EXHIBIT 2.5
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
BRESNAN COMMUNICATIONS COMPANY, L.P.
AND
XXXXX COMMUNICATIONS
OF GEORGIA/SOUTH CAROLINA, INC.
DATED AS OF
AUGUST 24, 1998
TABLE OF CONTENTS
Page
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Section 1. Definitions.............................................................. 1
1.1 Affiliate........................................................ 1
1.2 Assets........................................................... 1
1.3 Basic Service.................................................... 1
1.4 Business......................................................... 1
1.5 Business Day..................................................... 1
1.6 Closing.......................................................... 2
1.7 Encumbrance...................................................... 2
1.8 Environmental Law................................................ 2
1.9 Equipment........................................................ 2
1.10 Equivalent Basic Subscribers (or EBSs)........................... 2
1.11 Expanded Basic Service........................................... 3
1.12 GAAP............................................................. 3
1.13 Governmental Authority........................................... 3
1.14 Governmental Permits............................................. 3
1.15 Hazardous Substances............................................. 3
1.16 Intangibles...................................................... 4
1.17 Knowledge........................................................ 4
1.18 Legal Requirement................................................ 4
1.19 Losses........................................................... 4
1.20 Pay TV........................................................... 4
1.21 Permitted Encumbrances........................................... 4
1.22 Person........................................................... 4
1.23 Real Property.................................................... 4
1.24 Required Consents................................................ 4
1.25 Seller Contracts................................................. 5
1.26 Service Area..................................................... 5
1.27 System........................................................... 5
1.28 Taxes............................................................ 5
1.29 Other Definitions................................................ 5
SECTION 2. SALE OF ASSETS........................................................... 6
SECTION 3. CONSIDERATION............................................................ 6
3.1 Deposit.......................................................... 6
3.2 Base Purchase Price.............................................. 6
3.3 Adjustments to Base Purchase Price............................... 7
3.4 Determination of Adjustments..................................... 8
3.5 Allocation of Consideration...................................... 9
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SECTION 4. ASSUMED LIABILITIES AND EXCLUDED ASSETS............................... 9
4.1 Assignment and Assumption........................................ 9
4.2 Excluded Assets.................................................. 9
SECTION 5. REPRESENTATIONS AND WARRANTIES OF SELLER.............................. 10
5.1 Organization and Qualification................................... 10
5.2 Authority and Validity........................................... 10
5.3 No Conflict; Required Consents................................... 10
5.4 Assets........................................................... 11
5.5 Governmental Permits............................................. 11
5.6 Seller Contracts................................................. 11
5.7 Real Property.................................................... 12
5.8 Environmental Matters............................................ 12
5.9 Compliance with Legal Requirements............................... 13
5.10 Patents, Trademarks and Copyrights............................... 15
5.11 Financial Statements............................................. 15
5.12 Absence of Certain Changes....................................... 15
5.13 Legal Proceedings................................................ 15
5.14 Tax Returns; Other Reports....................................... 16
5.15 Employment Matters............................................... 16
5.16 Systems Information.............................................. 17
5.17 Bonds............................................................ 17
5.18 Finders and Brokers.............................................. 18
Section 6. Buyer's Representations and Warranties................................ 18
6.1 Organization and Qualification................................... 18
6.2 Authority and Validity........................................... 18
6.3 No Conflicts; Required Consents.................................. 18
6.4 Finders and Brokers.............................................. 19
6.5 Legal Proceedings................................................ 19
Section 7. Additional Covenants.................................................. 19
7.1 Access to Premises and Records................................... 19
7.2 Continuity and Maintenance of Operations; Financial Statements... 19
7.3 Employee Matters................................................. 21
7.4 Leased Vehicles; Other Capital Leases............................ 22
7.5 Required Consents; Estoppel Certificates......................... 22
7.6 [Intentionally Omitted].......................................... 23
7.7 Title Commitments and Surveys.................................... 23
7.8 HSR Notification................................................. 24
7.9 No Shopping...................................................... 24
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7.10 Lien and Judgment Searches....................................... 24
7.11 Transfer Taxes................................................... 25
7.12 Distant Broadcast Signals........................................ 25
7.13 Letter to Programmers............................................ 25
7.14 Updated Schedules................................................ 25
7.15 Use of Names and Logos........................................... 25
7.16 Subscriber Billing Services...................................... 25
7.17 Satisfaction of Conditions....................................... 26
7.18 Confidentiality and Publicity.................................... 26
7.19 Bulk Transfers................................................... 26
7.20 Environmental Reports............................................ 26
SECTION 8. CONDITIONS PRECEDENT.................................................... 26
8.1 Conditions to the Obligations of Buyer and Seller................ 26
8.2 Conditions to the Obligations of Buyer........................... 27
8.3 Conditions to Obligations of Seller.............................. 28
8.4 Waiver of Conditions............................................. 28
SECTION 9. CLOSING................................................................. 29
9.1 The Closing; Time and Place...................................... 29
9.2 Seller's Delivery Obligations.................................... 29
9.3 Buyer's Delivery Obligations..................................... 30
Section 10. Termination............................................................. 30
10.1 Termination Events............................................... 30
10.2 Effect of Termination............................................ 31
SECTION 11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION............. 31
11.1 Survival of Representations and Warranties....................... 31
11.2 Indemnification by Seller........................................ 32
11.3 Indemnification by Buyer......................................... 33
11.4 Third Party Claims............................................... 33
11.5 Limitations on Indemnification -- Seller......................... 34
11.6 Limitations on Indemnification -- Buyer.......................... 34
SECTION 12. MISCELLANEOUS........................................................... 34
12.1 Parties Obligated and Benefited.................................. 34
12.2 Notices.......................................................... 35
12.3 Attorneys' Fees.................................................. 36
12.4 Waiver........................................................... 36
12.5 Captions......................................................... 36
12.6 Choice of Law.................................................... 36
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12.7 Terms............................................................ 36
12.8 Rights Cumulative................................................ 36
12.9 Further Actions.................................................. 36
12.10 Time............................................................. 36
12.11 Late Payments.................................................... 37
12.12 Counterparts..................................................... 37
12.13 Entire Agreement................................................. 37
12.14 Severability..................................................... 37
12.15 Construction..................................................... 37
12.16 Expenses......................................................... 37
12.17 Risk of Loss; Condemnation....................................... 37
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LIST OF EXHIBITS AND SCHEDULES
EXHIBITS
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A - Indemnity Escrow Agreement
B - Xxxx of Sale
C - Assignment and Assumption of Contracts
D - Assignment of Leases
E - Letter to Programmers
F - FIRPTA Affidavit
G - Opinion of Seller's Counsel
H - Opinion of Buyer's Counsel
SCHEDULES
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1.9 - Owned Equipment and Vehicles
4.2 - Excluded Assets
5.3 - Required Consents
5.4 - Encumbrances to Be Discharged Prior to Closing
5.5 - Governmental Permits
5.6 - Seller Contracts
5.7 - Real Property
5.8 - Environmental Matters
5.9 - Cost of Service Filings
5.11 - Financial Statements
5.13 - Proceedings and Judgments
5.14 - Tax Matters
5.15 - Employee Matters
5.16 - The Business/Systems Information (including Rate Schedule)
5.17 - Bonds
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ASSET PURCHASE AGREEMENT
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This Asset Purchase Agreement ("Agreement") is made as of August 24, 1998,
by and between Bresnan Communications Company, L.P., a Michigan limited
partnership ("Seller") and Xxxxx Communications of Georgia/South Carolina, Inc.,
a Colorado corporation ("Buyer").
RECITALS
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Seller is engaged in the business of providing cable television service to
subscribers in and around the Service Area. Buyer desires to purchase and
Seller desires to sell substantially all the assets of Seller used or useful in
connection with that business.
AGREEMENT
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In consideration of the above recitals and the mutual agreements stated in
this Agreement, the parties agree as follows:
Section 1. Definitions.
In addition to terms defined elsewhere in this Agreement, the following
capitalized terms, when used in this Agreement, will have the meanings set forth
below:
1.1 Affiliate. With respect to any Person, any other Person controlling,
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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.
1.2 Assets. All properties, privileges, rights, interests and claims,
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real and personal, tangible and intangible, of every type and description that
are owned, leased, held, used or useful in the Business in which Seller has any
right, title or interest or in which Seller acquires any right, title or
interest on or before the Closing Date, including Governmental Permits,
Intangibles, Seller Contracts, Equipment, Real Property and deposits relating to
the Business that are held by third parties for the account of Seller or for
security for Seller's performance of its obligations, but excluding any Excluded
Assets.
1.3 Basic Service. The lowest tier of service offered to subscribers of a
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System.
1.4 Business. The cable television business conducted by Seller on the
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date of this Agreement through one or more Systems, as described on SCHEDULE
5.16.
1.5 Business Day. Any day other than Saturday, Sunday or a day on which
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banking institutions in Denver, Colorado are required or authorized to be
closed.
1.6 Closing. The consummation of the transactions contemplated by this
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Agreement, as described in SECTION 9, the date of which is referred to as the
Closing Date.
1.7 Encumbrance. Any security interest, security agreement, financing
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statement filed with any Governmental Authority, conditional sale or other title
retention agreement, any lease, consignment or bailment given for purposes of
security, any mortgage, lien, indenture, pledge, option, encumbrance, adverse
interest, constructive trust or other trust, claim, attachment, exception to or
defect in title or other ownership interest (including but not limited to
reservations, rights of entry, possibilities of reverter, encroachments,
easements, rights-of-way, restrictive covenants, leases and licenses) of any
kind, which constitutes an interest in or claim against property, whether
arising pursuant to any Legal Requirement, Governmental Permit, Seller Contract
or otherwise.
1.8 Environmental Law. Any Legal Requirement relating to pollution or
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protection of public health, safety or welfare or the environment, including
those relating to emissions, discharges, releases or threatened releases of
Hazardous Substances into the environment (including ambient air, surface water,
ground water or land), or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Substances.
1.9 Equipment. All electronic devices, trunk and distribution coaxial and
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optical fiber cable, amplifiers, power supplies, conduit, vaults and pedestals,
grounding and pole hardware, subscriber's devices (including converters,
encoders, transformers behind television sets and fittings), headend hardware
(including origination, earth stations, transmission and distribution system),
test equipment, vehicles and other tangible personal property owned, leased,
used or held for use in the Business, the principal items of which are described
on SCHEDULE 1.9 (and, with respect to leased Equipment, on SCHEDULE 5.6).
1.10 Equivalent Basic Subscribers (or EBSs). An active customer for Basic
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Service either in a single household, a commercial establishment or in a multi-
unit dwelling (including a hotel unit); provided, however, that the number of
customers in a multi-unit dwelling or commercial establishment that obtain
service on a "bulk-rate" basis will be determined on a System by System basis by
dividing the gross bulk-rate xxxxxxxx for Basic Service and Expanded Basic
Service (but not xxxxxxxx from a la carte tiers or premium services,
installation or other non-recurring charges, converter rental or from any outlet
or connection other than the first outlet or connection or from any pass-through
charge for sales taxes, line-itemized franchise fees, fees charged by the FCC
and the like), attributable to such multi-unit dwelling or commercial
establishment during the most recent billing period ended prior to the date of
calculation (but excluding xxxxxxxx in excess of a single month's charge) by the
rate charged at the time of determination to individual households for the
highest level of Basic Service and Expanded Basic Service offered by such
System, such rate not to be less than the rate for such System set forth on
SCHEDULE 5.16 (excluding a la carte tiers or premium services, installation or
other non-recurring charges, converter rental, pass-through charges for sales
taxes, line-itemized franchise fees charged by the FCC and the like). For
purposes of this definition, an "active customer" will mean any person,
commercial establishment or multi-unit dwelling at any given time that is paying
for and receiving Basic Service from the System who has
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an account that is not more than 60 days past due (except for past due amounts
of $5 or less, provided such account is otherwise current). For purposes of this
definition, an "active customer" does not include any person, commercial
establishment or multi-unit dwelling that as of the date of calculation has not
paid in full the charges for at least one month of the services ordered or any
subscriber whose service is pending disconnection for any reason. For purposes
of this definition, the number of days past due of a customer account will be
determined from the first day of the period for which the applicable billing
relates.
1.11 Expanded Basic Service. Any video programming provided over a cable
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television system, regardless of service tier other than (a) Basic Service, (b)
any new product tier and (c) video programming offered on a per channel or per
program basis.
1.12 GAAP. Generally accepted accounting principles as in effect from
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time to time in the United States of America.
1.13 Governmental Authority. The United States of America, any state,
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commonwealth, territory or possession of the United States of America and any
political subdivision or quasi-governmental authority of any of the same,
including any court, tribunal, department, commission, board, bureau, agency,
county, municipality, province, parish or other instrumentality of any of the
foregoing.
1.14 Governmental Permits. All franchises (the "Franchises"), approvals,
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authorizations, permits, licenses, easements, registrations, qualifications,
leases, variances and similar rights obtained with respect to the Business or
Assets from any Governmental Authority, including those set forth on SCHEDULE
5.5.
1.15 Hazardous Substances. Any pollutant, contaminant, chemical,
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industrial, toxic, hazardous or noxious substance or waste which is regulated by
any Governmental Authority, including (a) any petroleum or petroleum compounds
(refined or crude), flammable substances, explosives, radioactive materials or
any other materials or pollutants which pose a hazard or potential hazard to the
Real Property or to Persons in or about the Real Property or cause the Real
Property to be in violation of any laws, regulations or ordinances of federal,
state or applicable local governments, (b) asbestos or any asbestos-containing
material of any kind or character, (c) polychlorinated biphenyls ("PCBs"), as
regulated by the Toxic Substances Control Act, 15 U.S.C. (S) 2601 et seq., (d)
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any materials or substances designated as "hazardous substances" pursuant to the
Clean Water Act, 33 U.S.C. (S) 1251 et seq., (e) "economic poison," as defined
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in the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. (S) 135 et
--
seq., (f) "chemical substance," "new chemical substance" or "hazardous chemical
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substance or mixture" pursuant to the Toxic Substances Control Act, 15 U.S.C.
(S) 2601 et seq., (g) "hazardous substances" pursuant to the Comprehensive
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Environmental Response, Compensation, and Liability Act, 42 U.S.C. (S) 9601 et
--
seq. and (h) "hazardous waste" pursuant to the Resource Conservation and
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Recovery Act, 42 U.S.C. (S) 6901 et seq.
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1.16 Intangibles. All intangible assets, including subscriber lists,
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accounts receivable, claims (excluding any claims relating to Excluded Assets),
patents, copyrights and goodwill, if any, owned, used or held for use in the
Business.
1.17 Knowledge. The actual collective knowledge of a particular matter
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of one or more of the executive officers of a Person or the general manager or
one or more of the managers of such Person's Systems.
1.18 Legal Requirement. Applicable common law and any statute, ordinance,
-----------------
code, or other law, rule, regulation, order, technical or other written standard
or procedure enacted, adopted or applied by any Governmental Authority,
including judicial decisions applying common law or interpreting any other Legal
Requirement.
1.19 Losses. Any claims, losses, liabilities, damages, penalties, costs
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and expenses, including interest that may be imposed in connection therewith,
expenses of investigation, reasonable fees and disbursements of counsel and
other experts, and the cost to any Person making a claim or seeking
indemnification under this Agreement with respect to funds expended by such
Person by reason of the occurrence of any event with respect to which
indemnification is sought.
1.20 Pay TV. Premium programming services selected by and sold to
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subscribers on a per channel or per program basis.
1.21 Permitted Encumbrances. The following Encumbrances: (a) liens
----------------------
securing Taxes, assessments and governmental charges not yet due and payable,
(b) any zoning law or ordinance or any similar Legal Requirement, (c) any right
reserved to any Governmental Authority to regulate the affected property and (d)
as to Real Property interests, any Encumbrance reflected in the public records
and that does not individually or in the aggregate interfere with the right or
ability to own, use or operate the Real Property or to convey good, marketable
and indefeasible fee simple title to such Real Property, provided that
"Permitted Encumbrances" will not include any Encumbrance which could prevent or
inhibit in any way the conduct of the business of the affected System and
provided further that classification of any Encumbrance as a "Permitted
Encumbrance" will not affect any liability Seller may have for such Encumbrance,
including pursuant to any indemnity obligation under this Agreement.
1.22 Person. Any natural person, corporation, partnership, trust,
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unincorporated organization, association, limited liability company,
Governmental Authority or other entity.
1.23 Real Property. All assets held by Seller related to the Business
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consisting of realty, including appurtenances, improvements and fixtures located
on such realty, and any other interests in real property, including fee
interests, leasehold interests and easements, wire crossing permits and rights
of entry (except agreements related to multiple dwelling units) described on
SCHEDULE 5.7.
1.24 Required Consents. All franchises, licenses, authorizations,
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approvals and consents required under Governmental Permits, Seller Contracts or
otherwise for (a) Seller to transfer the
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Assets and the Business to Buyer, (b) Buyer to conduct the Business and to own,
lease, use and operate the Assets at the places and in the manner in which the
Business is conducted as of the date of this Agreement and on the Closing Date
and (c) Buyer to assume and perform the Governmental Permits, Seller Contracts
and the other Assumed Liabilities.
1.25 Seller Contracts. All contracts and agreements, other than
----------------
Governmental Permits and those relating to Real Property, pertaining to the
ownership, operation and maintenance of the Assets or the Business or used or
held for use in the Business, as described on SCHEDULE 5.6 or, in the case of
contracts and agreements relating to Real Property, on SCHEDULE 5.7.
1.26 Service Area. The area in which Seller operates the Business,
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specifically in the communities of Riceboro, City of Jesup, Xxxxxxxx County,
Liberty County, XxXxxxxx County, Camden County, City of Screven, City of Xxxx,
Xxxxx County, City of Flemington, City of Gum Branch, Fort Xxxxxxx, City of
Woodbine, City of Hinesville, City of Richmond Hill, City of Walthourville, City
of Midway, Long County, Town of Allenhurst, Charlton County, and Xxxxx County,
all in the State of Georgia.
1.27 System. A complete cable television reception and distribution system
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operated in the conduct of the Business, consisting of one or more headends,
subscriber drops and associated electronic and other equipment, and which is, or
is capable of being without modification, operated as an independent system
without interconnections to other systems. Any systems which are interconnected
or which are served in total or in part by a common headend will be considered a
single System.
1.28 Taxes. All levies and assessments of any kind or nature imposed by
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any Governmental Authority, including all income, sales, use, ad valorem, value
added, franchise, severance, net or gross proceeds, withholding, payroll,
employment, excise or property taxes and levies or assessments related to
unclaimed property, together with any interest thereon and any penalties,
additions to tax or additional amounts applicable thereto.
1.29 Other Definitions. The following terms are defined in the Sections
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indicated:
Term Section
---- -------
Action 11.4
Antitrust Division 7.8
Assumed Liabilities 4.1
Base Purchase Price 3.2
Buyer Damages 11.5
CLI 5.9.5
Closing Date 1.8
Code 5.15.2
Collective Bargaining Agreement 4.2
Cost of Service Election 5.9.4
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Deposit 3.1
Employee Benefit Plans 5.15.2
ERISA 5.15.1
Escrow Agent 3.1.1
Excluded Assets 4.2
FCC 1.10
Final Adjustments Report 3.4.2
Financial Statements 5.11
Franchises 1.14
FTC 7.8
GP 5.1
HSR Act 7.8
Indemnified Party 11.4
Indemnifying Party 11.4
Indemnity Escrow Agreement 3.1(a)
1992 Cable Act 5.9.4
Outside Closing Date 10.1.4
PCB 1.15
Preliminary Adjustments Report 3.4.1
Rate Regulation Documents 5.9.4
Seller Damages 11.6
Survival Period 11.1
Taking 12.17.2
Transaction Documents 5.2
Unreflected Liabilities 5.11
Section 2. Sale of Assets.
Subject to the terms and conditions set forth in this Agreement, at the
Closing, Seller will sell to Buyer, and Buyer will purchase from Seller, all of
Seller's rights, titles and interests in, to and under the Assets. Except as
otherwise specifically provided in this Agreement, all the Assets are intended
to be transferred to Buyer, whether or not described in the Schedules.
Section 3. Consideration.
3.1 Deposit. Upon execution and delivery of this Agreement by Seller
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and Buyer, Buyer shall deliver Two Million Dollars ($2,000,000) (the "Deposit")
to U.S. Bank National Association (the "Escrow Agent"), to be held in an
interest bearing account in accordance with a Deposit Escrow Agreement, dated
the date hereof, by and among Seller, Buyer and Escrow Agent.
3.2 Base Purchase Price. Buyer will pay to Seller total cash
-------------------
consideration of $48,000,000 (the "Base Purchase Price"), subject to adjustment
as provided in SECTIONS 3.2 and 3.3. Such consideration will be paid at Closing
as follows:
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3.2.1 Buyer shall wire to Escrow Agent the amount of Two Million
Dollars ($2,000,000), which will secure payment by Seller of post-Closing
adjustments and indemnification obligations of Seller to Buyer, in accordance
with an Indemnity Escrow Agreement in substantially the form attached as EXHIBIT
A (the "Indemnity Escrow Agreement"); and
3.2.2 Buyer shall wire to Seller Forty-six Million Dollars
($46,000,000) in immediately available funds pursuant to wire instructions
delivered no later than two Business Days prior to the Closing Date by Seller to
Buyer. Buyer shall receive credit for the Deposit, plus interest thereon, toward
this amount.
3.3 Adjustments to Base Purchase Price. The Base Purchase Price will be
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adjusted as follows:
3.3.1 If the number of EBSs as of the Closing Date is less than
23,500, the Base Purchase Price will be reduced by an amount equal to $2,043
multiplied by the number by which 23,500 exceeds the greater of 23,200 or the
number of EBSs as of the Closing Date.
3.3.2 Adjustments on a pro rata basis as of the Closing Date will be
made for all prepaid expenses (but only to the extent the full benefit thereof
will be realizable by Buyer within 12 months after the Closing Date), accrued
expenses (including real and personal property Taxes and the economic value of
all accrued vacation time permitted by Buyer's policies to be taken after the
Closing Date by Seller's System employees hired by Buyer), prepaid income,
subscriber prepayments and accounts receivable related to the Business, all as
determined in accordance with GAAP consistently applied, and to reflect the
principle that all expenses and income attributable to the Business for the
period prior to the Closing Date are for the account of Seller, and all expenses
and income attributable to the Business for the period on and after the Closing
Date are for the account of Buyer. The Purchase Price will be increased by an
amount equal to the sum of (a) 100% of the face amount of all accounts
receivable (other than from advertising sales) that are current or 30 days or
less past due as of the Closing Date, plus (b) 80% of the face amount of all
accounts receivable (other than from advertising sales) that are between 31 days
and 60 days past due as of the Closing Date, plus (c) 100% of the face amount of
all direct-billed advertising accounts receivable that are current or 60 days or
less past due as of the Closing Date, plus (d) 50% of the face amount of all
direct-billed advertising accounts receivable that are between 61 and 90 days
past due as of the Closing Date, plus (e) 100% of the face amount of all agency
advertising accounts receivable that are current or 90 days or less past due as
of the Closing Date, plus (f) 50% of all agency advertising accounts receivable
that are between 91 and 120 days past due as of the Closing Date; provided, that
Seller will not receive credit for any accounts receivable (a) any portion of
which is 60 days or more past due as of the Closing Date (other than accounts
receivable from advertising sales), (b) from subscribers whose accounts are
inactive or whose service is pending disconnection for any reason as of the
Closing Date or (c) resulting from advertising sales any portion of which is 120
days or more past due as of the Closing Date.
3.3.3 Buyer's account will be credited for the amount of all advance
payments to, or funds of third parties on deposit with, Seller as of the Closing
Date, relating to the Business,
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including advance payments and deposits by subscribers served by the Business
for converters, encoders, decoders, cable television service and related sales,
and the liability therefor will be assumed by Buyer.
3.4 Determination of Adjustments. Preliminary and final adjustments to
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the Base Purchase Price will be determined as follows:
3.4.1 Not later than a date Seller reasonably believes is at least
10 Business Days prior to the expected Closing Date, Seller will deliver to
Buyer a report (the "Preliminary Adjustments Report"), certified as to
completeness and accuracy by an authorized officer of Xxxxx Intercable, Inc.,
showing in detail the preliminary determination of the adjustments referred to
in SECTION 3.3, which are calculated as of the Closing Date (or as of any other
date agreed by the parties) and any documents substantiating the adjustments
proposed in the Preliminary Adjustments Report. The Preliminary Adjustments
Report will include a complete list of subscribers, a detailed calculation of
the number of Equivalent Basic Subscribers and a schedule setting forth advance
payments made to or by Seller and deposits made by Seller, as well as accounts
receivable information relating to the Business (showing sums due and their
respective aging as of the Closing Date). Seller also will furnish to Buyer its
billing report for the most current period as of the Closing Date. Following
receipt of such Preliminary Adjustments Report and supporting information, Buyer
will have five Business Days to review such Preliminary Adjustments Report and
supporting information and to notify Seller of any disagreements with Seller's
estimates. If Buyer provides a notice of disagreement with Seller's estimates of
the adjustments referred to in SECTION 3.3 within such five Business Day period,
Buyer and Seller will negotiate in good faith to resolve any such dispute and to
reach an agreement prior to the Closing Date on such estimated adjustments as of
the Closing Date. The basis for determining the Base Purchase Price to be paid
at Closing will be (a) the estimate so agreed upon by Buyer and Seller or (b) if
no notice of disagreement is provided, or if such notice is provided but the
parties do not reach such an agreement prior to the Closing Date, the estimate
of such adjustments set forth in the Preliminary Adjustments Report.
3.4.2 Within 90 days after the Closing, Seller will deliver to
Buyer a report (the "Final Adjustments Report"), similarly certified by Seller,
showing in detail the final determination of all adjustments which were not
calculated as of the Closing Date and containing any corrections to the
Preliminary Adjustments Report, together with any documents substantiating the
adjustments proposed in the Final Adjustments Report. Buyer will provide Seller
with reasonable access to all records which Buyer has in its possession and
which are necessary for Seller to prepare the Final Adjustments Report.
3.4.3 Within 30 days after receipt of the Final Adjustments
Report, Buyer will give Seller written notice of Buyer's objections, if any, to
the Final Adjustments Report. If Buyer makes any such objection, the parties
will agree on the amount, if any, which is not in dispute within 30 days after
Seller's receipt of Buyer's notice of objections to the Final Adjustments
Report. If Seller makes any such objection, the parties will agree on the
amount, if any, which is not in dispute within 30 days after Buyer's receipt of
Seller's objections. Any disputed amounts will be determined within 120 days
after the Closing Date by the accounting firm of Price Waterhouse,
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whose determination will be conclusive; provided, however, that if at the time
of such dispute, Price Waterhouse is the accounting firm for either Seller or
Buyer, the parties shall select a different accounting firm of national standing
acceptable to both parties to determine the dispute. Seller and Buyer will bear
equally the fees and expenses payable to such firm in connection with such
determination. The payment required after such determination will be made by the
responsible party by wire transfer of immediately available funds to the other
party within three Business Days after the final determination.
3.5 Allocation of Consideration. The consideration payable by Buyer
---------------------------
under this Agreement will be allocated among the Assets as set forth in a
schedule to be prepared not later than 180 days after the Closing Date (or April
1 of the year following the Closing Date if earlier) by an independent appraiser
with significant experience in the cable television industry. Such appraiser
will be selected by the mutual agreement of Buyer and Seller within 30 days
after the date of this Agreement, and the fees of such appraiser will be shared
equally by Buyer and Seller; provided, however, that if the parties so agree,
the appraisal and preparation of the schedule described above may occur prior to
Closing. Buyer and Seller agree to be bound by the allocation and will not take
any position inconsistent with such allocation and will file all returns and
reports with respect to the transactions contemplated by this Agreement,
including all federal, state and local Tax returns, on the basis of such
allocation.
Section 4. Assumed Liabilities and Excluded Assets.
4.1 Assignment and Assumption. Seller will assign, and Buyer will
-------------------------
assume and after the Closing will pay, discharge and perform the following (the
"Assumed Liabilities"): (a) Seller's obligations to subscribers of the Business
for (i) subscriber deposits held by Seller as of the Closing Date and which are
refundable, in the amount for which Buyer received credit under SECTION 3.3,
(ii) subscriber advance payments held by Seller as of the Closing Date for
services to be rendered by a System after the Closing Date, in the amount for
which Buyer received credit under SECTION 3.3 and (iii) the delivery of cable
television service to subscribers of the Business after the Closing Date; and
(b) obligations accruing and relating to periods after the Closing Date under
Governmental Permits listed on SCHEDULE 5.5 (to the extent that such
Governmental Permits are transferable) and Seller Contracts. Buyer will not
assume or have any responsibility for any liabilities or obligations of Seller
other than the Assumed Liabilities. In no event will Buyer assume or have any
responsibility for any liabilities or obligations associated with the Excluded
Assets.
4.2 Excluded Assets. The Excluded Assets, which will be retained by
---------------
Seller, will consist of the following: (a) programming contracts, retransmission
consent agreements and pole attachment agreements (except for those set forth on
SCHEDULE 5.7); (b) Employee Benefit Plans; (c) insurance policies and rights and
claims thereunder (except as otherwise provided in SECTION 12.17); (d) bonds,
letters of credit, surety instruments and other similar items; (e) cash and cash
equivalents and notes receivable; (f) Seller's trademarks, trade names, service
marks, service names, logos and similar proprietary rights (subject to Buyer's
rights under SECTION 7.15); (g) Seller's rights under any agreement governing or
evidencing an obligation of Seller for borrowed money; (h) Seller Contracts for
subscriber billing and equipment; (i) Seller's rights and obligations
-9-
under any contract, license, authorization, agreement or commitment other than
those creating or evidencing Assumed Liabilities; (j) the Collective Bargaining
Agreement between Seller and International Association of Machinists and
Aerospace Workers South Atlantic District No. 96 and all related agreements
(together the "Collective Bargaining Agreement"); and (k) the assets described
on SCHEDULE 4.2.
Section 5. Representations and Warranties of Seller.
To induce Buyer to enter into this Agreement, Seller represents and
warrants to Buyer, as of the date of this Agreement and as of the Closing, as
follows:
5.1 Organization and Qualification. Seller is a limited
------------------------------
partnership duly organized and validly existing under the laws of the State of
Michigan and has all requisite partnership power and authority to own, lease and
use the Assets owned, leased or used by it and to conduct the Business as it is
currently conducted. Seller is duly qualified to do business in the State of
Georgia, and under the laws of each jurisdiction in which the ownership, leasing
or use of the Assets owned, leased or used by it or the nature of Seller's
activities makes such qualification necessary, except in any such jurisdiction
where the failure to be so qualified and in good standing would not have a
material adverse effect on the Business, the Assets or the Systems or on the
ability of Seller to perform its obligations under this Agreement. The general
partner of Seller is BCI (USA), L.P. ("GP").
5.2 Authority and Validity. Seller has all requisite partnership
----------------------
power and authority to execute and deliver, to perform its obligations under,
and to consummate the transactions contemplated by, this Agreement and all other
documents and instruments to be executed and delivered in connection with the
transactions contemplated by this Agreement (collectively, the "Transaction
Documents") to which Seller is a party. Subject to approval by the partners of
Seller, the execution and delivery by Seller of, the performance by Seller of
its obligations under, and the consummation by Seller of the transactions
contemplated by, this Agreement and the Transaction Documents to which Seller is
a party have been duly and validly authorized by all necessary action by or on
behalf of Seller and the general partner of Seller. This Agreement has been, and
when executed and delivered by Seller the Transaction Documents will be, duly
and validly executed and delivered by Seller and the valid and binding
obligations of Seller, enforceable against Seller in accordance with their
terms, except as the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect relating
to the enforcement of creditors' rights generally or by principles governing the
availability of equitable remedies.
5.3 No Conflict; Required Consents. Except for the Required
------------------------------
Consents, all of which are listed on SCHEDULE 5.3, the execution and delivery by
Seller, the performance of Seller under, and the consummation of the
transactions contemplated by, this Agreement and the Transaction Documents to
which Seller is a party do not and will not: (a) violate any provision of the
Partnership Agreement of Seller; (b) violate any Legal Requirement; (c) require
any consent, approval or authorization of, or filing of any certificate, notice,
application, report or other document with any Governmental Authority or other
Person; or (d) (i) violate or result in a breach of or default
-10-
under (without regard to requirements of notice, lapse of time, or elections of
any Person, or any combination thereof), (ii) permit or result in the
termination, suspension or modification of, (iii) result in the acceleration of
(or give any Person the right to accelerate) the performance of Seller under, or
(iv) result in the creation or imposition of any Encumbrance under any Seller
Contract or any other instrument evidencing any of the Assets or by which Seller
or any of its assets is bound or affected, except for purposes of this clause
(d) such violations, conflicts, breaches, defaults, terminations, suspensions,
modifications, and accelerations as would not, individually or in the aggregate,
have a material adverse effect on any System, the Business or Seller, the
validity, binding effect or enforceability of this Agreement or on the ability
of Seller to perform its obligations under this Agreement or the Transaction
Documents to which Seller is a party.
5.4 Assets. Seller has exclusive, good and marketable title to (or,
------
in the case of Assets that are leased, valid leasehold interests in) the Assets
(other than Real Property, as to which the representations and warranties in
SECTION 5.7 apply). The Assets are free and clear of all Encumbrances, except
(a) Permitted Encumbrances and (b) Encumbrances described on SCHEDULE 5.4, all
of which will be terminated, released or, in the case of rights of refusal
listed on SCHEDULE 5.4, waived, as appropriate, at or prior to the Closing.
Except as described on SCHEDULE 5.6, none of the Equipment is leased by Seller
from any other Person. All the Equipment is in good operating condition and
repair (ordinary wear and tear excepted). Except for items included in the
Excluded Assets, the Assets constitute all the assets necessary to permit Buyer
to (i) conduct the Business and to operate the Systems substantially as they are
being conducted and operated on the date of this Agreement and in compliance in
all material respects with all Legal Requirements, Governmental Permits and
Seller Contracts and (ii) perform all the Assumed Liabilities.
5.5 Governmental Permits. All Governmental Permits are listed on
--------------------
SCHEDULE 5.5. Complete and correct copies of all Governmental Permits have been
delivered by Seller to Buyer. Each Governmental Permit is in full force and
effect and Seller is not and, to Seller's Knowledge, the other party thereto is
not, in breach or default of any material terms or conditions thereunder, and is
valid under all applicable Legal Requirements according to its terms. There is
no legal action, governmental proceeding or investigation, pending or, to
Seller's Knowledge threatened, to terminate, suspend or modify any Governmental
Permit and Seller is in compliance with the material terms and conditions of all
the Governmental Permits and with other material applicable requirements of all
Governmental Authorities (including the FCC and the Register of Copyrights)
relating to the Governmental Permits, including all requirements for
notification, filing, reporting, posting and maintenance of logs and records. As
of the date of this Agreement, to Seller's Knowledge, no third party has been
granted or has applied for a cable television franchise or is providing or
intending to provide cable television services in any of the communities or
unincorporated areas currently served by the Business other than Buyer in the
City of Midway.
5.6 Seller Contracts. All Seller Contracts (other than those
----------------
constituting Excluded Assets) are described on SCHEDULE 5.6 or 5.7. Complete and
correct copies of all Seller Contracts have been delivered by Seller to Buyer.
Each Seller Contract is in full force and effect and constitutes the
-11-
valid, legal, binding and enforceable obligation of Seller, and Seller is not
and to Seller's Knowledge each other party thereto is not, in breach or default
of any material terms or conditions thereunder.
5.7 Real Property.
-------------
5.7.1 All the Assets consisting of Real Property interests are
described on SCHEDULE 5.7. Except as otherwise disclosed on SCHEDULE 5.7, Seller
holds good, marketable and indefeasible fee simple title to the Real Property
shown as being owned by Seller on SCHEDULE 5.7 and the valid and enforceable
right to use and possess such Real Property, subject only to the Permitted
Encumbrances. Seller has valid and enforceable leasehold interests in Real
Property shown as being leased by Seller on SCHEDULE 5.7 and, with respect to
other Real Property not owned or leased by Seller, Seller has the valid and
enforceable right to use all such other Real Property pursuant to the easements,
licenses, rights-of-way or other rights described on SCHEDULE 5.7, subject only
to Permitted Encumbrances. Except for routine repairs, all of the material
improvements, leasehold improvements and the premises of the Real Property are
in good condition and repair and are suitable for the purposes used. The current
use and occupancy of the Real Property do not constitute nonconforming uses
under any applicable zoning Legal Requirements.
5.7.2 The documents delivered by Seller to Buyer as evidence of
each Seller Contract that is a lease of Real Property constitute the entire
agreement with the landlord in question. There are no leases or other
agreements, oral or written, granting to any Person other than Seller the right
to occupy or use any Real Property, except as described on SCHEDULE 5.7. All
easements, rights-of-way and other rights appurtenant to, or which are necessary
for Seller's current use of, any Real Property are valid and in full force and
effect, and Seller has not received any notice with respect to the termination,
breach or impairment of any of those rights. Each parcel of Real Property, any
improvements constructed thereon and their current use (a) has access to and
over all public streets, or private streets for which Seller has a valid right
of ingress and egress, (b) conforms in its current use and occupancy to all
zoning requirements without reliance upon a variance issued by a Governmental
Authority or a classification of the parcel in question as a nonconforming use,
and (c) conforms in all material respects in its use to all restrictive
covenants, if any, or other Encumbrances affecting all or part of such parcel.
5.8 Environmental Matters.
---------------------
5.8.1 The Real Property currently complies in all material
respects with and, to Seller's Knowledge, has previously been operated in
compliance in all material respects with, all Environmental Laws. Seller has not
directly or indirectly (a) generated, released, stored, used, treated, handled,
discharged or disposed of any Hazardous Substances at, on, under, in or about,
or in any other manner affecting, any Real Property, (b) transported any
Hazardous Substances to or from any Real Property or (c) undertaken or caused to
be undertaken any other activities relating to the Real Property which could
reasonably give rise to any liability under any Environmental Law, and, to
Seller's Knowledge, no other present or previous owner, tenant, occupant or user
of any Real Property or any other Person has committed or suffered any of the
foregoing. To Seller's Knowledge, (i) no release of Hazardous Substances outside
the Real Property has entered or
-12-
threatens to enter any Real Property, nor (ii) is there any pending or
threatened claim based on Environmental Laws which arises from any condition of
the land surrounding any Real Property. No litigation based on Environmental
Laws which relates to any Real Property or any operations on conditions on it
(A) has been asserted or conducted in the past or is currently pending against
or with respect to Seller or, to Seller's Knowledge, any other Person, or (B) to
Seller's Knowledge is threatened or contemplated.
5.8.2 To Seller's Knowledge, other than as described on SCHEDULE
5.8, (a) no aboveground or underground storage tanks are currently or have been
located on any Real Property, (b) no Real Property has been used at any time as
a gasoline service station or any other facility for storing, pumping,
dispensing or producing gasoline or any other petroleum products or wastes and
(c) no building or other structure on any Real Property contains asbestos-
containing material.
5.8.3 Seller has provided Buyer with complete and correct copies
of (a) all studies, reports, surveys or other materials in Seller's possession
or, to Seller's Knowledge to which it has access, relating to the presence or
alleged presence of Hazardous Substances at, on or affecting the Real Property,
(b) all notices or other materials in Seller's possession or, to Seller's
Knowledge to which it has access, that were received from any Governmental
Authority having the power to administer or enforce any Environmental Laws
relating to current or past ownership, use or operation of the Real Property or
activities at the Real Property and (c) all materials in Seller's possession or,
to Seller's Knowledge to which it has access, relating to any litigation or
allegation by any Person concerning any Environmental Law.
5.9 Compliance with Legal Requirements.
----------------------------------
5.9.1 The ownership, leasing and use of the Assets as they are
currently owned, leased and used and the conduct of the Business and the
operation of the Systems as they are currently conducted and operated do not
violate or infringe, in any material respect, any Legal Requirements currently
in effect (other than the Legal Requirements described in SECTION 5.9.4, as to
which the provisions of SECTION 5.9.4 will apply, and other than as referenced
in Schedule 5.5 with respect to the City of Midway). Seller has received no
notice of any violation by Seller or the Business of any Legal Requirement
applicable to the Business or the Systems as currently conducted, and to
Seller's Knowledge, there is no basis for the allegation of any such a
violation.
5.9.2 A valid request for renewal has been duly and timely filed
under Section 626 of the Cable Communications Policy Act of 1984 with the proper
Governmental Authority with respect to applicable Governmental Permits with
franchising authorities that have expired prior to, or will expire within 30
months after, the date of this Agreement.
5.9.3 Seller has complied, and the Business is in compliance, in
all material respects, with the specifications set forth in Part 76, Subpart K
of the rules and regulations of the FCC, Section 111 of the U.S. Copyright Act
of 1976 and the applicable rules and regulations thereunder and the applicable
rules and regulations of the U.S. Copyright Office, the Register of Copyrights,
the Copyright Royalty Tribunal and the Communications Act of 1934, including
-13-
provisions of any thereof pertaining to signal leakage, to utility pole make
ready and to grounding and bonding of cable television systems (in each case as
the same is currently in effect), and all other applicable Legal Requirements
relating to the construction, maintenance, ownership and operation of the
Assets, the Systems and the Business.
5.9.4 Notwithstanding the foregoing, to Seller's Knowledge, each
System is in compliance in all material respects with the provisions of the
Cable Television Consumer Protection and Competition Act of 1992 and the FCC
rules and regulations promulgated thereunder (the "1992 Cable Act") as such
Legal Requirements relate to the operation of the Business; provided, however,
that Seller does not hereby make any representation about rates charged to
subscribers, other than the representation regarding the rates charged to
subscribers set forth below. Seller has complied in all material respects with
the must carry and retransmission consent provisions of the 1992 Cable Act and
has all must carry elections and retransmission consent agreements necessary for
the operation of the Business. Seller has used reasonable good faith efforts to
establish rates charged to subscribers, effective since September 1, 1993, that
are or were allowable under the 1992 Cable Act and any authoritative
interpretation thereof now or then in effect, whether or not such rates are or
were subject to regulation at that date by any Governmental Authority, including
any local franchising authority and/or the FCC, unless such rates were not
subject to regulation pursuant to a specific exemption from rate regulation
contained in the 1992 Cable Act other than the failure of any franchising
authority to have been certified to regulate rates. Notwithstanding the
foregoing, Seller makes no representation or warranty that the rates charged to
subscribers (a) are allowable under any rules and regulations of the FCC or any
authoritative interpretation thereof, or (b) would be allowable under any rules
and regulations of the FCC or any authoritative interpretation thereof
promulgated after the date of the Closing. Seller has delivered to Buyer
complete and correct copies of all FCC Forms 393, 1200, 1205, 1210, 1215, 1220,
1225, 1235 and 1240 filed with respect to the Systems and copies of all other
FCC Forms filed by Seller and of all correspondence with any Governmental
Authority relating to rate regulation generally or specific rates charged to
subscribers with respect to the Systems, including copies of any complaints
(attached hereto as SCHEDULE 5.9.4) filed with the FCC with respect to any rates
charged to subscribers of the Systems, and any other documentation supporting an
exemption from the rate regulation provisions of the 1992 Cable Act claimed by
Seller with respect to any of the Systems (collectively, "Rate Regulation
Documents"). As of the date of this Agreement, Seller has received no notice
from any Governmental Authority with respect to an intention to enforce customer
service standards pursuant to the 1992 Cable Act and Seller has not agreed with
any Governmental Authority to establish customer service standards that exceed
the customer service standards promulgated pursuant to the 1992 Cable Act. In
addition, Seller has also delivered to Buyer documentation for each of the
Systems in which the franchising authority has not certified to regulate rates
as of the date of this Agreement showing a determination of allowable rates
using a benchmark methodology. Except as described in SCHEDULE 5.9.4, Seller has
not made any election with respect to any cost of service proceeding conducted
in accordance with Part 76.922 of Title 47 of the Code of Federal Regulations or
any similar proceeding (a "Cost of Service Election") with respect to any of the
Systems.
5.9.5 CLI. Seller has conducted all system and microwave
---
performance tests and all Cumulative Leakage Index ("CLI") related tests
applicable to the System. Seller has
-14-
(i) maintained appropriate log books and other record keeping which accurately
and completely reflect in all material respects all results required to be shown
thereon; (ii) to the extent required by the rules and regulations of the FCC,
corrected any radiation leakage of the System required to be corrected in
connection with Seller's monitoring obligations under the rules and regulations
of the FCC; and (iii) otherwise complied in all material respects with all
applicable CLI rules and regulations in connection with the operation of the
System.
5.10 Patents, Trademarks and Copyrights. Seller has timely and
----------------------------------
accurately made all requisite filings and payments with the Register of
Copyrights with respect to the Business. Seller has delivered to Buyer complete
and correct copies of all current reports and filings, and all reports and
filings for the past three years, made or filed pursuant to copyright rules and
regulations with respect to the Business. Seller does not possess any patent,
patent right, trademark or copyright material to the operation of the Business
and Seller is not 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. The Business and the System have been operated in
such a manner so as not to violate or infringe upon the rights of, or give rise
to any rightful claim of any Person for copyright, trademark, service xxxx,
patent, license, trade secret infringement or the like.
5.11 Financial Statements. A correct copy of the unaudited
--------------------
financial statements for the Systems as of December 31, 1997, including an
unaudited income statement and balance sheet which fairly present the financial
condition of the Systems, is attached as SCHEDULE 5.11 (collectively, the
"Financial Statements"). At the date of the Financial Statements, Seller had no
liability or obligation, whether accrued, absolute, fixed or contingent
(including liabilities for Taxes or unusual forward or long-term commitments),
required by GAAP to be reflected or reserved against therein that were not fully
reflected or reserved against on the balance sheet included in the Financial
Statements, other than liabilities included in current liabilities, and none of
which was or would be material to the Business (collectively, the "Unreflected
Liabilities"). As of the date of this Agreement, since the date of the Financial
Statements, there has not existed or developed, and Seller is not aware of, any
additional Unreflected Liabilities.
5.12 Absence of Certain Changes. Since December 31, 1997 (a)
--------------------------
Seller has not incurred any obligation or liability (contingent or otherwise),
except normal trade or business obligations incurred in the ordinary course of
business, the performance of which would be reasonably likely, individually or
in the aggregate, to have a material adverse effect on the financial condition
or results of operations of the Business, (b) there has been no material adverse
change (except any change affecting the United States cable industry as a whole,
including any change arising from (i) legislation, litigation, rulemaking or
regulation or (ii) competition caused by or arising from other multiple channel
distribution services) in the business, condition (financial or otherwise) or
liabilities of the Business, and (c) the Business has been conducted only in the
ordinary course of business.
5.13 Legal Proceedings. Except as set forth in SCHEDULE 5.13:
-----------------
(a) there is no claim, investigation or litigation pending or, to Seller's
Knowledge, threatened, by or before any
-15-
Governmental Authority or private arbitration tribunal against Seller which, if
adversely determined, would materially adversely affect the financial condition
or operations of the Business, the Systems, the Assets or the ability of Seller
to perform its obligations under this Agreement, or which, if adversely
determined, would result in the modification, revocation, termination,
suspension or other limitation of any of the Governmental Permits, Seller
Contracts or leases or other documents evidencing the Real Property; and (b)
there is not in existence any judgment requiring Seller to take any action of
any kind with respect to the Assets or the operation of the Systems, or to which
Seller (with respect to the Systems), the Systems or the Assets are subject or
by which they are bound or affected.
5.14 Tax Returns; Other Reports. Seller has duly and timely filed
--------------------------
in correct form all federal, state and local Tax returns and all other Tax
reports required to be filed by Seller and has timely paid all Taxes which have
become due and payable, whether or not shown on any such report or return, the
failure of which to be filed or paid could adversely affect the Assets or result
in the imposition of an Encumbrance upon the Assets, except such amounts as are
being contested diligently and in good faith and are not in the aggregate
material. Except as specifically identified on SCHEDULE 5.14, Seller has
received no notice of, nor does Seller have any Knowledge of, any deficiency,
assessment or audit, or proposed deficiency, assessment or audit from any taxing
Governmental Authority which could affect or result in the imposition of an
Encumbrance upon the Assets.
5.15 Employment Matters.
------------------
5.15.1 SCHEDULE 5.15 contains a complete and correct list of
names and positions of all employees of Seller engaged in the Business as of the
date set forth in such SCHEDULE. Seller has no employment agreements, either
written or oral, with any employee of the Business. Seller has complied in all
material respects with applicable Legal Requirements relating to the employment
of labor, including WARN, the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), continuation coverage requirements with respect to group
health plans, and those relating to wages, hours, collective bargaining,
unemployment insurance, worker's compensation, equal employment opportunity, age
and disability discrimination, immigration control and the payment and
withholding of Taxes.
5.15.2 Each "employee benefit plan" or "multiemployer plan"
(as those terms are defined in ERISA) with respect to which Seller or any ERISA
Affiliate (as defined in ERISA) of Seller has any liability is set forth on
SCHEDULE 5.15 (the "Employee Benefit Plans"). Neither Seller nor its ERISA
Affiliates nor any Employee Benefit Plan is in material violation of any
provision of ERISA. No "reportable event," as defined in Section 4043 of ERISA,
has occurred and is continuing with respect to any Employee Benefit Plan. No
"prohibited transaction," within the meaning of Section 406 of ERISA, has
occurred with respect to any such Employee Benefit Plan, and no "accumulated
funding deficiency" or "withdrawal liability" (both as defined in Section 302 of
ERISA) exists with respect to any such Employee Benefit Plan. After the Closing,
Buyer will not be required, under ERISA, the Internal Revenue Code of 1986, as
amended (the "Code") or any collective bargaining agreement, to establish,
maintain or continue any Employee Benefit Plan
-16-
currently maintained by Seller or any of its ERISA Affiliates, nor will Buyer
have any liabilities of any nature whatsoever under any Employment Benefit
Plans.
5.15.3 Except as set forth on SCHEDULE 5.15, Seller is not a
party to any collective bargaining agreements and Seller has not recognized or
agreed to recognize and has no duty to bargain with any labor organization or
collective bargaining unit. There are not pending any unfair labor practice
charges against Seller, any demand for recognition or any other request or
demand from a labor organization for representative status with respect to any
Person employed by Seller. Except as set forth on SCHEDULE 5.15, and to Seller's
Knowledge, Seller's employees are not engaged in organizing activity with
respect to any labor organization. Seller has no employment agreement, either
written or oral, express or implied, that would require Buyer to employ any
Person after the Closing Date. Seller has made no representations to any of its
employees regarding future employment with Buyer following consummation of the
transactions contemplated hereby.
5.16 Systems Information. SCHEDULE 5.16 sets forth a materially true
-------------------
and accurate description of the following information relating to the Business
as of the most recent monthly report generated by Seller in the ordinary course
of business containing the information required to prepare such SCHEDULE
(provided that such date is no earlier than two months prior to the date of this
Agreement):
5.16.1 the approximate number of miles of plant included in the
Assets;
5.16.2 the number of subscribers and EBS's served by the
Systems for each Franchise;
5.16.3 the approximate number of single family homes and
residential dwelling units passed by the Systems;
5.16.4 a description of basic and optional or tier services
available from the Systems, the rates charged by Seller for each and the number
of subscribers and subscriber equivalents receiving each optional or tier
service;
5.16.5 the stations and signals carried by the Systems and the
channel position of each such signal and station; and
5.16.6 the cities, towns, villages, townships, boroughs and
counties served by the Systems.
5.17 Bonds. Except as set forth on SCHEDULE 5.17, as of the date of
-----
this Agreement, there are no franchise, construction, fidelity, performance, or
other bonds or letters of credit posted by Seller in connection with its
operation or ownership of any of the Systems or Assets.
-17-
5.18 Finders and Brokers. Seller has not employed any financial advisor,
-------------------
broker or finder or incurred any liability for any financial advisory,
brokerage, finder's or similar fee or commission in connection with the
transactions contemplated by this Agreement for which Buyer could be liable.
Section 6. Buyer's Representations and Warranties.
To induce Seller to enter into this Agreement, Buyer represents and
warrants to Seller, as of the date of this Agreement and as of the Closing, as
follows:
6.1 Organization and Qualification. Buyer is a corporation duly
------------------------------
organized, validly existing and in good standing under the laws of the State of
Colorado and has all requisite corporate power and authority to own, lease and
use the assets owned, leased or used by it and to conduct its business as it is
currently conducted. Buyer is duly qualified to do business and is in good
standing under the law of Georgia, and of each jurisdiction in which the
ownership, leasing or use of the assets owned, leased or used by it or the
nature of Buyer's activities makes such qualification necessary, except in any
such jurisdiction where the failure to be so qualified and in good standing
would not have a material adverse effect on Buyer or on the ability of Buyer to
perform its obligations under this Agreement.
6.2 Authority and Validity. Buyer has all requisite corporate power and
----------------------
authority to execute and deliver, to perform its obligations under, and to
consummate the transactions contemplated by, this Agreement and the Transaction
Documents to which Buyer is a party. The execution and delivery by Buyer of,
the performance by Buyer of its obligations under, and the consummation by Buyer
of the transactions contemplated by, this Agreement and the Transaction
Documents to which Buyer is a party have been duly and validly authorized by all
necessary action by or on behalf of Buyer. This Agreement has been, and when
executed and delivered by Buyer the Transaction Documents will be, duly and
validly executed and delivered by Buyer and the valid and binding obligations of
Buyer, enforceable against Buyer in accordance with their terms, except as the
same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect relating to the
enforcement of creditors' rights generally or by principles governing the
availability of equitable remedies.
6.3 No Conflicts; Required Consents. Except for the Required Consents,
-------------------------------
the execution and delivery by Buyer, the performance of Buyer under, and the
consummation of the transactions contemplated by, this Agreement and the
Transaction Documents to which Buyer is a party do not and will not (a) violate
any provision of the articles of incorporation or bylaws of Buyer, (b) violate
any Legal Requirement, (c) require any consent, approval or authorization of, or
filing of any certificate, notice, application, report or other document with
any Governmental Authority or other Person or (d) (i) violate or result in a
breach of or constitute a default under (without regard to requirements of
notice, lapse of time or elections of any Person or any combination thereof),
(ii) permit or result in the termination, suspension, modification of, (iii)
result in the acceleration of (or give any Person the right to accelerate) the
performance of Buyer under, or (iv) result in the creation or imposition of any
Encumbrance under, any instrument or other agreement to which Buyer is a party
or by which Buyer or any of its assets is bound or affected, except for purposes
of
-18-
this clause (d) such violations, conflicts, breaches, defaults, terminations,
suspensions, modifications and accelerations as would not, individually or in
the aggregate, have a material adverse effect on the validity, binding effect or
enforceability of this Agreement or on the ability of Buyer to perform its
obligations under this Agreement or the Transaction Documents to which it is a
party.
6.4 Finders and Brokers. Buyer has not employed any financial advisor,
-------------------
broker or finder or incurred any liability for any financial advisory,
brokerage, finder's or similar fee or commission in connection with the
transactions contemplated by this Agreement for which Seller could be liable.
6.5 Legal Proceedings. There are no claims, actions, suits, proceedings
-----------------
or investigations pending or, to Buyer's Knowledge, threatened, by or before any
Governmental Authority, or any arbitrator, by or against or affecting or
relating to Buyer which, if adversely determined, would restrain or enjoin the
consummation of the transactions contemplated by this Agreement or declare
unlawful the transactions or events contemplated by this Agreement or cause any
of such transactions to be rescinded.
Section 7. Additional Covenants.
7.1 Access to Premises and Records. Between the date of this Agreement
------------------------------
and the Closing Date, Seller will give Buyer and its counsel, accountants and
other representatives full access during normal business hours upon reasonable
notice to all the premises and books and records of the Business and to all the
Assets and to the System personnel and will furnish to Buyer and such
representatives all such documents, financial information, and other information
regarding the Business and the Assets as Buyer from time to time reasonably may
request; provided that no such investigation will affect or limit the scope of
any of Seller's representations, warranties, covenants and indemnities in this
Agreement or any Transaction Document or limit liability for any breach of any
of the foregoing.
7.2 Continuity and Maintenance of Operations; Financial Statements. Except
--------------------------------------------------------------
as Buyer may otherwise consent in writing, between the date of this Agreement
and the Closing:
7.2.1 Seller will (a) conduct the Business and operate the Systems
only in the usual, regular and ordinary course consistent with past practices
(including fulfilling installation requests and making budgeted capital
expenditures; provided, however, that to the extent that any assumption
underlying any of Seller's budgeted capital expenditure(s) turns out to have
been untrue, and such capital expenditure(s) is no longer reasonably necessary
for the operation of the Business, Seller will not be required to make such
capital expenditure(s)) and (b) use commercially reasonable efforts to (i)
preserve its current business intact, including preserving existing
relationships with franchising authorities, suppliers, customers and others
having business dealings with Seller relating to the Business unless Buyer
requests otherwise, (ii) keep available the services of its employees and agents
providing services in connection with the Business and (iii) continue making
marketing, advertising and promotional expenditures with respect to the Business
consistent with past practices.
-19-
7.2.2 Seller will maintain the Assets in good repair, order and
condition (ordinary wear and tear excepted), will maintain equipment and
inventory at historical levels consistent with past practices, will maintain in
full force and effect, policies of insurance with respect to the Business in
such amounts and with respect to such risks as customarily maintained by
operators of cable television systems of the size and geographic location as the
Systems and will maintain its books, records and accounts in the usual, regular
and ordinary manner on a basis consistent with past practices. Seller will not
itself, and will not permit any of its partners, agents or employees to, pay any
of Seller's subscriber accounts receivable (other than for their own residences)
prior to the Closing Date. Seller will continue to implement its procedures for
disconnection and discontinuance of service to subscribers whose accounts are
delinquent in accordance with those in effect on the date of this Agreement.
7.2.3 Without the prior approval of Buyer, Seller will not (a) change
the rate charged for Basic Service, Expanded Basic Service or Pay TV or add,
delete, retier or repackage any programming services except to the extent
required under the 1992 Cable Act or any other Legal Requirement, provided
however if Seller changes such rates in order to so comply, Seller will provide
Buyer with copies of any FCC forms (even if not filed with any Governmental
Authority) that Seller used to determine that the new rates were allowable, (b)
sell, transfer or assign any portion of the Assets other than sales in the
ordinary course of business or permit the creation of any Encumbrance on any
Asset other than a Permitted Encumbrance or any Encumbrance which will be
released at or prior to Closing, (c) modify in any material respect, terminate,
suspend or abrogate any Governmental Permits, Seller Contracts or any other
contract or agreement (other than those constituting Excluded Assets), (d) enter
into any contract or commitment or incur any indebtedness or other liability or
obligation of any kind relating to any System or the Business involving an
expenditure in excess of $25,000, other than contracts or commitments which are
cancelable on 30 days' notice or less without penalty, (e) take or omit to take
any action that would result in any of its representations or warranties in this
Agreement or in any Transaction Document not being true and correct when made or
as of the Closing, (f) engage in any marketing, subscriber installation or
collection practices that are inconsistent with past practices, or (g) enter
into any agreement with or commitment to any competitive access providers with
respect to the Systems.
7.2.4 Seller promptly will deliver to Buyer true and complete copies
of monthly and quarterly financial statements and operating reports and any
reports with respect to the operations of the Business prepared by or for Seller
at any time between the date of this Agreement and the Closing Date. All
financial statements so delivered will be prepared in accordance with GAAP on a
basis consistent with the Financial Statements.
7.2.5 Seller will give or cause to be given to Buyer as soon as
reasonably possible but in any event no later than 5 Business Days prior to the
date of submission to the appropriate Governmental Authority, copies of all Rate
Regulation Documents prepared with respect to any of the Systems, and Seller
will make a good faith effort to address any specific concerns raised by Buyer
with respect to such documents.
-20-
7.2.6 Seller will duly and timely file a valid notice of renewal
under Section 626 of the Cable Communications Policy Act of 1984 with the
appropriate Governmental Authority with respect to all cable television
franchises of the Business that will expire within 36 months after any date
between the date of this Agreement and the Closing Date.
7.2.7 Seller will promptly notify Buyer of any fact, circumstance,
event or action by it or otherwise (a) which, if known at the date of this
Agreement, would have been required to be disclosed in or pursuant to this
Agreement or (b) the existence, occurrence or taking of which would result in
any of Seller's representations and warranties in this Agreement or any
Transaction Document not being true, complete and correct when made or at the
Closing, and, with respect to clause (b) use its best efforts to remedy the
same; provided, however, that nothing in this SECTION 7.2.7 shall be deemed to
limit Buyer's rights under SECTION 10.1.2.
7.3 Employee Matters.
----------------
7.3.1 Buyer will have no obligation to employ or offer employment to
any of the employees of Seller. Seller agrees that it will not make any
representations to any of its employees regarding future employment with Buyer
following consummation of the transactions contemplated hereby. Seller
acknowledges that it has no authority to bind Buyer to any employment
arrangement with any of Seller's employees. Seller hereby represents and
warrants that it has not represented itself as having any such authority and
agrees that it will not make any such representations. As of the Closing Date,
Seller will terminate the employment of all its employees who were employed
incidental to the conduct of the Business whose employment will not continue
with Seller after the Closing and will promptly pay to all such employees all
compensation, including salaries, commissions, bonuses, deferred compensation,
severance, insurance, pensions, profit sharing, vacation (except for accrued
vacation included in the adjustments pursuant to SECTION 3.3), sick pay and
other compensation or benefits to which they are entitled for periods prior to
the Closing, including all amounts, if any, payable on account of the
termination of their employment. Seller agrees to cooperate in all reasonable
respects with Buyer to allow Buyer to evaluate and interview employees of the
Business to make hiring decisions. Such cooperation will include but not be
limited to allowing Buyer to contact employees during work time and, with the
consent of the employee, making personnel records available. Buyer will give
Seller written notice on or before 60 days after the date hereof of the name of
all employees of the System to whom Buyer desires to offer employment on and
after the Closing Date (subject to satisfaction of Buyer's conditions for
employment). Seller will not, without the prior written consent of Buyer, change
the compensation or benefits of any employees of the Business except in
accordance with past practice.
7.3.2 All claims and obligations under, pursuant to or in connection
with any welfare, medical, insurance, disability or other employee benefit plans
of Seller or arising under any Legal Requirement affecting employees of Seller
incurred on or before the Closing Date or resulting or arising from events or
occurrences occurring or commencing on or before the Closing Date will remain
the responsibility of Seller, whether or not such employees are hired by Buyer
after the Closing.
-21-
7.3.3 In no event shall Purchaser by virtue of anything express or
implied, or anything done or not done pursuant to this Agreement, assume, or be
responsible for any liabilities or obligations of any kind with respect to
Seller's relationship with its employees at the time of termination of
employment of such employees, including without limitation any liabilities or
obligations described below. Seller will remain solely responsible for, and will
indemnify and hold harmless Buyer from and against all Losses arising from or
with respect to, all salaries and all severance, vacation (except for accrued
vacation included in the adjustments pursuant to SECTION 3.3), medical, sick,
holiday, continuation coverage and other compensation or benefits (including any
pension, retirement, savings and profit sharing plans and all expenses
attributable thereto) to which Seller's employees (whether or not hired by
Buyer) may be entitled as a result of their employment by Seller prior to the
Closing, the termination of their employment prior to the Closing, the
consummation of the transactions contemplated hereby or pursuant to any
applicable Legal Requirement (including without limitation WARN) or otherwise
relating to their employment prior to the Closing.
7.3.4 Nothing in this Agreement shall be interpreted to require Buyer
to adopt the Collective Bargaining Agreement, and/or any agreements, memoranda,
programs or employee benefit plans contained therein or contemplated thereby.
The Assumed Liabilities in no event shall include any collective bargaining
agreement or other labor agreement. Buyer shall not be obligated or responsible,
by virtue of this Agreement or anything done or not done pursuant to this
Agreement, for performance of any terms of any collective bargaining agreement
or other labor agreement applicable to any of Seller's employees, salaried or
hourly, at any of the Seller's facilities. Seller agrees that following the
Closing it will honor all of its continuing obligations under the Collective
Bargaining Agreement, if any.
7.3.5 Seller represents and warrants that it has not and shall not
make any representations to anyone, including without limitation any union
representing Seller's employees or to Seller's employees, that Buyer will, may,
or is considering adopting any collective bargaining agreement or other labor
agreement.
7.4 Leased Vehicles; Other Capital Leases. Seller will pay the remaining
-------------------------------------
balances on any leases for vehicles or capital leases included in the Equipment
and will deliver title to such vehicles and other Equipment free and clear of
all Encumbrances (other than Permitted Encumbrances) to Buyer at the Closing.
7.5 Required Consents; Estoppel Certificates.
----------------------------------------
7.5.1 Seller will use commercially reasonable efforts to obtain in
writing, as promptly as possible and at its expense, all the Required Consents,
the approval of its partners for the consummation of the transactions
contemplated hereby, and any other consent, authorization or approval required
to be obtained by Seller in connection with the transactions contemplated by
this Agreement, in form and substance reasonably satisfactory to Buyer and
deliver to Buyer copies of such Required Consents and such other consents,
authorizations or approvals promptly after they are obtained by Seller;
provided, however, that nothing in this SECTION 7.5 will limit the rights of
-22-
Buyer to terminate the Agreement pursuant to SECTION 10.1.2 hereof if the
condition specified in SECTION 8.2.4 has not been met by the Outside Closing
Date. Such Required Consents will be proposed in a form that provides
confirmation from the third party of the continued existence of and the absence
of defaults under the applicable Seller Contract or Governmental Permit. Buyer
will cooperate with Seller to obtain all Required Consents, but Buyer will not
be required to accept or agree or accede to any modifications or amendments to,
or changes in, or the imposition of any condition to the transfer to Buyer of
(in each case other than inconsequential matters with no adverse effect on
Buyer), any Seller Contract or Governmental Permit that are not acceptable to
Buyer in its sole discretion. Notwithstanding the foregoing, Seller will
complete, execute and deliver to the appropriate Governmental Authority, the FCC
Forms 394 prepared by Buyer with respect to each franchise as to which such Form
394 is required within two Business Days after it receives each such Form 394
from Buyer.
7.5.2 Seller will use commercially reasonable efforts to obtain for
each lease that has not been recorded in the public records, execution of a
document suitable for recording in the public records and sufficient after
recording to constitute a memorandum of lease.
7.6 [Intentionally Omitted].
7.7 Title Commitments and Surveys.
-----------------------------
7.7.1 After the execution of this Agreement, Buyer will order at
Seller's expense (a) commitments for owner's title insurance policies on all
Real Property owned by Seller and on easements which provide access to each such
parcel of real property, (b) commitments for lessee's title insurance policies
for all Real Property leased by Seller which is used for headend or tower sites
and on easements which provide access to each such site and (c) an ALTA survey
(including such items on Table A of the Minimum Standard Detail Requirements and
Classifications thereto that Buyer in its reasonable judgment determines are
desirable or necessary) on each parcel of Real Property for which a title
insurance policy is to be obtained. The title commitments will evidence a
commitment to issue an ALTA title insurance policy insuring good, marketable and
indefeasible fee simple title or leasehold interest, in the case of leased Real
Property, if applicable) to each parcel of such Real Property, subject only to
Permitted Encumbrances, for such amount as Buyer directs and will contain no
exceptions except for items which in Buyer's reasonable opinion do not adversely
affect (other than in an immaterial way as to any individual parcel) the good,
marketable and indefeasible title to or Buyer's access or quiet use or enjoyment
of such Real Property in the manner the Real Property is presently used or in
the normal conduct of the Business. At the Closing, Seller will cause Buyer to
receive, at Seller's expense, title commitments redated to the date and time of
Closing. In the event Seller has not eliminated or caused to be eliminated all
unacceptable exceptions from such policies or commitments prior to Closing, and
Buyer elects to proceed with the Closing, Buyer will be entitled to
indemnification with respect to such exceptions as provided in SECTION 11.2.
7.7.2 Title insurance policies on all Real Property in such amounts
as Buyer directs will be delivered to Buyer at Seller's expense within 30 days
after the Closing Date
-23-
evidencing title to the Real Property vested in Buyer consistent with the
commitments delivered at the Closing pursuant to SECTION 7.7.1.
7.8 HSR Notification. As soon as practicable after the execution of this
-----------------
Agreement, but in any event no later than 30 days after such execution, Seller
and Buyer will each complete and file, or cause to be completed and filed, any
notification and report required to be filed under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act"); and each such
filing will request early termination of the waiting period imposed by the HSR
Act. The parties will use their reasonable best efforts to respond as promptly
as reasonably practicable to any inquiries received from the Federal Trade
Commission (the "FTC") and the Antitrust Division of the Department of Justice
(the "Antitrust Division") for additional information or documentation and to
respond as promptly as reasonably practicable to all inquiries and requests
received from any other Governmental Authority in connection with antitrust
matters. The parties will use their respective reasonable best efforts to
overcome any objections which may be raised by the FTC, the Antitrust Division
or any other Governmental Authority having jurisdiction over antitrust matters.
Notwithstanding the foregoing, Buyer will not be required to make any
significant change in the operations or activities of the business (or any
material assets employed therein) of Buyer or any of its Affiliates, if Buyer
determines in good faith that such change would be materially adverse to the
operations or activities of the business (or any material assets employed
therein) of Buyer or any of its Affiliates having significant assets, net worth,
or revenue. Notwithstanding anything to the contrary in this Agreement, if
Buyer or Seller, in its sole opinion, considers a request from a governmental
agency for additional data and information in connection with the HSR Act to be
unduly burdensome, such party may terminate this Agreement by giving written
notice to the other. Within 10 days after receipt of a statement therefor,
Seller will reimburse Buyer for one-half of the filing fees payable by Buyer in
connection with Buyer's filing under the HSR Act.
7.9 No Shopping. None of Seller, its partners or any agent or
-----------
representative of any of them will, during the period commencing on the date of
this Agreement and ending with the earlier to occur of the Closing or the
termination of this Agreement, directly or indirectly (a) solicit or initiate
the submission of proposals or offers from any Person for, (b) participate in
any discussions pertaining to or (c) furnish any information to any Person other
than Buyer relating to, any direct or indirect acquisition or purchase of all or
any portion of the Assets.
7.10 Lien and Judgment Searches. Not more than 20 nor fewer than 10 days
--------------------------
prior to the expected Closing Date, Seller, at its expense, will provide Buyer
with (a) the results of a lien search conducted by a professional search company
of records in the offices of the secretaries of state in each state and county
clerks in each county where there exist tangible Assets, and in the state and
county where Seller's principal offices are located, including copies of all
financing statements or similar notices or filings (and any continuation
statements) discovered by such search company and (b) the results of a search of
the dockets of the clerk of each federal and state court sitting in the city,
county or other applicable political subdivision where the principal office or
any material assets of Seller may be located, with respect to judgments, orders,
writs or decrees against or affecting Seller or any of the Assets.
-24-
7.11 Transfer Taxes. Any state or local sales or transfer Taxes imposed by
--------------
any Governmental Authority arising from or payable by reason of the transfer of
any of the Assets pursuant to this Agreement will be paid by Seller. Any state
or local use Taxes or fees or any other charge (including filing fees) imposed
by any Governmental Authority arising from or payable by reason of the transfer
of any of the Assets pursuant to this Agreement will be paid by one-half by
Buyer, with the balance to be paid by Seller.
7.12 Distant Broadcast Signals. Unless otherwise restricted or prohibited
-------------------------
by any Governmental Authority or applicable Legal Requirement, if requested by
Buyer, Seller will delete prior to the Closing Date any distant broadcast
signals which Buyer determines will result in unacceptable liability on the part
of Buyer for copyright payments with respect to continued carriage of such
signals after the Closing.
7.13 Letter to Programmers. On or before the Closing Date, Seller will
---------------------
transmit a letter in the form of EXHIBIT E to all programmers from which Seller
purchases programming for the Systems and provide Buyer with a copy of each such
letter.
7.14 Updated Schedules. Not later than ten Business Days prior to the
-----------------
expected Closing Date, Seller will deliver to Buyer revised copies of all
Schedules to this Agreement which will have been updated and marked to show any
changes occurring between the date of this Agreement and the date of delivery;
provided, however, that for purposes of Seller's representations and warranties
and covenants in this Agreement, all references as of the date of signing to the
Schedules will mean the version of the Schedules attached to this Agreement on
the date of signing, and all references as of the date of Closing to the
Schedules will mean the version of the Schedules attached to this Agreement on
the date of Closing, and provided further, that if the effect of any such
updates to Schedules is to disclose any one or more additional properties,
privileges, rights, interests or claims as Assets, Buyer, at or before Closing,
will have the right (to be exercised by written notice to Seller) to cause any
one or more of such items to be designated as and deemed to constitute Excluded
Assets for all purposes under this Agreement.
7.15 Use of Names and Logos. For a period of 90 days after the Closing
----------------------
Date, Buyer will be entitled to use all trademarks, trade names, service marks,
service names, logos and similar proprietary rights of Seller and all
derivations and abbreviations of such name and related marks to the extent
incorporated in or on the Assets transferred to it at the Closing.
Notwithstanding the foregoing, Buyer will not be required to remove or
discontinue using any such trade name or xxxx that is affixed to converters or
other items in or to be used in subscriber homes or properties, or as are used
in a similar fashion making such removal or discontinuation impracticable for
Buyer.
7.16 Subscriber Billing Services. Seller will provide to Buyer, upon
---------------------------
request, on terms and conditions reasonably satisfactory to each party, access
to and the right to use its billing system computers, software and related fixed
assets in connection with the Systems acquired by Buyer for a period of up to 90
days following the Closing to allow for conversion of existing billing
arrangements ("Transitional Billing Services"); provided however that Buyer will
not be required to pay Seller more than Seller's actual cost of providing such
service. Buyer will notify Seller at
-25-
least 10 days prior to the expected Closing Date as to whether it desires
Transitional Billing Services from Seller.
7.17 Satisfaction of Conditions. Each party will use its best efforts to
--------------------------
satisfy, or to cause to be satisfied, the conditions to the obligations of the
other party to consummate the transactions contemplated by this Agreement, as
set forth in SECTION 8, provided that Buyer will not be required to agree to any
increase in the amount payable with respect to, or any modification that makes
more burdensome in any material respect, any of the Assumed Liabilities.
7.18 Confidentiality and Publicity. Neither party will issue any press
-----------------------------
release or make any other public announcement or any oral or written statements
to Seller's employees concerning this Agreement or the transactions contemplated
hereby except as required by applicable Legal Requirements, without the prior
written consent of the other party. Each party will hold, and will cause its
employees, consultants, advisors and agents to hold the terms of this Agreement
in confidence; provided that (a) such party may use and disclose such
information once it has become publicly disclosed (other than by such party in
breach of its obligations under this Section) or which rightfully has come into
the possession of such party (other than from the other party) and (b) to the
extent that such party may be compelled by Legal Requirements to disclose any of
such information, but the party proposing to disclose such information will
first notify and consult with the other party concerning the proposed
disclosure, to the extent reasonably feasible. Each party also may disclose such
information to employees, consultants, advisors, agents and actual or potential
lenders whose knowledge is necessary to facilitate the consummation of the
transactions contemplated by this Agreement. The obligation by either party to
hold information in confidence pursuant to this Section will be satisfied if
such party exercises the same care with respect to such information as it would
exercise to preserve the confidentiality of its own similar information.
7.19 Bulk Transfers. Buyer waives compliance by Seller with Legal
--------------
Requirements relating to bulk transfers applicable to the transactions
contemplated hereby.
7.20 Environmental Reports. Within 60 days after the execution of this
---------------------
Agreement, Seller will, at its expense, obtain and deliver to Buyer for each
parcel of Real Property owned or leased by Seller a current Phase I
Environmental Site Assessment ("Environmental Report") prepared by a nationally
known environmental engineering firm reasonably satisfactory to Buyer in
accordance with ASTM Standard E 1527-93 and certified to Buyer. Each
Environmental Report will include, in addition to the process described in E
1527-93, such soil and groundwater sampling and other testing as will enable the
environmental engineers to determine if Hazardous Substances are detected and to
provide an estimate of the cost to remove and dispose of the Hazardous
Substances or otherwise remediate the property in accordance with all applicable
Environmental Laws.
Section 8. Conditions Precedent.
8.1 Conditions to the Obligations of Buyer and Seller. The obligations of
-------------------------------------------------
each party to consummate the transactions contemplated by this Agreement are
subject to the satisfaction, at or
-26-
before the Closing, of the following, which may be waived by the parties to the
extent permitted by applicable Legal Requirements:
8.1.1 HSR Act Filings. All filings required under the HSR Act have
---------------
been made and the applicable waiting period has expired or been earlier
terminated without the receipt of any objection or the commencement or threat of
any litigation by a Governmental Authority of competent jurisdiction to restrain
the consummation of the transactions contemplated by this Agreement.
8.1.2 Absence of Litigation. No action, suit or proceeding is pending
---------------------
or threatened by or before any Governmental Authority and no Legal Requirement
has been enacted, promulgated or issued or become or deemed applicable to any of
the transactions contemplated by this Agreement by any Governmental Authority,
which would (a) prohibit Buyer's ownership or operation of all or a material
portion of any System, the Business or the Assets, (b) compel Buyer to dispose
of or hold separate all or a material portion of any System, the Business or the
Assets as a result of any of the transactions contemplated by this Agreement,
(c) if determined adversely to Buyer's interest, materially impair the ability
of Buyer to realize the benefits of the transactions contemplated by this
Agreement (including the ability to acquire the Systems pursuant to a like-kind
exchange under Section 1031 of the Code) or have a material adverse effect on
the right of Buyer to exercise full rights of ownership of the Systems or (d)
prevent or make illegal the consummation of any transactions contemplated by
this Agreement.
8.2 Conditions to the Obligations of Buyer. The obligations of Buyer to
--------------------------------------
consummate the transactions contemplated by this Agreement are subject to the
satisfaction, at or before the Closing, of the following conditions, which may
be waived by Buyer to the extent permitted by applicable Legal Requirements:
8.2.1 Representations and Warranties. All representations and
------------------------------
warranties of Seller in this Agreement and any Transaction Document are true and
correct in all material respects, in each case on and as of the Closing Date
with the same effect as if made at and as of the Closing Date, except for
changes permitted or contemplated by this Agreement.
8.2.2 Performance of Agreements. Seller has performed in all material
-------------------------
respects all obligations and agreements and complied in all material respects
with all covenants and conditions in this Agreement and any Transaction Document
to be performed or complied with by Seller at or before the Closing.
8.2.3 Deliveries. Seller has delivered the items and documents
----------
required to be delivered by it pursuant to this Agreement, including those
required under SECTION 9.2.
8.2.4 Consents and Franchise Extensions and Renewals. Seller has
----------------------------------------------
delivered to Buyer evidence, in form and substance satisfactory to Buyer, that
all of the Required Consents marked with an asterisk on SCHEDULE 5.3 have been
obtained or given (or deemed to have been given) and are in full force and
effect.
-27-
8.2.5 Environmental Matters. The Environmental Reports delivered to
---------------------
Buyer pursuant to SECTION 7.20 and any other environmental audits or assessments
conducted with respect to the Assets do not indicate the existence of any
conditions that could reasonably be expected to give rise to a material risk of
liability.
8.2.6 No Material Adverse Change. There has not been any material
--------------------------
adverse change in the Business, the Assets or the Systems since the date of this
Agreement other than any change arising out of general economic conditions in
the United States or any change affecting the United States cable television
industry as a whole, including any change arising from (a) legislation,
litigation, rulemaking or regulation or (b) competition caused by or arising
from other multiple channel distribution services.
8.2.7 EBS. As of the Closing Date, the Business has no fewer than
---
23,200 EBSs.
8.2.8 Partner Approval. The partners of Seller shall have approved
----------------
this Agreement and the transactions contemplated by this Agreement.
8.3 Conditions to Obligations of Seller. The obligations of Seller to
-----------------------------------
consummate the transactions contemplated by this Agreement are subject to the
satisfaction by Seller at or before the Closing, of the following, which may be
waived by Seller, to the extent permitted by applicable Legal Requirements:
8.3.1 Representations and Warranties. All representations and
------------------------------
warranties of Buyer contained in this Agreement and any Transaction Document are
true and correct in all material respects, in each case on and as of the Closing
Date with the same effect as if made on and as of the Closing Date, except for
changes permitted or contemplated by this Agreement.
8.3.2 Performance of Agreements. Buyer has performed in all material
-------------------------
respects all obligations and agreements, and complied in all material respects
with all covenants and conditions in this Agreement and any Transaction Document
to be performed or complied with by Buyer at or before the Closing.
8.3.3 Deliveries. Buyer has delivered the items and documents
----------
required to be delivered by it pursuant to this Agreement, including those
required under SECTION 9.3.
8.3.4 Partner Approval. The partners of Seller shall have approved
----------------
this Agreement and the transactions contemplated by this Agreement.
8.4 Waiver of Conditions. Any party may waive in writing any or all of the
--------------------
conditions to its obligations under this Agreement.
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Section 9. Closing
9.1 The Closing; Time and Place. The Closing will be held on a date
---------------------------
specified by Buyer (upon three Business Days prior notice to Seller) that is
within 15 days after all conditions to the Closing contained in this Agreement
(other than those based on acts to be performed at the Closing) have been
satisfied or waived. The Closing will be held at 10:00 a.m. local time at
Buyer's office located at 0000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000,
or at such place and time as Buyer and Seller may agree.
9.2 Seller's Delivery Obligations. At the Closing, Seller will deliver (or
-----------------------------
cause to be delivered) to Buyer the following:
9.2.1 a Xxxx of Sale, Assignment and Assumption Agreement in the form
attached as EXHIBIT B;
9.2.2 a special warranty deed in a form reasonably acceptable to
Buyer (and complying with applicable state laws) with respect to each parcel of
owned Real Property, duly executed and acknowledged and in recordable form,
warranting to defend title to such Real Property against all persons claiming
by, through or under Seller, subject only to Permitted Encumbrances, and in form
sufficient to permit the title company to issue the title policy described in
SECTION 7.7.1 to Buyer with respect to such Real Property;
9.2.3 an Assignment and Assumption of Contracts in the form attached
as EXHIBIT C;
9.2.4 one or more Assignments of Leases in the form attached as
EXHIBIT D and, if requested by Buyer, short forms or memoranda of such
Assignments in recordable form;
9.2.5 any memorandum of lease obtained by Seller pursuant to SECTION
7.5.2;
9.2.6 an affidavit of Seller, under penalty of perjury, that Seller
is not a "foreign person" (as defined in the Foreign Investment in Real Property
Tax Act and applicable regulations) and that Buyer is not required to withhold
any portion of the consideration payable under this Agreement under the
provisions of such Act in the form attached as EXHIBIT F;
9.2.7 motor vehicle title certificates and such other transfer
instruments as Buyer may deem necessary or advisable to transfer the Assets to
Buyer and to perfect Buyer's rights in the Assets;
9.2.8 an opinion of Xxxxx X. Xxxxxxxx, counsel to Seller, or of any
other counsel to Seller reasonably acceptable to Buyer, dated the Closing Date,
in substantially the form set forth in EXHIBIT H;
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9.2.9 evidence satisfactory to Buyer that all Encumbrances affecting
any of the Assets (other than Permitted Encumbrances) have been terminated and
released;
9.2.10 the title insurance commitments described in SECTION 7.7.1;
9.2.11 a certificate, dated the Closing Date, signed by an executive
officer of GP, stating that to his or her knowledge, the conditions set forth in
SECTIONS 8.3.1 and 8.3.2, are satisfied; and
9.2.12 such other documents as Buyer may reasonably request in
connection with the transactions contemplated by this Agreement.
9.3 Buyer's Delivery Obligations. At the Closing, Buyer will deliver (or
-----------------------------
cause to be delivered) to Seller the following:
9.3.1 the Base Purchase Price required to be paid at the Closing, as
adjusted in accordance with Section 3.4.1 of this Agreement minus the Deposit
(plus interest accrued thereon);
9.3.2 a Xxxx of Sale, Assignment and Assumption Agreement in the form
attached as EXHIBIT B;
9.3.3 an Assignment and Assumption of Contracts in the form attached
as EXHIBIT C;
9.3.4 a certificate, dated the Closing Date, signed by an executive
officer of Buyer, stating that to his or her knowledge, the conditions set forth
in SECTIONS 8.2.1, 8.2.2, 8.2.6 and 8.2.7 are satisfied;
9.3.5 the opinion of Xxxxxxxxx Xxxxxx, Esq., counsel for Buyer, dated
the Closing Date, in substantially the form set forth in EXHIBIT H; and
9.3.6 such other documents as Seller may reasonably request in
connection with the transactions contemplated by this Agreement.
Section 10. Termination
10.1 Termination Events. This Agreement may be terminated and the
------------------
transactions contemplated by this Agreement may be abandoned:
10.1.1 At any time by the mutual written agreement of Buyer and
Seller;
10.1.2 By Buyer at any time, if Seller is in material breach or
default of any of Seller's covenants, agreements or other obligations in this
Agreement or in any Transaction Document, or if any of Seller's representations
in this Agreement or in any Transaction Document
is not true in all material respects when made or when otherwise required by
this Agreement or any Transaction Document to be true and such breach or default
or failure to be true is not cured by Seller or waived by Buyer prior to
Closing;
10.1.3 By Seller at any time, if Buyer is in material breach or
default of any of Buyer's covenants, agreements or other obligations in this
Agreement or in any Transaction Document, or if any of Buyer's representations
in this Agreement or in any Transaction Document is not true in all material
respects when made or when otherwise required by this Agreement or any
Transaction Document to be true and such breach or default or failure to be true
is not cured by Buyer or waived by Seller prior to Closing;
10.1.4 By either party upon written notice to the other, if Closing
has not occurred on or before November 30, 1998 (the "Outside Closing Date"),
for any reason other than a material breach or default by such party of its
respective covenants, agreements or other obligations under this Agreement, or
any of its representations this Agreement not being true and accurate in all
material respects when made or when otherwise required by this Agreement to be
true and accurate in all material respects; and
10.1.5 As otherwise provided in this Agreement.
10.2 Effect of Termination. If this Agreement is terminated pursuant to
---------------------
SECTION 10.1, all obligations of the parties under this Agreement will
terminate, except for the obligations set forth in SECTIONS 7.18, 11 and 12.16.
Termination of this Agreement pursuant to SECTIONS 10.1.2 or 10.1.3 will not
limit or impair any remedies that any party may have with respect to a breach or
default by the other of its covenants, agreements or obligations under this
Agreement.
Section 11. Survival of Representations and Warranties; Indemnification.
11.1 Survival of Representations and Warranties. The representations and
------------------------------------------
warranties of Seller in this Agreement and in the Transaction Documents to be
delivered by Seller pursuant to this Agreement will survive until the first
anniversary of the Closing Date, except that (a) all such representations and
warranties with respect to any federal, state or local Taxes, rates,
Environmental Law, ERISA, employment matters or copyright matters will survive
until 60 days after the expiration of the applicable statute of limitations
(including any extensions) for such federal, state or local Taxes, rates,
Environmental Law, ERISA, employment matters or copyright matters, respectively
and (b) the representations and warranties as to ownership of the Assets in
SECTION 5.4, SECTION 5.7.1 and in the deed or deeds delivered with respect to
Real Property will survive the Closing and the delivery of such deeds and will
continue in full force and effect without limitation. The representations and
warranties of Buyer in this Agreement and in the Transaction Documents to be
delivered by Buyer pursuant to this Agreement will survive until the first
anniversary of the Closing Date. The periods of survival of the representations
and warranties prescribed by this SECTION 11.1 are referred to as the "Survival
Period." The liabilities of the parties under their respective representations
and warranties will expire as of the expiration of the applicable Survival
Period; provided, however, that such expiration will not include, extend or
apply to any
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representation or warranty, the breach of which has been asserted by Buyer in a
written notice to Seller before such expiration or about which Seller has given
Buyer written notice before such expiration indicating that facts or conditions
exist that, with the passage of time or otherwise, can reasonably be expected to
result in a breach (and describing such potential breach in reasonable detail).
The covenants and agreements of the parties in this Agreement (that are by their
terms intended to be performed after Closing) and in the Transaction Documents
to be delivered by Seller or Buyer pursuant to this Agreement, will survive the
Closing and will continue in full force and effect without limitation.
11.2 Indemnification by Seller. Seller will indemnify and hold harmless
-------------------------
Buyer and its shareholders and its and their respective Affiliates, and the
shareholders, directors, officers, employees, agents, successors and assigns and
any Person claiming by or through any of them, as the case may be, from and
against:
11.2.1 all Losses resulting from or arising out of (i) any breach of
any representation or warranty made by Seller in this Agreement or in the
Transactions Documents delivered by Seller, (ii) any breach of any covenant,
agreement or obligation of Seller contained in this Agreement or in the
Transaction Documents delivered by Seller, (iii) any act or omission of Seller
with respect to, or any event or circumstance related to, the ownership or
operation of the Assets or the conduct of the Business, which act, omission,
event or circumstance occurred or existed prior to or at the Closing Date,
without regard to whether a claim with respect to such matter is asserted before
or after the Closing Date, including any matter described on SCHEDULE 5.13, (iv)
any liability or obligation not included in the Assumed Liabilities, (v) any
title defect Seller fails to eliminate as an exception from a title insurance
commitment referred to in SECTION 7.7.1, (vi) any claim that the transactions
contemplated by this Agreement violates WARN, or any similar state or local law
or any bulk transfer or fraudulent conveyance laws of any jurisdiction, (vii)
the presence, generation, removal or transportation of a Hazardous Substance on
or from any of the Real Property prior to the Closing Date, including the costs
of removal or clean-up of such Hazardous Substance and other compliance with the
provisions of any Environmental Laws (whether before or after Closing), or
(viii) any rate refund ordered by any Governmental Authority for periods prior
to the Closing Date; and
11.2.2 all claims, actions, suits, proceedings, demands, judgments,
assessments, fines, interest, penalties, costs and expenses (including
settlement costs and reasonable legal, accounting, experts' and other fees,
costs and expenses) incident or relating to or resulting from any of the
foregoing.
In the event that an indemnified item arises under both clause 11.2.1(i) and
under one or more of clauses 11.2.1(ii) through 11.2(viii) of this SECTION 11.2,
Buyer's rights to pursue its claim under clauses 11.2.1(ii) through 11.2(viii),
as applicable, will exist notwithstanding the expiration of the Survival Period
applicable to such claim under clause 11.2.1(i).
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11.3 Indemnification by Buyer. Buyer will indemnify and hold harmless
------------------------
Seller and Seller's partners, employees, agents, successors and assigns, and any
Person claiming by or through any of them, as the case may be, from and against:
11.3.1 all Losses resulting from or arising out of (i) any
breach of any representation or warranty made by Buyer in this Agreement or in
the Transaction Documents delivered by Buyer, (ii) any breach of any covenant,
agreement or obligation of Buyer contained in this Agreement or in the
Transaction Documents delivered by Buyer or (iii) the failure by Buyer to
perform any of its obligations in respect of the Assumed Liabilities; and
11.3.2 all claims, actions, suits, proceedings, demands,
judgments, assessments, fines, interest, penalties, costs and expenses
(including settlement costs and reasonable legal, accounting, experts' and other
fees, costs and expenses) incident or relating to or resulting from any of the
foregoing.
In the event that an indemnified item arises under both clause 11.3.1(i) and
under one or more of clauses 11.3.1(ii) or 11.3.1(iii) of this SECTION 11.3,
Seller's rights to pursue its claim under clauses 11.3.1(ii) or 11.3.1(iii), as
applicable, will exist notwithstanding the expiration of the Survival Period
applicable to such claim under clause 11.3.1(i).
11.4 Third Party Claims. Promptly after the receipt by any party of
------------------
notice of any claim, action, suit or proceeding by any Person who is not a party
to this Agreement (collectively, an "Action"), which Action is subject to
indemnification under this Agreement, such party (the "Indemnified Party") will
give reasonable written notice to the party from whom indemnification is claimed
(the "Indemnifying Party"). The Indemnified Party will be entitled, at the sole
expense and liability of the Indemnifying Party, to exercise full control of the
defense, compromise or settlement of any such Action unless the Indemnifying
Party, within a reasonable time after the giving of such notice by the
Indemnified Party, (a) admits in writing to the Indemnified Party the
Indemnifying Party's liability to the Indemnified Party for such Action under
the terms of this SECTION 11, (b) notifies the Indemnified Party in writing of
the Indemnifying Party's intention to assume such defense, (c) provides evidence
reasonably satisfactory to the Indemnified Party of the Indemnifying Party's
ability to pay the amount, if any, for which the Indemnified Party may be liable
as a result of such Action and (d) retains legal counsel reasonably satisfactory
to the Indemnified Party to conduct the defense of such Action. The other party
will cooperate with the party assuming the defense, compromise or settlement of
any such Action in accordance with this Agreement in any manner that such party
reasonably may request. If the Indemnifying Party so assumes the defense of any
such Action, the Indemnified Party will have the right to employ separate
counsel and to participate in (but not control) the defense, compromise or
settlement of the Action, but the fees and expenses of such counsel will be at
the expense of the Indemnified Party unless (i) the Indemnifying Party has
agreed to pay such fees and expenses, (ii) any relief other than the payment of
money damages is sought against the Indemnified Party or (iii) the Indemnified
Party will have been advised by its counsel that there may be one or more
defenses available to it which are different from or additional to those
available to the Indemnifying Party, and in any such case that portion of the
fees and expenses of such separate counsel that are reasonably related to
matters
-33-
covered by the indemnity provided in this SECTION 11 will be paid by the
Indemnifying Party. No Indemnified Party will settle or compromise any such
Action for which it is entitled to indemnification under this Agreement without
the prior written consent of the Indemnifying Party, unless the Indemnifying
Party has failed, after reasonable notice, to undertake control of such Action
in the manner provided in this SECTION 11.4. No Indemnifying Party will settle
or compromise any such Action (A) in which any relief other than the payment of
money damages is sought against any Indemnified Party or (B) in the case of any
Action relating to the Indemnified Party's liability for any Tax, if the effect
of such settlement would be an increase in the liability of the Indemnified
Party for the payment of any Tax for any period beginning after the Closing
Date, unless the Indemnified Party consents in writing to such compromise or
settlement.
11.5 Limitations on Indemnification -- Seller. Seller will not be
----------------------------------------
liable for indemnification arising solely under SECTION 11.2.1(I) for (a) any
Losses of or to Buyer or any other person entitled to indemnification from
Seller or (b) any claims, actions, suits, proceedings, demands, judgments,
assessments, fines, interest, penalties, costs and expenses (including
settlement costs and reasonable legal, accounting, experts' and other fees,
costs and expenses) incidental or relating to or resulting from any of the
foregoing (the items described in clauses (a) and (b) collectively being
referred to for purposes of this SECTION 11.5 as "Buyer Damages") unless the
amount of Buyer Damages for which Seller would, but for the provisions of this
SECTION 11.5, be liable exceeds, on an aggregate basis, $250,000 (the "Threshold
Amount"), in which case Seller will be liable for all such Buyer Damages, which
will be due and payable within 15 days after Seller's receipt of a statement
therefor; provided, however, that Seller shall be liable for (a) all rate
refunds ordered by any Governmental Authority for periods prior to the Closing
Date and (b) all federal, state or local taxes determined by any Governmental
Authority to be owing for periods prior to the Closing Date, regardless of
whether the aggregate amount of such rate refunds and/or taxes equals or exceeds
the Threshold Amount.
11.6 Limitations on Indemnification -- Buyer. Buyer will not be
---------------------------------------
liable for indemnification arising solely under SECTION 11.3.1(I) for (a) any
Losses of or to Seller or any other person entitled to indemnification from
Buyer or (b) any claims, actions, suits, proceedings, demands, judgments,
assessments, fines, interest, penalties, costs and expenses (including
settlement costs and reasonable legal, accounting, experts' and other fees,
costs and expenses) incidental or relating to or resulting from any of the
foregoing the items described in clauses (a) and (b) collectively being referred
to for purposes of this SECTION 11.6 as "Seller Damages") unless the amount of
Seller Damages for which Buyer would, but for the provisions of this SECTION
11.6, be liable exceeds, on an aggregate basis, the Threshold Amount, in which
case Buyer will be liable for all such Seller Damages, which will be due and
payable within 15 days after Buyer's receipt of a statement therefor.
Section 12. Miscellaneous
12.1 Parties Obligated and Benefited. Subject to the limitations set
-------------------------------
forth below, this Agreement will be binding upon the parties and their
respective assigns and successors in interest and will inure solely to the
benefit of the parties and their respective assigns and successors in
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interest, and no other Person will be entitled to any of the benefits conferred
by this Agreement. Without the prior written consent of the other party, neither
party may assign any of its rights under this Agreement or delegate any of its
duties under this Agreement, except as described in the following sentence.
Buyer agrees that Seller will have the right to assign its right to sell the
Assets under this Agreement to a qualified institution, acting as a Qualified
Intermediary (as such term is used in Treas. Reg. Section 1.1031(k)-1(g)(4), and
that this Agreement constitutes notice to Buyer of such assignment, which
assignment Seller will make effective immediately prior to Closing (provided no
such assignment will relieve Seller of any obligations under this Agreement).
12.2 Notices. Any notice, request, demand, waiver or other communication
-------
required or permitted to be given under this Agreement will be in writing and
will be deemed to have been duly given only if delivered in person or by first
class, prepaid, registered or certified mail, or sent by courier or, if receipt
is confirmed, by telecopier:
to Buyer at:
c/x Xxxxx Intercable, Inc.
0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: President
Telecopy: (000) 000-0000
with a copy similarly addressed to the attention of the General
Counsel;
with a copy to:
Xxxxx, Xxxxxx & Xxxxxx LLP
000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. XxXxxx, Esq.
Telecopy: 893-1379
to Seller at:
Bresnan Communications Company, L.P.
000 Xxxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, General Counsel
Telecopy: (000) 000-0000
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Any party may change the address to which notices are required to be sent by
giving notice of such change in the manner provided in this SECTION 12.2. All
notices will be deemed to have been received on the date of delivery, which in
the case of deliveries by telecopier will be the date of the sender's
confirmation, or on the third Business Day after mailing in accordance with this
Section, except that any notice of a change of address will be effective only
upon actual receipt.
12.3 Attorneys' Fees'. In the event of any action or suit based upon
----------------
or arising out of any alleged breach by any party of any representation,
warranty, covenant or agreement contained in this Agreement, the prevailing
party will be entitled to recover reasonable attorneys' fees and other costs of
such action or suit from the other party.
12.4 Waiver. This Agreement or any of its provisions may not be waived
------
except in writing. The failure of any party to enforce any right arising under
this Agreement on one or more occasions will not operate as a waiver of that or
any other right on that or any other occasion.
12.5 Captions. The captions of this Agreement are for convenience only
--------
and do not constitute a part of this Agreement.
12.6 Choice of Law. THIS AGREEMENT AND THE RIGHTS OF THE PARTIES UNDER
-------------
IT WILL BE GOVERNED BY AND CONSTRUED IN ALL RESPECTS IN ACCORDANCE WITH THE LAWS
OF THE STATE OF COLORADO, WITHOUT REGARD TO THE CONFLICTS OF LAWS RULES OF
COLORADO.
12.7 Terms. Terms used with initial capital letters will have the
-----
meanings specified, applicable to both singular and plural forms, for all
purposes of this Agreement. The word "include" and derivatives of that word are
used in this Agreement in an illustrative sense rather than limiting sense.
12.8 Rights Cumulative. All rights and remedies of each of the parties
-----------------
under this Agreement will be cumulative, and the exercise of one or more rights
or remedies will not preclude the exercise of any other right or remedy
available under this Agreement or applicable law.
12.9 Further Actions. Seller and Buyer will execute and deliver to the
---------------
other, from time to time at or after the Closing, for no additional
consideration and at no additional cost to the requesting party, such further
assignments, certificates, instruments, records, or other documents, assurances
or things as may be reasonably necessary to give full effect to this Agreement
and to allow each party fully to enjoy and exercise the rights accorded and
acquired by it under this Agreement.
12.10 Time. If the last day permitted for the giving of any notice or the
----
performance of any act required or permitted under this Agreement falls on a day
which is not a Business Day, the time for the giving of such notice or the
performance of such act will be extended to the next succeeding Business Day.
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12.11 Late Payments. If either party fails to pay the other any amounts
-------------
when due under this Agreement, the amounts due will bear interest from the due
date to the date of payment at the annual rate publicly announced from time to
time by The Bank of New York as its prime rate (the "Prime Rate") plus 2%,
adjusted as and when changes in the Prime Rate are made.
12.12 Counterparts. This Agreement may be executed in counterparts, each
------------
of which will be deemed an original.
12.13 Entire Agreement. This Agreement (including the Schedules and
----------------
Exhibits referred to in this Agreement, which are incorporated in and constitute
a part of this Agreement) and the Transaction Documents contain the entire
agreement of the parties and supersedes all prior oral or written agreements and
understandings with respect to the subject matter. This Agreement may not be
amended or modified except by a writing signed by the parties.
12.14 Severability. Any term or provision of this Agreement which is
------------
invalid or unenforceable will be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining rights
of the Person intended to be benefited by such provision or any other provisions
of this Agreement.
12.15 Construction. This Agreement has been negotiated by Buyer and
------------
Seller 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.
12.16 Expenses. Except as otherwise expressly provided in this
--------
Agreement, each party will pay all of its expenses, including attorneys' and
accountants' fees, in connection with the negotiation of this Agreement, the
performance of its obligations and the consummation of the transactions
contemplated by this Agreement.
12.17 Risk of Loss; Condemnation.
--------------------------
12.17.1 Seller will bear the risk of any loss or damage to the
Assets resulting from fire, theft or other casualty (except reasonable wear and
tear) at all times prior to the Closing. If any such loss or damage is
sufficiently substantial so as to preclude or prevent resumption of normal
operations of any material portion of a System or the replacement or restoration
of the lost or damaged property within 30 days from the occurrence of the event
resulting in such loss or damage, Seller will immediately notify Buyer in
writing of that fact and Buyer, at any time within 10 days after receipt of such
notice, may elect by written notice to Seller either (a) to waive such defect
and proceed toward consummation of the transaction in accordance with terms of
this Agreement or (b) terminate this Agreement. If Buyer elects to so terminate
this Agreement, Buyer and Seller will stand fully released and discharged of any
and all obligations under this Agreement. If Buyer elects to consummate the
transactions contemplated by this Agreement notwithstanding such loss or damage
and does so, there will be no adjustment in the consideration payable to Seller
on account of such loss or damage but all insurance proceeds payable as a result
of the occurrence of the event
-37-
resulting in such loss or damage (to the extent not used to replace or restore
such lost or damaged property) will be delivered by Seller to Buyer, or the
rights to such proceeds will be assigned by Seller to Buyer if not yet paid over
to Seller.
12.17.2 If, prior to the Closing, any part of or interest in the Assets
is taken or condemned as a result of the exercise of the power of eminent
domain, or if a Governmental Authority having such power informs Seller or Buyer
that it intends to condemn all or any part of or interest in the Assets (such
event being called, in either case, a "Taking"), and such Taking involves a
material part of or interest in the Assets, then Buyer may terminate this
Agreement. If Buyer does not elect or have the right to terminate this
Agreement, then (a) Buyer will have the sole right, in the name of Seller, if
Buyer so elects, to negotiate for, claim, contest and receive all damages with
respect to the Taking, (b) Seller will be relieved of its obligation to convey
to Buyer the Assets or interests that are the subject of the Taking, (c) at the
Closing Seller will assign to Buyer all of Seller's rights to all damages
payable with respect to such Taking and will pay to Buyer all damages previously
paid to Seller with respect to the Taking and (d) following the Closing, Seller
will give Buyer such further assurances of such rights and assignment with
respect to the taking as Buyer may from time to time reasonably request.
******************
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The parties have executed this Agreement as of the day and year first above
written.
SELLER:
BRESNAN COMMUNICATIONS COMPANY, L.P.
By: BCI (USA), L.P.,
its managing general partner
By: Bresnan Communications, Inc.,
its managing general partner
By:/s/ Xxxxxxx Xxxxxxx
-------------------------------
Name: Xxxxxxx Xxxxxxx
-----------------------------
Title: SVP Domestic Division
----------------------------
BUYER:
XXXXX COMMUNICATIONS OF GEORGIA/
SOUTH CAROLINA, INC.
By:/s/ Xxxxxxxxx Xxxxxx
--------------------------------
Name: Xxxxxxxxx Xxxxxx
------------------------------
Title: Vice President
-----------------------------
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