfer of Systems Franchises which shall be governed by
Section 7.5.5) on or prior to the Closing (whether or not Charter shall have
waived satisfaction of the condition to Closing set forth in Section 8.1.5),
subsequent to the Closing, IPWT will continue to use commercially reasonable
efforts to obtain in writing as promptly as possible such Required Consents and
will deliver copies of the same, reasonably satisfactory in form and substance,
to Charter. The obligations set forth in this Section will survive the Closing
and will not be merged in the consummation of the transactions contemplated
hereby.
7.5.5 If less than all of the Required Consents for the transfer of
Systems Franchises are obtained as of the Closing Date and all other conditions
precedent are satisfied or waived, then, subject to the conditions set forth in
Section 4.1(c)(i) and (iii) of the Common Agreement, then the System Franchise
with respect to which consent has not been obtained shall not be transferred to
Tennessee LLC and the Parties shall negotiate a modification to the calculation
of the Base Price as set forth in Section 3.1 to account for the exclusion of
such Franchise.
7.6 Title Commitments and Surveys. Charter will have the option to obtain,
at its own expense, (i) commitments of title insurance ("Title Commitments")
issued by a nationally recognized title insurance company selected by Charter
(the "Title Company") and containing policy limits and other terms reasonably
acceptable to Charter, and photocopies of all recorded items described as
exceptions therein committing to insure (a) fee title in Charter to each parcel
of Owned Property and (b) a leasehold interest in Charter in each parcel of
Leased Property that is the site of a System headend or tower, by American Land
Title Association ("ALTA") (1992) owner's or lessee's policies of title
insurance, and (ii) current ALTA as-built surveys (in
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accordance with the Minimum Standard Detail Requirements for Land Title Surveys
jointly established and adopted by ALTA and the American Congress on Surveying
and Mapping in 1992) of each such parcel of the Owned Property or Leased
Property with monuments placed at all major corners of the property boundary
unless already marked and showing the location and identification by recorded
instrument number of all easements or rights-of-way burdening or benefiting the
property in question and all other documents and matters referenced as
exceptions on the Title Commitment, the location of all apparent easements and
rights-of-way, flood zone designation, setback lines, if applicable, the
location of all substantial visible improvements on such property and the
location of all adjoining streets and indication of access to a public way such
as curb cuts and driveways, in such form as is reasonably satisfactory to
Charter and as is necessary to obtain the title insurance to be issued pursuant
to the Title Commitments with the standard printed exceptions relating to survey
matters deleted (the "Surveys"), certified to the parties and the Title Company
issuing a Title Commitment. If Charter notifies RMG within twenty (20) days of
this Agreement or, if later, of its receipt of both the Title Commitments and
the Surveys of any Lien (other than a Permitted Lien) or other matter affecting
title to the Owned Property or Leased Property which renders (or presents a
material risk of rendering) title to any parcel of the Owned Property not good
and marketable or prevents or materially interferes with (or presents a material
risk of preventing or interfering with) the use of any parcel of Owned Property
or Leased Property for the purposes for which it is currently used or intended
to be used by RMG (each a "Title Defect"), RMG will exercise commercially
reasonable efforts to remove or, with the consent of Charter, cause the Title
Company to commit to insure over, each such Title Defect prior to the Closing.
7.7 HSR Notification. As soon as practicable after the execution of this
Agreement, but in any event no later than thirty (30) days after such execution,
Charter and RMG will each complete and file, or cause to be completed and filed
at its own cost and expense, any notification and report required to be filed
under the HSR Act with respect to the transactions contemplated by this
Agreement and each such filing shall request early termination of the waiting
period imposed by the HSR Act. The Parties shall use their respective
commercially reasonable efforts to respond as promptly as reasonably practicable
to any inquiries received from the Federal Trade Commission (the "FTC") and the
Antitrust Division of the Department of Justice (the "Antitrust Division") for
additional information or documentation and to respond as promptly as reasonably
practicable to all inquiries and requests received from any other Governmental
Authority in connection with antitrust matters. The Parties shall use their
respective commercially reasonable efforts to overcome any objections which may
be raised by the FTC, the Antitrust Division or any other Governmental Authority
having jurisdiction over antitrust matters. Each Party will cooperate to prevent
inconsistencies between their respective filings and between their respective
responses to all such inquiries and responses, 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. Notwithstanding the foregoing, no Party shall be required to
make any significant change in the operations or activities of the business (or
any material assets employed therein) of such Party or any of its Affiliates, if
a Party determines in good faith that such change would be materially adverse to
the operations
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or activities of the business (or any material assets employed therein) of such
Party or any of its Affiliates having significant assets, net worth or revenue.
7.8 Sales and Transfer Taxes. All sales, use or excise Taxes arising from
or payable by reason of the transfer of any of the Assets or the LLC Interest
("Sales Taxes") will be shared equally by IPWT and Charter. All transfer and
similar taxes or assessments, including transfer fees and similar assessments
for or under System Franchises, System Licenses and System Contracts, arising
from or payable by reason of the conveyance of the Assets or the LLC Interest
("Transfer Taxes") also will be shared equally by IPWT and Charter. Tax Returns
required to be filed in respect of Sales Taxes and Transfer Taxes ("Transfer Tax
Returns") shall be prepared and filed by the Party that has primary
responsibility under applicable law for filing such Transfer Tax Returns. If no
Party has primary responsibility for filing a Transfer Tax Return, Charter shall
be responsible for preparing and filing any such Transfer Tax Return.
Notwithstanding the foregoing, however, Charter shall be solely responsible for
any Sales Taxes and Transfer Taxes imposed, and the costs associated with any
Transfer Tax Return filed, as a result of the contribution of the Assets by RMG
to Tennessee LLC pursuant to Section 2.1.1 and subsequent sale of the LLC
Interest to Charter pursuant to Section 2.1.2, greater than those Sales Taxes
and Transfer Taxes that would have been imposed, and the costs that would have
been associated with any Transfer Tax Returns filed, in connection with a sale
of the Assets directly from RMG to Charter.
7.9 Programming. Charter will execute and deliver such documents and take
such action as may be reasonably requested by RMG to enable RMG to comply with
the requirements of its programming agreements with respect to divestitures and
acquisitions of cable television systems; provided, however, that Charter will
not be required to provide specific programming or channels or to assume any
liability with respect to or in connection with the programming agreements of
RMG or any Affiliate of RMG, except to the extent included on Schedule 4.2(b).
7.10 Updated Schedules.
(a) Schedule and exhibit references contained in this Agreement are
for convenience only and any matter disclosed pursuant to one section,
subsection or other provision of this Agreement, are deemed disclosed for all
purposes of this Agreement, as long as the disclosure with respect to such
matter provides a truthful, accurate and adequate description of all relevant
aspects of such matter.
(b) Not less than ten (10) Business Days prior to Closing, RMG will
deliver to Charter revised copies of each of its Schedules, except for Schedule
5.14 as it relates to matters addressed in Sections 5.14.1 and 5.14.2
(regardless of whether the original Schedule is as of a certain date) which
shall have been updated and marked to show any changes occurring between the
date of this Agreement and the date of delivery; provided, however, that such
updates are for informational purposes only, and for purposes of determining
whether IPWT's representations, warranties and covenants in this Agreement are
true and correct at Closing, all references to the
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Schedules will mean the version of the Schedules attached to this Agreement on
the date of signing. Notwithstanding the foregoing, if the effect of any such
updates to Schedules is to disclose any one or more additional properties,
privileges, rights, interests or claims, in each case acquired after the date of
this Agreement ("New Properties") as Assets that would have been (if owned on
the date of this Agreement) required by this Agreement to have been disclosed by
RMG in its original Schedules or that were acquired by RMG after the date of
this Agreement in breach of this Agreement, then Charter, at or before Closing,
will have the right (to be exercised by written notice to RMG) to cause any one
or more of such New Properties to be designated as and deemed to constitute
Excluded Assets of RMG for all purposes under this Agreement. If such right is
not exercised by Charter and if Charter waives the applicable condition to
Closing provided in Section 8.1.1 or 8.1.2, Charter shall be deemed to have
accepted such new disclosure with respect to such New Properties and it shall be
deemed incorporated by reference into the Schedules. Notwithstanding anything to
the contrary contained in this Agreement, and except as set forth in the
preceding sentence with respect to New Properties, the waiver of any condition
to Closing by a Party who has knowledge of a breach by the other Party will not
be deemed a waiver of any rights and remedies with respect to such breach under
this Agreement or the Common Agreement.
7.11 Use of Name and Logo. For a period of one hundred eighty (180) days
after the Closing, Charter and Tennessee LLC will be entitled to use the
trademarks, trade names, service marks, service names, logos and similar
proprietary rights of RMG to the extent incorporated in or on the Assets
transferred to it at the Closing on a royalty-free basis, provided that Charter
will exercise commercially reasonable efforts to remove all such names, marks,
logos and similar proprietary rights of RMG (except to the extent otherwise
permitted by RMG) from the Assets as soon as reasonably practicable, and in any
event within one hundred eighty (180) days, following the Closing.
Notwithstanding the foregoing, nothing in this Section will require Charter to
remove or discontinue using any such name or xxxx that is affixed to converters
or other items in or to be used in customer homes or properties, or as are used
in a similar fashion making such removal or discontinuation impracticable.
7.12 Transitional Billing Services. IPWT will provide Charter, 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 for
a period of up to one hundred fifty (150) days following the Closing to allow
for conversion of existing billing arrangements, including billing and related
arrangements regarding internet access services being provided to customers of a
System on the Closing Date ("Transitional Billing Services"). Charter will
notify RMG at least thirty (30) days prior to the Closing as to whether it
desires Transitional Billing Services from RMG. All Transitional Billing
Services, if any, that are requested by Charter will be provided on terms and
conditions reasonably satisfactory to each Party; provided, however, that the
amount to be paid by Charter for such Transitional Billing Services will not
exceed the out-of-pocket cost to IPWT of providing such Transitional Billing
Services. IPWT will notify Charter of the cost to IPWT of providing such
Transitional Billing Services within ten (10) Business Days after receiving
Charter's notice
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requesting the provision of such Transitional Billing Services.
7.13 Confidentiality and Publicity.
7.13.1 Prior to the Closing, each Party will keep confidential any
non-public information that such Party may obtain from the other Parties in
connection with this Agreement, and following the Closing, each Party will keep
confidential any non-public information that such Party may obtain from the
other Parties in connection with this Agreement unrelated to the Cable Business
and Systems as well as any non-public information in the possession of such
Party related to the Cable Business and Systems (any such information that a
Party is required to keep confidential pursuant to this sentence shall be
referred to as "Confidential Information"). No Party will disclose, and each
Party will cause its employees, consultants, advisors and agents not to
disclose, any Confidential Information to any other Person (other than its
directors, officers and employees and representatives of its advisers and
lenders whose knowledge thereof is necessary in order to facilitate the
consummation of the transactions contemplated hereby) or use, and will cause its
controlled Affiliates, directors, officers, employees, consultants, advisors and
agents not to use, such Confidential Information to the detriment of the other
Parties; provided that (i) Charter may use and disclose any such Confidential
Information once it has been publicly disclosed (other than by Charter in breach
of its obligations under this Section) or which rightfully has come into the
possession of Charter (other than from RMG or IPWT and other than from another
Person in violation of any duty or obligation of confidentiality) and (ii) to
the extent that Charter may, in the reasonable opinion of its counsel, be
compelled by Legal Requirements to disclose any of such Confidential
Information, Charter may disclose such Confidential Information if it will have
used all reasonable efforts, and will have afforded the other the opportunity,
to obtain an appropriate protective order or other satisfactory assurance of
confidential treatment, for the Confidential Information compelled to be
disclosed. In the event of termination of this Agreement, Charter will cause to
be delivered to the other, and retain no copies of, any documents, work papers
and other materials obtained by Charter or on its behalf from the other, whether
so obtained before or after the execution hereof.
7.13.2 No Party will issue any press releases or make any other
public announcement concerning this Agreement and the transactions contemplated
hereby, except as required by applicable Legal Requirements, without the prior
written consent and approval of the other Party, which consent and approval may
not be unreasonably withheld.
7.13.3 Each Party expressly agrees that, in addition to any other
right or remedy the other may have, such other Party may seek and obtain
specific performance of the covenants and agreements set forth in or made
pursuant to this Section 7.13 and temporary and permanent injunctive relief to
prevent any breach or violation thereof, and that no bond or other security may
be required from such other parties in connection therewith.
7.14 Bulk Transfer. Each Party waives compliance by each other Party with
Legal Requirements relating to bulk transfers applicable to the transactions
contemplated hereby.
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7.15 Lien Searches. RMG will obtain, at its expense, the results of a lien
search conducted by a professional search company of records in the offices of
the secretaries of state in each state and county clerks in each county where
there exist any Owned Property or Tangible Personal Property, and in the state
and county where RMG's principal offices are located, including copies of all
financing statements or similar notices or filings (and any continuation
statements) discovered by such search company.
7.16 Further Assurances. At or after the Closing, each Party at the
request of the other Party, will promptly execute and deliver, or cause to be
executed and delivered, to the other Party all such documents and instruments,
in addition to those otherwise required by this Agreement, in form and substance
reasonably satisfactory to the other Party as the other Party may reasonably
request in order to carry out or evidence the terms of this Agreement or to
collect any accounts receivable or other claims included in the Assets.
7.17 Post-Closing Cooperation as to Rates.
7.17.1 RMG will use commercially reasonable efforts to cooperate
with and assist Charter by providing, upon reasonable request, all information
in RMG's possession (and not previously made available to Charter) relating
directly to the rates set forth on Schedule 5.15.2, or on any of FCC Forms 1200,
1205, 1210, 1220, 1225, 1235 or 1240 or any other FCC Form, that Charter may
reasonably require to justify such rates in response to any inquiry, order or
requirements of any Governmental Authority.
7.17.2 Prior to Closing, RMG shall not settle or permit to be
settled any rate proceeding with respect to the Systems without the consent of
Charter, which consent will not be unreasonably withheld or delayed, unless the
proposed settlement includes injunctive or other relief that adversely affects
the Assets or its ability to operate the Systems substantially in the manner in
which they are operated on the date of this Agreement (other than changing the
rates in question), in which case consent may be withheld or delayed in
Charter's sole discretion.
7.17.3 After the Closing, IPWT will be responsible for and follow to
conclusion any rate order of any Governmental Authority or proceeding with
respect to rates of any of the Systems charged by RMG immediately prior to the
Closing; provided, however, that IPWT shall not: (i) agree to any
forward-looking rate adjustment; (ii) submit any refund plan to a Governmental
Authority that would impact any rates charged or impose financial liability on
Tennessee LLC or Charter after the Closing; or (iii) appeal or take any other
action with regard to such proceeding that would impact any rates charged or
impose financial liability on Tennessee LLC or Charter after the Closing, in any
case without obtaining the prior written consent of Charter, which consent shall
not be unreasonably withheld. Each Party will cooperate with and assist the
other by providing, upon reasonable request, all information in its possession
(and not previously made available to the requesting Party) that the requesting
Party may reasonably require to justify rates in response to any inquiry, order
or requirements of any Governmental
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Authority.
7.17.4 If, following Closing, any System is required pursuant to any
Legal Requirement, settlement or otherwise to refund to subscribers any
payments, in whole or in part, made by such subscribers prior to Closing,
including fees for cable television service, equipment charges, late fees and
similar payments, then at the election of Charter and upon IPWT's prior written
consent, which consent shall not be unreasonably withheld: (i) Charter or
Tennessee LLC must fulfill such refund obligation through a one-time cash
payment to subscribers, in which case IPWT shall provide funds for such payment
to Charter, Charter shall cooperate with IPWT or implement and administer such
refund payment through Charter's billing system, and IPWT shall reimburse
Charter for all reasonable expenses incurred by Charter in connection therewith;
(ii) Charter may fulfill such refund obligation through a cash payment, credit
or in-kind or other form of consideration, at its discretion and subject to any
required approval by a Governmental Authority, and IPWT shall reimburse Charter
in the amount of any payment or in the amount of the cost to Charter of any
credit or in-kind or other form of consideration and all reasonable expenses
incurred by Charter in connection therewith. Without limiting the foregoing,
Charter will provide IPWT with all information in Charter's possession that is
reasonably required by IPWT in connection with such reimbursement.
7.17.5 If either Tennessee LLC or Charter is permitted following
Closing to pass through to subscribers of the Systems, the amount of any
"franchise fees on franchise fees" paid by RMG to the appropriate local
franchising authority with respect to the period prior to Closing, Charter
agrees that it will collect for the benefit of IPWT such amounts specified no
later than the Six-Month Date as paid by RMG and, except as specified below,
will promptly remit such amounts to IPWT; provided, however, that if a local
franchising authority challenges such collection or orders Charter to refund
such fees to subscribers, then Charter shall not remit the fees to IPWT but
shall hold such fees in escrow and the parties will cooperate reasonably and in
good faith to challenge such local franchising authority action. Upon the final
resolution of such local franchising authority action, the escrowed fees shall
be released from escrow and, to the extent not refunded to subscribers, paid
over to IPWT. IPWT agrees to provide Charter with such documentation as
necessary to demonstrate its payment of the "franchise fees on franchise fees"
and to enable Charter to collect the pass through amounts from subscribers.
7.18 Distant Broadcast Signals. Unless otherwise restricted or prohibited
by any Governmental Authority, applicable Legal Requirements or Contract, RMG
will, if requested by Charter, delete prior to the Closing any distant broadcast
signals which Charter determines will result in unacceptable liability on the
part of Charter for copyright payments with respect to continued carriage of
such signals after the Closing; provided, however, that RMG may refuse to honor
such a request if such deletion could reasonably be expected to delay or
otherwise jeopardize RMG's ability to complete the transactions contemplated
herein.
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7.19 Environmental Assessment.
7.19.1 RMG acknowledges and agrees, subject to any enforceable
restrictions placed thereon by a Third Party owner or lessor of any real
property involved, that Charter may commission, at Charter's cost and expense, a
so-called "Phase I" environmental site assessment of the Assets (a "Phase I
Assessment"). If the Phase I Assessment or any other information known to RMG
(including information disclosed in connection with the negotiation of this
Agreement or described in the Schedules hereto) indicates that a so-called
"Phase II" assessment or other additional testing or analysis of the Assets as
Charter may deem appropriate (a "Phase II Assessment") is advisable, then,
subject to any enforceable restrictions placed thereon by a Third Party owner or
lessor of any real property involved, Charter may elect to cause its agents or
representatives to conduct such testing and analysis. RMG will use its
commercially reasonable efforts to comply with any reasonable request for
information made by Charter or its agents in connection with any such
investigation, but in no event will RMG be required under this Section 7.19.1 to
disclose any materials constituting attorney-client privileged communications.
RMG covenants that any response to any such request for information will be
complete and correct in all material respects. RMG will afford Charter and its
agents or representatives access to all operations of RMG at all reasonable
times and in a reasonable manner in connection with any such investigation
subject to any reasonably required approval of RMG's landlords, which approval
RMG will use its commercially reasonable efforts to obtain. Should Charter
commission such an investigation, such investigation will have no effect upon
the representations and warranties made by RMG or IPWT to Charter under this
Agreement except that if any Phase I Assessment or Phase II Assessment uncovers
an environmental condition which then comprises a breach of RMG's
representations or warranties herein and such breach is capable of being cured,
RMG shall be deemed not to have breached such representation or warranty if RMG
cures such breach in accordance with the provisions of this Agreement. In the
event this Agreement is terminated or fails to close in accordance with its
terms, Charter agrees to repair any damage or disturbance it causes to the Owned
Property or Leased Property in the course of such investigative activities by
returning such Owned Property or Leased Property to approximately the same
condition as existed prior to such investigative activities. Charter shall
indemnify, protect, defend, and hold RMG, IPWT, Tennessee LLC and the Assets
free and harmless from and against any and all claims, actions, causes of
action, suits, proceedings, costs, expenses (including reasonable attorneys' and
consultants' fees and costs), liabilities, damages, and liens of any type
arising directly out of any act or omission of Charter or any of Charter's
representatives on or about the Owned Property or Leased Property in the course
of such investigative activities. However, neither of the two preceding
sentences shall be interpreted to impose any obligation upon Charter with
respect to Hazardous Substances present at, on, in, under or about, or any
conditions existing on, the Owned Property or Leased Property at the time of
such investigative activities, except to the extent of Charter's negligence or
willful misconduct causes a release of such Hazardous Substances or otherwise
exacerbates any such condition in a manner that leads to liability under any
Environmental Law.
7.19.2 All information collected and generated as a result of the
environmental due diligence authorized by Section 7.19.1 will be subject to the
terms and conditions of Section
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7.13 of this Agreement. Charter shall provide to RMG copies of all draft and
final reports, assessments and other information composed or compiled by
Charter's environmental consultants within five (5) Business Days after
Charter's receipt of copies thereof.
7.20 Year 2000 Matters.
7.20.1 Definitions. For purposes of this Agreement, the following
terms shall have the following meanings:
(a) "Computer and Other Systems" means any level of hardware
or software, equipment and cable plant, or environmental and security systems
and other facilities used in connection with the Cable Business which are date
dependent or which process date data, including any firmware, embedded systems,
application programs, user interfaces, files and databases, and which might be
adversely affected by any date-related issue or calculation prior to, during or
after January 1, 2000, including any problem related to a leap year.
(b) "Year 2000 High-Level Inventory, Assessment and
Remediation Decisions" means RMG's documentation of its Year 2000 inventory,
assessment and remediation decisions performed in accordance with its Year 2000
Plan, consisting of (i) database reports identifying each category of items
inventoried at RMG's cable Systems and specifying as appropriate the
manufacturer or vendor and release, version or model number of each item listed,
(ii) risk or critically assessments, (iii) determination and execution of
evaluation approaches with respect to Year 2000 Readiness, (iv) determination of
Year 2000 Readiness based on evaluation approaches employed, and (v) decisions
regarding disposition alternatives (do nothing, repair, replace or retire). All
such reports have been reviewed at appropriate levels within RMG's organization
in accordance with RMG's Year 2000 Plan. RMG's Year 2000 High-Level Inventory,
Assessment and Remediation Decisions are attached hereto as Schedule 7.20.1(b).
(c) "Year 2000 Plan" means the plans adopted in accordance
with RMG's Year 2000 Remediation Program to make Year 2000 Ready by a date no
later than August 31, 1999, all of RMG's Computer and Other Systems having a
significant impact on RMG's business. Such Year 2000 Plan will include scope of
methodologies and timelines (including objective milestones) for inventory,
assessment, remediation and/or replacement, and testing or evaluation of Third
Party Testing, as applicable, of its Computer and Other Systems having a
significant impact on RMG's business. RMG's Year 2000 Plan is attached hereto as
Schedule 7.20.1(c).
(d) "Year 2000 Ready" or "Year 2000 Readiness" means that the
referenced component, system, software, equipment or other item is designed or
has been modified to be used prior to, during and after the calendar year 2000
A.D., and that such item will operate at all levels, including microcode,
firmware, application programs, user interfaces, files and databases, during
each such time period without error or interruption relating to, or the product
of, date related issues or calculations, including date data which represents or
references
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different centuries or more than one century or leap year.
(e) "Year 2000 Remediation Program" means an enterprise wide
program to make Year 2000 Ready all Computer and Other Systems having a
significant impact on RMG's business. Such Year 2000 Remediation Program must be
conducted by Persons with experience in issues related to Year 2000 Readiness
and such Persons must have organized an enterprise wide program management
office which reports to, or an enterprise wide program management structure with
oversight by, executive level management and the board of directors (or
committee thereof or other governing body of such entity).
7.20.2 Acknowledgments. The Parties acknowledge the following:
(a) RMG and certain of its Affiliates have established a Year
2000 Remediation Program.
(b) Charter has reviewed and approved RMG's Year 2000 Plan and
Year 2000 High-Level Inventory, Assessment and Remediation Decisions.
(c) Charter acknowledges and agrees with RMG's preliminary
decision to rely on testing of cable plant and related equipment to be performed
by certain cable industry technical and trade associations, certain critical
vendors or other cable operators ("Third Party Testing"). RMG will continue to
review the progress of such Third Party Testing plans and results as they become
available. RMG has developed test methodologies as part of its Year 2000 Plan to
address implementation of additional testing should RMG and Charter mutually
consider such additional testing to be necessary or prudent.
(d) RMG makes no representation, warranty or guarantee that
its Computer and Other Systems will be Year 2000 Ready at the Closing Date or
thereafter.
7.20.3 Covenants. Notwithstanding any other provision set forth in
this Agreement, the Parties agree as follows:
(a) Through the Closing Date, RMG will exercise prudent and
reasonable care and diligence to take such actions with respect to the Cable
Business when and as required by its approved Year 2000 Plan.
(b) Through the Closing Date, RMG will cooperate with Charter
with respect to the nature and results of its activities relating to its Year
2000 Plan. Such cooperation shall include providing Charter with any
non-confidential information possessed by RMG or one of its Affiliates and
reasonably requested by Charter regarding the Year 2000 Readiness of any
material component of the Computer and Other Systems having a significant impact
on RMG's business.
(c) RMG shall deliver to Charter on or before July 31, 1999,
and again
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on August 31, 1999 (if Closing has not occurred prior to such date), a
statement, certified by an authorized officer of RMG who is responsible for
implementation of its Year 2000 Plan, setting forth in reasonable detail that as
of such date all of the milestones contained in its Year 2000 Plan to be
completed as of such date have been fully completed (or if not, indicating which
such milestones have not been completed and describing the efforts required to
complete the same).
(d) From the date hereof through the Closing Date, Charter
shall have the opportunity to conduct due diligence regarding the Year 2000
Readiness of the Computer and Other Systems having a significant impact on RMG's
business in accordance with this Section 7.20.3(d). Charter may conduct a review
of the Year 2000 Ready assessment activities with respect to the Computer and
Other Systems having a significant impact on RMG's business, including
inspecting individual headend and office sites and reviewing existing reports,
correspondence and related material regarding the Year 2000 Readiness of the
Computer and Other Systems having a significant impact on RMG's business.
Charter shall conduct no more than three (3) visits to any site of RMG and no
single site visit shall exceed three (3) Business Days. Charter shall give RMG
at least five (5) Business Days written notice prior to any visit to any System
facilities of RMG and, if Charter intends during such visit to perform testing
at a headend, office or other site of RMG, Charter also must provide a
description of the scope of work regarding such testing. If RMG does not notify
Charter in writing of the RMG's objection to such proposed site visit and/or
testing within three (3) Business Days after receipt of such notice, RMG shall
be deemed to have consented to the proposed site visit and any described
testing. RMG shall not unreasonably object to Charter's request to perform
testing. A representative of RMG shall be present at all times during any such
visit and testing. All activities of Charter regarding its Year 2000 due
diligence shall be conducted to minimize any inconvenience or interruption of
the normal use and enjoyment of the Cable Business and Computer and Other
Systems.
7.21 Satisfaction of Conditions. Each Party will use its commercially
reasonable efforts to satisfy, or to cause to be satisfied, the conditions to
the obligations of the other Party to consummate the transactions contemplated
by this Agreement, as set forth in Article 8.
7.22 Offers. RMG (and its directors, officers, employees, representatives
and agents) shall not directly or indirectly, (i) offer the Assets or the Cable
Business for sale, (ii) solicit, encourage or entertain offers for the Assets or
the Cable Business, (iii) initiate negotiations or discussions for the sale of
the Assets or the Cable Business or (iv) make information about the Assets or
the Cable Business available to any Third Party in connection with the possible
sale of the Assets or the Cable Business prior to the Closing Date or the date
this Agreement is terminated in accordance with its terms.
7.23 Retention of Books and Records. At or prior to the Closing, RMG shall
make arrangements reasonably satisfactory to Charter to deliver all Books and
Records not located at any of the offices included in the Owned Property or
Leased Property. Following the Closing, each Party shall give access to the
other Parties, their counsel, accountants and other authorized
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representatives during normal business hours to such Party's materials, books,
records and documents which relate to the operations of the Cable Business prior
to the Closing Date, as may be reasonably necessary in connection with any
legitimate purpose (including the preparation of tax reports and returns and the
preparation of financial statements). Such access will be subject to reasonable
advance written notice, will be conducted in a manner that is not disruptive of
such Party's business, and will be subject to any other reasonable limitations
imposed by such Party. The requesting Party shall have the right to make copies
of such materials at its own expense. If any Party proposes to destroy or
otherwise dispose of any of its materials, books, records or documents that
related to the operations of the Cable Business prior to the Closing Date, it
will give no less than thirty (30) days' advance written notice to the other
Party so as to permit the other Party to exercise its rights under this Section
7.23.
7.24 Formation of Tennessee LLC. RMG shall form Tennessee LLC as a single
member limited liability company solely owned by RMG and pursuant to operating
agreements reasonably acceptable to Charter, and RMG shall cause Tennessee LLC
to not enter into any transactions or assume any liabilities prior to the
Closing except as provided in this Agreement. Charter shall reimburse IPWT for
all monies paid (other than general and administrative expenses) by RMG or IPWT
in connection with forming Tennessee LLC.
7.25 Tax Return Cooperation. RMG, IPWT and Charter shall reasonably
cooperate in connection with the preparation and filing of any Tax Return for
which any other Party is responsible for preparing and filing with respect to
the Systems.
8. CONDITIONS PRECEDENT.
8.1 Conditions to Charter's Obligations. The obligations of Charter to
consummate the transactions contemplated by this Agreement will be subject to
the satisfaction, at or before the Closing, of the following conditions, one or
more of which may be waived by Charter:
8.1.1 Accuracy of Representations and Warranties. The
representations and warranties of IPWT in this Agreement and in the Transaction
Documents, without giving effect to any materiality qualifications contained
therein, are true, complete and accurate on and as of the date hereof and at and
as of the Closing with the same effect as if made at and as of the Closing,
except to the extent that all misstatements, omissions and inaccuracies, in the
aggregate, do not have a material adverse effect on the Assets, the Cable
Business, the operations, condition (financial or otherwise) or results of
operations of the Systems taken as a whole, or on the ability of RMG to perform
its obligations under this Agreement.
8.1.2 Performance of Agreements. RMG 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 Closing.
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8.1.3 Deliveries. RMG 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 9.2.
8.1.4 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.
8.1.5 Consents.
(a) Except as otherwise provided in Section 7.5.5, Required
Consents related to all Systems Franchises shall have been obtained in form and
substance reasonably satisfactory to Charter, or the consent of the appropriate
Governmental Authority shall be deemed to have been received in accordance with
Section 617 of the Communications Act (47 U.S.C. ss.537).
(b) Except as otherwise provided in Section 7.5.3, Charter
shall have received evidence, in form and substance reasonably satisfactory to
it, that the Required Consents related to the Systems Licenses and the Systems
Contracts identified with an asterisk (*) on Schedule 5.3 have been obtained.
8.1.6 No Material Adverse Changes. There shall not have been any
material adverse change in the Assets or the condition (financial or otherwise)
or operations of the Cable Business or the Systems, taken as a whole, since
December 31, 1998.
8.1.7 Franchise Renewals. Each Systems Franchise for which (a) a
valid notice of renewal pursuant to the formal renewal procedures established by
Section 626 of the Cable Act has not been timely delivered to the appropriate
Governmental Authority, and (b) with respect to which the appropriate
Governmental Authority has not confirmed in writing that the procedures
established by Section 626 nonetheless shall apply to the renewal or extension
of such Systems Franchise, shall have been renewed or extended for a period
expiring no earlier than three (3) years after the Closing Date.
8.1.8 Common Agreement and Related Closings.
(a) The conditions set forth in Section 4.1 of the Common
Agreement shall have been satisfied or waived.
(b) The transactions contemplated by the IP Agreements and the
Redemption Agreement (each as defined in the Common Agreement) shall have been,
or will be, consummated as set forth in Section 4.4 of the Common Agreement,
except to the extent such Agreements are not consummated as a result of a breach
by Charter or any of its Affiliates of its
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or their obligation to consummate such transactions.
8.2 Conditions to RMG's Obligations. The obligations of RMG to consummate
the transactions contemplated by this Agreement will be subject to the
satisfaction, at or before the Closing, of the following conditions, one or more
of which may be waived by RMG:
8.2.1 Accuracy of Representations and Warranties. The
representations and warranties of Charter in this Agreement and in the
Transaction Documents, 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 Closing with the same effect as if made at and as of the
Closing, except to the extent that all misstatements, omissions and
inaccuracies, in the aggregate, do not have a material adverse effect on the
ability of Charter to perform its obligations under this Agreement.
8.2.2 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 Closing.
8.2.3 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 RMG under Section 9.3.
8.2.4 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.
8.2.5 Common Agreement and Related Closings.
(a) The conditions set forth in Section 4.2 of the Common
Agreement shall have been satisfied or waived.
(b) The transactions contemplated by the IP Agreements and the
Redemption Agreement (each as defined in the Common Agreement) shall have been,
or will be, consummated as set forth in Section 4.4 of the Common Agreement,
except to the extent that such Agreements are not consummated as a result of a
breach by RMG, IPWT or their Affiliates of its or their obligation to consummate
such transactions.
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9. THE CLOSING.
9.1 The Closing; Time and Place. Subject to the terms and conditions of
this Agreement, the Closing shall be held in San Francisco, California, or as
otherwise agreed, at a place mutually agreed upon by the Parties at 10:00 a.m.,
local time, on the last calendar day of the calendar month in which the
conditions set forth in Article 8 (other than Sections 8.1.3 and 8.2.3) shall
have been satisfied or waived (provided that each Party shall have at least ten
(10) days' prior notice of the scheduled Closing Date in order to prepare for
the Closing) or at such other place, date and time as may be mutually agreed
upon by the Parties (the "Closing Date"). The transactions to be consummated at
Closing shall be deemed to have been consummated as of the Closing Time. If the
Closing Date is not a Business Day, then the Closing Date shall be the
immediately preceding Business Day.
9.2 RMG's Delivery Obligations. At the Closing, RMG will deliver or cause
to be delivered to Charter the following:
9.2.1 Xxxx of Sale and Assignment and Assumption Agreement. The Xxxx
of Sale and Assignment and Assumption Agreement with respect to the transfer of
the Assets to Tennessee LLC, and a Xxxx of Sale with respect to the transfer of
the LLC Interest to Charter in the form of Exhibit 9.2.1.
9.2.2 Deeds. Special warranty deeds in recordable form conveying to
Tennessee LLC each parcel of Owned Property, and assignments of leases and
easements in recordable form, with respect to Leased Property and Other Real
Property Interests as to which prior assignments into RMG were recorded in the
applicable real estate records.
9.2.3 Lien Releases. Evidence reasonably satisfactory to Charter
that all Liens (other than Permitted Liens) affecting or encumbering the Assets
have been terminated, released or waived, as appropriate, or original, executed
instruments in form reasonably satisfactory to Charter effecting such
terminations, releases or waivers.
9.2.4 Vehicle Titles. Title certificates to all vehicles included
among the Assets, endorsed for transfer of title to Tennessee LLC, and separate
bills of sale therefor or other transfer documentation, if required by the laws
of the states in which such vehicles are titled.
9.2.5 Evidence of Authorization Actions. Certified resolutions or
other evidence reasonably satisfactory to Charter that RMG and IPWT have taken
all action necessary to authorize the execution of this Agreement and the
Transaction Documents and the consummation of the transactions contemplated
hereby.
9.2.6 FIRPTA Certificate. FIRPTA Non-Foreign Seller Certificate
certifying that RMG is not a foreign person within the meaning of Section 1445
of the Code reasonably satisfactory in form and substance to Charter.
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9.2.7 Officer's Certificate. Charter will have received a
certificate executed by an executive officer of RMG dated the date of the
Closing, reasonably satisfactory in form and substance to Charter certifying
that the conditions specified in Sections 8.1.1. and 8.1.2 have been satisfied.
9.2.8 Opinions of Counsel. Opinions of Pillsbury Madison & Sutro LLP
and Dow, Xxxxxx & Xxxxxxxxx, PLLC, substantially in the forms attached as
Exhibits C.1 and C.3 to the Common Agreement.
9.2.9 Other. Such other documents and instruments as may be
necessary to effect the intent of this Agreement and to consummate the
transactions contemplated hereby.
9.3 Charter's Delivery Obligations. At the Closing, Charter will deliver
or cause to be delivered to IPWT the following:
9.3.1 Cash Consideration. The Adjusted Value will be paid by Charter
to RMG in accordance with the Common Agreement.
9.3.2 Evidence of Authorization Actions. Certified resolutions of
Charter or other evidence reasonably satisfactory to RMG and IPWT that Charter
has taken all action necessary to authorize the execution of this Agreement and
the Transaction Documents and the consummation of the transactions contemplated
hereby.
9.3.3 Officer's Certificate. RMG and IPWT will have received a
certificate executed by an executive officer of Charter dated the date of the
Closing, reasonably satisfactory in form and substance to RMG and IPWT
certifying that the conditions specified in Sections 8.2.1 and 8.2.2 have been
satisfied.
9.3.4 Opinion of Counsel. Opinion of Irell & Xxxxxxx LLP,
substantially in the form of Exhibit C.2 to the Common Agreement.
9.3.5 Other. Such other documents and instruments as may be
necessary to effect the intent of this Agreement and to consummate the
transactions contemplated hereby.
10. TERMINATION AND DEFAULT.
10.1 Termination Events. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned:
10.1.1 At any time, by the mutual agreement of Charter and RMG;
10.1.2 By either Charter or RMG at any time, if the other is in
material breach
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or default of any of the other's covenants, agreements or other obligations
herein or in any Transaction Document and the defaulting Party has failed to
cure such breach within thirty (30) days of its receipt of notice of such breach
from the other Party;
10.1.3 By either Charter or RMG upon written notice to the other, if
any of the conditions to its obligations set forth in Sections 8.1 and 8.2,
respectively, are not satisfied on or before the later of January 15, 2000, or
nine (9) months after the date of this Agreement, for any reason other than an
intentional and material breach or default by such Party of its respective
covenants, agreements or other obligations under this Agreement, or any of its
representations herein not being true and accurate in all material respects when
made or when otherwise required by this Agreement to be true and accurate in all
material respects;
10.1.4 By either Charter or RMG if an injunction, restraining order
or decree of any nature of any Governmental Authority of competent jurisdiction
is issued that prohibits the consummation of any of the transactions
contemplated hereby and such injunction, restraining order or decree is final
and nonappealable; provided, however, that the Party seeking to terminate this
Agreement pursuant to this clause has used commercially reasonable efforts to
have such injunction, order or decree vacated or denied; or
10.1.5 As otherwise provided in the Common Agreement.
10.2 Effect of Termination. If this Agreement is terminated pursuant to
Section 10.1, all obligations of the Parties under this Agreement will
terminate, except for the obligations set forth in Sections 7.13, 7.19 and
12.13. Termination of this Agreement pursuant to Sections 10.1.2, 10.1.3, 10.1.4
or 10.1.5 will not limit or impair any remedies that any of RMG, IPWT, Tennessee
LLC or Charter may have pursuant to the terms of this Agreement with respect to
a breach or default by another Party of such Party's covenants, agreements or
obligations under this Agreement.
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11. SURVIVAL; REMEDIES.
11.1 Survival of Representations, Warranties Covenants and Agreements. The
representations, warranties, covenants and agreements of RMG, IPWT and Charter
in this Agreement and in the Transaction Documents will survive Closing for a
period of twelve (12) months after the Closing Date. The period of survival of
the representations, warranties, covenants and agreements prescribed by this
Section 11.1 are referred to as the "Survival Period." The liabilities of each
Party under its respective representations, warranties, covenants and agreements
will expire as of the expiration of the Survival Period; provided, however, that
such expiration will not include, extend or apply to (a) any representation,
warranty, covenant or agreement the breach of which has been asserted by a Party
in a written notice to the other Party before such expiration or about which a
Party has given the other Party written notice before such expiration indicating
that facts or conditions exist that, with the passage of time or otherwise, can
reasonably be expected to result in a breach (and describing such potential
breach in reasonable detail), (b) the Party's obligations under Sections 7.13
and 7.23, or (c) the Party's obligations under Sections 7.16 and 7.17.1, but
only to the extent reasonably practicable.
11.2 Exclusive Remedy. The Parties hereby agree that the rights set forth
in the Common Agreement shall be each Party's sole and exclusive remedies
against the other Parties for any claims arising after the Closing Time and
relating to any breaches of the representations, warranties or covenants
contained in this Agreement other than based on fraud.
12. MISCELLANEOUS PROVISIONS.
12.1 Parties Obligated and Benefitted. Subject to the limitations set
forth below, this Agreement will be binding upon each of the Parties and their
respective assigns and successors in interest and will inure solely to the
benefit of the Parties and their respective assigns and successors in interest,
and no other Person will be entitled to any of the benefits conferred by this
Agreement. Subject to the foregoing sentence, without the prior written consent
of the other Parties, no Party will assign any of its rights under this
Agreement or delegate any of its duties under this Agreement, provided that the
appropriate Party may assign any or all of its rights under this Agreement to an
Affiliate, provided that such assignment will not result in any adverse tax
consequences to the other Parties, will not give rise to any material
requirements for additional Required Consents, and will not, in the reasonable
judgment of the other Parties, delay the Closing.
12.2 Notices. Any notice, request, demand, waiver or other communication
required or permitted to be given under this Agreement to any Party will be
given as set forth in the Common Agreement.
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12.3 Right to Specific Performance. Each Party acknowledges that the
unique nature of the Assets and LLC Interest to be contributed or purchased
hereunder pursuant to this Agreement renders money damages an inadequate remedy,
and the Parties agree that any Party shall be entitled to pursue specific
performance as a remedy, without the requirement of posting a bond or other
security therefor.
12.4 Waiver. This Agreement or any of its provisions may not be waived
except in writing. The failure of any Party to enforce any right arising under
this Agreement on one or more occasions will not operate as a waiver of that or
any other right on that or any other occasion.
12.5 Captions. The section and other captions of this Agreement are for
convenience only and do not constitute a part of this Agreement.
12.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware (other than its rules of
conflicts of law to the extent that the application of the laws of another
jurisdiction would be required thereby).
12.7 Time. Time is of the essence under this Agreement. If the last day
permitted for the giving of any notice or the performance of any act required or
permitted under this Agreement falls on a day which is not a Business Day, the
time for the giving of such notice or the performance of such act will be
extended to the next succeeding Business Day.
12.8 Late Payments. If any Party fails to pay the other Parties any
amounts when due under this Agreement, the amounts due will bear interest from
the due date to the date of payment at the rate per annum publicly announced
from time to time by the Bank of New York as its prime rate (the "Prime Rate")
plus two (2) percentage points, adjusted as and when changes in the Prime Rate
are made.
12.9 Counterparts. This Agreement may be executed in counterparts, each of
which will be deemed an original.
12.10 Entire Agreement. This Agreement (including the Transaction
Documents and the Schedules and Exhibits referred to in this Agreement, which
are incorporated in and constitute a part of this Agreement) contains the entire
agreement of the Parties with respect to the subject matter hereof and
supersedes all prior oral or written agreements and understandings with respect
to such subject matter. This Agreement may not be amended or modified except by
a writing signed by all of the Parties.
12.11 Severability. Any term or provision of this Agreement which is
invalid or unenforceable will be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining rights
of the Person intended to be benefitted by such provision or any other
provisions of this Agreement.
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12.12 Construction. This Agreement has been negotiated by the Parties and
their respective legal counsel, and legal or other equitable principles that
might require the construction of this Agreement or any provision of this
Agreement against the Party drafting this Agreement will not apply in any
construction or interpretation of this Agreement.
12.13 Expenses. Except as otherwise expressly provided in this Agreement,
each Party will pay all of its expenses, including attorneys' and accountants'
fees, in connection with the negotiation of this Agreement, the performance of
its obligations and the consummation of the transactions contemplated by this
Agreement.
12.14 Risk of Loss. The risk of any loss or damage to the Assets resulting
from fire, theft or other casualty (except reasonable wear and tear) will be
borne by RMG at all times prior to the Closing Time. In the event of any such
loss or damage after December 31, 1998, RMG will immediately notify Charter in
writing of that fact. All insurance proceeds paid or payable as a result of the
occurrence of the event resulting in such loss or damage will be delivered by
IPWT to Charter, or the rights thereto will be assigned if not yet paid over by
the insurer to IPWT. The obligations under this Section 12.14 to pay or assign
insurance proceeds will not apply to the extent that any insurance proceeds are
applied to replace or restore such loss or damage prior to Closing.
If, on or prior to the Closing Date, all or any part of or interest in the
Assets is taken or condemned as a result of a Governmental Authority's exercise
of its powers of eminent domain, or if a Governmental Authority having such
power informs RMG that it intends to condemn all or any part of the Assets (such
event being called, in either case, a "Taking"), then (i) Charter may elect, in
the name of RMG, to negotiate for, claim, contest and receive all damages with
respect to the Taking, (ii) RMG will be relieved of its obligation to convey to
Tennessee LLC those of the Assets that were the subject of the Taking, (iii) at
Closing, RMG will assign to Tennessee LLC all of its rights to damages payable
as a result of the Taking, and will pay to Tennessee LLC all damages previously
paid to it in connection with the Taking, and (iv) following the Closing, IPWT
will give to Charter any further assurances of such rights and assignment with
respect to the Taking as Charter reasonably may request from time to time.
12.15 Tax Consequences. No Party makes any representation or warranty,
express or implied, with respect to the Tax implications of any aspect of this
Agreement on any other Party, and each Party expressly disclaims any such
representation or warranty with respect to any Tax consequences arising under
this Agreement. Each Party has relied solely on its own Tax advisors with
respect to the Tax implications of this Agreement.
12.16 Commercially Reasonable Efforts. For purposes of this Agreement,
"commercially reasonable efforts" will not be deemed to require a Party to
undertake extraordinary or unreasonable measures, including the payment of
amounts in excess of normal and usual filing
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fees and processing fees, if any or other payments with respect to any Contract
that are significant in the context of such Contract (or significant on the
aggregate basis as to all Contracts).
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The parties have executed this Agreement as of the day and year first above
written.
CHARTER RMG, LLC
/s/ Xxxxxx X. Xxxx
By: _____________________________________
Name: Xxxxxx X. Xxxx
Title: Vice President
XXXXX MEDIA GROUP, INC.
/s/ Xxxxxx X. Xxxxx
By: _____________________________________
Name: Xxxxxx X. Xxxxx
Title: President and
Chief Executive Officer
INTERMEDIA PARTNERS OF WEST TENNESSEE,
L.P.
By InterMedia Capital Management, LLC,
its general partner
By InterMedia Management, Inc.,
its managing member
/s/ Xxxxxx X. Xxxxx
By _________________________________
Xxxxxx X. Xxxxx
President and
Chief Executive Officer
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[Signature Page to RMG Purchase Agreement dated
as of April 20, 1999 among RMG, IPWT and Charter]
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