PURCHASE AGREEMENT
dated as of March 15, 1996
between
XXXXXXXX/NEW HERITAGE PARTNERSHIP
and
NEW HERITAGE ASSOCIATES
as Sellers
and
CONTINENTAL CABLEVISION, INC.
as Buyer
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "AGREEMENT") is made and entered as of March
15, 1996 by and between Xxxxxxxx/New Heritage Partnership, an Iowa general
partnership ("MNHP"), New Heritage Associates, an Iowa general partnership
("NHA") (MNHP and NHA are sometimes hereinafter referred to, collectively, as
"SELLERS" and, singly, as a "SELLER"), and Continental Cablevision, Inc., a
Delaware corporation ("BUYER" or "CCI").
RECITALS
--------
X. Xxxxxxxx/New Heritage Strategic Partners L.P. ("MNH") is an Iowa
limited partnership. MNH owns and operates indirectly through its subsidiaries
certain cable television systems.
B. MNHP is the sole general partner of MNH. MNHP owns a general
partnership interest (the "MNHP GENERAL PARTNERSHIP INTEREST") representing at
the date hereof a 62.1% Ownership Interest (as defined in the Restated Agreement
of Limited Partnership of Xxxxxxxx/New Heritage Strategic Partners L.P., dated
as of December 30, 1991 (the "MNH PARTNERSHIP AGREEMENT"), among MNHP, NHA and
Continental Cablevision of Minnesota, Inc., a Minnesota corporation ("CCM")) in
MNH.
C. NHA is a limited partner of MNH. NHA owns a limited partnership
interest in MNH (the "NHA LIMITED PARTNERSHIP INTEREST") (the MNHP General
Partnership Interest and the NHA Limited Partnership Interest are sometimes
hereinafter referred to, collectively, as the "SUBJECT INTERESTS" and, singly,
as a "SUBJECT INTEREST") representing at the date hereof a 0.0% Ownership
Interest (as defined in the MNH Partnership Agreement) in MNH and a carried
interest in MNH effective pursuant to Section 3.7 of the MNH Partnership
Agreement at such time as CCM is deemed to have received distributions from MNH
equal to its capital contributions to MNH.
D. Buyer desires to purchase, and Sellers desire to sell to Buyer, the
Subject Interests on and subject to the terms and conditions hereinafter set
forth.
AGREEMENTS
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ARTICLE 1
DEFINITIONS AND CONSTRUCTION
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Section 1.1 Certain Defined Terms. The following terms with initial
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capital letters, when used in this Agreement, shall have the meanings set forth
below:
"ACCOUNTS RECEIVABLE" means all subscriber, trade and other accounts
receivable and receivables of the MNH Entities.
"ACCUMULATED FUNDING DEFICIENCY" is defined in Section 4.17(q).
"AFFILIATE" means, with respect to any Person, any other Person
controlling, controlled by or under common control with such Person, with
"control" for such purpose meaning the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities or voting interests,
by contract or otherwise.
"ASSETS" means all of the assets and properties, real and personal,
tangible and intangible, owned or leased by any of the MNH Entities that are not
Excluded Assets, including Tangible Personal Property, Owned Property, Systems
Franchises, Systems Licenses, Systems Contracts, Systems Leases, Accounts
Receivable and Books and Records.
"BANKS" is defined in Section 2.1(d).
"BANK CO-AGENTS" is defined in Section 2.1(d).
"BANK AGENT" is defined in Section 2.1(d).
"BASIC SUBSCRIBER" means any basic subscriber of a System, with the
number of such basic subscribers as of any date to be determined using the same
methods and criteria as used in determining the number of basic subscribers of
the MNH Entities at October 31, 1995 set forth in line 01 of the page of the
CableData Report for the month of October 1995 with respect to the MNH Entities
(which number of basic subscribers was 119,781 at October 31, 1995) attached
hereto as SCHEDULE 1.1.
"BENEFIT ARRANGEMENT" is defined in Section 4.17(q).
"BOOKS AND RECORDS" means all engineering records, files, data,
drawings, blueprints, schematics, reports, lists, plans and processes of the MNH
Entities and all files of correspondence,
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lists, records and reports of the MNH Entities, including all files of
correspondence, lists, records and reports concerning subscribers and
prospective subscribers, signal and program carriage and dealings with
Governmental Authorities and all reports filed by or on behalf of any MNH Entity
with the FCC and all statements of account filed by or on behalf of any MNH
Entity with the United States Copyright Office.
"BUSINESS DAY" means any day other than a Saturday or Sunday or a day
on which banks in Boston, Massachusetts or Des Moines, Iowa are closed.
"BUYER" is defined in the preamble preceding the Recitals to this
Agreement.
"BUYER PURCHASE PRICE CALCULATION" is defined in Section 8.3(b).
"BUYER REQUIRED CONSENTS" means any and all Consents identified on
SCHEDULE 5.2.
"CABLE ACT" means the Cable Television Consumer Protection and
Competition Act of 1992, and the rules and regulations promulgated thereunder.
"CABLE BENEFIT ARRANGEMENT" is defined in Section 4.17(q).
"CABLE EMPLOYEE PLAN" is defined in Section 4.17(q).
"CABLE EMPLOYEE" is defined in Section 4.17(q).
"CABLE FRANCHISE AREAS" is defined in Section 7.1(k).
"CABLE PLAN" is defined in Section 4.17(q).
"CAPITAL EXPENDITURES" shall mean, for any period, any and all
expenditures in respect of any one or more of the Systems made, accrued or
incurred by any MNH Entity which, under GAAP, would be classified as capital
expenditures for such period.
"CAPITAL EXPENDITURES ADJUSTMENT" is defined in Section 8.3(b).
"CCI" is defined in the preamble preceding the Recitals to this
Agreement.
"CCI BALANCE SHEET" is defined in Section 5.5.
"CCI BALANCE SHEET DATE" is defined in Section 5.5.
"CCI COUNSEL OPINION" is defined in Section 7.2(e).
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"CCI MERGER AGREEMENT" means the Agreement and Plan of Merger, dated
as of February 27, 1996, between CCI and U S WEST, Inc., a Delaware corporation,
as heretofore or hereafter amended.
"CCI PROXY STATEMENT" means the Proxy Statement and the exhibits
thereto to be filed with the SEC and delivered to the stockholders of CCI in
connection with the CCI Merger Agreement, including any amendments and
supplements thereto.
"CCI SEC FILINGS" means (i) the Registration Statement on Form S-4 and
the exhibits thereto, as filed by CCI with the SEC on January 27, 1995,
including Amendment Xx. 0, Xxxxxxxxx Xx. 0, Xxxxxxxxx Xx. 0 and Amendment No. 4
thereto, each as filed with the SEC, and Prospectus Supplement No. 1, dated
September 22, 1995, to the Joint Proxy-Prospectus included in said Registration
Statement on Form S-4, (ii) all reports on Form 10-K, Form 10-Q or Form 8-K
filed by CCI with the SEC on or after January 1, 1995 and (iii) the CCI Proxy
Statement and all amendments thereto.
"CCM" is defined in Recital B.
"CLOSING" is defined in Section 8.1.
"CLOSING DATE" means the date on which the Closing occurs.
"CLOSING TIME" means 11:59 P.M., eastern local time, on the Closing
Date.
"COBRA" is defined in Section 4.17(q).
"CODE" means the Internal Revenue Code of 1986, as amended, and,
unless the context otherwise requires, the rules and regulations promulgated
thereunder.
"COMMUNICATIONS ACT" means the Communications Act of 1934, as amended
to date, and the rules and regulations thereunder.
"COMMUNICATIONS ACTS" means the Communications Act, the Cable
Communications Policy Act of 1984 and the Cable Act, all as amended to date, and
the rules and regulations thereunder.
"CONSENT" means any vote, consent, permit, approval or authorization
of, or filing of any certificate, notice, application, report or other document
with, any Governmental Authority or other Person.
"CONTRACT" means any written contract, mortgage, deed of trust, bond,
indenture, lease, license, note, franchise, certificate, option, warrant, right
or other instrument, document, obligation or agreement, and any oral obligation,
right or agreement.
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"DEAL PRICE" is defined in Section 8.3(b).
"ELIGIBLE ACCOUNTS RECEIVABLE" is defined in Section 8.3(b).
"EMPLOYEE BENEFIT PLAN" is defined in Section 4.17(q).
"ENFORCEABILITY EXCEPTIONS" is defined in Section 3.1(b).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder and published
interpretations with respect thereto.
"ERISA AFFILIATE" means, as to any Person, any trade or business,
whether or not incorporated, which together with such Person would be deemed, at
any time through the Closing Date, a single employer within the meaning of (S)
4001 of ERISA or (S) 414(b), (c), (m) or (o) of the Code; provided that "ERISA
AFFILIATE" shall, as to any MNH Entity, not include at any time (whether before
or after September 1, 1992) any trade or business that would not be deemed at
any time on or after September 1, 1992 to be such a single employer with any MNH
Entity.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"EXCLUDED ASSETS" means the assets of the MNH Entities located in Des
Moines, Iowa that are described in EXHIBIT A hereto.
"EXPENSES" means any and all expenses reasonably incurred in
connection with investigating, preparing, defending, bringing or prosecuting any
claim, action, suit or proceeding (including court filing fees, court costs,
arbitration fees or costs, witness fees and reasonable fees of legal counsel,
investigators, expert witnesses, accountants and other professionals).
"FCC" means the Federal Communications Commission.
"FCC LICENSES" means all Licenses issued by the FCC.
"FRANCHISE" means any governmental franchise or similar authorization
(other than FCC Licenses) pursuant to which a Person is authorized to provide
cable television service.
"GAAP" means generally accepted accounting principles as in effect in
the United States of America on the date hereof.
"GOVERNMENTAL AUTHORITY" means (i) the United States of America, (ii)
any state, commonwealth, territory or possession of the United States of America
and any political subdivision thereof (including counties, municipalities,
provinces, parishes and the like), (iii) any foreign (as to the United States of
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America) sovereign entity and any political subdivision thereof and (iv) any
court, tribunal, department, commission, board, bureau, agency, authority or
instrumentality of any of the foregoing.
"GROUP HEALTH PLAN" is defined in Section 4.17(q).
"HAZARDOUS SUBSTANCES" means (i) any "hazardous waste" as defined by
the Resource Conservation and Recovery Act of 1976 (RCRA) (42 U.S.C.A. (S)(S)
6901 et seq.), as amended, and the rules and regulations promulgated thereunder;
-- ---
(ii) any "hazardous substance" as defined by the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (CERCLA)(42 U.S.C.A. (S)(S)
9601 et seq.), as amended, and the rules and regulations promulgated thereunder;
-- ---
(iii) any substance regulated by the Toxic Substances Control Act (TSCA) (42
U.S.C. (S) 2601 et seq.), as amended, and the rules and regulations promulgated
-- ---
thereunder; (iv) asbestos; (v) polychlorinated biphenyls; (vi) any substances
regulated under the provisions of Subtitle I of RCRA relating to underground
storage tanks; (vii) any substance the presence, use, treatment, storage or
disposal of which on the Owned or Leased Property is prohibited by any Legal
Requirement; and (viii) any other substance which by any Legal Requirement
requires special handling, reporting to or notification of any Governmental
Authority in its collection, storage, use, treatment or disposal.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder.
"INDEMNITEE" is defined in Section 10.3.
"INDEMNITOR" is defined in Section 10.3.
"INGERSOLL" is defined in Section 3.2(b).
"INGERSOLL EQUITY HOLDERS" means the registered holders at the date
hereof of the issued and outstanding shares of capital stock of Ingersoll, which
registered holders are listed in SCHEDULE 3.2(B)(V).
"IRS" means the Internal Revenue Service.
"JUDGMENT" means any judgment, writ, order, decision, injunction,
award or decree of or by any Governmental Authority or private arbitration
tribunal.
"LEASE" means any written or oral lease, sublease, license, easement,
grant, pole attachment or conduit or reach agreement or other attachment right
or similar instrument under which a Person has the right to use real or personal
property or a right of way.
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"LEASED PROPERTY" is defined in Section 4.14.
"LEGAL REQUIREMENT" means applicable common law and any statute,
ordinance, code, law, rule, regulation, order or other written standard,
requirement or procedure enacted, adopted, promulgated, applied or followed by
any Governmental Authority, and includes any Judgment.
"LICENSE" means any approval, consent, right, certificate, order,
franchise, determination, permission, license, authority or grant granted,
issued, declared, designated or adopted by any Governmental Authority, including
any Franchise.
"LIEN" means any security agreement, conditional sale, financing lease
or other title retention agreement, any consignment or bailment given for
purposes of security, any lien, mortgage, pledge, option, encumbrance, security
interest, rights of entry, possibilities of reverter, encroachments, easements,
rights-of-way, restrictive covenants and licenses of any kind, which otherwise
constitutes an interest in or claim against property, whether arising pursuant
to any Legal Requirement, any Contract or otherwise.
"LITIGATION" means, with respect to any Person, any claim, action,
suit, proceeding, arbitration, investigation, hearing or other activity or
procedure that could result in a Judgment, and any written notice of any of the
foregoing.
"LOSSES" means any claims, losses, liabilities, obligations, costs,
damages, Liens, penalties, fines, settlement payments, awards, judgments,
deficiencies and other charges, including interest which may be imposed in
connection therewith.
"MATERIAL ADVERSE EFFECT" means, with respect to any Person or
Persons, a material adverse effect on the business, condition (financial or
other), operations or assets of such Person or such Persons taken as a whole (as
the case may be).
"XXXXXXXX" is defined in Section 3.2(a).
"XXXXXXXX EQUITY HOLDER" means the registered holder at the date
hereof of the issued and outstanding shares of capital stock of Xxxxxxxx, which
registered holder is listed in Schedule 3.2(a)(iv).
"MINIMUM DAMAGE REQUIREMENT" is defined in Section 10.6(d).
"MNH" is defined in Recital A.
"MNH BALANCE SHEET" is defined in Section 4.6.
"MNH BALANCE SHEET DATE" is defined in Section 4.6.
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"MNH EMPLOYEES" is defined in Section 4.15.
"MNH ENTITY" means any of MNH and the MNH Subsidiaries.
"MNH FCC COUNSEL OPINION" is defined in Section 7.1(e).
"MNH FINANCIAL STATEMENTS" is defined in Section 4.5.
"MNH LOAN AGREEMENT" is defined in Section 2.1(d).
"MNH PARTNERSHIP AGREEMENT" is defined in Recital B.
"MNH SUBSIDIARY" means any Subsidiary of MNH.
"MNHP" is defined in the preamble preceding the Recitals to this
Agreement.
"MNHP GENERAL PARTNERSHIP INTEREST" is defined in Recital B.
"MNHP PARTNERSHIP AGREEMENT" is defined in Section 3.2(a).
"MULTIEMPLOYER PLAN" is defined in Section 4.17(q).
"NEW HERITAGE" is defined in Section 3.2(b).
"NEW HERITAGE EQUITY HOLDERS" means the registered holders at the date
hereof of the issued and outstanding shares of capital stock of New Heritage,
which registered holders are listed in SCHEDULE 3.2(B)(V).
"NHA" is defined in the preamble preceding the Recitals to this
Agreement.
"NHA EQUITY HOLDERS" means the partners of NHA at the date hereof,
which partners are Ingersoll and New Heritage.
"NHA LIMITED PARTNERSHIP INTEREST" is defined in Recital C.
"NHA PARTNERSHIP AGREEMENT" is defined in Section 3.2(b).
"NLRB" means the National Labor Relations Board.
"OUTSIDE CLOSING DATE" is defined in Section 9.1.
"OWNED PROPERTY" is defined in Section 4.14.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PENSION PLAN" is defined in Section 4.17(q).
"PERMITTED LIENS" means any (i) Liens securing current Taxes,
assessments and governmental charges not yet due and
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payable or being contested in good faith, (ii) materialmen's, mechanics',
carriers', workmen's, warehousemen's, repairmen's or other like Liens arising in
the ordinary course of business, or deposits to obtain the release of such
Liens, and (iii) Liens or minor imperfection of title that do not, individually
or in the aggregate, in any material respect interfere with or detract from the
ownership, use, operation, value or marketability of the affected property;
provided that "Permitted Liens" shall not include any Lien which could prevent
or inhibit in any material respect the conduct of the business of any System as
it is currently being conducted.
"PERSON" means any human being, Governmental Authority, corporation,
limited liability company, partnership, joint venture, trust, association or
unincorporated entity of any kind.
"PRIME RATE" means the "Prime Rate" or base rate on corporate loans at
large U.S. money center commercial banks as published in The Wall Street Journal
-----------------------
or, if publication of such rate shall be suspended or terminated, "PRIME RATE"
shall mean the annual rate of interest, determined daily and expressed as a
percentage, from time to time announced by CitiBank, N.A. as its prime or base
rate on corporate loans. Each change in the Prime Rate shall take effect
simultaneously with the date of publication or announcement, as applicable, of
each corresponding change in the Prime Rate.
"PROCEEDS" is defined in Section 7.1(k)(iii).
"PROHIBITED TRANSACTION" is defined in Section 4.17(q).
"PURCHASE PRICE" is defined in Section 8.3(b).
"REPORTABLE EVENT" is defined in Section 4.17(q).
"REQUIRED PERCENTAGE" is defined in Section 7.1(k).
"SEC" means the Securities and Exchange Commission.
"SECTION 3.1(C) EXCEPTIONS" is defined in Section 3.1(c).
"SECTION 4.3(A) EXCEPTIONS" is defined in Section 4.3(a).
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
"SELLER BENEFIT ARRANGEMENT" is defined in Section 4.17(q).
"SELLERS" is defined in the preamble preceding the Recitals to this
Agreement.
"SELLERS COUNSEL OPINIONS" is defined in Section 7.1(f).
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"SELLERS INDEMNIFICATION PERCENTAGE" means the quotient (expressed as
a percentage) of the Purchase Price (other than the $5,000,000 payable by Buyer
pursuant to Section 8.3(b)(i)(C)), as estimated at Closing pursuant to Section
8.3(b)(iii)(A), divided by the Deal Price.
"SELLERS PURCHASE PRICE CALCULATION" is defined in Section 8.3(b).
"SELLERS REQUIRED CONSENTS" means any and all Consents identified on
SCHEDULE 4.3.
"SUBJECT INTERESTS" is defined in Recital C.
"SUBSIDIARY" means, with respect to any Person, any other Person,
whether or not incorporated, of which (i) such Person or any other Subsidiary of
such Person is a general partner or (ii) at least a majority of the securities
or other interests having by their terms ordinary voting power to elect a
majority of the board of directors or others performing similar functions with
respect to such other Person is directly or indirectly owned or controlled by
such Person, by one or more Subsidiaries of such Person, or by such Person and
one or more of its Subsidiaries.
"SYSTEM" means any of the cable television systems in and around
Minneapolis and St. Xxxx, Minnesota owned and operated by an MNH Entity,
including any extension or additions thereto made after the date hereof.
"SYSTEMS CONTRACTS" means any and all (i) pole line and joint line
agreements, underground conduit agreements, crossing agreements, bulk or
commercial service or multiple dwelling unit agreements, and retransmission
consent agreements, (ii) other Contracts which contemplate payments by or to any
MNH Entity exceeding $50,000 in any 12-month period or $100,000 in the
aggregate, and (iii) other Contracts that are material to the operation of the
Systems taken as a whole (other than the Systems Franchises).
"SYSTEMS FRANCHISES" means any and all Franchises used or useful by
the MNH Entities in the operation of the Systems.
"SYSTEMS LEASES" means (i) any and all Leases of real property to
which any MNH Entity is a party or by which any of the Assets are bound, and
(ii) any and all written Leases of personal property to which any MNH Entity is
a party or by which any of the Assets are bound, under which the annual rental
exceeds $50,000 in any 12-month period or $100,000 in the aggregate.
"SYSTEMS LICENSES" means (i) any and all Licenses, including all of
the intangible cable television channel distribution
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rights, cable television relay service (CARS), business radio and other
licenses, and other licenses, authorizations, consents or permits issued by the
FCC that are used or useful by the MNH Entities in the operation of the Systems
and (ii) all other material Licenses that are used by the MNH Entities in the
operation of the System.
"TANGIBLE PERSONAL PROPERTY" means all tangible personal property of
the MNH Entities, including all tangible personal property used or useful by the
MNH Entities in the operation of the Systems (including towers, tower equipment,
aboveground and underground cable, distribution systems, headend amplifiers,
line amplifiers, microwave equipment, converters, testing equipment, motor
vehicles, office equipment, furniture, fixtures, supplies, inventory and other
physical assets).
"TAXES" means all 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, together with any interest thereon and any
penalties, additions to tax or additional amounts applicable thereto.
"TRANSACTION DOCUMENTS" means the agreements, instruments and
documents executed and delivered in connection with this Agreement or the
transactions contemplated hereby, including the agreements, instruments and
documents described in Sections 8.2 and 8.3 which are being executed and
delivered by or on behalf of a Seller or Buyer, as the case may be, or, an
Affiliate or direct or indirect equity holder of either of them in connection
with this Agreement or the transactions contemplated hereby.
"TRANSFERABLE FRANCHISE AREAS" is defined in Section 7.1(k).
"U S WEST, INC. REGISTRATION STATEMENT" means the Registration
Statement on Form S-4 and the exhibits thereto to be filed with the SEC by U S
WEST, Inc. in connection with the CCI Merger Agreement, including any amendments
thereto filed with the SEC, and the Prospectus included in said Registration
Statement on Form S-4 and any supplements to such Prospectus.
"ULTIMATE EQUITY HOLDER GUARANTIES" is defined in Section 7.1(m).
"ULTIMATE EQUITY HOLDERS" means the Xxxxxxxx Equity Holders, the
Ingersoll Equity Holders and the New Heritage Equity Holders.
"WELFARE PLANS" is defined in Section 4.17(q).
"WITHDRAWAL LIABILITY" is defined in Section 4.17(q).
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"WORKING CAPITAL ADJUSTMENT" is defined in Section 8.3(b).
Section 1.2 Rules of Construction.
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(a) Unless otherwise expressly provided in this Agreement, accounting
terms used in this Agreement will have the meaning ascribed to them under GAAP.
(b) Words used in this Agreement, regardless of the gender and number
used, will be deemed and construed to include any other gender, masculine,
feminine, or neuter, and any other number, singular or plural, as the context
requires.
(c) As used in this Agreement, the word "INCLUDING" is not limiting,
and the word "OR" is not exclusive.
(d) The words "THIS AGREEMENT", "HERETO", "HEREIN", "HEREUNDER",
"HEREOF", and words or phrases of similar import refer to this Agreement as a
whole, together with any and all Appendices, Schedules and Exhibits hereto, and
not to any particular article, section, subsection, paragraph, clause or other
portion of this Agreement.
(e) Unless the context requires otherwise, a reference herein to a
particular article, section, subsection, paragraph or clause shall refer to such
article, section, subsection, paragraph or clause of this Agreement.
(f) This Agreement has been negotiated by Sellers and Buyer and their
respective legal counsel, and legal or 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.
(g) The section and other headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement. Reference to Schedules and Exhibits shall, unless otherwise
indicated, refer to the Schedules and Exhibits attached to this Agreement, which
shall be incorporated in and constitute a part of this Agreement by such
reference.
(h) The words "TO THE KNOWLEDGE OF SELLERS" and words or phrases of
similar import shall, except as may be otherwise expressly stated herein, refer
to the knowledge after due inquiry (or what would reasonably be the knowledge if
due inquiry were made) of Xxxxx Xxxxxx, Xxxxx Xxxxxxxxx, Xxxxx Xxxxxxx, Xxxxxxx
Xxxxxx or Xxxxx Xxxxxxx.
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ARTICLE 2
PURCHASE AND SALE
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Section 2.1 Purchase and Sale of Subject Interests. Subject to the
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terms and conditions set forth in this Agreement, at the Closing:
(a) MNHP shall convey, assign and transfer to Buyer the MNHP General
Partnership Interest, free and clear of all Liens;
(b) NHA shall convey, assign and transfer to Buyer the NHA Limited
Partnership Interest, free and clear of all Liens;
(c) Buyer shall pay to the Sellers the Purchase Price in accordance
with Section 8.3, subject to adjustment as provided in Section 8.3(b)(iii); and
(d) Buyer shall either (i) pay in full the principal indebtedness of
MNH, all interest accrued thereon and any other amounts otherwise due arising
under that certain Loan Agreement, dated as of March 31, 1992, among MNH,
Toronto-Dominion Bank and the other banks named therein (the "BANKS"), The Bank
of New York, The First National Bank of Chicago and NationsBank of Texas, N.A.,
as co-agents (the "BANK CO-AGENTS"), and Toronto-Dominion Bank Trust Company as
agent (the "BANK AGENT") for the Banks and the Co-Agents, including any security
or other agreements entered into pursuant thereto, in each case, as amended
(collectively, the "MNH LOAN AGREEMENT") or (ii) deliver to the Sellers releases
duly executed by the Banks, the Co-Agents and the Agent in favor of the Sellers
releasing the Sellers from any liability under the MNH Loan Agreement and the
other agreements and instruments delivered in connection with the MNH Loan
Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES REGARDING SELLERS
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Section 3.1 Seller Matters. Each Seller severally and not jointly
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represents and warrants as to itself and not as to any other Seller to Buyer as
follows:
(a) Organization and Qualification of each Seller. Such Seller is a
---------------------------------------------
general partnership duly formed and validly existing under the laws of the State
of Iowa. Such Seller has all requisite partnership power and authority to own
and lease its assets and properties and to conduct its activities as such
activities are currently conducted.
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(b) Authority. Such Seller has all requisite partnership power and
---------
authority to execute, deliver and perform this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and each Transaction Document to which such Seller is or will be
a party, and the consummation by such Seller of the transactions contemplated
hereby or thereby, have been duly and validly authorized by all necessary
partnership action on the part of such Seller and its partners. This Agreement
and each Transaction Document to which such Seller is or will be a party have
been or will be (as the case may be) duly executed and delivered by such Seller
and are or will be (as the case may be) the valid and binding obligations of
such Seller, enforceable against such Seller and its general partners in
accordance with their respective terms, except (i) as the same may be limited by
applicable bankruptcy, insolvency, moratorium or similar laws of general
application relating to or affecting creditors' rights, including without
limitation, the effect of statutory or other laws regarding fraudulent
conveyances and preferential transfers, and (ii) for the limitations imposed by
general principles of equity. The foregoing exceptions are hereinafter referred
to as the "ENFORCEABILITY EXCEPTIONS".
(c) No Conflict; Required Consents.
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(i) Except for (A) obtaining the Sellers Required Consents identified
on SCHEDULE 4.3 and for (B) such other exceptions (the "SECTION 3.1(C)
EXCEPTIONS") from which the aggregate amount of resulting Losses and Expenses
suffered or incurred by Buyer or the MNH Entities, together with the aggregate
amount of Losses and Expenses resulting from any Section 4.3(a) Exceptions,
would not exceed $250,000, neither the execution, delivery or performance by
such Seller of this Agreement or any Transaction Document to which such Seller
is or will be a party, nor the consummation of the transactions contemplated
hereby or thereby, does or will:
(A) conflict with or violate any provision of the MNHP Partnership
Agreement (in the case of MNHP) or the NHA Partnership Agreement (in the case of
NHA);
(B) violate any provision of any Legal Requirement applicable to such
Seller;
(C) conflict with, violate, result in a breach of, constitute a
default under (without regard to requirements of notice, lapse of time, or
elections of other Persons, or any combination thereof), accelerate or permit
the acceleration of the performance required by, any Contract or License to
which such Seller is a party or by which such Seller or any of the assets or
properties owned or leased by such Seller are bound;
-14-
(D) result in the creation or imposition of any Lien against or upon
any of the Subject Interests; or
(E) require any Consent.
(ii) Sellers have delivered to Buyer a true and complete copy of the
MNH Partnership Agreement, as in effect at the date hereof.
(d) Compliance with Legal Requirements. Such Seller holds all
----------------------------------
Contracts and Licenses necessary for the lawful conduct of its business, except
where the failure to hold such Contracts and Licenses would not in the aggregate
have a Material Adverse Effect on such Seller. Such Seller has not violated and
is not in violation of any Contract or Legal Requirement, except where such
violations do not and will not have a material adverse effect on the
authorization, execution or delivery, or the consummation of the transactions
contemplated by, this Agreement or any Transaction Document.
(e) Litigation and Judgments. There is no Litigation pending or, to
------------------------
the knowledge of such Seller, threatened by or before any Governmental Authority
or private arbitration tribunal against such Seller or any of its partners or
its partners' respective shareholders that, individually or in the aggregate,
could prevent, hinder or materially delay or affect in any material respect the
consummation of the transactions contemplated by this Agreement or any
Transaction Document.
Section 3.2 Ultimate Equity Holder Matters.
----------- ------------------------------
(a) MNHP. MNHP represents and warrants to Buyer as follows:
----
(i) Sellers have delivered to Buyer a true and complete copy of the
Xxxxxxxx/New Heritage Partnership Agreement, dated as of September 1, 1991, as
in effect at the date hereof (the "MNHP PARTNERSHIP AGREEMENT"). The Management
Committee (as defined in the MNHP Partnership Agreement) has approved and
consented to this Agreement and the transactions contemplated hereby.
(ii) Xxxxxxxx Cable, Inc., an Iowa corporation ("XXXXXXXX"), and NHA
are the only partners of MNHP. Sellers have delivered to Buyer true and complete
copies of the charter and bylaws of Xxxxxxxx, each as in effect at the date
hereof.
(iii) Xxxxxxxx is a corporation duly organized, validly existing and
in good standing under the laws of the State of Iowa. Xxxxxxxx has all
requisite corporate power and authority to own and lease its assets and
properties and to
-15-
conduct its activities as such activities are currently conducted, except where
the failure to have such power or authority would not have a Material Adverse
Effect on the ability of Xxxxxxxx to execute, deliver or perform its obligations
under this Agreement and any Transaction Document to which it is or will be a
party. Xxxxxxxx has all requisite corporate power and authority to execute,
deliver and perform, for itself and in its capacity as a general partner of MNHP
each of the Transaction Documents to which it is or will be a party and to
consummate the transactions contemplated thereby. The execution, delivery and
performance of each Transaction Document to which Xxxxxxxx is or will be a
party, and the consummation by Xxxxxxxx of the transactions contemplated
thereby, have been duly and validly authorized by all necessary corporate action
on the part of Xxxxxxxx and its shareholders. Each Transaction Document to
which Xxxxxxxx is or will be a party has been or will be (as the case may be)
duly executed and delivered by Xxxxxxxx and is or will be (as the case may be)
the valid and binding obligation of Xxxxxxxx enforceable against Xxxxxxxx in
accordance with its terms, subject to the Enforceability Exceptions. The Board
of Directors and the sole shareholder of Xxxxxxxx have, by resolutions duly
adopted in accordance with all Legal Requirements and the charter and bylaws of
Xxxxxxxx, approved and adopted this Agreement and the transactions contemplated
hereby on the terms and conditions set forth herein and authorized MNHP to
execute and deliver this Agreement and the other Transaction Documents and
perform its obligations hereunder and thereunder.
(iv) SCHEDULE 3.2(A)(IV) sets forth the authorized and issued and
outstanding shares of capital stock or other equity interests of Xxxxxxxx and
the registered and beneficial holders thereof. All such outstanding shares are
duly authorized, validly issued and fully paid and nonassessable. There are no
outstanding options, warrants, rights, puts, calls, commitments, or other
contracts, arrangements or understandings requiring or providing for, and there
are no outstanding debt or equity securities of Xxxxxxxx which upon the
conversion, exchange or exercise thereof would require or provide for, the
issuance or transfer of any shares of capital stock or other equity interests of
Xxxxxxxx (or any other securities which, with notice, lapse of time and/or
payment of monies, are or would be convertible into or exercisable or
exchangeable for shares of capital stock or other equity interests of Xxxxxxxx).
There are no voting trusts or other agreements or understandings with respect to
the voting of capital stock or other equity interests of Xxxxxxxx.
(b) NHA. NHA represents and warrants to Buyer as follows:
---
(i) Sellers have delivered to Buyer a true and complete copy of the
New Heritage Associates Partnership
-16-
Agreement, dated as of September 1, 1991, as in effect at the date hereof (the
"NHA PARTNERSHIP AGREEMENT").
(ii) SCHEDULE 3.2(B)(II) sets forth all of the authorized and issued
and outstanding partnership interests or other equity interests of NHA and the
legal and beneficial holders thereof. There are no outstanding options,
warrants, rights, puts, calls, commitments, or other contracts, arrangements or
understandings requiring or providing for, and there are no outstanding debt or
equity securities of NHA which upon the conversion, exchange or exercise thereof
would require or provide for, the issuance or transfer of any shares of
partnership interests or other equity interests of NHA (or any other securities
which, with notice, lapse of time and/or payment of monies, are or would be
convertible into or exercisable or exchangeable for shares of partnership
interests or other equity interests of NHA). There are no voting trusts or
other agreements or understandings with respect to the voting of partnership
interests or other equity interests of NHA.
(iii) Ingersoll Group, Inc., an Iowa corporation ("INGERSOLL"), and
New Heritage Associates, Inc., an Iowa corporation ("NEW HERITAGE"), are the
only partners of NHA. Sellers have delivered to Buyer true and complete copies
of the charter and bylaws of Ingersoll, each as in effect at the date hereof.
(iv) Each of Ingersoll and New Heritage is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Iowa. Each of Ingersoll and New Heritage has all requisite corporate power and
authority to own and lease its assets and properties and to conduct its
activities as such activities are currently conducted, except where the failure
to have such power or authority could not reasonably be expected to have a
Material Adverse Effect on the ability of Ingersoll or New Heritage to execute,
deliver or perform, for itself and in its capacity as a general partner of NHA,
its obligations under this Agreement and any Transaction Document to which it is
or will be a party. Each of Ingersoll and New Heritage has all requisite
corporate power and authority to execute, deliver and perform, for itself and in
its capacity as a general partner of NHA, each of the Transaction Documents to
which it is or will be a party and to consummate the transactions contemplated
thereby. The execution, delivery and performance, for itself and in its
capacity as a general partner of NHA, of this Agreement and each Transaction
Document to which Ingersoll or New Heritage is or will be a party, and the
consummation by Ingersoll or New Heritage of the transactions contemplated
hereby or thereby, have been duly and validly authorized by all necessary
corporate action on the part of Ingersoll and New Heritage and their respective
shareholders. Each Transaction Document to which Ingersoll or New Heritage is
or will be a party
-17-
has been or will be (as the case may be) duly executed and delivered by
Ingersoll or New Heritage (as the case may be) and is or will be (as the case
may be) its valid and binding obligation enforceable against it in accordance
with such Transaction Document's terms, subject to the Enforceability
Exceptions. The Board of Directors and the shareholders of each of Ingersoll
and New Heritage have, by resolutions duly adopted in accordance with all Legal
Requirements and the charter and bylaws of Ingersoll and New Heritage (as the
case may be) approved and adopted this Agreement and the transactions
contemplated hereby on the terms and conditions set forth herein and authorized
each of MNHP and NHA to execute and deliver this Agreement and the other
Transaction Documents and perform their respective obligations hereunder and
thereunder.
(v) SCHEDULE 3.2(B)(V) sets forth the authorized and issued and
outstanding shares of capital stock or other equity interests of each of
Ingersoll and New Heritage and the registered and beneficial holders thereof.
All such outstanding shares are duly authorized, validly issued and fully paid
and nonassessable. There are no outstanding options, warrants, rights, puts,
calls, commitments, or other contracts, arrangements or understandings requiring
or providing for, and there are no outstanding debt or equity securities of
Ingersoll or New Heritage which upon the conversion, exchange or exercise
thereof would require or provide for, the issuance or transfer of any shares of
capital stock or other equity interests of Ingersoll or New Heritage (or any
other securities which, with notice, lapse of time and/or payment of monies, are
or would be convertible into or exercisable or exchangeable for shares of
capital stock or other equity interests of Ingersoll or New Heritage). There
are no voting trusts or other agreements or understandings with respect to the
voting of capital stock or other equity interests of Ingersoll or New Heritage.
Section 3.3 Title to the Subject Interests.
----------- ------------------------------
(a) MNHP represents and warrants to Buyer that MNHP has good and
marketable title to the MNHP General Partnership Interest, free and clear of all
Liens. Subject to the Closing, upon the execution and delivery by MNHP of the
Xxxx of Sale and Assignment to be executed and delivered by MNHP pursuant to
Section 8.2(a), MNHP will have assigned, transferred and conveyed to and vested
in Buyer (or its permitted assignee) legal and valid title to the MNHP General
Partnership Interest, free and clear of all Liens.
(b) NHA represents and warrants to Buyer that NHA has good and
marketable title to the NHA Limited Partnership Interest, free and clear of all
Liens, except for any lien and security interest granted by NHA in connection
with the MNH Loan Agreement. Subject to the Closing, upon the execution and
-18-
delivery by NHA of the Xxxx of Sale and Assignment to be executed and delivered
by NHA pursuant to Section 8.2(b), NHA will have assigned, transferred and
conveyed to and vested in Buyer (or its permitted assignee) legal and valid
title to the NHA Limited Partnership Interest, free and clear of all Liens.
Section 3.4 Brokers and Finders. Each of Sellers represents and
----------- -------------------
warrants, jointly and severally, to Buyer that neither of Sellers nor any MNH
Entity nor any partner, director, officer, employee, agent or Affiliate of
either Seller or any MNH Entity has employed any broker or finder or incurred
any liability for any brokerage fees, commissions, finder's fees or similar fees
or liabilities in connection with the transactions contemplated herein, except
that MNH has employed Xxxxxxx & Associates, for whose fees and expenses MNH
shall be exclusively responsible.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES REGARDING THE MNH ENTITIES
---------------------------------------------------------
Each of Sellers represents and warrants, jointly and severally, to
Buyer as follows:
Section 4.1 Organization, Qualification and Business.
----------- ------------------------------- --------
(a) MNH is a limited partnership duly formed, validly existing and in
good standing under the laws of the State of Iowa. MNH has all requisite
partnership power and authority to own and lease its assets and properties and
to conduct its activities as such activities are currently conducted. MNH is
duly qualified to do business as a foreign partnership and is in good standing
in Minnesota. True and complete copies of the MNH Partnership Agreement and the
certificate of limited partnership of MNH, each as in effect at the date hereof,
have been delivered by Sellers to Buyer.
(b) Each MNH Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of its state of incorporation.
Each MNH Subsidiary has all requisite corporate power and authority to own and
lease its assets and properties and to conduct its activities as such activities
are currently conducted. Each MNH Subsidiary is duly qualified to do business
as a foreign corporation and is in good standing in Minnesota.
(c) The MNH Entities engage in no material business other than the
construction, ownership, operation and management of the Systems. All of the
Systems are located entirely within Minnesota. No MNH Entity has a place of
business, or owns or leases any material assets or properties, located in any
jurisdiction other than in Minnesota and Iowa.
-19-
Section 4.2 Authority. Each MNH Entity has all requisite partnership
----------- ---------
(in the case of MNH) or corporate (in the case of each MNH Subsidiary) power and
authority to execute, deliver and perform, and to consummate the transactions
contemplated by, any Transaction Document to which such MNH Entity is or will be
a party. The execution, delivery and performance and the consummation by each
MNH Entity of the transactions contemplated by each Transaction Document to
which such MNH Entity is or will be a party have been duly and validly
authorized by all necessary action on the part of such MNH Entity and its
respective partners (in the case of MNH) and shareholders (in the case of each
MNH Subsidiary). Each Transaction Document to which any MNH Entity is or will
be a party has been or will be (as the case may be) duly executed and delivered
by such MNH Entity and is or will be (as the case may be) the valid and binding
obligation of such MNH Entity, enforceable against such MNH Entity in accordance
with its terms, subject to the Enforceability Exceptions.
Section 4.3 No Conflict; Required Consents.
----------- ------------------------------
(a) Subject to obtaining the Sellers Required Consents identified on
SCHEDULE 4.3, and except for such other exceptions (the "SECTION 4.3(A)
EXCEPTIONS") from which the aggregate amount of resulting Losses and Expenses
suffered or incurred by Buyer or the MNH Entities, together with the aggregate
amount of Losses and Expenses resulting from any Section 3.1(c) Exceptions,
would not exceed $250,000, neither the execution, delivery or performance by any
MNH Entity of any Transaction Document to which such MNH Entity is or will be a
party, nor the consummation of the transactions contemplated thereby, does or
will:
(i) conflict with or violate any provision of the MNH Partnership
Agreement or the certificate of limited partnership of MNH;
(ii) conflict with or violate any provision of the charter or bylaws
of any MNH Subsidiary;
(iii) violate any provision of any Legal Requirement;
(iv) conflict with, violate, result in a breach of, constitute a
default under (without regard to requirements of notice, lapse of time, or
elections of other Persons, or any combination thereof), accelerate or permit
the acceleration of the performance required by, any Contract or License to
which such MNH Entity is a party or by which such MNH Entity or any of the
assets or properties owned or leased by such MNH Entity are bound;
-20-
(v) result in the creation or imposition of any Lien against or upon
any of the assets or properties owned or leased by such MNH Entity; or
(vi) require any Consent.
(b) Except as specified in SCHEDULE 4.3, no MNH Entity is a party to
or bound by any Contract that restricts or purports to restrict in any material
respect the ability of any MNH Entity or any Affiliate of any MNH Entity to
engage in any location in the cable television business or in any other
business.
Section 4.4 Capitalization.
----------- --------------
(a) SCHEDULE 4.4 sets forth the name, jurisdiction of organization and
the authorized and issued and outstanding shares of capital stock, partnership
interests or other equity interests of each MNH Entity and the registered and
beneficial holders thereof. All such outstanding shares are duly authorized,
validly issued and fully paid and nonassessable. Other than the transactions
contemplated by this Agreement or as specified in SCHEDULE 4.4, there are no
outstanding options, warrants, rights, puts, calls, commitments, or other
contracts, arrangements or understandings issued by or binding upon any MNH
Entity requiring or providing for, and there are no outstanding debt or equity
securities of any MNH Entity which upon the conversion, exchange or exercise
thereof would require or provide for the issuance or transfer of any shares of
capital stock, partnership interests or other equity interests of any MNH Entity
(or any other securities which, with notice, lapse of time and/or payment of
monies, are or would be convertible into or exercisable or exchangeable for
shares of capital stock, partnership interests or other equity interests of any
MNH Entity). There are no voting trusts or other agreements or understandings
to which any MNH Entity is a party with respect to the voting of capital stock,
partnership interests or other equity interests of any MNH Entity.
(b) All of the Subsidiaries of MNH are at the date hereof and will at
the Closing Time be wholly owned, directly or indirectly, by MNH.
Section 4.5 Financial Statements. Schedule 4.5 contains (i) the
----------- --------------------
audited consolidated balance sheet of the MNH Entities as of June 30, 1995 and
the related statements of operations and cash flows (including the notes
thereto) for the year then ended and (ii) the unaudited consolidated balance
sheet of the MNH Entities as of December 31, 1995 and the related statement of
operations for the six months then ended. The financial statements referred to
in clauses (i) and (ii) of the preceding sentence are herein referred to
collectively as the "MNH FINANCIAL STATEMENTS." The MNH Financial Statements
were prepared in accordance with GAAP applied on a consistent basis
-21-
throughout the periods covered thereby except to the extent otherwise indicated
therein. The MNH Financial Statements present fairly the financial condition of
the MNH Entities at the respective dates thereof, and the results of their
operations and their cash flows for each of the respective periods covered
thereby, all in accordance with GAAP, subject in the case of unaudited financial
statements to normal year-end accruals and audit adjustments and to the lack of
footnotes.
Section 4.6 Absence of Undisclosed Liabilities. Except as set forth
----------- ----------------------------------
in SCHEDULE 4.6, as of the date (the "MNH BALANCE SHEET DATE") of the most
recent consolidated balance sheet (including the notes thereto) forming part of
the MNH Financial Statements (the "MNH BALANCE SHEET"), no MNH Entity had any
indebtedness, liabilities or obligations, contingent or otherwise, except as
reflected or reserved against in the MNH Balance Sheet and except for such
indebtedness, liabilities and obligations as do not and will not in the
aggregate have a Material Adverse Effect on the MNH Entities. Since the MNH
Balance Sheet Date, no MNH Entity has incurred any such indebtedness,
liabilities or obligations other than in the ordinary course of business or as
permitted or contemplated by this Agreement or any Transaction Document.
Section 4.7 Absence of Certain Changes. Except as set forth in
----------- --------------------------
SCHEDULE 4.7 or as permitted or contemplated by this Agreement or any
Transaction Document, since the MNH Balance Sheet Date:
(i) the MNH Entities have conducted their respective business solely
in the ordinary course; and
(ii) there has not occurred (A) any Material Adverse Effect on the MNH
Entities or (B) other events or conditions of any character that, individually
or in the aggregate, have or would reasonably be expected to have a Material
Adverse Effect on the MNH Entities, except in each case for any Material Adverse
Effect or other event or condition that is due to general economic or industry-
wide conditions (including, without limitation, determinations by the FCC, state
or local franchising authorities affecting or applicable to the offering or
packaging of a la carte channels or cost-of-service showings and any rate
adjustments pursuant to such determinations).
Section 4.8 Assets: Title; Sufficiency; Condition.
----------- --------------------------- ---------
(a) Except as set forth on SCHEDULE 4.8 and except for leased Assets,
each MNH Entity has good title to its Assets (other than Owned Property and
Leased Property, which are covered by Section 4.14), free and clear of all Liens
other than
-22-
Permitted Liens. Each MNH Entity has valid leasehold interests in all of the
Assets leased by it pursuant to the System Leases.
(b) Except as does not and will not result in any Material Adverse
Effect on the MNH Entities, each MNH Entity owns or has the lawful right to use
all assets, properties, Contracts and Licenses necessary to operate its business
lawfully and to maintain the same as presently conducted. Without limiting the
generality of the foregoing, except for the office equipment, furniture and
supplies located at the date hereof in MNH's executive offices in Des Moines,
Iowa and described in SCHEDULE 4.8, the Assets constitute all of the assets
necessary to permit Buyer to operate the Systems substantially as they are being
operated on the date of this Agreement and in compliance in all material
respects with all applicable Legal Requirements and requirements of Systems
Contracts, except for such non-compliances as do not and will not in the
aggregate have Material Adverse Effect on the MNH Entities. The Tangible
Personal Property is in all material respects in good condition and repair,
ordinary wear and tear excepted.
Section 4.9 Compliance with Legal Requirements. Except as set
----------- ----------------------------------
forth in SCHEDULE 4.9:
(a) To the knowledge of Sellers, the operation of the business of the
MNH Entities (including the operation of the Systems) as it is currently
operated does not violate or infringe in any material respect any Legal
Requirement. Each MNH Entity holds all Contracts and Licenses (including the
Systems Franchises) necessary for the lawful conduct of its business (including
the operation of each System) directly or indirectly owned or operated by it,
except where any failures to hold any such Contract or License do not and will
not in the aggregate have a Material Adverse Effect on the MNH Entities.
(b) Each MNH Entity and System has not violated and is not in
violation of any Contract or Legal Requirement (including any Systems
Franchise), except for any such violations as do not and will not in the
aggregate have a Material Adverse Effect on the MNH Entities. Neither of
Sellers nor any MNH Entity (i) has received on or after September 1, 1992
written notice of any violation by any MNH Entity or any System of any Legal
Requirement, or (ii) knows (without having made any inquiry with respect
thereto) of any basis for the allegation of any material violation of any Legal
Requirement by any MNH Entity or any System.
(c) The MNH Entities are each in compliance in all material respects
with the Communications Acts, and have submitted to the FCC all fees and
filings, including cable television registration statements, annual reports and
aeronautical frequency usage notices, that are required under the
-23-
rules and regulations of the FCC, except for such failures to submit such
filings which do not and (as far as can be reasonably foreseen) will not in the
aggregate have a Material Adverse Effect on the MNH Entities. The operation of
the Assets (including the Systems) has been and is in compliance in all material
respects with the rules and regulations of the FCC (including rules and
regulations of the FCC pertaining to customer service standards), and neither of
Sellers nor any MNH Entity has received written notice from the FCC of any
violation of its rules and regulations with respect to the Assets (including the
Systems). Each relevant MNH Entity has been certified for the years ended
December 31, 1993 and 1994 as in compliance with the FCC's equal employment
opportunity rules. The Assets (including the Systems) are in compliance in all
material respects with all signal leakage criteria prescribed by the FCC. For
each relevant semi-annual reporting period, each MNH Entity has timely filed
with the United States Copyright Office all required statements of account in
proper form, and has paid when due all required copyright royalty fee payments,
relating to the carriage of television broadcast signals and is otherwise in
compliance in all material respects with all applicable rules and regulations of
the United States Copyright Office. Sellers have delivered to Buyer true and
complete copies of all reports and filings for the past year, made or filed
pursuant to FCC and United States Copyright Office rules and regulations and
will make available to Buyer all other past reports and filings made or filed
pursuant to FCC and United States Copyright Office rules and regulations.
(d) Each MNH Entity has used reasonable good faith efforts to
establish rates charged and a la carte packages provided to subscribers of the
Systems, effective as of September 2, 1993, that would be allowable under the
Cable Act, whether or not such rates or packages were subject to regulation at
that date by any Governmental Authority, including any local franchising
authority or the FCC.
(e) No MNH Entity possesses any patent, patent right, trademark or
copyright and neither is a party to any license or royalty agreement with
respect to any patent, trademark or copyright, except for licenses respecting
program material and obligations under the Copyright Act of 1976 applicable to
cable television systems generally. To the knowledge of Sellers (without having
made any inquiry with respect thereto), the Assets are free of the rightful
claim of any third party by way of copyright infringement (excluding claims
involving music performance rights).
Section 4.10 Systems Franchises, etc.
------------ ------------------------
(a) SCHEDULE 4.10(A) sets forth a list of each of the Systems
Franchises.
-24-
(b) SCHEDULE 4.10(B) sets forth a list (including the name of the
licensor) of each of the Systems Licenses.
(c) SCHEDULE 4.10(C) sets forth a list (including the name of the
contracting parties and the general subject matter) of each of the Systems
Contracts other than Systems Leases and Systems Licenses and Systems Franchises.
(d) SCHEDULE 4.10(D) sets forth a list (including the name of the
lessor and a general description of the property leased) of each of the Systems
Leases. None of the MNH Entities is party to or bound by any material oral
Lease.
(e) Sellers have made, and will make, available to CCI the fixed asset
records of the MNH Entities as to tangible personal property (including, without
limitation, all equipment, machinery and vehicles) owned by the MNH Entities.
Such records have been prepared in the ordinary course of business and the MNH
Entities have used reasonable efforts to keep such records accurate in all
material respects, it being understood that no such representation is being made
with respect to the records relating to personal property acquired by the MNH
Entities prior to September 1, 1992.
(f) Except as described on SCHEDULE 4.10(A), (B), (C), (D) or (K), no
MNH Entity is bound or affected by any Franchise or any material License,
Contract or Lease. Except as set forth on SCHEDULE 4.10(F), since September 15,
1995, no MNH Entity has amended, terminated, extended or renewed any Systems
Franchise or entered into any Franchise.
(g) Sellers have caused to be delivered or made available to Buyer
true and complete copies of each of the Systems Franchises, Systems Licenses,
Systems Contracts and Systems Leases described in SCHEDULE 4.10(A), (B), (C) or
(D) (together with any written notices alleging non-compliance with any of the
requirements thereof) and of each document evidencing an MNH Entity's ownership
of any Owned Property. Except as described in SCHEDULE 4.10(G): (i) the MNH
Entities are in compliance in all material respects with each of the Systems
Franchises and Systems Licenses; (ii) the MNH Entities have fulfilled in all
material respects when due, or have taken all action necessary to enable it to
fulfill in all material respects when due, all of their obligations under each
of the Systems Contracts and Systems Leases; and (iii) to the knowledge of each
Seller, there has not occurred any material default (without regard to lapse of
time or the giving of notice, or both) by any Person under any of the Systems
Franchises, Systems Contracts or Systems Leases.
-25-
(h) Except as set forth on SCHEDULE 4.10(H), each Systems Franchise,
Systems License, Systems Contract and Systems Lease of the MNH Entities is the
validly existing, legally enforceable obligation of each MNH Entity party
thereto and, to the knowledge of Sellers, of the other parties thereto.
(i) Except as previously disclosed to Buyer in writing or in SCHEDULE
4.10(I), no Person (including any Governmental Authority) has any right to
acquire any interest in any cable television system or assets of any MNH Entity
(including any right of first refusal or similar right) upon an assignment or
transfer of control of a Systems Franchise, other than rights of condemnation or
eminent domain afforded by Legal Requirement.
(j) To the knowledge of Sellers, as of the date hereof no Person
(other than an MNH Entity) (i) has been granted or has sought the Consent of any
Governmental Authority for the installation, construction, development,
ownership, or operation of a cable television system (as defined in the
Communications Acts) within all or part of the geographic area served by any of
the Systems or (ii) operates, or has commenced the construction, installation or
development of, any cable television system within all or part of the geographic
area served by any cable television system of the MNH Entities, regardless of
whether the Consent of any Governmental Authority is required or has been
obtained.
(k) Except as set forth in SCHEDULE 4.10(K), no MNH Entity has made
any material commitments in writing to any Governmental Authority with respect
to the operation and construction of the Systems which are not fully reflected
in the Systems Franchises, Systems Licenses, Systems Contracts or Systems
Leases, and no MNH Entity has entered into any written agreements with community
groups or similar third parties restricting or limiting the types of programming
that may be shown on any of the Systems.
(l) No Governmental Authority has advised any MNH Entity in writing,
or otherwise formally notified in accordance with the terms of any applicable
Systems Franchise, of its intention to deny renewal of an existing Systems
Franchise. The MNH Entities have duly and timely filed notices of renewal in
accordance with the Communications Act with all Governmental Authorities with
respect to each Systems Franchise expiring within 36 months after the date of
this Agreement. Such notices of renewal have been filed pursuant to the formal
renewal procedures established by Section 626(a) of the Communications Act. As
of the Closing Date, an MNH Entity will have maintained a controlling ownership
in each System in its entirety for at least 36 consecutive months following the
initial construction or acquisition of such System by such MNH Entity.
-26-
(m) Except as set forth in SCHEDULE 4.10(M), the MNH Entities are
operating the Systems in compliance in all material respects with the provisions
of the Communications Acts and the rules and regulations of the FCC relating to
carriage of signals, syndicated exclusivity, network non-duplication, and
retransmission consent except where the failure to comply, individually or in
the aggregate, would not result in a Material Adverse Effect on the MNH
Entities. Except as previously disclosed to Buyer in writing, no written
notices or demands have been received since January 1, 1993 from any television
station or from any other Person claiming to have a right, or objecting to or
challenging the right under Sections 614 or 615 of the Cable Act of the Systems,
to carry any signal or deliver the same, or challenging the channel position on
which any television station is carried.
(n) SCHEDULE 4.10(N) indicates which television signals carried by the
Systems are carried without retransmission consent agreements (other than
stations which have elected must-carry status or for which retransmission
consents are not required). Sellers have delivered or made available to Buyer
full and complete copies of all retransmission consent agreements of the MNH
Entities. For each commercial television signal on each System that has elected
must-carry status, but that is not being carried because of signal quality
problems or potential copyright liability, SCHEDULE 4.10(N) lists the signal and
the reason for non-carriage.
(o) Sellers have made available to Buyer true and complete copies of
(i) all FCC Forms 393, 1200, 1205, 1210 and 1215 that have been prepared with
respect to the Systems, and (ii) all complaints filed with the FCC with respect
to any rates charged to subscribers of the Systems which have been received by
Sellers. No MNH Entity has sought or claims exemption from the rate regulation
provisions of the Communications Acts with respect to any of the Systems.
SCHEDULE 4.10(O) sets forth (A) a list of all rate complaints (if any) filed
pursuant to the Communications Acts and received by any MNH Entity which have
not been deemed invalid by the FCC, and further sets forth those Systems
Franchises that have been certified or, to Sellers' knowledge, filed for
certification under the Communications Acts with respect to rate regulation, and
(B) a list of all docketed letters of inquiry from the FCC received by any MNH
Entity since September 1, 1993 with regard to rate restructuring.
Section 4.11 Litigation and Judgments. Except as set forth in
------------ ------------------------
SCHEDULE 4.11, there is no Litigation pending or, to Sellers' knowledge,
threatened against any MNH Entity (other than proceedings or investigations
affecting the cable television industry generally) that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect on the
MNH Entities or the Systems taken as a whole or prevent, hinder
-27-
or materially delay the consummation of the transactions contemplated by this
Agreement, or seeks or could result in the modification, revocation,
termination, suspension or other limitation of any of the Systems Franchises,
Systems Licenses, Systems Contracts or Systems Leases. There is not any
Judgment outstanding against any MNH Entities or any of their properties,
unsatisfied or unperformed which could reasonably be expected to have a Material
Adverse Effect on the MNH Entities or the Systems taken as a whole.
Section 4.12 Tax Returns.
------------ -----------
(a) Each MNH Entity has timely filed all tax returns and other tax
reports required to be filed by it on or after September 1, 1992; and, to the
knowledge of Sellers (without having made any inquiry with respect thereto),
each MNH Entity has timely filed all tax returns and other tax reports required
to be filed by it prior to September 1, 1992. Subject to Section 4.12(c), all
such tax returns and other tax reports are true, correct and complete in all
material respects; each MNH Entity has timely paid all Taxes payable by such MNH
Entity which have become due and payable, whether or not shown on any such tax
return or other tax report, other than Taxes that are currently being contested
in good faith (all of which Taxes are fully reserved for on the MNH Balance
Sheet); and all Taxes payable by any MNH Entity that were not yet due and
payable at the MNH Balance Sheet Date have been fully paid or adequate provision
therefor has been made and reflected on the MNH Balance Sheet.
(b) Except as set forth on SCHEDULE 4.12, there is no claim,
deficiency, assessment or investigation involving an amount greater than $10,000
pending or threatened against any MNH Entity for past Taxes, and adequate
provision for the claims or investigations set forth on SCHEDULE 4.12 has been
made as reflected on the MNH Balance Sheet or will have been made at Closing
(either as (i) an inclusion in the consolidated liabilities of the MNH Entities
to be deducted pursuant to Section 8.3(b)(i)(A)(I)(x) in determining the
Purchase Price or (ii) as an inclusion in the Consolidated Current Liabilities
to be deducted pursuant to Section 8.3(b)(iv)(E) in determining the Working
Capital Adjustment). Except as set forth on SCHEDULE 4.12, no MNH Entity has
waived or extended any applicable statute of limitations relating to the
assessment of any Taxes on or after September 1, 1992; and, to the knowledge of
Sellers (without having made any inquiry with respect thereto), no MNH Entity
has waived or extended any applicable statute of limitations relating to the
assessment of any Taxes prior to September 1, 1992.
(c) No representation is being made pursuant to this Section 4.12 to
the extent that any representation or warranty contained herein relates to net
operating losses or investment
-28-
tax credits reflected on tax returns filed prior to September 1, 1992.
Section 4.13 System Information.
------------ ------------------
(a) SCHEDULE 4.13(A) sets forth a materially true and complete
description of the following information as of December 31, 1995:
(i) the number of miles of plant included in each System;
(ii) a description of basic and optional or tier services available
from each of the Systems, and the rates charged by each MNH Entity for each
System.
(iii) the stations and signals carried by each of the Systems and the
channel position of each such signal and station; and
(iv) the cities, towns, villages, boroughs and counties served by each
of the Systems.
(b) The subscriber information set forth on the CableData Reports,
dated as of October 31, 1995, November 30, 1995, December 31, 1995, January 31,
1996 and February 29, 1996, included in SCHEDULE 4.13(B) is true and accurate in
all material respects as of the respective dates of such reports, and the
subscriber information reported thereon has been compiled in a manner consistent
with the past practices of Sellers. Except as set forth on SCHEDULE 4.13(B),
there has been no material adverse change since October 31, 1995 in such
subscriber information, taken as a whole, as reported in such CableData Report,
dated as of October 31, 1995.
Section 4.14 Real Property. Except under the Systems Leases, no MNH
------------ -------------
Entity holds or uses under lease or leases to others any land or buildings
relating to the Systems or otherwise. Except for the land and buildings
described (including the record owner) on SCHEDULE 4.14 (the "OWNED PROPERTY"),
no MNH Entity has other ownership interests in land or buildings relating to the
Systems or otherwise. The MNH Entity that is the record owner of each parcel of
Owned Property has good and marketable title in fee simple absolute to each such
parcel and all buildings, structures and other improvements thereon, in each
case free and clear of all Liens except for Permitted Encumbrances. Except as
set forth in SCHEDULE 4.14, there are no leases, subleases, tenancies or rights
of occupancy affecting any Owned Property. Complete and correct copies of any
title opinions, surveys and appraisals in the Sellers' or MNH's possession, and
of any policies of title insurance currently in force, with respect to any Owned
Property have been delivered by
-29-
the Sellers to CCI. Except for routine repairs, all of the Owned Property and
the land and buildings demised under the Systems Leases (the "LEASED PROPERTY")
are, taken as a whole, in good condition and repair and are suitable for the
purposes used.
Section 4.15 Employees.
------------ ---------
(a) No MNH Entity is a party to any labor or collective bargaining
agreement and there are no collective bargaining agreements applicable to any
Persons employed by any MNH Entity ("MNH EMPLOYEES").
(b) Except as set forth on SCHEDULE 4.15(B), (i) no MNH Employees are
represented by any labor organization and (ii) as of the date hereof, no labor
organization or group of employees of any MNH Entities has made a pending demand
for recognition or certification, and there are no representation or
certification proceedings or petitions seeking a representation proceeding
presently pending or, to the knowledge of Sellers, threatened to be brought or
filed with any Governmental Authority. To the knowledge of Sellers, there are
no formal organizing activities involving a material number of MNH Employees
pending with, or threatened by, any labor organization.
(c) There are (i) no strikes, work stoppages, slowdowns, lockouts,
material arbitrations or material grievances or other material labor disputes
pending or, to the knowledge of Sellers, threatened against or involving any of
the MNH Entities and (ii) no unfair labor practice charges, grievances or
complaints pending or, to the knowledge of Sellers, threatened by or on behalf
of any MNH Employee or group of MNH Employees.
(d) SCHEDULE 4.15(D) is a true and complete list as of January 31,
1996 of the names and positions of all full-time MNH Employees whose annual
compensation (including bonuses) was in excess of $50,000 in 1995 or is expected
to be in excess of $50,000 in 1996. Each MNH Entity has complied in all
material respects with all applicable Legal Requirements relating to (i) wages,
hours, collective bargaining, unemployment insurance, worker's compensation, and
the payment and withholding of Taxes and, (ii) to the knowledge of Sellers
(without having made any inquiry with respect thereto), equal employment
opportunity, age and disability discrimination and immigration control.
(e) Except as described on SCHEDULE 4.15(E), no MNH Entity has any
employment agreement, either written or, to the knowledge of Sellers, oral, with
any MNH Employee and none of the employment agreements listed on SCHEDULE
4.15(E) requires Buyer or any MNH Entity to employ any Person after the Closing.
-30-
Section 4.16 Environmental. Except as disclosed on SCHEDULE 4.16:
------------ -------------
(a) Neither of Sellers nor any MNH Entity has received notice that it
is the subject of any "Superfund" evaluation or investigation, or that it is the
subject of any investigation or proceeding of any Governmental Authority
evaluating whether any remedial action is necessary to respond to any release of
Hazardous Substances on or in connection with any of the Owned Property or
Leased Property.
(b) Each MNH Entity is in compliance in all material respects with all
Legal Requirements with respect to pollution or protection of the environment,
including Legal Requirements relating to actual or threatened emissions,
discharges or releases of Hazardous Substances into ambient air, surface water,
ground water, land or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Substances, insofar as they relate to any of the Owned Property or
Leased Property. Neither of Sellers nor any MNH Entity has received notice of,
and Sellers have no knowledge of, any circumstances relating to, any past,
present or future events, conditions, circumstances, activities, practices or
incidents (including but not limited to the presence, use, generation,
manufacture, disposal, release or threatened release of any Hazardous Substances
from or on any of the Owned Property or the Leased Property), which are
reasonably likely to give rise to any material 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 any of the Owned
Property or Leased Property.
Section 4.17 Employee Benefits; ERISA Matters.
------------ --------------------------------
(a) Plans and Seller Benefit Arrangements. SCHEDULE 4.17(A) lists
-------------------------------------
each Employee Benefit Plan and Benefit Arrangement covering Cable Employees.
Sellers have made available to Buyer with respect to each Employee Benefit Plan
and Benefit Arrangement covering Cable Employees true and complete copies of (i)
all written documents comprising such plans and arrangements (including
amendments and individual agreements relating thereto); (ii) the two most recent
Federal Form 5500 series (including all schedules thereto) filed with respect to
each Employee Benefit Plan; (iii) the most recent financial statements and
actuarial reports, if any, pertaining to each such plan or arrangement; and (iv)
the summary plan description currently in effect and all material modifications
thereto, if any, for each Employee Benefit Plan.
(b) Multiemployer Plans.
-------------------
-31-
(i) No MNH Entity nor any ERISA Affiliate of any MNH Entity has
incurred any unsatisfied Withdrawal Liability with respect to any Multiemployer
Plan to which any MNH Entity or any ERISA Affiliate of any MNH Entity is
required to make or accrue a contribution or has, either at any time on or after
September 1, 1992 or, to the knowledge of Sellers (without having made any
inquiry with respect thereto), at any time from January 1, 1990 through August
31, 1992, been required to make or accrue a contribution, nor, to the knowledge
of either of Sellers or any MNH Entity, is any MNH Entity or any present ERISA
Affiliate of any MNH Entity reasonably expected to incur any Withdrawal
Liability with respect to any such Multiemployer Plan.
(ii) No MNH Entity nor any ERISA Affiliate of any MNH Entity has been
notified by the sponsor of any Multiemployer Plan to which any MNH Entity or any
ERISA Affiliate of any MNH Entity is required to make or accrue a contribution
or has, either at any time on or after September 1, 1992 or, to the knowledge of
Sellers (without having made any inquiry with respect thereto), at any time from
January 1, 1990 through August 31, 1992, been required to make or accrue a
contribution, that such Multiemployer Plan is in reorganization or has been
terminated, within the meaning of Title IV of ERISA, and to the knowledge of
Sellers no such Multiemployer Plan is reasonably expected to be in
reorganization or to be terminated, within the meaning of Title IV of ERISA.
(c) Union Welfare Funds. No MNH Entity nor any ERISA Affiliate of any
-------------------
MNH Entity has, at any time on or after September 1, 1992 or, to the knowledge
of Sellers (without having made any inquiry with respect thereto), at any time
prior to September 1, 1992, incurred any liability based on withdrawal from any
union-sponsored multiemployer welfare benefit fund maintained pursuant to any
Welfare Plan to which any MNH Entity or any ERISA Affiliate of any MNH Entity
contributes pursuant to the terms of a collective bargaining agreement.
(d) Welfare Plans. No MNH Entity nor any ERISA Affiliate of any MNH
-------------
Entity maintains any plan which is funded through a "welfare benefit fund" as
defined in (S) 419(e) of the Code.
(e) Retiree Welfare Benefits Plans. Except as set forth in SCHEDULE
------------------------------
4.17(E) and pursuant to the provisions of COBRA, no MNH Entity nor any ERISA
Affiliate of any MNH Entity maintains any Employee Benefit Plan or Benefit
Arrangement that provides benefits described in (S) 3(l) of ERISA to any former
employees or retirees of any MNH Entity. Any disclosure in SCHEDULE 4.17(E)
shall indicate the present value of accumulated plan liabilities calculated in a
manner consistent with FAS 106
-32-
and actual annual expense for such benefits for each of the last two years.
(f) Pension Plans. All Cable Employee Plans that are Pension Plans
-------------
intended to be qualified under (S) 401 of the Code maintained by any MNH Entity
or any ERISA Affiliate of any MNH Entity have received favorable determinations
with respect to such qualified status from the IRS. To the knowledge of
Sellers, nothing has occurred since such determinations to affect adversely such
determinations, and true and correct copies of such determination letters have
been made available to Buyer.
(g) Prohibited Transactions and Fiduciary Responsibility. To the
----------------------------------------------------
knowledge of Sellers, none of the Cable Employee Plans has participated in,
engaged in or been a party to any Prohibited Transaction which could result in
the imposition of a material liability upon any MNH Entity or any ERISA
Affiliate of any MNH Entity. To the knowledge of Sellers, no officer, partner,
director or employee of any MNH Entity or any ERISA Affiliate of any MNH Entity
has committed a material breach of any responsibility or obligation imposed upon
fiduciaries by Title I of ERISA or engaged in any Prohibited Transaction with
respect to any Cable Employee Plan.
(h) Reporting and Disclosure. Except with respect to any violation
------------------------
relating to any Multiemployer Plan where such violation could not result in any
liability to any MNH Entity or any ERISA Affiliate of any MNH Entity, there
have, at any time on or after September 1, 1992 and, to the knowledge of Sellers
(without having made any inquiry with respect thereto), at any time prior to
September 1, 1992, been no material violations of any reporting or disclosure
requirements under ERISA with respect to any Cable Employee Plan.
(i) Annual Reports. Sellers have made available to Buyer a copy of
--------------
(i) the two most recently filed Federal Form 5500 series and accountant's
opinion, if applicable, for each Cable Employee Plan other than Multiemployer
Plans and (ii) the two most recent actuarial valuation reports for each Cable
Employee Plan that is a Pension Plan subject to Title IV of ERISA. To the
knowledge of Sellers, all information provided by either Seller or any MNH
Entity, as applicable, to any actuary in connection with the preparation of such
actuarial valuation report was true, correct and complete in all respects.
(j) Funding Obligations. No Cable Employee Plan that is a Pension
-------------------
Plan subject to Title IV of ERISA (other than any Multiemployer Plan) has (i)
incurred an Accumulated Funding Deficiency, whether or not waived, (ii) an
accrued benefit obligation that exceeds the assets of the plan by more than
$25,000, determined as of the last applicable annual valuation date, using the
actuarial methods, factors and assumptions used
-33-
for the most recent actuarial report with respect to such plan, (iii) been a
plan with respect to which a Reportable Event has occurred and is continuing, or
(iv) to the knowledge of Sellers, been a plan with respect to which any
termination liability to the PBGC has been or is expected to be incurred or with
respect to which there exist conditions or events which have occurred presenting
a significant risk of termination by the PBGC.
(k) Liens and Penalties. No MNH Entity nor any ERISA Affiliate of any
-------------------
MNH Entity has any unsatisfied material liability with respect to any Cable
Employee Plan (i) for the termination of any Cable Employee Plan that is a
single employer plan under ERISA (S) 4062 or a multiple employer plan under
ERISA (S) 4063, (ii) for any lien imposed under (S) 302(f) of ERISA or (S)
412(n) of the Code, (iii) for any interest payments required under (S) 302(e) of
ERISA or (S) 412(m) of the Code, (iv) for any excise tax imposed by (S)(S) 4971,
4972, 4974, 4975, 4976, 4977, 4978, 4978B, 4979, 4979A, 4980 or 4980B of the
Code, or (v) for any failure to make any minimum funding contributions under (S)
302(c)(11) of ERISA or (S) 412(c)(11) of the Code.
(l) Acts or Omissions. There have, at any time on or after September
-----------------
1, 1992 and, to the knowledge of Sellers (without having made any inquiry with
respect thereto), at any time prior to September 1, 1992, been no acts or
omissions with respect to any Cable Plan by any MNH Entity or any ERISA
Affiliate of any MNH Entity which have given rise to or may give rise to any
material fines, penalties or related charges under (S) 502 or (S) 4071 of ERISA
or Chapter 43 of the Code for which the MNH Entity or any ERISA Affiliate of any
MNH Entity may be liable.
(m) COBRA. The MNH Entities and their ERISA Affiliates have, at all
-----
times on or after September 1, 1992 and, to the knowledge of Sellers (without
having made any inquiry with respect thereto), at all times prior to September
1, 1992, complied in all material respects with the provisions of COBRA with
respect to all Cable Employee Plans that are Group Health Plans.
(n) Additional Benefits. Except as set forth on SCHEDULE 4.17(N), no
-------------------
Cable Employee shall accrue or receive additional benefits, service or
accelerated rights to payments of benefits under any Cable Plan or Seller
Benefit Arrangement, including the right to receive any parachute payment, as
defined in (S) 280G of the Code, or become entitled to severance, termination
allowance or similar payments as a direct result of the transactions
contemplated by this Agreement.
(o) Claims. Other than claims for benefits in the ordinary course,
------
there is no claim pending or, to the knowledge of either of Sellers or any MNH
Entity, threatened involving any Cable Plan by any Person against such plan or
any of the MNH
-34-
Entities or any of their ERISA Affiliates. There is no pending or, to the
knowledge of either of Sellers, threatened proceeding involving any Cable
Employee Plan before the IRS, the United States Department of Labor or any other
governmental authority.
(p) Compliance with Laws; Contributions. To the knowledge of Sellers,
-----------------------------------
each Cable Plan has, at all times on or after September 1, 1992 and, to the
knowledge of Sellers (without having made any inquiry with respect thereto), at
all times prior to September 1, 1992, been maintained in all material respects,
by its terms and in operation, in accordance with all Legal Requirements
(including (S) 1862(b)(1) of the Social Security Act). The MNH Entities and
their ERISA Affiliates have made full and timely payment of all amounts required
to be contributed under the terms of each Cable Plan and Legal Requirements or
required to be paid as expenses under such Cable Plan, and the MNH Entities and
their ERISA Affiliates shall continue to do so through the Closing, except as
Sellers and Buyer may otherwise agree.
(q) Definitions.
-----------
(i) "ACCUMULATED FUNDING DEFICIENCY" means an accumulated funding
deficiency, as defined in (S) 302 of ERISA and (S) 412 of the Code.
(ii) "BENEFIT ARRANGEMENT" means any material benefit arrangement that
is not an Employee Benefit Plan, including (i) any employment or consulting
agreement, (ii) any arrangement providing for insurance coverage or workers'
compensation benefits, (iii) any incentive bonus or deferred bonus arrangement,
(iv) any arrangement providing termination allowance, severance or similar
benefits, (v) any equity compensation plan, (vi) any deferred compensation plan
and (vii) any compensation policy and practice.
(iii) "CABLE BENEFIT ARRANGEMENT" means any Benefit Arrangement that
covers exclusively one or more of the employees, former employees, directors and
former directors of the MNH Entities and the beneficiaries of any of them.
(iv) "CABLE EMPLOYEE" means any employee or former employee of any MNH
Entity.
(v) "CABLE EMPLOYEE PLAN" means any Employee Benefit Plan that is
sponsored or contributed to by either Seller or any MNH Entity or any ERISA
Affiliate of any of them that covers any Cable Employees.
(vi) "CABLE PLAN" means any Cable Employee Plan or Cable Benefit
Arrangement.
-35-
(vii) "COBRA" means the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended, as set forth in Section 4980B of the Code and Part 6 of
Title I of ERISA.
(viii) "EMPLOYEE BENEFIT PLAN" has the meaning given such term in (S)
3(3) of ERISA.
(ix) "GROUP HEALTH PLAN" means group health plan, as defined in (S)
5000(b)(1) of the Code.
(x) "MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in
(S)(S) 3(37) and 4001(a)(3) of ERISA.
(xi) "PENSION PLAN" means any employee pension benefit plan, as
defined in (S) 3(2) of ERISA.
(xii) "PROHIBITED TRANSACTION" means a transaction that is prohibited
under (S) 4975 of the Code or (S) 406 of ERISA and not exempt under (S) 4975 of
the Code or (S) 408 of ERISA respectively.
(xiii) "REPORTABLE EVENT" means a reportable event, as defined in (S)
4043 of ERISA to the extent that the reporting of such event to the PBGC has not
been waived.
(xiv) "SELLER BENEFIT ARRANGEMENT" means any Benefit Arrangement
covering any employees, former employees, directors or former directors of
either Seller or the ERISA Affiliates of either of them, and the beneficiaries
of any of them, other than any Cable Benefit Arrangement.
(xv) "WELFARE PLANS" means any employee welfare benefit plan, as
defined in (S) 3(1) of ERISA.
(xvi) "WITHDRAWAL LIABILITY" has the meaning given such term in (S)
4201 of ERISA.
Section 4.18 Full Disclosure. To the knowledge of Sellers (without
------------ ---------------
having made any inquiry with respect thereto), all of the statements made by
either Seller in this Article 4 (including the statements made by either Seller
in any Schedule referred to in this Article 4) do not include or contain any
untrue statement of a material fact, and do not omit to state any material fact
required to be stated in this Article 4 (including the statements made by either
Seller in any Schedule referred to in this Article 4) or necessary in order to
make the statements in this Article 4 (including the statements made by either
Seller in any Schedule referred to in this Article 4), in light of the
circumstances under which they were made, not misleading.
-36-
ARTICLE 5
REPRESENTATIONS AND WARRANTIES REGARDING BUYER
----------------------------------------------
Buyer represents and warrants to Sellers as follows:
Section 5.1 Organization and Authority. CCI and each of its
----------- --------------------------
corporate Subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws of its state of incorporation. CCI and each of its
Subsidiaries have all requisite power and authority (corporate or partnership,
as the case may be) to own, lease and operate their properties and to carry on
their business as now being conducted, except where the failure to have such
power or authority would not have a Material Adverse Effect on CCI and its
Subsidiaries. CCI has all requisite corporate power and authority to execute,
deliver and perform this Agreement and each Transaction Document to which CCI is
or will be a party and to consummate the transactions contemplated hereby and
thereby. The execution, delivery and performance of the Agreement and each
Transaction Document to which CCI is or will be a party, and the consummation by
CCI of the transactions contemplated thereby, have been duly and validly
authorized by all necessary corporate action on the part of CCI. The Agreement
and each Transaction Document to which CCI is or will be a party constitutes or
will constitute (as the case may be) a valid and binding obligation of CCI,
enforceable against CCI in accordance with its terms, subject to the
Enforceability Exceptions.
Section 5.2 No Conflict; Required Consents.
----------- ------------------------------
(a) Subject to obtaining the Buyer Required Consents identified on
SCHEDULE 5.2, neither the execution, delivery or performance by Buyer of this
Agreement or any Transaction Document to which Buyer is or will be a party, nor
the consummation of the transactions contemplated hereby or thereby, does or
will:
(i) conflict with or violate any provision of the charter or bylaws of
Buyer;
(ii) violate any provision of any Legal Requirement applicable to
Buyer;
(iii) conflict with, violate, result in a breach of, constitute a
default under (without regard to requirements of notice, lapse of time, or
elections of other Persons, or any combination thereof), accelerate or permit
the acceleration of the performance required by, any material Contract or
License to which Buyer is a party or by which Buyer or any of the assets or
properties owned or leased by Buyer are bound; or
-37-
(iv) result in the creation or imposition of any Lien against or upon
any of the assets or properties owned or leased by Buyer;
except as would not result in the aggregate in (A) a Material Adverse Effect on
CCI and its Subsidiaries or (B) a material adverse effect on the ability of
Buyer to execute, deliver or perform its obligations under this Agreement and
any Transaction Document to which it is or will be a party.
(b) Except for the Buyer Required Consents identified on SCHEDULE 5.2,
no Consent is required for the execution, delivery or performance by Buyer of
this Agreement or any Transaction Document to which Buyer is or will be a party,
or the consummation of the transactions contemplated hereby or thereby, except
for such Consents as, if not obtained or made, would not have a Material Adverse
Effect on CCI and its Subsidiaries.
Section 5.3 Approval of the Board. The Board of Directors of CCI
----------- ---------------------
has, by resolutions duly adopted at a meeting duly called and held, unanimously
approved and adopted this Agreement and the transactions contemplated hereby on
the terms and conditions set forth herein.
Section 5.4 [This Section has been intentionally left blank.]
-----------
Section 5.5 Financial Statements. The consolidated balance sheets of
----------- --------------------
CCI and its Subsidiaries and the notes thereto as of December 31, 1994, 1993 and
1992 and consolidated statements of income, shareholder's equity and cash flows
and the notes thereto for the three fiscal years ended December 31, 1994, 1993
and 1992 certified by Deloitte & Touche, whose reports thereon are included
therewith, and the unaudited condensed consolidated balance sheet (the "CCI
BALANCE SHEET") of CCI and its Subsidiaries as of September 30, 1995 (the "CCI
BALANCE SHEET DATE") and unaudited consolidated statements of income and cash
flow for the nine months then ended, were prepared in accordance with GAAP
applied on a consistent basis throughout the periods covered thereby except to
the extent otherwise indicated therein, and present fairly as of their
respective dates, in all material respects, the consolidated financial position
of CCI and its Subsidiaries as at the dates thereof and the consolidated results
of their operations and their consolidated cash flows for each of the respective
periods covered thereby, in conformity with GAAP.
Section 5.6 [This Section has been intentionally left blank.]
Section 5.7 Absence of Certain Changes. Except as disclosed on
----------- --------------------------
SCHEDULE 5.7 or in the CCI SEC Filings filed prior
-38-
to the date hereof, since the CCI Balance Sheet Date there has not occurred (i)
any Material Adverse Effect on CCI and its Subsidiaries or (ii) other events or
conditions of any character that, individually or in the aggregate, have or
would reasonably be expected to have a Material Adverse Effect on CCI and its
Subsidiaries or on the ability of CCI or Buyer to perform (including a material
delay in CCI's or Buyer's ability to obtain any Consents necessary for the
transfer of the Systems Franchises) its material obligations under the
Transaction Documents to which it is or will be a party, except for any Material
Adverse Effect or other event or condition due to general economic or industry-
wide conditions (including, without limitation, determinations by the FCC or
local franchising authorities affecting or applicable to the offering or
packaging of a la carte channels or cost-of-service showings and any rate
adjustments pursuant to such determinations).
Section 5.8 Compliance with Laws. To Buyer's knowledge, none of CCI
----------- --------------------
or any of its Subsidiaries has violated, nor is CCI or are any of them in
violation of, any such Franchises or Licenses or any Legal Requirement, except
where such violations do not and, insofar as reasonably can be foreseen, will
not prevent, hinder, or materially delay (including a material delay in the
obtaining of any Consents necessary for the transfer of the Systems Franchises)
for CCI to be able to consummate the transactions contemplated by this
Agreement.
Section 5.9 Litigation. Except as may be otherwise disclosed in
----------- ----------
SCHEDULE 5.9 hereto or the CCI SEC Filings filed prior to the date hereof, there
is no Litigation pending or, to the knowledge of CCI, threatened against or
affecting CCI or any of its Subsidiaries (except for proceedings or
investigations affecting the cable television industry generally) that,
individually or in the aggregate, would reasonably be expected to prevent,
hinder, or materially delay (including a material delay in the obtaining of any
Consents necessary for the transfer of the Systems Franchises) the ability of
CCI to consummate the transactions contemplated by this Agreement, nor is there
any Judgment outstanding, unsatisfied or unperformed against CCI or any of its
Subsidiaries which could have any such effect in the future.
Section 5.10 [This Section has been intentionally left blank.]
------------
Section 5.11 [This Section has been intentionally left blank.]
------------
Section 5.12 Financing. Buyer has sufficient cash on hand and
------------ ---------
availability under its existing loan facilities to pay the Purchase Price
hereunder.
-39-
Section 5.13 Investment Intent. Buyer represents that it is
------------ -----------------
acquiring the Subject Interests for its own account or for one of its wholly
owned Subsidiaries for investment with no present intention of distributing or
reselling the same, subject nevertheless to its right to dispose of the Subject
Interests, or any part thereof, in compliance with applicable law if at some
future time in its sole discretion it deems it advisable to do so.
ARTICLE 6
CERTAIN COVENANTS
-----------------
Section 6.1 Conduct of Business of the Sellers; Ownership of MNH
----------- ----------------------------------------------------
Entities. Except as contemplated by this Agreement or as Buyer may otherwise
--------
consent in writing, which consent shall not be unreasonably withheld or delayed,
between the date hereof and the Closing Time neither of Sellers shall:
(a) amend its partnership agreement or admit any new partners except
as set forth in SCHEDULE 6.1(A); or
(b) issue, sell, deliver or agree to commit to issue, sell or deliver
(whether through the issuance or granting of options, warrants, commitments,
subscriptions, rights to acquire or otherwise) any partnership interests or
other equity securities or amend any of the terms of any partnership interests
or other equity securities or agreements outstanding on the date hereof.
Section 6.2 Conduct of the Business of the MNH Entities. Except as
----------- -------------------------------------------
contemplated by this Agreement or as Buyer may otherwise consent in writing,
which consent shall not be unreasonably withheld or delayed, between the date
hereof and the Closing Time, each of Sellers shall and shall cause the MNH
Entities to:
(a) operate or cause the business of the MNH Entities to be operated
(including the Systems) only in the ordinary course and consistent with past
practices (including completing line extensions, placing conduit or cable in new
developments, fulfilling installation requests and continuing work on existing
construction projects) and, to the extent consistent with such operation, use
its reasonable efforts to (i) preserve the current business organization of the
Systems intact (including preserving existing relationships with Governmental
Authorities, suppliers, subscribers, customers and others having business
dealings with any of the Systems) unless Buyer requests otherwise in writing,
(ii) keep available the services of the MNH Employees and (iii) continue normal
marketing, advertising and promotional expenditures with respect to the business
of the MNH Entities (including the Systems);
-40-
(b) maintain (i) the Assets as a whole in good condition and repair
and consistent with past practices, ordinary wear and tear excepted, and (ii) in
full force and effect policies of insurance with respect to the Assets and the
business of the MNH Entities (including the Systems), in such amounts and with
respect to such risks as are customarily maintained by operators of cable
television systems of the size and in the geographic location of the Systems
(and in any event in such amounts and with respect to such risks as are insured
against at the date hereof);
(c) maintain their Books and Records with respect to the Assets and
the operation of the Systems in the ordinary course on a basis consistent with
past practices;
(d) (i) give to Buyer, and its counsel, accountants and other
representatives, upon reasonable request after reasonable notice shall have been
given to Sellers, access during normal business hours to the Assets (including
the Systems) and to the General Manager of the System and the MNH Employees
provided, that, Buyer shall obtain the prior approval of the General Manager
(which approval shall not be unreasonably withheld or delayed) prior to being
granted access to any other MNH Employee; and (ii) furnish or cause to be
furnished to Buyer and such representatives all such additional documents,
financial information and other information as Buyer from time to time may
reasonably request; provided that no investigation will affect or limit the
scope of any of the representations and warranties contained herein or in any
Transaction Document or limit liability for any breach of such representations
and warranties;
(e) not accept or agree or accede to any modifications or amendments
to any of the Systems Franchises (including modifications or amendments in
connection with the renewal of any of the Systems Franchises), or material
adverse modifications to any of the Systems Licenses, Systems Contracts or
Systems Leases that are not acceptable to Buyer, other than the modifications or
amendments described in SCHEDULE 6.2(E);
(f) promptly deliver to Buyer true and complete copies of all monthly
and quarterly financial statements and operating reports and any reports with
respect to the operation of any of the Systems prepared at any time from the
date hereof until Closing, and any other similar materials which Buyer may
reasonably request;
(g) promptly notify Buyer of any circumstance, event or action by it
or that comes to the knowledge of Sellers (i) which, if known at the date of
this Agreement, would have been required to be disclosed in or pursuant to this
Agreement or (ii) the existence, occurrence or taking of which would result in
any
-41-
of the representations and warranties in this Agreement or in any Transaction
Document not being true and correct in all material respects when made or at
Closing, and, with respect to clause (ii), use its reasonable efforts to remedy
the same (subject, nonetheless, to the provisions of Section 7.1(c));
(h) deliver to Buyer, prior to the execution and delivery of this
Agreement, a schedule of all franchise, construction, fidelity, performance or
other bonds posted by any MNH Entity (and Buyer hereby acknowledges that Sellers
have heretofore delivered such schedule to Buyer, a copy of which is attached
hereto as SCHEDULE 6.2(H));
(i) promptly furnish to Buyer, upon written request by Buyer, and its
counsel, accountants and other representatives copies of all FCC Forms 1200,
1205, 1210 and 1215 or any other FCC forms required under the regulations of the
FCC promulgated under the Cable Act that are prepared with respect to any of the
Systems; and
(j) use reasonable good faith efforts to establish or cause to be
established rates charged and a la carte packages provided to subscribers of any
of the Systems as of the Closing Date, that would be allowable under the
regulations of the FCC promulgated under the Cable Act.
Section 6.3 Certain Negative Covenants.
----------- --------------------------
(a) Except as contemplated by this Agreement or as Buyer may otherwise
consent in writing, which consent shall not be unreasonably withheld or delayed,
between the date hereof and the Closing Time, each of Sellers shall not and
shall cause each MNH Entity not to:
(i) (A) create, incur or assume any long-term debt not currently
outstanding (including obligations in respect of capital leases), provided that
the MNH Entities shall be permitted to extend the maturity date of the
indebtedness arising under the MNH Loan Agreement, (B) assume, guarantee,
endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other Person other than
another MNH Entity or (C) make any loans, advances or capital contributions to,
or investments in, any Person other than another MNH Entity;
(ii) acquire, sell, lease or dispose of any assets other than sales of
inventory and equipment in the ordinary course of business consistent with past
practice; provided, however, that notwithstanding anything in this Agreement to
-------- -------
the contrary MNH may assign and transfer the Excluded Assets to any Person
immediately prior to the Closing;
-42-
(iii) mortgage, pledge or subject to any Lien any of its properties
or assets, tangible or intangible (other than a Permitted Lien);
(iv) fail to use reasonable efforts to effect Capital Expenditures
substantially in accordance with the Capital Expenditure budget attached hereto
as SCHEDULE 6.3(A)(IV) (it being understood that such expenditures may be
subject to construction and other delays, and other factors including the
availability of equipment and labor, beyond the control of the MNH Entities), or
fail in any event to effect Capital Expenditures for the period from July 1,
1995 through the Closing Date in an aggregate amount equal to at least 90% of
the aggregate amount of Capital Expenditures provided for in such Capital
Expenditure budget for the period between July 1, 1995 and the Closing Date;
(v) effect any Capital Expenditure at a time when the amount of such
Capital Expenditure together with the aggregate amount of all other Capital
Expenditures theretofore effected by the MNH Entities during the period between
July 1, 1995 and such time would exceed 105% of the aggregate amount of Capital
Expenditures provided for in the Capital Expenditure budget attached hereto as
SCHEDULE 6.3(A)(IV) for the period between July 1, 1995 and such time;
(vi) except as set forth in SCHEDULE 6.3(A)(VI), (A) grant any
material increases in the compensation of any MNH Employees except in the
ordinary course of business consistent with past practice, (B) pay or agree to
pay any pension, retirement allowance or other material employee benefit not
required or contemplated by any of the existing benefit, severance, pension or
employment plans, agreements or arrangements as in effect on the date hereof to
any MNH Employee, whether past or present, (C) enter into any new or materially
amend any existing employment agreement with any MNH Employee, except for
employment agreements with new employees entered into in the ordinary course of
business consistent with past practice, (D) enter into any new or materially
amend any existing severance agreement with any MNH Employee or, (E) except as
may be required to comply with applicable Legal Requirements, become obligated
under any new Pension Plan, Welfare Benefit Plan, Multiemployer Plan, Employee
Benefit Plan or similar plan or arrangement that is not in existence on the date
hereof, or amend any such plan or arrangement in existence on the date hereof;
(vii) except as set forth on SCHEDULE 6.3(A)(VII):
(A) enter into any Contract or Lease relating to the purchase, lease
or other acquisition of any
-43-
goods, equipment, materials or supplies involving an aggregate expenditure in
excess of $100,000; or
(B) enter into any Lease or License or any Contract for services
which, by its terms, is not to expire or be completed or performed in its
entirety prior to the Closing Date and involves expenditures in excess of (I)
$50,000 during the one-year period immediately following the Closing Date or
(II) $100,000 in the aggregate;
(viii) amend or modify the MNH Partnership Agreement or admit any new
partner to MNH;
(ix) amend the charter or bylaws of any MNH Subsidiary or alter
through merger, liquidation, reorganization, restructuring or in any other
fashion the ownership of any MNH Entity;
(x) issue, sell, deliver or agree or commit to issue, sell or deliver
(whether through the issuance or granting of options, warrants, commitments,
subscriptions, rights to purchase or otherwise) any stock of any class or any
other equity securities or amend any of the terms of any such stock or other
securities outstanding on the date hereof; or
(xi) knowingly take or agree in writing or otherwise to take any
action that would (A) make any representation or warranty contained in this
Agreement untrue or incorrect as of the date when made or as of the Closing
Time, (B) result in any of the conditions to Closing contained in this Agreement
not being satisfied or (C) be inconsistent with the terms of this Agreement or
the transactions contemplated hereby or by any Transaction Document.
(b) Except as contemplated by this Agreement or as Buyer may otherwise
consent in writing, between the date hereof and the Closing Time, each of
Sellers shall not and shall cause each MNH Entity not to declare, set aside or
pay any dividend or other distribution (whether in cash, stock or property or
any combination thereof) in respect of its capital stock, partnership interests
or other equity interests, or redeem or otherwise acquire any of its securities
or partnership interests; provided, however, that (i) any MNH Entity may declare
-------- -------
and pay dividends to any other MNH Entity and (ii) MNH may distribute the
Excluded Assets to any Person immediately prior to the Closing.
(c) After the date hereof and prior to the Closing Date and
notwithstanding any other notice provision set forth in this Agreement, Buyer
hereby authorizes any of Xxxxxxxx Xxxxxxxxx-Xxxxx, Xxxxx Xxxxx, Xxxx
Xxxxxxxxxxx, Xxxxxxx Xxxxxxxx or Xxxxxx Xxxx of Buyer (the "Authorized
Representative") to receive and respond, on Buyer's behalf, to any written
request
-44-
for consent of Buyer required by Sellers pursuant to Section 6.2, 6.3(a) or
6.3(b) hereof. The Authorized Representative shall respond to any such request
for consent as soon as reasonably practicable and in any event within fourteen
days from the date of receipt of such request. If the Authorized Representative
fails to respond to such a request for consent within such fourteen-day period,
such consent shall have been deemed to have been given by Buyer.
Section 6.4 Conduct of Business of Buyer. CCI shall not without the
----------- ----------------------------
prior written consent of Sellers, knowingly take or agree in writing or
otherwise to take any action that would (i) make any representation or warranty
of CCI contained in this Agreement untrue or incorrect as of the date when made
or as of the Closing Time, (ii) result in any of the conditions to Closing
contained in this Agreement not being satisfied or (iii) be inconsistent with
the terms of this Agreement or the transactions contemplated hereby or by any
Transaction Document.
Section 6.5 Confidentiality and Publicity.
----------- -----------------------------
(a) Any non-public information that a party may obtain from another
party in connection with the negotiation and execution of this Agreement or the
consummation of the transactions contemplated hereby will be confidential and,
unless and until the Closing occurs, such party will not disclose any such
information to any other Person (other than its and its Affiliates' 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 such information to the detriment of
any other party; provided that (i) such party may use and disclose any such
information once it has been publicly disclosed (other than by such party in
breach of its obligations under this Section) or that has rightfully come into
the possession of such party (other than in connection with this Agreement) and,
(ii) to the extent that such party may, in the reasonable judgment of its
counsel, be compelled by Legal Requirements to disclose any of such information,
such party may disclose such information.
(b) Sellers and Buyer each will consult with and cooperate with the
other with respect to the content and timing of all press releases and other
public announcements, and any written statements to MNH Employees concerning
this Agreement and the transactions contemplated hereby. Prior to Closing,
neither of Sellers nor Buyer will make any such release, announcement or
statement without the prior written consent and approval of the other (which
approval shall not be unreasonably withheld or delayed), except as required by
applicable Legal Requirements, in which case the other party or parties shall be
consulted to the
-45-
extent reasonably practicable as to the content and timing of such release,
announcement or statement to be issued.
Section 6.6 Distant Broadcast Signals. Unless otherwise restricted
----------- -------------------------
or prohibited by any Governmental Authority or applicable Legal Requirements, if
requested by Buyer, Sellers will cause the MNH Entities to delete, prior to the
Closing Date, any distant broadcast signals which Buyer determines will result
in unacceptable liability for copyright payments with respect to continued
carriage of such signals after the Closing Date unless Sellers reasonably object
to any such deletion.
Section 6.7 Post-Closing Cooperation upon Inquiries as to Rates or a
----------- --------------------------------------------------------
la Carte Packages. For a period of 6 months after Closing, each Seller will
-----------------
cooperate with and assist Buyer by providing, upon request, all information in
such Seller's possession (and not previously made available to Buyer) relating
directly to the rates set forth in SCHEDULE 4.10 or on any of FCC Forms 393,
1200, 1205, 1210 or 1215, that Buyer may reasonably require to justify such
rates in response to any inquiry, order or requirement of any Governmental
Authority.
Section 6.8 Use of Names and Logos. For a period of 60 days after
----------- ----------------------
Closing, Buyer shall have a non-exclusive license and be entitled to use the
trademarks, trade names, service marks, service names, logos and similar
proprietary rights of Sellers to the extent incorporated in or on the Assets at
Closing, provided that Buyer will exercise reasonable efforts to remove all such
names, marks, logos and similar proprietary rights of the other from the Assets
as soon as reasonably practicable following Closing.
Section 6.9 Consents.
----------- --------
(a) Each of Sellers and Buyer agrees to use all reasonable efforts to
obtain all Consents necessary for its execution and delivery of and the
performance of its obligations pursuant to this Agreement, and will cooperate
fully with the other parties in promptly seeking to obtain all such Consents.
Without limiting the foregoing, Sellers and Buyer shall each make an appropriate
filing of a notification and report form pursuant to the HSR Act as promptly as
practicable but in no event later than 30 days following the execution of this
Agreement. Each such filing shall request early termination of the waiting
period imposed by the HSR Act.
(b) Any application to any Governmental Authority for a Consent
necessary for the transfer of control of any License or Systems Franchise shall
be mutually acceptable to Sellers and Buyer and, if applicable, shall request
that the relevant Governmental Authority agree that no further Consent of such
Governmental Authority will be required if a security interest is
-46-
granted in such License or Systems Franchise to any lender. Without limiting the
obligations of Sellers and Buyer under paragraph (a) of this Section, each of
Sellers and Buyer agrees, upon reasonable prior notice, to make appropriate
representatives available for attendance at meetings and hearings before
applicable Governmental Authorities in connection with the transfer of control
of any License or Systems Franchise.
(c) If any Consent of any Governmental Authority necessary for the
transfer of control of any License or Systems Franchise shall not have been
obtained prior to the Closing Time, Sellers and Buyer shall, at the option of
Buyer, cooperate with each other and use all reasonable efforts (i) to
restructure the ownership and control of such License or Systems Franchise from
and after the Closing Time in such a manner that, to the extent feasible,
prevents any violation of the terms of such License or Systems Franchise that
would have a Material Adverse Effect on Buyer and its Subsidiaries or on the MNH
Entities yet preserves the intent of the parties as set forth in this Agreement
with respect to the transactions contemplated hereby, and (ii) notwithstanding
the Closing, to continue to seek any Consent necessary for the transfer of
control of such License or Systems Franchise.
Section 6.10 Further Assurances. Each of the parties hereto shall
------------ ------------------
execute such documents and other instruments and take such further actions as
may be reasonably required or desirable to carry out the provisions hereof and
consummate and evidence the transactions contemplated hereby or, at and after
the Closing Date, to evidence the consummation of the transactions contemplated
by this Agreement or any Transaction Document. Without limiting the generality
of the immediately preceding sentence, subsequent to Closing, each of Sellers
shall continue to use all reasonable efforts to obtain in writing as promptly as
possible any Consent required to be obtained by it in connection with the
transactions contemplated hereunder which was not obtained on or before Closing
and will deliver to Buyer copies of the same, reasonably satisfactory in form
and substance to Buyer. Upon the terms and subject to the conditions hereof,
each of the parties hereto shall take or cause to be taken all actions and to do
or cause to be done all other things necessary, proper or advisable to
consummate and make effective as promptly as practicable the transactions
contemplated by this Agreement.
Section 6.11 No Related Party Agreements. Except as otherwise
------------ ---------------------------
contemplated hereby, neither of Sellers nor any of either Seller's Affiliates
will at the Closing Time be a party to any material Contract with any MNH
Entity, including any material Contract providing for the furnishing of services
or rental of real or personal property to or from or otherwise relating to the
business or operations of any MNH Entity or pursuant to which any MNH Entity may
have any obligation or liability.
-47-
Section 6.12 Termination of Seller's Profit Sharing Plan. Sellers
------------ -------------------------------------------
shall, on or prior to the Closing Date, arrange for termination of the New
Heritage Associates Profit Sharing Plan. In connection with the termination,
plan assets shall be distributed to, or as directed by, plan participants.
Section 6.13 Cooperation with CCI Merger, etc. Sellers shall, and
------------ --------------------------------
prior to the Closing Sellers shall cause the MNH Entities to, at the expense of
CCI, (i) furnish in writing to CCI such information (including audited and
unaudited financial statements), and in such form, regarding Sellers, the MNH
Entities, MNHP, NHA, Meredith, Ingersoll, New Heritage and the Ultimate Equity
Holders as CCI may reasonably request in connection with the CCI Proxy Statement
and the U S WEST, Inc. Registration Statement, (ii) cooperate with CCI in its
efforts to respond to any comments of the SEC with respect to the CCI Proxy
Statement or the U S WEST, Inc. Registration Statement relating to Sellers, the
MNH Entities, MNHP, NHA, Meredith, Ingersoll, New Heritage or the Ultimate
Equity Holders, (iii) cause the MNH Entities' independent auditors to deliver a
letter to CCI and U S WEST, Inc. in connection with the CCI Proxy Statement and
the U S WEST, Inc. Registration Statement, such letter to be in form and
substance reasonably satisfactory to CCI and U S WEST, Inc. and customary in
scope and substance for letters delivered by independent public accountants in
connection with proxy statements similar to the CCI Proxy Statement and with
registration statements similar to the U S WEST, Inc. Registration Statement,
and (iv) take any other action reasonably requested by CCI in connection with
the CCI Proxy Statement or the U S WEST, Inc. Registration Statement. Sellers
shall, prior to the Closing Date, similarly cooperate with CCI and take such
other actions, all as and consistent with the cooperation and actions
contemplated by the foregoing clauses (i), (ii), (iii) and (iv) and at the
expense of CCI, in connection with such other proxy statements or registration
statements as CCI may submit to or file with, or propose to submit to or file
with, the SEC after the date hereof, to the extent that such cooperation and
actions do not unreasonably interfere with the normal operations of Sellers and
the MNH Entities.
Section 6.14 Access to Records. Subject to the Closing, Buyer shall
------------ -----------------
cause MNH to (i) use its reasonable efforts to preserve all material Books and
Records pertaining to the MNH Entities operations of the Systems prior to the
Closing Date for a period of five years after the Closing Date, and (ii) give
such access during normal business hours to such Books and Records to Sellers,
their counsel, accountants and other authorized representatives, during such
five-year period, on reasonable advance written notice and in a manner that is
not disruptive of the operation of the Systems, as may be reasonably necessary
in connection with any legitimate purpose (including, without
-48-
limitation, the preparation of tax reports and returns and the preparation of
financial statements). Sellers shall have the right to make copies at their own
expense.
Section 6.15 Form 394. Buyer shall use all reasonable efforts to
------------ --------
prepare, with the cooperation of Sellers, on or before April 15, 1996 a Form 394
for filing with each franchising authority for which such Form 394 is required
to be filed. Upon approval of Sellers as to the form and content of such Form
394 (which approval shall not be unreasonably withheld or delayed), Buyer shall
immediately file such Form 394 with each such franchising authority. Each of
Buyer and Sellers represents that the information provided by it in such filings
will be, as of the date filed, true and correct in all material respects and
will comply in all material respects with the requirements of such Form 394.
Each of Buyer and Sellers agrees to use all reasonable efforts to promptly
respond to any request for additional information by any such franchising
authority and Buyer agrees to promptly file any such additional information
after any such request. Sellers acknowledge and agree that, at Buyer's option,
(i) each such Form 394 may contain information regarding and seek approval from
such franchising authority of the transfer of (or the transfer of control of)
the Systems Franchises (including the particular Systems Franchise within the
jurisdiction of such franchising authority) from Buyer to U S WEST, Inc. by
reason of the transactions contemplated by the CCI Merger Agreement (or from
Sellers directly to U S WEST, Inc. if the transactions contemplated by the CCI
Merger Agreement are consummated prior to the transactions contemplated hereby),
or (ii) U S WEST, Inc. or Buyer or an Affiliate thereof may file a separate Form
394 with each such franchising authority containing information regarding and
seeking approval from such franchising authority of the transfer of (or the
transfer of control of) the Systems Franchises (including the particular Systems
Franchise within the jurisdiction of such franchising authority) from Buyer to U
S WEST, Inc. by reason of the transactions contemplated by the CCI Merger
Agreement (or from Sellers directly to U S WEST, Inc. if the transactions
contemplated by the CCI Merger Agreement are consummated prior to the
transactions contemplated hereby), either concurrently with or subsequent to the
filing of the Form 394 with such franchising authority relating to the
transactions contemplated by this Agreement.
Section 6.16 Tax Returns. Sellers shall prepare and cause to be
------------ -----------
filed all tax returns and other tax reports required to be filed by MNH as a
result of or subsequent to the Closing, for the period ending on the Closing
Date. Buyer shall reimburse Sellers for the reasonable out-of-pocket costs
incurred by them in connection with the preparation and filing of such final tax
returns and other tax reports up to an amount equal to the product of (i) the
aggregate amount of such reasonable out-of-
-49-
pocket costs, multiplied by (ii) the remainder of 100% minus the Sellers
Indemnification Percentage.
ARTICLE 7
CONDITIONS PRECEDENT
--------------------
Section 7.1 Conditions to Buyer's Obligations. The obligations of
----------- ---------------------------------
Buyer to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction of the following conditions on or prior to the
Closing Date (any of which may be waived in writing by CCI):
(a) Accuracy of Representations and Warranties. The representations
------------------------------------------
and warranties of Sellers in this Agreement and of Sellers in any Transaction
Document shall be true and correct in all material respects at and as of the
Closing with the same effect as if made at and as of the Closing, except for
changes, if any, permitted or contemplated by this Agreement or to which Buyer
may consent in writing pursuant to Section 6.1, 6.2 or 6.3 or may be deemed to
consent pursuant to Section 6.3(c).
(b) Performance of Agreements. Each Seller shall have performed or
-------------------------
caused to be performed in all material respects all of its obligations and
agreements contained in this Agreement or in any Transaction Document that is to
be performed by it at or before Closing.
(c) Officer's Certificate. Buyer shall have received a certificate
---------------------
executed by a general partner of each Seller, dated as of the Closing Date,
reasonably satisfactory in form and substance to CCI, certifying that the
conditions specified in Sections 7.1 (a) and (b) have been satisfied.
(d) Legal Proceedings. There shall be (i) no Legal Requirement, and
-----------------
no Judgment shall have been entered and not vacated by any Governmental
Authority of competent jurisdiction in any Litigation or arising therefrom,
which (i) enjoins, restrains, makes illegal or prohibits consummation of the
transactions contemplated by this Agreement or by any Transaction Document or
(ii) requires separation or divestiture by CCI of all or any portion of the
Assets after Closing, and no Governmental Authority shall have instituted or
threatened in writing any action, suit or similar proceeding seeking or which,
in the good faith judgment of Buyer, might reasonably be expected to have the
effect of, any of the foregoing.
(e) Opinion of FCC Counsel. Buyer shall have received an opinion of
----------------------
Xxxxxxxxxx and Xxxxx, L.L.P., special FCC counsel to the MNH Entities, dated as
of the Closing Date, in form and substance reasonably satisfactory to Buyer and
its counsel (the "MNH FCC COUNSEL OPINION").
-50-
(f) MNH Counsel Opinions. Buyer shall have received opinions of
--------------------
Sidley & Austin and Nyemaster, Goode, McLaughlin, West, Xxxxxxx & X'Xxxxx,
counsel to Sellers, the MNH Entities, Meredith, Ingersoll, NHA and the Ultimate
Equity Holders, dated as of the Closing Date, in form and substance reasonably
satisfactory to Buyer and its counsel (the "SELLERS COUNSEL OPINIONS").
(g) HSR Act Waiting Period. The waiting period under the HSR Act with
----------------------
respect to the transactions contemplated by this Agreement shall have expired or
been terminated.
(h) Consents. Except to the extent otherwise permitted by Section
--------
7.1(k), Buyer shall have received evidence, in form and substance reasonably
satisfactory to it, that the Sellers Required Consents and Buyer Required
Consents have been obtained.
(i) No Material Adverse Change. There shall have been no material
--------------------------
adverse change in the Assets, or the financial condition or operations of the
Systems, in each case taken as a whole, since the date of this Agreement. There
shall not have occurred or been suffered any casualty or loss, whether or not
covered by insurance, which either alone or in the aggregate has had or is
reasonably likely to have a Material Adverse Effect on the MNH Entities.
(j) Subscribers. The Systems shall be serving at least 115,000 Basic
-----------
Subscribers as of the end of the calendar month immediately preceding the
Closing Date.
(k) Transferable Franchise Areas. The aggregate number of Basic
----------------------------
Subscribers in the Cable Franchise Areas (as defined below) that are
Transferable Franchise Areas (as defined below) shall be not less than 95% (the
"REQUIRED PERCENTAGE") of the aggregate number of Basic Subscribers in all Cable
Franchise Areas; provided, however, that the condition set forth in this Section
-------- -------
7.1(k) shall not be deemed to be satisfied until the earlier to occur of (x)
thirty (30) days following the date on which the Required Percentage is
obtained, (y) the date on which the condition set forth in this Section 7.1(k)
would be satisfied if the Required Percentage were one hundred percent, or (z)
December 31, 1996. For purposes of this Section 7.1(k):
(i) "CABLE FRANCHISE AREA" means any of the geographic areas in which
the MNH Entities are authorized to provide cable television service pursuant to
a Systems Franchise or provide cable television service without a Franchise;
(ii) A Cable Franchise Area is a "TRANSFERABLE FRANCHISE AREA" if (A)
any Consent necessary for
-51-
the transfer of control of the Systems Franchise for such Cable Franchise Area
in connection with the consummation of the transactions contemplated by this
Agreement shall have been obtained; (B) no Consent is necessary for the transfer
of control of the Systems Franchise for such Cable Franchise Area in connection
with the consummation of the transactions contemplated by this Agreement; or (C)
no Franchise is required for the provision of cable television service in the
Cable Franchise Area;
(iii) If at any time prior to the Closing Date any Governmental
Authority exercises any right reserved to it in a Systems Franchise for any
Cable Franchise Area to acquire the Systems Franchise or related System upon the
actual or proposed transfer of control of such Systems Franchise, then during
the pendency of any proceeding with respect to the acquisition of such Systems
Franchise or related System by such Governmental Authority, and notwithstanding
any other action taken by such Governmental Authority, (A) such Systems
Franchise shall be deemed to be one with respect to which Consent is required
for the transfer of control of such Systems Franchise in connection with the
consummation of the transactions contemplated by this Agreement, (B) such
Governmental Authority shall be deemed not to have granted its consent to the
transfer of control of such Systems Franchise, (C) the proceeds (the "PROCEEDS")
received by any MNH Entity in connection with such acquisition shall be held in
escrow by such MNH Entity until after the Closing, and, (D) anything herein to
the contrary notwithstanding, the Proceeds shall not be counted as current
assets of the MNH Entities for purposes of the Working Capital Adjustment; and
(iv) In calculating the number of Basic Subscribers in a Cable
Franchise Area, the number of Basic Subscribers in such Cable Franchise Area on
October 31, 1995 shall be used.
Notwithstanding the foregoing, Sellers and Buyers agree to use their respective
reasonable efforts to contest any attempt to so acquire a System Franchise or a
related System, including, without limitation, by commencing and prosecuting
such legal actions as may be necessary to prevent such acquisition in
circumstances where such action is appropriate.
(l) [This Section has been intentionally left blank.]
(m) Ultimate Equity Holder Guaranties. Each of the Ultimate Equity
---------------------------------
Holders shall have duly executed and delivered to Buyer a Guaranty of
Indemnification Obligations in the form attached hereto as EXHIBIT B (the
"ULTIMATE EQUITY HOLDER GUARANTIES").
-52-
(n) Removal of Liens. Except as set forth in SCHEDULE 7.1(N), all
----------------
Liens set forth in SCHEDULE 4.8 shall have been removed, released or discharged
at or prior to Closing.
Section 7.2 Conditions to Sellers' Obligations. The obligations of
----------- ----------------------------------
Sellers to consummate the transactions contemplated by this Agreement shall be
subject to the satisfaction of the following conditions on or prior to the
Closing Date (any of which may be waived in writing by Sellers):
(a) Accuracy of Representations and Warranties. The representations
------------------------------------------
and warranties of Buyer in this Agreement and in any Transaction Document to
which Buyer is a party shall be true and correct in all material respects at and
as of the Closing with the same effect as if made at and as of the Closing.
(b) Performance of Agreements. Buyer shall have performed in all
-------------------------
material respects all of its obligations and agreements contained in this
Agreement or in any Transaction Document that is to be performed by it at or
before Closing.
(c) Officer's Certificate. Sellers shall have received a certificate
---------------------
executed by an executive officer of Buyer, dated as of the Closing Date,
reasonably satisfactory in form and substance to Sellers, certifying that the
conditions specified in Section 7.2(a) and (b) have been satisfied.
(d) Legal Proceedings. There shall be no Legal Requirement, and no
-----------------
Judgment shall have been entered and not vacated by any Governmental Authority
of competent jurisdiction in any Litigation or arising therefrom, which enjoins,
restrains, makes illegal or prohibits consummation of the transactions
contemplated hereby or by any Transaction Document, and no Governmental
Authority shall have instituted or threatened any action, suit or similar
proceeding which, in the good faith judgment of Sellers, might reasonably be
expected to have the effect of, any of the foregoing.
(e) Buyer Counsel Opinion. Sellers shall have received an opinion of
---------------------
Xxxxxxxx & Worcester, dated as of Closing, in form and substance reasonably
satisfactory to Sellers and their counsel (the "CCI COUNSEL OPINION").
(f) HSR Act Waiting Period. The waiting period under the HSR Act with
----------------------
respect to the transactions contemplated by this Agreement shall have expired or
been terminated.
(g) Consents. Except to the extent otherwise permitted by Section
--------
7.1(k), Sellers shall have received evidence, in form and substance reasonably
satisfactory to them, that the Buyer Required Consents have been obtained.
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(h) [This Section has been intentionally left blank.]
(i) [This Section has been intentionally left blank.]
(j) [This Section has been intentionally left blank.]
Section 7.3 Exceptions to Conditions to Obligations.
----------- ---------------------------------------
(a) Exception to Section 7.1(a).
---------------------------
(i) The condition contained in Section 7.1(a) to the obligations of
Buyer to consummate the transactions contemplated by this Agreement shall be
deemed satisfied notwithstanding any failures of any representations and
warranties of Sellers to be true and correct as of the Closing Date due to
events or occurrences or other circumstances (other than any intentional breach
by either Seller of any of its obligations under this Agreement to be performed
prior to Closing) taking place or arising after the date hereof if (A) the
aggregate amount of Losses and Expenses that could reasonably be expected to be
suffered or incurred by Buyer as a result of such failures as of the Closing
Date would not exceed $5,000,000 and (B) there shall be no failure of any of the
representations and warranties of Sellers contained in Sections 3.1(b),
3.1(c)(i)(A), 3.2(a)(iii) (other than the first and second sentences) and (iv),
3.2(b)(ii), (iv) (other than the first and second sentences) and (v), 3.3, 4.2,
4.3(a)(i) and (ii) and 4.4 to be true and correct in all material respects;
provided, however, that nothing contained in this Section 7.3(a) shall limit in
any way whatsoever the obligations of Sellers under this Agreement to indemnify
Buyer against any and all Losses and Expenses arising out of or resulting from
such failures or otherwise except as otherwise provided in Section
7.3(a)(ii)(B). Sellers shall use all reasonable efforts to give written notice
to Buyer of any such failures, which notice (I) shall state with reasonable
specificity the facts and circumstances underlying each such failure, (II) shall
set forth Sellers' good faith estimate of the aggregate amount of Losses and
Expenses that could reasonably be expected to be suffered by Buyer as a result
of such failures (which estimate shall be for information purposes only and
shall in no way be binding on Buyer or Seller or determinative of the amount of
such Losses and Expenses for purposes of Section 7.3(a)(ii)), and (III) shall
state that such notice is being given pursuant to this Section 7.3(a). Sellers
shall use all reasonable efforts to give any such notice to Buyer at least seven
Business Days prior to the Closing Date. Anything in this Agreement to the
contrary notwithstanding, if any such notice is given less than seven Business
Days prior to the Closing Date, the Closing Date may be postponed at the option
of Buyer for up to seven Business Days after the date such notice is given.
Subject to the Closing, any such notice given by Sellers pursuant to this
Section 7.3(a) shall be deemed to constitute the giving
-54-
of any initial notice pertaining to such failures from Buyer or any Indemnitee
required under or contemplated by any provision of Article 10, including Section
10.5 and Section 10.6(d) but excluding the second sentence of Section 10.3.
(ii) If the aggregate amount of Losses and Expenses that could
reasonably be expected to be suffered by Buyer as a result of such failures as
of the Closing Date would exceed $5,000,000, Buyer may at its option:
(A) Refuse to proceed with Closing, whereupon this Agreement shall be
deemed to have been terminated (I) pursuant to Section 9.1(a) of this Agreement
so long as neither Seller has materially breached any of its obligations
hereunder and (II) pursuant to Section 9.1(d) of this Agreement if either Seller
has materially breached any of its obligations hereunder; or
(B) Proceed with Closing (subject to satisfaction of the other
conditions contained in Section 7.1), whereupon Sellers shall not be liable to
Buyer under Section 10.1 of this Agreement or otherwise for any Losses or
Expenses of Buyer in excess of $5,000,000 arising from any such failures that
are described in the notice given by Sellers pursuant to Section 7.3(a)(i)
hereof.
(b) Exception to Section 7.2(a).
---------------------------
(i) The condition contained in Section 7.2(a) to the obligations of
Sellers to consummate the transactions contemplated by this Agreement shall be
deemed satisfied notwithstanding any failures of any representations and
warranties of Buyer to be true and correct as of the Closing Date due to events
or occurrences or other circumstances (other than any intentional breach by
Buyer of any of its obligations under this Agreement to be performed prior to
Closing) taking place or arising after the date hereof if (A) such failures, in
the aggregate, would reasonably be expected not to have a Material Adverse
Effect on CCI and its Subsidiaries and (B) there shall be no failure of any of
the representations and warranties of Buyer contained in Sections 5.1 (third and
fourth sentences only), 5.2(a)(i) and (ii), and 5.3. to be true and correct in
all material respects; and Buyer shall not be liable to either of Sellers under
Section 10.2 of this Agreement or otherwise for any Losses or Expenses of either
of Sellers arising from such failures to the extent that (I) Buyer shall have
given written notice to Sellers of such failures, (II) such notice states with
reasonable specificity the facts and circumstances underlying each such failure
upon which such notice is based, and (III) it is expressly stated in such notice
that it is being given pursuant to this Section 7.3(b). Buyer shall use all
reasonable efforts to give any such notice to Sellers at least seven
-55-
Business Days prior to the Closing Date. Anything in this Agreement to the
contrary notwithstanding, if any such notice is given less than seven Business
Days prior to the Closing Date, the Closing Date may be postponed at the option
of Sellers for up to seven business days after the date such notice is given.
Subject to the Closing, any such notice given by Buyer pursuant to this Section
7.3(b) shall be deemed to constitute the giving of any initial notice pertaining
to such failures from Sellers or any Indemnitee required under or contemplated
by any provision of Article 10, including Section 10.5 and Section 10.6(d) but
excluding the second sentence of Section 10.3.
(ii) If such failures, in the aggregate, would reasonably be expected
to have a Material Adverse Effect on CCI and its Subsidiaries, Sellers may at
their option:
(A) Refuse to proceed with Closing, whereupon this Agreement shall be
deemed to have been terminated (i) pursuant to Section 9.1(a) of this Agreement
so long as Buyer has not materially breached any of its obligations hereunder
and (ii) pursuant to Section 9.1(c) of this Agreement if Buyer has materially
breached any of its obligations hereunder; or
(B) Proceed with Closing (subject to satisfaction of the other
conditions contained in Section 7.2), whereupon Buyer shall not be liable to
Sellers under Section 10.2 of this Agreement or otherwise for any Losses or
Expenses of either Seller arising from such failures.
(c) Exception to Section 7.1(h).
---------------------------
(i) The condition contained in Section 7.1(h) to the obligations of
Buyer to consummate the transactions contemplated by this Agreement shall be
deemed satisfied notwithstanding any failures of Sellers to obtain any Sellers
Required Consents (other than any failure to obtain any Consents necessary for
the transfer of control of any Systems Franchise (except to the extent otherwise
expressly permitted under Section 7.1(k) and other than any failure where the
consummation of the transactions contemplated hereby, without having obtained
the Sellers Required Consent in question, would result in a material violation
of any Legal Requirement) if the aggregate amount of Losses and Expenses that
could reasonably be expected to be suffered or incurred by Buyer or the MNH
Entities as a result of such failures as of the Closing Date, together with the
aggregate amount of Losses and Expenses that could reasonably be expected to be
suffered or incurred by Buyer or the MNH Entities resulting from any Section
3.1(c) Exceptions and Section 4.3(a) Exceptions, would not exceed $1,000,000;
provided, however, that nothing contained in this Section 7.3(c) shall limit in
any way whatsoever the obligations of Sellers under this Agreement to indemnify
Buyer against any and all Losses and
-56-
Expenses arising out of or resulting from such failures or otherwise. Sellers
shall use all reasonable efforts to give written notice to Buyer of any such
failures, which notice (A) shall state with reasonable specificity the facts and
circumstances underlying each such failure, (B) shall set forth Sellers' good
faith estimate of the aggregate amount of Losses and Expenses that could
reasonably be expected to be suffered or incurred by Buyer or the MNH Entities
as a result of such failures (which estimate shall be for information purposes
only and shall in no way be binding on Buyer or Seller or determinative of the
amount of such Losses and Expenses for purposes of Section 7.3(c)(ii)), and
(III) shall state that such notice is being given pursuant to this Section
7.3(c). Sellers shall use all reasonable efforts to give any such notice to
Buyer at least seven Business Days prior to the Closing Date. Anything in this
Agreement to the contrary notwithstanding, if any such notice is given less than
seven Business Days prior to the Closing Date, the Closing Date may be postponed
at the option of Buyer for up to seven Business Days after the date such notice
is given. Subject to the Closing, any such notice given by Sellers pursuant to
this Section 7.3(c) shall be deemed to constitute the giving of any initial
notice pertaining to such failures from Buyer or any Indemnitee required under
or contemplated by any provision of Article 10, including Section 10.5 and
Section 10.6(d) but excluding the second sentence of Section 10.3.
(ii) If the aggregate amount of Losses and Expenses that could
reasonably be expected to be suffered by Buyer or the MNH Entities as a result
of such failures as of the Closing Date, together with the aggregate amount of
Losses and Expenses that could reasonably be expected to be suffered or incurred
by Buyer or the MNH Entities resulting from any Section 3.1(c) Exceptions and
Section 4.3(a) Exceptions, would exceed $1,000,000, Buyer may at its option:
(A) Refuse to proceed with Closing, whereupon this Agreement shall be
deemed to have been terminated (I) pursuant to Section 9.1(a) of this Agreement
so long as neither Seller has materially breached any of its obligations
hereunder and (II) pursuant to Section 9.1(d) of this Agreement if either Seller
has materially breached any of its obligations hereunder; or
(B) Proceed with Closing (subject to satisfaction of the other
conditions contained in Section 7.1), whereupon Sellers shall be liable to Buyer
under and to the extent provided in Article 10 (including Section 10.1) for any
Losses or Expenses of Buyer or any MNH Entity arising from any such failures.
-57-
ARTICLE 8
CLOSING
-------
Section 8.1 Closing, Time and Place. The closing of the transactions
----------- -----------------------
contemplated by this Agreement ("CLOSING") will take place at the offices of
Xxxxxxxx & Worcester LLP in Boston, Massachusetts at a time mutually determined
by Sellers and Buyer on the last day of the calendar month during which all
conditions set forth in Sections 7.1 and 7.2 have either been satisfied or
waived in writing by the party entitled to the benefit of such condition;
provided, however, that all conditions set forth in Sections 7.1 and 7.2 have
either been satisfied or waived in writing by the party entitled to the benefit
of such condition.
Section 8.2 Sellers' Obligations. At the Closing, Sellers shall
----------- --------------------
deliver to Buyer (or its nominee) the following:
(a) MNHP Xxxx of Sale and Assignment. A Xxxx of Sale and Assignment
--------------------------------
duly executed by MNHP in the form attached hereto as EXHIBIT C and with such
modifications, if any, as may be necessary or advisable to cause such forms to
be effective under applicable Legal Requirements.
(b) NHA Xxxx of Sale and Assignment. A Xxxx of Sale and Assignment
-------------------------------
duly executed by NHA in the form attached hereto as EXHIBIT D and with such
modifications, if any, as may be necessary or advisable to cause such forms to
be effective under applicable Legal Requirements.
(c) Evidence of Necessary Actions. Certified resolutions, or other
-----------------------------
evidence reasonably satisfactory to Buyer, that Sellers, the MNH Entities,
Xxxxxxxx, Xxxxxxxxx and the Ultimate Equity Holders have taken all actions
necessary to authorize the execution of this Agreement and all other Transaction
Documents and the consummation of the transactions contemplated hereby.
(d) Officer's Certificate. The certificate described in Section 7.1
---------------------
(c).
(e) FCC Counsel Opinion. The MNH FCC Counsel Opinion.
-------------------
(f) Sellers Counsel Opinions. The Sellers Counsel Opinions.
------------------------
(g) [This Section has been intentionally left blank.]
(h) Ultimate Equity Holder Guaranties. The Ultimate Equity Holder
---------------------------------
Guaranties.
-58-
(i) Lien Releases. Evidence satisfactory to Buyer that all Liens
-------------
(other than Permitted Liens and the Liens specified in SCHEDULE 7.1(N))
affecting or encumbering the Assets have been terminated, released or waived, as
appropriate, or original, executed instruments in form satisfactory to Buyer
effecting such terminations, releases or waivers.
(j) Instruments under MNH Partnership Agreement. Such instruments as
-------------------------------------------
may be necessary or advisable under the MNH Partnership Agreement to permit the
transfer of the Subject Interests to Buyer (or its nominee) and the admission of
Buyer (or its nominee) as a successor limited partner and successor general
partner of MNH.
(k) Other. Such other documents and instruments as may be necessary
-----
to effect the intent of this Agreement and consummate the transactions
contemplated hereby or as Buyer may reasonably request.
Section 8.3 Buyer's Obligations.
----------- -------------------
(a) At the Closing, Buyer shall deliver or cause to be delivered to
Sellers the following:
(i) Purchase Price. The Purchase Price (subject to adjustment as
--------------
provided in Section 8.3(b)(iii)), which shall be determinable and payable as
provided in Section 8.3(b). The amount of the Purchase Price to be paid at the
Closing shall be equal to the estimate thereof set forth in the Sellers Purchase
Price Calculation (subject to any changes or modifications thereto agreed to by
Sellers and Buyer on or before the Closing Date).
(ii) Evidence of Authorization of Actions. Certified resolutions of
------------------------------------
the Board of Directors of CCI, or other evidence reasonably satisfactory to
Sellers, that Buyer has taken all action necessary to authorize the execution of
this Agreement and all other Transaction Documents and the consummation of the
transactions contemplated hereby.
(iii) Officer's Certificate. The certificate described in
---------------------
Section 7.2(c).
(iv) CCI Counsel Opinion. The CCI Counsel Opinion.
-------------------
(v) [This Section has been intentionally left blank.]
(vi) [This Section has been intentionally left blank.]
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(vii) Interest. An amount equal to interest accruing, at the Prime
--------
Rate from October 1, 1996 through the earlier of (A) the Closing Date and (B)
December 31, 1996, on the Purchase Price payable at Closing. Such amount shall
be payable, in cash, by wire transfer of immediately available funds to such
accounts as designated in writing by Sellers to Buyer at least 5 Business Days
prior to the Closing Date.
(viii) Other. Such other documents and instruments as may be
-----
necessary to effect the intent of this Agreement and consummate the transactions
contemplated hereby.
In addition to the foregoing, Buyer shall either (i) pay in full the principal
indebtedness of MNH, all interest accrued thereon and any other amounts
otherwise due through the Closing Date arising under the MNH Loan Agreement or
(ii) deliver to the Sellers releases duly executed by the Banks, the Co-Agents
and the Agent in favor of the Sellers releasing the Sellers from any liability
under the MNH Loan Agreement and the other agreements and instruments delivered
in connection with the MNH Loan Agreement.
(b) Purchase Price. The purchase price (subject to adjustment as
--------------
provided in Section 8.3(b)(iii), the "PURCHASE PRICE") to be paid by Buyer at
the Closing for the Subject Interests shall be determined and payable as
follows:
(i) The Purchase Price shall be equal to the greater of $-0- and
the sum of:
(A) the product of (I) the sum (such sum being referred to herein as
the "DEAL PRICE") of (x) the remainder of $257,500,000 minus the consolidated
liabilities of the MNH Entities as of the Closing Time other than the
Consolidated Current Liabilities (as defined below), determined in accordance
with GAAP as consistently applied by the MNH Entities, plus (y) the Working
Capital Adjustment (as defined below), plus (z) the Capital Expenditures
Adjustment (as defined below), multiplied by (II) 0.7378, plus
(B) the product of (I) the Deal Price minus $138,250,000, multiplied
by (II) 0.020976, plus
(C) $5,000,000.
(ii) The Purchase Price shall be payable entirely in cash, which shall
be payable by wire transfer of immediately available funds, in an aggregate
amount equal to the Purchase Price in such amounts and to such accounts as
designated in writing by Sellers to Buyer at least 5 Business Days prior to the
Closing Date.
-60-
(iii) The Purchase Price shall be determined as follows:
(A) At least 5 Business Days prior to the Closing Date, Sellers shall
prepare and deliver to Buyer a detailed schedule showing Sellers' best good
faith estimate of the Purchase Price as of the Closing Time (the "SELLERS
PURCHASE PRICE CALCULATION"). Buyer shall have the opportunity to review the
Sellers Purchase Price Calculation prior to the Closing (and shall have full
access to the Assets, including the Books and Records for that purpose) and
Sellers and Buyer shall negotiate in good faith to resolve any disagreement that
may exist between Sellers and Buyer as to proper calculation of the Purchase
Price for purposes of the Closing.
(B) As promptly as practicable after the Closing Date, but in any
event within 45 days thereafter, Buyer shall prepare and deliver to Sellers a
schedule showing Buyer's determination of the Purchase Price as of the Closing
Time (the "BUYER PURCHASE PRICE CALCULATION"). If Sellers disagree with the
Buyer Purchase Price Calculation, Sellers shall give notice thereof to Buyer
within fifteen days after delivery of the Buyer Purchase Price Calculation to
Sellers.
(C) Buyer and Sellers shall attempt to settle any such disagreement;
any such settlement shall be final and binding upon Buyer and Sellers. If,
however, Buyer and Sellers are unable to settle such disagreement within 15 days
after receipt by Buyer of such notice of disagreement, such disagreement shall
be submitted to an independent certified public accounting firm mutually
acceptable to Buyer and Sellers for resolution, and the decision of such
certified public accountants shall be final and binding upon Buyer and Sellers.
All costs incurred in connection with the resolution of such disagreement by
such certified public accountants, including expenses and fees for services
rendered, shall be paid one half by Buyer and one half by Sellers. Buyer and
Sellers shall use reasonable efforts to have any such disagreement resolved
within 30 days after such disagreement is submitted to such certified public
accountants, but neither Buyer nor Sellers shall have any liability to any party
if such disagreement is not resolved within such 30-day period.
(D) Within 5 Business Days following a final determination of the
Purchase Price (whether as a result of Sellers failing to give timely notice of
Sellers's disagreement with the Buyer Purchase Price Calculation, a resolution
by Buyer and Sellers of any such disagreement, or a determination by such a
certified public accounting firm selected pursuant to paragraph (C) above to
resolve any disagreement among the parties), Buyer shall pay to Sellers the
amount of any underpayment plus interest on such amount from the Closing Date to
the date of payment at a
-61-
per annum rate equal to the Prime Rate or Sellers shall pay to Buyer the amount
of any overpayment plus interest on such amount from the Closing Date to the
date of payment at a per annum rate equal to the Prime Rate, as the case may be,
of the Purchase Price as adjusted pursuant to this Section by wire transfer in
immediately available funds.
(iv) For purposes of this Agreement:
(A) "CAPITAL EXPENDITURES ADJUSTMENT" means an amount equal to the
remainder (which may be a negative number, which, in such case, would reduce the
Purchase Price) of (I) all amounts actually expended by the MNH Entities in
respect of Capital Expenditures (determined in accordance with GAAP applied
consistently with the past practices of the MNH Entities) between July 1, 1995
and the Closing Date, minus (II) the aggregate amount of Capital Expenditures
provided for in the Capital Expenditure budget attached hereto as SCHEDULE
6.3(A)(IV) for the period between July 1, 1995 and the Closing Date.
(B) "CONSOLIDATED CURRENT ASSETS" means the consolidated current
assets of the MNH Entities as of the Closing Time other than (I) any Accounts
Receivable, (II) any Proceeds and (III) any current assets arising out of the
CCM Note (as defined in the MNH Partnership Agreement), all determined in
accordance with GAAP applied consistently with the past practices of the MNH
Entities.
(C) "CONSOLIDATED CURRENT LIABILITIES" means the consolidated current
liabilities of the MNH Entities (including any and all accrued unpaid taxes but
excluding any unearned revenue) as of the Closing Time other than the current
portion of any principal indebtedness owed by MNH under the MNH Loan Agreement,
all determined in accordance with GAAP applied consistently with the past
practices of the MNH Entities.
(D) "ELIGIBLE ACCOUNTS RECEIVABLE" means an amount equal to the sum of
(I) 95% of advertising Accounts Receivables (other than interconnect advertising
Accounts Receivables) not more than 90 days past due, 60% of such advertising
Accounts Receivables more than 90 days and not more than 120 days past due, and
0% of such advertising Accounts Receivables more than 120 days past due; (II)
97% of all interconnect advertising Accounts Receivables; and (III) 100% of all
other Accounts Receivables not more than 30 days past due, 75% of such other
Accounts Receivables more than 30 days and not more than 90 days past due, and
0% of such other Accounts Receivables more than 90 days past due, all determined
in accordance with GAAP applied consistently with the past practices of the MNH
Entities. In valuing Accounts Receivables not more than 30 days past due,
unearned revenue shall first be netted and
-62-
the amount of Accounts Receivable shall be determined without deducting any
reserves for bad accounts.
(E) "WORKING CAPITAL ADJUSTMENT" means an amount equal to (which may
be a negative number, which, in such case, would reduce the Purchase Price) (I)
the sum of (x) the Consolidated Current Assets plus (y) Eligible Accounts
Receivable, minus (II) the Consolidated Current Liabilities.
ARTICLE 9
TERMINATION AND DEFAULT
-----------------------
Section 9.1 Termination. This Agreement may be terminated and the
----------- -----------
transactions contemplated hereby may be abandoned at any time prior to the
Closing Date:
(a) By mutual written consent of Sellers and Buyer;
(b) By either Buyer or Sellers, so long as the terminating party has
not breached any of its obligations hereunder, after December 31, 1996 or such
later date to which the Closing may be extended by Sellers or Buyer pursuant to
Section 7.3 (such date being herein referred to as the "OUTSIDE CLOSING DATE"),
if the Closing shall not have occurred on or before such date;
(c) By Sellers, so long as neither Seller has breached any of its
obligations hereunder, if either (i) Buyer fails to perform any covenant in this
Agreement when performance thereof is due and does not cure such failure within
20 Business Days after Sellers deliver written notice thereof to Buyer, or (ii)
any condition in Section 7.2 of this Agreement is not satisfied or capable of
being satisfied on or before the Outside Closing Date;
(d) By Buyer, so long as Buyer has not breached any of its obligations
hereunder, if either (i) either of Sellers fails to perform any covenant in this
Agreement when performance thereof is due, and does not cure the failure within
20 Business Days after written notice by Buyer thereof to Sellers, or (ii) any
condition in Section 7.1 of this Agreement is not satisfied or capable of being
satisfied on or before the Outside Closing Date.
Section 9.2 Effect of Termination. If this Agreement is terminated
----------- ---------------------
pursuant to Section 9.1, all rights and obligations of the parties hereunder
shall terminate, except for the rights and obligations set forth in Sections
6.5(a), 11.1, 11.2 and 11.11. Subject to the provisions of Section 7.3,
termination of this Agreement pursuant to Section 9.l(c) or (d) shall not limit
or impair any remedies that either Sellers or Buyer may have
with
-63-
respect to a breach or default by the other of its representations, warranties,
covenants or agreements or obligations hereunder.
ARTICLE 10
INDEMNIFICATION
---------------
Section 10.1 Indemnification by Sellers. From and after Closing,
------------ --------------------------
each Seller shall indemnify and hold harmless CCI and its Affiliates, directors,
officers, employees, agents and representatives, and any Person claiming by or
through any of them, as the case may be, from and against any and all Losses and
Expenses arising out of or resulting from:
(a) Any representations and warranties made by either Seller, any MNH
Entity, Xxxxxxxx, Ingersoll or any of the Ultimate Equity Holders in this
Agreement or in any Transaction Document not being true and accurate in all
material respects, when made or at Closing, provided that indemnification under
this paragraph is sought within the applicable time periods and in the manner
stated in Section 10.5;
(b) Any failure by either Seller, any MNH Entity, MNHP, NHA, Meredith,
Ingersoll or any of the Ultimate Equity Holders to perform in all material
respects any of its covenants, agreements, or obligations in this Agreement or
in any Transaction Document;
(c) Any indebtedness, liability or obligation set forth on SCHEDULE
4.6 to the extent not provided for in determining the Purchase Price (either as
(i) an inclusion in the consolidated liabilities of the MNH Entities to be
deducted pursuant to Section 8.3(b)(i)(A)(I)(x) in determining the Purchase
Price or (ii) as an inclusion in the Consolidated Current Liabilities to be
deducted pursuant to Section 8.3(b)(iv)(E) in determining the Working Capital
Adjustment); and
(d) The non-delivery or non-obtaining on or before the Closing Date of
any Sellers Required Consents to the extent that the aggregate Losses and
Expenses arising out of or resulting therefrom, together with the aggregate
amount of Losses and Expenses arising out of or resulting from any Section
3.1(c) Exceptions and Section 4.3(a) Exceptions, exceed $250,000; provided,
--------
however, that Sellers shall be liable to Buyer under this Section 10.1(d) for
-------
any Losses or Expenses of Buyer arising from the non-delivery or non-obtaining
of any Sellers Required Consents that are described in a notice given by Sellers
pursuant to Section 7.3(c)(i) hereof to the extent (and only to the extent) that
the aggregate amount of such Losses and Expenses, together with the aggregate
amount of Losses and Expenses resulting from any Section 3.1(c) Exceptions and
Section 4.3(a)
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Exceptions, (i) exceed $250,000 but (ii) do not exceed $1,000,000.
Section 10.2 Indemnification by Buyer. From and after Closing, Buyer
------------ ------------------------
shall indemnify and hold harmless each Seller and its Affiliates, partners,
directors, officers, employees, agents and representatives, and any Person
claiming by or through any of them, as the case may be, from and against any and
all Losses and Expenses arising out of or resulting from:
(a) Any representations and warranties made by Buyer in this Agreement
or in any Transaction Document not being true and accurate in all material
respects when made or at Closing, provided that indemnification under this
paragraph is sought within the applicable time periods and in the manner stated
in Section 10.5;
(b) Any failure by Buyer to perform in all material respects any of
its covenants, agreements, or obligations in this Agreement or in any
Transaction Document; and
(c) The operation of the Systems after the Closing Time.
Section 10.3 Procedure for Indemnified Third Party Claim. If any
------------ -------------------------------------------
person entitled to indemnification hereunder (the "INDEMNITEE") believes that it
has suffered or incurred any Losses and Expenses for which it is entitled to
indemnification hereunder, such Indemnitee shall notify the party or parties
from whom indemnification is sought (the "INDEMNITOR") with reasonable
promptness and with reasonable particularity in light of the circumstances then
existing. Promptly after receipt by an Indemnitee of written notice of the
assertion or the commencement of any Litigation by a third party giving rise to
any claim for indemnification with respect to any matter referred to in this
Article 10, the Indemnitee shall give written notice thereof to each Indemnitor
from whom indemnification is sought and thereafter will keep the Indemnitor
reasonably informed with respect thereto if the Indemnitor does not assume the
defense of such claim; provided, however, that failure of the Indemnitee to give
the Indemnitor notice as provided in this Section 10.3 shall not relieve any
Indemnitor of its obligations hereunder except to the extent that such
Indemnitor shall have been prejudiced by such failure. In case any Litigation
is brought against any Indemnitee, the Indemnitor shall be entitled to assume
the defense thereof, at the Indemnitor's sole expense. If the Indemnitor
assumes the defense of any Litigation, it will not settle the Litigation without
the prior written consent of the Indemnitee (which consent shall not be
unreasonably withheld or delayed); provided, however, that the Indemnitor may
-------- -------
settle any Litigation without the Indemnitee's consent if such settlement (i)
makes no admission or acknowledgment of liability or
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culpability with respect to the Indemnitee, (ii) includes a complete release of
the Indemnitee and (iii) does not require the Indemnitee to make any payment or
take (or forgo) any action. The Indemnitee shall cooperate in all reasonable
respects with the Indemnitor and its attorneys in the investigation, trial and
defense of any Litigation and any appeal arising therefrom (including the filing
in the Indemnitee's name of appropriate cross claims and counterclaims). The
Indemnitee may, at its own cost, participate in any investigation, trial and
defense of such Litigation controlled by the Indemnitor and any appeal arising
therefrom. If, after receipt of a written notice pursuant to this Section 10.3,
the Indemnitor does not undertake to defend any such Litigation, the Indemnitee
may, but shall have no obligation to, contest or defend against any Litigation
and the Indemnitor shall be bound by the result obtained with respect thereto by
the Indemnitee (including, without limitation, the settlement thereof without
the consent of the Indemnitor). If there are one or more legal defenses
available to the Indemnitee that conflict with those available to the
Indemnitor, the Indemnitee shall have the right, at the expense of the
Indemnitor, to assume the defense of the Litigation; provided, however, that the
Indemnitee may not settle such Litigation without the consent of the Indemnitor,
which consent shall not be unreasonably withheld or delayed.
Section 10.4 Payment of Indemnification Amounts. Amounts payable by
------------ ----------------------------------
the Indemnitor to the Indemnitee in respect of any Losses and Expenses under
Sections 10.1 or 10.2 shall be payable by the Indemnitor as incurred by the
Indemnitee, and shall bear interest at the Prime Rate from the date of demand by
the Indemnitee for indemnification of such Losses and Expenses until the date of
payment of indemnification by the Indemnitor.
Section 10.5 Time and Manner of Certain Claims. The representations
------------ ---------------------------------
and warranties of Sellers and Buyer in this Agreement and any Transaction
Document shall survive Closing for a period of six months except that,
(a) The representations and warranties in Sections 4.9(c), 4.9(d) and
4.9(e) shall survive closing for a period of one year;
(b) The representations and warranties contained in Sections 3.1(b),
3.1(c)(i)(A), 3.2(a)(iii) (other than the first and second sentences) and (iv),
3.2(b)(ii), (iv) (other than the first and second sentences) and (v), 3.3, 4.2,
4.3(a)(i) and (ii), 4.4, 4.12, 5.1 (third and fourth sentences only), 5.2(a)(i)
and (ii), and 5.3 shall survive until the expiration of the applicable statute
of limitations; and
(c) The obligations of Sellers to indemnify Buyer with respect to any
Litigation by a third party (including any claim
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against or contingent liability of MNH under section 3.01 or 9.01 of the
Contract of Sale, dated December 20, 1994, between MNH and Sioux Falls Cable),
that relates to any claim, indebtedness, liability or obligation existing at the
Closing Time (whether or not contingent at such time) to the extent that such
claim, indebtedness, liability or obligation (i) was not reflected or reserved
against on the MNH Balance Sheet or (ii) was incurred or arose after the MNH
Balance Sheet Date (other than in the ordinary course of business of the MNH
Entities or otherwise as permitted by this Agreement or with the consent of
Buyer) and was not provided for in determining the Purchase Price (either as (A)
an inclusion in the consolidated liabilities of the MNH Entities to be deducted
pursuant to Section 8.3(b)(i)(A)(I)(x) in determining the Purchase Price or (B)
as an inclusion in the Consolidated Current Liabilities to be deducted pursuant
to Section 8.3(b)(iv)(E) in determining the Working Capital Adjustment), shall
survive closing for a period of one year from the Closing Date;
provided, however, that in any of the foregoing cases the liability of the
parties shall extend beyond such applicable survival periods with respect to any
specific breach which has been asserted in a written notice before the
expiration of the applicable survival period. No claim for indemnification
arising out of an alleged breach of any representation or warranty hereunder
shall be valid unless notice of the breach thereof shall have been given in
writing (or deemed to have been given in writing pursuant to Section 7.3(a) or
(b) hereof) prior to the expiration of the applicable survival period specified
in the preceding sentence.
Section 10.6 Certain Limitations on Indemnification. Anything in this
------------ --------------------------------------
Article 10 to the contrary notwithstanding:
(a) The amount of any particular Losses and Expenses required to be
indemnified against under Section 10.1 or 10.2 shall be reduced by (i) the
amount of any insurance proceeds paid to the Indemnitee or any of its Affiliates
with respect to such Losses and Expenses (and no right of subrogation shall
accrue to any insurer hereunder), and (ii) the amount of any tax benefit
actually realized by the Indemnitee or any of its Affiliates with respect to
such Losses and Expenses (after giving effect to the tax effect of receipt of
the indemnification payments). With respect to any claim for which indemnity
has been paid hereunder, the Indemnitor shall be subrogated to all rights of
recovery of the Indemnitee and its Affiliates against any insurer or other third
party.
(b) Neither CCI nor any of its Affiliates shall be entitled to
indemnification under Section 10.1 for any Losses and Expenses to the extent
that such Losses and Expenses arise out of breaches of representations or
warranties of Sellers contained
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herein that constitute breaches of representation or warranties for which, as at
the Closing Time, MNH would be entitled to indemnification under Section 12.3 of
the Stock Purchase Agreement, dated as of February 11, 1992, Regarding North
Central Cable Communications Corporation, as amended through the date hereof.
(c) The amount of any particular Losses that Sellers are required to
indemnify CCI and its Affiliates against pursuant to Section 10.1(a) of this
Agreement shall be limited to the product of (i) the aggregate amount of such
Losses (after giving effect to Sections 10.8(a) and (b)), multiplied by (ii) the
Sellers Indemnification Percentage.
(d) Subject to the Closing, Sellers shall have no liability under
Section 10.1(a) or (b) unless and until the aggregate amount of Losses and
Expenses otherwise subject to their indemnification obligations thereunder
exceeds $600,000 (the "MINIMUM DAMAGE REQUIREMENT"), in which case all such
Losses and Expenses in excess of $125,000 shall be indemnifiable by Sellers;
provided, however, that the Minimum Damage Requirement shall not apply to any
Losses or Expenses resulting from or arising out of any default by Sellers of
their obligations under Section 6.10 or 8.3(b)(iii). Subject to the Closing,
Sellers shall have no liability under Section 10.1, and Buyer shall have no
liability under Section 10.2 to the extent that the aggregate amount of Losses
and Expenses otherwise subject to indemnification obligations of Sellers or
Buyer, as the case may be, hereunder exceeds $20,000,000, which amount shall be
reduced to $10,000,000 with respect to any claims with respect to which notice
is not given to Sellers or Buyer (as the case may be) on or prior to the first
anniversary of the date hereof.
Section 10.7 Exclusive Remedy. Subject to the Closing, the
------------ ----------------
indemnification rights provided for in this Article 10 shall be the exclusive
remedy for Sellers or Buyer, as the case may be, for damages for any breach of
any representation, warranty, covenant or agreement contained in this Agreement
or in any certificate delivered by either Seller or Buyer at or prior to the
Closing pursuant to this Agreement; provided that the provisions of this Section
10.7 shall not apply to, or limit in any way the remedies of Sellers or Buyer,
as the case may be, with respect to any breach of, Section 8.3(b)(iii), 11.1,
11.2 or 11.11 or the respective rights of Buyer and Sellers under Section 11.13
or the rights of Buyer under any of the Ultimate Equity Holder Guaranties.
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ARTICLE 11
MISCELLANEOUS PROVISIONS
------------------------
Section 11.1 Expenses. Except as otherwise provided in Section 11.11
------------ --------
or elsewhere in this Agreement or as may otherwise be agreed to in writing by
the parties, each of the parties will pay its own expenses and the fees and
expenses of its counsel, accountants, and other experts in connection with this
Agreement and the consummation of the transactions contemplated hereby;
provided, however, that (i) filing fees under the HSR Act shall be borne one-
half by MNH and one-half by Buyer; (ii) fees, costs and expenses to be paid to
third parties that Sellers and Buyer mutually agree to in connection with
obtaining any Consents necessary for the transfer of control of any Systems
Franchise or License shall be borne by the MNH Entities (except that Buyer shall
be solely responsible for all costs and expenses which result from material
amendments to the terms of a Systems Franchise made solely at the request of
Buyer).
Section 11.2 Brokerage. Except as otherwise expressly provided in
------------ ---------
Section 3.4 as to the fees and expenses of Xxxxxxx & Associates, Sellers shall
indemnify and hold CCI harmless from and against any and all Losses and Expenses
arising from any employment by either of Sellers or any of the MNH Entities of,
or services rendered to any of them by, any finder, broker, agency or other
intermediary, in connection with the transactions contemplated hereby or any
allegation of any such employment or services; and Buyer shall indemnify and
hold Sellers harmless from and against any and all Losses and Expenses arising
from any employment by CCI of, or services rendered to it by, any finder,
broker, agency or other intermediary, in connection with the transactions
contemplated hereby or any allegation of any such employment or services. The
obligations of Sellers and Buyer under this Section 11.2 shall not be limited or
otherwise affected by the provisions of Article 10 of this Agreement, including
Section 10.5 and Section 10.6.
Section 11.3 Waivers. In the absence of a written waiver delivered
------------ -------
by a party hereto, no action taken pursuant to this Agreement, including any
investigation by or on behalf of such party, will be deemed to constitute a
waiver by such party of compliance by any other party hereto with any
representation, warranty, covenant or agreement contained herein or in any
Transaction Document. No waiver by any party hereto of any condition or of a
breach of another provision of this Agreement or any Transaction Document shall
be effective unless in writing; and no such waiver shall operate or be construed
as a waiver of any other condition or subsequent breach. The waiver by any
party of any of the conditions precedent to its obligations under this Agreement
shall not preclude it from seeking redress for
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breach of this Agreement other than with respect to the condition so waived.
Section 11.4 Notices. All notices and other communications which are
------------ -------
required to be given under this Agreement shall be in writing and shall be
deemed to have been duly given if sent by telecopy or facsimile transmission,
answer back requested, or delivered by courier or mailed, certified first class
mail, postage prepaid, return receipt requested, to the parties at the following
addresses:
To Sellers:
(Prior to the Closing)
New Heritage Associates
0000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxx
---------
Telecopy: 515/246-8210
and
(After the Closing)
New Heritage Associates
0000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxxx
Telecopy: [To be supplied at Closing]
Copy:
Sidley & Austin
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxx, Esq.
---------
Telecopy: 312/853-7036
To Buyer:
Continental Cablevision, Inc.
The Xxxxx Xxxxx
Xxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xx. Xxxxxxx X. Xxxxx
---------
Telecopy: 617/742-0530
Copy:
Xxxxxxxx & Worcester LLP
Xxx Xxxx Xxxxxx Xxxxxx
-00-
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
---------
Telecopy: 617/338-2880
or to such other address as any party will have furnished to the other by notice
given in accordance with this Section. Such notice or other communication shall
be effective (i) if delivered in person or by courier, upon actual receipt by
the intended recipient, or (ii) if sent by telecopy or facsimile transmission,
when answer back is received, or (iii) if mailed, upon the earlier of five days
after deposit in the mail and the date of delivery as shown by the return
receipt therefor.
Section 11.5 Entire Agreement; Prior Representations; Amendments.
------------ ---------------------------------------------------
This Agreement embodies the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior representations,
agreements and understandings, oral or written, with respect thereto.
Notwithstanding any representations which may have been made by either party in
connection with the transactions contemplated by this Agreement, each party
acknowledges that (i) it has not relied on any representation by the other party
with respect to such transactions, the Assets, or the Systems except those
contained in this Agreement or the Schedules and Exhibits hereto and (ii) its
execution of this Agreement specifically precludes any negligent
misrepresentation or other claims by it based on any representation made by the
other party which is not contained in this Agreement or the Schedules or
Exhibits hereto. This Agreement may not be modified orally, but only by an
agreement in writing signed by the party or parties against whom any waiver,
change, amendment, modification or discharge may be sought to be enforced.
Section 11.6 Binding Effect; Benefits. This Agreement will inure to
------------ ------------------------
the benefit of and will be binding upon the parties hereto and their respective
heirs, legal representatives, successors and permitted assigns. Neither of
Sellers nor Buyer may assign this Agreement prior to the Closing or delegate any
of its duties hereunder prior to the Closing to any other Person without the
prior written consent of the other; except that Buyer may assign its rights or
delegate its duties under this Agreement to any Affiliate of CCI, provided that
in the case of any such assignment (i) the assignee shall assume in writing all
of Buyer's obligations hereunder, (ii) Buyer shall not be released from any of
its representations, warranties and obligations hereunder by reason of such
assignment, and (iii) the obligations of the Sellers to consummate the
transactions contemplated by Article 2 of this Agreement shall be subject to the
delivery by such assignee, on or prior to the Closing Date, of an agreement
signed on its behalf and in form reasonably acceptable to the Sellers containing
representations and warranties substantially
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similar to those made by Buyer in Article 5 and an opinion of counsel to the
assignee similar to the CCI Counsel Opinion.
Section 11.7 Counterparts. This Agreement may be executed in any
------------ ------------
number of counterparts, each of which, when executed, will be deemed to be an
original and all of which together will be deemed to be one and the same
instrument.
Section 11.8 GOVERNING LAW. THE VALIDITY, PERFORMANCE AND
------------ -------------
ENFORCEMENT OF THIS AGREEMENT AND ALL TRANSACTION DOCUMENTS, UNLESS EXPRESSLY
PROVIDED TO THE CONTRARY, WILL BE GOVERNED BY THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS, WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAW OF
SUCH COMMONWEALTH.
Section 11.9 Severability. Any term or provision of this Agreement
------------ ------------
which is held to be invalid or unenforceable for any reason 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.
Section 11.10 Third Parties, Joint Ventures. This Agreement
------------- -----------------------------
constitutes an agreement solely among the parties hereto and, except as
otherwise provided herein, is not intended to and will not confer any rights,
remedies, obligations or liabilities, legal or equitable, including any right of
employment, on any Person other than the parties hereto and their respective
successors or permitted assigns, or otherwise constitute any Person a third
party beneficiary under or by reason of this Agreement. Nothing in this
Agreement, express or implied, is intended to or will constitute the parties
hereto partners or participants in a joint venture.
Section 11.11 Attorneys' Fees. If any Litigation between Sellers and
------------- ---------------
Buyer with respect to this Agreement or the transactions contemplated hereby
will be resolved or adjudicated by a Judgment of any court, the party prevailing
under such Judgment shall be entitled, as part of such Judgment, to recover from
the other party its reasonable attorneys' fees and costs and expenses of
litigation.
Section 11.12 Tax Consequences. No party to this Agreement makes any
------------- ----------------
representation or warranty, express or implied, with respect to the tax
implications of any aspect of this Agreement on any other party to this
Agreement, and all parties expressly disclaim 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.
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Section 11.13 Specific Performance. Sellers acknowledge that money
------------- --------------------
damages are not an adequate remedy for violations of this Agreement by either of
Sellers and that Buyer may, in its sole discretion, apply to a court of
competent jurisdiction for specific performance or injunctive or other relief as
such court may deem just and proper in order to enforce this Agreement or
prevent any violation hereof by either of Sellers and, to the extent permitted
by applicable Legal Requirements, Seller waives any objection to the imposition
of such relief.
[The remainder of this page has been intentionally left blank.]
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Sellers and Buyer have duly executed this Agreement as of the date
first written above.
SELLERS:
XXXXXXXX/NEW HERITAGE PARTNERSHIP
By: New Heritage Associates, General Partner
By: Ingersoll Group, Inc., General Partner
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name:
Title: Chairman
NEW HERITAGE ASSOCIATES
By: Ingersoll Group, Inc., General Partner
By: /s/ Xxxxx X. Xxxxxx
--------------------------------
Name:
Title: Chairman
BUYER:
CONTINENTAL CABLEVISION, INC.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Name:
Title: Vice Chairman
-74-
EXHIBIT A
---------
Exhibit A lists Inventory Items and will be provided upon request by the
Commission.
-75-
EXHIBIT B TO THE PURCHASE AGREEMENT
Continental Cablevision, Inc.
The Xxxxx Xxxxx
Xxxxx Xxxxx
Xxxxxx, XX 00000
GUARANTY AGREEMENT
------------------
Dear Sirs and Mesdames:
Reference is hereby made to the Purchase Agreement, dated as of March __,
1996 (as from time to time amended and in effect, the "PURCHASE AGREEMENT"), by
and among Xxxxxxxx/New Heritage Partnership, an Iowa general partnership
("MNHP"), New Heritage Associates, an Iowa general partnership ("NHA" and,
together with MNHP, "SELLERS"), and Continental Cablevision, Inc., a Delaware
corporation ("BUYER"). Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings ascribed to them in the Purchase
Agreement.
The Purchase Agreement provides, among other things, for the purchase by
Buyer of the Subject Interests of the Sellers for cash consideration. The
undersigned (the "GUARANTOR") is one of the Ultimate Equity Holders and, as
such, will receive directly or indirectly from the Seller of which the
undersigned is an Ultimate Equity Holder one or more distributions of a portion
of such cash consideration. Accordingly, the Guarantor is receiving a
substantial and material benefit, and otherwise substantially and materially
benefits indirectly as an Ultimate Equity Holder, from the Closing of the
transactions contemplated by the Purchase Agreement.
In consideration of benefits received by the Guarantor from Buyer's Closing
of the transactions contemplated by the Purchase Agreement, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Guarantor, intending to be legally bound, hereby agrees as
follows:
Section 1. Unconditional Guaranty.
----------------------
(a) The Guarantor hereby unconditionally guarantees to Buyer the due
and punctual payment and performance of all present and future indebtedness,
obligations and liabilities, whether absolute or contingent, now existing or
hereafter arising, of Sellers, or either of them, arising out of any of the
agreements, covenants, obligations or liabilities of Sellers under Article 10 of
the Purchase Agreement, as amended and in effect from time to time and together
with any substitutions or replacements therefor and each other agreement and
instrument now or from time to time evidencing, securing or pertaining to any of
the agreements, covenants or obligations of Sellers under Article 10 of the
-2-
Purchase Agreement (collectively, the "GUARANTEED OBLIGATIONS"), including the
due and punctual payment of all amounts and other sums, together with all
interest accrued thereon to the extent provided in such Article 10, of any and
all Guaranteed Obligations now or hereafter owed by Sellers, or either of them,
or any other Person under the Guaranteed Obligations, in each case as and when
the same shall become due and payable, and the due and punctual performance and
observance of all other obligations under the Guaranteed Obligations, this
guaranty being an absolute, unconditional, present and continuing guaranty of
payment and not of collectibility and being in no way conditional or contingent;
and in case any part of the Guaranteed Obligations shall not have been paid,
performed or observed when payable or requested to be performed or observed, the
Guarantor will, promptly upon receipt of notice from Buyer, immediately pay or
cause to be paid to Buyer the amount of, or perform or cause the performance of,
such Guaranteed Obligations.
(b) The Guarantor further agrees that if at any time all or any part of
any payment theretofore applied by Buyer to any of the Guaranteed Obligations is
or must be rescinded or returned or restored for any reason whatsoever
(including the in solvency, bankruptcy or reorganization of either Seller), such
Guaranteed Obligations shall, for the purposes of this Agreement, to the extent
that such payment is or must be rescinded, restored or returned, be deemed to
have continued in existence, notwithstanding such application, and this
Agreement shall continue to be effective or be reinstated, as the case may be,
as to such Guaranteed Obligations, all as though such application by Buyer had
not been made.
(c) The obligations of the Guarantor hereunder shall be absolute and
unconditional, shall not be subject to any counterclaim, setoff, recoupment or
defense based upon any claim the Guarantor may have against Buyer or any other
Person (whether or not arising in connection with the Purchase Agreement
(including the Guaranteed Obligations or any of the transactions contemplated
thereby), and shall remain in full force and effect without regard to, and shall
not be released, altered, exhausted, discharged or in any way affected by any
circumstance or condition (whether or not the Guarantor shall have any knowledge
or notice thereof), including: (i) any amendment or modification of or
supplement to the Purchase Agreement (including the Guaranteed Obligations) or
of any obligation, duty or agreement of Sellers, or either of them, or any
other Person thereunder or in respect thereof, (ii) any assignment or transfer
in whole or in part of any Guaranteed Obligations, (iii) any furnishing or
acceptance of any direct or indirect security or guaranty, or any release of or
non-perfection or invalidity of any direct or indirect security or guaranty, for
the Guaranteed Obligations, (iv) any waiver, consent, extension, renewal,
indulgence, settlement, compromise or other action or inaction under or in
-3-
respect of any such instrument, or any exercise or non-exercise of any right,
remedy, power or privilege under or in respect of any such instrument (whether
by operation of law or otherwise), (v) any bankruptcy, insolvency,
reorganization, arrangement, readjustment, composition, liquidation or similar
proceeding with respect to Sellers, or either of them, or any other Person or
any of their respective properties or creditors or any resulting release or
discharge of any Guaranteed Obligations; (vi) the voluntary or involuntary sale
or other disposition of all or substantially all the assets of Sellers, or
either of them, or any other Person, (vii) the voluntary or involuntary
liquidation, dissolution or termination of Sellers, or either of them, or any
other Person, (viii) any invalidity or unenforceability, in whole or in part, of
any term hereof or of the Purchase Agreement (including the Guaranteed
Obligations) or any provision of any applicable law or regulation purporting to
prohibit the payment or performance by Sellers, or either of them, or any other
Person of any Guaranteed Obligations, or (ix) any failure on the part of
Sellers, or either of them, or any other Person for any reason to perform or
comply with any term of the Guaranteed Obligations.
(d) If for any reason Sellers, or either of them, or any other Person
is under no legal obligation to discharge any of the Guaranteed Obligations, or
if any other moneys included in the Guaranteed Obligations have become
unrecoverable from Sellers, or either of them, or any other Person by operation
of law or for any other reason, including the invalidity or irregularity in
whole or in part of any Guaranteed Obligation, the legal disability of Sellers,
or either of them, or any other obligor in respect of any Guaranteed
Obligations, any discharge of or limitation on the liability of Sellers, or
either of them, or any other Person or any limitation on the method or terms of
payment under any Guaranteed Obligation which may now or hereafter be caused or
imposed in any manner whatsoever (whether consensual or arising by operation of
law or otherwise), the guaranty contained in this Agreement shall nevertheless
remain in full force and effect and shall be binding upon the Guarantor to the
same extent as if the Guarantor at all times had been the principal obligor on
all such Guaranteed Obligations.
Section 2. Waivers. The Guarantor hereby waives, to the fullest extent
-------
permitted by applicable law, (i) all presentments, demands for performance,
notices of nonperformance, protests, notices of protests and notices of dishonor
in connection with the Guaranteed Obligations or any agreement relating thereto,
(ii) notice of acceptance of this Agreement, (iii) notice of any indulgence,
extensions or renewals granted to any obligor with respect to any of the
Guaranteed Obligations, (iv) any requirement of diligence or promptness in the
enforcement of rights under any of the Guaranteed Obligations or any other
agreement or instrument directly or indirectly relating thereto or to the
Guaranteed Obligations, (v) any enforcement of any
-4-
present or future agreement or instrument relating directly or indirectly
thereto or to the Guaranteed Obligations, (vi) notice of any of the matters
referred to in Section 1(c) hereof, (vii) any and all notices of every kind and
description which may be required to be given by any statute or rule of law and
any defense of any kind which it may now or hereafter have with respect to its
liability under this Agreement, (viii) any right to require Buyer, as a
condition of enforcement of this Agreement, to proceed against Sellers, or
either of them, or any other Person or to proceed against or exhaust any
security held by Buyer at any time or to pursue any other right or remedy in
Buyer's power before proceeding against Guarantor, (ix) any defense that may
arise by reason of the incapacity, lack of authority, death or disability of any
other Person or Persons or the failure of Buyer to file or enforce a claim
against the estate (in administration, bankruptcy, reorganization, insolvency or
any other proceeding) of any other Person or Persons, (x) any defense based upon
an election of remedies by Buyer, (xi) any defense based upon any lack of
diligence by Buyer in the collection of any Guaranteed Obligation, (xii) any
duty on the part of Buyer to disclose to the Guarantor any facts Buyer may now
or hereafter know about Sellers, or either of them, (xiii) any defense arising
because of an election made by Buyer under Section 1111(b)(2) of the Federal
Bankruptcy Code, (xiv) any defense based on any borrowing or grant of a security
interest under Section 364 of the Federal Bankruptcy Code, and (xv) any defense
based upon or arising out of any defense which Sellers, or either of them, or
any other Person may have to the payment or performance of the Guaranteed
Obligations.
Section 3. Waiver of Subrogation and Claims. The Guarantor hereby
--------------------------------
irrevocably waives, until such time as the Guaranteed Obligations shall have
been paid and satisfied in full, any and all rights of subrogation,
indemnification, contribution and other claims which the Guarantor may now or
hereafter have against Sellers, or either of them, or any other Person liable
with respect to the Guaranteed Obligations or any affiliates of Sellers, or
with respect to any of such Persons respective properties, by reason of any
payment made hereunder, including the benefit of any setoff or counterclaim or
proof against dividend, composition or payment by Sellers, or either of them, or
any such Person.
Section 4. No Effect of Automatic Stay. If payment or performance of
---------------------------
any Guaranteed Obligation is stayed upon the insolvency, bankruptcy or
reorganization of Sellers, or either of them, or any other Person or otherwise,
all such amounts shall nonetheless be payable by the Guarantor hereunder
forthwith upon demand.
Section 5. Limitation of Liability. The liability of the Guarantor
-----------------------
under this Agreement (other than the liability of
-5-
the Guarantor under Section 6 hereof) shall not exceed $____________.
Section 6. Expenses. The Guarantor will pay all costs and expenses of
--------
Buyer of obtaining performance under this Agreement, including all reasonable
attorneys fees and costs and expenses of collection if default is made in
payment under this Agreement; provided, however, that, if any litigation between
Buyer and the Guarantor with respect to this Agreement or the transactions
contemplated hereby is resolved or adjudicated by a final judgment or order of
any court, the party prevailing under such judgment or order shall be entitled,
as part of such judgment or order, to recover from the other party its
reasonable attorneys' fees and costs and expenses of litigation. The
obligations of the Guarantor under this Section 6 shall be in addition to the
other obligations of the Guarantor hereunder and shall not be limited or
otherwise affected by Section 6 hereof.
Section 7. Miscellaneous Provisions.
------------------------
(a) Notices.
-------
(i) All notices and other communications under this Agreement shall be in
writing (which shall include communications by telecopy, answer back requested,
if a telecopier number is listed below) and shall be deemed to have been given
when deposited in the mail, first class, post-prepaid, or sent out by
telecopier, answer back requested, addressed to the party to which such notice
is directed at its respective address as follows:
(A) In the case of the Guarantor, to it at:
(B) In the case of Buyer, to it at: Continental Cablevision, Inc.,
Xxxxx Xxxxx, Xxx Xxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xx.
Xxxxxxx X. Xxxxx Telecopy No. 617-742-____); with a copy to Xxxxxxxx &
Worcester, a Registered Limited Liability Partnership, Xxx Xxxx Xxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxx, Esq. (Telecopy No.
617-338-2880).
(ii) Any party hereto may change the address to which notices shall be
directed to it under this Section 7(a) by giving written notice of such change
to the other party in accordance with this Section 7(a).
-6-
(b) No Waivers of Rights Hereunder; Amendments. No course of dealing
------------------------------------------
or performance by Buyer, including any delay or forbearance in exercising any
right under any of the Guaranteed Obligations, shall operate as a waiver or
relinquishment of any rights hereunder, or the amendment, release or novation of
any provision hereof, nor shall any single or partial exercise of any right
hereunder preclude other or further exercises thereof or the exercise of any
other right hereunder. No waiver of any rights of Buyer under, nor any
amendment of any provision of, this Agreement shall be enforceable against Buyer
unless in writing and signed by its officers, and unless it expressly refers to
the right or provision affected. Any such waiver shall be limited solely to the
specific event waived.
(c) Assignment. All the provisions of this Agreement shall be binding
----------
upon the Guarantor and its successors and assigns and inure to the benefit of
Buyer its successors, assigns and transferees. The Guarantor may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of Buyer unless the Guarantor remains liable hereunder along
with the assignee or transferee.
(d) Construction.
------------
(i) Words used in this Agreement, regardless of the gender and number used,
shall be deemed and construed to include any other gender, masculine, feminine,
or neuter, and any other number, singular or plural, as the context requires.
(ii) As used in this Agreement, the word "INCLUDING" is not limiting, and
the word "OR" is not exclusive.
(iii) The words "THIS AGREEMENT", "HERETO", "HEREIN", "HEREUNDER",
"HEREOF", and words or phrases of similar import refer to this Agreement as a
whole and not to any particular article, section, subsection, paragraph, clause
or other portion of this Agreement.
(iv) Unless the context requires otherwise, a reference herein to a
particular article, section, subsection, paragraph or clause shall refer to such
article, section, subsection, paragraph or clause of this Agreement.
(v) This Agreement has been negotiated by Sellers, the Guarantor and Buyer
and their respective legal counsel, and legal or equitable principles that might
require the construction of this Agreement or any provision of this Agreement
against the party drafting this Agreement shall not apply in any construction or
interpretation of this Agreement.
-7-
(vi) The section and other headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
(e) Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
(f) Governing Law; Jurisdiction. THIS AGREEMENT SHALL BE CONSTRUED IN
---------------------------
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS.
EACH OF THE GUARANTOR AND BUYER SUBMITS TO THE JURISDICTION OF ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF MINNESOTA FOR ALL
MATTERS IN CONNECTION HEREWITH. THE GUARANTOR HEREBY IRREVOCABLY AGREES TO BE
ACCEPT AND BE BOUND BY SERVICE OF PROCESS EFFECTED IN ANY MANNER AUTHORIZED BY
THE RULES OF PRACTICE OF ANY SUCH COURT, AND, TO THE EXTENT THAT IT MAY LAWFULLY
DO SO, EXPRESSLY AND IRREVOCABLY WAIVES AND AGREES NOT TO ASSERT, BY WAY OF
MOTION, DEFENSE, COUNTERCLAIM OR OTHERWISE, THAT IT IS NOT SUBJECT TO THE
JURISDICTION OF ANY SUCH COURT OR THAT THE ACTION, SUIT OR PROCEEDING IS BROUGHT
IN AN INCONVENIENT FORUM OR THAT THE VENUE THEREOF IS IMPROPER. THE GUARANTOR
HEREBY AGREES THAT ALL OF BUYER'S RIGHTS HEREUNDER WERE THE RESULT OF
NEGOTIATIONS AMONG BUYER, SELLERS AND THE GUARANTOR, AND THAT THE BENEFITS TO
SELLERS AND THE GUARANTOR UNDER THE PURCHASE AGREEMENT WERE INDUCED IN A
MATERIAL RESPECT BY THE BENEFITS GRANTED TO THE BUYER HEREUNDER. IN THIS
CONTEXT, THE GUARANTOR HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO A TRIAL BY
JURY AS TO ANY AND ALL MATTERS AND ISSUES WHICH MAY ARISE DIRECTLY OR INDIRECTLY
HEREFROM OR FROM ANY OTHER AGREEMENT, INSTRUMENT OR DOCUMENT EXECUTED IN
CONJUNCTION HEREWITH, INCLUDING COUNTERCLAIMS, IF ANY.
(g) Severability. Any provision of this Agreement which is prohibited
------------
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof in that jurisdiction or affecting
the validity or enforceability of such provision in any other jurisdiction.
(h) Person Defined. As used herein, the term "Person" shall include an
--------------
human being, corporation, partnership, limited liability company, trust or
unincorporated association, or a government or any agency or political
subdivision thereof, or any other entity.
(i) Advice of Counsel. The Guarantor acknowledges that it has been
------------------
represented by, and has received the advice of, legal counsel of its choosing in
connection with its execution
-8-
and delivery of this Agreement and its debts, liabilities and obligations
hereunder.
(j) Exclusive Remedy. The rights of Buyer provided for in this
----------------
Agreement shall be the exclusive remedy for Buyer against the Guarantor for
damages for any breach of any representation, warranty, covenant or agreement of
Seller, or either of them, contained in the Purchase Agreement or in any
certificate delivered by either Seller at or prior to the Closing pursuant to
the Purchase Agreement; provided that the provisions of this Section 7(j) shall
not apply to or limit in any way the remedies of Buyer against any other Person
or the right of Buyer to seek specific performance or injunctive or other
equitable relief against the Guarantor in order to enforce this Agreement or
prevent any violation or avoidance hereof by the Guarantor and, to the extent
permitted by applicable law, the Guarantor waives any objection to the
imposition of such relief.
This Agreement shall become a binding agreement under seal as of the day and
year first above written upon the execution and delivery hereof by or on behalf
of the Guarantor.
Very truly yours,
_______________________________________
(Signature)
Print Name:____________________________
Print Address:_________________________
_________________________
_________________________
Telecopy No.:__________________________
The foregoing is hereby accepted:
CONTINENTAL CABLEVISION, INC.
By:______________________________
Name:
Title:
EXHIBIT C TO THE
PURCHASE AGREEMENT
XXXX OF SALE AND ASSIGNMENT
---------------------------
THIS XXXX OF SALE AND ASSIGNMENT, dated as of ________ __, 1996, from
Xxxxxxxx/New Heritage Partnership, an Iowa general partnership ("SELLER"), to
Continental Cablevision, Inc., a Delaware corporation ("BUYER"),
WITNESSETH:
----------
WHEREAS, pursuant to the Purchase Agreement dated as of March __, 1996 (the
"PURCHASE AGREEMENT") among Buyer, Seller and New Heritage Associates, an Iowa
general partnership, Seller has agreed to sell, assign, transfer and convey to
Buyer and Buyer has agreed to accept assignment, transfer and conveyance from
Seller of Seller's ______________ percent (__.__%) general partnership interest
(the "PARTNERSHIP INTEREST") in Xxxxxxxx/New Heritage Strategic Partners L.P.,
an Iowa limited partnership (the "PARTNERSHIP");
NOW, THEREFORE, in consideration of the premises and the payment to Seller
of the Purchase Price (as defined in the Agreement) required to be paid to
Seller on the date hereof pursuant to the Purchase Agreement, the receipt and
sufficiency of which are hereby acknowledged by Seller, and for other good and
valuable consideration:
Section 1. Seller has granted, bargained, sold, conveyed, assigned,
-------- ----
transferred, set over and delivered, and by these presents does hereby grant,
bargain, sell, convey, assign, transfer, set over and deliver, absolutely, to
Buyer, and its successors and assigns, the Partnership Interest and all of
Seller's right, title and interest therein and thereto.
Section 2. Buyer shall, from and after the date hereof, have all of the
-------- ----
rights, privileges and powers of a general partner of the Partnership under the
Certificate of Limited Partnership, dated December 29, 1991, of the Partnership,
as from time to time amended and in effect, and the Restated Agreement of
Limited Partnership, dated as of December 30, 1991, of the Partnership, as from
time to time amended and in effect, including but not limited to the right to
receive all distributions from the Partnership with respect to the Partnership
Interest and all other rights, privileges and powers appertaining thereto.
Section 3. Buyer hereby consents to and accepts the assignment of the
-------- ----
Partnership Interest and all of Seller's right, title and interest therein, and
Buyer agrees to pay and perform all of the obligations arising after the date
hereof of a general partner of the Partnership.
Section 4. Seller covenants and agrees that it shall execute, deliver
-------- ----
and acknowledge (or cause to be executed, acknowledged and delivered), from time
to time at the request of Buyer and without further consideration, all such
further instruments of conveyance, transfer, assignment and further assurance
and perform or cause to be performed all such other acts as may reasonably be
required by Buyer (including but not limited to amendments to partnership
agreements and amendments to certificates of limited partnership) in order to
vest in and confirm to Buyer the title of Seller to, and its right and interest
in, the Partnership Interest and to carry out the purpose and assure the
benefits of this Xxxx of Sale and Assignment and the Purchase Agreement to Buyer
in all respects.
Section 5. This Xxxx of Sale and Assignment is executed by, and shall
-------- ----
be binding upon, Seller and its successors and assigns, for the uses and
purposes above set forth and referred to and shall inure to the benefit of Buyer
and its successors and assigns; shall be effective for all purposes as of the
day and year first set forth above; is intended to and shall take effect as a
sealed instrument; and shall be governed by and construed and enforced in
accordance with the laws (other than those governing conflict of law questions)
of The Commonwealth of Massachusetts.
IN WITNESS WHEREOF, Seller has caused this Xxxx of Sale and Assignment to be
duly executed on the day and year first above set forth.
SELLER:
XXXXXXXX/NEW HERITAGE PARTNERSHIP
By: NEW HERITAGE ASSOCIATES, General Partner
By: Ingersoll Group, Inc., General Partner
By:_________________________________
Name:
Title:
By: New Heritage Associates, Inc., General Partner
By:_________________________________
Name:
Title:
By: XXXXXXXX CABLE, INC., General Partner
By:_________________________________
Name:
Title:
ACCEPTED:
CONTINENTAL CABLEVISION, INC.
By:____________________________
Name:
Title:
COMMONWEALTH OF MASSACHUSETTS)
) ss.
COUNTY OF SUFFOLK )
On this ______ day of ___________, 1996, before me personally appeared
__________________, to me known and known by me to be the ____________ of
Ingersoll Group, Inc., an Iowa corporation, and acknowledged said instrument by
him/her executed to be his/her free act and deed as ____________ as aforesaid.
_________________________
Notary Public
My commission expires:
COMMONWEALTH OF MASSACHUSETTS)
) ss.
COUNTY OF SUFFOLK )
On this ______ day of ___________, 1996, before me personally appeared
__________________, to me known and known by me to be the ____________ of New
Heritage Associates, Inc., an Iowa corporation, and acknowledged said instrument
by him/her executed to be his/her free act and deed as ____________ as
aforesaid.
_________________________
Notary Public
My commission expires:
COMMONWEALTH OF MASSACHUSETTS)
) ss.
COUNTY OF SUFFOLK )
On this ______ day of ___________, 1996, before me personally appeared
__________________, to me known and known by me to be the ____________ of
Xxxxxxxx Cable, Inc., an __________ corporation, and acknowledged said
instrument by him/her executed to be his/her free act and deed as ____________
as aforesaid.
_________________________
Notary Public
My commission expires:
EXHIBIT D TO THE
PURCHASE AGREEMENT
XXXX OF SALE AND ASSIGNMENT
---------------------------
THIS XXXX OF SALE AND ASSIGNMENT, dated as of ________ __, 1996, from New
Heritage Associates, an Iowa general partnership ("SELLER"), to Continental
Cablevision, Inc., a Delaware corporation ("BUYER"),
WITNESSETH:
----------
WHEREAS, pursuant to the Purchase Agreement dated as of March __, 1996 (the
"PURCHASE AGREEMENT") among Buyer, Seller and Xxxxxxxx/New Heritage Partnership,
an Iowa general partnership, Seller has agreed to sell, assign, transfer and
convey to Buyer and Buyer has agreed to accept assignment, transfer and
conveyance from Seller of Seller's ______________ percent (__.__%) limited
partnership interest (the "PARTNERSHIP INTEREST") in Xxxxxxxx/New Heritage
Strategic Partners L.P., an Iowa limited partnership (the "PARTNERSHIP");
NOW, THEREFORE, in consideration of the premises and the payment to Seller
of the Purchase Price (as defined in the Agreement) required to be paid to
Seller on the date hereof pursuant to the Purchase Agreement, the receipt and
sufficiency of which are hereby acknowledged by Seller, and for other good and
valuable consideration:
Section 1. Seller has granted, bargained, sold, conveyed, assigned,
-------- ----
transferred, set over and delivered, and by these presents does hereby grant,
bargain, sell, convey, assign, transfer, set over and deliver, absolutely, to
Buyer, and its successors and assigns, the Partnership Interest and all of
Seller's right, title and interest therein and thereto.
Section 2. Buyer shall, from and after the date hereof, have all of the
-------- ----
rights, privileges and powers of a general partner of the Partnership under the
Certificate of Limited Partnership, dated December 26, 1991, of the Partnership,
as from time to time amended and in effect, and the Restated Agreement of
Limited Partnership, dated as of December 30, 1991, of the Partnership, as from
time to time amended and in effect, including but not limited to the right to
receive all distributions from the Partnership with respect to the Partnership
Interest and all other rights, privileges and powers appertaining thereto.
Section 3. Buyer hereby consents to and accepts the assignment of the
-------- ----
Partnership Interest and all of Seller's right, title and interest therein, and
Buyer agrees to pay and perform all of the obligations arising after the date
hereof of a limited partner of the Partnership.
Section 4. Seller covenants and agrees that it shall execute, deliver
-------- ----
and acknowledge (or cause to be executed, acknowledged and delivered), from time
to time at the request of Buyer and without further consideration, all such
further instruments of conveyance, transfer, assignment and further assurance
and perform or cause to be performed all such other acts as may reasonably be
required by Buyer (including but not limited to amendments to partnership
agreements and amendments to certificates of limited partnership) in order to
vest in and confirm to Buyer the title of Seller to, and its right and interest
in, the Partnership Interest and to carry out the purpose and assure the
benefits of this Xxxx of Sale and Assignment and the Purchase Agreement to Buyer
in all respects.
Section 5. This Xxxx of Sale and Assignment is executed by, and shall
-------- ----
be binding upon, Seller and its successors and assigns, for the uses and
purposes above set forth and referred to and shall inure to the benefit of Buyer
and its successors and assigns; shall be effective for all purposes as of the
day and year first set forth above; is intended to and shall take effect as a
sealed instrument; and shall be governed by and construed and enforced in
accordance with the laws (other than those governing conflict of law questions)
of The Commonwealth of Massachusetts.
IN WITNESS WHEREOF, Seller has caused this Xxxx of Sale and Assignment to be
duly executed on the day and year first above set forth.
SELLER:
NEW HERITAGE ASSOCIATES
By: Ingersoll Group, Inc., General Partner
By:_________________________________
Name:
Title:
By: New Heritage Associates, Inc., General Partner
By:_________________________________
Name:
Title:
ACCEPTED:
BUYER:
CONTINENTAL CABLEVISION, INC.
By:____________________________
Name:
Title:
COMMONWEALTH OF MASSACHUSETTS)
) ss.
COUNTY OF SUFFOLK )
On this ______ day of ___________, 1996, before me personally appeared
__________________, to me known and known by me to be the ____________ of
Ingersoll Group, Inc., an Iowa corporation, and acknowledged said instrument by
him/her executed to be his/her free act and deed as ____________ as aforesaid.
_________________________
Notary Public
My commission expires:
COMMONWEALTH OF MASSACHUSETTS)
) ss.
COUNTY OF SUFFOLK )
On this ______ day of ___________, 1996, before me personally appeared
__________________, to me known and known by me to be
the ____________ of New Heritage Associates, Inc., an Iowa corporation, and
acknowledged said instrument by him/her executed to be his/her free act and deed
as ____________ as aforesaid.
_________________________
Notary Public
My commission expires:
