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EXHIBIT 2.2
Execution Copy
PURCHASE AND SALE AGREEMENT
This AGREEMENT is made this 16th day of October, 1998, by and between
Xxxxxxx X. Xxxxxxx and Xxxxxx X. Xxxxxxx, with an address at c/o Cable Alabama
Corporation, 0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000-0000
(collectively, "Seller"), and Knology of Huntsville, Inc., a Delaware
corporation, with an address at c/o Knology Holdings, Inc., 0000 X.X. Xxxxxxx
Xxxxx, Xxxx Xxxxx, Xxxxxxx 00000 ("Buyer").
RECITALS
WHEREAS, Cable Alabama Corporation, an Alabama corporation ("Cable
Alabama") and Buyer have entered into that certain Asset Purchase Agreement
dated as of the date hereof (the "Asset Purchase Agreement") pursuant to which
Buyer intends to acquire substantially all of the assets of Cable Alabama and
Cable Alabama intends to convey such assets to Buyer; and
WHEREAS, Seller leases the Premises (as hereinafter defined) to Cable
Alabama pursuant to a certain Lease dated October 1, 1996 and a certain
Commercial Lease dated July 3, 1995 (collectively, the "Leases"), each of which
will be terminated in connection with the Closing (as hereinafter defined); and
WHEREAS, the closing under the Asset Purchase Agreement is conditioned
upon the closing under this Agreement; and
WHEREAS, Buyer desires to buy the Property (as hereinafter defined)
from Seller and Seller desires to sell the Property to Buyer, all as more
particularly set forth herein;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Seller and Buyer hereby agree as
follows:
1. Property. Seller agrees to sell and Buyer agrees to buy, subject to
the terms and conditions of this Agreement, the following described property:
(a) all right, title and interest of Seller in and to certain
premises located in the City of Huntsville, County of
Madison, State of Alabama and the City of Madison, County of
Madison, State of Alabama as more particularly described in
Exhibit A attached hereto (the "Premises"); and
(b) all right, title and interest of Seller in and to all
buildings and improvements located on the Premises
(collectively, the "Improvements").
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The right, title and interest of Seller specified in subparagraphs (a) and (b)
of this Paragraph 1 are hereinafter sometimes collectively called the
"Property".
2. Purchase Price. The agreed purchase price for the Property is
$5,000,000.00 (the "Purchase Price"). On the Closing Date (as such term is
defined in the Asset Purchase Agreement), Buyer shall pay to Seller in cash, by
bank or cashiers check or by wire transfer of immediately available federal
funds the amount of the Purchase Price.
3. Closing. The closing of the sale of the Property (the "Closing")
pursuant to this Agreement shall take place on the Closing Date. Unless
otherwise mutually agreed to by Seller and Buyer in writing, the Closing shall
take place by mail and/or by facsimile in accordance with the provisions of the
Asset Purchase Agreement concerning the closing thereunder.
4. Title. The Premises and Improvements shall be free from all
encumbrances, except:
(a) Permitted Exceptions (as such term is defined in the Asset
Purchase Agreement); and
(b) any encumbrances of record that secure monetary obligations
of Seller (all of which encumbrances shall be released of
record in accordance with Paragraph 10 hereof).
The encumbrances referenced in clauses (a) and (b) above shall be collectively
referred to herein as the "Permitted Encumbrances". Except to the extent
expressly provided herein or in the Asset Purchase Agreement, Buyer shall have
no right to object to title to the Premises or not to proceed to Closing on the
basis of title unless any encumbrance on title at the time of Closing is not a
Permitted Encumbrance.
5. Due Diligence. It is understood that in connection with its due
diligence activities relating to the transactions contemplated by the Asset
Purchase Agreement, Buyer shall have the right, at its sole cost and expense,
to conduct or cause to be conducted, such audits, assessments, reviews,
investigations, inspections, tests and studies of the Property, and shall
obtain, at its sole cost and expense, such information regarding title to the
Premises and Improvements, as Buyer deems necessary or desirable in connection
with this Agreement. In furtherance of such understanding, Seller shall, and
Seller shall cause Cable Alabama to, subject to the provisions of this
Paragraph 5, permit Buyer, its agents, representatives and employees
(collectively, "Buyer's Representatives") to have full access to the Property
and all books, records and other documentation and information relating to the
Property. As of the execution of this Agreement, Seller has delivered to Buyer
true and correct copies of all existing title insurance policies, commitments
for title insurance, surveys, and environmental and engineering reports
pertaining to the Property which Seller has in its possession. Buyer and
Buyer's Representatives may enter upon the Property only at reasonable times
after at least twenty-four (24) hours' prior notice to either Seller or Cable
Alabama. Buyer shall take all reasonable precautions to minimize any
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adverse impact to the Property of any its due diligence activities. Buyer shall
promptly deliver to Seller copies of all written results, reports and materials
containing information relating to the Property and which are obtained by Buyer
as a result of Buyer's due diligence activities. Buyer shall, immediately after
any entry or any due diligence activity by Buyer or any of Buyer's
Representatives on the Property, restore the Property at its sole cost to
substantially the condition which existed immediately prior thereto to the
extent that any adverse change in condition is due to such entry or due
diligence activity. Buyer shall indemnify and hold Seller harmless against and
from any and all liabilities, costs, damages, claims or expenses arising in
connection with any physical damage or personal injury directly resulting from
Buyer's or Buyer's Representatives' conduct of inspections, tests or studies
and other due diligence activities. It is expressly understood that Buyer shall
not be responsible for any costs, expenses, damages or liabilities incurred by
Seller by reason of the information disclosed by such inspections, tests and
studies, or other due diligence activities, conducted by Buyer or Buyer's
Representatives. All information obtained by Buyer or Buyer's Representatives
with respect to the Property shall be held in confidence by Buyer and Buyer's
Representatives prior to the Closing and not disclosed to third parties, except
in furtherance of Buyer's due diligence activities with respect to the
Property. If for any reason a Closing does not occur with respect to the
Property, Buyer shall (i) return to Seller all materials and other information
regarding the Property that Seller has provided to Buyer, and (ii) deliver
immediately to Seller copies of all written results, reports and materials
resulting from Buyer's or Buyer's Representatives' due diligence activities
with respect to the Property and not previously delivered to Seller.
6. Condition of Premises. As between Buyer and Seller, the Property is
to be sold pursuant to this Agreement AS IS WHERE IS. No guarantees,
representations or warranties, express or implied, are made by Seller with
respect to the Property, except to the extent, if any, expressly set forth in
the Deed. Buyer expressly acknowledges and agrees that it is not relying on any
representations or warranties of any kind whatsoever from Seller, its
attorneys, agents, representatives, or any party purportedly acting on behalf
of Seller (except Cable Alabama to the extent expressly set forth in the Asset
Purchase Agreement) as to any matters concerning the Property, but shall
instead rely upon its own due diligence investigations as well as the
representations, warranties, covenants, agreements and indemnities made by
Cable Alabama in the Asset Purchase Agreement. Nothing contained in this
Agreement shall be deemed to limit, diminish or otherwise modify the
representations, warranties, covenants, agreements and indemnities made by
Cable Alabama with respect to the Property in the Asset Purchase Agreement.
Buyer hereby further acknowledges that any information provided by Seller to
Buyer will be provided to Buyer for informational purposes only and that Seller
does not represent, warrant or guarantee the contents or opinions contained in
or the accuracy or completeness of any such information. Buyer's decision with
respect to the ultimate purchase of the Property will be based solely upon (a)
the results of such inspections and reviews of the Property as Buyer shall
conduct or cause to be conducted with respect to (i) the environmental
condition of the Property, (ii) the title to the Property, (iii) the compliance
of the Property with applicable laws, (iv) the buildings, systems, fixtures and
equipment comprising the Improvements and (v) such other engineering, legal,
and other matters relating to or affecting the Property; and (b) the
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representations, warranties, covenants, agreements and indemnities made by
Cable Alabama with respect to the Property in the Asset Purchase Agreement. It
is understood that Buyer is an experienced and sophisticated purchaser of
commercial property, and has the capability to conduct due diligence
investigations sufficient for its purposes in connection with the Property.
This Paragraph 6 shall survive the Closing.
7. Maintenance of the Property and Insurance. Until the Closing,
Seller shall (a) maintain or cause to be maintained in full force and effect
the existing policies of insurance relating to the Property and (b) continue to
operate or cause to be operated the Property in substantially the same manner
as it is now being operated; provided, however, that (x) Seller shall have no
obligation to make any capital improvements to the Premises or the
Improvements, and (y) in the event of (i) destruction of or damage to the
Improvements, or (ii) condemnation or taking by eminent domain of any portion
of the Premises or the Improvements, Seller shall have no obligation to restore
the Premises or the Improvements, as the case may be. The risk of loss or
damage by fire or other casualty or cause to the Property from the date hereof
until the Closing Date shall be upon Seller. In the event any such loss or
damage shall not be restored, replaced or repaired as of the Closing Date,
Buyer shall, at its option either (a) proceed with the Closing and receive at
the Closing the insurance proceeds received by Seller and all rights of Seller
or Cable Alabama to receive insurance proceeds with respect to such loss or
damage, less any amounts previously spent by Seller in restoring, repairing or
replacing such loss or damage and with respect to which Seller shall have
consulted with Buyer prior to restoring, repairing, or replacing such loss or
damage; or (b) if such loss or damage has had or would have a Material Adverse
Effect (as such term is defined in the Asset Purchase Agreement), terminate
this Agreement by written notice to Seller.
8. Documents to be Delivered at the Closing.
(a) At the Closing, Seller shall deliver to Buyer the following
documents each in form and substance reasonably satisfactory
to Buyer, fully executed and, if required, acknowledged by
Seller:
(1) a statutory warranty deed (the "Deed") conveying
title to the Premises and Improvements to Buyer
subject only to the Permitted Exceptions (as such
term is defined in the Asset Purchase Agreement);
(2) a termination of the Leases;
(3) an affidavit and indemnity as to mechanics' liens
and persons in possession in a customary form
reasonably acceptable to Buyer's title insurance
company;
(4) an affidavit stating that Seller is not a foreign
person or entity within the meaning of Section 1445
of the Internal Revenue Code;
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(5) a designation agreement designating the party
responsible for any Form 1099-B filings as may be
required by the regulations promulgated by the
Internal Revenue Service;
(6) a gap insurance indemnity in substantially the form
attached hereto as Exhibit B;
(7) a xxxx of sale pursuant to which Seller conveys to
Buyer all of Seller's right, title and interest, if
any, in and to any personal property owned by
Seller, which is located on the Premises and used in
connection with the operation of Cable Alabama's
business on the Premises; and
(8) such other instruments, certificate and documents as
are reasonably required in order to fully effectuate
the terms of this Agreement.
(b) At the Closing, Buyer shall deliver to Seller the following
documents each fully executed and, if required, acknowledged
by Buyer:
(1) a designation agreement designating the party
responsible for any Form 1099-B filings as may be
required by regulations promulgated by the Internal
Revenue Service; and
(2) such other instruments, certificates and documents
as are reasonably required in order to fully
effectuate the terms of this Agreement.
9. Condition to Closing. The Closing, and the obligation of Buyer to
buy the Property and the obligation of
Seller to sell the Property under this
Agreement, shall be conditioned expressly
upon the occurrence of a simultaneous
closing under the Asset Purchase Agreement
(the "APA Closing"). In the event that the
Asset Purchase Agreement is terminated for
any reason pursuant to the terms thereof,
this Agreement shall likewise terminate and
be of no further force or effect.
10. Application of Purchase Money to Liens. To enable Seller to make
conveyance as herein provided, Seller may, at the time of Closing, use the
purchase money or any portion thereof to clear the title of any or all
encumbrances or interests; provided that all instruments so procured are
recorded at Seller's expense either (i) prior to or simultaneously with the
recording of the Deed, or (ii) where such title encumbrances constitute
mortgages, assignments of leases and rents, UCC-1 financing statements and the
like, and a payoff letter has been obtained but discharges, releases or
terminations thereof are not yet available, as soon thereafter as Seller may
reasonably obtain the same.
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11. Apportionments and Costs.
(a) At the Closing Buyer shall pay all recording fees and taxes
payable in connection with the conveyance of the Property
pursuant to this Agreement.
(b) Since Cable Alabama, as tenant under the Leases, is
responsible for the payment of all taxes, utilities and other
operating costs relating to the Premises or the Improvements
through the Closing, no adjustments with respect to taxes,
utilities or other operating costs relating to the Premises
or the Improvements will be made at the Closing.
(c) Buyer shall pay all costs relating to its due diligence
activities, and all costs incurred in obtaining title
insurance for or surveys of the Premises and the
Improvements.
(d) Each of the parties hereto shall pay the costs of their own
respective counsel and any costs or expenses incurred by such
party in connection with this transaction.
12.Brokers. Buyer and Seller each warrants and represents that such
party has not dealt with any broker with respect to this transaction or with
respect to the Property for which the other party will have any liability. Each
of Buyer and Seller agrees to indemnify and hold harmless the other party from
and against all claims for brokerage or commission on account of this sale
arising out of dealings with the party from whom identification is sought.
13.Assignments. This Agreement may not be assigned by either party
hereto without the prior written consent of the other party hereto; provided,
that Buyer may assign its right, title or interest under this Agreement in
connection with any assignment of Buyer's rights under the Asset Purchase
Agreement in accordance with Section 13.3 thereof. Any assignment by either
party of its right, title or interest under this Agreement in violation of this
Paragraph 13 shall be null and void, and shall allow the other party hereto, at
its option, to deem such party in default of its obligations hereunder. This
Agreement shall be binding and inure to the benefit of the parties hereto and
their respective permitted successors and assigns.
14.Survival Provisions; Acceptance of Deed. On the termination hereof,
all of the terms and provisions of this Agreement shall be void and of no
further force and effect and neither Buyer nor Seller shall have rights,
obligations or liabilities hereunder except Xxxxxxxxx 0, Xxxxxxxxx 11 and
Paragraph 12 which shall survive such termination and continue in effect in
accordance with their terms indefinitely. In the event that either party to
this Agreement fails to perform as required hereunder, the other party to this
Agreement shall be entitled to all remedies available at law or in equity. The
acceptance of the Deed, by Buyer or Buyer's permitted assignee, as the case may
be, shall be deemed to be a full performance and discharge of every agreement
and obligation of Seller herein contained or expressed.
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15.Further Assurances. The parties agree to execute any and all
additional instruments and documents as may be reasonably required to fully
effectuate the terms of this Agreement.
16.Notices. All notices or other communications required or permitted
to be given hereunder shall be in writing and delivered by hand or by
nationally recognized overnight courier or mailed, postage prepaid, by
registered or certified mail, return receipt requested, addressed in the case
of Buyer to it at the address set forth on Page 1 hereof, Attention: Xxxx
Xxxxxxx, with a copy to Xxxxx & Xxxxxxx, 000 00xx Xxxxxx, X.X., Xxxxxxxxxx,
X.X. 00000, Attention: Xxxxxx X. Xxxxxxx, Esq. and in the case of Seller to it
at the address set forth on Page 1 hereof with a copy to Ropes & Xxxx at Xxx
Xxxxxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xxxxxx X. XxXxxx
III, Esq., or to such other address and to such other person's attention as
either Buyer or Seller may from time to time specify by like notice to the
other. Notices shall be deemed given when delivered or mailed as aforesaid.
17.Time. Time is of the essence in this Agreement.
00.Xx Recording. Buyer agrees not to record this Agreement or any
notice hereof. If Buyer nonetheless records this Agreement or a notice thereof,
Seller, at its option, may declare Seller's obligations hereunder to be null
and void and may deem Buyer in default of its obligations hereunder, whereupon
this Agreement shall terminate except as provided in Paragraph 14 and any
recorded copy of this Agreement or notice thereof shall for all purposes be
considered null and void between the parties hereto and shall not be a notice
to or binding in any way on third parties.
19.Miscellaneous. This instrument may be executed in one or more
counterparts which together shall constitute one instrument. The invalidity or
unenforceability of any term or provision hereof shall not affect the validity
or enforceability of any other term or provision hereof. The captions to the
paragraphs hereof are for convenience of reference only and are not intended to
affect the meaning of the provisions of this Agreement. This Agreement is to be
construed as an Alabama contract, is to take effect as a sealed instrument,
sets forth the entire contract and understanding between the parties
superseding any prior oral or written agreements is binding upon and inures to
the benefit of the parties hereto and their respective successors and assigns,
and may be canceled, modified, or amended only by a written instrument executed
by both Seller and Buyer.
IN WITNESS WHEREOF, this instrument has been executed by each of the
parties hereto, under seal, by an officer or person thereunto duly authorized,
as of the date first written above.
BUYER:
KNOLOGY OF HUNTSVILLE, INC.
By:
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Name:
Title:
SELLER:
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Xxxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
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EXHIBIT A
(Legal Description)
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EXHIBIT B
(Gap Indemnity)
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