EXHIBIT 10.51
ASSET PURCHASE AND SALE AGREEMENT
This Asset Purchase and Sale Agreement is made as of March 10 2005, by
and between NORTHLAND CABLE PROPERTIES EIGHT LIMITED PARTNERSHIP, a Washington
limited partnership ("SELLER"), and XXXXXXXXX X. XXXX, III, an individual,
residing at Meridian Mississippi, d/b/a Sky Cablevision of Xxxxxx County, and
his successor and assigns ("BUYER").
Recitals
A. Seller owns certain cable television reception, processing and
distribution facilities and currently is engaged in the business of providing
cable television services located in and around the communities of Eutaw, Xxxxxx
County and Marion, Perry County, each in the State of Alabama more particularly
described as follows:
(i) Eutaw
Eutaw, Xxxxxx County, Alabama (PSID 003257)
Communities Served: Eutaw (CUID No. AL-0084)
Xxxxxx County (CUID No. AL-0714)
(ii) Xxxxxx
Xxxxxx, Xxxxx County, Alabama (PSID 007965)
Communities Served: Marion (CUID No. AL-0197)
Perry County (CUID No. AL-0715)
(collectively, the "SYSTEMS").
B. Buyer desires to purchase, and Seller desires to sell and convey,
substantially all of the Assets of Seller used solely in connection with the
Systems, except for the Excluded Assets, all as more particularly described in
this Asset Purchase and Sale Agreement, as amended, supplemented or modified
from time to time, including all agreements, instruments and documents delivered
in connection with this Agreement and all Schedules and Exhibits annexed hereto
(collectively, this "AGREEMENT").
Agreement
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties agree as follows:
Section 1. Sale of Assets. Subject to the terms and conditions set forth in this
Agreement, at Closing (defined in Section 6 hereof) Buyer shall purchase and
Seller shall sell, transfer, assign and convey to Buyer certain tangible and
intangible assets comprising and used by Seller solely in connection with the
operations of the Systems, including the tower, antennas, dishes and headend
structure and equipment more specifically described on Schedule A (collectively,
the "ASSETS") excluding those Assets set forth on Schedule B (the "Excluded
Assets"), attached hereto and incorporated by reference herein, and further
expressly excluding all assets used or useful in connection with Seller's other
cable television operations outside of the Systems.
Section 2. Non-refundable Deposit; Purchase Price.
2.1 Non-refundable Deposit. Upon execution of this Agreement, Buyer
shall deliver to Seller in readily available funds, a good faith NON-REFUNDABLE
deposit of five percent (5%) of the Purchase Price
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(defined in Section 2.2 below), equal to Fifty Thousand Dollars ($50,000.00)
(the "DEPOSIT"). Upon Closing, the Deposit will be applied against the Purchase
Price payable by Buyer.
2.2 Purchase Price. Buyer shall pay to Seller total consideration of
One Million Dollars ($1,000,000.00), at Closing (the "PURCHASE PRICE"), plus any
and all applicable taxes or fees due upon the sale of the Assets to any
governmental agency or body. At Closing, Buyer shall pay Seller the Purchase
Price in full in cash, less the Deposit, by federal wire transfer of immediately
available funds to account(s) designated by Seller.
2.3 Prorations. The Purchase Price shall be adjusted for all prepaid
expenses, accrued expenses and prepaid revenue, all as determined in accordance
with generally accepted accounting principles, to reflect the principle that all
expenses arising out of and all income attributable to the System for the period
prior to 11:59 p.m. local time on the Closing Date are for the account of
Seller, and that all expenses arising out of and all income attributable to the
System for the period after 11:59 p.m. local time on the Closing Date are for
the account of Buyer. Such adjustments shall be made on the basis of a
certificate delivered by Seller to Buyer at least five business days prior to
Closing setting forth Seller's good faith estimate of any adjustments or
prorations required by this Section 2.3. All overlapping items of income or
expense shall be prorated or reimbursed, as the case may be, as of 11:59 p.m.
local time on the Closing Date, including without limitation the following:
expenses and deposits prepaid by Seller; FCC user fees; copyright royalty
payments; franchise fees; rental payments; deposits and prepayments received but
unearned by Seller; liabilities for incurred but unpaid expenses; real and
personal property taxes and utility charges relating to the System; and all
other items normally prorated in the sale of the assets of a going concern cable
television business.
Section 3. Assumption of Liabilities.
3.1 By Buyer. At Closing, Buyer shall assume and agree to pay and
perform all of Seller's obligations and liabilities with respect to the
operation of the System, along with all of the obligations and liabilities under
or in connection with the Assets, heretofore accrued and that may hereafter
accrue, including, but not limited to those items more specifically described on
Schedule A, attached hereto and incorporated by reference herein. Buyer shall
pay all reasonable costs, fees, taxes (including any applicable sales taxes) and
expenses associated with the consummation of the transactions contemplated by
this Agreement, including without limitation the expenses associated with
obtaining the consent or agreement of any governmental authority or any
independent third-party with whom Seller is contractually bound. Buyer shall
assume the liability for and shall pay the sales taxes, if any, that may be
imposed upon and payable in connection with this transaction pursuant to law,
and Buyer shall be responsible for its fees and expenses, including the fees and
expenses of its own attorneys, accountants and experts, in connection with the
transaction contemplated hereby.
3.2 By Seller. Seller shall assume the liability for and shall pay any
and all taxes (except any applicable sales taxes which shall be paid by Buyer)
that may be imposed on Seller on the basis of Seller's income. Seller shall be
responsible for its fees and expenses, including the fees and expenses of its
own attorneys, accountants and experts, in connection with the transaction
contemplated hereby.
Section 4. Representations and Warranties.
4.1 Representations and Warranties of Seller. Seller represents and
warrants to Buyer as follows:
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4.1.1 The Purchase Price reflects the absence of any
representation or warranty regarding the Assets, except as expressly provided
herein. Buyer takes the Assets "AS IS AND WHERE IS." SELLER MAKES NO
REPRESENTATIONS OR WARRANTIES WHATSOEVER REGARDING THE ASSETS, EXPRESS OR
IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF TITLE, NONINFRINGEMENT,
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
4.1.2 Due Incorporation. Seller is a limited partnership duly
formed and validly existing under the laws of the State of Washington and has
the power and authority to conduct its business as heretofore conducted and to
own or hold under lease its properties and assets.
4.1.3 Authorization. Seller has full power to execute and
deliver this Agreement and to perform hereunder, and the execution, delivery and
performance hereof and the consummation of the transactions contemplated hereby
have been duly authorized by all requisite action.
4.1.4 Enforceability. This Agreement has been duly executed
and delivered by Seller, and constitutes a valid and binding obligation of
Seller enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
other similar laws affecting creditors' rights generally or by the application
of general principles of equity.
4.1.5 Claims, Litigation and Disputes. There is no claim or
litigation or investigative proceeding pending or threatened against Seller
either arising out of its operation of the Systems or which would adversely
affect Seller's ability to perform hereunder.
4.2 Representations and Warranties of Buyer. Buyer represents and
warrants to Seller as follows:
4.2.1 Sole Proprietorship. Buyer is a sole proprietor.
4.2.2 Authorization and Capacity. Buyer has full power to
execute and deliver this Agreement and to perform hereunder, and the execution,
delivery and performance hereof and the consummation of the transactions
contemplated hereby have been duly authorized by all requisite action. Buyer has
or will have at Closing sufficient funds readily available to close the
transaction contemplated herein.
4.2.3 Enforceability. This Agreement has been duly executed
and delivered by Buyer, and constitutes a valid and binding obligation of Buyer
enforceable in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
other similar laws affecting creditors' rights generally or by the application
of general principles of equity.
4.2.4 Claims, Litigation and Disputes. There is no claim or
litigation or investigative proceeding pending or threatened against Buyer which
would adversely affect Buyer's ability to perform hereunder.
4.2.5 Buyer's Investigation. Buyer will have until the Closing
Date to conduct its due diligence and such investigation of the Assets and
Systems as Buyer deems appropriate. Buyer acknowledges that it is accepting the
Assets in their present conditions and locations and with their present
operating capabilities, and, subject only to the express representations of
Seller set forth in Section 4.1 of this Agreement, Buyer acknowledges that
Seller makes no warranty, express or implied, as to the Assets. Buyer has not
relied upon, and Seller shall not be liable for or bound in any manner by, any
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express or implied verbal or written information, warranties, guarantees,
promises, statements, inducements, representations of opinions pertaining to the
Systems or the Assets, except as expressly provided in this Agreement and any
certificates delivered hereunder.
Section 5. Conduct Pending Closing.
5.1 Of Seller. Between the date of execution and delivery of this
Agreement and the Closing Date, Seller shall allow Buyer, its accountants or
auditors full access at reasonable times to the Systems and the books and
records of Seller that relate solely thereto and shall furnish to Buyer and its
representatives such information regarding the business and properties of Seller
as may reasonably be requested by Buyer. Seller shall continue to operate the
Systems, maintain the Assets, and keep its business books, records, and files in
the ordinary course of business in accordance with past practices, consistently
applied. Except as otherwise requested by Buyer, Seller shall use its
commercially reasonable efforts to preserve the Systems as a going concern and
to preserve existing relationships with suppliers, customers, governmental
entities and others having business dealings with Seller. Seller shall use its
commercially reasonable efforts to obtain each of the required consents. Buyer
shall reasonably cooperate and assist Seller in obtaining the required consents.
5.2 Of Buyer. Neither Buyer nor any of its officers, members, managers
or employees has entered or will enter into any contract, arrangement, or
understanding with any person or firm, which may result in the obligation of
Seller or Buyer to pay any finder's, brokerage, or agent's fees, commission or
other like payment or compensation.
Section 6. Closing; Closing Date; Termination. Subject to the terms and
conditions of this Agreement, the consummation of the transactions contemplated
in this Agreement ("CLOSING") shall be conducted at the offices of Seller or
other mutually agreeable location on or before March 15, 2005 (the "CLOSING
DATE"). The parties will endeavor to conduct the Closing by facsimile and
express mail. This Agreement may be terminated at any time prior to Closing: (a)
by the mutual written consent of Seller and Buyer, (b) by either Seller or by
Buyer, in the event of a material breach of this Agreement by the other party
which breach remains uncured 15 business days after the written receipt of
notice describing in detail the facts and circumstances surrounding such breach
or (c) by Seller or Buyer, if all the consents of third parties listed in
Schedule A and marked with an asterisk (the "Required Consents") cannot be
obtained. Notwithstanding the foregoing, this Agreement may be extended if
Closing cannot occur because the consents or approvals from third parties
identified on Schedule A have not yet been obtained, and the parties are using
commercially reasonable efforts to obtain such consents or approvals, or Closing
is otherwise delayed due to no fault of the party seeking such extension, then
Closing Date may be extend to a mutually agreeable date, but in no event later
than April 1, 2005.
Section 7. Post-Closing Matters.
7.1 Use of Trade Name. For a period of ninety (90) days after the
Closing Date, Buyer may continue to operate the Systems using Seller's d/b/a
name(s) and its corporate name and all derivations and abbreviations of such
names and related marks, in order to effectively transfer title to all Assets
and the Systems to Buyer. Within ninety (90) days after the Closing Date, Buyer
shall discontinue using and shall dispose of all items of stationery, business
cards and literature bearing such names or marks.
7.2 Seller's Billing Services. For a period of ninety (90) days after
the Closing Date, Seller may provide certain billing services in connection with
the Systems for a fee; provided that on the Closing Date, Buyer and Seller have
entered into a mutually agreed-upon subscriber billing transition services
agreement. Buyer shall promptly reimburse Seller for any other out-of-pocket
costs, fees or
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expenses as a result of Seller's performance of billing related services, which
may include the cost of retrieving, compiling, collecting and/or delivering
subscriber data and/or history to Buyer.
Section 8. Seller's Obligations. Seller shall deliver to Buyer at Closing the
following: (a) executed originals of the Xxxx of Sale and Assignment and
Assumption Agreement, each substantially in the forms of Exhibits A and B,
respectively; (b) any releases necessary to remove security interests and any
other known liens or encumbrances on the Assets; (c) the Required Consents; (d)
a current subscriber list; and keys for the Systems (e.g., lock boxes, power
supplies, gates), as applicable.
Section 9. Buyer's Obligations. Buyer shall deliver to Seller at Closing the
following: (a) payment of the Purchase Price; and (b) executed originals of the
Assignment and Assumption Agreement in the form of Exhibit B. After Closing,
Buyer shall perform and pay any and all obligations assumed by it pursuant to
Section 3.1.
Section 10. Conditions of Buyer's Obligations. Buyer's obligation to close, if
not waived in writing by Buyer, is subject to the condition that Seller shall
have performed in all material respects all of its agreements and covenants
under this Agreement, including without limitation the actions required by
Sections 5.1 and 8, to the extent such are required to be performed at or prior
to Closing.
Section 11. Conditions of Seller's Obligations. Seller's obligation to close, if
not waived in writing by Seller, is subject to the condition that Buyer shall
have performed in all material respects all of its agreements and covenants
under this Agreement, including without limitation the actions required by
Sections 5.2 and 9, to the extent such are required to be performed at or prior
to Closing.
Section 12.
a. Buyer's Indemnification. Buyer shall defend, indemnify and hold
harmless Seller, its affiliates, partners, employees, directors, officers,
agents, and assigns, from and against any loss, liability, damage, or expense
(including attorneys' and other experts' fees) (a) resulting from any claim by
any third party relating to the Assets and/or the Systems arising or accruing on
or after Closing, which shall include but not be limited to Buyer's failure to
pay or perform the debts, liabilities and obligations it agreed to assume
pursuant to Section 3.1 hereof, and (b) arising from any breach of any
representation, warranty, or covenant by Buyer in this Agreement, including
without limitation any liabilities and costs arising from any pending or
threatened litigation involving Buyer. Buyer's indemnification obligations
hereunder shall survive Closing for a period of three (3) years, or the
applicable statute of limitations, whichever is longer.
b. Seller's Indemnification. Seller shall defend, indemnify and hold
harmless Buyer, his partners, employees, directors, officers, agents, and
assigns, from and against any loss, liability, damage, or expense (including
attorneys' and other experts' fees) (a) resulting from any claim by any third
party relating to the Assets and/or the Systems arising or accruing before
Closing, which shall include but not be limited to Seller's failure to pay or
perform the debts, liabilities and obligations it agreed to assume pursuant to
Section 3.2 hereof, and (b) arising from any breach of any representation,
warranty, or covenant by Seller in this Agreement, including without limitation
any liabilities and costs arising from any pending or threatened litigation
involving Seller. Seller's indemnification obligations hereunder shall survive
Closing for a period of three (3) years, or the applicable statute of
limitations, whichever is longer.
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Section 13.
a. Confidentiality. Buyer agrees and covenants that, without the prior
written consent of the Seller, it will not release any publicity concerning this
transaction and will not disclose any terms of this transaction, , the name of
the Seller and Buyer or the Purchase Price, to any persons. Because Seller will
make available to Buyer certain financial, customer and other information Seller
desires to keep confidential, Seller has requested and Buyer has agreed to keep
confidential any and all information provided by Seller to Buyer (the
"CONFIDENTIAL INFORMATION"). Buyer shall hold all such Confidential Information
in trust and exercise all reasonable steps to safeguard the confidentiality of
the Confidential Information and not disclose any portion of it to any third
party except to Buyer's representatives (i) who need to know the Confidential
Information to assist in evaluating a possible transaction and (ii) who have
agreed in writing to preserve the confidentiality of such Confidential
Information at least to the extent required herein. In addition, Buyer shall use
the Confidential Information solely for the purpose of evaluating the
transaction contemplated hereby with Seller and not use such Confidential
Information for Buyer's own account or for the benefit of any other person.
Buyer shall be responsible for enforcing the confidentiality of the Confidential
Information and shall take such action, legal or otherwise, to the extent
necessary to prevent any disclosure by any of Buyer's representatives of the
Confidential Information. In the event Seller is required to initiate any action
to enforce Buyer's obligations hereunder, Buyer shall agree to reimburse Seller
for all costs and expenses, including attorneys' fees, incurred by it in this
regard. This Agreement shall not apply to any portion of the Confidential
Information that (i) is or becomes generally available to the public other than
as a result of an act or omission in violation of this Agreement; (ii) becomes
available through legitimate means to Buyer on a non-confidential basis from a
source, other than Seller, which is not bound by any confidentiality agreement;
or (iii) was already in Buyer's possession or known by Buyer through legitimate
means on a non-confidential basis prior to the disclosure to Buyer by Seller. If
for any reason the transaction contemplated by this Agreement is not
consummated, and no Closing occurs, Buyer agrees that it shall not disclose to
any third party, except in the context of a legal proceeding, any information
concerning this Agreement obtained by Buyer either from Seller or as a result of
its own investigations and inspection without the prior written consent of
Seller. Buyer shall also promptly return and deliver to Seller all originals and
copies of documents (or certify in writing to Seller that any copies have been
destroyed) and other materials in any form which contain any confidential or
proprietary information of Seller.
b. Non-Competition. Seller covenants and agrees that, unless Buyer
shall otherwise give its prior written consent, for a period of twenty four (24)
months from Closing it will not directly or indirectly own, manage, operate,
control or engage, directly or indirectly, in the business of operating a
wireline video cable television system within the franchise areas of the City of
Xxxxxx and the City of Eutaw currently serviced by the System. Notwithstanding
the foregoing, nothing herein shall be construed to prohibit or restrict the
ownership of a company's securities listed on a national securities exchange or
the National Association of Securities Dealers Automated Quotations System,
which (x) constitutes less than 5% of the outstanding voting stock of such
company, (y) does not constitute control over such company and (z) is held
solely for investment purposes. Notwithstanding anything to the contrary herein,
nothing herein shall restrict Seller's general partner or any of its affiliates,
directly or as a successor or assign of Seller.
Section 14. Notices. All notices and communications required or permitted to be
given under any of the provisions of this Agreement shall be in writing and
shall be deemed to have been duly given when delivered by messenger, by
overnight delivery service, or mailed by first class certified mail, return
receipt requested, addressed to the parties at the addresses set forth below or
at such other addresses as either party shall notify the other in accordance
with this Section 14:
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If to Seller: Northland Cable Properties Eight Limited Partnership
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx X. Xxxxx and Legal Department
If to Buyer: Sky Cablevision
Physical Address: Mailing Address:
0000 Xxxxxxx Xxxxx X.X. Xxx 00
Xxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
Attn: Xxxxxxxxx X. Xxxx, III
With a Copy to: Glover, Young, Xxxxxx & Xxxxxxx
Physical Address: Mailing Address:
0000 00xx Xxx X.X. Xxx 0000
Xxxxxxxx, XX 00000 Xxxxxxxx, XX 00000
Section 15. Waiver. This Agreement or any of its provisions may not be waived
except in writing. The failure of any party to enforce any right arising under
this Agreement on one or more occasions will not operate as a waiver of that or
any other right on that or any other occasion.
Section 16. Miscellaneous. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York. The parties agree that the
exclusive jurisdiction and venue of any lawsuit between the parties arising out
of this business relationship shall be the courts of appropriate jurisdiction in
Birmingham, Alabama, and each of the parties hereby submits itself to the
exclusive jurisdiction and venue of such court for the purposes of such lawsuit.
This Agreement constitutes and embodies the entire agreement and understanding
between the parties with respect to the subject matter hereof and supersedes all
prior or contemporaneous written or oral agreements and understandings between
the parties with respect thereto. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one instrument. This
Agreement may not be modified or amended except by a written instrument executed
by the parties. If any proceeding is brought by either party to enforce or
interpret any term or provision of this Agreement, the substantially prevailing
party in such proceeding shall be entitled to recover, in addition to all other
relief as set forth in this Agreement, such party's reasonable attorneys' and
experts' fees, costs and expenses.
Section 17. Severability. If any part of any provision of this Agreement is
invalid or unenforceable under applicable law, the provision shall be
ineffective only to the extent of such invalidity or unenforceability without in
any way affecting the remaining parts of the provision or this Agreement.
Section 18. Assignment. The benefits and burdens of this Agreement shall be
binding on each party's lawful successors and assigns; provided, however, Buyer
may assign this Agreement only upon advance written notice to Seller.
Section 19. Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one instrument.
[SIGNATURE PAGE FOLLOWS]
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BUYER: SELLER:
XXXXXXXXX X. XXXX, III NORTHLAND CABLE PROPERTIES
d/b/a SKY CABLEVISION OF XXXXXX EIGHT LIMITED PARTNERSHIP
COUNTY BY: NORTHLAND COMMUNICATIONS CORPORATION
ITS: GENERAL PARTNER
By: /S/ XXXXXXXXX X. XXXX III By: /S/ XXXXXXX X. XXXXX
------------------------- --------------------
Xxxxxxx X. Xxxxx
Executive Vice President
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