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Exhibit 2.3(a)
ASSET PURCHASE AGREEMENT
Among
GREATER MEDIA, INC., and
GREATER MEDIA CABLEVISION, INC.,
and
CHARTER COMMUNICATIONS, INC.
February 17, 1999
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TABLE OF CONTENTS
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ARTICLE I
PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES..........................................1
1.1 Agreement to Purchase and Sell......................................................1
1.2 Subject Assets......................................................................2
1.3 Excluded Assets.....................................................................3
1.4 Purchase Price......................................................................4
1.5 Allocation of the Purchase Price....................................................4
1.6 Assumption of Liabilities...........................................................5
ARTICLE II
REPRESENTATIONS AND WARRANTIES REGARDING
THE COMPANY AND GMI....................................................6
2.1 Organization; Authority; Enforceability.............................................6
2.2 No Conflicts; Consents and Approvals, etc...........................................6
2.3 Subsidiaries........................................................................7
2.4 Financial Statements................................................................7
2.5 Absence of Certain Changes..........................................................7
2.6 Absence of Undisclosed Liabilities..................................................9
2.7 Compliance with Law................................................................10
2.8 Company Contracts; Franchise Matters...............................................12
2.9 Personal Property; Assets..........................................................14
2.10 Real Property......................................................................15
2.11 Intellectual Property..............................................................16
2.12 Litigation.........................................................................16
2.13 Taxes..............................................................................16
2.14 Employee Benefit Plan Matters......................................................17
2.15 Labor Matters......................................................................19
2.16 Environmental Matters..............................................................19
2.17 Transactions with Affiliates.......................................................20
2.18 Brokers and Finders................................................................20
2.19 Disclosure.........................................................................20
2.20 Insurance..........................................................................20
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ARTICLE III
REPRESENTATIONS AND
WARRANTIES OF THE BUYER........................................................................21
3.1 Organization and Authority.........................................................21
3.2 No Conflicts; Consents and Approvals, etc..........................................21
3.3 Financial Ability to Perform.......................................................22
3.4 Litigation.........................................................................22
3.5 No Violation of FCC Cross Ownership Rules..........................................22
3.6 Brokers and Finders................................................................22
ARTICLE IV
COVENANTS......................................................................................22
4.1 Conduct of Business of the Company.................................................22
4.2 Access to Information, etc.........................................................24
4.3 Reasonable Best Efforts............................................................25
4.4 No Action..........................................................................25
4.5 Public Announcements...............................................................25
4.6 Notification.......................................................................25
4.7 Employee Benefits..................................................................26
4.8 Records Retention..................................................................27
4.9 Company Names......................................................................28
4.10 Intercompany Accounts..............................................................28
4.11 Intercompany Debt..................................................................28
4.12 Notice of Proceedings..............................................................29
4.13 Guarantees.........................................................................29
4.14 Affiliate Contracts................................................................29
4.15 Certain Litigation.................................................................30
4.16 Retained Franchises................................................................30
4.17 Transfer Laws......................................................................30
4.18 Further Assurances.................................................................30
ARTICLE V
CLOSING AND CLOSING DATE; CONDITIONS TO CLOSING................................................31
5.1 Closing and Closing Date...........................................................31
5.2 Conditions to the Obligations of All Parties.......................................31
5.3 Conditions to the Obligations of the Company and GMI...............................32
5.4 Conditions to Obligations of the Buyer ............................................33
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ARTICLE VI
TERMINATION....................................................................................34
6.1 Termination........................................................................34
6.2 Effect of Termination..............................................................34
ARTICLE VII
TAX MATTERS....................................................................................35
7.1 Proration of Taxes.................................................................35
7.2 Payments...........................................................................35
7.3 Tax Returns........................................................................36
7.4 Refunds............................................................................37
7.5 Audits.............................................................................37
7.6 Certain Post-Closing Actions.......................................................38
7.7 Mutual Cooperation.................................................................38
7.8 Maintenance Of Books and Records...................................................38
7.9 Tax Dispute Resolution Mechanism...................................................39
7.10 Certain Payroll Matters............................................................39
7.11 Characterization of Indemnity Payments.............................................39
ARTICLE VIII
MISCELLANEOUS..................................................................................40
8.1 Entire Agreement...................................................................40
8.2 Notices............................................................................40
8.3 Governing Law......................................................................41
8.4 Interpretation.....................................................................41
8.5 Parties in Interest................................................................41
8.6 Counterparts.......................................................................41
8.7 Expenses...........................................................................41
8.8 Personal Liability.................................................................42
8.9 Assignment.........................................................................42
8.10 Amendment..........................................................................42
8.11 Exclusivity of Representations and Warranties; Non-Survival;
Relationship Between the Parties...................................................42
8.12 Exclusive Jurisdiction, etc........................................................42
8.13 Right to Specific Performance......................................................43
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ARTICLE IX
DEFINITIONS....................................................................................43
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Schedules
A Systems
B Allocation Schedule
1.3(b) Excluded Programming Agreements
2.2 Consents
2.3 Equity Interests
2.4 Financial Statements
2.5 Absence of Certain Changes
2.6 Absence of Undisclosed Liabilities
2.8(a) Company Contracts; Franchise Matters
2.8(c) Subscribers; Homes Passed; Plant Miles
2.8(g) Overbuild Matters
2.9 Personal Property
2.10 Real Property
2.11 Intellectual Property
2.12 Litigation
2.13 Tax Matters
2.14(a) Employee Benefit Plans
2.14(c) Retiree Plans
2.14(e) Additional Benefits
2.15 Employees; Retired Employees
2.16(a) Environmental Matters
2.17 Transactions with Affiliates
2.20 Insurance
3.2 Buyer Consents
3.6 Buyer Brokers and Finders
4.1 Conduct of the Business
4.13 Guarantees
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ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "AGREEMENT"), dated as of
February 17, 1999, is made by and among Greater Media, Inc., a Delaware
corporation ("GMI"), Greater Media Cablevision, Inc., a Delaware corporation and
a wholly owned subsidiary of GMI (the "COMPANY"), and Charter Communications,
Inc., a Delaware corporation (the "BUYER").
RECITALS
WHEREAS, the Company is the owner and operator of the cable
television systems set forth on Schedule A (the "SYSTEMS").
WHEREAS, the Company desires to sell all of the Systems to the
Buyer, and the Buyer desires to purchase all of the Systems from the Company,
upon the terms and conditions set forth herein.
WHEREAS, certain capitalized terms used herein without
definition are defined in Article IX.
NOW, THEREFORE, in consideration of the foregoing and the
representations, warranties and agreements set forth below, the parties hereto
agree as follows:
ARTICLE I
PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES
1.1 Agreement to Purchase and Sell. Subject to the terms and
conditions contained in this Agreement, the Company agrees to sell, convey,
assign, transfer and deliver to the Buyer on the Closing Date, and the Buyer
agrees to purchase from the Company on the Closing Date, all of the Company's
right, title and interest in and to all real and personal, tangible and
intangible, assets and properties (other than the Excluded Assets) used by the
Company in its business (collectively, the "SUBJECT ASSETS"), free and clear of
all Liens other than Permitted Liens .
1.2 Subject Assets. The Subject Assets shall include, without
limitation:
(a) all towers, tower equipment, receivers, modulators,
demodulators, processors, encoders, descramblers, taps, aboveground and
underground cable,
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headend amplifiers, line amplifiers, earth stations, converters, ad
insertion equipment, auxiliary equipment and facilities and other
physical assets that are owned by the Company and any leasehold
interests of the Company relating to any of the foregoing;
(b) all Franchise Agreements and other Authorizations
(including, but not limited to, television translator station licenses,
microwave licenses (including, without limitation, CARS), business
radio licenses and TVRO earth station registrations) held by the
Company;
(c) all rights of the Company under pole line or joint pole
agreements, multiple dwelling unit agreements, leases (including leases
of real property), retransmission consent agreements, written
agreements with subscribers for cable television service and written
hotel and motel agreements and any other instruments, contracts and
agreements to which the Company is a party;
(d) all real property interests owned by the Company,
including, without limitation, all improvements or fixtures that may
exist on the foregoing, all easements, rights of entry and rights of
way, whether public or private, and leasehold interests and
improvements owned or utilized by the Company;
(e) all subscriber, customer and trade and other accounts
receivable of the Company;
(f) all motor vehicles owned by the Company and any leasehold
interests of the Company in any motor vehicles;
(g) all rights, claims, credits, causes of action or rights of
set-off with respect to or arising out of the Subject Assets or the
Assumed Liabilities (as defined in Section 1.6);
(h) all intangible assets owned by the Company, including,
without limitation, all of the rights of the Company to the
Intellectual Property (as defined in Section 2.11), including technical
information and data, computer disks and tapes, drawings, blueprints,
schematics, maps, reports, lists, plans, filings with Governmental
Authorities and the FCC and all books and records, including subscriber
records;
(i) the Company's cash on hand and cash equivalents, including
customer and advertiser prepayments and deposits;
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(j) all GMI Contracts for which the requisite third party
consents have been obtained pursuant to Section 4.14(a); and
(k) all other assets, tangible or intangible, owned by the
Company as of the date hereof, which shall not have been disposed of in
the ordinary course of business after the date hereof and any
replacements or additions to such assets.
1.3 Excluded Assets. Notwithstanding anything to the contrary
in Section 1.2, the Subject Assets shall not include, and the Company shall not
sell, convey, assign, transfer or deliver, any of the following assets and
properties of the Company (the "EXCLUDED ASSETS"):
(a) all rights, title and interest in (i) the shares of
Greater Philadelphia Cablevision, Inc. ("GPCI"), (ii) the Philadelphia
Merger Agreement and all related ancillary agreements and documents and
(iii) the GPCI Merger Consideration;
(b) the programming agreements set forth on Schedule 1.3(b);
(c) the Master Affiliation Agreement, dated as of December 4,
1998, between ServiceCo LLC and the Company;
(d) all insurance policies, except for rights and claims
thereunder related to occurrences prior to the Closing and except as
provided in Section 4.7(c);
(e) the following books and records: any books and records
that the Company is required by law to retain, any tax reports and
returns, the Company's corporate minute books, any other books and
records relating to internal corporate matters, and any other books and
records relating to financial relationships with the Company's lenders
or affiliates;
(f) any claims, rights and interest in and to any refunds of
any Taxes (i) for which GMI or the Company is responsible under Article
VII hereof, or (ii) that are Excluded Liabilities;
(g) subject to Section 4.9 hereof, all owned or licensed
trademarks, trade names, service marks, service names, logos and
similar proprietary rights of the Company relating to the names
"Greater Media" and "Greater Media Cablevision" and the initials "GMI,"
whether alone or in combination with one or more other words, whether
or not used by the Company or any of its affiliates;
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(h) any and all indebtedness owed by GPCI to the Company and
any intercompany accounts owing to the Company referred to in Section
4.10;
(i) any assets of or related to the Company Plans, including,
without limitation, the Greater Media Cablevision, Inc. Pension Plan;
(j) the Guarantees (as defined in Section 4.13);
(k) any GMI Contracts for which the requisite third party
consents have not been obtained pursuant to Section 4.14(a);
(l) the GPCI Contracts (as defined in Section 4.14(b));
(m) subject to Section 4.16, any assets or properties,
including, without limitation, Franchise Agreements, relating to any
Retained Franchises (as defined in Section 4.16);
(n) the Management Agreement, dated September 1, 1986, between
the Company and GMI (the agreements referred to in clauses (a)(ii),
(b), (c), (i), (k), (l), (m) and (n) of this Section 1.3, the "EXCLUDED
CONTRACTS"); and
(o) the shares of the common stock of Telesynergy, Inc. held
by the Company.
1.4 Purchase Price. The purchase price payable for all the
Subject Assets shall be $500,000,000 (the "PURCHASE PRICE") and shall be paid as
set forth in Section 5.1.
1.5 Allocation of the Purchase Price. The aggregate amount of
the Purchase Price, the Intercompany Debt and the Assumed Liabilities shall be
allocated among the Subject Assets in accordance with a schedule (the
"ALLOCATION SCHEDULE") to be prepared by the Buyer and delivered to the Company
for the approval of the Company and GMI within 45 days after the date of this
Agreement, which Allocation Schedule shall be attached to and incorporated into
this Agreement as Schedule B hereto. The Company and the Buyer shall cooperate
and use their reasonable best efforts in reaching a mutually satisfactory
agreement regarding the Allocation Schedule. If prior to the Closing Date, the
Buyer and the Company are unable to reach a mutually satisfactory agreement as
to such Allocation Schedule, then, any matters in dispute shall be referred to
the Tax Dispute Accountants in accordance with Section 7.9 of this Agreement.
The final Allocation Schedule, determined in the manner described in this
Section 1.5, shall comply with the provisions of Section 1060 of the Code and
each of the Company and the Buyer shall timely file any forms required to be
filed under Section 1060 of the Code
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and any corresponding provision of state or local Tax law in accordance with the
final Allocation Schedule. The Buyer and the Company each agree (i) to reflect
the Subject Assets on their respective books for tax reporting purposes in
accordance with the Allocation Schedule, (ii) to file all Tax Returns and
determine all Taxes (including, without limitation, for purposes of Section 1060
of the Code) in accordance with and based upon the Allocation Schedule and (iii)
not to take any position inconsistent with such Allocation Schedule in any audit
or judicial or administrative proceeding or otherwise.
1.6 Assumption of Liabilities. (a) At the Closing, the Buyer
shall assume, pay, discharge and perform, in accordance with the respective
terms thereof, and indemnify the Company and its affiliates with respect to, all
liabilities, obligations and commitments (whether direct or indirect, matured or
unmatured, known or unknown, absolute, accrued, contingent or otherwise) of the
Company, including, without limitation, all Transfer Taxes, the Intercompany
Debt and all liabilities, obligations and commitments under the Company
Contracts (including, without limitation, the Franchise Agreements), the
Employee Protection Plan and the Authorizations or arising out of or relating to
the ownership or operation of the Subject Assets, whether arising before, on or
after the Closing Date, other than Excluded Liabilities (collectively, the
"ASSUMED LIABILITIES").
(b) The Buyer will not assume or have responsibility for the
following liabilities or obligations of the Company (collectively, the "EXCLUDED
LIABILITIES"): (i) any Taxes for which Buyer is not responsible under Article
VII hereof; (ii) the legal, accounting and investment banking fees or expenses
incurred by the Company or any of its affiliates in connection with the
transactions contemplated by this Agreement; (iii) all liabilities of the
Company arising under the Excluded Contracts (other than as provided in Sections
4.14(a) and 4.16); (iv) any amounts payable under the Employee Retention Plan;
(v) the upstream guaranty of the Company referred to in Section 4.13(b); (vi)
any intercompany accounts owed by the Company (other than the Intercompany
Debt), including, without limitation, those referred to in Section 4.10; and
(vii) any liabilities directly relating to the Excluded Assets (other than as
provided above in this Section 1.6(b)).
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ARTICLE II
REPRESENTATIONS AND WARRANTIES REGARDING
THE COMPANY AND GMI
The Company and GMI, jointly and severally, represent and
warrant that:
2.1 Organization; Authority; Enforceability. (a) Each of the
Company and GMI is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware and has all requisite corporate
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder, and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by the Company and GMI have been duly and
validly authorized by all necessary corporate action and no other corporate
action on the part of the Company or GMI is necessary to authorize, approve or
consummate the transactions contemplated by this Agreement. Assuming the due
execution and delivery by the other parties hereto, this Agreement constitutes a
valid and binding agreement of each of the Company and GMI, enforceable against
each of them in accordance with its terms, except (x) as the same may be limited
by applicable bankruptcy, insolvency, moratorium or similar laws of general
application relating to or affecting creditors' rights, including, without
limitation, the effect of statutory or other laws regarding fraudulent
conveyances and preferential transfers, and (y) for the limitations imposed by
general principles of equity.
(b) The Company is qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where such
qualification is necessary to conduct its business and operations as presently
conducted and to own and lease the property and assets it owns or leases, except
where the failure to so qualify, individually or in the aggregate, would not
have a Material Adverse Effect. The Company has all requisite corporate power
and authority and all necessary governmental approvals to own, lease and operate
its properties and to carry on its business as now being conducted and as will
be conducted on the Closing Date, except where the failure to have such power,
authority and governmental approvals would not have a Material Adverse Effect.
2.2 No Conflicts; Consents and Approvals, etc. (a) The
execution and delivery of this Agreement by each of the Company and GMI do not,
and the performance of its respective obligations hereunder will not (i) violate
or conflict with the certificate of incorporation or by-laws of the Company or
GMI; (ii) except as set forth in Schedule 2.2, conflict with or violate any
statute, regulation, judgment, order or decree applicable to the Company or GMI
or by which any of their respective assets or property is bound or affected; or
(iii) except as set forth in Schedule 2.2, result in any breach or constitute a
default (or an event which with notice or lapse of time or both would become
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a default) under, result in the loss of a material benefit under, or give to
others any right of termination, acceleration or cancellation of, or result in
the creation or imposition of any Lien on any property or asset of the Company
pursuant to any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, Franchise Agreement or other instrument or obligation to which
the Company or GMI or any of their respective assets or property is bound or
affected, except, in the case of clauses (ii) and (iii), for such conflicts,
violations, breaches, defaults or other occurrences that, individually or in the
aggregate, would not have a Material Adverse Effect.
(b) Except as set forth in Schedule 2.2, neither the execution
and delivery of this Agreement by the Company or GMI nor the consummation of the
transactions contemplated hereby by the Company or GMI will require any consent,
approval or authorization of, or filing with or notification to, any
governmental or regulatory authority, except for (i) notification pursuant to,
and expiration or termination of the waiting period under, the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, and the rules and regulations
thereunder (the "HSR ACT") and (ii) such other consents, approvals,
authorizations, filings or notifications as, if not obtained or made,
individually or in the aggregate, would have a Material Adverse Effect.
2.3 Subsidiaries. Other than (i) GPCI, which will cease to be
a Subsidiary of the Company prior to the time of the Closing hereunder, or (ii)
as set forth in Schedule 2.3, the Company has no Subsidiaries or any other
equity interest or rights to acquire any equity interest in any entity (other
than the GPCI Merger Consideration).
2.4 Financial Statements. Schedule 2.4 contains true and
complete copies of the unaudited balance sheets as at September 30, 1998,
September 30, 1997 and September 30, 1996, and the related statements of income
and cash flows for such fiscal years of the Company on a stand alone basis. Such
financial statements present fairly, in all material respects, the financial
position and the results of operations and cash flows of the Company on a stand
alone basis as of the dates or for the periods presented therein in conformity
with United States generally accepted accounting principles applied on a
consistent basis ("GAAP"), except as otherwise noted therein. Such financial
statements have been derived from the work papers used in the preparation of
GMI's audited consolidated financial statements for such fiscal years.
2.5 Absence of Certain Changes. Other than in connection with
the transactions contemplated by this Agreement or as set forth on Schedule 2.5,
since September 30, 1998:
(a) there has not been any material adverse change in the
business, results of operations, financial condition or assets of the
Company, other than as may be a result of (i) general economic and
political conditions; (ii) any change in
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law, governmental regulation or interpretation thereof by any
Governmental Authority; (iii) matters affecting the cable television
business generally, including, without limitation, the impact or
potential impact of competition from other providers or potential
providers of video programming and (iv) the resignation, retirement or
death of one or more officers or directors of the Company or GMI; and
(b) the Company has conducted its business in the ordinary
course and consistent with past practice, and, except as set forth on
Schedule 2.5, the Company has not:
(i) purchased or redeemed any shares of its
capital stock or issued or agreed to issue any capital stock
or other equity securities of the Company or any securities
or rights convertible into or exchangeable for equity
securities of the Company or rights to purchase or otherwise
receive any of the foregoing, or amended any of the terms of
any equity securities or any such rights outstanding on the
date hereof;
(ii) incurred or guaranteed any indebtedness
for borrowed money other than the Intercompany Debt;
(iii) mortgaged, pledged or subjected to any
Lien any of its material properties or assets, except for
Permitted Liens;
(iv) other than in the ordinary course of
business and consistent with past practice or pursuant to
existing plans, programs or arrangements described on Schedule
2.14(a) hereto, made any change in personnel policies or the
compensation (salary, bonus or otherwise) payable or to become
payable to any officer, director, employee, agent, affiliate
or consultant, entered into or amended any employment, sever-
ance, termination or other similar agreement or made any loans
to any of its officers, directors, employees, agents,
affiliates or consultants or made any material change in its
existing borrowing or lending arrangements for or on behalf of
any such persons, or otherwise entered into any trans actions
with or made any payment to or for any affiliate of the
Company, provided that (i) this clause (iv) shall not apply to
the Employee Protection Plan and the Employee Retention Plan
and (ii) the Employee Protection Plan adopted by the Company
shall be substantially in the form set forth in Schedule
2.14(e) and the Company shall not amend the Employee
Protection Plan after its adoption without the prior written
consent of the Buyer;
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(v) amended its certificate of incorporation
or by-laws;
(vi) changed its accounting methods,
principles, or practices in such a manner as would be required
to be disclosed pursuant to federal securities laws if the
Company were subject to such laws;
(vii) disposed or agreed to dispose of any
assets where the proceeds of the disposition or the net book
value of the relevant assets exceed in the aggregate $500,000,
except in the ordinary course of business or in connection
with the Philadelphia Transaction;
(viii) suffered the damage, destruction or
loss of any assets (whether or not covered by insurance)
having a Material Adverse Effect;
(ix) waived or released any right or claim
material to the operation of the business of the Company
(without regard to its ownership of GPCI), except in the
ordinary course of business;
(x) amended in any material respect or
terminated any contract, license, agreement or understanding
listed in any Schedule hereto and material to the operation of
the business of the Company (without regard to its ownership
of GPCI), except in the ordinary course of business; or
(xi) entered into any agreement to do any of
the things described in the preceding clauses (i) through (x).
2.6 Absence of Undisclosed Liabilities. Except as disclosed on
Schedule 2.6, the Company has no liabilities or obligations of any kind
whatsoever, whether accrued, contingent, absolute or otherwise, that would be
required by GAAP to be reflected on the Company's balance sheet (including the
notes thereto), that is not reflected or reserved against in the unaudited
balance sheet of the Company as of September 30, 1998, except for (i)
liabilities or obligations incurred in the ordinary course of business
consistent with past practice since September 30, 1998, and (ii) liabilities or
obligations which, individually or in the aggregate, would not have a Material
Adverse Effect.
2.7 Compliance with Law. (a) The Company holds all licenses,
franchises, certificates, consents, permits, qualifications and authorizations
("AUTHORIZATIONS") from all Governmental Authorities necessary for the conduct
of its business as currently conducted, and each such Authorization is valid and
in full force and effect,
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except where the failure to hold any of the foregoing or for any of the
foregoing not to be in full force and effect would not have a Material Adverse
Effect. The Company has not received written notice of any action taken by any
Governmental Authority to terminate, revoke or impair any such Authorization,
except for any such action that would not have a Material Adverse Effect. The
Company is not in conflict with, or in default or violation of (a) any law,
rule, regulation, order, judgment or decree applicable to it or by which any of
its properties or assets is bound, or (b) any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which the Company is a party or by which the Company or any
property or asset of the Company is bound, except for any such conflicts,
defaults or violations that would not have a Material Adverse Effect.
(b) Except as would not have a Material Adverse Effect, (i)
the Company is operating in compliance in all respects with the provisions of
the Communications Act and the rules and regulations of the FCC, (ii) all
reports required by the FCC to be filed and fees required to be paid to the FCC
by the Company have been timely and accurately filed and paid, (iii) the Company
provides customers with periodic notices and information as required by the FCC
rules and regulations, and (iv) each employment unit comprised of one or more
Systems operated by the Company has been certified by the FCC for compliance
with the rules and regulations governing equal employment opportunity for each
reporting year since October 1, 1995.
(c) The Company is providing syndicated exclusivity and
network nonduplication protection to stations entitled thereto which have
requested such protection and has followed the FCC procedures applicable to
origination cablecasting, the fairness doctrine, equal time and personal attack
obligations, obscenity, sponsorship identifications and sponsorship lists as
specified by FCC rules, except where the failure to so provide such protection
or follow such procedures would not have a Material Adverse Effect. The Company
has obtained all necessary consents for the retransmission of broadcast signals
or is carrying such signals pursuant to must carry elections.
(d) Except for normal "blackout" with respect to syndicated
exclusivity or network nonduplication notices pursuant to FCC regulations, no
notices or demands have been received from any television station or from any
other person claiming to have a right, or objecting to or challenging the right
of the Company to carry any program services, including, without limitation,
broadcast signals, as now being carried by the Company, or challenging the
channel position on which any television station is carried or demanding the
Company to carry any program services not carried, except where such claim,
demand, objection or challenge would not have a Material Adverse Effect.
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(e) The Company maintains appropriate files as required by FCC
rules, except as would not have a Material Adverse Effect. The Company has made
available to the Buyer true and complete copies of (i) all FCC cable rate
regulation forms that it has filed with the FCC, (ii) all material
correspondence since October 1, 1995 with any Governmental Authority, customer
or other interested party relating to rate regulation generally or specific
rates charged to its customers, including, without limitation, any complaints
filed with the FCC since October 1, 1995 with respect to any rates charged to
its customers, and all FCC orders issued since October 1, 1995 with respect to
rate complaints or petitions for review or appeals of local rate decisions, and
(iii) all pleadings filed by the Company or any other party (to the extent the
Company has copies thereof) in any pending FCC rate proceeding involving any
System's rates and any documentation supporting an exemption from the rate
regulation provisions of the Communications Act it has claimed. The Company is
in compliance with any orders affecting the Company's rates of all franchise
authorities with jurisdiction over the Systems and the FCC, except as would not
have a Material Adverse Effect.
(f) Since October 1, 1995, the Company has filed timely and
accurately all copyright notices, reports, statements, supplemental statements
and amendments required to be filed by Section 111 of the Copyright Act of 1976,
as amended (the "COPYRIGHT ACT"), and has timely and accurately paid all fees
required to be paid pursuant to Section 111 of the Copyright Act and the rules
and regulations of the United States Copyright Office with respect to the
operation of its Systems, except where the failure to file or pay would not have
a Material Adverse Effect. The Company is in all other respects in compliance
with the Copyright Act, except where the failure to be in compliance would not
have a Material Adverse Effect. The Company is entitled to hold and currently
holds the compulsory copyright license described in Section 111 of the Copyright
Act, which compulsory license is in full force and effect and has not been
revoked, canceled, encumbered or adversely affected in any manner that would
have a Material Adverse Effect. The Company has not received any notice or other
communication asserting that it is not in compliance with the Copyright Act,
including, without limitation, any written notice from the United States
Copyright Office, or any other person, either challenging any copyright filing
or payment made by it or alleging a failure by it to make any copyright filing
or payment or threatening to bring suit for copyright infringement, except in
each case as would not have a Material Adverse Effect.
(g) The Company has obtained all necessary Federal Aviation
Administration ("FAA") approvals and waivers with respect to system towers and
is in compliance with all FAA rules and regulations applicable to its business,
except where the failure to obtain such or be in such compliance would not have
a Material Adverse Effect. The Company has made available to the Buyer true and
complete copies of all material FAA approvals and waivers applicable to it.
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(h) Since October 1, 1995, the Company has not received any
material written notice from any Governmental Authority of its intent to
investigate customer rates (other than with respect to FCC rate regulations) or
business practices, pursuant to a customer complaint or otherwise, including,
without limitation, under any state or local so-called "consumer protection,"
trade practice" or other similar law, or any other statute, law, ordinance, rule
or regulation.
2.8 Company Contracts; Franchise Matters. (a) Schedule 2.8 (a)
lists all the material contracts, agreements and commitments relating to the
Systems to which the Company or GMI is a party or by which either of them is
otherwise bound, including, without limitation, (i) the franchise agreements
(the "FRANCHISE AGREEMENTS") relating to the Systems; (ii) agreements for the
use of head-end sites; (iii) pole attachment agreements and master utilities
agreements; (iv) public utility and municipal facilities agreements; and (v)
agreements to which GMI is a party that will be assigned to the Company upon the
Closing. All contracts, agreements and commitments referred to in the
immediately preceding sentence (other than the Excluded Contracts) are referred
to herein as the "COMPANY CONTRACTS". The Company has not (and, to the knowledge
of GMI or the Company, no other party thereto has) breached any provision of, or
defaulted, nor has the Company received any written notice that it is in default
under the terms of any Company Contract, nor has there occurred any event that,
with notice or lapse of time, or both, would constitute a default by the Company
under any such Company Contract, except where such breach or default would not
have a Material Adverse Effect. At no time during the 24 month period prior to
the date hereof has any Governmental Authority taken formal action to terminate
or, other than in connection with franchise renewals, materially adversely
modify any Franchise Agreement. Each of the Company Contracts is a legally
enforceable obligation of the Company, except (a) as the same may be limited by
applicable bankruptcy, insolvency, moratorium or similar laws of general
application relating to or affecting creditors' rights, including, without
limitation, the effect of statutory or other laws regarding fraudulent
conveyances and preferential transfers, and (b) for the limitations imposed by
general principles of equity. Copies of all Company Contracts have been made
available by the Company to the Buyer.
(b) All conditions precedent (other than applicable notice and
approval provisions, if any) contained in any Franchise Agreement relating to
rate increases resulting in the Company's current rates for any type of service
have been satisfied, other than such failures to satisfy conditions that would
not have a Material Adverse Effect and except to the extent any such
requirements have been preempted by federal law or regulation. The Company has
no material obligation or liability for the refund of monies to its subscribers
other than with respect to converter deposits and advance payments of monthly
subscriber fees.
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(c) Schedule 2.8(c) lists, as of September 30, 1998, the
Company's approximate (i) number of Basic Subscribers, (ii) number of
subscribers to premium cable service, (iii) number of homes passed and (iv)
number of plant miles of coaxial and fiber optic cable. As of the date of this
Agreement, no investigation by any Governmental Authority with respect to the
Systems is pending or, to the knowledge of the Company, threatened.
(d) The Company has not made any material commitment to any
Governmental Authority with respect to the operation and construction of the
Systems that is not reflected in the Franchise Agreements. The Company has not
entered into any agreement with any Governmental Authority, community group or
similar third parties restricting or limiting the types of programming that may
be shown on the Systems, except where such restrictions or limitations would not
have a Material Adverse Effect.
(e) To the knowledge of the Company, there exists no factor or
matter which would constitute a legally valid basis for revocation, suspension,
termination or denial of granting of a new Franchise upon the expiration thereof
or elimination of rights thereunder, except where such revocation, suspension,
termination, denial or elimination would not have a Material Adverse Effect.
(f) The Company has no knowledge that any Franchise Agreement
will not be renewed in accordance with Section 626 of the Communications Act on
reasonable terms. The Company has timely filed notices of renewal in accordance
with the Communications Act with all franchising authorities and has diligently
pursued the renewal of each Franchise expiring within 36 months after the date
of this Agreement, except as previously disclosed in writing to the Buyer or
except where the failure to so file any such notice and to diligently purse any
such renewal would not have a Material Adverse Effect.
(g) Except as set forth on Schedule 2.8(g), to the knowledge
of the Company, as of the date hereof, no geographic area served by the Systems
is presently or threatened to be subject to, any overbuild situation involving
in excess of 1,000 homes passed. To the knowledge of the Company, except as
previously disclosed to the Buyer in writing, as of the date hereof, no other
person (a) has been granted or applied for the consent or approval of any
Governmental Authority for the installation, construction, development,
ownership or operation of a cable television system (as defined in the Cable
Communications Policy Act of 1984, as amended) within the geographic area served
by the Systems (other than country-wide franchises where operators have not
shown any significant interest in overbuilding), (b) operates, or has commenced
construction, installation or development of, any cable television system (as
defined in the Cable Communications Policy Act of 1984, as amended) within the
geographic area served by the Systems or (c) has publicly announced an intention
to provide cable television service
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in any such geographic area, except where the grant or approval, or operation
of, such cable television system would not have a Material Adverse Effect. No
Governmental Authority has advised the Company in writing, or otherwise notified
the Company of its intention to deny renewal of any Franchise Agreement.
2.9 Personal Property; Assets. (a) Except as would not have a
Material Adverse Effect, the Company has and at Closing will have good and
marketable title to, or valid leasehold interests in, its material personal
property and assets, free and clear of all Liens except Permitted Liens. Except
as set forth on Schedule 2.9, the Company owns or has the lawful right to use
all assets, properties and rights which are used in the conduct of its business
as currently conducted. Except as set forth on Schedule 2.9 and for the Excluded
Assets, the Subject Assets constitute all material assets, properties and rights
used or useful in the ownership and operation of the Systems.
(b) The Systems and all major component parts thereof,
including specifically, but not limited to, headend antenna equipment, headend
amplifiers and associated equipment, line amplifiers, trunk line cable and
distribution cable, are, in all material respects, in good and efficient
operating condition, and require no more repair, replacement and rehabilitation
than is normal in the cable television industry, and the Systems, in general,
deliver a picture and sound to all customers which meet the technical standards
of 47 C.F.R. Part 76, Subpart K, and adequate proof of performance tests as
required thereby have been made showing material compliance therewith. Other
than in the ordinary course of business, the Company has not received any
notification that any plant used in the Systems requires any rearrangement or
rehabilitation in order to conform to the requirements of the National Electric
Safety Code or the terms of any pole attachment, conduit or buried cable
agreement, except for any such rearrangement or rehabilitation as would not have
a Material Adverse Effect.
(c) The Systems, in general, monitor signal leakage, maintain
applicable signal leakage logs, conduct the cumulative leakage tests,
demonstrate compliance with the cumulative leakage criteria by showing a passing
cumulative leakage index or a successful flyover, and comply with the frequency
separation standards, in material compliance with the requirements set forth in
47 C.F.R. Part 76 Sec. 76-610 through Sec. 76.619. The Company has filed with
the FCC all notification of utilization of frequencies in the 108-137 MHZ and
225-240 MHZ bands and all other reports required to be filed under such rules
and regulations and has not received any notification of objection thereto by
the FCC which has not been promptly resolved by the Company, except for any such
failure to file or any such notification of objection that would not have a
Material Adverse Effect.
2.10 Real Property. (a) Schedule 2.10(a) lists all real
property owned by the Company in connection with its business (the "OWNED REAL
PROPERTY"), together
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with a list of all leases (the "LEASES") for real property leased, occupied or
used by the Company in connection with its business (the "LEASED PROPERTY" and,
together with the Owned Real Property, the "REAL PROPERTY"). Except as set forth
on Schedule 2.10(a), the Real Property constitutes all of the real property
currently used in, held for use in, and necessary to conduct the Company's
business as currently conducted.
(b) The Company has good and marketable fee simple title to
each parcel of Owned Real Property and all improvements thereon and a valid
leasehold interest in each parcel of Leased Property, in each case, free of all
Liens except for Permitted Liens.
(c) The Owned Real Property and all improvements thereon is in
good condition and repair and is sufficient and appropriate for the conduct of
the Company's business. There exist no pending or, to the Company's knowledge,
threatened condemnation proceedings of or relating to the Owned Real Property or
any part thereof. There exist no outstanding options or rights of first refusal
to purchase the Owned Real Property or any portion thereof or any rights or
interests therein. Except as set forth on Schedule 2.12 or as would not have a
Material Adverse Effect, neither GMI nor the Company has received any written
notice or order to correct any currently existing violation of law with respect
to the Real Property. Complete and correct copies of any title opinions, surveys
and appraisals in the possession of GMI or the Company, and of any policies of
title insurance currently in force, with respect to any such parcel of Owned
Real Property have been made available by GMI or the Company to the Buyer. With
respect to Real Property leased by the Company, the Company has the right to
quiet enjoyment of such Real Property for the full term of each such lease (and
any renewal option related thereto), except where the failure to enjoy such
quiet enjoyment would not have a Material Adverse Effect.
(d) Each Lease is in full force and effect and, to the
Company's knowledge, is enforceable against the landlord which is party thereto
in accordance with its terms, except to the extent the failure of any such Lease
to be in full force and effect or to be enforceable would not reasonably be
expected to have a Material Adverse Effect. There exists no default or event of
default (or any event which, with notice or lapse of time or both, would become
a default) under any Lease which, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect. The Company has made
available to the Buyer true and complete copies of all Leases, including all
amendments thereto. Except as set forth on Schedule 2.10(a) or as would not have
a Material Adverse Effect, the Company holds all easements, access to public
roads, utilities and services and other similar rights necessary to operate its
business as presently conducted.
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2.11 Intellectual Property. Except as set forth on Schedule
2.11 or as would not have a Material Adverse Effect, the Company owns free and
clear of any Liens, other than Permitted Liens, or is validly licensed or
otherwise has the right to use, all patents, trademarks, copyrights, trade
names, service marks and similar intangible rights, and all applications
therefor, used or held for use in the conduct of its business (the "INTELLECTUAL
PROPERTY"). The conduct of the business of the Company as currently conducted
does not infringe, either directly or indirectly, any patent right, license,
trademark right, trade name, trade name right, service xxxx or copyright of any
third party, except for any infringement that would not have a Material Adverse
Effect. No claims are pending or, to the knowledge of the Company, threatened
that the Company is infringing or otherwise adversely affecting the rights of
any Person with regard to any Intellectual Property, except for any such
infringements which would not have a Material Adverse Effect. To the knowledge
of the Company, no Person is infringing the rights of the Company with respect
to any Intellectual Property, except for any such infringements which would not
have a Material Adverse Effect. The Company has not licensed or agreed to
license for use by any other Person any of the Intellectual Property.
2.12 Litigation. Except as set forth on Schedule 2.12, there
is no suit, claim, action, proceeding or investigation pending against or, to
the knowledge of the Company, threatened against the Company or any of its
assets or properties that, individually or in the aggregate, would have a
Material Adverse Effect. There are no judgments outstanding against the Company
or to or by which the Company is or may be subject or bound which would
reasonably be expected to materially delay the consummation of the transactions
contemplated hereby or would have a Material Adverse Effect. There is no suit,
claim, action, proceeding or investigation to restrain, prohibit or otherwise
challenge the legality or propriety of the transactions contemplated by this
Agreement pending, or to the Company's or GMI's knowledge, threatened against
the Company as of the date of this Agreement which would be reasonably likely to
prevent or delay the consummation of the transactions contemplated by this
Agreement.
2.13 Taxes. (a) (i) All Tax Returns relating to the Company
required to be filed on or before the Closing Date (taking into account
applicable extensions) have (or by the Closing Date will have) been duly filed,
except to the extent that the failure to so file, individually or in the
aggregate, would not have a Material Adverse Effect, (ii) all Taxes shown to be
due on such Tax Returns referred to in clause (i) or otherwise due have been
paid or will be paid prior to the Closing Date, except for Taxes reflected or
reserved against on the balance sheets of the Company referred to in Section 2.4
in accordance with GAAP (without regard to any amounts reserved for deferred
taxes) and Taxes the failure of which to be paid, individually or in the
aggregate, would not have a Material Adverse Effect.
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(b) Except as set forth on Schedule 2.13(b), (i) neither the
IRS nor any other taxing authority is now asserting in writing against the
Company, GMI, the Systems or the Subject Assets any material deficiency or claim
for additional Taxes relating to the Company, the Systems or the Subject Assets
or any material adjustment of Taxes relating to the Company, the Systems or the
Subject Assets, and (ii) there are no proposed written reassessments of any
property owned by the Company or other written proposals that could materially
increase the amount of any Tax to which the Company, the Systems or the Subject
Assets would be subject.
(c) The Company has withheld or collected and paid over to the
appropriate Governmental Authorities or is properly holding for such payment all
Taxes required by law to be withheld or collected, except for such failures to
have so withheld or collected and paid over or to be so holding for payment
which would not have a Material Adverse Effect.
(d) There are no material Tax liens on any assets of the
Company, other than liens for current Taxes not yet due and payable and liens
for Taxes that are being contested in good faith by appropriate proceedings.
2.14 Employee Benefit Plan Matters.
(a) Company Employee Plans and Company Benefit Arrangements.
Schedule 2.14(a) lists each Company Employee Plan and Company Benefit
Arrangement. The Company has delivered to the Buyer with respect to each such
Company Employee Plan and Company Benefit Arrangement true and complete copies
of (i) all written documents comprising such plans and arrangements (including
amendments and individual, trust, group annuity, or insurance agreements
relating thereto); (ii) the most recent Federal Form 5500 series (including all
schedules thereto) filed with respect to each such Company Employee Plan; (iii)
the most recent financial statements and actuarial reports, if any, pertaining
to each such plan or arrangement; and (iv) the summary plan description
currently in effect and all material modifications thereto, if any, for each
such Company Employee Plan.
(b) Multiemployer Plans. With respect to any Multiemployer
Plan to which the Company or any of its ERISA Affiliates has within the six year
period preceding the Closing Date been required to make or accrue a
contribution, neither the Company nor any of its ERISA Affiliates has (i)
incurred or reasonably expects to incur any withdrawal liability, within the
meaning of Section 4201 of ERISA, (ii) been notified by the sponsor of such
Multiemployer Plan that such Multiemployer Plan is in reorganization or has
been terminated or (iii) engaged in or is a successor or parent
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corporation to an entity that has engaged in a transaction described in Section
4212(c) of ERISA.
(c) Retiree Welfare Benefits Plans. Except as set forth in
Schedule 2.14(c) and pursuant to the provisions of COBRA, no Company Employee
Plan provides benefits described in Section 3(l) of ERISA to any former
employees or retirees of the Company.
(d) Pension Plans. All Company Employee Plans that are Pension
Plans intended to be qualified under Section 401 of the Code are so qualified
and have been so qualified during the period since their adoption; each trust
created under any such Plan is exempt from tax under Section 501(a) of the Code
and has been so exempt since its creation. A true and correct copy of the most
recent determination letter from the IRS regarding such qualified status for
each such Plan has been delivered to the Buyer. No Company Employee Plan (other
than any Multiemployer Plan) has incurred an Accumulated Funding Deficiency,
whether or not waived. As of the last applicable annual valuation date, using
the actuarial methods, factors and assumptions used for the most recent
actuarial report with respect to such plan, no Company Pension Plan had accrued
benefit obligations which exceed the current fair market value of the assets of
such plan. Neither the Company nor any of its ERISA Affiliates has incurred, or
reasonably expects to incur prior to the Closing, any liability under Title IV
of ERISA, other than with respect to the payment of premiums to the PBGC.
(e) Additional Benefits. Except as set forth on Schedule
2.14(e), no employee of the Company will receive additional benefits, service or
accelerated rights to payments of benefits under any Company Plan, including the
right to receive any parachute payment, as defined in Section 280G of the Code,
or become entitled to any severance, termination allowance or similar payments
as a result of the transactions contemplated by this Agreement.
(f) Compliance with Laws; Contributions. Each Company Plan has
at all times prior hereto been maintained, in all material respects, in
accordance with its terms and all applicable laws, except where the failure to
do so would not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. Other than claims for benefits in the ordinary
course, there is no claim pending or, to the knowledge of the Company,
threatened, involving any Company Plan by any Person against such plan or the
Company that would reasonably be expected to have a Material Adverse Effect.
There is no pending or, to the knowledge of the Company, threatened, proceeding
involving any Company Employee Plan before the IRS, the United States Department
of Labor or any other Governmental Authority. The Company and its ERISA
Affiliates have made full and timely payment of all amounts required to be
contributed under the terms of each Company Plan and applicable law or required
to be paid as expenses under
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such Company Plan, except where the failure to do so, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect.
2.15 Labor Matters. (a) None of the Company or any of its
affiliates is party to any employment contract with any employee of the Company
or any labor or collective bargaining agreement.
(b) As of the date hereof, (i) no employees of the Company are
represented by any labor organization, (ii) no labor organization or group of
employees of the Company has made a pending demand for recognition or
certification, and there are no representation or certification proceedings or
petitions seeking a representation proceeding presently pending or, to the
knowledge of the Company, threatened to be brought or filed with the NLRB or any
other labor relations tribunal or authority and (iii) to the knowledge of the
Company, there are no formal organizing activities involving of employees of the
Company pending with, or threatened by, any labor organization that would have a
Material Adverse Effect.
(c) As of the date hereof, except as would not have a Material
Adverse Effect, there are no strikes, work stoppages, slowdowns, lockouts,
arbitrations or grievances or other labor disputes pending or, to the knowledge
of the Company, threatened against or involving the Company and (ii) there are
no unfair labor practice charges, grievances or complaints pending or, to the
knowledge of the Company, threatened by or on behalf of any employee or group of
employees of the Company.
(d) Schedule 2.15 lists each Retired Employee and each
Employee, as well as such Employee's compensation as of the date hereof, and
such Employee's date of hire by the Company.
2.16 Environmental Matters. (a) The Company has all permits,
licenses and other authorizations required under all applicable federal, state
and local laws and regulations relating to the pollution or protection of public
health, safety or welfare or the environment, including laws and regulations
relating to emissions, discharges, releases or threatened releases of
pollutants, contaminants or hazardous or toxic materials or wastes into ambient
air, surface water, groundwater or lands or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants or hazardous or toxic
materials or waste ("ENVIRONMENTAL LAWS"), except where the failure to hold such
permits, licenses and authorizations would not have a Material Adverse Effect.
Except as set forth on Schedule 2.16(a), the Company is in compliance with the
terms and conditions of such permits, licenses and authorizations and with
Environmental Laws, except where the failure to so comply would not have a
Material Adverse Effect.
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(b) Except as would not have a Material Adverse Effect: (i) to
the knowledge of the Company, no real property owned or operated by the Company
is contaminated with any toxic or hazardous substance that is regulated by or
under authority of any Environmental Law, including any petroleum products,
asbestos or polychlorinated biphenyls (a "HAZARDOUS SUBSTANCE"), (ii) the
Company has not disposed or arranged for the disposal of Hazardous Substances so
as to give rise to liability of the Company for any disposal or contamination on
Owned Real Property or Leased Property or the real property of any other party,
including, without limitation, off-site locations; and (iii) the Company has not
received any claims or notices alleging liability under any Environmental Law,
nor is there any pending claim or investigation alleging a violation of any
Environmental Law relating to the Owned Real Property.
2.17 Transactions with Affiliates. Except as set forth in
Schedule 2.17, none of GMI's or the Company's stockholders or directors, their
relatives nor any of their respective affiliates is involved in any business
arrangement or relationship with the Company, and none of GMI's stockholders,
their relatives nor any of their respective affiliates owns any property or
right, tangible or intangible, which is used by the Company in connection with
its business.
2.18 Brokers and Finders. Neither the Company nor GMI nor any
of their respective officers, directors or employees has employed any investment
banker, broker or finder or incurred any liability for any brokerage fees,
commissions or finder's fees in connection with the transactions contemplated
herein, except that GMI has employed Xxxxxxx, Xxxxx & Co. as its financial
advisor. The fees of Xxxxxxx, Sachs & Co. shall be paid by GMI.
2.19 Disclosure. The representations and warranties of the
Company and GMI, taken as a whole, do not contain any untrue statement of a
material fact or omit to state a material fact required to be stated herein or
necessary in order to make the statements herein, in light of the circumstances
under which they were made, not misleading.
2.20 Insurance. Schedule 2.20 lists all material policies of
insurance and surety bonds in force maintained, owned or held by the Company on
the date hereof with respect to the Systems. To the knowledge of the Company,
all such policies are with financially sound insurers and are in full force and
effect and insure against risks and liabilities to an extent and in a manner
customary in the cable television business. Since October 1, 1995, no insurance
carrier has refused to renew any policy issued in respect of any material
portion of the Company's assets.
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ARTICLE III
REPRESENTATIONS AND
WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Company and GMI that:
3.1 Organization and Authority. The Buyer is a corporation duly incorporated,
validly existing and in good standing under the laws of its state of in
corporation and has all requisite corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by the Buyer have been duly and validly
authorized and approved by the Buyer's board of directors. No other corporate or
stockholder proceedings on the part of the Buyer are necessary to authorize or
approve this Agreement and the consummation of the transactions contemplated by
this Agreement. This Agreement has been duly executed and delivered by the Buyer
and, assuming the due execution and delivery by the other parties hereto,
constitutes a valid and binding agreement of the Buyer, enforceable against the
Buyer in accordance with its terms, except (x) as the same may be limited by
applicable bankruptcy, insolvency, moratorium or similar laws of general
application relating to or affecting creditors' rights, including, without
limitation, the effect of statutory or other laws regarding fraudulent
conveyances and preferential transfers and (y) for the limitations imposed by
general principles of equity.
3.2 No Conflicts; Consents and Approvals, etc. (a) The
execution and delivery of this Agreement by the Buyer do not, and the
performance of its obligations hereunder or consummation of the transactions
contemplated hereby by the Buyer will not (i) violate or conflict with the
certificate of incorporation or by-laws of the Buyer; or (ii) constitute a
breach or default (or an event which with notice or lapse of time or both would
become a breach or default) of any statute, regulation, judgment, order or
decree or any mortgage, agreement, deed of trust, indenture or any other
instrument to which the Buyer or any of its Subsidiaries is bound, except, in
the case of clause (ii), for any such conflicts, breaches or defaults which
would not prevent or delay consummation of the Closing, or otherwise prevent the
Buyer from performing its obligations under this Agreement.
(b) Except as set forth in Schedule 3.2, neither the execution
and delivery of this Agreement by the Buyer nor the consummation of the
transactions contemplated hereby by the Buyer will require any consent, approval
or authorization of, or filing with or notification to, any Governmental
Authority, except (i) as set forth in Section 2.2(b) and (ii) such other
consents, approvals, authorizations, filings or noti-
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fications as, if not obtained or made would not prevent or delay the
consummation of the transactions contemplated hereby.
3.3 Financial Ability to Perform. The Buyer has currently
available and will have available as of the Closing Date cash funds sufficient
to pay the Purchase Price pursuant to Section 5.1 of this Agreement.
3.4 Litigation. There are no claims, judicial or
administrative actions, proceedings or investigations pending or, to the
knowledge of the Buyer, threatened, against the Buyer or any of its affiliates
or any property or assets of the Buyer or any affiliate, before any court,
arbitrator or administrative, governmental or regulatory authority or body,
domestic or foreign, which would have an adverse affect on the Buyer's ability
to complete the transactions contemplated by this Agreement in a timely manner.
3.5 No Violation of FCC Cross Ownership Rules. On the Closing
Date, the Buyer will not be in violation of any FCC restrictions regarding the
ownership of competing media and related businesses which would adversely affect
the Buyer's ability to complete the transactions contemplated hereby in a timely
manner.
3.6 Brokers and Finders. Except as set forth on Schedule 3.6,
neither the Buyer nor any of its respective officers, directors, employees or
affiliates has employed any investment banker, broker or finder or incurred any
liability for any brokerage fees, commissions or finder's fees in connection
with the transactions contemplated herein.
ARTICLE IV
COVENANTS
4.1 Conduct of Business of the Company. Except as contemplated
by this Agreement or the Schedules hereto or by the Company's budgets and plans
heretofore delivered to the Buyer, including, without limitation, the Company's
Schedule of Capital Expenditures included in Schedule 4.1, during the period
from the date hereof to the Closing Date, the Company shall conduct its
operations in the ordinary course of business in substantially the same manner
as heretofore conducted and use commercially reasonable efforts to preserve
intact its business organizations and material relationships with third parties
other than any adverse effect that results from the announcement of the
transactions contemplated by this Agreement and the Company shall not without
the prior written consent of the Buyer (not to be unreasonably withheld):
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(a) make any material capital expenditures, as determined in
accordance with GAAP, except for capital expenditures referred to in the
Schedule of Capital Expenditures referred to above;
(b) agree or commit to dispose of any material Subject Assets
out of the ordinary course of business where the proceeds of disposition or the
net book value of the relevant assets exceed in the aggregate $200,000;
(c) merge or consolidate with any Person, acquire any stock or
other ownership interest in any Person or the assets of any business, except in
connection with the Philadelphia Transaction;
(d) other than in the ordinary course of business consistent
with past practice, or pursuant to existing arrangements described on Schedule
2.14(a) hereto, or as contemplated by this Agreement or required by law, make
any change in the compensation (salary, bonus or otherwise) payable or to become
payable to any officer, director, employee, agent, affiliate or consultant,
enter into or amend any employment, severance, termination or other similar
agreement or make any loans to any of its officers, directors, employees,
agents, affiliates or consultants or make any material change in its existing
borrowing or lending arrangements for or on behalf of any such persons, or
otherwise enter into any transactions with or make any payment to or for any
affiliate of the Company or adopt, amend, modify, spin-off, transfer or assume
any of the assets or liabilities of, terminate or partially terminate any
Company Employee Plan, in each case whether contingent on consummation of the
transactions contemplated hereby or otherwise, provided that (i) this Section
4.1(d) shall not apply to the Employee Protection Plan and the Employee
Retention Plan and (ii) the Employee Protection Plan adopted by the Company
shall be substantially in the form set forth in Schedule 2.14(e) and the Company
shall not amend the Employee Protection Plan after its adoption without the
prior written consent of the Buyer.
(e) other than the distribution of the GPCI Merger
Consideration, declare, set aside or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect of
the Company Common Stock or redeem or otherwise acquire any of its securities;
(f) issue, sell, deliver or agree or commit to issue, sell or
deliver (whether through the issuance or granting of options, warrants,
commitments, subscriptions, performance shares, interests in the ownership or
earnings of the Company, stock appreciation rights or similar rights to purchase
or otherwise) any stock of any class or any other securities of the Company or
amend any of the terms of any securities of the Company outstanding on the date
hereof;
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(g) except as previously disclosed to the Buyer or other than
in the ordinary course of business consistent with past practice, change the
rates or make any material change in marketing practices applicable to any of
the Systems;
(h) create any Subsidiary of the Company;
(i) incur or guarantee any indebtedness for borrowed money
other than the Intercompany Debt; or
(j) take, or agree in writing or otherwise to take, any of the
foregoing actions.
4.2 Access to Information, etc. (a) Between the date this
Agreement is publicly announced and the Closing Date, the Company will (i) give
the Buyer and its authorized representatives reasonable access, during regular
business hours upon reasonable notice, to all offices and other facilities and
books and records of the Company, (ii) permit the Buyer to make such reasonable
inspections of the offices, facilities, books and records described in clause
(i) as it may require and (iii) cause its officers to furnish the Buyer with
such financial and operating data and other information with respect to the
business and properties of the Company as the Buyer may from time to time
reasonably request. All such access and information obtained by the parties
hereto and their authorized representatives shall be subject to the terms and
conditions of the confidentiality agreement between GMI and the Buyer, dated
February 16, 1999 (the "CONFIDENTIALITY AGREEMENT").
(b) During the period from the date hereof to the Closing
Date, each of the parties hereto will cooperate with the others in developing
and implementing a strategy for the implementation of high speed Internet access
in the Systems and for positioning the Company to provide its subscribers with
such high speed Internet access on a timely basis, consistent with such
strategy, provided that without the Buyer's prior written consent (not to be
unreasonably withheld) neither the Company nor GMI will enter into any agreement
with respect to the foregoing that is binding on the Buyer or the Subject Assets
after the Closing Date. Without limiting the generality of the foregoing, the
Buyer will make available to the Company and GMI such assistance as may be
reasonably requested to assist the Company in creating the network design for
such high speed Internet access.
4.3 Reasonable Best Efforts. Each of the parties hereto agrees
to use its reasonable best efforts to take, or cause to be taken, all
appropriate action, and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement in the most
expeditious manner practicable, including, but not limited to, the
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satisfaction of all conditions to the Closing. Without limiting the generality
of the foregoing, each of the Company and GMI, on the one hand, and the Buyer,
on the other hand, shall make or cause to be made all required filings with or
applications to Governmental Authorities which are necessary to consummate the
transactions contemplated by this Agreement and use its reasonable best efforts
to obtain the consents listed on Schedule 2.2 to the transactions contemplated
hereby and each party hereto shall use its reasonable best efforts to contest
and resist any action, including, without limitation, judicial action, and to
have vacated, lifted, reversed or overturned any decree, judgment, injunction or
other order (whether temporary, preliminary or permanent) that would restrict,
prohibit or prevent the consummation of the transactions contemplated hereby,
including, without limitation, vigorously pursuing all avenues of administrative
and judicial appeal.
4.4 No Action. Subject to the terms and conditions of this
Agreement, no party will, nor shall it permit any of its Subsidiaries to,
intentionally take any action or commit to take any action that would be
reasonably likely to result in any of the representations and warranties of
such party or its Subsidiary contained herein being or becoming untrue in any
material respect, in the non-fulfillment of any of the agreements contained in
this Article IV or in the failure of any conditions contained in Article V.
4.5 Public Announcements. So long as this Agreement is in
effect, none of the parties hereto shall issue any press release or otherwise
make any public statements with respect to this Agreement or the transactions
contemplated hereby without the prior consent of the other parties, provided
that if any such press release or public statement is required by law, the party
subject to such requirement may issue such press release or make such statement,
but such party shall consult with the other party prior to issuing such press
release or public statement. Notwithstanding the foregoing, the parties hereto
shall agree to the timing and the text of the initial press release announcing
the execution and delivery of this Agreement.
4.6 Notification. Each party hereto shall, in the event of, or
promptly after obtaining knowledge of the occurrence or threatened occurrence
of, any fact or circumstance that would be reasonably likely to constitute or
cause a breach of any of its representations and warranties set forth herein,
give notice thereof to the other parties hereto and shall use its reasonable
best efforts to promptly remedy or prevent such breach.
4.7 Employee Benefits.
(a) Employees. (i) Except as otherwise provided in this
Section 4.7, the Buyer shall be responsible for all liabilities with respect to
the Employees and the Retired Employees, and their dependents and beneficiaries,
relating to, arising out of or
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resulting from future, present or former employment of, or services rendered by,
the Employees and the Retired Employees prior to or after the Closing Date.
Without limiting the generality of the foregoing, the Buyer acknowledges and
agrees that it shall be responsible for, and shall pay or cause to be paid, all
amounts that will become payable under the Employee Protection Plan. GMI shall
be responsible for, and shall pay or cause to be paid, all amounts that will
become payable under the Employee Retention Plan and the Greater Media
Cablevision, Inc. Pension Plan.
(ii) Prior to and effective as of the Closing Date,
the Buyer shall offer employment to all the Employees. The Buyer shall provide
the Employees with remuneration and benefits which shall be substantially
comparable, and the Retired Employees with benefits which shall be identical in
all material respects, to those provided to such Employees and Retired
Employees, as the case may be, immediately prior to the Closing Date for at
least the one-year period following the Closing Date, with length of service
with the Company, up to the Closing Date, to be recognized by the Buyer for all
purposes whatsoever other than benefit accrual, including, without limitation,
for the purposes of the Buyer's benefit plans to the extent such service was
recognized under the Company Plans. The Buyer shall pay or grant to the
Employees and the Retired Employees vacation pay or time earned and/or accrued
to the Employees and the Retired Employees under the Company's vacation policy
prior to the Closing Date, but not paid to or taken by such Employees and the
Retired Employees as vacation time as of the Closing Date. The Buyer
acknowledges that it is familiar with the present employment conditions,
remuneration and benefits of the Employees and the Retired Employees.
(iii) From and after the Closing Date, the employment
or cost of termination of employment of, or future compensation to, the
Employees shall be the sole responsibility of the Buyer and the Buyer shall
defend, indemnify, pay, reimburse and hold GMI and its affiliates harmless with
respect to any and all liabilities to such Employees from and after the Closing
Date. The Buyer agrees to provide severance benefits to each Employee in
accordance with the terms of the Employee Protection Plan.
(b) Company Plans in General. As of the Closing Date, the Em-
ployees shall cease to accrue benefits under the Company Plans. GMI and the
Buyer confirm that upon the completion of the transfers contemplated in Section
4.7(d) hereof, GMI and each of its ERISA Affiliates and each Company Plan shall
be completely discharged of all of their respective obligations with respect to
the benefits accrued by, and account balances of, the Employees and the Retired
Employees under such plans, and the Buyer shall defend, indemnify, pay,
reimburse and hold GMI and its affiliates harmless with respect to any and all
loss, liability or expense in respect of such benefits and account balances,
provided, however, that the forgoing shall not apply to the Greater
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Media Cablevision, Inc. Pension Plan and the Company shall retain all of its
obligations thereunder and the Buyer shall have no obligations with respect
thereto.
(c) Group Insurance. The Buyer shall be responsible for any
and all welfare and fringe benefit claims incurred by the Employees and the
Retired Employees on and after the Closing Date. Without in any way limiting the
generality of Section 4.7(a), the Buyer and GMI shall use their reasonable
efforts to cause the insurance companies providing the Buyer's group insurance
program ("BUYER'S INSURERS") to assume the obligations of the insurance
companies providing GMI's group insurance program ("GMI'S INSURERS") with
respect to the benefits of any Employee or Retired Employee under any short term
or long term disability program. GMI and the Buyer shall use their reasonable
efforts to cause GMI's Insurers to transfer the existing reserves (disabled life
reserve, disabled reserve, incurred but not reported reserve) under GMI's
relevant insurance contracts to the Buyer's relevant insurance contracts as at
the Closing Date. The Buyer acknowledges that this transfer of reserves is only
possible if the relevant GMI's Insurers and the relevant Buyer's Insurers are
the same insurance company.
(d) Buyer's 401(k) Plan. Effective as of the Closing Date,
Employees who were participants in GMI's 401(k) Plan on the Closing Date shall
commence participation in a tax-deferred savings plan maintained by the Buyer
(the "BUYER'S 401(K) PLAN"). Prior to the Closing Date the Company will permit
each Employee and Retired Employee who is a participant in GMI's 401(k) Plan to
elect (i) to receive a distribution of the value in his account less the amount
of any outstanding loan to such participant under such Plan (such participant's
"Account Balance"), (ii) to roll over such participant's Account Balance to an
individual retirement account of such participant or (iii) to roll over such
participant's Account Balance to the Buyer's 401(k) Plan by wire transfer on the
Closing Date. GMI shall make all matching contributions with respect to the
Employees and the Retired Employees that are required to be made before the
Closing Date.
4.8 Records Retention. Except as may otherwise be required
under Article VII, for a period of five years after the Closing Date, (a) the
Buyer shall retain all of the books and records relating to the Company's
business for periods prior to the Closing Date (except for those referred to in
Section 1.3(e)), (b) the Company or GMI shall retain all of the books and
records referred to in Section 1.3(e), and (c) the Company and GMI or the Buyer,
as the case may be, and its authorized representatives shall have the right to
inspect and copy such books and records during normal business hours, upon
reasonable prior notice, in connection with the preparation of tax returns,
financial statements, reports and filings and for any other reasonable purpose.
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4.9 Company Names. The Buyer acknowledges that the names
"Greater Media" and "Greater Media Cablevision" and the initials "GMI," whether
alone or in combination with one or more other words, are an asset of GMI.
Following the Closing Date, the Buyer shall and shall cause its Subsidiaries to
cease using any such name, word or initials or any derivation thereof.
Notwithstanding the foregoing, for a period of 180 days after the Closing Date,
the Buyer may continue (but only to the extent reasonably necessary) to operate
the Systems using the names "Greater Media" and "Greater Media Cablevision" and
all derivations and abbreviations of such names in use in the Systems on the
Closing Date, such use to be in a manner consistent with the way in which the
Company has heretofore used such names, derivations and abbreviations. Within
180 days after the Closing Date, the Buyer will discontinue using and will
dispose of all items of stationery, business cards and literature bearing such
names, derivations or abbreviations. Notwithstanding the foregoing, the Buyer
will not be required to remove or discontinue using any such name, derivation or
abbreviation that is affixed to converters or other items in or to be used in
customer homes or properties, making such removal or discontinuation
impracticable for the Buyer. The Buyer acknowledges and agrees that it will
acquire no rights to any such names, derivations or abbreviations.
4.10 Intercompany Accounts. Other than the Intercompany Debt
(the treatment of which shall be governed by Section 4.11 hereof), all
intercompany accounts between the Company, on the one hand, and GMI and its
other Subsidiaries, on the other hand, shall be canceled or contributed to
capital as of the close of business on the business day immediately preceding
the Closing Date.
4.11 Intercompany Debt. (a) On the Closing Date, the Company
shall repay the entire outstanding principal amount of and any accrued interest
on the Intercompany Debt as of such date, provided that, if the Company does not
have sufficient available cash funds to pay such amount on the Closing Date, the
Buyer shall provide the necessary funds to the Company so that the outstanding
principal amount of and accrued interest on the Intercompany Debt is paid in
full on the Closing Date. GMI shall issue to the Buyer an officer's certificate
at least three Business Days prior to the Closing Date, certifying (i) the
amount of unpaid principal of and interest on the Intercompany Debt to be
outstanding as of the Closing Date, (ii) that all Intercompany Debt was incurred
after October 1, 1998 in accordance with, or not in violation of, this Agreement
and (iii) the amount of cash funds of the Company to be available on the Closing
Date to repay the Intercompany Debt.
(b) Upon the closing of the Philadelphia Transaction, all
indebtedness owed by GPCI to the Company shall be canceled.
4.12 Notice of Proceedings. Each party will promptly notify
the other in writing upon (a) becoming aware of the occurrence of any fact or
circumstance that
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would cause or constitute a breach of its representations and warranties set
forth herein or any order or decree or any complaint seeking an order or decree
(or any threat to seek any of the foregoing) restraining or enjoining the
consummation of the transactions contemplated hereby or (b) receiving any notice
from any court or Governmental Authority of its intention to (i) commence an
investigation into, or commence a suit or proceeding to restrain or enjoin, the
consummation of the transactions contemplated hereby or (ii) nullify or render
ineffective the transactions contemplated hereby if such transactions are
consummated.
4.13 Guarantees. (a) Set forth in Schedule 4.13 are various
guarantees entered into by GMI to support the business of the Company (the
"GUARANTEES"). The Buyer agrees that it will arrange, effective as of the
Closing Date, for either (a) the Buyer to be substituted as the obligor under
each of the Guarantees or (b) each of the Guarantees to be terminated and, if
requested by any third party to whom a Guarantee was originally issued, for the
Buyer to provide substitute credit support.
(b) GMI will cause the Company's guaranty of GMI's obligations
under GMI's credit agreement with the Bank of New York to be terminated as of
the Closing.
4.14 Affiliate Contracts. (a) As soon as practicable after the
date hereof, GMI will use good faith efforts to obtain all requisite third party
consents required to assign to the Buyer those Company Contracts (except for the
guaranty referenced in Section 4.13(b) and the agreements described in item 2 of
Schedule 2.17) which have been entered into by GMI and relate to the business of
the Company and are listed in item II in Schedule 2.8(a) (the "GMI CONTRACTS").
Upon the Closing, GMI will assign, and the Buyer will assume, those GMI
Contracts for which such third party consents have been obtained or which do not
require such third party consents. If any such third party consents have not
been obtained by the Closing Date, GMI agrees to make the benefits of such GMI
Contracts available to the Buyer from and after the Closing Date at no
additional cost to the Buyer other than the Buyer (i) reimbursing the Company
for amounts due thereunder, (ii) performing all of GMI's obligations thereunder
and (iii) defending, indemnifying, paying, reimbursing and holding harmless GMI
and its affiliates from any liabilities, claims, costs or expenses (including
reasonable attorney fees) arising from or relating to such GMI Contracts.
(b) Set forth in item IV on Schedule 2.8(a) are certain
agreements entered into by the Company that relate only to the business of GPCI
(the "GPCI CONTRACTS"). On or prior to the closing of the Philadelphia
Transaction, the Company shall assign to GPCI, and GPCI will assume those GPCI
Contracts for which third party consents have been obtained or which do not
require such consents.
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4.15 Certain Litigation. The suits, actions, litigations,
proceedings and investigations listed in Schedule 2.12 relate exclusively to the
conduct of the business of the Company. Nevertheless, third parties have and may
in the future name GMI or its affiliates, directors, officers or employees as
parties. Accordingly, the Buyer shall defend, indemnify, pay, reimburse and hold
harmless GMI and its affiliates, directors, officers and employees from any
liabilities, claims, costs or expenses (including reasonable attorney fees)
arising from or relating to the suits, actions, litigations, proceedings and
investigations listed in Schedule 2.12 or arising after the date hereof to the
extent they relate to the Company or its business.
4.16 Retained Franchises. In the event that less than 100% of
the consents necessary to transfer the Systems are obtained but the condition
set forth in Section 5.2(a)(iii) has either been satisfied or waived, then GMI
and the Buyer shall cooperate with each other and use their respective
reasonable best efforts to restructure the ownership, control and management of
the assets of each System for which consents have not been obtained (each, a
"RETAINED FRANCHISE") from and after the Closing Date in such a manner that, to
the extent feasible, prevents any violation of the terms of any Franchise
Agreements relating to the Retained Franchises that would have a material
adverse effect on the Buyer and its affiliates, taken as a whole, or on GMI and
its Subsidiaries, taken as a whole, yet preserves the intent of the parties as
set forth in this Agreement regarding their respective economic positions, to
the extent practicable, had 100% of the consents been obtained. Notwithstanding
the foregoing, GMI and the Buyer shall continue to use their reasonable best
efforts to obtain consents for the transfer to the Buyer of any Retained
Franchise.
4.17 Transfer Laws. The Buyer waives compliance by the Company
with legal requirements relating to bulk transfers applicable to the
transactions contemplated by this Agreement. The Company agrees to indemnify and
hold harmless the Buyer against any and all claims to the extent they result
from such noncompliance. Nothing in this Section 4.17 shall be interpreted to be
a waiver by the Company or GMI of Buyer's obligation to pay all Transfer Taxes
pursuant to Section 7.2(b).
4.18 Further Assurances. The Company and GMI agree to execute
all such further documents and to do all such other acts and things (other than
the payment of money) as the Buyer, acting reasonably, may request from time to
time after the Closing for the purpose of transferring to the Buyer the Subject
Assets in the manner contemplated by this Agreement.
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ARTICLE V
CLOSING AND CLOSING DATE; CONDITIONS TO CLOSING
5.1 Closing and Closing Date. As soon as practicable after the
satisfaction or waiver of the conditions set forth in Section 5.2(a) (but no
later than five business days thereafter), a closing of the transactions
contemplated hereby (the "CLOSING") shall take place at the offices of Debevoise
& Xxxxxxxx, 875 Third Avenue, New York, New York, or on such other date and at
such other location as the parties may agree in writing. The date on which the
Closing occurs is referred to as the "CLOSING Date". At the Closing, the Buyer
will pay to the Company the Purchase Price by wire transfer of immediately
available funds to the account designated by the Company at least two business
days prior to the Closing Date.
5.2 Conditions to the Obligations of All Parties. The
respective obligations of the Company and the Buyer to consummate the
transactions contemplated hereby are subject to the requirements that:
(a) (i) Any waiting period applicable to the consummation of
the transactions contemplated hereby under the HSR Act shall have
expired or been terminated, (ii) all FCC authorizations, consents,
orders and approvals listed in item (b) of Schedule 2.2 and which, if
not received, in the aggregate, would reasonably be expected to have a
material adverse effect on the Buyer's operation of the Systems after
the Closing, shall have been received, and (iii) the authorizations,
consents, orders and approvals from franchising authorities listed in
item (c) of Schedule 2.2 regarding the transactions contemplated hereby
shall have been received, provided that so long as the authorizations,
consents, orders or approvals for the transfer to the Buyer of the
Systems representing at least 90% of the subscribers of the Company
shall have been obtained, then the condition described in this Section
5.2(a)(iii) shall be deemed to be satisfied.
(b) There shall not be in effect any injunction or any other
order issued by a court of competent jurisdiction restraining or
prohibiting the consummation of the transactions contemplated by this
Agreement.
5.3 Conditions to the Obligations of the Company and GMI. The
obligations of the Company and GMI to effect the transactions contemplated
hereby are subject to the satisfaction, on or prior to the Closing Date, of the
following conditions:
(a) The representations and warranties of the Buyer contained
in this Agreement, taken as a whole, shall be true and correct in all
material respects on and as of the Closing Date (without giving effect
to the materiality or Material
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Adverse Effect qualifiers set forth therein) with the same effect as if
made on and as of the Closing Date (except to the extent such
representations and warranties speak as of an earlier date), except for
such failures to be true and correct which would not in the aggregate
have a material adverse effect on the transactions contemplated hereby,
and at the Closing the Buyer shall have delivered to each of the
Company and GMI a certificate to that effect.
(b) The Buyer shall have executed and delivered to the Company
an assumption agreement in form and substance reasonably satisfactory
to the Company in which the Buyer agrees to assume, pay, discharge and
perform all of the Assumed Liabilities.
(c) Each of the agreements of the Buyer to be performed on or
before the Closing pursuant to the terms of this Agreement shall have
been duly performed in all material respects on or before the Closing
and at the Closing the Buyer shall have delivered to each of the
Company and GMI a certificate to that effect.
(d) GMI shall have received an opinion of Paul, Hastings,
Xxxxxxxx & Xxxxxx, LLP, counsel for the Buyer, dated as of the Closing
Date, covering such matters as GMI may reasonably request.
(e) GMI shall have been released from the Guarantees or the
Guarantees shall have been terminated, in each case without any further
obligation of GMI.
(f) The Philadelphia Transaction shall have closed.
(g) GMCI shall have received payment in full of the Purchase
Price.
(h) GMI shall have received payment in full of the entire
outstanding principal amount of and accrued interest on the
Intercompany Debt.
(i) GMI shall have received all customary closing documents it
may reasonably request relating to the existence of the Buyer and the
authority of the Buyer to enter into this Agreement and to consummate
the transactions contemplated hereby, all in form and substance
reasonably satisfactory to GMI.
5.4 Conditions to Obligations of the Buyer . The obligations
of the Buyer to effect the transactions contemplated hereby are subject to the
satisfaction, on or prior to the Closing Date, of the following conditions:
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(a) The representations and warranties of the Company and GMI
contained in this Agreement, taken as a whole, shall be true and
correct in all respects on and as of the Closing Date (without giving
effect to the materiality or Material Adverse Effect qualifiers set
forth therein) with the same effect as if made on and as of the Closing
Date (except to the extent such representations and warranties speak as
of an earlier date), except for such failures to be true and correct
which would not in the aggregate have a Material Adverse Effect, and at
the Closing the Company and GMI shall have delivered to the Buyer a
certificate to that effect.
(b) The Company shall have executed and delivered to the Buyer
a General Conveyance, Xxxx of Sale and Assignment in form and substance
reasonably satisfactory to the parties and such other deeds,
assignments and instruments of transfer and assignment as the Buyer may
reasonably request, transferring to the Buyer good and marketable title
in and to the Subject Assets transferred, sold, assigned and conveyed
by the Company to the Buyer pursuant to the terms of this Agreement.
(c) Each of the agreements of the Company and GMI to be
performed on or before the Closing pursuant to the terms of this
Agreement shall have been duly performed in all material respects on or
before the Closing and at the Closing the Company shall have delivered
to the Buyer a certificate to that effect.
(d) The Buyer shall have received an opinion of (i) Debevoise
& Xxxxxxxx, special counsel to the Company and GMI, (ii) Xxxxxxx Xxxxx,
Esq., general counsel to the Company and GMI (iii) and the opinion of
FCC Counsel to the Company, each dated as of the Closing Date, covering
such matters as the Buyer may reasonably request.
(e) The Buyer shall have received evidence of the cancellation
of all indebtedness owed by GPCI to the Company as provided in Section
4.11(b).
(f) The Buyer shall have received all customary closing
documents it may reasonably request relating to the existence of the
Company and GMI and the authority of the Company and GMI to enter into
this Agreement and to consummate the transactions contemplated hereby,
all in form and substance reasonably satisfactory to the Buyer.
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ARTICLE VI
TERMINATION
6.1 Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing Date:
(a) by mutual written consent duly authorized by the boards of
directors of the Company and the Buyer;
(b) by either the Company or the Buyer upon written notice to
the other, one year from the date hereof (the "TERMINATION DATE"), if
the Closing shall not have occurred on or before such Termination Date,
so long as the terminating party is not then in material breach of any
of its obligations hereunder;
(c) by the Company, provided that neither GMI nor the Company
is then in material breach of any of its obligations hereunder, if
either (i) the Buyer fails to perform any material agreement in this
Agreement when performance thereof is due and does not cure such
failure within 20 business days after the Company delivers written
notice thereof or (ii) any condition in Section 5.2 (other than Section
5.2(a)) or Section 5.3 has not been satisfied by the Closing Date and
is not capable of being satisfied prior to the Termination Date; or
(d) by the Buyer, provided that it is not then in material
breach of any of its obligations hereunder, if (i) either the Company
or GMI fails to perform any material agreement in this Agreement when
performance thereof is due and does not cure such failure within 20
business days after notice by the Buyer thereof or (ii) any condition
in Section 5.2 (other than Section 5.2(a)) or Section 5.4 has not been
satisfied by the Closing Date and is not capable of being satisfied
prior to the Termination Date.
6.2 Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 6.1 hereof, no party shall have any further
liability hereunder, provided that, (a) this Section 6.2, Sections 8.7 and 8.8,
and the confidentiality provisions of Section 4.2 shall survive such termination
and shall remain in full force and effect and (b) that nothing in this Section
6.2 shall relieve any party to this Agreement of liability for any willful
breach of this Agreement. Notwithstanding the foregoing or anything else in this
Agreement to the contrary, if the Closing fails to occur for any reason other
than any of the conditions to the Buyer's obligations to close as set forth in
Section 5.4 that is capable of being satisfied prior to the Closing not being
satisfied on or prior to the Termination Date (other than a failure of such
condition as a result of any
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breach by the Buyer of any of its representations, warranties, covenants or
agreements), GMI and the Company may seek to specifically enforce this Agreement
as provided in Section 8.13.
ARTICLE VII
TAX MATTERS
7.1 Proration of Taxes. In determining the parties' liability
for Taxes for a taxable year or period that begins before and ends after the
Closing Date, the determination of the Taxes for the portion of the year or
period beginning after the Closing Date shall be determined by assuming that the
taxable year or period ended on and included the Closing Date, except that
exemptions, allowances or deductions that are calculated on an annual basis and
real and personal property taxes shall be prorated based on the number of days
in the taxable year or period elapsed through the Closing Date, as compared to
the total number of days in the taxable year or period elapsed after the Closing
Date.
7.2 Payments. (a) GMI's Responsibility. GMI shall pay or cause
to be paid and shall indemnify and hold the Buyer harmless from and against (i)
all Taxes imposed on the Company (other than any Taxes described in Section
7.2(b)) or any Subsidiary and (ii) all Taxes (other than Transfer Taxes) for any
taxable period (or portion thereof) ending on or before the Closing Date
relating to the Systems or the Subject Assets.
(b) Buyer's Responsibility. The Buyer shall pay or cause to be
paid and shall indemnify and hold GMI and the Company harmless from and against
(i) all Taxes for any taxable period (or portion thereof), beginning after the
Closing Date relating to the Systems, Subject Assets and Assumed Liabilities and
(ii) all excise, sales, use, value added, transfer (including real property
transfer), transfer gains, gross receipts, stamp, documentary, filing,
recordation, registration, conveyance, license and other similar taxes, together
with any interest, additions or penalties with respect thereto and any interest
in respect of such additions or penalties arising out of or in connection with
or attributable to the transactions contemplated by this Agreement ("TRANSFER
TAXES"). The Company and the Buyer shall cooperate with each other in minimizing
Transfer Taxes, including, without limitation, by providing each other all
applicable exemption certificates with respect to such Transfer Taxes available
under applicable law.
7.3 Tax Returns. (a) GMI's Responsibility. GMI shall prepare,
or cause to be prepared, and file, or cause to be filed (i) the consolidated
U.S. federal Income Tax Returns of GMI's Consolidated Group, (ii) the combined,
consolidated or
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unitary Tax Returns for state, local and foreign Income Taxes which includes GMI
or any Subsidiary or affiliate thereof, (iii) all Tax Returns required to be
filed by the Company or any Subsidiary and (iv) all Tax Returns relating to the
Systems or the Subject Assets required to be filed on or before the Closing
Date.
(b) Buyer's Responsibility. The Buyer shall prepare, or cause
to be prepared, and file, or cause to be filed, all Tax Returns relating to the
Systems or the Subject Assets other than those Tax Returns described in Section
7.3(a).
(c) Transfer Taxes. Subject to Section 7.3(d), Tax Returns
required to be filed in respect of Transfer Taxes ("TRANSFER TAX RETURNS") shall
be prepared and filed by the party that has the primary responsibility under
applicable law for filing such Transfer Tax Returns. If no party has primary
responsibility for filing a Transfer Tax Return, then the Buyer shall be
responsible for preparing and filing any such Transfer Tax Return.
(d) Cooperation. The Buyer and GMI shall cooperate in
connection with the preparation and filing of any Tax Return for which the other
is responsible for preparing and filing pursuant to this Section 7.3. If either
GMI or the Buyer is liable for any portion of the Tax payable in connection with
any Tax Return to be prepared and filed by the other, the party responsible for
filing such return (the "PREPARER") shall prepare and deliver to the other party
(the "PAYOR") a copy of such return and any schedules, work papers and other
documentation that are relevant to the preparation of the portion of such Tax
Return for which the Payor is or may be liable hereunder not later than 30 days
prior to the due date for such Tax Return (including applicable extensions) (the
"DUE DATE"). The Preparer shall not file such Tax Return until the earlier of
(i) the receipt of written notice from the Payor indicating the Payor's consent
thereto, or (ii) one day prior to the Due Date. The Payor shall have the option
of providing to the Preparer, at any time at least 10 days prior to the Due
Date, written instructions as to how the Payor wants any, or all, of the Tax
items for which it may be liable reflected on such Tax Return. The Preparer
shall, in preparing such Tax Return, cause the items for which the Payor is
liable hereunder to be reflected in accordance with the Payor's instructions,
provided that if the amount of Taxes for which the Preparer is liable hereunder
would be increased as a result of reflecting such Tax items in accordance with
the Payor's instructions, the manner in which such Tax items will be reflected
on such Tax Return shall be determined pursuant to Section 7.9. In the absence
of having received instructions from Payor, such items shall be reported in any
manner determined by the Preparer.
7.4 Refunds. Subject to the provisions of this Section 7.4,
(i) GMI shall be entitled to retain, or receive immediate payment from the Buyer
(or any affiliate or Subsidiary of the Buyer) of, any refund or credit with
respect to Taxes (including,
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without limitation, refunds and credits arising by reason of amended Returns
filed after the Closing Date), plus any interest received with respect thereto
from the applicable taxing authorities, that are described as being the
responsibility of GMI in Section 7.2(a) and for which GMI has made payment
thereof and (ii) the Buyer shall be entitled to retain, or receive immediate
payment from GMI of, any refund or credit with respect to Taxes, plus any
interest received with respect thereto from the applicable taxing authorities,
that are described as being the responsibility of the Buyer in Section 7.2(b),
provided that neither the Buyer nor any Subsidiary of the Buyer shall be
permitted to carry back any item of loss, deduction or credit from a Tax Return
described as being the responsibility of the Buyer in Section 7.3(b) to any Tax
Return described as being the responsibility of GMI in Section 7.3(a). The Buyer
and GMI shall cooperate with respect to claiming any refund or credit with
respect to Taxes referred to in this Section 7.4, provided that the foregoing
shall be done in a manner so as not to interfere unreasonably with the conduct
of the business of the parties.
7.5 Audits. GMI and the Buyer shall notify the other in
writing within 10 days of its receipt of written notice of any pending or
threatened audits, adjustments, assessments or proceedings (whether judicial or
administrative) (a "TAX AUDIT") which may affect the liability for Taxes of such
other party. If the recipient of any such notice fails to notify the other
party, or if such notification is not in sufficient detail to notify the other
party of the nature of the Tax Audit, the recipient shall not be entitled to
indemnification for any Taxes arising in connection with such Tax Audit if such
failure to give adequate notice adversely affects the other party's right to
participate in and contest the Tax Audit. GMI shall have the right to control
any Tax Audit to the extent relating to Taxes that are described as being the
responsibility of GMI in Section 7.2(a), and to employ counsel of its choice at
its expense. The Buyer shall have the right to control any Tax Audit relating to
Taxes that are described as being the responsibility of the Buyer in Section
7.2(b), and to employ counsel of its choice at its expense. Notwithstanding the
foregoing, if such Tax Audit relates to Taxes for which both GMI and the Buyer
are liable hereunder, to the extent possible such Tax items will be
distinguished and each party will control the defense and settlement of those
Taxes for which it is so liable. If any such Tax item cannot be identified as
being a liability of only one party or cannot be separated from a Tax item for
which the other party is liable, the party which has the greater potential
liability for those Tax items that cannot be so attributed or separated (or
both) shall control the defense and settlement of the Tax Audit, provided that
such party defends the items as reported on the relevant Tax Return and the
other party is entitled to participate in such defense and settlement at its own
expense. The Buyer and GMI shall cooperate with respect to any Tax Audit
referred to in this Section 7.5, provided that the foregoing shall be done in a
manner so as not to interfere unreasonably with the conduct of the business of
the parties.
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7.6 Certain Post-Closing Actions. (a) Pre-Closing Tax Returns.
None of the Buyer nor any of its Subsidiaries or affiliates shall amend any Tax
Return prepared and filed by GMI pursuant to Section 7.3(a) hereof.
(b) Post-Closing Tax Elections. None of the Buyer nor any of
its Subsidiaries or affiliates shall make any election or take any other action
with respect to Taxes after the Closing which would affect the pre-Closing Tax
liability of GMI, the Company or any of their Subsidiaries or affiliates without
the prior written consent of GMI.
7.7 Mutual Cooperation. In addition to the obligations
otherwise set forth herein, but subject to the terms hereof, GMI and the Buyer
will cooperate with each other in paying any Taxes, filing any Tax Return and
conducting any Tax Audit contemplated by this Agreement and, except as set forth
to the contrary in this Agreement, take such actions as the other party may
reasonably request, including, without limitation, the following: (a) provide
data for the preparation of any Tax Return, including schedules; (b) provide
required documents and data and cooperate in any Tax Audit and execute
appropriate powers of attorney in favor of the other party and/or its agents;
(c) file protests or otherwise contest any proposed or asserted Tax
deficiencies, including filing petitions for redetermination or prosecuting
actions for refund in any court, and pursuing the appeal of any such actions;
(d) execute Tax Returns or other documents reasonably required by the other
party; (e) provide complete access to, and comply with reasonable requests for
copies of all Tax Returns, books and records, data, documents, work papers,
materials and other information relating to Taxes with respect to the Systems or
the Subject Assets for any taxable period; and (f) make available to each other,
its officers, directors, employees and agents for any fact finding, consultation
and discussions related to the preparation and filing of any Tax Return, the
conduct of any Tax Audit and any other matter with respect to Taxes, provided
that the foregoing shall be done in a manner so as not to interfere unreasonably
with the conduct of the business of the parties.
7.8 Maintenance Of Books and Records. Notwithstanding Section
4.8 hereof, until the applicable statute of limitations (including periods of
waiver) has expired for any Tax Return filed or required to be filed covering
the periods up to and including the Closing Date (including, without limitation,
any period beginning before and ending after the Closing Date), the Buyer shall
retain all Tax work papers and related materials in its possession and under its
control that were used in the preparation of any such Tax Return. Each party
shall notify the other party at least 60 days prior to disposing of any Tax
record relating to such taxable periods and will deliver to such other party any
such records requested by such other party.
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7.9 Tax Dispute Resolution Mechanism. If there is a dispute
between the Buyer and GMI regarding any of the matters contained in Section 1.5
hereof or in this Article VII or the interpretation of any other provision of
this Agreement relating to Taxes, such dispute shall be resolved as follows: (i)
the parties will in good faith attempt to negotiate a settlement of the dispute,
(ii) if the parties are unable to negotiate a resolution of the dispute within
30 days of the commencement of the dispute, the dispute will be submitted to the
national office of a firm of independent accountants of nationally recognized
standing reasonably satisfactory to GMI and the Buyer (the "TAX DISPUTE
ACCOUNTANTS"), (iii) the parties will present their arguments to the Tax Dispute
Accountants within 15 days after submission of the dispute to the Tax Dispute
Accountants, (iv) the Tax Dispute Accountants will resolve the dispute, in a
fair and equitable manner and in accordance with the applicable Tax law, within
30 days after the parties have presented their arguments to the Tax Dispute
Accountants, which decision shall be final, conclusive and binding on the
parties, (v) any payment to be made as a result of the resolution of a dispute
shall be made, and any other action to be taken as a result of the resolution of
a dispute shall be taken, on or before the later of (A) the date on which such
payment or action would otherwise be required or (B) the third business day
following the date on which the dispute is resolved (in the case of a dispute
resolved by the Tax Dispute Accountants, such date being the date on which the
parties receive written notice from the Tax Dispute Accountants of their
resolution) and (vi) the fees and expenses of the Tax Dispute Accountants in
resolving a dispute will be borne equally by GMI and the Buyer.
7.10 Certain Payroll Matters. Notwithstanding any other
provision of this Agreement, in respect of wages paid with respect to the 1999
calendar year to employees of GMI, the Company or any Subsidiary who after the
Closing become employees of the Buyer or its affiliates, GMI, the Company and
the Buyer agree to comply, and to cause their respective affiliates to comply,
with the procedures set forth in Revenue Procedure 96-60 and shall cooperate,
and cause their respective affiliates to cooperate, with each other in complying
with such procedures.
7.11 Characterization of Indemnity Payments. The parties agree
that any indemnification payments made pursuant to this Agreement shall be
treated for tax purposes as an adjustment to purchase price, unless otherwise
required by applicable law.
ARTICLE VIII
MISCELLANEOUS
8.1 Entire Agreement. Other than the Confidentiality
Agreement, this Agreement constitutes the entire agreement among the parties
with respect to the subject
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matter hereof and supersedes all prior written and oral and all contemporaneous
oral agreements and understandings with respect to the subject matter hereof
(including, without limitation, the Confidential Memorandum, dated April 1998,
prepared by Xxxxxxx, Xxxxx & Co., with respect to the cable television
properties of GMI, and any supplements thereto).
8.2 Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given or made as follows: (a) if sent by registered or certified mail in
the United States, return receipt requested, upon receipt; (b) if sent by
reputable overnight air courier (such as DHL or Federal Express), two business
days after mailing; (c) if sent by facsimile transmission, with a copy mailed on
the same day in the manner provided in (a) or (b) above, when transmitted and
receipt is confirmed by telephone; or (d) if otherwise actually personally
delivered, when delivered and shall be delivered as follows:
if to the Buyer:
Charter Communications, Inc.
00000 Xxxxxxxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx, President and CEO
Fax: 000-000-0000
with a copy to:
Charter Communications, Inc.
00000 Xxxxxxxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx, Senior Vice President
and General Counsel
Fax: 000-000-0000
if to GMI:
Greater Media, Inc.
Two Xxxxxxx Xxxxxxxxx
X.X. Xxx 0000
Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: General Counsel
Fax: 000-000-0000
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with a copy to:
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxx
Fax: 000-000-0000
or to such other address or to such other person as the party to whom notice is
given may have previously furnished to the others in writing in the manner set
forth above.
8.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York regardless of the
laws that might otherwise govern under principles of conflicts of laws
applicable thereto.
8.4 Interpretation. The section headings in this Agreement are
for convenience of reference only and shall not be deemed to alter or affect
the meaning or interpretation of any provision hereof. Any references to the
Company's knowledge or the knowledge of the Company shall mean the actual
knowledge of Xxxxx X. Xxxxxx, Xxxx Xxxxxxxxx, Xxxxxxx Xxxxx and Xxxxxx Xxxx.
8.5 Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, and nothing in this
Agreement, express or implied, is intended to confer upon any other person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
8.6 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original but all of which
shall constitute one and the same agreement.
8.7 Expenses. Except as otherwise provided for in this
Agreement, all costs and expenses incurred in connection with the transactions
contemplated by this Agreement shall be paid by the party incurring such
expenses, provided that if the Closing occurs, all such cost and expenses shall
be paid by the Buyer except as provided in clause (ii) of Section 1.6(b).
8.8 Personal Liability. This Agreement shall not create or be
deemed to create or permit any personal liability or obligation on the part of
any direct or indirect stockholder of any party hereto or any officer, director,
employee, agent or representative of any party hereto.
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8.9 Assignment. This Agreement may not be assigned by any
party hereto, whether by operation of law or otherwise, except that Buyer shall
be permitted to assign its rights and obligations under this Agreement to any of
its controlled affiliates without the prior consent of any other party hereto,
so long as such assignment does not prevent or delay consummation of the
Closing. No such assignment shall relieve the Buyer of its obligations under
this Agreement.
8.10 Amendment. No provision of this Agreement may be amended,
modified or waived except by an instrument in writing signed by all the parties
hereto.
8.11 Exclusivity of Representations and Warranties;
Non-Survival; Relationship Between the Parties. It is the explicit intent and
understanding of each of the parties hereto that none of the parties nor any of
their affiliates, nor any of their representatives or agents, is making any
representation or warranty whatsoever, oral or written, express or implied,
other than those set forth in Articles II and III, and no party is relying on
any statement, representation or warranty, oral or written, express or implied,
made by any other party or any such other party's affiliates, or any of their
representatives or agents, except for the representations and warranties set
forth in such sections. None of the representations and warranties in this
Agreement or in any certificate or instrument delivered pursuant to this
Agreement shall survive the Closing, and neither GMI nor the Company shall have
any liability hereunder to the Buyer or any other person with respect to,
arising out of or in any way relating to its representations and warranties
hereunder. The parties agree that this is an arm's length transaction in which
the parties' undertakings and obligations are limited to the performance of
their obligations under this Agreement.
8.12 Exclusive Jurisdiction, etc. Each party irrevocably
submits to the exclusive jurisdiction of any court in the City of New York or
any courts of the United States of America located in the Southern District of
New York and, subject to Section 7.9, each party hereby agrees that all suits,
actions and proceedings brought by such party hereunder shall be brought in any
such court. Each party irrevocably waives, to the fullest extent permitted by
law, any objection which it may now or hereafter have to the laying of the venue
of any such suit, action or proceeding brought in any such court, any claim that
any such suit, action or proceeding brought in such a court has been brought in
an inconvenient forum and the right to object, with respect to any such suit,
action or proceeding brought in any such court, that such court does not have
jurisdiction over such party or the other party. In any such suit, action or
proceeding, each party waives, to the fullest extent it may effectively do so,
personal service of any summons, complaint or other process and agrees that the
service thereof may be made by certified or registered mail accompanied by first
class prepaid ordinary postage, addressed to such party at its address. Each
party agrees that a final non-appealable judgment in any such suit, action or
proceeding brought in such a court shall be conclusive and binding.
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8.13 Right to Specific Performance. Notwithstanding anything
to the contrary set forth herein or elsewhere, (i) GMI and the Company shall be
entitled, at their sole option, to (a) waive compliance by the Buyer with any
term or provision of this Agreement (including, without limitation, any closing
conditions) and/or (b) without the posting of any bond or other security,
require the Buyer to consummate and specifically perform the transactions
contemplated hereby in accordance with all other terms of this Agreement, if
necessary through injunction or other court order or process, if the conditions
to the obligations of the Buyer to effect the Closing have been satisfied or are
capable of being satisfied if the Closing were to be held, and (ii) the Buyer
shall be entitled, at its sole option, to (a) waive compliance by GMI and the
Company with any term or provision of this Agreement (including, without
limitation, any closing conditions) and/or (b) without the posting of any bond
or other security, require GMI and the Company to consummate and specifically
perform the transactions contemplated hereby in accordance with all other terms
of this Agreement, if necessary through injunction or other court order or
process, if the conditions to the obligations of GMI and the Company to effect
the Closing have been satisfied or are capable of being satisfied if the Closing
were to be held. Any such equitable relief granted shall not be exclusive and
GMI and the Company or Buyer, as the case may be, shall also be entitled to seek
money damages.
ARTICLE IX
DEFINITIONS
When used in this Agreement, the following terms shall have
the meanings indicated.
"ACCUMULATED FUNDING DEFICIENCY" means an accumulated funding
deficiency, as defined in Section 302 of ERISA and Section 412 of the Code.
"ALLOCATION SCHEDULE" has the meaning set forth in Section
1.5.
"ASSUMED LIABILITIES" has the meaning set forth in Section
1.6.
"AUTHORIZATIONS" has the meaning set forth in Section 2.7(a).
"BASIC SUBSCRIBER" means a Person (i) who subscribes to basic
service, (ii) who pays the full rate for such service charged by the Company for
detached single family homes and (iii) whose accounts receivable owed for such
service are not more than 60 days past due from the date of invoice.
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"CARS" means Cable Television Relay Service.
"CLOSING" AND "CLOSING DATE" each has the meaning set forth in
Section 5.1.
"COBRA" means the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended, as set forth in Section 4980B of the Code and Part 6 of
Title I of ERISA.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMUNICATIONS ACT" means the Communications Act of 1934, as
amended.
"COMPANY BENEFIT ARRANGEMENT" means any material benefit
arrangement (whether or not written) that is not a Company Employee Plan,
including (i) any employment or consulting agreement, (ii) any arrangement
providing for insurance coverage or workers' compensation benefits, (iii) any
incentive bonus or deferred bonus arrangement, (iv) any arrangement providing
termination allowance, severance or similar benefits, (v) any equity
compensation plan, (vi) any deferred compensation plan and (vii) any
compensation policy and practice, in each case that is maintained by the Company
or any of its ERISA Affiliates covering any employees, former employees,
directors or former directors of the Company, and the beneficiaries of any of
them.
"COMPANY COMMON STOCK" means the issued and outstanding shares
of Class A common stock of the Company.
"COMPANY CONTRACTS" has the meaning set forth in Section
2.8(a).
"COMPANY EMPLOYEE PLAN" means any employee benefit plan, as
defined in Section 3(3) or ERISA, that is sponsored or contributed to by the
Company or any of its ERISA Affiliates covering any employees or former
employees, directors or former directors of the Company and the beneficiaries of
any of them.
"COMPANY PLAN" means any Company Employee Benefit Plan or
Company Benefit Arrangement.
"EMPLOYEE" means any individual who, as of the Closing Date,
is actively employed by, or on short-term or long-term disability, accident or
sickness, maternity, lay-off or other authorized leave of absence from the
Company.
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"EMPLOYEE PROTECTION PLAN" means the Company's Employee
Protection Plan, the terms of which are included on Schedule 2.14(e).
"EMPLOYEE RETENTION PLAN" means the Company's Employee
Retention Plan, the terms of which are included in Schedule 2.14(e).
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"ERISA AFFILIATE" means a Person and/or such Person's
Subsidiary or any trade or business (whether or not incorporated) which is under
common control with such entity or such entity's Subsidiaries or which is
treated as a single employer with such Person or any Subsidiary of such Person
under Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(f) of
ERISA.
"EXCLUDED ASSETS" has the meaning set forth in Section 1.3.
"EXCLUDED CONTRACTS" has the meaning set forth in Section
1.3(n).
"EXCLUDED LIABILITIES" has the meaning set forth in Section
1.6.
"FCC" means the Federal Communications Commission.
"FRANCHISE AGREEMENTS" has the meaning set forth in Section
2.8(a).
"GMI CONTRACTS" has the meaning set forth in Section 4.14(a).
"GOVERNMENTAL AUTHORITY" means any governmental or regulatory
authority, domestic or foreign, including, without limitation, any governmental
administrative agency or franchising authority.
"GPCI" has the meaning set forth in Section 1.3(a).
"GPCI MERGER CONSIDERATION" means the consideration to be
received by the Company in connection with the merger of GPCI with and into
Philadelphia Merger Sub.
"GUARANTEES" has the meaning set forth in Section 4.13(a).
"INCOME TAX" means any Tax computed in whole or in part based
on or by reference to net income and any alternative, minimum, accumulated
earnings or
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personal holding company Tax (including all interest and penalties thereon and
additions thereto).
"INCOME TAX RETURN" means any Tax Return relating to Income
Taxes.
"INTELLECTUAL PROPERTY" has the meaning set forth in Section
2.11.
"INTERCOMPANY DEBT" means the debt of the Company to GMI
incurred for the operation of the Systems in a manner consistent with past
practice after October 1, 1998 in accordance with, or not in violation of, this
Agreement, the interest on which shall accrue at a rate equal to GMI's average
borrowing rate over the period from October 1, 1998 to the Closing Date,
compounded annually, and any short-term advances to the Company made by GMI (as
to which no interest is charged) in the ordinary course of business and
consistent with past practice and the Company's cash management practices and
disbursement controls for the purposes of, without limitation, the payment of
the Company's payroll and insurance premiums.
"IRS" means the Internal Revenue Service.
"LIENS" means any lien, claim, charge, restriction, pledge,
mortgage, security interest or other encumbrance.
"MATERIAL ADVERSE EFFECT" means any effect that is or is
reasonably likely to be materially adverse to the business, results of
operations or financial condition of the Company, except for effects due to the
general economic or industry-wide conditions.
"MULTIEMPLOYER PLAN" means a multiemployer plan, as defined in
Sections 3(37) and 4001(a)(3) of ERISA.
"NLRB" means the National Labor Relations Board.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PENSION PLAN" means any employer pension benefit plan, as
defined in Section 3(2) of ERISA.
"PERMITTED LIENS" means (i) Liens for taxes and other
governmental charges and assessments which are not yet due and payable or which
are being contested in good faith by appropriate proceedings, (ii) Liens of
landlords and Liens of carriers, warehousemen, mechanics and materialmen and
other like Liens arising in the ordinary course of business for sums not yet due
and payable or that are being contested in good
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faith by appropriate proceedings or with respect to which arrangements for
payment and/or release have been made, (iii) purchase money Liens on property
acquired by the Company in connection with its business which were created
contemporaneously with such acquisition to secure or provide for the payment or
financing of all or any part of the purchase price thereof, (iv) easements,
rights of way, restrictions, leases of property to others, title imperfections
and restrictions, zoning ordinances and other similar encumbrances affecting
the Real Property which in the aggregate do not adversely affect the value of
such Real Property or materially impair its use for the operation of the
relevant Systems, (v) statutory Liens in favor of lessors arising in connection
with any property leased to the Company in connection with the its business, and
(vi) other Liens which, individually or in the aggregate, would not reasonably
be expected to have a Material Adverse Effect.
"PERSON" means any individual, general partnership, limited
partnership, corporation, limited liability company, joint venture, trust,
business trust, cooperative or association, and the heirs, executors,
administrators, legal representatives, successors, and assigns of such Person
where the context so requires.
"PHILADELPHIA MERGER AGREEMENT" means the definitive agreement
for the Philadelphia Transaction.
"PHILADELPHIA MERGER SUB" means the wholly owned subsidiary of
Comcast Corporation with which GPCI is to merge pursuant to the Philadelphia
Transaction.
"PHILADELPHIA TRANSACTION" means the transaction in which GPCI
is to be merged with Philadelphia Merger Sub.
"PURCHASE PRICE" has the meaning set forth in Section 1.4.
"RETAINED FRANCHISE" has the meaning set forth in Section
4.16.
"RETIRED EMPLOYEES" means all former employees of the Company
who, as of the Closing Date, are entitled or will be entitled to retirement
benefits under Company Plans.
"SCHEDULE OF CAPITAL EXPENDITURES" means the Schedule of
Capital Expenditures included in Schedule 4.1.
"SUBJECT ASSETS" has the meaning set forth in Section 1.2
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"SUBSIDIARY" as to any Person means (i) any corporation,
association or other business entity of which such Person owns or controls,
either directly or indirectly, 50% or more of the total combined voting power of
all classes of voting securities of such corporation that are entitled to vote
in the election of directors, managers or trustees thereof and (ii) any
partnership, association, joint venture or other form of business organization,
whether or not it constitutes a legal entity, in which such Person directly or
indirectly through its Subsidiaries owns or controls 50% or more of the total
equity interests.
"SYSTEMS" has the meaning set forth in the recitals hereto.
"TAX" means any tax, levy, impost, duty, charge, assessment or
fee of any nature (including any interest and penalties thereon and additions
thereto) that is imposed by any taxing authority or other governmental
authority.
"TAX RETURN" means any return, report, declaration, form,
claim for refund or information return or statement relating to Taxes, including
any schedule or attachment thereto, and including any amendment thereof.
"TRANSFER TAXES" has the meaning set forth in Section 7.2(b).
"TRANSFER TAX RETURNS" has the meaning set forth in Section
7.3(c).
[The remainder of this page intentionally left blank]
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IN WITNESS WHEREOF, each of the parties has caused this
Agreement to be executed on its behalf by its officers thereunto duly authorized
on the day and year first above written.
GREATER MEDIA, INC.
By /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chairman of the Board
GREATER MEDIA CABLEVISION, INC.
By /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: President
CHARTER COMMUNICATIONS, INC.
By /s/ Xxxxxx X. Xxxx
-----------------------------------
Name: Xxxxxx X. Xxxx
Title: Senior Vice President
