EXHIBIT 10
EXECUTION COPY
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ASSET PURCHASE AGREEMENT
BY AND BETWEEN
TCI CABLEVISION OF GEORGIA, INC.
AND
XXXXX CABLE INCOME FUND 1-A, LTD.
DATED AS OF
NOVEMBER 8, 1996
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TABLE OF CONTENTS
Page
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Section 1. Definitions................................................................ 1
1.1 Affiliate............................................................ 1
1.2 Assets............................................................... 1
1.3 Basic Service........................................................ 1
1.4 Business............................................................. 1
1.5 Business Day......................................................... 2
1.6 Closing.............................................................. 2
1.7 Encumbrance.......................................................... 2
1.8 Environmental Law.................................................... 2
1.9 Equipment............................................................ 2
1.10 Equivalent Basic Subscribers (or EBSs)............................... 2
1.11 Expanded Basic Service............................................... 3
1.12 GAAP................................................................. 3
1.13 Governmental Authority............................................... 3
1.14 Governmental Permits................................................. 3
1.15 Hazardous Substances................................................. 3
1.16 Intangibles.......................................................... 4
1.17 Knowledge............................................................ 4
1.18 Legal Requirement.................................................... 4
1.19 Losses............................................................... 4
1.20 Pay TV............................................................... 4
1.21 Permitted Encumbrances............................................... 4
1.22 Person............................................................... 4
1.23 Real Property........................................................ 4
1.24 Required Consents.................................................... 5
1.25 Seller Contracts..................................................... 5
1.26 Service Area......................................................... 5
1.27 System............................................................... 5
1.28 Taxes................................................................ 5
1.29 Other Definitions.................................................... 5
Section 2. Sale of Assets............................................................. 6
Section 3. Consideration.............................................................. 6
3.1 Base Purchase Price.................................................. 6
3.2 Adjustments to Base Purchase Price................................... 6
3.3 Determination of Adjustments......................................... 7
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3.4 Allocation of Consideration.......................................... 8
Section 4. Assumed Liabilities and Excluded Assets.................................... 8
4.1 Assignment and Assumption............................................ 8
4.2 Excluded Assets...................................................... 8
Section 5. Representations and Warranties of Seller................................... 9
5.1 Organization and Qualification....................................... 9
5.2 Authority and Validity............................................... 9
5.3 No Conflict; Required Consents....................................... 9
5.4 Assets............................................................... 10
5.5 Governmental Permits................................................. 10
5.6 Seller Contracts..................................................... 10
5.7 Real Property........................................................ 11
5.8 Environmental Matters................................................ 11
5.9 Compliance with Legal Requirements................................... 12
5.10 Patents, Trademarks and Copyrights................................... 13
5.11 Financial Statements................................................. 14
5.12 Absence of Certain Changes........................................... 14
5.13 Legal Proceedings.................................................... 14
5.14 Tax Returns; Other Reports........................................... 14
5.15 Employment Matters................................................... 15
5.16 Systems Information.................................................. 15
5.17 Bonds................................................................ 16
5.18 Finders and Brokers.................................................. 16
Section 6. Buyer's Representations and Warranties..................................... 16
6.1 Organization and Qualification....................................... 16
6.2 Authority and Validity............................................... 16
6.3 No Conflicts; Required Consents...................................... 17
6.4 Finders and Brokers.................................................. 17
6.5 Legal Proceedings.................................................... 17
Section 7. Additional Covenants....................................................... 17
7.1 Access to Premises and Records....................................... 17
7.2 Continuity and Maintenance of Operations; Financial Statements....... 18
7.3 Employee Matters..................................................... 19
7.4 Leased Vehicles; Other Capital Leases................................ 20
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7.5 Required Consents; Estoppel Certificates............................. 20
7.6 Title Commitments and Surveys........................................ 21
7.7 HSR Notification..................................................... 21
7.8 No Shopping.......................................................... 22
7.9 Lien and Judgment Searches........................................... 22
7.10 Transfer Taxes....................................................... 22
7.11 Distant Broadcast Signals............................................ 22
7.12 Guaranty............................................................. 22
7.13 Letter to Programmers................................................ 22
7.14 Updated Schedules.................................................... 23
7.15 Use of Names and Logos............................................... 23
7.16 Subscriber Billing Services.......................................... 23
7.17 Satisfaction of Conditions........................................... 23
7.18 Confidentiality and Publicity........................................ 23
7.19 Bulk Transfers....................................................... 24
7.20 Environmental Reports................................................ 24
7.21 Board Approvals...................................................... 24
Section 8. Conditions Precedent....................................................... 24
8.1 Conditions to the Obligations of Buyer and Seller.................... 24
8.2 Conditions to the Obligations of Buyer............................... 25
8.3 Conditions to Obligations of Seller.................................. 26
8.4 Waiver of Conditions................................................. 26
Section 9. Closing.................................................................... 26
9.1 The Closing; Time and Place.......................................... 26
9.2 Seller's Delivery Obligations........................................ 26
9.3 Buyer's Delivery Obligations......................................... 28
Section 10 Termination................................................................ 28
10.1 Termination Events................................................... 28
10.2 Effect of Termination................................................ 29
Section 11. Survival of Representations and Warranties; Indemnification................ 29
11.1 Survival of Representations and Warranties........................... 29
11.2 Indemnification by Seller............................................ 30
11.3 Indemnification by Buyer............................................. 30
11.4 Third Party Claims................................................... 31
11.5 Limitations on Indemnification - Seller.............................. 32
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11.6 Limitations on Indemnification - Buyer............................... 32
Section 12. Miscellaneous.............................................................. 32
12.1 Parties Obligated and Benefited..................................... 32
12.2 Notices............................................................. 33
12.3 Attorneys' Fees..................................................... 34
12.4 Waiver.............................................................. 34
12.5 Captions............................................................ 34
12.6 Choice of Law....................................................... 34
12.7 Terms............................................................... 34
12.8 Rights Cumulative................................................... 34
12.9 Further Actions..................................................... 34
12.10 Time................................................................ 35
12.11 Late Payments....................................................... 35
12.12 Counterparts........................................................ 35
12.13 Entire Agreement.................................................... 35
12.14 Severability........................................................ 35
12.15 Construction........................................................ 35
12.16 Expenses............................................................ 35
12.17 Risk of Loss; Condemnation.......................................... 36
LIST OF EXHIBITS AND SCHEDULES
EXHIBITS
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A - Xxxx of Sale
B - Assignment and Assumption of Contracts
C - Assignment of Leases
D - Guaranty
E - Letter to Programmers
F - FIRPTA Affidavit
G - Opinion of Seller's Counsel
H - Opinion of Buyer's Counsel
SCHEDULES
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1.9 - Owned Equipment and Vehicles
4.2 - Excluded Assets
5.3 - Required Consents
5.4 - Encumbrances to Be Discharged Prior to Closing
5.5 - Governmental Permits
5.6 - Seller Contracts
5.7 - Real Property
5.8 - Environmental Matters
5.9 - Cost of Service Filings
5.11 - Financial Statements
5.13 - Proceedings and Judgments
5.14 - Tax Matters
5.15 - Employee Matters
5.16 - The Business/Systems Information (including Rate Schedule)
5.17 - Bonds
ASSET PURCHASE AGREEMENT
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This Asset Purchase Agreement ("Agreement") is made as of November
8, 1996, by and between TCI Cablevision of Georgia, Inc., a Georgia corporation
("Buyer"), and Xxxxx Cable Income Fund 1-A, Ltd., a Colorado limited partnership
("Seller").
RECITALS
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Seller is engaged in the business of providing cable television
service to subscribers in and around the Service Area. Buyer desires to purchase
and Seller desires to sell substantially all the assets of Seller used or useful
in connection with that business.
AGREEMENT
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In consideration of the above recitals and the mutual agreements
stated in this Agreement, the parties agree as follows:
SECTION 1. DEFINITIONS.
In addition to terms defined elsewhere in this Agreement, the
following capitalized terms, when used in this Agreement, will have the meanings
set forth below:
1.1 Affiliate. With respect to any Person, any other Person
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controlling, controlled by or under common control with such Person, with
"control" for such purpose meaning the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities or voting interests,
by contract or otherwise.
1.2 Assets. All properties, privileges, rights, interests and
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claims, real and personal, tangible and intangible, of every type and
description that are owned, leased, held, used or useful in the Business in
which Seller has any right, title or interest or in which Seller acquires any
right, title or interest on or before the Closing Date, including Governmental
Permits, Intangibles, Seller Contracts, Equipment, Real Property and deposits
relating to the Business that are held by third parties for the account of
Seller or for security for Seller's performance of its obligations, but
excluding any Excluded Assets.
1.3 Basic Service. The lowest tier of service offered to
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subscribers of a System.
1.4 Business. The cable television business conducted by
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Seller on the date of this Agreement through one or more Systems, as described
on SCHEDULE 5.16.
1.5 Business Day. Any day other than Saturday, Sunday or a day
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on which banking institutions in Denver, Colorado are required or authorized to
be closed.
1.6 Closing. The consummation of the transactions contemplated
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by this Agreement, as described in SECTION 9, the date of which is referred to
as the Closing Date.
1.7 Encumbrance. Any security interest, security agreement,
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financing statement filed with any Governmental Authority, conditional sale or
other title retention agreement, any lease, consignment or bailment given for
purposes of security, any mortgage, lien, indenture, pledge, option,
encumbrance, adverse interest, constructive trust or other trust, claim,
attachment, exception to or defect in title or other ownership interest
(including but not limited to reservations, rights of entry, possibilities of
reverter, encroachments, easements, rights-of-way, restrictive covenants, leases
and licenses) of any kind, which constitutes an interest in or claim against
property, whether arising pursuant to any Legal Requirement, Governmental
Permit, Seller Contract or otherwise.
1.8 Environmental Law. Any Legal Requirement relating to
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pollution or protection of public health, safety or welfare or the environment,
including those relating to emissions, discharges, releases or threatened
releases of Hazardous Substances into the environment (including ambient air,
surface water, ground water or land), or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Substances.
1.9 Equipment. All electronic devices, trunk and distribution
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coaxial and optical fiber cable, amplifiers, power supplies, conduit, vaults and
pedestals, grounding and pole hardware, subscriber's devices (including
converters, encoders, transformers behind television sets and fittings), headend
hardware (including origination, earth stations, transmission and distribution
system), test equipment, vehicles and other tangible personal property owned,
leased, used or held for use in the Business, the principal items of which are
described on SCHEDULE 1.9 (and with respect to leased Equipment, on SCHEDULE
5.6).
1.10 Equivalent Basic Subscribers (or EBSs). An active customer
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for Basic Service either in a single household, a commercial establishment or in
a multi-unit dwelling (including a hotel unit); provided, however, that the
number of customers in a multi-unit dwelling or commercial establishment that
obtain service on a "bulk-rate" basis will be determined on a System by System
basis by dividing the gross bulk-rate xxxxxxxx for Basic Service and Expanded
Basic Service (but not xxxxxxxx from a la carte tiers or premium services,
installation or other non-recurring charges, converter rental or from any outlet
or connection other than the first outlet or connection or from any pass-through
charge for sales taxes, line-itemized franchise fees, fees charged by the FCC
and the like), attributable to such multi-unit dwelling or commercial
establishment during the most recent billing period ended prior to the date of
calculation (but excluding xxxxxxxx in excess of a single month's charge) by the
rate charged at the time of determination to individual households for the
highest level of Basic Service and Expanded Basic Service offered by such
System, such rate not to be less than the rate for such System set forth on
SCHEDULE 5.16 (excluding a la carte tiers or premium services, installation or
other non-recurring charges, converter rental, pass-through charges for sales
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taxes, line-itemized franchise fees charged by the FCC and the like). For
purposes of this definition, an "active customer" will mean any person,
commercial establishment or multi-unit dwelling at any given time that is paying
for and receiving Basic Service from the System who has an account that is not
more than 60 days past due (except for past due amounts of $5 or less, provided
such account is otherwise current). For purposes of this definition, an "active
customer" does not include any person, commercial establishment or multi-unit
dwelling that as of the date of calculation has not paid in full the charges for
at least one month of the services ordered or any subscriber whose service is
pending disconnection for any reason. For purposes of this definition, the
number of days past due of a customer account will be determined from the first
day of the period for which the applicable billing relates.
1.11 Expanded Basic Service. Any video programming provided
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over a cable television system, regardless of service tier other than (a) Basic
Service, (b) any new product tier and (c) video programming offered on a per
channel or per program basis.
1.12 GAAP. Generally accepted accounting principles as in
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effect from time to time in the United States of America.
1.13 Governmental Authority. The United States of America, any
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state, commonwealth, territory or possession of the United States of America and
any political subdivision or quasi-governmental authority of any of the same,
including any court, tribunal, department, commission, board, bureau, agency,
county, municipality, province, parish or other instrumentality of any of the
foregoing.
1.14 Governmental Permits. All franchises, approvals,
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authorizations, permits, licenses, easements, registrations, qualifications,
leases, variances and similar rights obtained with respect to the Business or
Assets from any Governmental Authority, including those set forth on SCHEDULE
5.5.
1.15 Hazardous Substances. Any pollutant, contaminant,
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chemical, industrial, toxic, hazardous or noxious substance or waste which is
regulated by any Governmental Authority, including (a) any petroleum or
petroleum compounds (refined or crude), flammable substances, explosives,
radioactive materials or any other materials or pollutants which pose a hazard
or potential hazard to the Real Property or to Persons in or about the Real
Property or cause the Real Property to be in violation of any laws, regulations
or ordinances of federal, state or applicable local governments, (b) asbestos or
any asbestos-containing material of any kind or character, (c) polychlorinated
biphenyls ("PCBs"), as regulated by the Toxic Substances Control Act, 15 U.S.C.
(S) 2601 et seq., (d) any materials or substances designated as "hazardous
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substances" pursuant to the Clean Water Act, 33 U.S.C. (S) 1251 et seq., (e)
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"economic poison," as defined in the Federal Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. (S) 135 et seq., (f) "chemical substance," "new
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chemical substance" or "hazardous chemical substance or mixture" pursuant to the
Toxic Substances Control Act, 15 U.S.C. (S) 2601 et seq., (g) "hazardous
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substances" pursuant to the Comprehensive Environmental Response, Compensation,
and Liability Act, 42 U.S.C. (S) 9601 et seq. and (h)
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"hazardous waste" pursuant to the Resource Conservation and Recovery Act, 42
U.S.C. (S) 6901 et seq.
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1.16 Intangibles. All intangible assets, including subscriber
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lists, accounts receivable, claims (excluding any claims relating to Excluded
Assets), patents, copyrights and goodwill, if any, owned, used or held for use
in the Business.
1.17 Knowledge. The actual knowledge of a particular matter of
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one or more of the executive officers of a Person or the general manager or one
or more of the managers of such Person's Systems.
1.18 Legal Requirement. Applicable common law and any statute,
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ordinance, code, or other law, rule, regulation, order, technical or other
written standard or procedure enacted, adopted or applied by any Governmental
Authority, including judicial decisions applying common law or interpreting any
other Legal Requirement.
1.19 Losses. Any claims, losses, liabilities, damages,
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penalties, costs and expenses, including interest that may be imposed in
connection therewith, expenses of investigation, reasonable fees and
disbursements of counsel and other experts, and the cost to any Person making a
claim or seeking indemnification under this Agreement with respect to funds
expended by such Person by reason of the occurrence of any event with respect to
which indemnification is sought.
1.20 Pay TV. Premium programming services selected by and sold
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to subscribers on a per channel or per program basis.
1.21 Permitted Encumbrances. The following Encumbrances: (a)
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liens securing Taxes, assessments and governmental charges not yet due and
payable, (b) any zoning law or ordinance or any similar Legal Requirement, (c)
any right reserved to any Governmental Authority to regulate the affected
property and (d) as to Real Property interests, any Encumbrance reflected in the
public records and that does not individually or in the aggregate interfere with
the right or ability to own, use or operate the Real Property or to convey good,
marketable and indefeasible fee simple title to such Real Property, provided
that "Permitted Encumbrances" will not include any Encumbrance which could
prevent or inhibit in any way the conduct of the business of the affected System
and provided further that classification of any Encumbrance as a "Permitted
Encumbrance" will not affect any liability Seller may have for such Encumbrance,
including pursuant to any indemnity obligation under this Agreement.
1.22 Person. Any natural person, corporation, partnership,
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trust, unincorporated organization, association, limited liability company,
Governmental Authority or other entity.
1.23 Real Property. All assets held by Seller related to the
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Business consisting of realty, including appurtenances, improvements and
fixtures located on such realty, and any other interests in real property,
including fee interests, leasehold interests and easements, wire crossing
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permits, rights of entry (except agreements related to multiple dwelling units)
described on SCHEDULE 5.7.
1.24 Required Consents. All franchises, licenses,
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authorizations, approvals and consents required under Governmental Permits,
Seller Contracts or otherwise for (a) Seller to transfer the Assets and the
Business to Buyer, (b) Buyer to conduct the Business and to own, lease, use and
operate the Assets at the places and in the manner in which the Business is
conducted as of the date of this Agreement and on the Closing Date and (c) Buyer
to assume and perform the Governmental Permits, Seller Contracts and the other
Assumed Liabilities.
1.25 Seller Contracts. All contracts and agreements, other than
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Governmental Permits and those relating to Real Property, pertaining to the
ownership, operation and maintenance of the Assets or the Business or used or
held for use in the Business, as described on SCHEDULE 5.6 or, in the case of
contracts and agreements relating to Real Property, on SCHEDULE 5.7.
1.26 Service Area. The area in which Seller operates the
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Business, specifically in and around the City of Milwaukie, Oregon.
1.27 System. A complete cable television reception and
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distribution system operated in the conduct of the Business, consisting of one
or more headends, subscriber drops and associated electronic and other
equipment, and which is, or is capable of being without modification, operated
as an independent system without interconnections to other systems. Any systems
which are interconnected or which are served in total or in part by a common
headend will be considered a single System.
1.28 Taxes. All levies and assessments of any kind or nature
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imposed by any Governmental Authority, including all income, sales, use, ad
valorem, value added, franchise, severance, net or gross proceeds, withholding,
payroll, employment, excise or property taxes and levies or assessments related
to unclaimed property, together with any interest thereon and any penalties,
additions to tax or additional amounts applicable thereto.
1.29 Other Definitions. The following terms are defined in the
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Sections indicated:
Term Section
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Action 11.4
Antitrust Division 7.7
Assumed Liabilities 4.1
Base Purchase Price 3.1
Buyer Damages 11.5
Closing Date 1.6
Code 5.15.2
Cost of Service Election 5.9.4
Due Diligence Deadline 10.1.4
Employee Benefit Plans 5.15.2
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ERISA 5.15.1
Excluded Assets 4.2
FCC 5.5
Final Adjustments Report 3.3.2
Financial Statements 5.11
FTC 7.7
HSR Act 7.7
Indemnified Party 11.4
Indemnifying Party 11.4
Intercable 5.2
1992 Cable Act 5.9.4
Preliminary Adjustments Report 3.3.1
Rate Regulation Documents 5.9.4
Seller Damages 11.6
Survival Period 11.1
Taking 12.17.2
Transaction Documents 5.2
SECTION 2. SALE OF ASSETS.
Subject to the terms and conditions set forth in this Agreement,
at the Closing, Seller will sell to Buyer, and Buyer will purchase from Seller,
all of Seller's rights, titles and interests in, to and under the Assets. Except
as otherwise specifically provided in this Agreement, all the Assets are
intended to be transferred to Buyer, whether or not described in the Schedules.
SECTION 3. CONSIDERATION.
3.1 Base Purchase Price. Buyer will pay to Seller total cash
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consideration of $8,200,000 (the "Base Purchase Price"), subject to adjustment
as provided in SECTIONS 3.2 and 3.3. Such consideration will be paid at Closing
by wire transfer of immediately available funds pursuant to wire instructions
delivered by Seller to Buyer no later than two Business Days prior to the
Closing Date.
3.2 Adjustments to Base Purchase Price. The Base Purchase Price
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will be adjusted as follows:
3.2.1 Reduced by an amount equal to $1,485 multiplied by
the positive difference between (a) 5,523 and (b) the number of EBSs as of the
Closing Date;
3.2.2 Adjustments on a pro rata basis as of the Closing
Date will be made for all prepaid expenses (but only to the extent the full
benefit thereof will be realizable by Buyer within 12 months after the Closing
Date), accrued expenses (including real and personal property Taxes and the
economic value of all accrued vacation time permitted by Buyer's policies to be
taken after the Closing Time by Seller's System employees hired by Buyer),
prepaid income, subscriber prepayments and accounts receivable related to the
Business, all as determined in accordance with
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GAAP consistently applied, and to reflect the principle that all expenses and
income attributable to the Business for the period prior to the Closing Date are
for the account of Seller, and all expenses and income attributable to the
Business for the period on and after the Closing Date are for the account of
Buyer. Seller will receive no credit for any accounts receivable (a) resulting
from cable service sales any portion of which is 60 days or more past due as of
the Closing Date, (b) from subscribers whose accounts are inactive or whose
service is pending disconnection for any reason as of the Closing Date or (c)
resulting from advertising sales any portion of which is 120 days or more past
due as of the Closing Date.
3.2.3 Buyer's account will be credited for the amount of
all advance payments to, or funds of third parties on deposit with, Seller as of
the Closing Date, relating to the Business, including advance payments and
deposits by subscribers served by the Business for converters, encoders,
decoders, cable television service and related sales, and the liability therefor
will be assumed by Buyer.
3.3 Determination of Adjustments. Preliminary and final
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adjustments to the Base Purchase Price will be determined as follows:
3.3.1 Not later than a date Seller reasonably believes is
at least 10 Business Days prior to the expected Closing Date, Seller will
deliver to Buyer a report (the "Preliminary Adjustments Report"), certified as
to completeness and accuracy by Seller, showing in detail the preliminary
determination of the adjustments referred to in SECTION 3.2, which are
calculated as of the Closing Date (or as of any other date agreed by the
parties) and any documents substantiating the adjustments proposed in the
Preliminary Adjustments Report. The Preliminary Adjustments Report will include
a complete list of subscribers, a detailed calculation of the number of
Equivalent Basic Subscribers and a schedule setting forth advance payments made
to or by Seller and deposits made by Seller, as well as accounts receivable
information relating to the Business (showing sums due and their respective
aging as of the Closing Date). Seller also will furnish to Buyer its billing
report for the most current period as of the Closing Date. Following receipt of
such Preliminary Adjustments Report and supporting information, Buyer will have
five Business Days to review such Preliminary Adjustments Report and supporting
information and to notify Seller of any disagreements with Seller's estimates.
If Buyer provides a notice of disagreement with Seller's estimates of the
adjustments referred to in SECTION 3.2 within such five Business Day period,
Buyer and Seller will negotiate in good faith to resolve any such dispute and to
reach an agreement prior to the Closing Date on such estimated adjustments as of
the Closing Date. The basis for determining the Base Purchase Price to be paid
at Closing will be (a) the estimate so agreed upon by Buyer and Seller or (b) if
no notice of disagreement is provided, or if such notice is provided but the
parties do not reach such an agreement prior to the Closing Date, the estimate
of such adjustments set forth in the Preliminary Adjustments Report.
3.3.2 Within 90 days after the Closing, Seller will
deliver to Buyer a report (the "Final Adjustments Report"), similarly certified
by Seller, showing in detail the final determination of all adjustments which
were not calculated as of the Closing Date and containing any corrections to the
Preliminary Adjustments Report, together with any documents substantiating the
adjustments proposed in the Final Adjustments Report. Buyer will provide Seller
with reasonable
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access to all records which Buyer has in its possession and which are necessary
for Seller to prepare the Final Adjustments Report.
3.3.3 Within 30 days after receipt of the Final
Adjustments Report, Buyer will give Seller written notice of Buyer's objections,
if any, to the Final Adjustments Report. If Buyer makes any such objection, the
parties will agree on the amount, if any, which is not in dispute within 30 days
after Seller's receipt of Buyer's notice of objections to the Final Adjustments
Report. Any disputed amounts will be determined within 120 days after the
Closing Date by the accounting firm of Price Waterhouse, whose determination
will be conclusive. Seller and Buyer will bear equally the fees and expenses
payable to such firm in connection with such determination. The payment
required after such determination will be made by the responsible party by wire
transfer of immediately available funds to the other party within three Business
Days after the final determination.
3.4 Allocation of Consideration. The consideration payable by
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Buyer under this Agreement will be allocated among the Assets as set forth in a
schedule to be prepared not later than 180 days after the Closing Date (or April
1 of the year following the Closing Date if earlier) by an independent appraiser
with significant experience in the cable television industry. Such appraiser
will be selected by the mutual agreement of Buyer and Seller within 30 days
after the date of this Agreement, and the fees of such appraiser will be shared
equally by Buyer and Seller. Buyer and Seller agree to be bound by the
allocation and will not take any position inconsistent with such allocation and
will file all returns and reports with respect to the transactions contemplated
by this Agreement, including all federal, state and local Tax returns, on the
basis of such allocation.
SECTION 4. ASSUMED LIABILITIES AND EXCLUDED ASSETS.
4.1 Assignment and Assumption. Seller will assign, and Buyer
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will assume and after the Closing will pay, discharge and perform the following
(the "Assumed Liabilities"): (a) Seller's obligations to subscribers of the
Business for (i) subscriber deposits held by Seller as of the Closing Date and
which are refundable, in the amount for which Buyer received credit under
SECTION 3.2, (ii) subscriber advance payments held by Seller as of the Closing
Date for services to be rendered by a System after the Closing Date, in the
amount for which Buyer received credit under SECTION 3.2 and (iii) the delivery
of cable television service to subscribers of the Business after the Closing
Date; and (b) obligations accruing and relating to periods after the Closing
Date under Governmental Permits listed on SCHEDULE 5.5 (to the extent that such
Governmental Permits are transferrable) and Seller Contracts. Buyer will not
assume or have any responsibility for any liabilities or obligations of Seller
other than the Assumed Liabilities. In no event will Buyer assume or have any
responsibility for any liabilities or obligations associated with the Excluded
Assets.
4.2 Excluded Assets. The Excluded Assets, which will be
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retained by Seller, will consist of the following: (a) programming contracts,
retransmission consent agreements and pole attachment agreements (except for
those set forth on SCHEDULE 5.6); (b) Employee Benefit Plans; (b) insurance
policies and rights and claims thereunder (except as otherwise provided in
SECTION 12.17); (c) bonds, letters of credit, surety instruments and other
similar items; (d) cash and cash equivalents and notes receivable; (e) Seller's
trademarks, trade names, service marks, service names, logos and similar
proprietary rights (subject to Buyer's rights under SECTION 7.5); (f) Seller's
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rights under any agreement governing or evidencing an obligation of Seller for
borrowed money; (g) Seller Contracts for subscriber billing and equipment; (h)
Seller's rights under any contract, license, authorization, agreement or
commitment other than those creating or evidencing Assumed Liabilities; and (i)
the assets described on SCHEDULE 4.2.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller represents and warrants to Buyer, as of the date of this
Agreement and as of the Closing, as follows:
5.1 Organization and Qualification. Seller is a limited
------------------------------
partnership duly organized, validly existing and in good standing under the laws
of the State of Colorado and has all requisite partnership power and authority
to own, lease and use the Assets owned, leased or used by it and to conduct the
Business as it is currently conducted. Seller is duly qualified to do business
and is in good standing under the laws of each jurisdiction in which the
ownership, leasing or use of the Assets owned, leased or used by it or the
nature of Seller's activities makes such qualification necessary, except in any
such jurisdiction where the failure to be so qualified and in good standing
would not have a material adverse effect on the Business, the Assets or the
Systems or on the ability of Seller to perform its obligations under this
Agreement.
5.2 Authority and Validity. Seller has all requisite
----------------------
partnership power and authority to execute and deliver, to perform its
obligations under, and to consummate the transactions contemplated by, this
Agreement and all other documents and instruments to be executed and delivered
in connection with the transactions contemplated by this Agreement
(collectively, the "Transaction Documents") to which Seller is a party. Subject
to approval by the Board of Directors of Xxxxx Intercable, Inc. ("Intercable"),
the sole general partner of Seller, the execution and delivery by Seller of, the
performance by Seller of its obligations under, and the consummation by Seller
of the transactions contemplated by, this Agreement and the Transaction
Documents to which Seller is a party have been duly and validly authorized by
all necessary action by or on behalf of Seller. This Agreement has been, and
when executed and delivered by Seller the Transaction Documents will be, duly
and validly executed and delivered by Seller and the valid and binding
obligations of Seller, enforceable against Seller in accordance with their
terms, except as the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect relating
to the enforcement of creditors' rights generally or by principles governing the
availability of equitable remedies.
5.3 No Conflict; Required Consents. Except for the Required
------------------------------
Consents, all of which are listed on SCHEDULE 5.3, the execution and delivery by
Seller, the performance of Seller under, and the consummation of the
transactions contemplated by, this Agreement and the Transaction Documents to
which Seller is a party do not and will not: (a) violate any provision of the
partnership agreement or certificate of limited partnership of Seller; (b)
violate any Legal Requirement; (c) require any consent, approval or
authorization of, or filing of any certificate, notice, application, report or
other document with any Governmental Authority or other Person; or (d) (i)
violate or result in a breach of or default under (without regard to
requirements of notice, lapse of time, or elections of any Person, or any
combination thereof), (ii) permit or result in the
9
termination, suspension or modification of, (iii) result in the acceleration of
(or give any Person the right to accelerate) the performance of Seller under, or
(iv) result in the creation or imposition of any Encumbrance under any Seller
Contract or any other instrument evidencing any of the Assets or by which Seller
or any of its assets is bound or affected, except for purposes of this clause
(d) such violations, conflicts, breaches, defaults, terminations, suspensions,
modifications, and accelerations as would not, individually or in the aggregate,
have a material adverse effect on any System, the Business or Seller, the
validity, binding effect or enforceability of this Agreement or on the ability
of Seller to perform its obligations under this Agreement or the Transaction
Documents to which Seller is a party.
5.4 Assets. Seller has exclusive, good and marketable title to
------
(or, in the case of Assets that are leased, valid leasehold interests in) the
Assets (other than Real Property, as to which the representations and warranties
in SECTION 5.7 apply). The Assets are free and clear of all Encumbrances, except
(a) Permitted Encumbrances and (b) Encumbrances described on SCHEDULE 5.4, all
of which will be terminated, released or, in the case of rights of refusal
listed on SCHEDULE 5.4, waived, as appropriate, at or prior to the Closing.
Except as described on SCHEDULE 5.6, none of the Equipment is leased by Seller
from any other Person. All the Equipment is in good operating condition and
repair (ordinary wear and tear excepted). Except for items included in the
Excluded Assets, the Assets constitute all the assets necessary to permit Buyer
to (i) conduct the Business and to operate the Systems substantially as they are
being conducted and operated on the date of this Agreement and in compliance in
all material respects with all Legal Requirements, Governmental Permits and
Seller Contracts and (ii) perform all the Assumed Liabilities.
5.5 Governmental Permits. All Governmental Permits are listed
--------------------
on SCHEDULE 5.5. Complete and correct copies of all Governmental Permits have
been delivered by Seller to Buyer. Each Governmental Permit is in full force and
effect and Seller is not and, to Seller's Knowledge, the other party thereto is
not, in breach or default of any material terms or conditions thereunder and is
valid under all applicable Legal Requirements according to its terms. There is
no legal action, governmental proceeding or investigation, pending or, to
Seller's Knowledge threatened, to terminate, suspend or modify any Governmental
Permit and Seller is in compliance with the material terms and conditions of all
the Governmental Permits and with other material applicable requirements of all
Governmental Authorities (including the Federal Communications Commission
("FCC") and the Register of Copyrights) relating to the Governmental Permits,
including all requirements for notification, filing, reporting, posting and
maintenance of logs and records. As of the date of this Agreement, to Seller's
Knowledge, no third party has been granted or has applied for a cable television
franchise or is providing or intending to provide cable television services in
any of the communities or unincorporated areas currently served by the Business.
5.6 Seller Contracts. All Seller Contracts (other than those
----------------
constituting Excluded Assets) are described on SCHEDULE 5.6 or 5.7. Complete and
correct copies of all Seller Contracts have been delivered by Seller to Buyer.
Each Seller Contract is in full force and effect and constitutes the valid,
legal, binding and enforceable obligation of Seller and Seller is not and to
Seller's Knowledge each other party thereto is not, in breach or default of any
material terms or conditions thereunder.
10
5.7 Real Property.
-------------
5.7.1 All the Assets consisting of Real Property interests
are described on SCHEDULE 5.7. Except as otherwise disclosed on SCHEDULE 5.7,
Seller holds good, marketable and indefeasible fee simple title to the Real
Property shown as being owned by Seller on SCHEDULE 5.7 and the valid and
enforceable right to use and possess such Real Property, subject only to the
Permitted Encumbrances. Seller has valid and enforceable leasehold interests in
Real Property shown as being leased by Seller on SCHEDULE 5.7 and, with respect
to other Real Property not owned or leased by Seller, Seller has the valid and
enforceable right to use all such other Real Property pursuant to the easements,
licenses, rights-of-way or other rights described on SCHEDULE 5.7, subject only
to Permitted Encumbrances. Except for routine repairs, all of the material
improvements, leasehold improvements and the premises of the Real Property are
in good condition and repair and are suitable for the purposes used. The
current use and occupancy of the Real Property do not constitute nonconforming
uses under any applicable zoning Legal Requirements.
5.7.2 The documents delivered by Seller to Buyer as
evidence of each Seller Contract that is a lease of Real Property constitute the
entire agreement with the landlord in question. There are no leases or other
agreements, oral or written, granting to any Person other than Seller the right
to occupy or use any Real Property, except as described on SCHEDULE 5.7. All
easements, rights-of-way and other rights appurtenant to, or which are necessary
for Seller's current use of, any Real Property are valid and in full force and
effect, and Seller has not received any notice with respect to the termination,
breach or impairment of any of those rights. Each parcel of Real Property, any
improvements constructed thereon and their current use (a) has access to and
over all public streets, or private streets for which Seller has a valid right
of ingress and egress, (b) conforms in its current use and occupancy to all
zoning requirements without reliance upon a variance issued by a Governmental
Authority or a classification of the parcel in question as a nonconforming use,
and (c) conforms in all material respects in its use to all restrictive
covenants, if any, or other Encumbrances affecting all or part of such parcel.
5.8 Environmental Matters.
---------------------
5.8.1 The Real Property currently complies in all material
respects with and, to Seller's Knowledge, has previously been operated in
compliance in all material respects with, all Environmental Laws. Seller has
not directly or indirectly (a) generated, released, stored, used, treated,
handled, discharged or disposed of any Hazardous Substances at, on, under, in or
about, or in any other manner affecting, any Real Property, (b) transported any
Hazardous Substances to or from any Real Property or (c) undertaken or caused to
be undertaken any other activities relating to the Real Property which could
reasonably give rise to any liability under any Environmental Law, and, to
Seller's Knowledge, no other present or previous owner, tenant, occupant or user
of any Real Property or any other Person has committed or suffered any of the
foregoing. To Seller's Knowledge, (i) no release of Hazardous Substances
outside the Real Property has entered or threatens to enter any Real Property,
nor (ii) is there any pending or threatened claim based on Environmental Laws
which arises from any condition of the land surrounding any Real Property. No
litigation based on Environmental Laws which relates to any Real Property or any
operations on conditions on it (A) has
11
been asserted or conducted in the past or is currently pending against or with
respect to Seller or, to Seller's Knowledge, any other Person, or (B) to
Seller's Knowledge is threatened or contemplated.
5.8.2 To Seller's Knowledge, other than as described on
SCHEDULE 5.8, (a) no aboveground or underground storage tanks are currently or
have been located on any Real Property, (b) no Real Property has been used at
any time as a gasoline service station or any other facility for storing,
pumping, dispensing or producing gasoline or any other petroleum products or
wastes and (c) no building or other structure on any Real Property contains
asbestos-containing material.
5.8.3 Seller has provided Buyer with complete and correct
copies of (a) all studies, reports, surveys or other materials in Seller's
possession or, to Seller's Knowledge to which it has access, relating to the
presence or alleged presence of Hazardous Substances at, on or affecting the
Real Property, (b) all notices or other materials in Seller's possession or, to
Seller's Knowledge to which it has access, that were received from any
Governmental Authority having the power to administer or enforce any
Environmental Laws relating to current or past ownership, use or operation of
the Real Property or activities at the Real Property and (c) all materials in
Seller's possession or, to Seller's Knowledge to which it has access, relating
to any litigation or allegation by any Person concerning any Environmental Law.
5.9 Compliance with Legal Requirements.
----------------------------------
5.9.1 The ownership, leasing and use of the Assets as they
are currently owned, leased and used and the conduct of the Business and the
operation of the Systems as they are currently conducted and operated do not
violate or infringe, in any material respect, any Legal Requirements currently
in effect (other than the Legal Requirements described in SECTION 5.9.4, as to
which the provisions of SECTION 5.9.4 will apply). Seller has received no
notice of any violation by Seller or the Business of any Legal Requirement
applicable to the Business or the Systems as currently conducted, and to
Seller's Knowledge, there is no basis for the allegation of any such a
violation.
5.9.2 A valid request for renewal has been duly and timely
filed under Section 626 of the Cable Communications Policy Act of 1984 with the
proper Governmental Authority with respect to applicable Governmental Permits
with franchising authorities that have expired prior to, or will expire within
36 months after, the date of this Agreement.
5.9.3 Seller has complied, and the Business is in
compliance, in all material respects, with the specifications set forth in Part
76, Subpart K of the rules and regulations of the FCC, Section 111 of the U.S.
Copyright Act of 1976 and the applicable rules and regulations thereunder and
the applicable rules and regulations of the U.S. Copyright Office, the Register
of Copyrights, the Copyright Royalty Tribunal and the Communications Act of
1934, including provisions of any thereof pertaining to signal leakage, to
utility pole make ready and to grounding and bonding of cable television systems
(in each case as the same is currently in effect), and all other applicable
Legal Requirements relating to the construction, maintenance, ownership and
operation of the Assets, the Systems and the Business.
12
5.9.4 Notwithstanding the foregoing, to Seller's
Knowledge, each System is in compliance in all material respects with the
provisions of the Cable Television Consumer Protection and Competition Act of
1992 and the FCC rules and regulations promulgated thereunder (the "1992 Cable
Act") as such Legal Requirements relate to the operation of the Business;
provided, however, that Seller does not hereby make any representation about
rates charged to subscribers, other than the representation regarding the rates
charged to subscribers set forth below. Seller has complied in all material
respects with the must carry and retransmission consent provisions of the 1992
Cable Act. Seller has used reasonable good faith efforts to establish rates
charged to subscribers, effective since September 1, 1993, that are or were
allowable under the 1992 Cable Act and any authoritative interpretation thereof
now or then in effect, whether or not such rates are or were subject to
regulation at that date by any Governmental Authority, including any local
franchising authority and/or the FCC, unless such rates were not subject to
regulation pursuant to a specific exemption from rate regulation contained in
the 1992 Cable Act other than the failure of any franchising authority to have
been certified to regulate rates. Notwithstanding the foregoing, Seller makes no
representation or warranty that the rates charged to subscribers (a) are
allowable under any rules and regulations of the FCC or any authoritative
interpretation thereof, or (b) would be allowable under any rules and
regulations of the FCC or any authoritative interpretation thereof promulgated
after the date of the Closing. Seller has delivered to Buyer complete and
correct copies of all FCC Forms 393, 1200, 1205, 1210, 1215, 1220, 1225, 1235
and 1240 filed with respect to the Systems and copies of all other FCC Forms
filed by Seller and of all correspondence with any Governmental Authority
relating to rate regulation generally or specific rates charged to subscribers
with respect to the Systems, including copies of any complaints filed with the
FCC with respect to any rates charged to subscribers of the Systems, and any
other documentation supporting an exemption from the rate regulation provisions
of the 1992 Cable Act claimed by Seller with respect to any of the Systems
(collectively, "Rate Regulation Documents"). As of the date of this Agreement,
Seller has received no notice from any Governmental Authority with respect to an
intention to enforce customer service standards pursuant to the 1992 Cable Act
and Seller has not agreed with any Governmental Authority to establish customer
service standards that exceed the customer service standards promulgated
pursuant to the 1992 Cable Act. In addition, Seller has also delivered to Buyer
documentation for each of the Systems in which the franchising authority has not
certified to regulate rates as of the date of this Agreement showing a
determination of allowable rates using a benchmark methodology. Except as
described in SCHEDULE 5.9, Seller has not made any election with respect to any
cost of service proceeding conducted in accordance with Part 76.922 of Title 47
of the Code of Federal Regulations or any similar proceeding (a "Cost of Service
Election") with respect to any of the Systems.
5.10 Patents, Trademarks and Copyrights. Seller has timely and
----------------------------------
accurately made all requisite filings and payments with the Register of
Copyrights with respect to the Business. Seller has delivered to Buyer complete
and correct copies of all current reports and filings, and all reports and
filings for the past three years, made or filed pursuant to copyright rules and
regulations with respect to the Business. Seller does not possess any patent,
patent right, trademark or copyright material to the operation of the Business
and Seller is not a party to any license or royalty agreement with respect to
any patent, trademark or copyright except for licenses respecting program
material and obligations under the Copyright Act of 1976 applicable to cable
television systems generally. The Business and the System have been operated in
such a manner so as not to violate or infringe upon
13
the rights of, or give rise to any rightful claim of any Person for copyright,
trademark, service xxxx, patent, license, trade secret infringement or the like.
5.11 Financial Statements. A correct copy of the unaudited
--------------------
financial statements for the Systems as of September 30, 1996, including an
unaudited income statement and balance sheet which fairly present the financial
condition of the Systems, is attached as SCHEDULE 5.11 (collectively, the
"Financial Statements"). At the date of the Financial Statements, Seller had no
liability or obligation, whether accrued, absolute, fixed or contingent
(including liabilities for Taxes or unusual forward or long-term commitments),
required by GAAP to be reflected or reserved against therein that were not fully
reflected or reserved against on the balance sheet included in the Financial
Statements, other than liabilities included in current liabilities, and none of
which was or would be material to the Business.
5.12 Absence of Certain Changes. Since September 30, 1996 (a)
--------------------------
Seller has not incurred any obligation or liability (contingent or otherwise),
except normal trade or business obligations incurred in the ordinary course of
business, the performance of which would be reasonably likely, individually or
in the aggregate, to have a material adverse effect on the financial condition
or results of operations of the Business, (b) there has been no material adverse
change (except any change affecting the United States cable industry as a whole,
including any change arising from (i) legislation, litigation, rulemaking or
regulation or (ii) competition caused by or arising from other multiple channel
distribution services) in the business, condition (financial or otherwise) or
liabilities of the Business, and (c) the Business has been conducted only in the
ordinary course of business.
5.13 Legal Proceedings. Except as set forth in SCHEDULE 5.13:
-----------------
(a) there is no claim, investigation or litigation pending or, to Seller's
Knowledge, threatened, by or before any Governmental Authority or private
arbitration tribunal against Seller which, if adversely determined, would
materially adversely affect the financial condition or operations of the
Business, the Systems, the Assets or the ability of Seller to perform its
obligations under this Agreement, or which, if adversely determined, would
result in the modification, revocation, termination, suspension or other
limitation of any of the Governmental Permits, Seller Contracts or leases or
other documents evidencing the Real Property; and (b) there is not in existence
any judgment requiring Seller to take any action of any kind with respect to the
Assets or the operation of the Systems, or to which Seller (with respect to the
Systems), the Systems or the Assets are subject or by which they are bound or
affected.
5.14 Tax Returns; Other Reports. Seller has duly and timely
--------------------------
filed in correct form all federal, state and local Tax returns and all other Tax
reports required to be filed by Seller and has timely paid all Taxes which have
become due and payable, whether or not shown on any such report or return, the
failure of which to be filed or paid could adversely affect the Assets or result
in the imposition of an Encumbrance upon the Assets, except such amounts as are
being contested diligently and in good faith and are not in the aggregate
material. Except as specifically identified on SCHEDULE 5.14, Seller has
received no notice of, nor does Seller have any Knowledge of, any deficiency,
assessment or audit, or proposed deficiency, assessment or audit from any taxing
Governmental Authority which could affect or result in the imposition of an
Encumbrance upon the Assets.
14
5.15 Employment Matters.
------------------
5.15.1 SCHEDULE 5.15 contains a complete and correct list
of names and positions of all employees of Seller engaged in the Business as of
the date set forth in such SCHEDULE. Seller has no employment agreements, either
written or oral, with any employee of the Business. Seller has complied in all
material respects with applicable Legal Requirements relating to the employment
of labor, including WARN, the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), continuation coverage requirements with respect to group
health plans, and those relating to wages, hours, collective bargaining,
unemployment insurance, worker's compensation, equal employment opportunity, age
and disability discrimination, immigration control and the payment and
withholding of Taxes.
5.15.2 Each "employee benefit plan" or "multiemployer plan"
(as those terms are defined in ERISA) with respect to which Seller or any ERISA
Affiliate (as defined in ERISA) of Seller has any liability is set forth on
SCHEDULE 5.15 (the "Employee Benefit Plans"). Neither Seller nor its ERISA
Affiliates nor any Employee Benefit Plan is in material violation of any
provision of ERISA. No "reportable event," as defined in Section 4043 of ERISA,
has occurred and is continuing with respect to any Employee Benefit Plan. No
"prohibited transaction," within the meaning of Section 406 of ERISA, has
occurred with respect to any such Employee Benefit Plan, and no "accumulated
funding deficiency" or "withdrawal liability" (both as defined in Section 302 of
ERISA) exists with respect to any such Employee Benefit Plan. After the Closing,
Buyer will not be required, under ERISA, the Internal Revenue Code of 1986, as
amended (the "Code") or any collective bargaining agreement, to establish,
maintain or continue any Employee Benefit Plan currently maintained by Seller or
any of its ERISA Affiliates.
5.15.3 Seller is not a party to any collective bargaining
agreements and Seller has not recognized or agreed to recognize and has no duty
to bargain with any labor organization or collective bargaining unit. There are
not pending any unfair labor practice charges against Seller, any demand for
recognition or any other request or demand from a labor organization for
representative status with respect to any Person employed by Seller. To
Seller's Knowledge, its employees are not engaged in organizing activity with
respect to any labor organization. Seller has no employment agreement, either
written or oral, express or implied, that would require Buyer to employ any
Person after the Closing Date.
5.16 Systems Information. SCHEDULE 5.16 sets forth a materially
-------------------
true and accurate description of the following information relating to the
Business as of the most recent monthly report generated by Seller in the
ordinary course of business containing the information required to prepare such
SCHEDULE (provided that such date is no earlier than two months prior to the
date of this Agreement):
(a) the approximate number of miles of plant included in
the Assets;
(b) the number of subscribers and EBS's served by the
Systems for each Franchise;
15
(c) the approximate number of single family homes and
residential dwelling units passed by the Systems;
(d) a description of basic and optional or tier services
available from the Systems, the rates charged by Seller for each and the number
of subscribers and subscriber equivalents receiving each optional or tier
service;
(e) the stations and signals carried by the Systems and the
channel position of each such signal and station; and
(f) the cities, towns, villages, townships, boroughs and
counties served by the Systems.
5.17 Bonds. Except as set forth on SCHEDULE 5.17, as of the date
-----
of this Agreement, there are no franchise, construction, fidelity, performance,
or other bonds or letters of credit posted by Seller in connection with its
operation or ownership of any of the Systems or Assets.
5.18 Finders and Brokers. Seller has not employed any financial
-------------------
advisor, broker or finder or incurred any liability for any financial advisory,
brokerage, finder's or similar fee or commission in connection with the
transactions contemplated by this Agreement for which Buyer could be liable.
SECTION 6. BUYER'S REPRESENTATIONS AND WARRANTIES.
To induce Seller to enter into this Agreement, Buyer represents and
warrants to Seller, as of the date of this Agreement and as of the Closing, as
follows:
6.1 Organization and Qualification. Buyer is a corporation duly
------------------------------
organized, validly existing and in good standing under the laws of the State of
Georgia and has all requisite corporate power and authority to own, lease and
use the assets owned, leased or used by it and to conduct its business as it is
currently conducted. Buyer is duly qualified to do business and is in good
standing under the laws of each jurisdiction in which the ownership, leasing or
use of the assets owned, leased or used by it or the nature of Buyer's
activities makes such qualification necessary, except in any such jurisdiction
where the failure to be so qualified and in good standing would not have a
material adverse effect on Buyer or on the ability of Buyer to perform its
obligations under this Agreement.
6.2 Authority and Validity. Buyer has all requisite corporate
----------------------
power and authority to execute and deliver, to perform its obligations under,
and to consummate the transactions contemplated by, this Agreement and the
Transaction Documents to which Buyer is a party. The execution and delivery by
Buyer of, the performance by Buyer of its obligations under, and the
consummation by Buyer of the transactions contemplated by, this Agreement and
the Transaction Documents to which Buyer is a party have been duly and validly
authorized by all necessary action by or on behalf of Buyer. This Agreement has
been, and when executed and delivered by Buyer the Transaction Documents will
be, duly and validly executed and delivered by Buyer and the valid and binding
obligations of Buyer, enforceable against Buyer in accordance with their terms,
except as the
16
same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect relating to the
enforcement of creditors' rights generally or by principles governing the
availability of equitable remedies.
6.3 No Conflicts; Required Consents. Except for the Required
-------------------------------
Consents, the execution and delivery by Buyer, the performance of Buyer under,
and the consummation of the transactions contemplated by, this Agreement and the
Transaction Documents to which Buyer is a party do not and will not (a) violate
any provision of the charter or bylaws of Buyer, (b) violate any Legal
Requirement, (c) require any consent, approval or authorization of, or filing of
any certificate, notice, application, report or other document with any
Governmental Authority or other Person or (d) (i) violate or result in a breach
of or constitute a default under (without regard to requirements of notice,
lapse of time or elections of any Person or any combination thereof), (ii)
permit or result in the termination, suspension, modification of, (iii) result
in the acceleration of (or give any Person the right to accelerate) the
performance of Buyer under, or (iv) result in the creation or imposition of any
Encumbrance under, any instrument or other agreement to which Buyer is a party
or by which Buyer or any of its assets is bound or affected, except for purposes
of this clause (d) such violations, conflicts, breaches, defaults, terminations,
suspensions, modifications and accelerations as would not, individually or in
the aggregate, have a material adverse effect on the validity, binding effect or
enforceability of this Agreement or on the ability of Buyer to perform its
obligations under this Agreement or the Transaction Documents to which it is a
party.
6.4 Finders and Brokers. Buyer has not employed any financial
-------------------
advisor, broker or finder or incurred any liability for any financial advisory,
brokerage, finder's or similar fee or commission in connection with the
transactions contemplated by this Agreement for which Seller could be liable.
6.5 Legal Proceedings. There are no claims, actions, suits,
-----------------
proceedings or investigations pending or, to Buyer's Knowledge, threatened, by
or before any Governmental Authority, or any arbitrator, by or against or
affecting or relating to Buyer which, if adversely determined, would restrain or
enjoin the consummation of the transactions contemplated by this Agreement or
declare unlawful the transactions or events contemplated by this Agreement or
cause any of such transactions to be rescinded.
SECTION 7. ADDITIONAL COVENANTS.
7.1 Access to Premises and Records. Between the date of this
------------------------------
Agreement and the Closing Date, Seller will give Buyer and its counsel,
accountants and other representatives full access during normal business hours
upon reasonable notice to all the premises and books and records of the Business
and to all the Assets and to the System personnel and will furnish to Buyer and
such representatives all such documents, financial information, and other
information regarding the Business and the Assets as Buyer from time to time
reasonably may request; provided that no such investigation will affect or limit
the scope of any of Seller's representations, warranties, covenants and
indemnities in this Agreement or any Transaction Document or limit liability for
any breach of any of the foregoing.
17
7.2 Continuity and Maintenance of Operations; Financial
---------------------------------------------------
Statements. Except as Buyer may otherwise consent in writing, between the date
----------
of this Agreement and the Closing:
7.2.1 Seller will conduct the Business and operate the
Systems only in the usual, regular and ordinary course consistent with past
practices (including making budgeted capital expenditures and fulfilling
installation requests) and will use commercially reasonable efforts to (a)
preserve its current business intact, including preserving existing
relationships with franchising authorities, suppliers, customers and others
having business dealings with Seller relating to the Business unless Buyer
requests otherwise, (b) keep available the services of its employees and agents
providing services in connection with the Business and (c) continue making
marketing, advertising and promotional expenditures with respect to the Business
consistent with past practices.
7.2.2 Seller will maintain the Assets in good repair,
order and condition (ordinary wear and tear excepted), will maintain equipment
and inventory at historical levels consistent with past practices, will maintain
in full force and effect, policies of insurance with respect to the Business in
such amounts and with respect to such risks as customarily maintained by
operators of cable television systems of the size and geographic location as the
Systems and will maintain its books, records and accounts in the usual, regular
and ordinary manner on a basis consistent with past practices. Seller will not
itself, and will not permit any of its officers, directors, shareholders, agents
or employees to, pay any of Seller's subscriber accounts receivable (other than
for their own residences) prior to the Closing Date. Seller will continue to
implement its procedures for disconnection and discontinuance of service to
subscribers whose accounts are delinquent in accordance with those in effect on
the date of this Agreement.
7.2.3 Except as specified in Section 7.2.5, without the prior
approval of Buyer, Seller will not (a) change the rate charged for Basic
Service, Expanded Basic Service or Pay TV or add, delete, retier or repackage
any programming services except to the extent required under the 1992 Cable Act
or any other Legal Requirement, provided however if Seller changes such rates in
order to so comply, Seller will provide Buyer with copies of any FCC forms (even
if not filed with any Governmental Authority) that Seller used to determine that
the new rates were allowable, (b) make any Cost of Service Election with respect
to any of the Systems, (c) sell, transfer or assign any portion of the Assets
other than sales in the ordinary course of business or permit the creation of
any Encumbrance on any Asset other than a Permitted Encumbrance or any
Encumbrance which will be released at or prior to Closing, (d) modify in any
material respect, terminate, suspend or abrogate any Governmental Permits,
Seller Contracts or any other contract or agreement (other than those
constituting Excluded Assets), (e) enter into any contract or commitment or
incur any indebtedness or other liability or obligation of any kind relating to
any System or the Business involving an expenditure in excess of $25,000, other
than contracts or commitments which are cancellable on 30 days' notice or less
without penalty, (f) take or omit to take any action that would result in any of
its representations or warranties in this Agreement or in any Transaction
Document not being true and correct when made or as of the Closing, (g) engage
in any marketing, subscriber installation or collection practices that are
inconsistent with past practices, or (h) enter into any agreement with or
commitment to any competitive access providers with respect to the Systems.
18
7.2.4 Seller promptly will deliver to Buyer true and
complete copies of monthly and quarterly financial statements and operating
reports and any reports with respect to the operations of the Business prepared
by or for Seller at any time between the date of this Agreement and the Closing
Date. All financial statements so delivered will be prepared in accordance with
GAAP on a basis consistent with the Financial Statements.
7.2.5 Seller will give or cause to be given to Buyer as
soon as reasonably possible but in any event no later than 5 Business Days prior
to the date of submission to the appropriate Governmental Authority, copies of
all Rate Regulation Documents prepared with respect to any of the Systems, and
Seller will make a good faith effort to address any specific concerns raised by
Buyer with respect to such documents. Seller will cause its "Operator Selected
Rate for Projected Period" as shown on line 110 of the FCC Form 1240 to go into
effect in the System on February 1, 1997.
7.2.6 Seller will duly and timely file a valid notice of
renewal under Section 626 of the Cable Communications Policy Act of 1984 with
the appropriate Governmental Authority with respect to all cable television
franchises of the Business that will expire within 36 months after any date
between the date of this Agreement and the Closing Date.
7.2.7 Seller will promptly notify Buyer of any fact,
circumstance, event or action by it or otherwise (a) which, if known at the date
of this Agreement, would have been required to be disclosed in or pursuant to
this Agreement or (b) the existence, occurrence or taking of which would result
in any of Seller's representations and warranties in this Agreement or any
Transaction Document not being true, complete and correct when made or at the
Closing, and, with respect to clause (b) use its best efforts to remedy the
same.
7.3 Employee Matters.
----------------
7.3.1 Buyer will have no obligation to employ or offer
employment to any of the employees of Seller. As of the Closing Date, Seller
will terminate the employment of all its employees who were employed incidental
to the conduct of the Business whose employment will not continue with Seller
after the Closing and will promptly pay to all such employees all compensation,
including salaries, commissions, bonuses, deferred compensation, severance,
insurance, pensions, profit sharing, vacation (except for accrued vacation
included in the adjustments pursuant to SECTION 3.2), sick pay and other
compensation or benefits to which they are entitled for periods prior to the
Closing, including all amounts, if any, payable on account of the termination of
their employment. Seller agrees to cooperate in all reasonable respects with
Buyer to allow Buyer to evaluate and interview employees of the Business to make
hiring decisions. Such cooperation will include but not be limited to allowing
Buyer to contact employees during work time and, with the consent of the
employee, making personnel records available. Buyer will give Seller written
notice on or before January 10, 1997 of the name of all employees of the System
to whom Buyer desires to offer employment on and after the Closing Date (subject
to satisfaction of Buyer's conditions for employment). Seller will not, without
the prior written consent of Buyer, change the compensation or benefits of any
employees of the Business except in accordance with past practice.
19
7.3.2 All claims and obligations under, pursuant to or in
connection with any welfare, medical, insurance, disability or other employee
benefit plans of Seller or arising under any Legal Requirement affecting
employees of Seller incurred on or before the Closing Date or resulting or
arising from events or occurrences occurring or commencing on or before the
Closing Date will remain the responsibility of Seller, whether or not such
employees are hired by Buyer after the Closing.
7.3.3 Seller will remain solely responsible for, and will
indemnify and hold harmless Buyer from and against all Losses arising from or
with respect to, all salaries and all severance, vacation (except for accrued
vacation included in the adjustments pursuant to SECTION 3.2), medical, sick,
holiday, continuation coverage and other compensation or benefits to which
Seller's employees (whether or not hired by Buyer) may be entitled as a result
of their employment by Seller prior to the Closing, the termination of their
employment prior to the Closing, the consummation of the transactions
contemplated hereby or pursuant to any applicable Legal Requirement (including
without limitation WARN) or otherwise relating to their employment prior to the
Closing.
7.3.4 Nothing in this Agreement will require Buyer to
assume any collective bargaining agreement between Seller and any labor
organization.
7.4 Leased Vehicles; Other Capital Leases. Seller will pay the
-------------------------------------
remaining balances on any leases for vehicles or capital leases included in the
Equipment and will deliver title to such vehicles and other Equipment free and
clear of all Encumbrances (other than Permitted Encumbrances) to Buyer at the
Closing.
7.5 Required Consents; Estoppel Certificates.
----------------------------------------
7.5.1 Seller will use commercially reasonable efforts to
obtain in writing, as promptly as possible and at its expense, all the Required
Consents and any other consent, authorization or approval required to be
obtained by Seller in connection with the transactions contemplated by this
Agreement, in form and substance reasonably satisfactory to Buyer and deliver to
Buyer copies of such Required Consents and such other consents, authorizations
or approvals promptly after they are obtained by Seller. Such Required Consents
will be proposed in a form that provides confirmation from the third party of
the continued existence of and the absence of defaults under the applicable
Seller Contract or Governmental Permit. Buyer will cooperate with Seller to
obtain all Required Consents, but Buyer will not be required to accept or agree
or accede to any modifications or amendments to, or changes in, or the
imposition of any condition to the transfer to Buyer of (in each case other than
inconsequential matters with no adverse effect on Buyer), any Seller Contract or
Governmental Permit that are not acceptable to Buyer in its sole discretion.
Notwithstanding the foregoing, Seller will complete, execute and deliver to the
appropriate Governmental Authority, the FCC Forms 394 prepared by Buyer with
respect to each franchise as to which such Form 394 is required within two
Business Days after it receives each such Form 394 from Buyer.
20
7.5.2 Seller will use commercially reasonable efforts to
obtain for each lease that has not been recorded in the public records,
execution of a document suitable for recording in the public records and
sufficient after recording to constitute a memorandum of lease.
7.6 Title Commitments and Surveys.
-----------------------------
7.6.1 After the execution of this Agreement, Buyer will
order at Seller's expense (a) commitments for owner's title insurance policies
on all Real Property owned by Seller and on easements which provide access to
each such parcel of real property, (b) commitments for lessee's title insurance
policies for all Real Property leased by Seller which is used for headend or
tower sites and on easements which provide access to each such site and (c) an
ALTA survey (including such items on Table A of the Minimum Standard Detail
Requirements and Classifications thereto that Buyer in its reasonable judgment
determines are desirable or necessary) on each parcel of Real Property for which
a title insurance policy is to be obtained. The title commitments will evidence
a commitment to issue an ALTA title insurance policy insuring good, marketable
and indefeasible fee simple title or leasehold interest, in the case of Leased
Real Property, if applicable) to each parcel of such Real Property, subject only
to Permitted Encumbrances, for such amount as Buyer directs and will contain no
exceptions except for items which in Buyer's reasonable opinion do not adversely
affect (other than in an immaterial way as to any individual parcel) the good,
marketable and indefeasible title to or Buyer's access or quiet use or enjoyment
of such Real Property in the manner the Real Property is presently used or in
the normal conduct of the Business. At the Closing, Seller will cause Buyer to
receive, at Seller's expense, title commitments redated to the date and time of
Closing. In the event Seller has not eliminated or caused to be eliminated all
unacceptable exceptions from such policies or commitments prior to Closing, and
Buyer elects to proceed with the Closing, Buyer will be entitled to
indemnification with respect to such exceptions as provided in SECTION 11.2.
7.6.2 Title insurance policies on all Real Property in
such amounts as Buyer directs will be delivered to Buyer at Seller's expense
within 30 days after the Closing Date evidencing title to the Real Property
vested in Buyer consistent with the commitments delivered at the Closing
pursuant to SECTION 7.6.1.
7.7 HSR Notification. As soon as practicable after the
----------------
execution of this Agreement, but in any event no later than 30 days after such
execution, Seller and Buyer will each complete and file, or cause to be
completed and filed, any notification and report required to be filed under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"); and each such filing will request early termination of the waiting period
imposed by the HSR Act. The parties will use their reasonable best efforts to
respond as promptly as reasonably practicable to any inquiries received from the
Federal Trade Commission (the "FTC") and the Antitrust Division of the
Department of Justice (the "Antitrust Division") for additional information or
documentation and to respond as promptly as reasonably practicable to all
inquiries and requests received from any other Governmental Authority in
connection with antitrust matters. The parties will use their respective
reasonable best efforts to overcome any objections which may be raised by the
FTC, the Antitrust Division or any other Governmental Authority having
jurisdiction over antitrust matters. Notwithstanding the foregoing, Buyer will
not be required to make any significant change in the operations or activities
of the business (or any material assets employed therein) of Buyer or any of
21
its Affiliates, if Buyer determines in good faith that such change would be
materially adverse to the operations or activities of the business (or any
material assets employed therein) of Buyer or any of its Affiliates having
significant assets, net worth, or revenue. Notwithstanding anything to the
contrary in this Agreement, if Buyer or Seller, in its sole opinion, considers a
request from a governmental agency for additional data and information in
connection with the HSR Act to be unduly burdensome, such party may terminate
this Agreement by giving written notice to the other. Within 10 days after
receipt of a statement therefor, Seller will reimburse Buyer for one-half of the
filing fees payable by Buyer in connection with Buyer's filing under the HSR
Act.
7.8 No Shopping. None of Seller, its shareholders or any agent
-----------
or representative of any of them will, during the period commencing on the date
of this Agreement and ending with the earlier to occur of the Closing or the
termination of this Agreement, directly or indirectly (a) solicit or initiate
the submission of proposals or offers from any Person for, (b) participate in
any discussions pertaining to or (c) furnish any information to any Person other
than Buyer relating to, any direct or indirect acquisition or purchase of all or
any portion of the Assets.
7.9 Lien and Judgment Searches. Not more than 20 nor fewer
--------------------------
than 10 days prior to the expected Closing Date, Seller, at its expense, will
provide Buyer with (a) the results of a lien search conducted by a professional
search company of records in the offices of the secretaries of state in each
state and county clerks in each county where there exist tangible Assets, and in
the state and county where Seller's principal offices are located, including
copies of all financing statements or similar notices or filings (and any
continuation statements) discovered by such search company and (b) the results
of a search of the dockets of the clerk of each federal and state court sitting
in the city, county or other applicable political subdivision where the
principal office or any material assets of Seller may be located, with respect
to judgments, orders, writs or decrees against or affecting Seller or any of the
Assets.
7.10 Transfer Taxes. Any state or local sales, use, transfer,
--------------
Taxes or fees or any other charge (including filing fees) imposed by any
Governmental Authority arising from or payable by reason of the transfer of any
of the Assets pursuant to this Agreement will be paid one-half by Buyer and one-
half by Seller.
7.11 Distant Broadcast Signals. Unless otherwise restricted or
-------------------------
prohibited by any Governmental Authority or applicable Legal Requirement, if
requested by Buyer, Seller will delete prior to the Closing Date any distant
broadcast signals which Buyer determines will result in unacceptable liability
on the part of Buyer for copyright payments with respect to continued carriage
of such signals after the Closing.
7.12 Guaranty. At the Closing, Seller will cause Intercable to
--------
sign and deliver to Buyer, a Guaranty in the form of EXHIBIT D.
7.13 Letter to Programmers. On or before the Closing Date,
---------------------
Seller will transmit a letter in the form of EXHIBIT E to all programmers from
which Seller purchases programming for the Systems and provide Buyer with a copy
of each such letter.
22
7.14 Updated Schedules. Not later than 10 Business Days after
-----------------
signing of this Agreement Seller will deliver to Buyer all Schedules to this
Agreement to the extent not attached at the time of signing. Not later than ten
Business Days prior to the expected Closing Date, Seller will deliver to Buyer
revised copies of all Schedules to this Agreement which will have been updated
and marked to show any changes occurring between the date of this Agreement and
the date of delivery; provided, however, that for purposes of Seller's
representations and warranties and covenants in this Agreement, all references
to the Schedules will mean the version of the Schedules attached to this
Agreement on the date of signing or the date of initial delivery in accordance
with the first sentence of this Section (if later), and provided further that if
the effect of any such updates to Schedules is to disclose any one or more
additional properties, privileges, rights, interests or claims as Assets, Buyer,
at or before Closing, will have the right (to be exercised by written notice to
Seller) to cause any one or more of such items to be designated as and deemed to
constitute Excluded Assets for all purposes under this Agreement.
7.15 Use of Names and Logos. For a period of 90 days after the
----------------------
Closing Date, Buyer will be entitled to use all trademarks, trade names, service
marks, service names, logos and similar proprietary rights of Seller and all
derivations and abbreviations of such name and related marks to the extent
incorporated in or on the Assets transferred to it at the Closing.
Notwithstanding the foregoing, Buyer will not be required to remove or
discontinue using any such trade name or xxxx that is affixed to converters or
other items in or to be used in subscriber homes or properties, or as are used
in a similar fashion making such removal or discontinuation impracticable for
Buyer.
7.16 Subscriber Billing Services. Seller will provide to Buyer,
---------------------------
upon request, on terms and conditions reasonably satisfactory to each party,
access to and the right to use its billing system computers, software and
related fixed assets in connection with the Systems acquired by Buyer for a
period of up to 90 days following the Closing to allow for conversion of
existing billing arrangements ("Transitional Billing Services"); provided
however that Buyer will not be required to pay Seller more than Seller's actual
cost of providing such service. Buyer will notify Seller at least 10 days prior
to the expected Closing Date as to whether it desires Transitional Billing
Services from Seller.
7.17 Satisfaction of Conditions. Each party will use its best
--------------------------
efforts to satisfy, or to cause to be satisfied, the conditions to the
obligations of the other party to consummate the transactions contemplated by
this Agreement, as set forth in SECTION 8, provided that Buyer will not be
required to agree to any increase in the amount payable with respect to, or any
modification that makes more burdensome in any material respect, any of the
Assumed Liabilities.
7.18 Confidentiality and Publicity. Neither party will issue any
-----------------------------
press release or make any other public announcement or any oral or written
statements to Seller's employees concerning this Agreement or the transactions
contemplated hereby except as required by applicable Legal Requirements, without
the prior written consent of the other party. Each party will hold, and will
cause its employees, consultants, advisors and agents to hold the terms of this
Agreement in confidence; provided that (a) such party may use and disclose such
information once it has become publicly disclosed (other than by such party in
breach of its obligations under this Section) or which rightfully has come into
the possession of such party (other than from the other party) and (b) to the
23
extent that such party may be compelled by Legal Requirements to disclose any of
such information, but the party proposing to disclose such information will
first notify and consult with the other party concerning the proposed
disclosure, to the extent reasonably feasible. Each party also may disclose
such information to employees, consultants, advisors, agents and actual or
potential lenders whose knowledge is necessary to facilitate the consummation of
the transactions contemplated by this Agreement. The obligation by either party
to hold information in confidence pursuant to this Section will be satisfied if
such party exercises the same care with respect to such information as it would
exercise to preserve the confidentiality of its own similar information.
7.19 Bulk Transfers. Buyer waives compliance by Seller with
--------------
Legal Requirements relating to bulk transfers applicable to the transactions
contemplated hereby.
7.20 Environmental Reports. Within 60 days after the execution
---------------------
of this Agreement, Seller will, at its expense, obtain and deliver to Buyer for
each parcel of Real Property owned or leased by Seller a current Phase I
Environmental Site Assessment ("Environmental Report") prepared by a nationally
known environmental engineering firm reasonably satisfactory to Buyer in
accordance with ASTM Standard E 1527-93 and certified to Buyer. Each
Environmental Report will include, in addition to the process described in E
1527-93, such soil and groundwater sampling and other testing as will enable the
environmental engineers to determine if Hazardous Substances are detected and to
provide an estimate of the cost to remove and dispose of the Hazardous
Substances or otherwise remediate the property in accordance with all applicable
Environmental Laws.
7.21 Board Approvals. On or before the Due Diligence Deadline,
---------------
the Board of Directors of Buyer and the Board of Directors of Intercable will
have been presented with resolutions for the approval of the transactions
contemplated hereby on behalf of Buyer and Seller, and will have approved or
disapproved the same.
SECTION 8. CONDITIONS PRECEDENT
8.1 Conditions to the Obligations of Buyer and Seller. The
-------------------------------------------------
obligations of each party to consummate the transactions contemplated by this
Agreement are subject to the satisfaction, at or before the Closing, of the
following, which may be waived by the parties to the extent permitted by
applicable Legal Requirements:
8.1.1 HSR Act Filings. All filings required under the HSR
---------------
Act have been made and the applicable waiting period has expired or been earlier
terminated without the receipt of any objection or the commencement or threat of
any litigation by a Governmental Authority of competent jurisdiction to restrain
the consummation of the transactions contemplated by this Agreement.
8.1.2 Absence of Litigation. No action, suit or
---------------------
proceeding is pending or threatened by or before any Governmental Authority and
no Legal Requirement has been enacted, promulgated or issued or become or deemed
applicable to any of the transactions contemplated by this Agreement by any
Governmental Authority, which would (a) prohibit Buyer's ownership or operation
of all or a material portion of any System, the Business or the Assets, (b)
compel Buyer to
24
dispose of or hold separate all or a material portion of any System, the
Business or the Assets as a result of any of the transactions contemplated by
this Agreement, (c) if determined adversely to Buyer's interest, materially
impair the ability of Buyer to realize the benefits of the transactions
contemplated by this Agreement (including the ability to acquire the Systems
pursuant to a like-kind exchange under Section 1031 of the Code) or have a
material adverse effect on the right of Buyer to exercise full rights of
ownership of the Systems or (d) prevent or make illegal the consummation of any
transactions contemplated by this Agreement.
8.2 Conditions to the Obligations of Buyer. The obligations of
--------------------------------------
Buyer to consummate the transactions contemplated by this Agreement are subject
to the satisfaction, at or before the Closing, of the following conditions,
which may be waived by Buyer to the extent permitted by applicable Legal
Requirements:
8.2.1 Representations and Warranties. All representations
------------------------------
and warranties of Seller in this Agreement and any Transaction Document are, if
specifically qualified by materiality, true and correct in all respects and, if
not so qualified, are true and correct in all material respects, in each case on
and as of the Closing Date with the same effect as if made at and as of the
Closing Date, except for changes permitted or contemplated by this Agreement.
8.2.2 Performance of Agreements. Seller has performed in
-------------------------
all material respects all obligations and agreements and complied in all
material respects with all covenants and conditions in this Agreement and any
Transaction Document to be performed or complied with by Seller at or before the
Closing.
8.2.3 Deliveries. Seller has delivered the items and
----------
documents required to be delivered by it pursuant to this Agreement, including
those required under SECTION 9.2.
8.2.4 Consents. Seller has delivered to Buyer evidence,
--------
in form and substance satisfactory to Buyer, that all of the Required Consents
marked with an asterisk on SCHEDULE 5.3 have been obtained or given (or deemed
to have been given) and are in full force and effect.
8.2.5 Retransmission Consent; Programming. With respect
-----------------------------------
to any retransmission consent agreements for broadcast signals carried on the
Systems that are included as part of the Excluded Assets, all required
retransmission consents for continued carriage of such broadcast signals will
have been obtained on terms and conditions reasonably acceptable to Buyer.
8.2.6 Environmental Matters. The Environmental Reports
---------------------
delivered to Buyer pursuant to SECTION 7.20 and any other environmental audits
or assessments conducted with respect to the Assets do not indicate the
existence of any conditions that could reasonably be expected to give rise to a
material risk of liability.
8.2.7 No Material Adverse Change. There has not been any
--------------------------
material adverse change in the Business, the Assets or the Systems since the
date of this Agreement other than any change arising out of general economic
conditions in the United States or any change affecting the
25
United States cable television industry as a whole, including any change arising
from (a) legislation, litigation, rulemaking or regulation or (b) competition
caused by or arising from other multiple channel distribution services.
8.2.8 EBS. As of the Closing Date, the Business has no
---
fewer than 5,250 EBSs.
8.3 Conditions to Obligations of Seller. The obligations of
-----------------------------------
Seller to consummate the transactions contemplated by this Agreement are subject
to the satisfaction by Seller at or before the Closing, of the following, which
may be waived by Seller, to the extent permitted by applicable Legal
Requirements:
8.3.1 Representations and Warranties. All representations
------------------------------
and warranties of Buyer contained in this Agreement and any Transaction Document
are, if specifically qualified by materiality, true and correct in all respects
and, if not so qualified, are true and correct in all material respects, in each
case on and as of the Closing Date with the same effect as if made on and as of
the Closing Date, except for changes permitted or contemplated by this
Agreement.
8.3.2 Performance of Agreements. Buyer has performed in
-------------------------
all material respects all obligations and agreements, and complied in all
material respects with all covenants and conditions in this Agreement and any
Transaction Document to be performed or complied with by Buyer at or before the
Closing.
8.3.3 Deliveries. Buyer has delivered the items and
----------
documents required to be delivered by it pursuant to this Agreement, including
those required under SECTION 9.3.
8.3.4 EBS. As of the Closing Date, either (a) the
---
Business has no fewer than 5,250 EBSs or (b) Buyer has waived its right to an
adjustment pursuant to SECTION 3.2.1 except to the extent of the adjustment
applicable if the number of EBSs were 5,250.
8.4 Waiver of Conditions. Any party may waive in writing any
--------------------
or all of the conditions to its obligations under this Agreement.
SECTION 9. CLOSING.
9.1 The Closing; Time and Place. The Closing will be held on
---------------------------
a date specified by Buyer (upon three Business Days prior notice to Seller) that
is within 15 days after all conditions to the Closing contained in this
Agreement (other than those based on acts to be performed at the Closing) have
been satisfied or waived. The Closing will be held at 10:00 a.m. local time at
Buyer's counsel's office located at 633-17th Street, Suite 3000, Xxxxxx,
Xxxxxxxx 00000, or at such place and time as Buyer and Seller may agree.
9.2 Seller's Delivery Obligations. At the Closing, Seller will
-----------------------------
deliver (or cause to be delivered) to Buyer the following:
26
(a) a Xxxx of Sale in the form attached as EXHIBIT A;
(b) a special warranty deed in a form reasonably acceptable
to Buyer (and complying with applicable state laws) with respect to each parcel
of owned Real Property, duly executed and acknowledged and in recordable form,
warranting to defend title to such Real Property against all persons claiming
by, through or under Seller, subject only to Permitted Encumbrances, and in form
sufficient to permit the title company to issue the title policy described in
SECTION 7.6.1 to Buyer with respect to such Real Property;
(c) an Assignment and Assumption of Contracts in the form
attached as EXHIBIT B;
(d) one or more Assignments of Leases in the form attached
as EXHIBIT C and, if requested by Buyer, short forms or memoranda of such
Assignments in recordable form;
(e) any memorandum of lease obtained by Seller pursuant to
SECTION 7.5(B);
(f) a Guaranty signed by Intercable in the form attached as
EXHIBIT D;
(g) an affidavit of Seller, under penalty of perjury, that
Seller is not a "foreign person" (as defined in the Foreign Investment in Real
Property Tax Act and applicable regulations) and that Buyer is not required to
withhold any portion of the consideration payable under this Agreement under the
provisions of such Act in the form attached as EXHIBIT F;
(h) motor vehicle title certificates and such other
transfer instruments as Buyer may deem necessary or advisable to transfer the
Assets to Buyer and to perfect Buyer's rights in the Assets;
(i) the opinion of Xxxxxxxxx Xxxxxx, Esq., counsel for
Seller, dated the Closing Date, in the form set forth in EXHIBIT G;
(j) evidence satisfactory to Buyer that all Encumbrances
affecting any of the Assets (other than Permitted Encumbrances) have been
terminated and released;
(k) the title insurance commitments described in SECTION
7.6.1;
(l) a certificate, dated the Closing Date, signed by the
President or any Vice President of Intercable, stating that to his or her
knowledge, the conditions set forth in SECTIONS 8.2.1, 8.2.2 and 8.2.8 are
satisfied; and
(m) such other documents as Buyer may reasonably request in
connection with the transactions contemplated by this Agreement.
27
9.3 Buyer's Delivery Obligations. At the Closing, Buyer will
----------------------------
deliver (or cause to be delivered) to Seller the following:
(a) the Base Purchase Price required to be paid at the
Closing, as adjusted in accordance with this Agreement;
(b) a Xxxx of Sale in the form attached as EXHIBIT A;
(c) an Assignment and Assumption of Contracts in the form
attached as EXHIBIT B;
(d) a certificate, dated the Closing Date, signed by an
executive officer of Buyer, stating that to his or her knowledge, the conditions
set forth in SECTIONS 8.3.1 and 8.3.2, are satisfied;
(e) an opinion of Xxxx X. Xxxxxx, Esq., counsel to Buyer,
dated the Closing Date, in the form set forth in EXHIBIT H; and
(f) such other documents as Seller may reasonably request
in connection with the transactions contemplated by this Agreement.
SECTION 10. TERMINATION.
10.1 Termination Events. This Agreement may be terminated and
------------------
the transactions contemplated by this Agreement may be abandoned:
10.1.1 At any time by the mutual written agreement of Buyer
and Seller;
10.1.2 By either party at any time, if the other is in
material breach or default of any of its covenants, agreements or other
obligations in this Agreement or in any Transaction Document, or if any of its
representations in this Agreement or in any Transaction Document is not true in
all material respects when made or when otherwise required by this Agreement or
any Transaction Document to be true and such breach or default or failure to be
true is not cured or waived prior to Closing;
10.1.3 By either party upon written notice to the other, if
Closing has not occurred on or before March 12, 1997, for any reason other than
a material breach or default by such party of its respective covenants,
agreements or other obligations under this Agreement, or any of its
representations this Agreement not being true and accurate in all material
respects when made or when otherwise required by this Agreement to be true and
accurate in all material respects;
10.1.4 By Buyer, within 35 days after the date Buyer
acknowledges receipt of substantially all of the Schedules to this Agreement
that are not attached at the time of signing and all of the due diligence
materials requested by Buyer from Seller (such 35th day, or if it is not a
Business Day, the next Business Day that follows being referred to as the "Due
Diligence Deadline"),
28
which acknowledgment will be given by Buyer in writing promptly after such
receipt, if either (a) the results and findings of Buyer's investigation of the
Business and the Assets are not satisfactory in Buyer's sole discretion or (b)
all board of director approvals are not obtained by Buyer (for any reason) on or
before the Due Diligence Deadline;
10.1.5 By Seller, on or before the Due Diligence Deadline,
if Intercable has not approved the transactions contemplated by this Agreement
(for any reason) on or before such date; or
10.1.6 As otherwise provided in this Agreement.
10.2 Effect of Termination. If this Agreement is terminated
---------------------
pursuant to SECTION 10.1, all obligations of the parties under this Agreement
will terminate, except for the obligations set forth in SECTIONS 7.18 and 12.16.
Termination of this Agreement pursuant to SECTIONS 10.1.2 OR 10.1.3 will not
limit or impair any remedies that any party may have with respect to a breach or
default by the other of its covenants, agreements or obligations under this
Agreement. Buyer will have no liability in any event upon exercise of its right
to terminate pursuant to SECTION 10.1.4. Seller will have no liability in any
event upon exercise of its right to terminate pursuant to SECTION 10.1.5.
SECTION 11. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION.
11.1 Survival of Representations and Warranties. The
------------------------------------------
representations and warranties of Seller in this Agreement and in the
Transaction Documents to be delivered by Seller pursuant to this Agreement will
survive until the first anniversary of the Closing Date, except that (a) all
such representations and warranties with respect to any federal, state or local
Taxes, rates, Environmental Law, ERISA, employment matters or copyright matters
will survive until 60 days after the expiration of the applicable statute of
limitations (including any extensions) for such federal, state or local Taxes,
rates, Environmental Law, ERISA, employment matters or copyright matters,
respectively and (b) the representations and warranties as to ownership of the
Assets in SECTION 5.4, SECTION 5.7.1 and in the deed or deeds delivered with
respect to Real Property will survive the Closing and the delivery of such deeds
and will continue in full force and effect without limitation. The
representations and warranties of Buyer in this Agreement and in the Transaction
Documents to be delivered by Buyer pursuant to this Agreement will survive until
the first anniversary of the Closing Date. The periods of survival of the
representations and warranties prescribed by this SECTION 11.1 are referred to
as the "Survival Period." The liabilities of the parties under their respective
representations and warranties will expire as of the expiration of the
applicable Survival Period; provided, however, that such expiration will not
include, extend or apply to any representation or warranty, the breach of which
has been asserted by Buyer in a written notice to Seller before such expiration
or about which Seller has given Buyer written notice before such expiration
indicating that facts or conditions exist that, with the passage of time or
otherwise, can reasonably be expected to result in a breach (and describing such
potential breach in reasonable detail). The covenants and agreements of the
parties in this Agreement (that are by their terms intended to be performed
after Closing) and in the Transaction Documents to be delivered by Seller
29
or Buyer pursuant to this Agreement, will survive the Closing and will continue
in full force and effect without limitation.
11.2 Indemnification by Seller. Seller will indemnify and hold
-------------------------
harmless Buyer and its shareholders and its and their respective Affiliates, and
the shareholders, directors, officers, employees, agents, successors and assigns
and any Person claiming by or through any of them, as the case may be, from and
against:
(a) all Losses resulting from or arising out of (i) any
breach of any representation or warranty made by Seller in this Agreement or in
the Transactions Documents delivered by Seller, (ii) any breach of any covenant,
agreement or obligation of Seller contained in this Agreement or in the
Transaction Documents delivered by Seller, (iii) any act or omission of Seller
with respect to, or any event or circumstance related to, the ownership or
operation of the Assets or the conduct of the Business, which act, omission,
event or circumstance occurred or existed prior to or at the Closing Date,
without regard to whether a claim with respect to such matter is asserted before
or after the Closing Date, including any matter described on SCHEDULE 5.13, (iv)
any liability or obligation not included in the Assumed Liabilities, (v) any
title defect Seller fails to eliminate as an exception from a title insurance
commitment referred to in SECTION 7.7.1, (vi) any claim that the transactions
contemplated by this Agreement violates WARN, or any similar state or local law
or any bulk transfer or fraudulent conveyance laws of any jurisdiction, (vii)
the presence, generation, removal or transportation of a Hazardous Substance on
or from any of the Real Property prior to the Closing Date, including the costs
of removal or clean-up of such Hazardous Substance and other compliance with the
provisions of any Environmental Laws (whether before or after Closing), or
(viii) any rate refund ordered by any Governmental Authority for periods prior
to the Closing Date; and
(b) all claims, actions, suits, proceedings, demands,
judgments, assessments, fines, interest, penalties, costs and expenses
(including settlement costs and reasonable legal, accounting, experts' and other
fees, costs and expenses) incident or relating to or resulting from any of the
foregoing.
In the event that an indemnified item arises under both clause (a)(i) and under
one or more of clauses (a)(ii) through (a)(viii) of this SECTION 11.2, Buyer's
rights to pursue its claim under clauses (a)(ii) through (a)(viii), as
applicable, will exist notwithstanding the expiration of the Survival Period
applicable to such claim under clause (a)(i).
11.3 Indemnification by Buyer. Buyer will indemnify and hold
------------------------
harmless Seller and Seller's shareholders, directors, officers, employees,
agents, successors and assigns, and any Person claiming by or through any of
them, as the case may be, from and against:
(a) all Losses resulting from or arising out of (i) any
breach of any representation or warranty made by Buyer in this Agreement or in
the Transaction Documents delivered by Buyer, (ii) any breach of any covenant,
agreement or obligation of Buyer contained in this Agreement or in the
Transaction Documents delivered by Buyer or (iii) the failure by Buyer to
perform any of its obligations in respect of the Assumed Liabilities; and
30
(b) all claims, actions, suits, proceedings, demands,
judgments, assessments, fines, interest, penalties, costs and expenses
(including settlement costs and reasonable legal, accounting, experts' and other
fees, costs and expenses) incident or relating to or resulting from any of the
foregoing.
In the event that an indemnified item arises under both clause (a)(i) and under
one or more of clauses (a)(ii) or (a)(iii) of this SECTION 11.3, Seller's rights
to pursue its claim under clauses (a)(ii) or (a)(iii), as applicable, will exist
notwithstanding the expiration of the Survival Period applicable to such claim
under clause (a)(i).
11.4 Third Party Claims. Promptly after the receipt by any party
------------------
of notice of any claim, action, suit or proceeding by any Person who is not a
party to this Agreement (collectively, an "Action"), which Action is subject to
indemnification under this Agreement, such party (the "Indemnified Party") will
give reasonable written notice to the party from whom indemnification is claimed
(the "Indemnifying Party"). The Indemnified Party will be entitled, at the sole
expense and liability of the Indemnifying Party, to exercise full control of the
defense, compromise or settlement of any such Action unless the Indemnifying
Party, within a reasonable time after the giving of such notice by the
Indemnified Party, (a) admits in writing to the Indemnified Party the
Indemnifying Party's liability to the Indemnified Party for such Action under
the terms of this SECTION 11, (b) notifies the Indemnified Party in writing of
the Indemnifying Party's intention to assume such defense, (c) provides evidence
reasonably satisfactory to the Indemnified Party of the Indemnifying Party's
ability to pay the amount, if any, for which the Indemnified Party may be liable
as a result of such Action and (d) retains legal counsel reasonably satisfactory
to the Indemnified Party to conduct the defense of such Action. The other party
will cooperate with the party assuming the defense, compromise or settlement of
any such Action in accordance with this Agreement in any manner that such party
reasonably may request. If the Indemnifying Party so assumes the defense of any
such Action, the Indemnified Party will have the right to employ separate
counsel and to participate in (but not control) the defense, compromise or
settlement of the Action, but the fees and expenses of such counsel will be at
the expense of the Indemnified Party unless (i) the Indemnifying Party has
agreed to pay such fees and expenses, (ii) any relief other than the payment of
money damages is sought against the Indemnified Party or (iii) the Indemnified
Party will have been advised by its counsel that there may be one or more
defenses available to it which are different from or additional to those
available to the Indemnifying Party, and in any such case that portion of the
fees and expenses of such separate counsel that are reasonably related to
matters covered by the indemnity provided in this SECTION 11 will be paid by the
Indemnifying Party. No Indemnified Party will settle or compromise any such
Action for which it is entitled to indemnification under this Agreement without
the prior written consent of the Indemnifying Party, unless the Indemnifying
Party has failed, after reasonable notice, to undertake control of such Action
in the manner provided in this SECTION 11.4. No Indemnifying Party will settle
or compromise any such Action (A) in which any relief other than the payment of
money damages is sought against any Indemnified Party or (B) in the case of any
Action relating to the Indemnified Party's liability for any Tax, if the effect
of such settlement would be an increase in the liability of the Indemnified
Party for the payment of any Tax for any period beginning after the Closing
Date, unless the Indemnified Party consents in writing to such compromise or
settlement.
31
11.5 Limitations on Indemnification - Seller. Seller will not be
---------------------------------------
liable for indemnification arising solely under SECTION 11.2(A)(I) for (a) any
Losses of or to Buyer or any other person entitled to indemnification from
Seller or (b) any claims, actions, suits, proceedings, demands, judgments,
assessments, fines, interest, penalties, costs and expenses (including
settlement costs and reasonable legal, accounting, experts' and other fees,
costs and expenses) incidental or relating to or resulting from any of the
foregoing (the items described in clauses (a) and (b) collectively being
referred to for purposes of this SECTION 11.5 as "Buyer Damages") unless the
amount of Buyer Damages for which Seller would, but for the provisions of this
SECTION 11.5, be liable exceeds, on an aggregate basis, $50,000, in which case
Seller will be liable for all such Buyer Damages, which will be due and payable
within 15 days after Seller's receipt of a statement therefor.
11.6 Limitations on Indemnification - Buyer. Buyer will not be
--------------------------------------
liable for indemnification arising solely under SECTION 11.3(A)(I) for (a) any
Losses of or to Seller or any other person entitled to indemnification from
Buyer or (b) any claims, actions, suits, proceedings, demands, judgments,
assessments, fines, interest, penalties, costs and expenses (including
settlement costs and reasonable legal, accounting, experts' and other fees,
costs and expenses) incidental or relating to or resulting from any of the
foregoing the items described in clauses (a) and (b) collectively being referred
to for purposes of this SECTION 11.6 as "Seller Damages") unless the amount of
Seller Damages for which Buyer would, but for the provisions of this SECTION
11.6, be liable exceeds, on an aggregate basis, $50,000, in which case Buyer
will be liable for all such Seller Damages, which will be due and payable within
15 days after Buyer's receipt of a statement therefor.
SECTION 12. MISCELLANEOUS.
12.1 Parties Obligated and Benefited. Subject to the limitations
-------------------------------
set forth below, this Agreement will be binding upon the parties and their
respective assigns and successors in interest and will inure solely to the
benefit of the parties and their respective assigns and successors in interest,
and no other Person will be entitled to any of the benefits conferred by this
Agreement. Without the prior written consent of the other party, neither party
may assign any of its rights under this Agreement or delegate any of its duties
under this Agreement, except as described in the following sentence. Seller
agrees that Buyer will have the right to assign its right to purchase the Assets
under this Agreement to Norwest Bank Colorado, National Association, acting as a
Qualified Intermediary (as such term is used in Treas. Reg. Section 1.1031(k)-
1(g)(4), and that this Agreement constitutes notice to Seller of such
assignment, which assignment Buyer will make effective immediately prior to
Closing (provided no such assignment will relieve Buyer of any obligations under
this Agreement).
32
12.2 Notices. Any notice, request, demand, waiver or other
-------
communication required or permitted to be given under this Agreement will be in
writing and will be deemed to have been duly given only if delivered in person
or by first class, prepaid, registered or certified mail, or sent by courier or,
if receipt is confirmed, by telecopier:
To Buyer at:
c/o Tele-Communications, Inc.
0000 XXX Xxxxxxx
Xxxxxxxxx Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxx
Telecopy: (000) 000-0000
With a copy similarly addressed to the attention of Legal
Department, and
With a copy to:
Xxxxxxx & Xxxxxx LLC
000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telecopy: (000) 000-0000
To Seller at:
c/x Xxxxx Intercable, Inc.
0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: President
Telecopy: (000) 000-0000
With a copy similarly addressed to the attention of Legal
Department.
Any party may change the address to which notices are required to be sent by
giving notice of such change in the manner provided in this SECTION 12.2. All
notices will be deemed to have been received on the date of delivery, which in
the case of deliveries by telecopier will be the date of the sender's
confirmation, or on the third Business Day after mailing in accordance with this
Section, except that any notice of a change of address will be effective only
upon actual receipt.
33
12.3 Attorneys' Fees. In the event of any action or suit based
---------------
upon or arising out of any alleged breach by any party of any representation,
warranty, covenant or agreement contained in this Agreement, the prevailing
party will be entitled to recover reasonable attorneys' fees and other costs of
such action or suit from the other party.
12.4 Waiver. This Agreement or any of its provisions may not be
------
waived except in writing. The failure of any party to enforce any right arising
under this Agreement on one or more occasions will not operate as a waiver of
that or any other right on that or any other occasion.
12.5 Captions. The captions of this Agreement are for
--------
convenience only and do not constitute a part of this Agreement.
12.6 CHOICE OF LAW. THIS AGREEMENT AND THE RIGHTS OF THE PARTIES
-------------
UNDER IT WILL BE GOVERNED BY AND CONSTRUED IN ALL RESPECTS IN ACCORDANCE WITH
THE LAWS OF THE STATE OF COLORADO, WITHOUT REGARD TO THE CONFLICTS OF LAWS RULES
OF COLORADO.
12.7 Terms. Terms used with initial capital letters will have
-----
the meanings specified, applicable to both singular and plural forms, for all
purposes of this Agreement. The word "include" and derivatives of that word are
used in this Agreement in an illustrative sense rather than limiting sense.
12.8 Rights Cumulative. All rights and remedies of each of the
-----------------
parties under this Agreement will be cumulative, and the exercise of one or more
rights or remedies will not preclude the exercise of any other right or remedy
available under this Agreement or applicable law.
12.9 Further Actions. Seller and Buyer will execute and deliver
---------------
to the other, from time to time at or after the Closing, for no additional
consideration and at no additional cost to the requesting party, such further
assignments, certificates, instruments, records, or other documents, assurances
or things as may be reasonably necessary to give full effect to this Agreement
and to allow each party fully to enjoy and exercise the rights accorded and
acquired by it under this Agreement.
34
12.10 Time. Time is of the essence under this Agreement. If the
----
last day permitted for the giving of any notice or the performance of any act
required or permitted under this Agreement falls on a day which is not a
Business Day, the time for the giving of such notice or the performance of such
act will be extended to the next succeeding Business Day.
12.11 Late Payments. If either party fails to pay the other any
-------------
amounts when due under this Agreement, the amounts due will bear interest from
the due date to the date of payment at the annual rate publicly announced from
time to time by The Bank of New York as its prime rate (the "Prime Rate") plus
2%, adjusted as and when changes in the Prime Rate are made.
12.12 Counterparts. This Agreement may be executed in
------------
counterparts, each of which will be deemed an original.
12.13 Entire Agreement. This Agreement (including the Schedules
----------------
and Exhibits referred to in this Agreement, which are incorporated in and
constitute a part of this Agreement) and the Transaction Documents contain the
entire agreement of the parties and supersedes all prior oral or written
agreements and understandings with respect to the subject matter. This
Agreement may not be amended or modified except by a writing signed by the
parties.
12.14 Severability. Any term or provision of this Agreement which
------------
is invalid or unenforceable will be ineffective to the extent of such invalidity
or unenforceability without rendering invalid or unenforceable the remaining
rights of the Person intended to be benefitted by such provision or any other
provisions of this Agreement.
12.15 Construction. This Agreement has been negotiated by Buyer
------------
and Seller and their respective legal counsel, and legal or equitable principles
that might require the construction of this Agreement or any provision of this
Agreement against the party drafting this Agreement will not apply in any
construction or interpretation of this Agreement.
12.16 Expenses. Except as otherwise expressly provided in this
--------
Agreement, each party will pay all of its expenses, including attorneys' and
accountants' fees, in connection with the negotiation of this Agreement, the
performance of its obligations and the consummation of the transactions
contemplated by this Agreement.
35
12.17 Risk of Loss; Condemnation.
--------------------------
12.17.1 Seller will bear the risk of any loss or damage to
the Assets resulting from fire, theft or other casualty (except reasonable wear
and tear) at all times prior to the Closing. If any such loss or damage is
sufficiently substantial so as to preclude or prevent resumption of normal
operations of any material portion of a System or the replacement or restoration
of the lost or damaged property within 30 days from the occurrence of the event
resulting in such loss or damage, Seller will immediately notify Buyer in
writing of that fact and Buyer, at any time within 10 days after receipt of such
notice, may elect by written notice to Seller either (a) to waive such defect
and proceed toward consummation of the transaction in accordance with terms of
this Agreement or (b) terminate this Agreement. If Buyer elects to so terminate
this Agreement, Buyer and Seller will stand fully released and discharged of any
and all obligations under this Agreement. If Buyer elects to consummate the
transactions contemplated by this Agreement notwithstanding such loss or damage
and does so, there will be no adjustment in the consideration payable to Seller
on account of such loss or damage but all insurance proceeds payable as a result
of the occurrence of the event resulting in such loss or damage (to the extent
not used to replace or restore such lost or damaged property) will be delivered
by Seller to Buyer, or the rights to such proceeds will be assigned by Seller to
Buyer if not yet paid over to Seller.
12.17.2 If, prior to the Closing, any part of or interest in
the Assets is taken or condemned as a result of the exercise of the power of
eminent domain, or if a Governmental Authority having such power informs Seller
or Buyer that it intends to condemn all or any part of or interest in the Assets
(such event being called, in either case, a "Taking"), and such Taking involves
a material part of or interest in the Assets, then Buyer may terminate this
Agreement. If Buyer does not elect or have the right to terminate this
Agreement, then (a) Buyer will have the sole right, in the name of Seller, if
Buyer so elects, to negotiate for, claim, contest and receive all damages with
respect to the Taking, (b) Seller will be relieved of its obligation to convey
to Buyer the Assets or interests that are the subject of the Taking, (c) at the
Closing Seller will assign to Buyer all of Seller's rights to all damages
payable with respect to such Taking and will pay to Buyer all damages previously
paid to Seller with respect to the Taking and (d) following the Closing, Seller
will give Buyer such further assurances of such rights and assignment with
respect to the taking as Buyer may from time to time reasonably request.
36
The parties have executed this Agreement as of the day and year
first above written.
SELLER:
XXXXX CABLE INCOME FUND 1-A, LTD.
By: Xxxxx Intercable, Inc., its general partner
By: /s/ XXXXX X. X'XXXXX
____________________________________________
Name: Xxxxx X. X'Xxxxx
____________________________________________
Title: President
____________________________________________
BUYER:
TCI CABLEVISION OF GEORGIA, INC.
By: /s/ XXXXXXX X. XXXXXXXXXX
____________________________________________
Name: Xxxxxxx X. Xxxxxxxxxx
____________________________________________
Title: Vice President
____________________________________________
37
EXHIBIT A
to the Asset Purchase Agreement between Xxxxx Cable Income Fund 1-A, Ltd.
and TCI Cablevision of Georgia, Inc.
XXXX OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT
This Xxxx of Sale, Assignment and Assumption Agreement (this
"Assignment") is dated as of ____________, 1997 and entered into by Xxxxx Cable
Income Fund 1-A, Ltd., a Colorado limited partnership ("Seller"), and TCI
Cablevision of Georgia, Inc., a Georgia corporation ("Buyer").
This Assignment is entered into pursuant to the terms of the Asset
Purchase Agreement dated as of November 8, 1996 by and between Seller and Buyer
(the "Agreement"). Capitalized terms not otherwise defined in this Assignment
will have the meanings given to such terms in the Agreement.
For valuable consideration, the receipt and sufficiency of which are
acknowledged, and subject to the terms and conditions of the Agreement, (i)
Seller grants, bargains, sells, transfers, assigns and conveys to Buyer, its
successors and assigns, all of the right, title and interest of Seller in and to
the Assets, and (ii) Buyer assumes and agrees to observe, comply with, and
perform in accordance with the terms of each, the Assumed Liabilities. Buyer
does not assume or have any responsibility for any liabilities or obligations
associated with the Excluded Assets.
Seller reasserts the representations and warranties pertaining to the
Assets that are contained in the Agreement, all of which representations and
warranties are incorporated herein by this reference as if set forth in full
herein, subject to the limitations set forth in the Agreement regarding the
survival of, and the liability for breach of, such representations and
warranties.
Specifically excluded from this Assignment is any right, title or
interest which is by law or contract non-assignable without the consent of the
other party or parties thereto, unless and until such consent has been given, at
which time the assignment of such right, title or interest will be automatically
effective.
This Assignment may be executed simultaneously in any number of
counterparts, each of which will be deemed an original, but all of which
together constitute one and the same instrument.
This Assignment will be governed by and construed in accordance with
the internal laws, and not the laws of conflicts, of the State of Colorado.
A-1
The undersigned have executed this Agreement as of the date first
written above.
SELLER:
Xxxxx Cable Income Fund 1-A, Ltd.
By: Xxxxx Intercable, Inc., its general partner
By: __________________________________________
Name: __________________________________________
Title: __________________________________________
BUYER:
TCI Cablevision of Georgia, Inc.
By: __________________________________________
Name: __________________________________________
Title: __________________________________________
A-2
EXHIBIT B
to the Asset Purchase Agreement between Xxxxx Cable Income Fund 1-A, Ltd.
and TCI Cablevision of Georgia, Inc.
ASSIGNMENT AND ASSUMPTION OF CONTRACTS [AND CONSENT]
This Assignment and Assumption of Contracts [and Consent] (this
"Assignment") is made as of ________, 1997 among Xxxxx Cable Income Fund 1-A,
Ltd., a Colorado limited partnership ("Seller"), and TCI Cablevision of Georgia,
Inc., a Georgia corporation ("Buyer"), and [IF APPLICABLE, APPROPRIATE
CONTRACTING PARTY ("CONSENTING PARTY")].
RECITALS
--------
1. This Assignment is entered into pursuant to the terms of the Assets
Purchase Agreement dated as of November 8, 1996 by and between Seller and Buyer
(the "Agreement"). Capitalized terms not otherwise defined in this Assignment
will have the meanings given to such terms in the Agreement.
2. [CONSENTING PARTY/NAME OF CONTRACTING PARTY] and Seller are parties
to a (DESCRIBE AGREEMENT) dated __________________ [AND RECORDED ON ____________
IN __________________ OF THE OFFICIAL RECORDS OF __________ COUNTY, OREGON] (the
"Assigned Agreement") for __________________________, which Assigned Agreement
is being assigned to Buyer, [WITH THE CONSENT OF THE CONSENTING PARTY], pursuant
to the terms of the Agreement. A copy of the Assigned Agreement is attached as
Attachment A.
ASSIGNMENT
----------
For valuable consideration, the receipt and sufficiency of which are
acknowledged, subject to the terms and conditions of the Agreement, Seller
assigns, transfer, sells and conveys to Buyer, all of Seller's right, title and
interest in, to and under the Assigned Agreement, and Buyer assumes and agrees
to observe, comply with, and perform in accordance with the terms of, the
Assigned Agreement for all periods from and after consummation of the Closing.
[ADD THE FOLLOWING FOR THOSE CONTRACTS REQUIRING CONSENTING PARTY CONSENT:
CONSENTING PARTY HEREBY CONFIRMS THAT (I) THE ASSIGNED AGREEMENT IS VALID AND IN
FULL FORCE AND EFFECT, (II) IT REPRESENTS THE ENTIRE UNDERSTANDING OF THE
PARTIES THERETO, AND (III) CONSENTING PARTY IS NOT AWARE OF ANY FACT OR
CIRCUMSTANCE WHICH CONSTITUTES A DEFAULT OR BREACH UNDER THE ASSIGNED
AGREEMENT. CONSENTING PARTY HEREBY CONSENTS TO THE ASSIGNMENT AND TRANSFER OF
THE ASSIGNED AGREEMENT BY SELLER TO BUYER, EFFECTIVE UPON CONSUMMATION OF THE
CLOSING.]
B-1
Nothing in this Assignment is intended to modify, amend or alter in
any respect the rights and obligations of the parties under the Agreement or the
Assigned Agreement, which will remain in full force and effect notwithstanding
the execution and delivery of this Assignment.
This Assignment may be executed in any number of counterparts which
together will constitute a fully executed agreement.
This Assignment will be governed by and construed in accordance with
the internal laws, and not the laws of conflicts, of the State of Colorado.
The undersigned have executed this Assignment and Assumption of
Contracts effective as of the date first written above.
SELLER:
XXXXX CABLE INCOME FUND 1-A, LTD.
By: Xxxxx Intercable, Inc., its general partner
By: ___________________________________________
Name: ___________________________________________
Title: ___________________________________________
BUYER:
TCI CABLEVISION OF GEORGIA, INC.
By: ___________________________________________
Name: ___________________________________________
Title: ___________________________________________
[CONSENTING PARTY:]
_______________________________________________________
By: ___________________________________________
Name: ___________________________________________
Title: __________________________________________]
[NOTE: IF TO BE RECORDED, ADD APPROPRIATE, ACKNOWLEDGMENT FORMS.]
B-2
EXHIBIT C
to the Asset Purchase Agreement between Xxxxx Cable Income Fund 1-A, Ltd.
and TCI Cablevision of Georgia, Inc.
[NOTE: ADD CONSENT PROVISIONS (SIMILAR TO EXHIBIT B) IF REQUIRED BY LEASE AND
NOT OBTAINED IN SEPARATE DOCUMENT.]
ASSIGNMENT OF LEASES
(For Recordation in County Records)
This Assignment of Leases (this "Assignment") is made as of _________,
1997 by Xxxxx Cable Income Fund 1-A, Ltd., a Colorado limited partnership
("Seller"), in favor of TCI Cablevision of Georgia, Inc., a Georgia corporation
("Buyer").
RECITALS
--------
A. This Assignment is entered into pursuant to the terms of the Asset
Purchase Agreement dated as of November 8, 1996 by and between Buyer and Seller
(the "Agreement"). Capitalized terms not otherwise defined in this Assignment
will have the meanings given to such terms in the Agreement.
B. ____________, as lessor, and Seller, as lessee, are parties to a
lease agreement dated as of ____________, 19__ [as amended ___________, 19__]
(the "Lease") for the demise of the premises located at [INSERT STREET ADDRESS
AND COUNTY], which Lease is being assigned to Buyer pursuant to the terms of the
Agreement. The legal description of the premises subject to the Lease is
attached hereto as Schedule I.
ASSIGNMENT
----------
For valuable consideration, the receipt and sufficiency of which are
acknowledged, Seller assigns, transfers, sells, conveys and sets over to Buyer,
all of Seller's right, title and interest in, to and under the Lease.
Seller reasserts the representations and warranties pertaining to the
Lease which are contained in the Agreement, all of which representations and
warranties are incorporated herein by this reference as if set forth in full
herein, subject to the limitations set forth in the Agreement regarding the
survival of, and the liability for breach of, such representations and
warranties.
Specifically excluded from this Assignment is any right, title or
interest which is by law or contract non-assignable without the consent of the
other party or parties thereto, unless and until such consent has been given,
whereupon the assignment of such right, title or interest will be automatically
effective.
C-1
IN WITNESS WHEREOF, the undersigned has executed this Assignment of
Leases effective as of the date first written above.
SELLER:
Xxxxx Cable Income Fund 1-A, Ltd.
By: Xxxxx Intercable, Inc., its
general partner
By: _________________________________
Name: _________________________________
Title: _________________________________
STATE OF _______________ )
)
COUNTY OF ______________ )
BEFORE ME, the undersigned authority, a Notary Public, on this day
personally appeared _______________________, known to me to be the person and
officer whose name is subscribed to the foregoing instrument and acknowledged to
me that the same was the act of Xxxxx Intercable, Inc., a Colorado corporation,
as general partner of Xxxxx Cable Income Fund 1-A, Ltd., and that [s]he
executed the same as the act of such corporation as general partner of Xxxxx
Cable Income Fund 1-A, Ltd., for the purposes and consideration therein
expressed, and in the capacity therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this ____ day of ____________,
1997.
___________________________________
Notary Public, State of ___________
___________________________________
(printed name)
My commission expires:
____________
C-2
EXHIBIT D
to the Asset Purchase Agreement between Xxxxx Cable Income Fund 1-A, Ltd.
and TCI Cablevision of Georgia, Inc.
GUARANTY
--------
FOR VALUE RECEIVED, and in order to induce TCI Cablevision of Georgia,
Inc. ("Buyer"), to consummate the transactions contemplated by the Asset
Purchase Agreement, dated as of November 8, 1996 (the "Agreement"), between
Buyer and Xxxxx Cable Income Fund 1-A, Ltd. ("Seller"), Xxxxx Intercable, Inc.
("Guarantor"), agrees as follows:
1. Definitions. Capitalized terms used herein, unless otherwise
-----------
defined herein, will have the meanings ascribed to them in the
Agreement.
2. Representations and Warranties of Guarantor. Guarantor represents
-------------------------------------------
and warrants to Buyer as follows:
a. Guarantor is a corporation duly formed, validly existing and
in good standing under the laws of the State of Colorado,
and has all requisite power and authority to own and operate
its properties and to carry on its business as currently
conducted.
b. The executed and delivery by Guarantor of this Guaranty and
the performance by Guarantor of its obligations under this
Guaranty:
i. Are within Guarantor's corporate power and authority;
ii. Have been duly authorized by all necessary
corporate action of Guarantor;
iii. Have received all necessary governmental approval, if
any is required; and
iv. Do not and will not contravene or conflict with
any provision of any law, regulation or rule, the
Articles of Incorporation or Bylaws of Guarantor,
any license, agreement, or instrument to which
Guarantor is a party or by which Guarantor or any
of Guarantor's property may be bound or affected,
or any judgment, order or decree of any court or
any federal, state, or local commission, board, or
other administrative agency by
D-1
which Guarantor or any of Guarantor's property may
be bound or affected.
c. This Guaranty is the legal, valid, and binding obligation of
Guarantor, enforceable against Guarantor in accordance with
its terms, except as the same may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or
similar laws now or hereafter in effect relating to the
enforcement of creditors' rights generally or by principles
governing the availability of equitable remedies.
3. Guaranty. Guarantor hereby absolutely, irrevocably and
--------
unconditionally guaranties (i) the performance by Seller when due of
all covenants, agreements, and obligations of every nature under the
Agreement and (ii) subject only to the limitations thereon
specifically set forth in the Agreement, the accuracy and completeness
of all representations and warranties of Seller under the Agreement.
Without limiting the generality of the foregoing, Guarantor
hereby absolutely, irrevocably and unconditionally guaranties any and
all of Seller's indemnification obligations under Section 11 of the
Agreement, including without limitation the full and prompt payment
when due of any and all monies which may become due or payable at any
time under or pursuant to such indemnification provisions, but subject
to the specific limitations on such indemnification obligations set
forth in Section 11 of the Agreement, including without limitation
those described in Section 11.5 (the "Limitations"). (The performance
and indemnification obligations of Seller under the Agreement, as the
same are subject to the Limitations, are herein, individually and
collectively, referred to as the "Obligations".) Guarantor further
agrees that the following terms and conditions will apply to this
Guaranty:
a. This Guaranty is in all respects continuing, absolute, and
unconditional.
b. This Guaranty is a guaranty of both performance and payment
when due, and not of collection.
c. Buyer may, from time to time, at Buyer's sole discretion and
with out notice to Guarantor, take any or all of the
following actions:
i. Obtain or accept a security interest in any property to
secure payment of any or all of the Obligations;
ii. Obtain the primary or secondary obligation of any third
party in addition to Guarantor with respect to any or
all of the Obligations;
iii. Release, compromise, extend, alter, or modify any of
the Obligation or any obligation of any nature of any
other obligor with respect to any of the Obligations;
D-2
iv. Release, compromise, or extend any obligation
of Guarantor hereunder;
v. Release any security interest in, or
surrender, release, or permit any
substitution or exchange for, all or any part
of any property securing any of the
Obligations or any obligation hereunder, or
release, compromise, extend, alter, or
modify any obligation of any nature of any
obligor with respect to any such property;
and
vi. Resort to or proceed against Guarantor for
performance or payment of any of the
Obligations whether or not Buyer has
proceeded against Seller or any other obligor
primarily or secondarily obligated with
respect to any of the Obligations, has
resorted to any property securing any of the
Obligations, has resorted to any property
securing any of the Obligations or any
obligation hereunder, or has pursued any
other remedy.
d. As between Buyer and Guarantor, any amounts
received by Buyer from whatsoever source on
account of any Obligation (arising by whatever
means) may be applied by Buyer towards the payment
of any Obligation then due and payable, in such
order of application as Buyer may from time to
time elect; and, notwithstanding any performance
or payments made by or for the account of
Guarantor pursuant to this Guaranty, Guarantor
will not be subrogated to any rights of Buyer
until such time as Buyer has received performance
and payment in full of all of the Obligations and
performance of all obligations of Guarantor
hereunder. Without limiting the generality of the
foregoing, Guarantor agrees and acknowledge that
if Buyer is required at any time to return all or
any part of any payment applied by Buyer to the
payment of the Obligations or any costs or
expenses covered by this Guaranty, whether by
virtue of the insolvency, bankruptcy, or
reorganization of the Seller or otherwise, the
Obligations to which the returned payment was
applied will be deemed to have continued in
existence and this Guaranty will continue to be
effective or to be reinstated, as the case may be,
as to such Obligations, as though such payment had
not been received and such application by Buyer
had not been made.
e. Guarantor hereby expressly waives: (i) notice of
the acceptance by Buyer of this Guaranty; (ii)
notice of the existence, creation, release,
compromise, extension, alteration, modification,
non-performance, or non-payment of any or all of
the Obligations; (iii) presentment, demand, notice
of dishonor, protest and all other notices
whatsoever; and (iv) all diligence in collection
of or realization upon any payments on, or
assurance of performance of, any of the
Obligations or any obligation hereunder, or in
collection on, realization upon, or protection of
any security for, or guaranty of, any of the
Obligations or any obligation hereunder.
D-3
4. Notices. All notices and communications under this Guaranty will be
-------
in writing and will be deemed to have been duly given when delivered by
messenger, by overnight delivery service, or by facsimile (receipt
confirmed), or mailed by first class certified mail, return receipt
requested; if to Guarantor addressed to Seller's address set forth in the
Agreement; and if to Buyer, addressed to Buyer's address set forth in the
Agreement; or in each case to such other address respectively as the party
has specified by notice to the other.
5. Integration, Assignment, MOdification, Payment of Expenses and
--------------------------------------------------------------
Construction. This Guaranty constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes any prior
written or oral agreements between Guarantor and Buyer. This Guaranty may
not be assigned by either party without the prior written consent of the
other party. Subject to the foregoing, this Guaranty will inure to the
benefit of Buyer, and be binding upon Guarantor, and their respective
successors and assigns. This Guaranty may be amended or modified only by a
writing signed by Guarantor and Buyer, an Buyer and Guarantor will each pay
its own costs and expenses in connection with the negotiation and execution
of this Guaranty. Guarantor agrees to pay all of Buyer's expenses
(including, without limitation, costs expenses of litigation and reasonable
attorneys' fees) in enforcing or endeavoring to realize upon this Guaranty
or in endeavoring to collect any amount payable under this Guaranty which
is not paid when due. The unenforceability or invalidity of any provision
of this Guaranty or the Agreement will not affect the validity of the
remainder of this Guaranty.
6. Waiver. The failure of Buyer to insist upon strict performance of
------
any of the terms, conditions, agreements, or covenants in this Guaranty in
any one or more instances will not be deemed to be a waiver by Buyer of its
rights to enforce thereafter any of such terms, conditions, agreements, or
covenants. Any waiver by Buyer of any of the terms, conditions, agreements,
or covenants in this Guaranty must be in writing signed by Buyer.
7. Applicable Law. This Guaranty will be governed by, and constructed
--------------
and interpreted in accordance with, the internal laws of the State of
Colorado, without regard to the conflicts of laws rules of such state.
8. Section Headings. The section headings used in this Guaranty are
----------------
for the convenience of Buyer and Guarantor only and will not affect the
construction or interpretation of the provisions of this Guaranty.
D-4
Guarantor has caused this Guaranty to be executed by a duly authorized
officer as of _______________, 1997.
XXXXX INTERCABLE, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
D-5
EXHIBIT E
to the Asset Purchase Agreement between Xxxxx Cable Income Fund 1-A,
Ltd. and TCI Cable visions of Georgia, Inc.
DATE
[Programmer name and address]
Dear ______________:
The purpose of this letter is to inform you of he impending sale
of cable television systems in the City of Milwaukie, Oregon now owned by Xxxxx
Cable Income Fund 1-A, Ltd. ("Seller") to TCI Cablevision of Georgia, Inc.
("Buyer"). Neither Buyer not its affiliate Satellite Services, Inc. ("SSI") will
assume programming contract of Xxxxx Programming Services, Inc. currently in
place to serve the systems described herein. This is not a notice deleting your
programming from these systems; SSI will contact you about continuation of
coverage of your service.
Very truly yours,
Xxxxx Cable Income Fund 1-A, Ltd
By: Xxxxx Intercable, Inc., its general partner
By: _________________________________________
Name: _________________________________________
Title: _________________________________________
E-1
EXHIBIT F
to the Asset Purchase Agreement between Xxxxx Cable Income Fund 1-A, Ltd.
and TCI Cablevision of Georgia, Inc.
AFFIDAVIT
STATE OF _______________________
COUNTY OF ______________________
This Affidavit is delivered pursuant to the Asset Purchase Agreement
dated as of November 8, 1996 between Xxxxx Cable Income Fund 1-A, Ltd., a
Colorado limited partnership ("Seller") and TCI Cablevision of Georgia, Inc., a
Georgia corporation ("Buyer"). Section 1445 of the United States Internal
Revenue Code of 1986, as amended ("IRC"), provides that a transferee of a United
States real property interest must withhold tax if the transferor is a foreign
person. The undersigned, being the duly elected____________of the general
partner of Seller and being duly sworn, certifies and agrees on behalf of Seller
as follows:
1. Seller is not a foreign person, foreign corporation, foreign
partnership, foreign trust, or foreign estate (as those terms are defined in the
IRC and the regulations promulgated thereunder).
2. Seller's U.S. taxpayer identification number is _______________.
3. Seller understands that this certification may be disclosed to
the Internal Revenue Service.
4. Seller hereby agrees to indemnify and hold harmless Buyer and
Buyer's partners and agents of, from and against any and all loss, liability,
interest, penalties, costs, damages, claims or causes of action which may arise
or be incurred by Buyer or Buyer's agents by reason of any failure of any
representation or warranty made in this Affidavit to be true and correct in all
respects, including but not limited to any liability for failure to withhold any
amount required under IRC (S)1445.
F-1
Dated this ______day of ___________________1997.
SELLER:
Xxxxx Cable Income Fund 1-A, Ltd.
By: Xxxxx Intercable, Inc., its general partner
By: ____________________________________________
Name: ____________________________________________
Title:____________________________________________
Subscribed and sworn to before me this ______day of_____________1997.
____________________________________
NOTARY PUBLIC
Notary Public in and for the State of ___________residing at ______________ My
commission expires:______________________.
F-2
EXHIBIT G
to the Asset Purchase Agreement between Xxxxx Cable Income Fund 1-A, Ltd.
and TCI Cablevision of Georgia, Inc.
OPINION OF SELLER'S COUNSEL
TCI Cablevision of Georgia, Inc.
c/o TCI Communications, Inc.
0000 XXX Xxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
I have acted as counsel for Xxxxx Cable Income Fund 1-A, Ltd., a
Colorado limited partnership ("Seller") and Xxxxx Intercable, Inc., a Colorado
corporation ("Intercable"), in connection with the transactions contemplated by
the Asset Purchase Agreement dated as of November 8, 1996 (the "Agreement"),
between Seller and TCI Cablevision of Georgia, Inc., a Georgia corporation
("Buyer"). Capitalized terms used and not otherwise defined herein will have
the respective meanings ascribed to such terms in the Agreement.
[MUTUALLY AGREED UPON INTRODUCTORY LANGUAGE TO BE INSERTED.]
Based on the foregoing, and on the assumptions herein set forth, and
subject to the exceptions, limitations and qualifications herein expressed, it
is my opinion that:
1. Seller is a limited partnership validly existing under the laws
of the State of Colorado and qualified to do business as a foreign limited
partnership under the laws of the State of Oregon. Seller has all requisite
partnership power and authority to own and lease the Assets and to carry on the
Business as such business is currently conducted.
2. Intercable is a corporation duly organized, validly existing and
in good standing under the laws of the State of Colorado. Intercable has
requisite corporate power and authority to own and lease its assets and to carry
on its business as currently conducted.
3. Seller and Intercable each has all requisite partnership or
corporate power and authority to execute and deliver the Transaction Documents
to which it is a party, to consummate the transactions contemplated thereby and
to perform all terms and conditions of the Transaction Documents to be performed
by it.
G-1
4. The execution and delivery of the Transaction Documents to which
it is a party by Seller and Intercable, the performance by Seller and Intercable
of all the terms and conditions thereof to be performed by it, and the
consummation of the transactions contemplated thereby have been duly authorized
and approved by the board of directors of Intercable and no other partnership or
corporate proceedings of Seller or its partners or Intercable are necessary with
respect thereto.
5. Each of the Transaction Documents has been duly executed and
delivered by Seller or Intercable, as applicable, and constitutes the legal,
valid and binding obligation of such party, enforceable against such party in
accordance with its terms, except insofar as enforceability may be limited or
affected by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws availability of equitable remedies.
6. Except for the Required Consents, the execution, delivery and
performance by Seller and Intercable of the Transaction Documents to which it is
a party do not (a) violate any charter or bylaws of Intercable, (b) violate any
Legal Requirement (except for those violations which would not, individually or
in the aggregate, have a material adverse effect on any System, the Business or
Seller), (c) require any consent, approval, filing, application or notice under
any Legal Requirement applicable to the Assets or the Business or (d) (i)
violate or constitute a breach of or default under (with or without the giving
of notice or the lapse of time, or both), (ii) permit or result in the
termination, suspension or modification of any provision of, (iii) result in the
acceleration of (or give any Person the right to accelerate) the performance of
Seller under, or (iv) result in the creation or imposition of any Encumbrance
upon any Asset under, any Seller Contract or other instrument evidencing any of
the Assets or by which Seller or any of its assets is bound, except for purposes
of this clause (d), such violations, breaches, defaults, terminations,
suspensions, modifications and accelerations which would not, individually or in
the aggregate, have a material adverse effect on any System, the Business or
Seller or on the ability of Seller to perform its obligations under the
Agreement or the Transaction Documents to which Seller is a party.
7. to the best of my knowledge, there is not pending (excluding
actions not served) or overtly threatened, any judicial, administrative or
arbitral action, suit, proceeding or claim against or investigation of Seller or
Intercable which questions the validity of any of the Transaction Documents.
8. To the best of my knowledge, except as set forth on SCHEDULE
5.13 to the Agreement and except for proceedings affecting the cable television
industry generally, there is no unsatisfied judgment or order outstanding, or
any action, proceeding, or investigation pending or threatened in any court or
quasi-judicial or administrative agency against Seller with respect to or
involving all or any part of the Business or the Assets.
G-2
[MUTUALLY AGREED UPON CLOSING LANGUAGE TO BE ADDED]
Sincerely,
G-3
EXHIBIT H
to the Asset Purchase Agreement between Xxxxx Cable Income Fund 1-A, Ltd.
and TCI Cablevision of Georgia, Inc.
OPINION OF BUYER'S COUNSEL
Xxxxx Cable Income Fund 1-A, Ltd.
0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
I have acted as counsel for TCI Cablevision of Georgia, Inc., a
Georgia corporation ("Buyer"), in connection with the transactions contemplated
by the Asset Purchase Agreement dated as of November 8, 1996 (the "Agreement'),
between Xxxxx Cable Income Fund 1-A, Ltd., a Colorado limited partnership
("Seller"), and Buyer. Capitalized terms used and not otherwise defined herein
will have the respective meanings ascribed to such terms in the Agreement.
[MUTUALLY AGREED UPON INTRODUCTORY LANGUAGE TO BE INSERTED.]
Based on the foregoing, and on the assumptions herein set forth, and
subject to the exceptions, limitations and qualifications herein above
expressed, it is my opinion that:
1. Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of Georgia. Buyer has all requisite
corporate power and authority to own and lease its assets and to carry on its
business as currently conducted.
2. Buyer has all requisite corporate power and authority to execute
and deliver the Transaction Documents to which it is a party, to consummate the
transactions contemplated thereby and to perform all terms and conditions of the
Transaction Documents to be performed by it.
3. The execution and delivery of the Transaction Documents by Buyer,
the performance by Buyer of all the terms and conditions thereof to be performed
by it, and the consummation of the transactions contemplated thereby have been
duly authorized and approved by its board of directors and no other corporate
proceedings of Buyer are necessary with respect thereto.
4. Each of the Transaction Documents to which Buyer is a party has
been duly executed and delivered by Buyer and constitutes the legal, valid
binding obligation of Buyer,
H-1
enforceble against Buyer in accordance with its terms, except insofar as
enforceability may be limited or affected by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws now or hereafter in effect affecting
creditors' rights generally or by principles governing the availability of
equitable remedies.
5. Except for the Required Consents, the execution, delivery and
performance by Buyer of the Transaction Documents to which it is a party do not
(a) violate any provision of the charter or bylaws of Buyer, (b) violate any
Legal Requirement applicable to Buyer but not related to or arising as a result
of ownership or operation of the Assets (except for those violations which would
not, individually or in the aggregate, have a material adverse effect on Buyer)
or (c) (i) violate or constitute a breach of or default under (with or without
the giving of notice or the lapse of time, or both), (ii) permit or result in
the termination, suspension or modification of any provision of, or (iii) result
in the acceleration of (or give any Person the right to accelerate) the
performance of Buyer under, any contract by which Seller or any of its assets is
bound, except for purposes of this clause (c), such violations, breaches,
defaults, terminations, suspensions, modifications and accelerations which would
not individually or in the aggregate, have a material adverse effect on the
ability of Buyer to perform its obligations under the Agreement or the
Transaction Documents to which Buyer is a party.
6. To the best of my knowledge, there is not pending (excluding
actions not served) or overtly threatened, any judicial, administrative or
arbitral action, suit, proceeding or claim against or investigation of Buyer
which questions the validity of any of the Transaction Documents.
7. To the best of my knowledge, except for proceedings affecting the
cable television industry generally, there is no unsatisfied judgment or order
outstanding, or any action, proceeding, or investigation pending or threatened
in any court or quasi-judicial or administrative agency against Buyer which, if
adversely determined, would restrain or enjoin the consummation of, or have a
material adverse effect on the ability of Buyer to consummate, the transactions
contemplated by the Agreement.
Sincerely,
H-2
