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FIRST AMENDMENT TO ASSET EXCHANGE AGREEMENT
FIRST AMENDMENT TO ASSET EXCHANGE AGREEMENT (the "Amendment"), dated as
of June 15, 1998, by and between Cable One, Inc., a Delaware corporation ("Cable
One"), and TCA Cable Partners, a Delaware general partnership ("TCA").
RECITALS
A. Cable One and TCA are parties to the Asset Exchange Agreement, dated
as of January 14, 1998 (the "Exchange Agreement").
B. Cable One and TCA desire to amend the Exchange Agreement in order to
exclude from the transaction contemplated thereby the Xxxxxxxxxx/Xxxxxxxx System
(as defined herein) and the Xxxxxxxxx System (as defined herein) and to update
their respective disclosure schedules.
In consideration of the premises and the respective representations,
warranties and agreements contained herein and in the Exchange Agreement, the
parties hereto agree as follows:
SECTION 1. The first three sentences of Section 5.1 of the Exchange
Agreement are hereby deleted and the following sentences are hereby added to
replace such deleted sentences:
Cable One has delivered to TCA complete and correct copies of the (i)
internally generated unaudited balance sheets and related statements of income
for the year ending as of December 31, 1996, both of which reflect the operation
of the Cable One Systems and the cable television system serving the Texas
communities of Xxxxxxxxxx and Xxxxxxxx (the "Xxxxxxxxxx/Xxxxxxxx System") as a
consolidated entity, and (ii) internally generated unaudited interim balance
sheets and related statements of income for and as of each quarter ending on and
up to September 30, 1997, both of which reflect the operation of the Cable One
Systems and the Xxxxxxxxxx/Xxxxxxxx System as a consolidated entity (all of such
financial statements being hereinafter referred to as "Cable One's Financial
Statements"). Cable One's Financial Statements are in accordance with the books
and records of the Cable One Systems and the Xxxxxxxxxx/Xxxxxxxx System, were
prepared in accordance with generally accepted accounting principles, applied on
a consistent basis throughout the periods covered thereby, and, except as may be
described therein, present fairly the financial condition of the Cable One
Systems and the Xxxxxxxxxx/Xxxxxxxx System on a consolidated basis at the dates
and for the periods indicated subject, in the case of unaudited Cable One's
Balance Sheets, only to standard year-end adjustments and the omission of
footnotes. The consolidated balance sheets as of December 31, 1996 of the Cable
One Systems and the Xxxxxxxxxx/Xxxxxxxx System are herein collectively called
the "Cable One Balance Sheets."
SECTION 2. Subsections 7.3.1 and 7.3.2 of the Exchange Agreement are
hereby amended to read in their entirety as follows:
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7.3.1. Each Party may, but shall have no obligation to employ or offer
employment to any employee of the other Party's Cable Business. Within 90 days
after the date of execution of this Agreement, each Party shall provide to the
other a list of all active employees of its Systems and, with respect to Cable
One only, its Xxxxxxxxxx/Xxxxxxxx System (excluding all employees subject to a
collective bargaining agreement or represented by a labor organization, if any)
as of a recent date, showing then-current positions and rates of compensation
and indicating which of such employees such Party desires to retain as its
employees (the "Retained Employees"). Within 30 days after receipt of this list,
the Party receiving such list will provide the other in writing a list of
employees such Party or its Affiliates desires to employ following the Closing,
which list shall not include any Retained Employees. As of the Closing Date,
each Party shall terminate the employment of all its employees who were employed
incidental to the conduct of such Party's Cable Business and, with respect to
Cable One only, the Xxxxxxxxxx/Xxxxxxxx System, other than Retained Employees.
7.3.2. Each Party will pay to all employees employed in its Cable
Business and, with respect to Cable One only, its Xxxxxxxxxx/Xxxxxxxx System,
all compensation, including salaries, commissions, bonuses, deferred
compensation, severance, insurance, vacation, sick pay and other compensation or
benefits to which they are entitled for periods prior to the Closing, including,
without limitation, all amounts, if any, payable on account of the termination
of their employment. Each Party agrees to cooperate in all reasonable respects
with the other Party to allow the other Party to evaluate and interview
employees of such Party's Cable Business and, with respect to Cable One only,
the Xxxxxxxxxx/Xxxxxxxx System, to make hiring decisions. Each Party shall, at
its cost, be permitted to conduct pre-employment physical examinations
(including drug screen urinalysis) and other appropriate pre-hire investigations
of such of the other Party's employees that it may desire to hire, and each
Party may make any offer of employment to any such employee conditional upon its
receipt of results of the pre-hire investigations of such employee that are
satisfactory to it.
SECTION 3. The form of the Noncompetition Agreement set forth in
Exhibit 7.9(a) and 7.9(b) is hereby deleted and replaced by the form of such
agreement attached hereto as Exhibit A.
SECTION 4. Subsection 7.14.1 of the Exchange Agreement is hereby
amended to add the following new sentence after the first sentence of such
subsection:
Each Party will use commercially reasonable efforts to assure that any
non-public information that such Party may obtain from the other in connection
with this Agreement with respect to the cable television system serving the
Oklahoma community of Blackwell (the "Blackwell System") or the
Xxxxxxxxxx/Xxxxxxxx System will be kept confidential and, unless and until
consummation of the Subsequent Exchange occurs, such Party will not disclose,
and will cause its employees, consultants, advisors and agents not to disclose,
any such information to any other Person (other than its directors, officers and
employees and representatives of its advisers and lenders whose knowledge
thereof is necessary in order to facilitate the consummation of the transactions
contemplated hereby) or use, and will cause its employees, consultants, advisors
and agents not to use, such information to the detriment of the other; provided
that (i) such Party may
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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) and (ii) to
the extent that such Party may, in the reasonable opinion of its counsel, be
compelled by Legal Requirements to disclose any of such information, such Party
may disclose such information if it will have used all reasonable efforts, and
will have afforded the other the opportunity, to obtain an appropriate
protective order or other satisfactory assurance of confidential treatment, for
the information compelled to be disclosed.
SECTION 5. The "Xxxxxxxxx Overbuild Elections" clause contained in
Section 7.20 of the Exchange Agreement is hereby deleted.
SECTION 6. The Exchange Agreement is hereby amended by adding the
following covenants:
7.21 Subsequent Exchange. Unless one Party provides 60 days advance
written notice of its intention otherwise, TCA and Cable One shall continue
after Closing to use their good faith, commercially reasonable efforts to effect
a subsequent like-kind exchange of the Xxxxxxxxx System for the
Xxxxxxxxxx/Xxxxxxxx System pursuant to Section 1031 of the Code (the "Subsequent
Exchange"). The Subsequent Exchange shall be governed by terms mutually
agreeable to the parties. In addition, consummation of the Subsequent Exchange
shall not occur until Cable One, in its reasonable discretion, has ascertained
the impact of the competing cable operator in the City of Xxxxxxxxx, Oklahoma on
the value of the Xxxxxxxxx System and whether the Subsequent Exchange continues
to be commercially warranted. During the period from Closing to the earlier of
(i) the consummation of the Subsequent Exchange or (ii) the termination of the
parties' efforts to effect the Subsequent Exchange, TCA shall operate the
Xxxxxxxxx System in accordance with its past practices and will rebuild the
Xxxxxxxxx System to 750 MHZ.
7.22 Operation of Xxxxxxxxxx/Xxxxxxxx System. From and after the
Closing Date until the earlier of (i) the consummation of the Subsequent
Exchange or (ii) the termination of the parties' efforts to effect the
Subsequent Exchange, the parties shall enter into the Management Agreement
attached hereto as Exhibit B concerning the operation of the Xxxxxxxxxx/Xxxxxxxx
System.
7.23 Signal Delivery. The parties shall provide signals and cable
television programming as set forth below:
7.23.1 Effective as of Closing the parties shall enter into
the signal delivery agreement attached hereto as
Exhibit C, whereby TCA shall, in accordance with the
terms of such agreement, provide Cable One with
certain video signals distributed over TCA's cable
television relay system known as the Oak Grove
microwave system.
7.23.2 Effective as of Closing the parties shall enter into
the signal delivery agreement attached hereto as
Exhibit D, whereby TCA shall, in accordance
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with the terms of such agreement, provide Cable One
with certain cable television programming from the
Xxxxxxxxx System.
7.23.3 Effective as of Closing, the parties shall enter into
the signal delivery agreement attached hereto as
Exhibit E, whereby Cable One shall, in accordance
with the terms of such agreement, provide TCA with
certain Oklahoma City television signals.
SECTION 7. Section 8.1.9 of the Exchange Agreement is hereby amended to
substitute "14,220" for "17,051."
SECTION 8. Section 8.2.9 of the Exchange Agreement is hereby amended to
substitute "11,959" for "14,237."
SECTION 9. Section 11.2 of the Exchange Agreement is hereby amended to
delete the word "or" prior to subsection (i) of 11.2 and the remainder of
Section 11.2 shall read as follows:
(i) the failure of TCA to perform the TCA Assumed Obligations and
Liabilities, or (j) claims of any Person (including claims arising from acts,
events or circumstances in which Cable One is alleged to be jointly or jointly
and severally liable with TCA) concerning or arising out of Cable One's or TCA's
provision of services to the other party, Cable One's purchase of the Xxxxxxxxx
System, or the Subsequent Exchange.
In the event that an indemnified item arises under both clause (a) and
under one or more of clauses (b) through (j) of this SECTION 11.2, Cable One's
rights to pursue its claim under clauses (b) through (j), as applicable, will
exist notwithstanding the expiration of the Survival Period applicable to such
claim under clause (a).
SECTION 10. Section 12.2 of the Exchange Agreement is hereby amended to
revise Cable One's address in the two instances in which it appears so as to
read as follows:
Cable One, Inc.
0000 Xxxxx Xxxxx Xxxxxx
Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
SECTION 11. Section 12.14 of the Exchange Agreement is hereby amended
to substitute "$50,000" for "$100,000."
SECTION 12. Cable One's Schedules 1.10, 1.13, 1.15, 1.16, 1.17, 1.18,
4.4, 5.3, 5.8.4, 5.15, 5.18 and 7.2.3 are hereby amended so as to read in their
entirety as set forth on Exhibit F hereto.
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SECTION 13. TCA's Schedules 1.34, 1.56, 1.59, 1.61, 1.62, 1.63, 1.64,
4.2, 6.3, 6.4.3, 6.8.4, 6.14.1, and 6.15 are hereby amended so as to read in
their entirety as set forth on Exhibit G hereto.
SECTION 14. This Amendment is hereby made supplemental to and a part of
the Exchange Agreement and, except as expressly amended by this Amendment, the
Exchange Agreement is in all respects ratified and confirmed and all terms,
conditions and provisions thereof shall remain in full force and effect.
SECTION 15. The validity, performance, and enforcement of this
Amendment shall be governed by the laws of the State of Delaware, without giving
effect to the principles of conflicts of law of such state. In accordance with
Title 6, Section 2708 of the Delaware Code Annotated, each Party hereby submits
to the jurisdiction of the courts of Delaware and agrees to be served with legal
process from any of such courts. Each Party hereby irrevocably waives, to the
fullest extent permitted by law, any objection that it may have, whether now or
in the future, to the laying of venue in, or to the jurisdiction of, any and
each of such courts, including any claim or objection that any of such courts
constitutes an inconvenient forum.
SECTION 16. Capitalized terms contained herein and not otherwise
defined herein shall have the respective meanings assigned to them in the
Exchange Agreement.
SECTION 17. This Amendment may be executed in one or more counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
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The parties have executed this Amendment as of the day and year first
written above.
TCA CABLE PARTNERS
By: TCA Holdings, L.P., a Texas
limited partnership, its general partner
By:
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CABLE ONE, INC.
By:
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80446
Signature page to the Amendment to the Asset Exchange
Agreement between TCA Cable Partners and Cable
One, Inc.
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