Exhibit 10.1
Asset Purchase Agreement (Chattanooga Regional Interconnect, Inc.)
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") made and entered into
as of May 29, 1998, by and among AVALON XXXXXX COMPANIES, INC., a Delaware
corporation (hereinafter referred to as the "Purchaser") and CHATTANOOGA
REGIONAL INTERCONNECT, INC., a Tennessee corporation (hereinafter referred to as
the "Seller").
WITNESSETH
WHEREAS, Seller desires to sell to Purchaser, and Purchaser desires to
purchase and acquire substantially all of the assets of Seller's cable
ad-insertion turn-key business located in Chattanooga, Tennessee (the "Seller's
Business") as more fully set forth below, including the use of the name
Chattanooga Regional Interconnect, all upon the terms and subject to the
condition hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the contemplated payment by Purchaser to Seller of the
Purchase Price (as hereinafter defined), and other good and valuable
consideration, the receipt and sufficiency of all which are hereby acknowledged,
the parties hereby agree as follows:
ARTICLE 1.
TERMS OF THE SALES AND PURCHASE OF ASSETS
Section 1.1 PURCHASE OF ASSETS AND ASSUMED LIABILITIES; ACCOUNTS
RECEIVABLE.
(a) PURCHASE AND SALE OF ASSETS. Subject to the terms and conditions
set forth in Section 1.5, Seller hereby agrees to sell to Purchaser, and
Purchaser hereby agrees to purchase from Seller, on or before May 29, 1998 (the
"Closing Date"), unless extended by mutual consent of the parties, with such
sell to be effective as of June 2, 1998 (the "Effective Date"), the assets of
Seller (except as otherwise provided herein)(collectively, the "Assets"),
including without limitation the following items:
(i) Seller's tangible personal property and other assets used in
connection with the Seller's Business (except as otherwise provided
herein)(such as machinery, equipment, inventories, parts and supplies,
furniture and furnishings) including those properties and assets set
forth on SCHEDULE 1.1(a)(i) attached hereto;
(ii) all contracts and agreements identified on SCHEDULE
1.1(a)(ii) attached hereto (excluding this Agreement and the
agreements, documents and instruments executed and delivered by Seller
pursuant to this Agreement), expressly including any and all cash or
other deposits required under the contracts and agreements, including
the deposit required under the Helicon contract;
(iii) all Accounts Receivable, as defined herein, of Seller as of
the Closing Date, including any pre-billed yet unaired Advertising time
relating in any way to Seller's Business;
(iv) Seller's intangible property used in connection with
Seller's Business, including Seller's trade name "Chattanooga Regional
Interconnect" and any trademarks, copyrights or other rights related to
such trade name;
(v) subject to applicable Laws, the transferable Licenses and
Approvals necessary for or incident to the operation of the Assets; and
(vi) the books and records of Seller relating to the Assets,
including any and all Accounts Receivable, aging and collection history
reports, all of which shall be delivered to Purchaser's designee at the
Closing.
(b) EXCLUDED ASSETS. There shall be excluded from the Assets to be
transferred and conveyed hereunder, and Seller shall retain all of its right,
title and interest in the corporate charters and other constituent documents of
Seller, qualifications to conduct business as a corporation, taxpayer and other
identification numbers, seals, minute books, stock transfer or partnership
transfer books and other documents relating to the organization, maintenance and
existence of Seller as a corporation, partnership or other entity, all
considerations delivered to Seller by Purchaser on the Closing Date.
Section 1.2 PURCHASE PRICE. In exchange for the sale of the Assets,
Purchaser will assume the Assumed Liabilities and provide the following
additional consideration:
(a) CASH CONSIDERATION. At the Closing, Purchaser will pay Seller the
total sum of Six Hundred Thousand Dollars ($600,000.00) less any and all
payments received by Seller as of the Closing Date for goods or services not
shipped or performed as of the Closing Date, and as listed and described on
Schedule 1.2(a)(i) attached hereto (the "Prepaid Receivables")(the "Purchase
Price") in the form of Three Hundred Thousand Dollars ($300,000.00) less the
Prepaid Receivables, in Cash or certified funds, and a Promissory Note with a
principal amount of Three Hundred Thousand Dollars ($300,000.00), the form of
which is attached hereto as SCHEDULE 1.2(a)(ii).
(b) ASSUMED LIABILITIES. Subject to Section 1.3 and 1.8 of this
Agreement, at the Closing Purchaser shall assume, and agrees to discharge,
Seller's obligations with respect to, all of the contracts, agreements, leases,
commitments, liabilities and obligations which are specifically set forth on
SCHEDULE 1.2(b) attached, hereto, except to the extent such items are excluded
by virtue of the operation of other provisions of this Agreement (the "Assumed
Liabilities"). Notwithstanding the foregoing, Purchaser shall not be deemed to
assume any liability which may be incurred prior to the Closing Date by reason
of any breach of or default under any of the Assumed Liabilities or act or
omission which could, with the passage of time, create a breach or default under
any such Assumed Liabilities.
(c) ALLOCATION OF PURCHASE PRICE. The Purchase Price shall be allocated
among the Assets as set forth on SCHEDULE 1.2(c) attached hereto.
Section 1.3 LIABILITIES NOT ASSUMED BY THE PURCHASER. Except for the
Assumed Liabilities. Purchaser shall not be deemed to assume any liability of
Seller whatsoever. Without limiting the generality of the foregoing. Purchaser
shall not be deemed to have assumed, nor shall Purchaser assume, except to the
extent expressly included in the Assumed Liabilities, any liability for or the
payment of
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(i) any liability based upon or arising out of any tortuous or wrongful actions
of Seller; (ii) any taxes of Seller arising out of any and all transactions
occurring on or prior to the Closing Date; (iii) any taxed of Seller arising in
connection with the transactions contemplated by this Agreement; (iv) any taxes
relating in any way to the Assets arising, accruing or due prior to or after the
Closing Date that arise from or relate in any way to Seller's ownership of the
Assets; (v) except with respect to employees listed on SCHEDULE 1.4(a) attached
hereto, any salary, wage, benefit, bonus, vacation pay, sick leave, insurance,
employment tax or similar liability of Seller to any employee, officer, director
or other person or entity attributable to services performed on or prior to the
execution and delivery of this Agreement; (vi) any obligation of Seller to the
Shareholders; (vii) any liabilities arising in connection with Seller's business
which is not included in the Assumed Liabilities; (viii) for any contributions
or otherwise, for any of the Employee Plans (as defined in Section 2.11) for the
benefit of Seller's employees, officers or directors except as set forth on
Schedule 1.4 (a); and (ix) any obligation or liability arising in any way under
Seller's national Cable Corporation contract.
Section 1.4 EMPLOYEES.
(a) EMPLOYMENT. As of the Closing Date, Purchaser shall offer
employment, as employees-at-will, to those employees of Seller who are
identified on SCHEDULE 1.4(a) attached hereto together with their current
salary or wages.
(b) TERMINATION/TRANSFER. As of the Effective Date, Seller will (i)
terminate any applicable employment contract of individuals who are to be
employed by Purchaser pursuant to Section 1.4(a); (ii) terminate the
participation of all such employees in all of the Employee Plans (as defined in
Section 2.11) and/or transfer the assets contained in any Employee Plans to any
employee plan required to be continued or established by Purchaser for the
benefit of any employees hired by Purchaser, and obtain any and all necessary
consents for such transfer, in accordance with all Laws, including, without
limitation, the provisions of the Internal Revenue code of 1986, as amended
("Code"), and the Employee Retirement Income Security Act of 1974, as amended
("ERISA"); (iii) cause the Employee Plans to make timely, appropriate
distributions and/or transfers, to the extent required, to such employees or new
employee plans in accordance with such Employee Plans and/or any and all Laws,
including, without limitation, the Code and ERISA; and (iv) provide Purchaser
with copies of documents and other information related to the foregoing matters
as Purchaser may request.
Section 1.5 ACTIONS TO BE TAKEN AT CLOSING.
(a) PURCHASER. Subject to the terms and conditions set forth in this
Agreement, contemporaneously with the execution and delivery hereof, Purchaser
has delivered the Purchase Price.
(b) SELLER. Subject to the terms and conditions set forth in this
Agreement, it is agreed that at the Closing, Seller has delivered or caused to
be delivered to Purchaser;
(i) All such bills of sale and other documents or instruments of
conveyance, transfer or assignment (including a statutory warranty deed
in the event of a sale of any real estate) as shall be necessary or
appropriate to vest in or confirm to Purchaser all of Seller's right,
title and
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interest in and to the Assets, free and clear of all liens, charges and
encumbrances, except for the Assumed Liabilities;
(ii) all original invoices and receipts for all Assets;
(iii) certified resolutions duly adopted by Seller and written
consent of the Shareholders, authorized and adopting this Agreement and
the sale, transfer and transactions provided for herein;
(iv) certificates, consents, estoppel letters, right of first
refusal waivers (as listed and described on SCHEDULE 1.7 and other
documents reasonably required by Purchaser executed and delivered by
all persons and entities necessary to authorize or complete the
transactions contemplated by herein;
(v) certified copy of Seller's constituent documents and
certificates of good standing of Seller in the State;
(vi) copies of all licenses, license applications and
communications with all applicable licensing or regulatory bodies;
(vii) certified copies of any certificate of need, license,
variance, certificate, registration or other governmental approval,
process, determination or notification necessary or appropriate for the
transfer to Purchaser and the operation of the Assets subsequent to the
Effective Date (collectively, the "Licenses and Approvals");
(viii) the designation and appointment of Purchaser, its
successors and assigns, by Seller as the true and lawful
attorneys-in-fact for Seller, with full power of substitution, in the
name of the Seller in the form attached hereto as SCHEDULE
1.5(b)(viii), to institute and prosecute, in the name of the Seller or
otherwise, all proceedings which Purchaser may deem proper in order to
collect, assert or enforce any claim, right or title of any kind in or
to the Assets to be transferred to Purchaser pursuant to the Agreement,
to defend and compromise any and all actions, suits or proceedings in
respect of any such Assets, to endorse all checks and all other
negotiable instruments in the name of Seller, and to do all such acts
and things in relation thereto as Purchaser shall reasonably deem
advisable. Seller agrees that the foregoing powers will be coupled with
interest and shall be irrevocable by Seller or by its dissolution or in
any other manner or for any reason. Seller shall pay to Purchaser, when
received, any amounts which shall be received by such Seller in respect
of any of the Assets transferred to Purchaser;
(ix) a list of all clients, customers, vendors, suppliers, etc.,
including all MSO contacts, which list should include the addresses,
contact names, phone numbers and description of such
client/customer/etc. relationships, with such list attached hereto as
SCHEDULE 1.5(b)(x); and
(x) the termination or recission of the National Cable
Corporation Contract with evidence of such termination or recission
attached hereto on SCHEDULE 1.5(b)(x).
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Section 1.6 COSTS AND EXPENSES OF PURCHASE AND SALE OF ASSETS. Each of
the parties to this Agreement shall pay all of its own costs and expenses
incurred by it in connection with the transactions contemplated by this
Agreement; provided that the parties agree to prorate all real and personal
property taxes as of the Effective Date. Without limiting the generality of the
foregoing, whether or not they may be deemed to have been incurred in the
Ordinary Course of Business, Purchaser shall not be liable for or required to
pay, either directly or indirectly, any of the following liabilities or expenses
incurred by Seller: (a) fees and expenses of any person for financial services
or services as a finder rendered to Seller in connection with the sale
contemplated by this Agreement; (b) fees and expenses of legal counsel retained
by Seller for services rendered to Seller in connection with the sale
contemplated by this Agreement; (c) fees and expenses of auditors, accountants
or brokers retained by Seller for services rendered to Seller in connection with
the sale contemplated by this Agreement; or (d) taxes or other similar charges
incurred by Seller in connection with the making of this Agreement of the
transfer of the Assets to Seller.
Section 1.7 SELLER TO FURNISH ASSIGNMENTS AND CONSENTS. Nothing
contained in Agreement shall be construed as an attempt to agree to assign any
contracts or Licenses and Approvals which by law are non-assignable without the
consent of the other party or parties thereto of the appropriate governmental
body or authority, unless such consent shall be given. Seller hereby covenants
that Seller will, at Seller's expense, take all reasonable actions as shall, in
the opinion of Purchaser, be necessary or appropriate for (i) the rights and
obligations of Seller under such contracts, certificates and Licenses and
Approvals to be preserved; (ii) written waivers of any and all Rights of First
Refusals, options, or other Rights held by any third party under any of the
contracts or agreements, and the written consents to the sale of any such Assets
as are covered by any such rights or options, with all such written waivers and
consents listed and attached hereto as SCHEDULE 1.7, (iii) Seller shall hold any
moneys it receives that is due and payable Purchaser under this Agreement for
the benefit of, and shall promptly pay the same over to, Purchaser; and
Additionally, Seller shall cooperate with and assist Purchaser, as Purchaser
shall reasonably request, in obtaining the approval of all regulatory agencies
and officials whose approval is required for the transfer of any of the Licenses
and Approvals necessary or appropriate to enable Purchaser to purchase and
operate the Assets.
ARTICLE 2.
REPRESENTATIONS AND WARRANTIES OF SELLER.
Seller hereby represents and warrants to Purchaser as follows:
Section 2.1 ORGANIZATION AND GOOD STANDING. Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
State. Seller has all necessary power to own all of its properties and assets
and to carry on its business as now being conducted. Seller is not required to
qualify to do business as a foreign corporation in any other state of
jurisdiction.
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Section 2.2 SELLER'S AUTHORITY; NO BREACH. Seller has the requisite
power and authority to execute, deliver and perform this Agreement and all
agreements executed and delivered by it pursuant to this Agreement, and has
taken all action required by law, its constituents documents or otherwise, to
authorize the execution, delivery and performance of this Agreement and such
related documents. The execution and delivery of this Agreement does not, and
the consummation of the sale contemplated hereby will not, violate any
provisions of the constituent documents of Seller, or any provisions of, or
result in the acceleration of, any obligation under any mortgage, lien, lease,
agreement or instrument, to which Seller is a party, or by which it is bound.
This Agreement has been duly executed and delivered by Seller and constitutes
the legal, valid and binding obligation of Seller.
Section 2.3 BALANCE SHEET. The unaudited balance sheet of Seller for
the period ending April 30, 1998 (the "Balance Sheet Date") is attached hereto
as SCHEDULE 2.3.
Section 2.4 FINANCIAL STATEMENTS. Seller has heretofore furnished
Purchaser with copies of financial information about Seller as set forth on
SCHEDULE 2.4 attached hereto, including without limitation the balance sheet
referenced in Section 2.3. To the best of Seller's knowledge, such financial
statements have been prepared in accordance with generally accepted accounting
principles consistently followed throughout the periods indicated, reflect all
material liabilities of Seller, including all material consolidated contingent
liabilities of Seller and present fairly the financial position of Seller as of
the dates indicated and the consolidated results of operations and cash flows
for the periods reflected therein.
Section 2.5 ASSUMED LIABILITIES. (i) SCHEDULE 1.2(b) to this Agreement
sets forth a list of all the Assumed Liabilities; (ii) except as may be set
forth on SCHEDULE 1.2(b), all of the contracts, leases and agreements listed in
SCHEDULE 1.2(b) are valid and effective in accordance with their respective
terms. Other than the Assumed Liabilities, Seller is not a party to any material
written or oral agreement, contract, lease or plan that would have a material
effect on the Assets, including any:
(a) contract related to the Assets not made in the Ordinary Course of
Business, other that this Agreement;
(b) employment contract that is not terminable without cause or
material cost or other liability to Seller or its successors and assigns upon
notice of 30 days or less;
(c) bonus, pension, profit sharing, retirement, stock purchase,
hospitalization, insurance or similar plan providing for employee benefits,
other than as set forth on SCHEDULE 2.11 attached hereto;
(d) other than the lease for office space located at 0000 Xxxxxxxxxxx
Xxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx, any lease with respect to any property,
real or personal, whether as lessor or lessee; or
(e) contract for future purchase of materials, supplies or equipment
which is not disclosed on SCHEDULE 2.5 and (A) in excess of the requirements of
Seller's Business now booked or for normal operating inventories, or (B) not
terminable without material cost or liability to Seller, its successors or
assigns, upon notice of 30 days or less.
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Section 2.6 SHAREHOLDERS, AFFILIATES AND SECURITIES. Seller does not
stock in or control, directly or indirectly, any other corporation, association
or business organization, nor is Seller a party to any joint venture or
partnership. Xx. Xxxxxxx X. Xxxxxx and Xx. Xxxxxxx X. Xxxxx are the sole
shareholders of Seller ("Shareholders"). There are no outstanding (i) securities
of Seller convertible into equity interests in Seller, or (ii) commitments,
options, rights or warrants to issue any such equity interests in Seller, or to
issue securities of Seller convertible into such equity interests.
Section 2.7 LOCATION OF SELLER'S BUSINESS; ASSETS. The principal place
of business of Seller is 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxxx,
Xxxxxxxxx, 00000. All of the Assets are located in various locations as listed
and described on SCHEDULE 2.7 attached.
Section 2.8 TITLE TO ASSETS. Seller holds good and defensible title to
all of the Assets, including any leasehold interests, free and clear of any
liens, claims, charges, exceptions or encumbrances, except for those expressly
disclosed as Assumed Liabilities and as set forth on SCHEDULE 2.8 and SCHEDULE
1.2 (b) attached hereto. All inventories, supplies, equipment, furniture and
other tangible assets listed on SCHEDULE 1.1(a)(i) to this Agreement currently
are used by or are useful in the Ordinary Course of Business by Seller and, to
the best of Seller's knowledge, are in good operating conditioning and in a
state of reasonable maintenance and repair.
Section 2.9 LITIGATION OR CLAIMS. Neither Seller nor the Shareholders
of Seller has any knowledge of any pending litigation, governmental
investigation, third party payor audit or recoupment proceeding or other
proceeding against or relating to Seller, the Seller's Business, the Assets, any
Shareholders of Seller, or the transaction contemplated by this Agreement and,
so far as is known to either Seller or any of its shareholders, no basis for any
such action exists.
Section 2.10 EMPLOYEES AND LABOR CONTRACTS. To the best of Seller's
knowledge, no executive, key employee or group of employees has any plans to
terminate employment with Seller. Seller is not a party to or bound by any
collective bargaining agreement, nor has it experienced any strikes, grievances,
claims of unfair labor practices or other collective bargaining disputes. To the
best of Seller's knowledge, Seller has not committed any unfair labor practice.
Seller has no knowledge of any organizational effort presently being made or
threatened by or on behalf of any labor union with respect to employees of
Seller. SCHEDULE 1.4(a) attached hereto sets forth the names of all present
employees of Seller, their position, starting date and current salary as of the
date hereof. Seller has not received notice of any claim in the nature of
worker's compensation or employment discrimination in the last two years.
Section 2.11 EMPLOYEE BENEFIT PLANS. Except as set forth on SCHEDULE
2.11 attached hereto (the "Employee Plans"), Seller has neither established, nor
maintains, nor is obligated to make contributions to or under or otherwise
participate in (i) any bonus or other type of incentive compensation plan,
program, agreement, policy, commitment, contract or arrangement (whether written
or oral); (ii) any pension, profit-sharing, retirement or other plan, program or
arrangement; or (iii) any other employee benefit plan fund or program,
including, but not limited to, the items referenced in Section 3(3) of ERISA.
All of the Employee Plans have been operated and administered in all material
respects in accordance with all applicable Laws, including, but not limited to,
ERISA, the Internal Revenue Code of 1986, as amended, the Age Discrimination in
Employment Act of 1967, as amended,
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Title VII of the Civil Rights Act of 1964, as amended, the Equal Pay Act of
1967, as amended, and the related rules and regulations adopted by those federal
agencies responsible for the administration of such laws. No act or failure to
act by Seller has resulted in a "prohibited transaction" (as defined by ERISA)
and no "reportable event" (as defined by ERISA) has occurred with respect to any
of the Employee Plans. Seller has not previously made, is not currently making,
and is not obligated in any way to make, any contributions to any multi-employer
plan within the meaning of the Multi-Employer Pension Plan Amendments Act of
1980.
Section 2.12 SUBSEQUENT EVENTS TO BALANCE SHEET DATE. Since the Balance
Sheet Date, Seller has not (i) incurred any material obligations or liability
(absolute, accrued, contingent or otherwise) related to Seller's Business,
except for the Assumed Liabilities; (ii) experienced any material adverse change
in the Seller's Business, including the type or number of Seller's patients; or
(iii) sold or transferred any of the Assets used in connection with Seller's
Business, or canceled any debts or claims or waived any rights related to
Seller's Business, except in the Ordinary Course of Business or in conjunction
with this Agreement.
Section 2.13 TAXES. Seller has been notified that any income tax
returns of Seller are currently under audit by the Internal Revenue Service or
any state or local tax agency, and any such prior audits have been finally and
fully concluded and all taxes owed pursuant thereto have been paid in full. No
agreements have been made by Seller for the extension of time or the waiver of
the statute of limitation for the assessment of any tax. Seller is not a foreign
partnership, corporation, entity or individual pursuant to the Internal Revenue
code and Purchaser is not required to withhold any part of the Purchase Price,
or otherwise comply with Section 1445 of the Internal Revenue Code of 1986, as
amended. Seller's federal tax identification number is 00-0000000. Seller has
filed all reports and returns and paid all taxes owed by Seller.
Section 2.14 LICENSES AND APPROVALS. Seller has obtained all Licenses
and Approvals necessary to operate Seller's Business, each of which is currently
in full force and effect, and the consummation of the transactions herein
contemplated will not conflict with or result in termination of such Licenses
and Approvals, each of which is set forth on SCHEDULE 2.14 attached hereto.
Except as set forth on SCHEDULE 2.14, all Licenses and Approvals can and shall
be transferred or assigned to Purchaser or will otherwise be obtained prior to
the Closing. Purchaser will take all actions reasonably necessary to ensure the
transfer of all Licenses and Approvals and such transfer shall not result in an
interruption of Seller's Business upon the consummation of the transactions
herein contemplated.
Section 2.15 INSURANCE. Seller has policies of insurance in effect for
general liability and for its facilities, equipment and inventory, with coverage
in amounts deemed by the management of Seller to be sufficient.
Section 2.16 COMMISSIONS. Seller has no obligation for any brokerage
commissions or finder's fees with respect to the transaction s contemplated by
this Agreement resulting from or arising out of any action taken by Seller,
Shareholders or its employees or agents.
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Section 2.17 COMPLIANCE WITH LAWS. To the best of Seller's knowledge,
Seller has complied with the applicable provisions of all Laws and no notice of
any pending inspection or violation of any Laws has been received by Seller.
Section 2.18 ACCOUNTS RECEIVABLE. To the best of Seller's knowledge,
all Accounts Receivable are valid debts incurred by the obligors thereunder in
the Ordinary Course of Business of Seller, are not subject to counterclaims or
setoffs, and Seller has taken all acts reasonably necessary to ensure their
ultimate collection, including timely compliance with all regulatory
requirements of any State or Federal Agency, including the Federal
Communications Commission. Seller knows of no hindrance that would prevent
Purchaser from collecting such Accounts Receivable in the Ordinary Course of
Business.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller as follows:
Section 3.1 ORGANIZATION. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and is qualified to do business in all other jurisdictions where it is required
to be so qualified. Purchaser has all necessary power to own all of its
properties and assets and to carry on the business as now being conducted or as
contemplated in the future under this Agreement. Purchaser has all necessary
power and is duly authorized to purchase Seller's Business.
Section 3.2 AUTHORIZATION. Purchaser has full power and authority,
including the corporate authority, to execute, deliver and perform this
Agreement and all agreements executed and delivered by it pursuant to this
Agreement and has taken all action required by law, its articles or certificate
of incorporation, its bylaws or otherwise, to authorize the execution, delivery
and the performance of this Agreement and related documents. The execution and
delivery of this Agreement or other transactions incidental to this Agreement
does not and, subject to the receipt of consents to assignment of leases and
other contracts where required, the consummation of the purchase contemplated
hereby will not, violate any provision of the certificate of incorporation or
bylaws of Purchaser, or any state or federal securities laws, or any provisions
of or result in the acceleration of any obligation under any mortgage, lien,
lease, agreement, instrument, order, arbitration, award, judgment or decree to
which Purchaser is a party or by which it is bound. This Agreement has been duly
executed and delivered by Purchaser and constitutes the legal, valid and binding
obligation of Purchaser, enforceable in accordance with its terms and
conditions.
Section 3.3 LITIGATION OR CLAIMS. Purchaser has no knowledge of any
pending litigation, governmental investigation, third party payor audit or
recoupment proceeding or other proceeding against or relating to Purchaser, its
subsidiaries or affiliates, any of its shareholders, or the transaction
contemplated by this Agreement and, so far as is known to Purchaser, no basis
for any such action exists.
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Section 3.4 TAXES. Purchaser has not been notified that any income,
franchise or shares tax returns of Purchaser are currently under audit by the
Internal Revenue Service or any state or local tax agency, and any such prior
audits have been finally and fully concluded and all taxes owed or claimed to be
owed pursuant thereto have been paid in full. No agreements have been made by
Purchaser for the extension of time or the waiver of the statute of limitation
for the assessment of any tax. Purchaser is not a foreign partnership,
corporation, entity or individual pursuant to the Internal Revenue Code and
Purchaser is not required to withhold any part of the Purchase Price, or
otherwise comply with Section 1445 of the Internal Revenue Code of 1986, as
amended. Purchaser's federal tax identification number is 00-0000000. Purchaser
has filed all reports and returns and paid all taxes owed by Purchaser.
Section 3.5 COMPLIANCE WITH LAWS. To the best knowledge of Purchaser,
it's officers or directors, Purchaser has complied with the applicable
provisions of all Laws and no notice of any pending inspection or violation of
any Laws has been received by Purchaser or its officers or directors.
Section 3.6 DISCLOSURE. The representations and warranties contained
in this Article 3 do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements and
information contained in this Article 3 not misleading.
ARTICLE 4.
NATURE AND SURVIVAL OF REPRESENTATIONS
AND WARRANTIES; INDEMNITIES; NONCOMPETITION
Section 4.1 NATURE OF STATEMENTS. All statements contained in this
Agreement or in any schedule attached hereto, any agreement executed pursuant
hereto, and any certificate or other instrument delivered by or on behalf of
either party pursuant to the terms of this Agreement, shall constitute
representations and warranties. All representations, warranties and covenants of
the parties shall survive the Closing Date for a period of three years following
the Closing Date, and the parties shall be entitled to rely upon such
representations, warranties and covenants irrespective of any investigations
made by such parties.
Section 4.2 PURCHASER'S INDEMNITY. Purchaser agrees to defend,
indemnify and hold harmless Seller from and against any and all Adverse
Consequences arising out of or in connection with (A) any misrepresentation or
breach of warranty or covenant contained in this Agreement by Purchaser and each
document, certificate or other instrument furnished or to be furnished by
Purchaser hereunder and (B) the transaction of Seller's Business arising after
the Effective Date.
Section 4.3 SELLER'S INDEMNITY. Seller and its Shareholders, jointly
and severally, agree to defend, indemnify and hold harmless Purchaser from and
against any and all Adverse Consequences arising out of or in connection with
(A) any misrepresentation or breach of warranty or covenant contained in this
Agreement (including the attached Schedules) by Seller and each document,
certificate or other instrument furnished or to be furnished by Seller hereunder
and (B) except for the Assumed Liabilities, the transaction of Seller's Business
prior to the Effective Date.
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Section 4.4 INDEMNIFICATION PROCEDURE. Within 60 days after any third
party notifies any Party (the "Indemnified Party") of the commencement of any
proceeding ("Proceeding") which may give rise to a claim for indemnification
hereunder against any other Party (the "Indemnifying Party"), the Indemnified
Party shall, if a claim in respect thereof is to be made against the
Indemnifying Party under this Agreement, give notice to the Indemnifying Party
of the commencement thereof, but the failure so to notify the Indemnifying Party
shall not relieve it of any liability that it may have to the Indemnified Party
except to the extent that the Indemnifying Party demonstrates that the defense
of such action is prejudiced thereby. In case any such Proceeding shall be
brought against the Indemnified Party and it shall give notice to the
Indemnifying Party of the commencement thereof, the Indemnifying Party shall,
unless the claim involves payment of state or federal taxes, be entitled to
participate therein and, to the extent that it shall wish (unless (i) the
Indemnifying Party is also a party to such Proceeding and the Indemnified Party
determines in good faith that the joint representations would be inappropriate
or (ii) the Indemnifying Party fails to provide reasonable assurance to the
Indemnified Party of its financial capacity to defend such Proceeding and
provide indemnification with respect thereto), to assume the defense thereof
with counsel satisfactory to the Indemnified Party and, after notice from the
Indemnifying Party to the Indemnified Party of the Indemnifying Party's election
so to assume the defense thereof, the Indemnifying Party shall not be liable to
the Indemnified Party under this Agreement for any fees of other counsel or any
other expenses with respect to the defense of such Proceeding, in each case
subsequently incurred by the Indemnified Party in connection with the defense
thereof. If the Indemnifying Party assumes the defense of such a Proceeding, (a)
no compromise or settlement thereof may be affected by the Indemnifying Party
without the Indemnified Party's consent unless (i) there is no finding or
admission of any violation of any laws or any violation of the rights of any
person and no affect on any other claims that may be made against the
Indemnified Party and (ii) the sole relief provided is monetary damages that are
paid in full by the Indemnifying Party and (b) the Indemnifying Party shall have
no liability with respect to any compromise or settlement thereof effected
without its consent. If notice is given to the Indemnifying Party of the
commencement of any Proceeding and the Indemnifying Party does not, within ten
days after the Indemnified Party's notice is given, give notice to the
Indemnified Party of its election to assume the defense thereof, the
Indemnifying Party shall be bound by any determination made in such action or
any compromise or settlement thereof effected by the Indemnified Party.
Notwithstanding the foregoing, if the Indemnified Party determines in good faith
that there is a reasonable probability that a Proceeding may adversely affect it
or its affiliates other than as a result of monetary damages, the Indemnified
Party may, by notice to the Indemnifying Party, assume the exclusive right to
defend, compromise or settle such Proceeding, but the Indemnifying Party shall
not be bound by any determination of such a Proceeding so defended or any
compromise or settlement thereof effected without its consent, which consent
shall not be unreasonably withheld. In connection with the Indemnifying Party's
obligation to indemnify for expenses, the Indemnifying Party shall reimburse
each Indemnified Party for such expenses as they are incurred by such
Indemnified Party; provided that such Indemnified Party agrees in writing to
refund all such reimbursed expenses if and to the extent that it is finally
judicially determined that such Indemnified Party is not entitled to
indemnification hereunder.
Section 4.5 NON-COMPETITION. Seller and Seller's Shareholders
individually and severally agree that for a period of three (3) years from the
Closing Date of this Agreement, neither Seller or Seller's Shareholders,
corporately, individually or as a consultant, employee, partner, officer or
agent
11
of any person, firm, partnership, corporation, governmental unit, company or
other entity, anywhere within the states of Alabama, Arkansas, Florida, Georgia,
Kentucky, Mississippi, North Carolina, South Carolina, Tennessee, and Texas
engage in any business that competes, directly or indirectly with any of
Purchaser's current businesses, expressly including but not limited to the
business of owning and acquiring cable companies, manufacturing, distributing,
selling or leasing advertising insertion equipment, and owning or operating
turnkey cable advertising businesses. Each Shareholder agrees that this
geographical limitation is fair and reasonable and is necessary to protect the
Corporation's business.
ARTICLE 5.
MISCELLANEOUS
Section 5.1 NOTICE. All notices, demands, requests and other
communications or documents to be provided under this Agreement shall be in
writing and shall be given to the applicable party at its address or telecopy
number set forth below or such other address or telecopy number as the party may
later specify for that purpose by notice to the other party:
If to Purchaser:
XXXXXX COMPANIES, INC.
000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxx Xxxxxx, Xxxxxxx 00000
Attention: Xx. Xxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With copies to:
Xxxxxxx X. Xxxxxx, Esq.
Dempsey, Steed, Xxxxxxx & Xxxxxx, P.C.
000 XxxxxXxxxx Xxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to Seller and the Shareholders:
CHATTANOOGA REGIONAL INTERCONNECT, INC.
0000 Xxxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxx
12
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Each notice shall be deemed given and received:
(i) if given by telecopy, when the telecopy is transmitted
to the party's telecopy number specified above and confirmation of
complete receipt is received by that transmitting party during normal
business hours on any Business Day or on the next Business Day if not
confirmed during normal business hours;
(ii) if hand delivered, when delivered;
(iii) if given by nationally recognized and reputable
overnight delivery service, the Business Day on which the notice is
actually received by the party; or
(iv) if given by certified mail, return receipt requested,
postage prepaid, two Business Days after posted with the United States
Postal Service.
Section 5.2 FURTHER ASSURANCES. Each party hereto agrees to perform
any further acts and to execute and deliver any other documents which may be
reasonably necessary to carry out the provisions of this Agreement.
Section 5.3 GOVERNING LAW. This Agreement shall be interpreted,
construed and enforced in accordance with the laws of the State of Alabama.
Section 5.4 CAPTIONS AND HEADINGS. The captions or headings in this
Agreement are made for convenience and general reference only and shall not be
construed to describe, define or limit the scope or intent of the provisions of
this Agreement.
Section 5.5 SEVERABILITY. The provisions of this Agreement shall be
severable and if any provisions shall be invalid or void or unenforceable in
whole or in part for any reason, the remaining provisions shall remain in full
force and effect.
Section 5.6 ENTIRE AGREEMENT; MODIFICATIONS. This Agreement contains
the entire agreement of the parties and supersedes any and all prior agreements
between the parties, written or oral, with respect to the purchase and sale
contemplated hereby. This Agreement may not be changed or terminated orally, but
may only be changed by an agreement in writing signed by the party or parties
against whom enforcement of any waiver, change, modification, extension,
discharge or termination is sought.
Section 5.7 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which, when so executed, shall be deemed to be an
original, and such counterparts shall, together, constitute and be one and the
same instrument.
13
Section 5.8 BINDING EFFECT. This Agreement shall be binding and shall
inure to the benefit of the parties hereto, and their respective heirs,
legatees, executors, administrators, successors and assigns.
Section 5.9 ASSIGNMENT. Purchaser may assign this Agreement and all
of Purchaser's right, title and interest (but not its obligations) hereunder to
any affiliate, subsidiary, or other related entity of Purchaser without the
prior written consent of Seller.
Section 5.10 NO RULE OF CONSTRUCTION. The parties acknowledge that
this Agreement was initially prepared by Purchaser solely as a convenience and
that all parties hereto, and their counsel, have read and fully negotiated all
the language used in this Agreement. The parties acknowledge that, because all
parties and their counsel participated in negotiating and drafting this
Agreement, no rule of construction shall apply to this Agreement which construes
ambiguous or unclear language in favor of or against any party because such
party drafted this Agreement.
Section 5.11 INTEGRATION OF SCHEDULES. All schedules, exhibits and
documents referred to in or attached to this Agreement are integral parts of
this Agreement as if fully set forth herein, and all statements appearing
therein shall be deemed disclosed and relied upon for all purposes and not just
in connection with the specific representation to which they are explicitly
referenced.
Section 5.12 "INCLUDING." The word "including," when following any
general statement, term or matter shall not be construed to limit such
statement, term or matter to the specific terms or matters as provided
immediately following the word "including" or to similar items or matters,
whether or not non-limiting language (such as "without limitation," "but not
limited to," or words of similar import) as used with reference to the word
"including" or the similar items or matters, but rather shall be deemed to refer
to all other items or matters that could reasonably fall within the broadest
possible scope of the general statement, term or matter.
ARTICLE 6.
DEFINITIONS
Section 6.1 GLOSSARY OF TERMS. As used in this Agreement, the
following terms shall have the meanings as indicated:
(a) ACCOUNTS RECEIVABLE means all receivables of Seller's Business
arising out of the sale of goods and services by Seller prior to the Closing
Date, but for which such goods or services have not yet been shipped or
performed by Seller.
(b) ADVERSE CONSEQUENCES means all actions, lawsuits, proceedings,
hearings, investigations, charges, complaints, claims, demands, injunctions,
judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs,
amounts paid in settlement, liabilities, obligations, taxes, liens, losses,
expenses and fees, including court costs and reasonable attorneys' fees and
expenses.
(c) AGREEMENT means this Asset Purchase Agreement.
14
(d) ASSETS has the meaning set forth in Section 1.1(a).
(e) ASSUMED LIABILITIES has the meaning set forth in Section 1.2(b).
(f) BALANCE SHEET DATE has the meaning set forth in Section 2.3.
(g) BUSINESS DAY means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which national banks in the City of Birmingham,
Alabama are closed.
(h) CLOSING means the closing of the transactions as contemplated by
this Agreement.
(i) CLOSING DATE has the meaning set forth in Section 1.1(a)
(j) EFFECTIVE DATE has the meaning set forth in Section 1.1(a).
(k) EMPLOYEE PLANS has the meaning set forth in Section 2.11.
(l) ERISA has the meaning set forth in Section 1.4(b).
(m) INDEMNIFIED PARTY has the meaning set forth in Section 4.4.
(n) INDEMNIFYING PARTY has the meaning set forth in Section 4.4.
(o) LAWS means all federal, state and local laws, regulations,
ordinances, proceedings or orders, including the Federal Environmental
Protection Act, the Occupational Safety and Health Act, the Employee Retirement
Income Security Act, all Medicare and Medicaid laws, all Hazardous Materials
Laws, rules and regulations and all federal, state and local licensing and
health laws and requirements and other similar statutes.
(p) LICENSES AND APPROVALS has the meaning set forth in Section
1.6(b)(vi) hereof.
(q) OFFER PRICE has the meaning set forth in Section 1.2(a) hereof.
(r) ORDINARY COURSE OF BUSINESS means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
(s) PARTY means any of Purchaser, Seller or any of its Shareholders.
(t) PURCHASE PRICE has the meaning set forth in Section 1.2(a)
hereof.
(u) PURCHASER has the meaning set forth in the first paragraph of
this Agreement.
(v) SELLER has the meaning set forth in the first paragraph of this
Agreement.
(w) SELLER'S BUSINESS has the meaning set forth in the recitals
hereof.
15
(x) SHAREHOLDERS has the meaning set forth in Section 2.6 hereof.
(y) STATE means the State of Alabama.
IN WITNESS WHEREOF, Seller and Purchaser have executed and delivered
this Agreement as of the day and year first written above.
PURCHASER:
AVALON-XXXXXX COMPANIES, INC.
a Delaware corporation
By: /s/ XXXXXX X. XXXX
----------------------------------
Xxxxxx X. Xxxx
Executive Vice President
SELLER:
CHATTANOOGA REGIONAL
INTERCONNECT, INC.,
a Tennessee corporation
By: /s/ XXXXXXX X. XXXXXX
----------------------------------
Xx. Xxxxxxx X. Xxxxxx
Its President
16
SCHEDULE INDEX TO
ASSET PURCHASE AGREEMENT OF
CHATTANOOGA REGIONAL INTERCONNECT, INC.
SCHEDULE
1.1(a)(i) Assets of Seller
1.1(a)(ii) Contracts and Agreements
1.2(a)(i) Prepaid Receivables
1.2(a)(ii) Promissory Note
1.2(b) Listing of Assumed Liabilities
1.2(c) Allocation of Purchase Price
1.4(a) List of Seller's Employees to be retained by Purchaser
1.5(b)(viii) Power of Attorney
1.5(b)(ix) Client/Vendor List
1.5(b)(x) National Cable Corporation Contract Termination
1.7 Assignments and Consents
2.3 Balance Sheet
2.4 Seller's Financial Statements
2.7 Location of Assets
2.8 Liabilities to be Satisfied at Closing
2.11 Employee Plans (Insurance/Profit Sharing)
2.14 Listing of all Licenses and Approvals
NOTE: This Schedule Index has been included in this Agreement solely for the
convenience and general reference of the parties and shall not be
construed to describe, define or limit the scope or intent of the
provisions of this Agreement.
SCHEDULE 1.1(a)(i)
INVENTORY OF ASSETS OF
CHATTANOOGA REGIONAL INTERCONNECT, INC.
QTY. DESCRIPTION
See Attached
CRI ASSET EVALUATION
QTY DESCRIPTION VALUE TOTAL
--------------------------------------------------------------------------------
2 Xxxxxxx ASI 4x4 Autoserters 1,000.00 2,000.00
2 Preview Switchers 100.00 200.00
4 Xxxxxxx FVS Verification Systems 150.00 600.00
27 Sony 7020 Umatic 3/4" Tape Decks 700.00 18,900.00
9 Computer 13" Monitors 100.00 900.00
10 keyboards 0.00 0.00
11 Racking systems 25.00 275.00
1 IBM Clone PC's 300.00 300.00
7 ACL 200 1,500.00 10,500.00
3 ACL 100 1,000.00 3,000.00
1 ACC 440 1,500.00 1,500.00
11 2400 baud external modem 10.00 110.00
6 Phone & Power Surge Protectors 5.00 40.00
2 Sony 5850 3/4" Edit Tape Deck 1,000.00 2,000.00
1 Tone Generator 10.00 10.00
1 Central Office Software & Verification System 0.00
1 Printer 50.00 50.00
1 Delta DCM1488B Monitor 125.00 125.00
8 UPS Power Battery Backup Systems 50.00 400.00
11 Xxxxxxx mainframes 250.00 2,750.00
52 Xxxxxxx Network Decoder Cards 250.00 13,000.00
Multi Cabling, Connecting Equipment and Power Strips
----------
TOTAL: 56,660.00
Helicon $10,000 Operator Fee Deposit 10,000.00
----------
66,660.00
CRI FIXTURE & FURNITURE ASSETS
QTY DESCRIPTION
--------------------------------------------------------------------------------
1 Large Edit Console
1 Small Edit Console
4 Production Equipment Racks
2 Production Suite Chairs
6 Sales Desks
6 Sales Office Chairs
1 Sales Mgr Exec Desk
1 Sales Mgr Chair
1 Sales Mgr Console
1 Mgmt. Exec Desk
1 Mgmt. Chair
1 Receptionist Desk
1 Receptionist Office Chair
2 Guest Chairs
Misc Staplers Calculators Trash Cans, etc. to accommodate each desk
CRI PRODUCTION ASSETS VALUATION
INVENTORY # DESCRIPTION QTY VALUE
--------------------------------------------------------------------------------
1231 Sony PVM1380 Monitor 1 $250.00
1232 Sony PVM1380 Monitor 1 $250.00
1234 Sony Edit Controler RM-450 1 $250.00
1235 Kelsey 12 Channel Mixer Audio 1 $250.00
1237 Sony PVM8020 Field Monitor 1 $400.00
1238 Toaster Memory
1239 Newtek Video Toaster 4000 1 $10,000.00
1240 Toaster Memory Block
1241 Sony BVE600 1 $2,000.00
1242 Grass 110E switcher 1 $8,000.00
1243 JVC TMR14U Monitor 1 $300.00
1244 JVC TMR14U Monitor 1 $300.00
1245 AR Speaker 1 $50.00
1246 AR Speaker 1 $50.00
1247 Realistic Power Amp 1 $50.00
1248 Jazz DVE 38-FXC902-01 1 $6,000.00
1249 Cybex Computer 1 $300.00
1250 Monitor 1
1251 Keyboard 1
1252 Ramsa audio mixer 1 $150.00
1253 Xxxxxx 00-0 0/0" Reel to Reel 1 $150.00
1254 Sony CDP291 CD Player 1 $100.00
1256 Sony VO5850 Edit Deck 1 $1,500.00
1257 Sony BVU900 3/4"sp Deck 1 $2,500.00
1258 ADC patch bay 1 $750.00
1259 ADC patch bay 1 $750.00
1260 Sony BVR-55 remote controller 1 $100.00
1261 Tektronic 1480R Vectorscope 1 $250.00
1262 Tektronic 520A Waveform 1 $250.00
1263 Sigma CSG455 Sync Gen. 1 $100.00
1264 Video Tech Dist. Amp VDA16x4 1 $250.00
1266 Sony SVO1620 VHS Deck 1 $150.00
1267 Sony VO9850 1 $4,500.00
1268 Ampex CVR65 Beta Sp Playbk 1 $12,000.00
1269 Sony BVU920 1 $3,500.00
1271 EYE 2 SM1411 Compiler Monitor 1
1272 AD Systems Compiler 1 $1,250.00
1274 AD Systems ABC Xxxx Xxxxx 0
0000 Xxxxxxxxx Xxxxxxx Toaster 1
1284 AD Systems Inserter 1 $800.00
1285 Hitachi Camera Monitor 1
1286 Hitachi View Finder 1
1287 Xxxxxx 2 piece Light Kit 1 $300.00
1289 Canon 12x1 Lens 1
1290 Hitachi Z1CU 3-chip Camera 1 $6,000.00
1295 Sony BVU150 w/batteries 1 $800.00
Pesa K4722 CG 1 $300.00
Triplite Line Stablizer LS600 1 $50.00
Batteries EP90-5 w/charger 4 $100.00
Xxxxx Xxxxx Brick Batt w/charger 1 $25.00
Ampex CVR35 Beta field record 1 $2,000.00
JVC TW118 Dual Cass. Deck 1 $100.00
Sony VO-9800 3/4" Tape Deck 1 $3,000.00
Xxxxx XX00XXxxx 0/0" XxxX 0 $150.00
Denon PMA8600 Power Amp 1 $200.00
Denon DN950FA CD Player 1 $125.00
Compaq Presario 140 Monitor 1 $50.00
Compaq "CDS 954 486 Comp 1 $350.00
Mackie 1202VLS Audio Mixer 1 $175.00
ITC Cart Machine 1 $100.00
Yamaha Studio Monitors 2 $100.00
Sennheiser 421 Microphone 1 $75.00
----------
$71,500.00
==========
SCHEDULE 1.1(a)(ii)
CONTRACTS AND AGREEMENTS
1. Helicon Agreement Attached.
2. Xxxxxxx Falcon Agreement Attached.
3. Rainsville Falcon Agreement Attached.
4. Xxxxxxx County Telephone Co-Op Agreement Attached.
5. Century Communications Agreement Attached.
ADVERTISING SALES AGREEMENT
This Agreement is made this 21st day of December, 1998, by and between Falcon
First, Inc. (herein "Owner") and Chattanooga Regional Interconnect (herein
"Contractor"), who do hereby agree as follows:
1. As used herein, the following terms shall have the respective meanings
stated below:
a. CABLECAST AREA. The area covered by the franchises held by Falcon
First, Inc. located in Rainsville, Alabama.
b. CABLE SYSTEM(S). The cable television system(s) owned by Falcon First,
Inc. over which Falcon First, Inc. cablecasts to the Cablecast Area.
c. NETWORK. All satellite-delivered cable channels which provide local
availability for advertising.
d. ADVERTISING INVENTORY. Time available by Owner for sale of commercial
advertising on Network including all national, regional and local
spots.
e. NET SALES REVENUES. Gross advertising revenues less any applicable
agency and Rep. firm commissions.
f. MINIMUM COMPENSATION. $1,500 per month shall be the minimum
compensation which Owner must receive for each broadcast month.
2. The term of this Agreement shall be for 3 years, commencing on January 1,
1999, and ending on December 31, 2001.
3. Owner grants to Contractor the non-exclusive rights for the marketing and
sale of all Advertising Inventory on the terms and conditions set forth herein
on those channels listed on Exhibit "A" attached hereto and incorporated herein
by reference ("Network") in the Cablecast Area. In this connection, Owner
understands that Contractor will make binding commitments to advertisers for the
sale of Advertising Inventory. To avoid conflicts in the sale of advertising
spots, Owner agrees that it will not itself sell Advertising Inventory and will
not permit any other person, firm, or entity to sell Advertising Inventory;
except for Advertising Inventory sold in Scottsboro, Alabama, and in the
surrounding Xxxxxxx County. Owner reserves the exclusive rights to sell
Rainsville Advertising Inventory to Scottsboro and Xxxxxxx County advertisers
and Contractor agrees to playback all such Advertising Inventory sold by Owner
in Scottsboro and Xxxxxxx County and further agrees it will not share in the
revenues generated as a result of the sale of said Advertising Inventory sold by
Owner. Owner further reserves the right to sell advertising on it's own local
origination channel, the character generator channel, and The Weather Channel.
4. Contractor agrees to: (a) handle the marketing and sale of Advertising
Inventory including contracting, negotiating with and making sales to potential
advertisers; (b) handle all contracts and paperwork in connection with the sale
of Advertising Inventory; (c) negotiate with and enter into binding contracts
with advertising agencies and advertisers; (d) handle all commercial production,
where required; (e) handle all accounting, scheduling, billing, collecting,
affidavits, and tape trafficking.
5. Contractor agrees that it will use its best efforts to maximize revenue from
the sale of Advertising Inventory.
6. The Net Sales Revenues derived from the sale of Advertising Inventory shall
be divided as follows: 35% to Owner and 65% to Contractor. In no event shall
Owner receive less that the Minimum Compensation.
7. Contractor shall provide, at Contractor's expense, all of the equipment
necessary to cablecast the advertising spots. The cost of the maintenance,
repair, and replacement of such equipment shall be the sole responsibility of
the Contractor. Owner shall provide the Contractor's employees or agents
reasonable access to its headend to perform the advertising insertions and
maintain equipment.
8. Contractor shall configure and operate its insertion equipment throughout
the term of the Agreement in a manner that, at no cost to Owner, permits it to
run, on a schedule requested by Owner, material provided by Owner. Owner shall
have the right, for each month during the term of the Agreement, to recapture
and utilize (in Owner's sole discretion, for such purposes as Owner shall deem
appropriate) up to 25% of the total Advertising inventory for such month for the
purpose of cablecasting such material.
9. Owner understands that from time to time it may be in the best interests of
Contractor to market and sell advertising spots together under one contract to
certain advertisers without distinguishing between Advertising Inventory and
Contractor's advertising inventory on the other cable system(s) (such a contract
hereafter referred to as a "Group Buy"). In such case, Owner shall be paid the
higher of: (a) the amount it would have received based on its own rate care for
the Cable System(s) included in the Group Buy as though the Group Buy did not
exist; or (b) the percentage of the Net Sales Revenues from the Group Buy that
Owner's subscribers included in the Group Buy bear to all subscribers included
in the Group Buy. Owner shall provide updated subscriber numbers to Contractor
every six (6) months during the term of this Agreement.
10. At no time during the term of this Agreement shall Contractor enter into any
trade or barter advertising agreement for any Advertising Inventory without the
prior express written consent of Vice President of Advertising Sales for Owner.
11. At the end of each calendar month, Contractor shall account to and pay Owner
the larger of the Minimum Compensation or its share of the Net Sales Revenues as
of the end of the latest broadcast month based on collections during the latest
broadcast month. For purposes of this paragraph, the term "latest broadcast
month" shall mean the latest broadcast month ending prior to or at the end of
the preceding calendar month. Such accounting shall include a list of all
advertisers for the current month and their current month invoice totals along
with a client payment summary report for all payments received during the
previous month and upon which the monthly payment to Owner is being calculated.
Contractor shall be responsible for payment to Owner for all Advertising
Inventory sold and invoiced by it prior to such invoicing reaching 90 days past
due irrespective of whether advertiser has paid Contractor for such airtime.
12. Cable System shall not participate in any production revenues generated by
Contractor as a result of production work done for advertisers. Owner shall not
be responsible for any expenses nor incur any liability as a result of
production work.
2
13. Contractor represents and warrants that the advertising material produced
and/or procured by Contractor for cablecasting over Owner's Cable System(s) and
the insertions performed by Contractor will not contain any libelous,
slanderous, obscene or defamatory material and will not, when exhibited by
Owner, violate or infringe upon the rights of any person, firm or corporation or
other party, or give rise to any adverse claim with respect to any common law or
other right (including, without limitation, any copyright, literary trademark,
contractual, dramatic or motion picture right, or right of privacy) of any
person, firm, corporation or other party. Contractor represents and warrants
that advertising sold by it will not violate or infringe upon any music
performance and/or music synchronization rights. Contractors represents and
warrants that the advertising material produced and/or procured by Contractor
for cablecasting over Owner's Cable System(s) and the insertions performed by
Contractor will comply in all respects with applicable laws and regulations.
Owner reserves the right to refuse to transmit or exhibit any commercial or
other material which Owner deems to be in violation of the terms contained in
this Agreement although Owner shall have no obligation to preview advertising
material and inserts that are cablecast over Owner's Cable System(s).
Contractor's representations and warranties contained in this Agreement shall
survive the termination of this Agreement.
14. Each party hereto shall indemnify and forever hold harmless the other, its
successors to and assignees, for, from and against any claim, loss or damage
costs or expense (including, without limitation, reasonable counsel fees)
resulting from any misrepresentation made by it or any breach by it of any
provisions of this Agreement.
15. In any case in which indemnification is being sought hereunder, the party
seeking indemnification shall afford the Indemnifying Party the opportunity of
controlling the litigation, settlement, or other disposition of such claim. The
Indemnified Party shall fully cooperate with the Indemnifying Party in
connection with such litigation, settlement or other disposition.
16. No party to this Agreement shall have any claims against the other for
failure to provide or exhibit, as the case may be, advertisement is such failure
is due to any act of God, accident, fire, lock-out, strike or other labor
dispute, riot or severe commotion, failure or misoperation of technical
facilities, act of public enemy, enactment, rule, order or act of governmental
authority, failure of electrical power or other cause beyond a party's control.
17. At all times during the term of this Agreement, Contractor shall at its own
cost carry the following insurance coverage: (a) comprehensive public liability
insurance for bodily injury or death and property damage of not less than five
hundred thousand dollars ($500,000) combined single limit with respect to any
one occurrence; (b) broadcaster's and cablecaster's liability insurance of not
less than one million ($1,000,000). Owner shall be furnished with a certificate
of insurance promptly upon issuance of said policies and each renewal and
replacement thereof. Under the terms of said policies, the insurer shall be
required to give Owner at least 30-days advance written notice of any lapse in
any such policy. Contractor shall also carry all necessary statutory and
regulatory minimum workmen's compensation insurance.
18. This Agreement may be terminated by either party upon occurrence of any of
the following circumstances: (a) if either party shall commit a material default
in its performance of any provision of this Agreement and such default is not or
cannot be cured within ten (10) days after such party's receipt of written
notice of the other party's decision to terminate; (b) if either party shall be
adjudicated as bankrupt or insolvent or shall be otherwise unable to fulfill all
of its obligations under this Agreement; (c) Contractor should fail to pay and
provide
3
to Owner the dollar amount and accounting when due pursuant to paragraphs 6 and
11 of this Agreement; or (d) Owner should eliminate Rainsville cable head end so
that local advertising originating exclusively from the Rainsville location
ceases to exist. In the event of any termination of this Agreement, Contractor's
obligation to pay and provide to Owner the compensation and accounting
theretofore due and owing Owner hereunder shall survive.
19. In the event that this Agreement is not renewed or is terminated by either
party according to terms outlined herein, Contractor shall be solely responsible
for any liability arising from its obligations that are not fully performed and
agrees to indemnify and hold harmless Owner from all claims, actions, or
lawsuits arising from or relating to any such nonrenewal. Further, Contractor's
obligations under paragraph 14 of this Agreement shall continue in full force
and effect thereafter, subject to the applicable statute of limitations.
20. This is an Agreement for exclusive representation for the sale of
Advertising Inventory and no provision or provisions of this Agreement expressed
or implied shall be construed to create a legal partnership, joint venture, or
other business entity among the parties hereto.
21. This Agreement shall be governed by and construed in accordance with the
laws of the State of Alabama.
22. Contractor shall maintain accurate books and records of the transactions
covered by this Agreement. Owner shall have the right, upon reasonable notice to
Contractor, to inspect any and all relevant books and records of Contractor
pertaining to this Agreement during ordinary business hours.
23. This Agreement is subject to the terms and conditions of the franchises held
by Owner; to any permits, licenses, or other authorizations necessary for it to
construct, operate or manage its Cable System(s); to all federal, state and
municipal laws, regulations and decisions, as such exist now and in the future;
and to the terms of applicable pay and satellite programming agreements, as they
exist now or in the future.
24. The prevailing party shall be entitled to reasonable attorney's fees and all
court costs in any litigation instituted to enforce the provisions of this
Agreement.
25. This Agreement shall be binding and inure to the benefit of the parties
hereto and their respective permitted assigns and successors. Contractor shall
not assign this Agreement without prior written consent of Owner.
4
26. All notice required or permitted to be made hereunder shall be in writing
and delivered by hand or certified mail, return receipt requested.
IF TO OWNER, ADDRESSED TO:
Xx. Xxxx Xxxxxx, V.P.
Advertising Sales and Production
Falcon Cable TV
00000 Xxxxxxxx Xxxx., 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
IF TO CONTRACTOR, ADDRESSED TO:
Xx. Xxxxx X. Xxxxxxx
Chattanooga Regional Interconnect
0000 Xxxxxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxxx, XX 00000
27. This writing constitutes the entire Agreement between the parties and may
not be amended or modified except by written instrument signed by both parties.
28. This Agreement shall not be deemed effective or of any force or effect
unless and until signed by Owner's Vice President of Advertising Sales and
Production.
IN WITNESS THEREOF, the parties have executed this Agreement.
(Owner) (Contractor)
BY: /s/ XXXX XXXXXX BY: /s/ XXXXX X. XXXXXXX
------------------- ------------------------
Xxxx Xxxxxx Xxxxx X. Xxxxxxx
President, Chattanooga
Regional Interconnect
Executive Vice President,
TITLE: V.P., Advertising Sales TITLE: Avalon Media Group, Inc.
----------------------- ----------------------------------
DATE: 1/19/99 DATE: 1/14/99
------------------- -----------------
5
EXHIBIT "A"
Advertising Channels*: ESPN
CNN
USA
TNN
*Contractor reserves the option of adding up to four additional Advertising
Channels upon 30-day written notice to Owner.
6
ADVERTISING SALES AGREEMENT
This Agreement is made this 21st day of December, 1998, by and between Falcon
First, Inc. (herein "Owner") and Chattanooga Regional Interconnect (herein
"Contractor"), who do hereby agree as follows:
1. As used herein, the following terms shall have the respective meanings
stated below:
a. CABLECAST AREA. The area covered by the franchises held by Falcon
First, Inc. located in Ringgold, Georgia.
b. CABLE SYSTEM(S). The cable television system(s) owned by Falcon First,
Inc. over which Falcon First, Inc. cablecasts to the Cablecast Area.
c. NETWORK. All satellite-delivered cable channels which provide local
availability for advertising.
d. ADVERTISING INVENTORY. Time available by Owner for sale of commercial
advertising on Network including all national, regional and local
spots.
e. NET SALES REVENUES. Gross advertising revenues less any applicable
agency and Rep. firm commissions.
f. MINIMUM COMPENSATION. $3,000 per month shall be the minimum
compensation which Owner must receive for each broadcast month.
2 The term of this Agreement shall be for 3 years, commencing on January 1,
1999, and ending on December 31, 2001.
3. Owner grants to Contractor the non-exclusive rights for the marketing and
sale of all Advertising Inventory on the terms and conditions set forth herein
on those channels listed on Exhibit "A" attached hereto and incorporated herein
by reference ("Network") in the Cablecast Area. In this connection, Owner
understands that Contractor will make binding commitments to advertisers for the
sale of Advertising Inventory. To avoid conflicts in the sale of advertising
spots, Owner agrees that it will not itself sell Advertising Inventory and will
not permit any other person, firm, or entity to sell Advertising Inventory;
except for Advertising Inventory sold in Dalton, Georgia, and in the surrounding
Xxxxxxxxx County. Owner reserves the exclusive rights to sell Ringgold
Advertising Inventory to Dalton and Xxxxxxxxx County advertisers and Contractor
agrees to playback all such Advertising Inventory sold by Owner in Dalton and
Xxxxxxxxx County and further agrees it will not share in the revenues generated
as a result of the sale of said Advertising Inventory sold by Owner. Owner
further reserves the right to sell advertising on it's own local origination
channel, the character generator channel, and The Weather Channel.
4. Contractor agrees to: (a) handle the marketing and sale of Advertising
Inventory including contracting, negotiating with and making sales to potential
advertisers; (b) handle all contracts and paperwork in connection with the sale
of Advertising Inventory; (c) negotiate with and enter into binding contracts
with advertising agencies and advertisers; (d) handle all commercial production,
where required; (e) handle all accounting, scheduling, billing, collecting,
affidavits, and tape trafficking.
5. Contractor agrees that it will use its best efforts to maximize revenue from
the sale of Advertising Inventory.
6. The Net Sales Revenues derived from the sale of Advertising Inventory shall
be divided as follows: 35% to Owner and 65% to Contractor. In no event shall
Owner receive less that the Minimum Compensation.
7. Contractor shall provide, at Contractor's expense, all of the equipment
necessary to cablecast the advertising spots. The cost of the maintenance,
repair, and replacement of such equipment shall be the sole responsibility of
the Contractor. Owner shall provide the Contractor's employees or agents
reasonable access to its headend to perform the advertising insertions and
maintain equipment.
8. Contractor shall configure and operate its insertion equipment throughout
the term of the Agreement in a manner that, at no cost to Owner, permits it to
run, on a schedule requested by Owner, material provided by Owner. Owner shall
have the right, for each month during the term of the Agreement, to recapture
and utilize (in Owner's sole discretion, for such purposes as Owner shall deem
appropriate) up to 25% of the total Advertising inventory for such month for the
purpose of cablecasting such material.
9. Owner understands that from time to time it may be in the best interests of
Contractor to market and sell advertising spots together under one contract to
certain advertisers without distinguishing between Advertising Inventory and
Contractor's advertising inventory on the other cable system(s) (such a contract
hereafter referred to as a "Group Buy"). In such case, Owner shall be paid the
higher of: (a) the amount it would have received based on its own rate care for
the Cable System(s) included in the Group Buy as though the Group Buy did not
exist; or (b) the percentage of the Net Sales Revenues from the Group Buy that
Owner's subscribers included in the Group Buy bear to all subscribers included
in the Group Buy. Owner shall provide updated subscriber numbers to Contractor
every six (6) months during the term of this Agreement.
10. At no time during the term of this Agreement shall Contractor enter into any
trade or barter advertising agreement for any Advertising Inventory without the
prior express written consent of Vice President of Advertising Sales for Owner.
11. At the end of each calendar month, Contractor shall account to and pay Owner
the larger of the Minimum Compensation or its share of the Net Sales Revenues as
of the end of the latest broadcast month based on collections during the latest
broadcast month. For purposes of this paragraph, the term "latest broadcast
month" shall mean the latest broadcast month ending prior to or at the end of
the preceding calendar month. Such accounting shall include a list of all
advertisers for the current month and their current month invoice totals along
with a client payment summary report for all payments received during the
previous month and upon which the monthly payment to Owner is being calculated.
Contractor shall be responsible for payment to Owner for all Advertising
Inventory sold and invoiced by it prior to such invoicing reaching 90 days past
due irrespective of whether advertiser has paid Contractor for such airtime.
12. Cable System shall not participate in any production revenues generated by
Contractor as a result of production work done for advertisers. Owner shall not
be responsible for any expenses nor incur any liability as a result of
production work.
2
13. Contractor represents and warrants that the advertising material produced
and/or procured by Contractor for cablecasting over Owner's Cable System(s) and
the insertions performed by Contractor will not contain any libelous,
slanderous, obscene or defamatory material and will not, when exhibited by
Owner, violate or infringe upon the rights of any person, firm or corporation or
other party, or give rise to any adverse claim with respect to any common law or
other right (including, without limitation, any copyright, literary trademark,
contractual, dramatic or motion picture right, or right of privacy) of any
person, firm, corporation or other party. Contractor represents and warrants
that advertising sold by it will not violate or infringe upon any music
performance and/or music synchronization rights. Contractor represents and
warrants that the advertising material produced and/or procured by Contractor
for cablecasting over Owner's Cable System(s) and the insertions performed by
Contractor will comply in all respects with applicable laws and regulations.
Owner reserves the right to refuse to transmit or exhibit any commercial or
other material which Owner deems to be in violation of the terms contained in
this Agreement although Owner shall have no obligation to preview advertising
material and inserts that are cablecast over Owner's Cable System(s).
Contractor's representations and warranties contained in this Agreement shall
survive the termination of this Agreement.
14. Each party hereto shall indemnify and forever hold harmless the other, its
successors to and assignees, for, from and against any claim, loss or damage
costs or expense (including, without limitation, reasonable counsel fees)
resulting from any misrepresentation made by it or any breach by it of any
provisions of this Agreement.
15. In any case in which indemnification is being sought hereunder, the party
seeking indemnification shall afford the Indemnifying Party the opportunity of
controlling the litigation, settlement, or other disposition of such claim. The
Indemnified Party shall fully cooperate with the Indemnifying Party in
connection with such litigation, settlement or other disposition.
16. No party to this Agreement shall have any claims against the other for
failure to provide or exhibit, as the case may be, advertisement is such failure
is due to any act of God, accident, fire, lock-out, strike or other labor
dispute, riot or severe commotion, failure or misoperation of technical
facilities, act of public enemy, enactment, rule, order or act of governmental
authority, failure of electrical power or other cause beyond a party's control.
17. At all times during the term of this Agreement, Contractor shall at its own
cost carry the following insurance coverage: (a) comprehensive public liability
insurance for bodily injury or death and property damage of not less than five
hundred thousand dollars ($500,000) combined single limit with respect to any
one occurrence; (b) broadcaster's and cablecaster's liability insurance of not
less than one million ($1,000,000). Owner shall be furnished with a certificate
of insurance promptly upon issuance of said policies and each renewal and
replacement thereof. Under the terms of said policies, the insurer shall be
required to give Owner at least 30-days advance written notice of any lapse in
any such policy. Contractor shall also carry all necessary statutory and
regulatory minimum workmen's compensation insurance.
18. This Agreement may be terminated by either party upon occurrence of any of
the following circumstances: (a) if either party shall commit a material default
in its performance of any provision of this Agreement and such default is not or
cannot be cured within ten (10) days after such party's receipt of written
notice of the other party's decision to terminate; (b) if either party shall be
adjudicated as bankrupt or insolvent or shall be otherwise unable to fulfill all
of its obligations under this Agreement; (c) Contractor should fail to pay and
provide
3
to Owner the dollar amount and accounting when due pursuant to paragraphs 6 and
11 of this Agreement; or (d) Owner should eliminate Rainsville cable head end so
that local advertising originating exclusively from the Rainsville location
ceases to exist. In the event of any termination of this Agreement, Contractor's
obligation to pay and provide to Owner the compensation and accounting
theretofore due and owing Owner hereunder shall survive.
19. In the event that this Agreement is not renewed or is terminated by either
party according to terms outlined herein, Contractor shall be solely responsible
for any liability arising from its obligations that are not fully performed and
agrees to indemnify and hold harmless Owner from all claims, actions, or
lawsuits arising from or relating to any such nonrenewal. Further, Contractor's
obligations under paragraph 14 of this Agreement shall continue in full force
and effect thereafter, subject to the applicable statute of limitations.
20. This is an Agreement for exclusive representation for the sale of
Advertising Inventory and no provision or provisions of this Agreement expressed
or implied shall be construed to create a legal partnership, joint venture, or
other business entity among the parties hereto.
21. This Agreement shall be governed by and construed in accordance with the
laws of the State of Georgia.
22. Contractor shall maintain accurate books and records of the transactions
covered by this Agreement. Owner shall have the right, upon reasonable notice to
Contractor, to inspect any and all relevant books and records of Contractor
pertaining to this Agreement during ordinary business hours.
23. This Agreement is subject to the terms and conditions of the franchises held
by Owner; to any permits, licenses, or other authorizations necessary for it to
construct, operate or manage its Cable System(s); to all federal, state and
municipal laws, regulations and decisions, as such exist now and in the future;
and to the terms of applicable pay and satellite programming agreements, as they
exist now or in the future.
24. The prevailing party shall be entitled to reasonable attorney's fees and all
court costs in any litigation instituted to enforce the provisions of this
Agreement.
25. This Agreement shall be binding and inure to the benefit of the parties
hereto and their respective permitted assigns and successors. Contractor shall
not assign this Agreement without prior written consent of Owner.
4
26. All notice required or permitted to be made hereunder shall be in writing
and delivered by hand or certified mail, return receipt requested.
IF TO OWNER, ADDRESSED TO:
Xx. Xxxx Xxxxxx, V.P.
Advertising Sales and Production
Falcon Cable TV
00000 Xxxxxxxx Xxxx., 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
IF TO CONTRACTOR, ADDRESSED TO:
Xx. Xxxxx X. Xxxxxxx
Chattanooga Regional Interconnect
0000 Xxxxxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxxxx, XX 00000
27. This writing constitutes the entire Agreement between the parties and may
not be amended or modified except by written instrument signed by both parties.
28. This Agreement shall not be deemed effective or of any force or effect
unless and until signed by Owner's Vice President of Advertising Sales and
Production.
IN WITNESS THEREOF, the parties have executed this Agreement.
(Owner) (Contractor)
BY: /s/ XXXX XXXXXX BY: /s/ XXXXX X. XXXXXXX
--------------- --------------------
Xxxx Xxxxxx Xxxxx X. Xxxxxxx
President, Chattanooga Regional
Interconnect
TITLE: V.P., ADVERTISING SALES TITLE: EXECUTIVE VICE PRESIDENT,
AVALON MEDIA GROUP, INC.
----------------------- ----------------------------------
DATE: 1/19/99 DATE: 1/14/99
------------------- -----------------
5
EXHIBIT "A"
Advertising Channels*: ESPN
CNN
USA
TNN
*Contractor reserves the option of adding up to four additional Advertising
Channels upon 30-day written notice to Owner.
6
CABLE AD SALES AGREEMENT
THIS AGREEMENT made and entered into this fifteenth day of May between
Chattanooga Regional Interconnect of Chattanooga, Tennessee, hereinafter
referred to as "Vendor", and Xxxxxxx County Telephone Co Op hereinafter referred
to as "Operator".
WITNESSETH
WHEREAS, Operator owns and operates cable television systems, serving portions
of Sequatchie County, Tennessee and Xxxxxxx County Tennessee and subject to
franchises listed in Attachment A hereto.
WHEREAS, Vendor desires to acquire the exclusive right to sell advertising time,
where and when available, on those channels of Operator's system which are
specified on Attachment E hereto.
NOW, THEREFORE, in consideration of the premises and of the exchange of mutual
promise, covenants, representations and warranties herein contained, receipt of
which are specifically acknowledged by the parties hereto, said parties
intending to be logically bound thereby, do hereby covenant and agree as
follows:
1) Operator does hereby agree that Vendor subject to the terms and conditions
hereinafter set forth, will have the exclusive right to sell advertising time on
specified cable television channels of Operator that are now, or will be in the
future, feasible or available for such use as more specifically delineated
herein.
2) Vendor shall maintain all equipment necessary to produce and deliver
signals to the headend of Operator's system for the purpose of transmitting
advertising messages to Operator's subscribers, said equipment being described
in Attachment B hereto. Operator reserves right to charge Vendor at the rate of
$20.00 per hour in the event Operator employees preform work on behalf of the
Vendor. Operator will make available at its headend such space as is necessary
for the installation and operation of such equipment needed to interface with
Operator's cable system. Vendor shall not maintain or otherwise be responsible
for any equipment or facilities of Operator that are required to the headend for
transmitting the said signal to Operator's subscribers.
Operator will use best efforts to cause the said signals to be transmitted
to its subscribers without degradation, and in a manner to achieve the same
quality as the signals transmitted on the other channels of the cable systems.
Operator shall not maintain or otherwise be responsible for any equipment or
facilities necessary to produce and deliver signals to the headend of Operator's
system for the purpose of transmitting advertising messages to Operator's
subscribers as generally specified in Attachment B. Vendor will cause said
advertising messages to be delivered to Operator's headend without degradation
and in a manner to achieve the same quality as the signals transmitted on
channel of the cable systems.
3) Any failure, interruption or degradation in transmitting said signals, in
which advertising messages have been or may be inserted, either in whole or in
part, resulting from technical difficulties or failure of any of Operator's
equipment, will be promptly brought to the attention of Vendor and shall be
corrected by Operator as soon as reasonably possible. Vendor specifically
understands the Operator at its option may deliver some or all of the said
signals as part of a tier service or scrambled and agrees that such tiering or
scrambling shall not be considered degradation of signal quality as compared to
transmission of other system channels. Any failure, interruption or degradation
in inserted messages, either whole or in part resulting from technical
difficulties or failure of any of Vendor's equipment, will promptly be brought
to the attention of Vendor and shall be corrected by Vendor within three (3)
days.
4) Vendor warrants that the advertising sold will not contain any libelous,
slanderous, obscene or defamatory material, and will not, when exhibited by
operator, violate or infringe upon the rights of any person, firm, or
corporation, or any other party, or give rise to any adverse claim with respect
to any common law or any other right (including, without limitation, any
copyright, literacy, trademark, contractual, dramatic or motion picture right,
or right of privacy of any person, firm, corporation, or any other party.)
Vendor further warrants that the advertising sold by Vendor will not violate or
infringe upon any music performance and/or music synchronization rights. The
Operator shall have the absolute right censor any commercial with content that
it deems to be unsuitable.
Vendor agrees not to air commercials promoting Direct TV, Primestar, USSB,
Alphastar, Echostar, or any other competitive distributors advertisements.
-2-
5) Vendor shall indemnify and hold Operator harmless from and against any and
all claims, damage or liability, including counsel fees and the cost and expense
of any legal action, from libel, slander, invasion of privacy, improper trade
practices, illegal competition, infringement or copyright or licenses, music
performance and/or music synchronization rights, or any other wrongful conduct
as well as any violation of laws or regulations, Federal, state or local,
resulting from the transmission of material supplied or produced by Vendor.
6) Operator shall indemnify and hold Vendor harmless from and against any and
all claims, damage or liability, including counsel fees and the cost and expense
of any legal action, for libel, slander, invasion of privacy, improper trade
practices, illegal competition, infringement of trademark or trade name, unfair
competition, infringement of copyright or licenses, or any other wrongful
conduct, as well as any violation of laws or regulations, Federal, state or
local, resulting from the transmission of material supplied or produced by
Operator.
7) This agreement is subject to the terms of the licenses held by Operator and
to all applicable Federal, state and municipal laws, regulations and decisions,
either presently in existence or enacted, make or enforced hereafter, including
regulations and actions of all governmental administrative agencies and
commissions having jurisdiction.
8) Operator and Vendor recognize and agree that either Vendor or Operator may
sell it business and any and all assets of said business at any time during the
term of this Agreement. The parties agree that in the event Vendor desires to
sell its business or any part thereof, written notice thereof reciting all terms
and conditions of the offer to sell and buy, including identifications of the
parties involved, will be given to Operator and Operator shall, for the period
of thirty (30) days, have the option to purchase the business or assets from
Vendor at the price and under the same conditions which said business or assets
are finally offered to a third party. Operator's option as described above,
shall, at Operator's sole discretion, relate to Vendor's entire business or any
portion thereof. Upon Operator's failure to exercise its option in writing
within thirty (30) days after receipt of a written notice from Vendor of an
offer to sell by Vendor, Vendor may sell the business or assets to such third
party.
Vendor will have no such right as to Operator only upon receipt of written
acceptance from Buyer of Operator's assets. However, Operator agrees that the
provisions of this contract will be binding on any assigns or successors in
interest of Operator. Vendor likewise agrees that the covenants and conditions
contained in this Agreement shall bind its successors in interest or assigns.
Operator's right of first refusal shall not be valid on any sale of partial
interest made through the Private Placement Sale of Stock.
-3-
9) Any notice or demand, under the terms of this Agreement or under the status,
which must or may be given or made by a party hereto shall be made in writing
and shall be delivered by hand or by certified mail, return receipt, addressed
to the respective parties as follows:
TO OPERATOR: Xxxxxxx Telephone Cooperative Corporation, Inc.
Xxxxxxx X. Xxxxxxxx
X.X. Xxx 000
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
TO VENDOR: Chattanooga Regional Interconnect
Xxxxxxx X. Xxxxxx
0000 Xxxxxxxxxxx Xx Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx
00000
10) Vendor may not sell advertising time or transmit advertising messages on
those channels of Operator's cable system which transmit signal of television
broadcast stations. However, advertising time may be sold by Vendor and
advertising messages transmitted on Operator's cable system on the Channels
listed on Attachment E which are carrying transmissions that are designed and
intended for insertion of advertising messages and or programming.
-4-
11) Attached hereto, and made an integral part hereof, are the following
documents:
(1) Attachment A - List of Operator's franchises.
(2) Attachment B - Equipment to be installed by Vendor.
(3) Attachment C - Amount and method of payment.
(4) Attachment D - Term of this Agreement.
(5) Attachment E - Operator's channels with advertising availabilities
to be sold by Vendor.
12) This agreement and the attachments hereto set forth the entire
understanding of the parties and oral or written communications not contained in
this Agreement are of no force or effect. This Agreement will be construed under
the laws of the State of Tennessee.
IN WITNESS WHEREOF, the undersigned parties have executed this Agreement on the
day and year first above written.
In the presence of:
Xxxxxxx Telephone Cooperative Corporation, Inc.
/s/ XXXX X. XXXXXX By: /s/ XXXX XXX XXXXXX
------------------ -------------------
SEC. Its: PRESIDENT
------------------ -------------------
CHATTANOOGA REGIONAL INTERCONNECT
/s/ XXXXXXX XXXXXXXX By: /s/ XXXXXXX X. XXXXXX
-------------------- ---------------------
NOTARY Its: PRESIDENT
-------------------- ---------------------
My commission expires March 21, 2001.
-5-
ATTACHMENT A
LIST OF OPERATOR'S FRANCHISES
Sequatchie County, Tennessee
Xxxxxxx County, Tennessee
Van Buren County, Tennessee
Cumberland County, Tennessee
-6-
ATTACHMENT B
EQUIPMENT TO BE INSTALLED BY VENDOR
Vendor hereby agrees to install sufficient equipment in the headend covered
by this agreement to automatically insert local commercials on channels for
which market demand levels dictate equipment be installed as mutually agreed.
Any substandard equipment in headends at the time of this contract will be
brought up to standard within six months of the date of this contract.
In addition, Vendor shall maintain sufficient production equipment in it's
Operations Center to produce all commercials sold by it's staff within one
hundred (100) mile radius of said Operations center.
Vendor reserves the right to add, delete, or rearrange equipment
configuration as market conditions may dictate the necessity thereof as mutually
agreed.
Vendor agrees to use a cuing acceptable to Operator.
-7-
ATTACHMENT C
AMOUNT AND METHOD OF PAYMENT
Vendor will pay operator fees quarterly based on the following schedule:
Year 1 - May 15, 1997 thru May 15, 1998 16%
Year 2 - May 15, 1998 thru May 15, 1999 18%
Year 3 - May 15, 1999 thru May 15, 2000 20%
Year 4 - May 15, 2000 thru May 15, 2001 22%
Year 5 - May 15, 2001 thru May 15, 2002 24%
Year 6 - May 15, 2002 thru May 15, 2003 26%
Operator agrees to allow Vendor a bad debt ratio of 5% annually in its
calculation of annual operator fees.
-8-
ATTACHMENT D
TERMS OF AGREEMENT
This contract shall be for an initial period of (6) six years, commencing on May
15, 1997.
This Agreement may be terminated by thirty (30) days written notice by the
Operator upon any one of the following occurrences:
- A petition in bankruptcy or for reorganization is filed by or against
Vendor under any Bankruptcy Act now or hereafter in force; Vendor makes an
assignment for the benefit of it creditors; a receiver, trustee, liquidator or
custodian is appointed for all or a substantial part of Vendor's property and
the order of appointment is not vacated within thirty (30) days; Vendor assigns
or encumbers this Agreement contrary to the terms hereof; all or a substantial
part of Vendor's property is sequestered and the order of sequestration is not
vacated within thirty (30) days.
- Breach of terms of contract.
- Violation of Operator's Franchise Agreement.
- Upon Vendor's failure to meet payment within thirty (30) days of the close
of each quarter.
- In the event a notice to cancel is submitted by the Operator to Vendor
within cause stated, Vendor shall have thirty (30) days to correct the cause for
cancellation thereby voiding said cancellation notice; otherwise, cancellation
shall become effective immediately.
-9-
ATTACHMENT E
OPERATOR'S CHANNELS WITH ADVERTISING AVAILABILITIES
A. PROGRAMMING SERVICE - ADVERTISING AVAILABILITIES.
Operator grants Vendor the right to sell, at rates developed by Vendor, the
local commercial availabilities on ESPN, CNN, Headlines News, TNT, USA,
Discovery, SportsSouth, Family, VH1, E, Home and Garden, MTV, A&E and Nick cable
channels carried on the cable television system designated by the Operator. If
after twelve (12) months of operations, Vendor had not utilize all of the
available avails on the channels at their disposal, then Vendor, after giving a
thirty (30) day written notice, may use these avails for its own cross
promotional uses, i.e., bonus spots; however, Vendor shall retain the rights to
Commercial Advertising Sales to "outside" parties. Those avails not sold by
Vendor will be made available to Operator for its own use. Operator retains the
right to sell any type of advertising it wishes on any other network or channel
not mentioned above.
B. RESERVATION OF AVAILABILITIES BY OPERATOR
Vendor will provide twenty percent (25%) of the avails to Operator for its
cross promotion purposes. Such avails shall be made available in all day parts
on an equal basis.
Operator reserves the right to have a third party vendor, such as NuStar,
use all avails to which it has rights under paragraphs A and B above for cross
promotional purposes.
C. ADDITIONAL CHANNELS - PROGRAMMING
If at any time after the effective date of this Agreement, Operator is or
shall begin carrying a satellite delivered cable television programming service
not listed in above on which there is available time for local insertion of
advertisements, Operator and Vendor will negotiate for the inclusion of such
programming service subject to new or additional terms to be negotiated by the
parties.
-10-
ATTACHMENT E (CONTINUED)
D. Vendor agrees to include the name "Xxxxxxx Telephone Co-Op" or as Operator
designates in all promotional commercials, promoting Vendor's ad sales business
on Operator's systems. Vendor agrees to limit such promotional announcements to
a reasonable number.
-11-
CABLE AD SALES AGREEMENT
THIS AGREEMENT made and entered into this first day of August, 1996 between
Chattanooga Regional Interconnect of Chattanooga, Tennessee, hereinafter
referred to as "Vendor", and Helicon Corporation of Englewood Cliffs, New Jersey
hereinafter referred to as "Operator".
WITNESSETH
WHEREAS, Operator owns and operates cable television systems, serving portions
of Xxxxxx County, Tn, Xxxx County, Tn, Dade County, Ga., Chattooga County, Ga.
and Xxxxxx County, Ga. and subject to franchises listed in Attachment A hereto.
WHEREAS, Vendor desires to acquire the exclusive right to sell advertising time,
where and when available, on those channels of Operator's system which are
specified on Attachment E hereto.
NOW, THEREFORE, in consideration of the premises and of the exchange of mutual
promise, covenants, representations and warranties herein contained, receipt of
which are specifically acknowledged by the parties hereto, said parties
intending to be logically bound thereby, do hereby covenant and agree as
follows:
1) Operator does hereby agree that Vendor subject to the terms and conditions
hereinafter set forth, will have the exclusive right to sell advertising time on
specified cable television channels of Operator that are now, or will be in the
future, feasible or available for such use as more specifically delineated
herein.
2) Vendor shall maintain all equipment necessary to produce and deliver signals
to the headend of Operator's system for the purpose of transmitting advertising
messages to Operator's subscribers, said equipment being described in Attachment
B hereto. Operator reserves right to charge Vendor at the rate of $20.00 per
hour in the event Operator employees preform work on behalf of the Vendor.
Operator will make available at its headend such space as is necessary for the
installation and operation of such equipment needed to interface with Operator's
cable system. Vendor shall not maintain or otherwise be responsible for any
equipment or facilities of Operator that are required to the headend for
transmitting the said signal to Operator's subscribers.
Operator will use best efforts to cause the said signals to be
transmitted to its subscribers without degradation, and in a manner to achieve
the same quality as the signals transmitted on the other channels of the cable
systems. Operator shall not maintain or otherwise be responsible for any
equipment or facilities necessary to produce and deliver signals to the headend
of Operator's system for the purpose of transmitting advertising messages to
Operator's subscribers as generally specified in Attachment B. Vendor will cause
said advertising messages to be delivered to Operator's headend without
degradation and in a manner to achieve the same quality as the signals
transmitted on channel of the cable systems.
3) Any failure, interruption or degradation in transmitting said signals, in
which advertising messages have been or may be inserted, either in whole or in
part, resulting from technical difficulties or failure of any of Operator's
equipment, will be promptly brought to the attention of Vendor and shall be
corrected by Operator as soon as reasonably possible. Vendor specifically
understands the Operator at its option may deliver some or all of the said
signals as part of a tier service or scrambled and agrees that such tiering or
scrambling shall not be considered degradation of signal quality as compared to
transmission of other system channels. Any failure, interruption or degradation
in inserted messages, either whole or in part resulting from technical
difficulties or failure of any of Vendor's equipment, will promptly be brought
to the attention of Vendor and shall be corrected by Vendor within three (3)
days.
4) Vendor warrants that the advertising sold will not contain any libelous,
slanderous, obscene or defamatory material, and will not, when exhibited by
operator, violate or infringe upon the rights of any person, firm, or
corporation, or any other party, or give rise to any adverse claim with respect
to any common law or any other right (including, without limitation, any
copyright, literacy, trademark, contractual, dramatic or motion picture right,
or right of privacy of any person, firm, corporation, or any other party.)
Vendor further warrants that the advertising sold by Vendor will not violate or
infringe upon any music performance and/or music synchronization rights. The
Operator shall have the absolute right censor any commercial with content that
it deems to be unsuitable.
Vendor agrees not to air commercials promoting Direct TV, Primestar, USSB,
Alphastar, Echostar, or any other competitive distributors advertisements.
-2-
5) Vendor shall indemnify and hold Operator harmless from and against any and
all claims, damage or liability, including counsel fees and the cost and expense
of any legal action, from libel, slander, invasion of privacy, improper trade
practices, illegal competition, infringement or copyright or licenses, music
performance and/or music synchronization rights, or any other wrongful conduct
as well as any violation of laws or regulations, Federal, state or local,
resulting from the transmission of material supplied or produced by Vendor.
6) Operator shall indemnify and hold Vendor harmless from and against any and
all claims, damage or liability, including counsel fees and the cost and expense
of any legal action, for libel, slander, invasion of privacy, improper trade
practices, illegal competition, infringement of trademark or trade name, unfair
competition, infringement of copyright or licenses, or any other wrongful
conduct, as well as any violation of laws or regulations, Federal, state or
local, resulting from the transmission of material supplied or produced by
Operator.
7) This agreement is subject to the terms of the licenses held by Operator and
to all applicable Federal, state and municipal laws, regulations and decisions,
either presently in existence or enacted, make or enforced hereafter, including
regulations and actions of all governmental administrative agencies and
commissions having jurisdiction.
8) Operator and Vendor recognize and agree that either Vendor or Operator may
sell it business and any and all assets of said business at any time during the
term of this Agreement. The parties agree that in the event Vendor desires to
sell its business or any part thereof, written notice thereof reciting all terms
and conditions of the offer to sell and buy, including identifications of the
parties involved, will be given to Operator and Operator shall, for the period
of thirty (30) days, have the option to purchase the business or assets from
Vendor at the price and under the same conditions which said business or assets
are finally offered to a third party. Operator's option as described above,
shall, at Operator's sole discretion, relate to Vendor's entire business or any
portion thereof. Upon Operator's failure to exercise its option in writing
within thirty (30) days after receipt of a written notice from Vendor of an
offer to sell by Vendor, Vendor may sell the business or assets to such third
party.
Vendor will have no such right as to Operator only upon receipt of written
acceptance from Buyer of Operator's assets. However, Operator agrees that the
provisions of this contract will be binding on any assigns or successors in
interest of Operator. Vendor likewise agrees that the covenants and conditions
contained in this Agreement shall bind its successors in interest or assigns.
Operator's right of first refusal shall not be valid on any sale of partial
interest made through the Private Placement Sale of Stock.
-3-
9) Any notice or demand, under the terms of this Agreement or under the status,
which must or may be given or made by a party hereto shall be made in writing
and shall be delivered by hand or by certified mail, return receipt, addressed
to the respective parties as follows:
TO OPERATOR: Helicon Corporation
Xxxxx X. Xxxx
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx Cliffs, N.J.
07632
With copies to Xxx Xxxxxx and Xxxx Xxxxxx,
in the Jasper, TN office.
TO VENDOR: Chattanooga Regional Interconnect
Xxxxxxx X. Xxxxxx
0000 Xxxxxxxxxxx Xx Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx
00000
10) Vendor may not sell advertising time or transmit advertising messages on
those channels of Operator's cable system which transmit signal of television
broadcast stations. However, advertising time may be sold by Vendor and
advertising messages transmitted on Operator's cable system on the Channels
listed on Attachment E which are carrying transmissions that are designed and
intended for insertion of advertising messages and or programming.
-4-
11) Attached hereto, and made an integral part hereof, are the following
documents:
(1) Attachment A - List of Operator's franchises.
(2) Attachment B - Equipment to be installed by Vendor.
(3) Attachment C - Amount and method of payment.
(4) Attachment D - Term of this Agreement.
(5) Attachment E - Operator's channels with advertising availabilities
to be sold by Vendor.
12) This agreement and the attachments hereto set forth the entire understanding
of the parties and oral or written communications not contained in this
Agreement are of no force or effect. This Agreement will be construed under the
laws of the State of Tennessee.
IN WITNESS WHEREOF, the undersigned parties have executed this Agreement on the
day and year first above written.
In the presence of:
HELICON CORPORATION
8/2/96 By: /s/ XXXXX X. XXXX
--------------------------- ----------------------
Its: V.P. OPERATIONS
--------------------------- ----------------------
CHATTANOOGA REGIONAL INTERCONNECT
By: /s/ XXXXXXX X. XXXXXX
--------------------------- ----------------------
Its: PRESIDENT
--------------------------- ----------------------
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ATTACHMENT A
LIST OF OPERATOR'S FRANCHISES
Xxxxxx County, Tennessee
Xxxx County, Tennessee
Dade County, Georgia
Chattooga County, Xxxxxxx
Xxxxxx County, Georgia
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ATTACHMENT B
EQUIPMENT TO BE INSTALLED BY VENDOR
Vendor hereby agrees to install sufficient equipment in the headend covered
by this agreement to automatically insert local commercials on channels for
which market demand levels dictate equipment be installed as mutually agreed.
Any substandard equipment in headends at the time of this contract will be
brought up to standard within six months of the date of this contract.
In addition, Vendor shall maintain sufficient production equipment in it's
Operations Center to produce all commercials sold by it's staff within one
hundred (100) mile radius of said Operations center.
Vendor reserves the right to add, delete, or rearrange equipment
configuration as market conditions may dictate the necessity thereof as mutually
agreed.
Vendor agrees to use a cuing acceptable to Operator.
Vendor agrees that it will produce on behalf of Operator, at a credit of .50
per sub per year charge and as requested by Operator, commercials advertising
the Operator's services or promotions.
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ATTACHMENT C
AMOUNT AND METHOD OF PAYMENT
Vendor agrees to compensate Operator at the time of execution of this
contract at the rate of $1.00 per sub, per year. At the conclusion of each year,
during a "reconciliation period", any operator fees unpaid at that time will be
drawn against the up front $1.00 per subscriber, per year charge. Further, as
Operator makes acquisitions within the Vendors market place an additional $1.00
per subscriber, per year, per additional subscriber acquired, Vendor will make
another "up front" payment.
Vendor agrees that at any point the "up front" proceeds draw below
$10,000.00, vendor will refurbish fund at the rate of .50 per subscriber.
Minimum monthly fees will be paid to Operator by Vendor at the rate of 2.70
per subscriber, per year. Minimum monthly fees will be paid within 30 days of
the close of previous months business. The rate of minimum monthly payment will
be reviewed at the conclusion of a nine month period from the date of this
contract. At the time of review a formula of the following will be used to
calculate future minimum payments.
Nine months net collected revenue averaged to a monthly sum, less 20%,
multiplied by the appropriate rate of Operator fees. Year 3 minimum will be year
2 + 15%. Year 4 will be year 3 + 15%. Year 5 will be year 4 + 15%.
Annual Operator fees will be calculated at the following schedule:
Year 1 - August 1, 1996 thru July 31, 1997 28%
Year 2 - August 1, 1997 thru July 31, 1998 29%
Year 3 - August 1, 1998 thru July 31, 1999 32%
Year 4 - August 1, 1999 thru July 31, 2000 34%
Year 5 - August 1, 2000 thru July 31, 2001 36%
Operator agrees to allow Vendor a bad debt ratio of 5% annually in its
calculation of annual operator fees.
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ATTACHMENT D
TERMS OF AGREEMENT
This contract shall be for an initial period of (5) five years, commencing
on August 1, 1996.
This agreement may be terminated by thirty (30) days written notice by
Operator or Vendor upon any of the following occurrences:
- A petition in bankruptcy or for reorganization is filed by or against
Vendor or Operator under any Bankruptcy Act now or hereafter in force; Vendor or
Operator makes an assignment for the benefit of it creditors; a receiver,
trustee, liquidator or custodian is appointed for all or a substantial part of
vendor's property and the order of appointment is not vacated within thirty (30)
days; Vendor assigns or encumbers this agreement contrary to the terms hereof;
all or a substantial part of vendor or operators property is sequestered and the
order of sequestration is not vacated within thirty (30) days.
- Breach of terms of contract.
- Violation of Operator's Franchise Agreement.
- Upon Vendor's failure to meet the monthly guaranteed payment within thirty
(30) days of the fifteenth of each month.
- In the event a notice to cancel is submitted by the Operator or Vendor
within cause stated, Operator or Vendor shall have thirty (30) days to correct
the cause for cancellation thereby voiding said cancellation notice; otherwise,
cancellation shall become effective immediately.
-9-
ATTACHMENT E
OPERATOR'S CHANNELS WITH ADVERTISING AVAILABILITIES
A. PROGRAMMING SERVICE - ADVERTISING AVAILABILITIES.
Operator grants Vendor the right to sell, at rates developed by Vendor, the
local commercial availabilities on ESPN, CNN, Headlines News, TNT, USA,
Discovery, SportsSouth, Family, VH1, E, Home and Garden, MTV, A&E and Nick cable
channels carried on the cable television system designated by the Operator. If
after twelve (12) months of operations, Vendor had not utilize all of the
available avails on the channels at their disposal, then Vendor, after giving a
thirty (30) day written notice, may use these avails for its own cross
promotional uses, i.e., bonus spots; however, Vendor shall retain the rights to
Commercial Advertising Sales to "outside" parties. Those avails not sold by
Vendor will be made available to Operator for its own use. Operator retains the
right to sell any type of advertising it wishes on any other network or channel
not mentioned above.
B. RESERVATION OF AVAILABILITIES BY OPERATOR
Vendor will provide twenty percent (25%) of the avails to Operator for its
cross promotion purposes. Such avails shall be made available in all day parts
on an equal basis. Additionally, Vendor will provide production services for
special events as agreed upon by Vendor and Operator.
Operator reserves the right to have a third party vendor, such as NuStar,
use all avails to which it has rights under paragraphs A and B above for cross
promotional purposes.
C. ADDITIONAL CHANNELS - PROGRAMMING
If at any time after the effective date of this Agreement, Operator is or
shall begin carrying a satellite delivered cable television programming service
not listed in above on which there is available time for local insertion of
advertisements, Operator and Vendor will negotiate for the inclusion of such
programming service subject to new or additional terms to be negotiated by the
parties.
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ATTACHMENT E (CONTINUED)
D. Vendor agrees to include the name "Helicon Cablevision" or as Operator
designates in all promotional commercials, promoting Vendor's ad sales business
on Operator's systems. Vendor agrees to limit such promotional announcements to
a reasonable number.
-11-
ADVERTISING SALES
REPRESENTATIVE AGREEMENT
AGREEMENT made this 1st day of August, 1994 by and between Century Alabama
Corp., a corporation organized and existing under the laws of the State of
Delaware with offices at 000 Xxxxx Xxxxxx Xxxxx, Xxxx Xxxxx, XX 00000,
("Client") and Chattanooga Regional Interconnect, Inc., a corporation organized
and existing under the laws of the State of Tennessee with offices at 0000
Xxxxxxxx Xxxx, Xxxxx X-00, Xxxxxxxxxxx, XX 00000 ("Representative").
WHEREAS, Client owns and/or operates cable television systems in the areas
listed on Schedule A annexed hereto and made a part hereof (the "Systems"); and
WHEREAS, Client has entered and may hereafter enter into agreements with various
entities to provide cable television programming services (the "Programming
Services") to subscribers certain of which Programming Services are listed on
Schedule B annexed hereto and made a part hereof (such agreements to be referred
to herein as the "Affiliation Agreements"); and
WHEREAS, pursuant to such Affiliation Agreements time has been (or will be) made
available to Client within such Programming Services for advertising by Client;
and
WHEREAS, Representative is in the business of selling various clients'
advertising time for the exhibition of commercial advertising on such various
clients' cable television systems, and of producing and of providing various
services related to cable television advertising; and
WHEREAS, Client seeks to obtain the services of Representative, including
Representative's services for the sale of Advertising Inventory (as hereinafter
defined) on the Programming Services and Representative is willing to and
desires to provide such services, subject to the terms and conditions herein set
forth.
NOW, THEREFORE, in consideration of the mutual promises set forth herein and for
other good and valuable consideration, Representative and Client mutually agree
as follows:
1. DEFINITIONS
As used in the Agreement, the following terms will have the following meanings:
(a) ADVERTISING INVENTORY. Time for advertising available for sale by Client on
the Programming Services distributed by Client on the Systems after
reduction by Client Time (as hereinafter defined). In the event that such
time for advertising available for sale by Client on the Programming
Services is reduced or eliminated for a Programming Service or Services.
Client shall not be liable to Representative or any third party for any such
reduction or elimination at such time regardless of whether or not
Representative has sold such time prior to such reduction or elimination.
Advertising Inventory expressly excludes so-called broadcast over-the-air
signals except to the extent that Client is expressly authorized to sell
certain of such time to commercial advertisers and excluding time on certain
local access, so-called leased channels and similar channels.
1
(b) CABLE RELATED SERVICE AGREEMENTS. Agreements heretofore or hereafter entered
into by Client including Affiliation Agreements and agreements with
suppliers of cable related services including, without limitation, shopping
networks, cable television guide publishers and equipment suppliers which
agreements contain provisions for the advertising, marketing and promotion
of cable television related services within Client Time.
(c) CLIENT TIME. Time within Programming Services used by Client for (i) public
service or public affairs announcements, (ii) advertising, promotion or
marketing of Client's cable television programming and related services,
(iii) programming promotions, (iv) advertising time sold by Client pursuant
to Cable Related Service Agreements and (v) any other purposes which Client
may deem appropriate, all in such amounts and on such terms as Client may
determine in its sole discretion. Subject to the Terms of the Affiliation
Agreements and the Cable Related Service Agreements and any other
preexisting obligations of Client regarding Client Time, Client Time may be
distributed evenly throughout the day. Client Time will in no event be less
than 25% (excluding unsold Advertising Inventory) of all time available for
sale of the Advertising Inventory on the Programming Services. All revenues
derived from the sale of Client Time will be and remain the sole property of
Client.
(d) GROSS REVENUES. Total gross revenues billed (whether or not collected),
charged, collected, or received or in any manner gained or derived by
Representative during the Term for the sale of Advertising Inventory, or for
consulting services or any other act service or employment done as part of
or in connection with this agreement. Gross Revenues will also include any
such act, service or employment by Representative for which a charge is made
or credit allowed, barter or trade received, including all receipts, cash,
credits and property of any kind or nature, any amount for which a credit is
allowed by the advertiser to Representative without any deduction therefrom
on account of the cost of the service rendered, property sold, materials
used, labor of service cost, interest paid or payable, losses or any other
expense whatsoever. Any engagement of any third party advertising
representative as described in subparagraph 2(b), will diminish Gross
Revenues upon which Client's Percentage is based, not to exceed fifteen
percent (15%) and only when Representative furnishes to Client written
evidence that there has been a third party advertising representative. Any
charge by third party representative in excess of fifteen percent (15%) will
be the obligation of Representative, with the exception that Representative
may, in addition to standard advertising agency discounts (15%) deduct fair,
actual commissions not in excess of thirty percent (30%) of
national/regional rep firms (included within Schedule C "The
Regional/National Rep Firms" annexed hereto and which may be updated from
time to time with written approval by both parties), which will also
diminish Gross Revenues upon which Client's percentage are based, but only
when Representative furnishes to Client written evidence of the engagement
of any such firm and amount of such commission charged by such firm and paid
by Representative, unless otherwise approved in writing by Client.
2
(e) TERM. As used in this Agreement, the Term will mean the period of time
commencing June 1, 1994 and continuing in full force and effect and ending
May 31, 1997 unless sooner terminated in accordance with this Agreement.
2. APPOINTMENT OF REPRESENTATIVE
(a) SCOPE. Subject to the restrictions contained in this Agreement, (i) SALE OF
ADVERTISING. Client hereby appoints Representative as an advertising
representative for the sale of the Advertising Inventory on the Systems for
the Term. (ii) INCREMENTAL REPRESENTATION AND SALES. During the first 18
months of the Term Representative will sell and insert Advertising Inventory
on 4 Programming Services approved by Client for insertion of Advertising
Inventory and listed on Schedule B. At the commencement of the 19th month of
the Term Representative will use its best efforts to maximize the sale of
Advertising Inventory on 4 additional Programming Services approved by
Client and added to Schedule B by a written amendment. Beginning on such
respective commencement dates and at all times thereafter throughout the
Term Representative will sell Advertising Inventory on such approved
Programming Services. Representative may add or delete certain Programming
Services from Schedule B only with Client's prior written approval. (iii)
PRODUCTION, CONSULTATION AND VARIOUS OTHER SERVICES. As further incentive
for Client to enter into this Agreement, Representative agrees to provide
Client with various services, including but not limited to, production
services and agrees that it will make and complete on behalf of Client, free
of charge, a minimum of 1 distinct commercial(s) per month (each commercial
to be 30 seconds in duration) to be used for any purpose Client deems
appropriate. Such commercials will not be considered distinct for purposes
of this agreement due to the Representative's use of distinct audio and/or
video tags (as such term is known and used in the advertising industry) on
similar or the same commercials. Said commercials will become the sole
property of Client. If in any month, such minimum of 1 commercial(s) is/are
not made and completed by Representative on behalf of Client, Client will
have the right to require Representative to make and complete the balance of
such minimum of 1 commercial(s) per month in any subsequent month during the
Term. Representative will not be required, however, to produce any more than
6 of such carry over commercials in any one subsequent month. However,
Client will not be responsible for and Representative will be solely
responsible for, payment of any in house talent fees, residuals and all
other costs and fees in connection with the production of such commercials.
(iv) NATURE OF RELATIONSHIP. Client and Representative intend that
Representative be an independent contractor and Representative will have no
authority to bind Client by contract or otherwise. Representative accepts
such appointment and agrees to use its best efforts in the sale of
Advertising Inventory. (b) THIRD PARTY ADVERTISING REPRESENTATIVE.
Representative agrees to provide sufficient personnel to enable
Representative to maximize the revenues from the sale of the Advertising
Inventory and to fulfill all of Representative's obligations contained
herein. Such efforts may include the engagement of a third party advertising
representative, subject to the terms and conditions hereof, provided that
any such engagement will be subject to the prior written approval of Client
which approval Client may withhold in its sole discretion.
3
(c) CLIENT'S RESERVATION OF RIGHT TO SELL. Client retains and reserves to itself
all rights not expressly granted to Representative herein including but not
limited to the exclusive right to sell or trade Client Time and to enter
into Cable Related Service Agreements. Representative agrees to notify
suppliers of cable television programming and other cable related services
wishing to buy Advertising Inventory on the Systems that Representative does
not have the right to sell such advertising time and that such advertisers
should deal directly with Client. Representative agrees to provide any such
suppliers with Client's address, telephone number and contact for such
inquiry. Representative will promptly notify Client of each such inquiry.
(d) INSERTION OF CLIENT MATERIALS. All announcements, advertising, promotions
and other uses of the Client Time are referred to as "Client Materials."
Client will deliver taped copies of any Client Material to Representative
and Representative will integrate such Client Material into its materials
for insertion on Programming Services and times designated by Client. If
such taped copies are not compatible with the Insertion Equipment,
Representative will, at its expense, prepare compatible taped copies.
(e) UNSOLD ADVERTISING INVENTORY. Representative agrees to utilize all unsold
Advertising Inventory as Client Time by insertion of Client Materials at no
cost to Client.
3. ADVERTISING GUIDELINES
(a) CLIENT'S POLICIES. Representative agrees to comply with all of Client's
policies and directions. Representative shall submit to Client any sales and
marketing materials it wishes to use and Client will have the right to
approve all sales and marketing materials created or proposed for use by
Representative before they are distributed.
(b) AFFILIATION AGREEMENTS. Representative shall comply with all terms and
restrictions contained in Client's various Affiliation Agreements. In no
event will Representative sell any Advertising Inventory for advertising by
person, firms or corporations competitive with the Programming Service
within which such advertising is to be inserted.
(c) SCHEDULING OF CLIENT TIME. Representative's rights will be subject to and
will accommodate the time requirements, designations and scheduling of
Client Time. Representative agrees that all Client Materials will be run
correctly and as required either by Client and/or Cable Related Service
Agreements and Representative agrees to provide Client with logs regarding
all Advertising Inventory run by Representative and an affidavit regarding
the accuracy of such run. In the event the sale of Advertising Inventory,
Client Time and the time requests under Cable Related Service Agreements
result in over-booking of particular time slots Representative and Client
will attempt to reach a mutually satisfactory resolution of the issue, but
in the event resolution cannot be reached, Client Time will have priority.
4. PRODUCTION OF ADVERTISING
(a) PERSONNEL/TALENT. Representative agrees to maintain, or make arrangements
for, the necessary production personnel and equipment to produce
high-quality television commercials and will offer such production services
to
4
potential advertisers at reasonable costs. Client will not be responsible
for and Representative will be solely responsible for production of said
commercials, including without limitation, payment of any talent fees,
residuals, and all other costs and fees in connection with the production of
such commercials.
(b) QUALITY. Representative represents that all commercials produced or used for
the purposes of this Agreement will be of broadcast quality, in good taste
and will accord with the requirements contained herein. In no event will any
appeals for funds be aired nor will there by an advertising of products or
services which are unacceptable under the advertising guidelines of the
National Association of Broadcasters which were in effect immediately prior
to the time such guidelines ceased to be effective unless agreed to by
Client in writing in its sole discretion. Further, any and all commercials
will conform to the standards and restrictions of the Programming Services
on which they will be cablecast. The standards described above in this
paragraph 4(b) will hereinafter be referred to as the "Quality Standards".
Client will have a reasonable opportunity, to review all proposed
advertising and will have the right to reject any advertising it deems to be
objectionable in whole or in part, but Client will not be responsible for
the content of any commercials despite the fact that it may have reviewed
same and not rejected same or not found same to be objectionable.
5. SERVICE MARKS
Client grants to Representative, during the Term, a limited license to utilize
any and all service marks of Client which Client uses to promote the Systems and
to the extent Client has the right to do so, the service marks of Programming
Services in which Advertising Inventory is available (both of which are referred
to as the "Marks") in furtherance of Representative's obligations pursuant to
this Agreement. Any such use of the Marks will be subject to Client's
instructions. Representative agrees to provide Client with examples of any and
all materials incorporating use of the Marks prior to such use by
Representative. Client will have ten (10) business days subsequent to such
notice to either approve or disapprove of such use of the Marks by
Representative. Representative acknowledges that Representative will not acquire
any proprietary rights in any Marks by reason of this Agreement or otherwise.
6. REPRESENTATIVE'S AGREEMENTS FOR SALE OF ADVERTISING INVENTORY
Representative agrees that all agreements for the sale of Advertising Inventory
will be in writing and will include the following provisions:
(a) it is advertiser's responsibility to provide to Representative all materials
necessary for the cablecast of the advertisement a reasonable period of time
in advance of the scheduled cablecast;
(b) the advertiser will be fully responsible for the content of all advertising
material submitted for the exhibition over the System will provide proof of
insurance and will indemnify Client in the event the cablecast of such
material violates any law, rule or regulation or infringes the rights of
third parties in any way;
5
(c) that Client is not responsible for any errors or omissions in or of the
advertising or for the payment of any fees, expenses or royalties with
respect to the advertisements and the materials contained therein; and
(d) that Client will have the right to reject any and all advertising which, in
the opinion of Client, does not meet the standards Client has set for
advertising over the System, is unlawful or otherwise inappropriate.
(e) Representative is not affiliated with and is not the agent of Client and is
not authorized to bind Client. In the event of termination of the Agreement
between Representative and Client, the Agreement between Representative and
the advertiser will automatically terminate. In such event, Representative
will return to advertiser any amounts paid to Representative by advertiser
for services not performed by Representative and not directed by Client to
be performed by Representative subsequent to the termination of the
agreement between Client and Representative.
7. DISTRIBUTION
(a) ADVERTISING MATERIALS. Advertisers will be responsible for delivering
advertising materials. All materials will be in a format compatible with the
Insertion Equipment and such materials will meet Client's Quality Standards
as set forth in paragraph 4(b) for material disseminated over the Systems.
Representative will be responsible for the proper insertion of all
advertising materials on the proper program services and at the scheduled
time (including without limitation insertion of all Client Materials). All
Advertising Materials will be the property of the Advertiser during the Term
and subsequent to the expiration of this Agreement.
(b) SCHEDULING. In the event the Systems do not function so that an
advertisement may be disseminated over the Systems at a particular scheduled
time, other than by reason of act of omission or commission of an advertiser
or an advertiser's agent, Representative or a third party, Client will
cooperate with Representative to assure that the particular advertiser may
be offered a "make good" of the commercial by Representative during the
calendar period ordered by the advertiser, it being understood and agreed
that Client will not be liable to Representative or to any customer, or
client of Representative or to any advertiser or agency of any advertiser
for any failure by Client to provide signals to that commercials may be
distributed in the Systems whether because of the breakdown of any System or
for any reason except, with respect to Representative, for the gross
negligence or willful misconduct of Client.
(c) AFFIDAVITS. Within 15 days after the end of each broadcast month,
Representative will supply any and all affidavits to advertisers, certifying
the dissemination of advertising.
(d) CHANNEL POSITION. Client reserves the right from time-to-time in its
discretion to add Programming Services to or delete Programming Services
from the Systems, and to move Programming Services to different channel
positions and to tier or re-tier the System's channel line-up. Client will
notify Representative of any such changes.
6
8. PAYMENTS
(a) RATE CARD. Representative will formulate a standard rate card for the
Advertising Inventory. Such rate card will be updated and repriced once
every six months during the Term. Such updating and re-pricing may be the
same as that in effect immediately preceding such updating and re-pricing.
Upon execution of this Agreement and upon each updating and re-pricing,
Representative will submit the Rate Card to Client for written approval,
which approval Client may withhold in its sole discretion. Representatives
will not deviate from such Rate Card to Client for written approval, which
approval Client may withhold in its safe discretion. Representative agrees
it will not reduce the net effective rate of the Advertising Inventory as
set forth on the Rate Card in any manner whatsoever. In particular
Representative agrees it will not sell or provide so called "bonus" spots or
"blind" spots of the Advertising Inventory without Client's prior written
approval. The sale of bonus spots occurs when certain spots of Advertising
Inventory are sold at the Rate Card Rate and additional or "bonus" spots are
given in the purchaser at a reduced cost or at no extra cost. The sale of
blind spots occurs when certain spots of Advertising Inventory are sold at
the rate Card Rate and additional or 'blind" spots are given to the
purchaser at no extra cost and/or without the purchaser's knowledge.
(b) BILLING AND REPORTING. Representative will be responsible for billing all
advertisers for all amounts due Representative. With regard to the portion
of Gross Revenues representing the amount to be billed to advertisers for
purchasing Advertising Inventory, such amount will not be calculated on
advertising rates less than those specified on the rate Card unless
expressly agreed to by Client in writing. Such billing will be made on a
monthly basis and will cover all Gross Revenues for each System during the
immediately preceding calendar month. On the 15th day of each month, during
the term, Representative will provide Client with an accounting of all Gross
Revenues for the immediately preceding calendar month. Such accounting will
itemize all amounts billed, advertiser by advertiser, will separate barter
from cash sales, and will be certified as to accuracy and completeness by
Representative's Chief Financial Officer. At the same time that
Representative provides Client with such accounting, Representative will
also provide Client with (i) copies of all invoices to advertisers and/or
their agencies or representatives during the immediately preceding calendar
month, (ii) a written description of the insertion tape for each network for
such preceding calendar month as referred to in section 3(c) hereof, (iii) a
copy and a summary of each contract entered into by Representative during
the immediately preceding calendar month pursuant to section 6 hereof and
(iv) a summary by time of day and Programming Service of all Client
Materials and Client Time utilized by Representative during the immediately
preceding calendar month.
(c) CLIENT'S PERCENTAGE. Together with the Reports described above,
Representative will remit to Client, in United States Dollars, the following
percentages of the aggregate of Gross Revenues ("Client's Percentage").
7
CLIENT'S PERCENTAGE OF
YEAR OF THE TERM GROSS REVENUES
First 28%
Second 32-1/2%
Third 37%
Acceptance of any payment by Client will not be deemed a waiver of any
provision of this Agreement.
(d) BARTER. Any and all barter advertising transactions (that is, arrangements
pursuant to which an advertiser barters goods or services in exchange for
advertising time) will be subject to the prior written approval of Client,
which Client may withhold it its sole discretion. The cash/value of the
goods and/or services bartered, for the purposes of determining Gross
Revenues for a particular time period, will be determined by Client at the
time a barter transaction is approved by Client. It is understood that all
payments to Client will be in cash and that no payment to Client will be
made in the form of bartered merchandise .
(e) FAVORED NATIONS. Representative agrees that the guaranteed dollar value per
subscriber as of any point in time paid to Client hereunder, shall not be
less than that paid to any other operator of a similar cable television
system represented by Representative. For the purposes of this paragraph, a
similar cable television system will be a system with approximately the same
channel capacity, member of basic subscribers, number of homes per cable
mile and average per capita income in the community it serves. For the
purposes of this paragraph, the guaranteed dollar value per subscriber is an
amount equal to the aggregate value of any guaranteed payment, service or
compensation received by such other cable television system operator from
Representative divided by the average number of actual advertising inserted
basic and tiered subscribers served by such other operator in the cable
system represented by Representative. In the event that at any time during
the Term, the guaranteed dollar value per subscriber received by any such
other cable television system operator from Representative exceeds the
guaranteed dollar value per subscriber paid to Client hereunder, then
Representative agrees to pay to Client the difference between such amount
paid to such other cable television system operator and the amount paid, to
Client for the period of time during which such difference is payments
exists.
(f) NO RELEASE. No acceptance by Client of any payments will be construed as a
release from any claim Client may have for further or additional sums
payable pursuant to this Agreement.
(g) EXPENSES. Representative will maintain its own office within each System's
operating area and will bear all expenses in connection with the fulfillment
of its obligation contained herein, including, without limitation, travel,
entertainment and telephone charges. Representative will not incur any debt,
obligation or liability of any kind, in the name of, or for, or on account
of Client, unless specifically authorized to do so by Client. In connection
with the commercials scheduled by Representative for the Advertising
Inventory, whether produced by Representative or not, Client will have no
responsibility or liability for
8
any services, elements, or products performed or provided by any person,
firm or corporation and Client will in no way be responsible or liable for
the making of any payments to any person (including, without limitation, any
union, guild, actor, director, performer or craftsman), all of which will be
paid for by Representative.
9. GUARANTEE
(a) GUARANTEED PAYMENT. Representative guarantees payment to Client of the
following amounts which will be the minimum payment to be made to Client for
each year of the Term. In the event that in the Second or Third year, such
year's Guaranteed Payment to Client is less than ninety percent (90%) of any
previous year's actual amount of payment to Client, then ninety percent
(90%) of such previous year's actual amount of payment will become the
Guaranteed Payment for such Second or Third year.
YEAR OF THE TERM "GUARANTEED PAYMENT"
First $2.40 per subscriber x * of subscribers
Second $3.40 per subscriber x * of subscribers
Third $4.40 per subscriber x * of subscribers
In the event that the Guaranteed Payment is based upon a subscriber count
multiplied by a dollar amount, the subscribers count for any year will be
the number of subscribers as of the anniversary of the effective date of
this Agreement. This number will include all subscribers who receive service
as a result of bulk or commercial subscriber accounts.
(b) FIRST YEAR. During the first year of the Term ("First Year"), Representative
shall make monthly payments to Client in accordance with paragraph 8(c). If
the payments for the first six months of the First Year do not equal or
exceed 50% of the Guaranteed Payment for the First Year, then together with
the payment for such six month period of the first year, Representative
shall pay Client the difference between 50% of the Guaranteed Payment for
the First Year and the aggregate payment for the First Year does not exceed
the Guaranteed Payment for such First Year, then on the 30th day immediately
succeeding such First Year, Representative shall pay Client such amount
which together with 50% of the Guaranteed Payment for such First Year shall
be equal to the difference between the Guaranteed Payment for such First
Year and the amounts paid to Client for such First Year and the amounts paid
to Client for such First Year pursuant to paragraph 8.
(c) SUBSEQUENT YEARS. During the Subsequent Years of the Term (the "Subsequent
Years" or individually a "Subsequent Year"), monthly payments shall be made
by Representative to Client in accordance with subparagraph 8(b) and if the
payments made or any quarter of each such Subsequent Year, do not equal or
exceed 25% of the Guaranteed Payment for such year, then together with the
payment for the third month of each such quarter, Representative shall pay
Client the difference between 25% of the Guaranteed Payment for such year
and the aggregate payments made for such quarter (the "Interim Guaranty
Payment"). In the event the aggregate payments for each full Subsequent Year
do not exceed the Guaranteed payments for each full Subsequent Year do not
exceed the Guaranteed Payment for such year, then on the 15th day
immediately succeeding each such year Representative shall pay Client such
amount which together with
9
any Interim Guaranteed Payments paid for each quarter of Subsequent Year
shall equal the difference between the Guaranteed Payment for such
Subsequent Year and the amounts paid to Client for such Subsequent Year
pursuant to paragraph 8. In the event the Guaranteed Payment for any
Subsequent Year exceeds the Payment for such year, no such excess shall be
credited to any future year.
10. AUDIT AND FINANCIAL STATEMENTS
Representative agrees to maintain complete records and accounts of all
transactions in connection with the sale of the Advertising Inventory, which
records shall be prepared in accordance with generally accepted accounting
principles consistently applied. All such records and accounts shall be
maintained at Representative's office (Representative to make copy facilities
available without charge) and shall be made available for inspection and copying
from time to time by Client or its duly authorized representatives during normal
business hours upon reasonable notice for any purposes reasonably related to
this Agreement. Representative agrees to submit to Client, annually during the
Tern, a financial statement reviewed in accordance with generally accepted
auditing standards by a Certified Public Accountant including a separate report
detailing Representative's Gross Revenue and Client's Percentage of Gross
Revenues.
11. INSERTION EQUIPMENT
(a) UPGRADE. At Representative's expenses, Representative will upgrade all of
Client's insertion equipment, install all required additional insertion
equipment and in the event no such equipment exists at any System, install
all required insertion equipment exists at any System, install all required
insertion equipment as may be necessary to perform all of Representative's
obligations hereunder (all of such equipment will be hereinafter referred to
as the "Insertion Equipment"). No less than 50% of such installation and
upgrades will be completed within 15 days from the effective date of this
Agreement and 100% of the upgrade and installation will be completed within
30 days from the effective date of this Agreement. The Insertion Equipment
and the method of its installation must be approved by Client in writing
prior to its installation. The Insertion Equipment will be like new, of
first class quality and will be the property of Representative. Service and
maintenance of the Insertion Equipment and installation, and upgrade costs
of new upgraded and additional insertion equipment will be provided by and
be Representative's sole obligation at no cost or obligation to Client. In
the event of the termination of this Agreement, subsequent to the first
twelve months of the term of this Agreement, title to the Insertion
Equipment will automatically vest in Client and Client will become the sole
owner of such equipment, which will at all times be free of all liens and
other encumbrances. At the expiration of the Term, Client may purchase the
Insertion Equipment from Representative at the lesser of its depreciated or
fair market value. For the purpose of this section 11(a) depreciation shall
be calculated on a 5-year straight-line basis.
(b) SAFETY BY-PASS SWITCH. Representative, at its sole cost, will provide a
safety by-pass switch that will enable Client's employees to temporarily
interrupt operation of the Insertion Equipment if deemed necessary or
desirable by Client in its sole discretion. In the event Client in its sole
discretion believes it necessary or desirable to use a method other than a
safety by-pass switch to interrupt operation of the Insertion Equipment,
Client may do so. Client will not be liable for any result of the
interruption of the operation of the Insertion
10
Equipment, whether by use of the by-pass switch or otherwise.
(c) REPRESENTATIVE'S ACCESS TO HEAD-END. Client agrees to cooperate with
Representative to insure that Representative's employees, agents, and
contractors will have 24 hour, seven day per week access to the Insertion
Equipment at each Systems's head-end. Other than during normal business
hours on business days, Client will not be required to have any employee
present at the particular System head-end but may merely have an employee or
other designee available on call for the purpose of providing access. Any
compensation to be made to any such employee or designee for providing such
access will be the obligation of Representative. In bringing employees and
other personnel on Client's property, Representative will comply and will
cause its employees, agents and contractors to comply with applicable
requirements of labor unions with which Client has collective bargaining
labor agreements. Representative agrees that ir and its agents, contractors
and employees will only enter the System's head-end only with the prior
approval of the manager or chief technician of the System and in the
presence of an authorized employee of Client expressly designated for such
purposes. Representative will provide Client with the insertion tapes
containing the sold Advertising Inventory and Client agrees to insert such
insertion tapes on the Programming Services through use of the Insertion
Equipment. Client agrees to perform such insertion on behalf of
Representative from time to time at Client's sole discretion. Representative
further agrees to indemnify Client for any damage to equipment as set forth
in (d) below as a result of any malfunction by such insertion tapes or the
Insertion Equipment except in the event that any such damage is due to any
gross negligence by Client.
(d) DAMAGE TO EQUIPMENT. Representative hereby acknowledges that Clients
head-end include sophisticated and expensive equipment including the Safety
By-Pass Switch. Representative will be responsible for and will reimburse
Client for any damage to Client, including, without limitation, damage to
any of Client's equipment or malfunction of any of Client's equipment or
service, including damage by Insertion Equipment interfering with or
interrupting Client's normal signal transmission. Such reimbursement by
Representative for any such damage will include, without limitation,
reimbursement for overtime labor costs and reimbursements for refunds or
credits to subscribers given as a result of such interference or
interruption. At the end of the Term, all Insertion Equipment will be in
good operating condition, normal wear and tear excepted.
(e) Any payments due client with respect to paragraph 11(c) and 11(d) are due
within 30 days of invoice. Any payment received by Client later than such
date is subject to interest as 1 1/2% per month or the maximum amount
allowed by law, whichever is less. Acceptance of any payment by Client shall
not be deemed a waiver of any provision of this agreement. In addition,
Client may exercise any other available at law.
11
12. REPRESENTATIONS AND WARRANTIES
Representative warrants and represents to Client that,
(a) It has the power and authority to execute and deliver this Agreement and to
fulfill Representative's obligations contained herein.
(b) All advertising scheduled by Representative for the Advertising Inventory,
whether or not produced by Representative, will comply with all applicable
laws, rules and regulations, including, without limitation, those relating
to lotteries.
13. INDEMNIFICATION
(a) Representative agrees to and does hereby indemnify and hold harmless Client
(which will be deemed to include Client, its direct and indirect
subsidiaries and affiliates and their representative agents, employees,
officers and directors) from and against, and agrees to reimburse Client
with respect to, any and all losses, liabilities, costs or expenses,
including reasonable attorney's fees and disbursements, and damages of every
kind whatsoever (including all claims of third parties) and, incurred by
Client by reason of, arising out of, or in connection with:
(1) The breach or alleged breach by Representative of any warranty or
representation contained in this Agreement.
(2) Representative's performance of or failure to perform its obligations
pursuant to this Agreement.
(3) The sale or scheduling of advertising by Representative.
(4) Advertising (and any ideas, creations and literary, musical, dramatic,
artistic and intellectual properties contained in any such advertising
and commercials) sold by Representative (whether or not created by
Representative and/or an advertiser) and cablecast hereunder, a claim
that the advertising or any element therein is libelous, slanderous,
defamatory, obscene or indecent or which, when transmitted,
distributed, exhibited, performed or disseminated by Client pursuant to
this Agreement, may or will subject Client, or subjects Client to any
liability for violation of any applicable law, rule or regulation, or
violate, infringe upon or give rise to any claim with respect to any
common law or other right (including, without limitation, any claim
under copyright, trade name, trademark, contractual, dramatic,
non-dramatic, music, motion picture, artistic, intellectual or literary
right or right of privacy or right of publicity rights for services
rendered, residual fees, pension and welfare payment, claim for
royalties including copyright royalties or other right) of any person,
firm or corporation and any advertisement created by Representative on
behalf of an advertiser, including, without limitation, a claim for
payment for services, elements or products performed or provided by any
person, firm or corporation, or for any payments to any person
12
(including without limitation, any uniform, guild, actor, director,
performer or artist or craftsperson), unless such advertisement was
created for Representative by Client or such advertisement was provided
by Client through Cable Related Service Agreements for Client Time.
(5) Client's insertion of the Insertion Tapes on the Programing Services on
behalf of Representative pursuant to 11(c) hereof.
(b) Client agrees to and does hereby indemnify and hold harmless Representative
(which will be deemed to include Representative, its direct and indirect
subsidiaries and affiliates and their respective agents, employees, officers
and directors) from and against, and agrees to reimburse Representative with
respect to, any and all loss, damage, liability, cost or expense, including
reasonable attorney's fees and disbursements, incurred by Representative by
reason of, arising out of, or in connection with:
(1) The breach or alleged breach by Client of any warranty or
representation contained in this Agreement.
(2) Client's performance of or failure to perform its obligations pursuant
to this Agreement.
14. INSURANCE
(a) Representative will carry workmen's compensation and employer's liability
insurance on all of their respective employees used in the performance of
this Agreement, and will each have and maintain a general liability policy
insuring operations, products, completed operations, contractual and
independent contractors' liability in minimum bodily injury amount of
$1,000,000 per occurrence and aggregate, $500,000 property damage per
occurrence and aggregate, and automobile liability on all of their
respective motor vehicles and equipment (whether all of their respective
motor vehicles and equipment (whether owned, hired or non-owned) in minimum
amount of $1,000,000 per person and occurrence and $500,000 per occurrence
for property damage. Client will be named a primary party insured under
Representative's liability policies.
(b) Representative will carry errors and omissions insurance with limits of
$1,000,000, and will name Client as a primary insured party thereon.
(c) Representative will carry theft, vandalism, and fire and extended coverage
insurance covering the Insertion Equipment in a principal amount equal to
the replacement value thereof, which insurance will contain provision
pursuant to which the carrier waives its right of subrogation against
Client.
(d) All policies to be effected by Representative will be written with
carrier(s) authorized to do business in the State of New York, or otherwise
approved by Client, and will contain a provision to the effect that same may
not be canceled or less than 30 days prior written notice
13
to Client. No later than five business days prior to the commencement of the
Term of this insurance certificates as proof of compliance with the
requirements set forth above.
15. CONFIDENTIALITY
Client possesses and will develop and acquire certain confidential information,
including, but not limited to, information concerning cable television
operation, Client's policies and procedures, programming, services and
advertising. In the performance of this Agreement, Representative may have
access to such information. Representative acknowledges that this information
constitutes the proprietary property of client and that Representative will not
acquire any interest in the information. Representative agrees to maintain
absolute confidentiality regarding the confidential information both during and
subsequent to the Term, not to reproduce any materials containing confidential
information and to implement and maintain all procedures prescribed by Client
from time-to-time to prevent disclosure of the confidential information.
16. TERMINATION
(a) CAUSES. Client may terminate this Agreement (i) at any time after
Representative fails to make any payment to Client required herein for 10 or
more days, or (ii) upon any material breach by Representative of this
Agreement, including Representative's failure, in any year of the Term, to
generate Gross Revenues sufficient to provide payments to Client in an
amount equal to seventy-five percent (75%) of Representative's Guaranteed
Payment pursuant to paragraph 8 of this Agreement. Such calculation is to be
made irrespective of any guaranteed Payment made, or (iii) with respect to
any franchised area within any System, if the corresponding franchise in the
System is forfeited, surrendered, terminated or otherwise ceases to be
effective and binding upon Client and/or the franchising authority, or (iv)
if the system is sold or all of or a controlling interest in the issued and
outstanding shares of client are sold or otherwise disposed of.
(b) RESULTS OF TERMINATION. In the event of any termination by Client pursuant
to this paragraph 16, (i) Client or any third party may act as Client's
representative to sell Advertising Inventory to any and all advertisers,
(ii) Certain of Representative's obligations, warranties and representations
assumed pursuant to this agreement will survive such termination. In
particular, Representative agrees to complete any production of advertising,
scheduling and delivery of Advertising Inventory and client Materials all as
designated by Client. Any such obligations must be completed within the time
specified by client which will be no longer than ninety (90) days, (iii)
Representative will return all Advertising Materials and Client Materials to
Client as directed by Client, (iv) Representative will return to advertisers
any payment received by Representative from Advertisers for services not
performed by Representative and not directed by Client to be performed by
Representative as of the termination of this Agreement, (v) Representative's
obligations pursuant to the following paragraphs will
14
survive termination pursuant to this Paragraph 16: Paragraph 9 (b) Billing
and Reporting, Paragraph 10 Audit and Financial Statements, Paragraph 11 (d)
Damage to Equipment, Paragraph 12 Representations and Warranties, Paragraph
13 Indemnification, Paragraph 14 Insurance and Paragraph 15 Confidentiality.
17. MISCELLANEOUS
(a) FORCE MAJEURE. Anything herein to the contrary notwithstanding neither
Client nor Representative will be liable for any failure or delay in
performance, or for any losses or damages arising therefrom because of an
act of God, accident, fire, explosion, strike, labor dispute, war,
governmental or judicial action or any other similar cause beyond their
control.
(b) BANKRUPTCY. If Representative makes an arrangement for the benefit of
creditors, or files a voluntary petition for bankruptcy or insolvency which
is not discharged within sixty (60) days after such filing or seeks relief
under any bankruptcy or insolvency law, or should a receiver by appointed
for any or all of its property, then a default will be deemed to have
occurred and Client, at its sole option, may terminate this Agreement
immediately.
(c) MODIFICATION. This Agreement will not be amended, changed or modified other
than by written instrument, signed by each of the parties hereto.
(d) ASSIGNMENT. This Agreement will not be assigned by Representative without
the written consent of Client.
(e) NO WAIVER. No waiver of any breach of, or default under any provision of
this Agreement will be deemed a waiver of such provision or of any
subsequent breach or default.
(f) SEVERABILITY. If any provisions of this Agreement, as applied to any party
or to any circumstances, will be adjudged by a court to be invalid or
unenforceable, the same will in no way affect any other provision hereof,
the application of such provision in any other circumstances, or the
validity or enforceability for this Agreement. In such event the parties
agree that the court making the determination will have the power to alter
such provision, to the extent necessary to make the remainder of the
provision enforceable.
(g) NOTICES. Except as otherwise provided herein, all notices, requests,
demands, consents, directions, statements and certifications and other
communications provided for herein will be in writing and will be mailed by
certified or registered mail, return receipt requested, or telegraphed,
telecopied, or delivered to the applicable party at the address indicated
below:
15
If to Client:
c/o Century Communications Corp.
00 Xxxxxx Xxxxxx
Xxx Xxxxxx, XX 00000
Attention: Legal Department
If to Representative:
Chattanooga Regional Interconnect, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxx X-00
Xxxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxx
or each party, at such other address as will be designated by such party in
a written notice to the other party complying as to delivery with the terms
of this paragraph. Except as herein otherwise expressly provided, all such
notices, requests, demands, consents, directions, statements, certifications
and other communications will, when mailed or telegraphed, respectively, be
effective three days after it has been deposited in the mails or one day
after it has been delivered to the telegraph company, respectively,
addressed as aforesaid; all notices which are delivered will be deemed
effective on delivery and all notices which are telecopied will be deemed
given when received during normal business hours of the recipient or normal
business days of the recipients and if not so received, on the immediately
succeeding business day of recipient.
(h) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York applicable to contracts
made and to be fully performed therein.
(i) ENTIRE AGREEMENT. This Agreement sets forth the entire agreement and
understanding of the parties relating to the subject matter hereof, and
supersedes all prior understandings, arrangements, representations and
agreements relating to the subject matter hereof.
(j) COUNTERPARTS. This Agreement may be signed in one or more counterparts, all
of which together will constitute one Agreement.
(k) NON-ASSIGNMENT. The appointment of Representative as a Representative of
Client is a personal appointment and may not be transferred, subcontracted
or assigned in whole or in part by Representative or by operation of law
without the prior express written consent of Client, which Client may grant
or withhold in its sole discretion. For purposes hereof, an assignment will
include any change in control of Representative or any merger,
consolidation, exchanges of shares, transfer of assets or dissolution of
Representative.
16
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and
year first above written.
CHATTANOOGA REGIONAL INTERCONNECT, INC.
By /s/ XXXXXXX X. XXXXXX
---------------------------------------
Its President
---------------------------------------
CENTURY ALABAMA CORP.
By /s/ [ILLEGIBLE]
---------------------------------------
Its Senior Vice President
---------------------------------------
17
SCHEDULE A
The "Systems"
Fort Xxxxx, Alabama
18
SCHEDULE B
"Programming Services"
ESPN
CNN
TNN
TNT
19
SCHEDULE C
20
SCHEDULE 1.2(a)(i)
PREPAID RECEIVABLES
See Attached
Report: XX Xxxxxxxx by Account Executive Index: BX5
Report Date: 05/19/1998 Page No: 2
Acct No. Client Net Contract Comm Bse Comm Amt Profit
Account Executive: XXXXX XXXXXX
Contract Though: 06/30/1999
Cable System: Xxxx County
920 ARROWHEAD RESORT & MARINE 500.00 -- -- --
752 HEARTLAND GRILL 90.00 -- -- --
910 XXXXXXX PLUMBING & SUPPLY -- -- -- --
3071 FIRST AMERICAN NATIONAL BANK -- -- -- --
895 THE GEM SHOP, INC. -- -- -- --
477 ACE HOME CENTER -- -- -- --
366 LUV HOMES -- -- -- --
820 BOB'S SMALL ENGINES 120.00 35.00 -- --
864 HI-TECH TIRE & WHEEL 200.00 142.00 -- --
000 0XX XXXX XX XXXX XXXXXX 400.00 264.00 -- --
80 XXXXX XXXXX CHEVROLET 350.00 248.50 -- --
481 RHEACO 350.00 248.50 -- --
------- ------- ------- -------
TOTAL FOR CABLE SYSTEM XXXX -- -- -- --
Cable Systems: [Illegible] County
910 XXXXXXX PLUMBING & SUPPLY 180.00 151.20 -- --
80 XXXXX XXXXX CHEVORLET 135.00 105.00 -- --
TOTAL FOR CABLE SYSTEM SLED 305.00 -- -- --
------- ------- ------- -------
TOTAL XXXXXXXX THROUGH 6/30/1998 4003.00 2861.78 -- --
------- ------- ------- -------
TOTAL XXXXXXXX FOR CGB 4003.00 2861.78 -- --
Xxxxxxxx by Account Executive Index: BX5
Report Date: 05/19/1998 Page No:
Acct No. Client Net Contract Comm Base Comm Amt Profit
Account Executive: XXXXXX XXXXX
Contract Though: 06/30/1998
Cable System: Rainsville
916 XXXXX TIRE & BATTERY 300.00 -- -- --
860 XXXXXXXX'X 100.00 -- -- --
303 WESTERN SIZZLIN FORT XXXXX 300.00 130.00 -- --
912 DIXIE SALVAGE 50.00 32.50 -- --
9075 COMM SOUTH -- -- -- --
772 ALFA INSURANCE /XXXXX XXXXXX 100.00 -- -- --
771 ALFA INSURANCE/XXXX XXXXX 100.00 -- -- --
------- ------- ------- -------
TOTAL FOR CABLE SYSTEM RAIN 1040.40 -- -- --
Cable System: Xxxxxx County
912 XXXXX SALVAGE 320.00 -- -- --
902 CASE TRUE VALUE 320.00 -- -- --
133 SOUTHERN WHOLESALE CARPETS 400.00 -- -- --
472 XXXXXX'X INC -- -- -- --
560 GROSS FURNITURE -- -- -- --
520 THE BANK OF DADE 250.00 -- -- --
521 XXXXX XXXXXX'X 150.00 -- -- --
------- ------- ------- -------
Total for Cable System MAR -- -- -- --
Cable System: Fort Xxxxx
916 XXXXX TIRE & BATTERY 400.00 252.00 52.40 201.62
860 XXXXXXXX'X 150.00 94.50 -- 75.60
309 WESTERN SIZZLIN FORT XXXXX 600.00 376.50 -- 302.40
912 XXXXX SALVAGE 75.00 42.25 -- 37.32
821 XXXXXX'X WHOLE CARPET 300.00 189.00 -- 151.22
0000 XXXXXXX XXXXXXXX FORD/TRUCK 357.00 224.91 -- 179.93
0000 XXXXXXX XXXXXXXX FORD/CAR -- 224.91 -- 179.93
9075 COMM SOUTH 449.82 383.39 -- --
588 TREASURE BOX COLLECTABLES 300.00 189.00 -- --
772 ALFA INSURANCE/XXXXX XXXXXX 200.00 -- -- --
771 ALFA INSURANCE/XXXX XXXXX 200.00 -- -- --
------- ------- ------- -------
Total For Cable Systems illegible -- -- -- --
Cable System: Chattooga County
470 XXXXXXXX FURNITURE 800.00 568.00 -- --
------- ------- ------- -------
Total for Cable System CHAT 800.00 -- -- --
------- ------- ------- -------
Total Xxxxxxxx Though 06/30/1998 -- -- -- --
------- ------- ------- -------
Total Xxxxxxxx for AJC -- -- -- --
Report Totals 45425.38 14159.78 -- --
Report : XX Xxxxxxxx by Account Executive Index: BX5
Report Date: 05/19/1998 Page No: 1
Acct No. Client Net Contract Comm Bse Comm Amt Profit
Account Executive: XXXX XXXXX
Contract Though: 06/30/1998
Cable System: Sequatchie County
917 SISSY'S PORTRAITS 75.00 63.00 12.60 50.40
908 THE BOW SHOP 150.00 126.00 25.20 100.80
143 TREVA'S CARPET & FURNITURE 200.00 168.00 33.60 134.40
578 PARTS PLUS 275.00 231.00 46.20 184.40
883 XXXXX PETROLEUM 0.00 0.00 0.00 0.00
16 BURNETTES FINE JEWELRY 261.25 220.00 44.00 176.25
747 Dunlap Auto Parts 250.00 210.00 42.00 168.00
569 VALLEY HOMES 200.00 165.00 42.00 126.00
770 CENTURY 21 PROFESSIONAL GROUP 350.00 294.00 58.80 235.20
100 Xxxx Motors 300.00 252.00 58.40 201.60
95 THE LITTLE STORE 400.00 336.00 67.20 268.80
------- ------- ------- -------
Total for Cable System SEQ 2461.25 2068.00 422.00 1646.25
Cable System : Reinsville
908 THE BOW SHOP 150.00 97.50 19.50 80.00
------- ------- ------- -------
Total for Cable System RAIN 150.00 97.50 19.50 80.00
Cable System: Xxxxxx County
919 VALLEY RESALE 300.00 213.00 42.50 170.40
917 SISSY'S PORTRAITS 100.00 71.00 14.20 56.80
914 THE RACING OUTLET 300.00 213.00 42.60 170.40
453 AG CREDIT 300.00 213.00 42.60 170.40
899 CASTLE'S OUTDOOR CENTER 300.00 213.00 42.60 170.40
27 Xxxxxx Xxxxx Chevrolet 400.00 284.00 56.80 227.20
882 BUBBA'S PIZZA 300.00 213.00 42.60 170.40
908 THE BOW SHOP 350.00 248.50 49.70 198.80
347 XXXX'X POOL 700.00 497.00 99.40 397.60
345 XXXXXX FARMERS CO-OP 300.00 213.00 42.60 170.40
890 XXXXXX'X REPAIR INC. 400.00 284.00 56.00 228.00
741 THE SHOE TREE 500.00 355.00 71.00 284.00
884 SEQUATCHIE VALLEY GARDEN CTR. 300.00 213.00 42.60 170.40
14 BOAGART'S FURNITURE 300.00 213.00 42.60 170.40
883 XXXXX PETROLEUM 400.00 0.00 0.00 0.00
506 Citizen State Bank 800.00 568.00 113.60 454.40
800 HALL JEWELERS 1200.00 852.00 170.40 681.60
27 Xxxxxx Xxxxx Chevrolet 500.00 355.00 71.00 284.00
876 HEART REALTY 500.00 355.00 71.00 284.00
148 Xxxxxx Vision Center 700.00 497.00 99.40 397.60
48 Xxxxxx Trust & Banking 500.00 355.00 71.00 284.00
49 Xxxxxx Lumber Co. 950.00 674.50 134.90 539.60
100 Xxxx Motors 500.00 355.00 71.00 284.00
000 Xxxxxx Tire & Service 1000.00 710.00 142.00 568.00
742 NORTH XXXXXXX BANK 400.00 284.00 56.80 227.20
38 Xxxxxx Chevrolet 1000.00 710.00 142.00 568.00
788 WHITWELL PHILIPS 66 550.00 390.50 78.10 312.40
------- ------- ------- -------
Total for Cable Systems MARI 13450.00 9549.50 1909.10 7640.40
Cable System: Xxxxxxx County
Report : XX Xxxxxxxx by Account Executive Index: BX5
Report Date: 05/19/1998 Page No:
Acct No. Client Net Contract Comm Bse Comm Amt Profit
Account Executive: XXXX XXXXX
Contract Though: 06/30/1998
Cable System: Xxxxxxx County
741 THE SHOE TREE 200.00 20.00 4.00 16.00
------- ------- ------- -------
Total for Cable System XXXX 200.00 20.00 4.00 16.00
Cable System: Fort Xxxxx
27 Xxxxxx Xxxxx Chevrolet 250.00 157.50 31.50 126.00
------- ------- -------- -------
Total for Cable System FTF 250.00 157.50 31.50 126.00
Cable System: Xxxxxxx Xxxxxx
000 XXXXXX XXXXXXXXX XXX 000.00 84.00 21.00 63.00
15 BURNETTES FINE JEWELRY 190.00 160.00 40.00 100.00
440 SELL'S BUILDING SUPPLY 200.00 168.00 42.00 --
569 VALLEY HOMES 200.00 168.00 42.00 --
823 TIRES PLUS 200.00 168.00 42.00 126.00
877 JR'S MARKET & DELI 200.00 168.00 -- --
570 CHRISTIAN BOOKS AND MORE 200.00 168.00 42.00 --
------- ------- ------- -------
Total for Cable Systems SLED 1290.00 1064.00 -- --
-------- -------- ------- -------
Total Xxxxxxxx Through 6/30/1998 17601.25 12976.50 2657.10 --
-------- -------- ------- -------
Total Xxxxxxxx for RWW 17601.25 12976.50 2657.10 --
Report : XX Xxxxxxxx by Account Executive Index: BX5
Report Date: 05/19/1998 Page No:
Acct No. Client Net Contract Comm Bse Comm Amt Profit
Account Executive: HOUSE ACCOUNT
Contract Though: 06/30/1998
Cable System: Sequatchie County
9043 SUPER CHEVY DEALERS -- -- -- --
9028 Chattanooga Ford -- -- -- --
------- -------- ------- -------
Total For Cable System SEQ -- -- -- --
Cable System: Xxxxxxx
9043 SUPER CHEVY DEALERS -- -- -- --
9045 GEORGIA LOTTERY -- -- -- --
------- -------- ------- -------
Total For Cable System RING -- -- -- --
Cable System: Xxxx County
9043 SUPER CHEVY DEALERS -- -- -- --
9028 Chattanooga Ford -- -- -- --
------- -------- ------- -------
Total For Cable System XXXX -- -- -- --
Cable System: Xxxxxx County
9043 SUPER CHEVY DEALERS -- -- -- --
9045 GEORGIA LOTTERY -- -- -- --
------- -------- ------- -------
Total For Cable System MUR -- -- -- --
Cable System: Xxxxxx County
9043 SUPER CHEVY DEALERS -- -- -- --
9028 Chattanooga Ford -- -- -- --
------- -------- ------- -------
Total For Cable System MAR1 -- -- -- --
Cable System: Fort Xxxxx
9081 NATIONWIDE INSURANCE -- -- -- --
9073 YOUR LOCAL CHEVY DEALER -- -- -- --
------- -------- ------- -------
Total For Cable System FTP -- -- -- --
------- -------- ------- -------
Total Billing Through 06/30/1998 -- -- -- --
------- -------- ------- -------
Total Xxxxxxxx for HSE -- -- -- --
Report : XX Xxxxxxxx by Account Executive Index: BX5
Report Date: 05/19/1998 Page No:
Acct No. Client Net Contract Comm Bse Comm Amt Profit
Account Executive: XXXXX XXXX
Contract Though: 06/30/1998
Cable System: Xxxxxxxxx County
9057 COHUTTA BANKING CC -- -- -- --
9072 XXXX XXXXXXXX -- -- -- --
------- -------- ------- -------
Total For Cable System WHIT -- -- -- --
Cable System: Ringgold
9014 ADVANCE AUTO PARTS -- -- -- --
316 XXXX CORPORATION -- -- -- --
316 XXXX CORPORATION -- -- -- --
------- ------ ------- -------
Total For Cable System RING -- -- -- --
Cable System: Rainsville
000 XXXX XXXXX XX XX -- -- -- --
------- ------- ------- -------
Total for Cable System RAIN -- -- -- --
Cable System: Xxxxxx County
915 FUTURE HOMES OF GA -- -- -- --
9057 COHUTTA BANKING CC -- -- -- --
316 XXXX CORPORATION -- -- -- --
880 411 LIQUIDATORS -- -- -- --
------- ------- ------- -------
Total For Cable System MUR -- -- -- --
Cable System: Xxxxxx County
9009 CITIZENS STATE BANK -- -- -- --
9082 COLUMBIA/HCA -- -- -- --
9060 HYUNDAI DEALER ASSOCIATION -- -- -- --
------- ------- ------- -------
Total For Cable System MAR1 -- -- -- --
Cable System: Fort Xxxxx
9014 ADVANCE AUTO PARTS -- -- -- --
------- ------- ------- -------
Total For Cable System FTP -- -- -- --
Cable System: Chattooga County
737 XXXXX MEDICAL CENTER -- -- -- --
------- ------- ------- -------
Total For Cable System CHAT -- -- -- --
Cable System: Xxxxxxx County
316 XXXX CORPORATION -- -- -- --
------- ------- ------- -------
Total For Cable System Xxxx -- -- -- --
Report : XX Xxxxxxxx by Account Executive Index:
Report Date: 05/19/1998 Page No:
Acct No. Client Net Contract Comm Bse Comm Amt Profit
Account Executive: XXXXX XXXX
Contract Though: 06/30/1998
Cable System: Xxxxxxx County
Total Xxxxxxxx Through 06/30/1998 -- -- -- --
------- ------- ------- -------
Total Billing for DBW -- -- -- --
SCHEDULE 1.2(a)(ii)
PROMISSORY NOTE
See Attached.
PROMISSORY NOTE
U.S. $300,000.00 MAY 29, 1998
FOR VALUE RECEIVED, the undersigned. AVALON-XXXXXX COMPANIES, INC., a
Delaware Corporation, or it successors or assigns (hereinafter referred to as
"Maker"), promises to pay to the order of CHATTANOOGA REGIONAL INTERCONNECT,
INC., a Tennessee corporation, or its heirs and assigns (hereinafter referred to
as "Holder"), in lawful money of the United States of America, the principal sum
of THREE HUNDRED THOUSAND AND No/100 DOLLARS ($300,000.00) together with simple
interest on the principal balance from time to time outstanding during the term
of this Promissory Note (hereinafter referred to as the "Note"), from the date
hereof, at the rate hereinafter set forth, the principal and interest being
payable as hereinafter set forth.
The interest shall accrue on the outstanding principal balance at the
rate of The Bank of New York's prime rate of interest as in effect on May 29,
1998 plus two percent (2%) per annum. The principal and accrued interest shall
be payable quarterly beginning on September 1, 1998, with the final payment due
on or before September 1, 2000. However, Maker may prepay this Note at any time
without penalty or premium.
This Note and all provisions, conditions, promises and covenants hereof
shall be binding in accordance with the terms hereof upon Maker, its successors
and assigns, provided nothing herein shall be deemed a consent to any assignment
or conveyance that is restricted or prohibited by the terms of this Note. This
Note may not be changed, modified or terminated except by a written instrument
executed by the Holder hereof.
All notices to Maker hereunder shall be deemed to have been
sufficiently given or served for all purposes when delivered to 000 Xxxxx
Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000, or sent by United States
mail, postage prepaid, to Maker at such address as given herein, or at such
other address of which Maker shall have notified the party giving such notice in
writing. All notices to Holder hereunder shall be deemed to have been
sufficiently given or served when delivered to Holder's address or sent by
United States mail, postage prepaid, to Holder at 0000 Xxxxxxxxxxx Xxxx, Xxxxx
000, Xxxxxxxxxxx, Xxxxxxxxx 00000, or such other address of which Holder shall
have notified Maker.
If any provision of this Note shall be determined to be invalid or
unenforceable, such determination shall not affect any other provision of this
Note, and such provision shall be considered deleted here from to the extent
necessary to render this Note enforceable. The Maker, for itself, its successors
and assigns, hereby waives presentment, protest and demand, notice of
presentment, demand, dishonor and non-payment of this Note.
IN WITNESS WHEREOF, Maker, through its duly authorized officers, has
signed, sealed and delivered this Note on the date first written above.
MAKER:
AVALON-XXXXXX COMPANIES, INC.
By: /s/ XXXXXX X. XXXX
--------------------------------
Xxxxxx X. Xxxx
Exec. V.P.
GUARANTY
For value received, I Das X. Xxxxxx, of 000 Xxxxxx Xxxxxx, Xxxxx 000,
Xxxxxx Xxxxxx, Xxxxxxx 00000 (hereinafter "Guarantor"), absolutely guarantee
payment to Chattanooga Regional Interconnect, Inc., a Tennessee corporation
(hereinafter "Obligee"), in accordance with the terms of the Promissory Note
dated May 29, 1998, in the principal amount of Three Hundred Thousand Dollars
($300,000.00), executed by Avalon-Xxxxxx Companies, Inc. (hereinafter
"Obligor"), of 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000.
Obligee shall have the privilege of granting such renewals and
extensions as Obligee may deem proper. This Guaranty is in addition to such
other security as Obligee now or hereafter may have. Obligee may surrender or
release all or any portion of this Guaranty. Guarantor acknowledges that this
Guaranty is in effect and binding on Guarantor without reference to whether it
is signed by any other person or persons.
Liability of Guarantor under this Guaranty shall not be affected or be
impaired by the existence, from time to time, of an indebtedness or liability of
principal Obligor to Obligee in excess of the amount of this Guaranty.
Dated: May 29, 1998
/s/ DAS X. XXXXXX
-------------------------
Das X. Xxxxxx
SCHEDULE 1.2(b)
LISTING OF ASSUMED LIABILITIES
None
SCHEDULE 1.2(c)
ALLOCATION OF PURCHASE PRICE
The total purchase price of Six Hundred Thousand Dollars (S600,000)
shall be allocated as follows:
1) $125.000 allocated to Seller's tangible personal property and
other assets used in connection with the Seller's Business;
and
2) $475,000 allocated to Seller's goodwill and going concern.
SCHEDULE 1.4(a)
LIST OF SELLER'S EMPLOYEES TO BE RETAINED BY PURCHASER
See Attached
Employee Hire Date Salary Position
1 Xxxx X. Xxxxx 8/91 - Sales
###-##-#### + Health-inc.
100.00/month Gas 20% Comm. Dental - inc.
Cell Phone Paid except Life - inc.
D.O.B. 9/9/55 25% COMM.
- Xxxxxxx
2 Xxxxxx Xxxxx 9/96 22,000.00 Sales Health - inc.
###-##-#### 20% comm. Dental - fam.
100.00/mo Gas Draw Life - inc.
30.00/mo cell phone
D.O.B. 8/27/54
3 Xxxxx Xxxxxx 1/1995 18,000.00/yr.
###-##-#### + Sales
100.00/mo. Gas 20% Comm.
D.O.B. 5/8/49
4 Xxxxx X. Xxxx 10/96 Straight Sales Health - inc.
###-##-#### 20% comm.
100.00/mo. Gas
D.O.B. 9/23/57
Xxxx X. Xxxxxxx 5/93 24,000/00 yr. Health - inc.
###-##-#### Production/Traffic
D.O.B. 2/3/58 Dental-inc.
Xxxx X. Sniff 10/95 21,000.00/yr. Production
###-##-#### Health - inc.
D.O.B. 9/29/64 Dental - inc.
Life - inc.
SCHEDULE 1.5(b)(viii)
IRREVOCABLE POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that CHATTANOOGA REGIONAL INTERCONNECT,
INC., a Tennessee corporation ("Seller"), in connection with the execution and
delivery of that certain Asset Purchase Agreement dated as of May 29, 1998 (the
"Purchase Agreement"), executed by and among Seller and AVALON-XXXXXX COMPANY,
INC., a Delaware corporation ("Purchaser"), hereby appoints Purchaser as
Seller's true and lawful attorney, with full power of substitution, irrevocably,
in the name of Purchaser or in the name of Seller, but on behalf of and for the
benefit of Purchaser, for the following purposes:
1. To collect all Accounts Receivable (as such term is defined in the
Purchase Agreement) of Seller arising out of the sale of goods and services by
Seller arising or created prior to the close of business on the date hereof, and
other items which Seller has conveyed, sold, transferred and assigned to
Purchaser;
2. To institute and prosecute, in the name of Seller or otherwise, all
proceedings which Purchaser may deem proper in order to collect, assert or
enforce any claim, right or title of any kind in or to the properties and assets
conveyed, sold, transferred and assigned by Seller to Purchaser;
3. To defend and compromise any and all actions, suits or proceedings
in respect of any of the properties and assets conveyed, transferred, and
assigned by Seller to Purchaser; and
4. To do such other acts and things in order to effect the intention of
the parties in accordance with the Purchase Agreement as Purchaser shall deem
reasonably advisable.
5. To retain for Purchaser's own account any amounts collected pursuant
to the foregoing powers, including any sums payable as interest in respect
thereof, and Seller will, from time to time, pay to Purchaser, when received,
any amounts that shall be received by Seller in respect of any receivables or
other assets or properties intended to be sold to Purchaser under the Xxxx of
Sale or the Purchase Agreement.
This Power of Attorney is a special power of attorney, given for
consideration and coupled with an interest, shall be irrevocable and shall
survive the dissolution, insolvency and incapacity of Seller.
IN WITNESS WHEREOF, Seller has executed this instrument as of May 29,
1998.
CHATTANOOGA REGIONAL
INTERCONNECT, INC.
a Tennessee corporation
By: /s/ XXXXXXX X. XXXXXX
------------------------------------
XXXXXXX X. XXXXXX
Its President
STATE OF TENNESSEE
XXXXXXXX COUNTY
I, the undersigned authority, a Notary Public in and for said county in
said state, hereby certify that Xxxxxxx X. Xxxxxx, whose name as President of
Chattanooga Regional Interconnect. Inc., a Tennessee corporation, is signed to
the foregoing instrument and who is known to me, acknowledged before me on this
day that, being informed of the contents of the said instrument, he as such
officer and with full authority, executed the same voluntarily for and as the
act of said association.
GIVEN under my hand and seal, this 29th day of May, 1998.
(NOTARIAL SEAL)
/s/ [ILLEGIBLE]
--------------------------------
Notary Public
My Commission Expires: 4/23/2000
SCHEDULE 1.5(b)(ix)
CLIENT/VENDOR LIST
See Atttached.
SCHEDULE 1.5(b)(x)
NATIONAL CABLE CORPORATION
CONTRACT TERMINATION
See Attached
(Logo omitted)
May 27, 1998
Via Fax: 000-000-0000
Xx. Xxxxxx X. Xxxxxx, Xx.
Director of Affiliate Relations
National Cable Communications
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Dear Bob,
Per our telephone conversations, I am writing to confirm our agreement
that NCC has agreed to allow Chattanooga Regional Interconnect to continue with
our present contract with NCC for this specified term, with the exception that
should our business be acquired by any other entity, the purchaser would have
the right to negotiate their own contract and would not be bound by ours.
In other words, NCC agrees to modify Paragraph 6 of the National Cable
Communications representation agreement by and between NCC and CRI (the
"Contract") so that the Contract shall not be binding on CRI's successors.
If this represents the terms of our verbal agreement, would you please
countersign this letter and return it to me by facsimile (423-490-3490) and
Federal Express today.
Bob, I feel certain that this issue will be behind us by Friday, May
29th, one way or the other. I can't tell you how much I appreciate your
cooperation in this matter.
Many Thanks....
/s/ XXXXXXX X. XXXXXX
----------------------------
Xxxxxxx X. Xxxxxx
President, CRI, Inc.
/s/ XXXXXX X. XXXXXX XX.
------------------------
Xxxxxx X. Xxxxxx Xx.
National Cable Communications
0000x Xxxxxxxxxxx Xx. Xxx 0000
Xxxxxxxxxxx, XX 00000
000-000-0000 Fax 000-000-0000
SCHEDULE 1.7
ASSIGNMENTS AND CONSENTS
1. Helicon Waiver & Assignment.
2. Xxxxxxx Waiver & Assignment.
3. Falcon Assignments.
CONSENT TO ASSIGNMENT
WHEREAS, Falcon First, Inc. ("Falcon") and Chattanooga Regional
Interconnect ("CRI") are parties to two (2) Advertising Sales Agreements dated
October 26, 1995 ("Agreements"); and
WHEREAS, in connection with the transfer by CRI of certain of its
assets to The Avalon-Xxxxxx Company Inc. ("Avalon") ("Transaction"), CRI intends
to assign its right, title and interest in and to the Agreement to Avalon;
NOW, THEREFORE, in consideration of the promises contained herein, the
parties hereto agree as follows:
1. Falcon hereby consents to CRI's assignment to Avalon of all of its
right, title and interest in the Agreements, effective on the date of
closing the transaction.
2. Avalon agrees that upon such assignment, Avalon will assume all
obligations of CRI under the Agreements, and be bound by all terms and
conditions thereof, from and after closing.
3. CRI will remain responsible for all obligations under this Agreements
until closing of the Transaction, but will be released and discharged
from its obligations under the Agreements which accrue from and after
the date of the closing of the Transaction.
4. Upon closing of the Transaction, Avalon will notify Falcon in writing
that the assignments and assumption contemplated herein has taken
place.
Dated: May 29, 1998.
ACCEPTED AND AGREED: CONSENT TO THIS ASSIGNMENT
HEREBY GIVEN:
Chattanooga Regional Interconnect Falcon First, Inc.
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ (illegible)
----------------------------- -----------------------------
Title: President Title: Vice President, Ad Sales
-------------------------- ---------------------------
Avalon Xxxxxx Company, Inc.
By: /s/ Xxxxxx Xxxx
--------------------------
Title: Exec. V.P.
--------------------------
HELICON COPORATION
000 XXXXXXXX XXXXXX
XXXXXXXXX XXXXXX, XXX XXXXXX
June 16, 1997
Xx. Xxxxxxx X. Xxxxxx
President, CRI, Inc.
0000 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
Dear Xxxx:
The following should serve as legal notice that Helicon Corporation waives its
right to the purchase of Chattanooga Regional Interconnect, In. as those rights
pertain to the contract between Helicon and CRI, particularly article 8, page 3.
Further note should be taken that Global Interconnect; Inc, may be assigned
under the same conditions and provisions, as was CRI, Inc. in its contract dated
August 1, 1996.
Sincerely,
/s/ Xxxxx Xxxx
----------------------------
Xxxxx Xxxx
Helicon Corporation
Vice President of Operations
XXXXXXX [LOGO OMITTED]
TELEPHONE
COOPERATIVE INC.
X.X. Xxx 000
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
May 29, 1998
Xx. Xxxxxxx X. Xxxxxx
President, CRI, Inc.
0000 Xxxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Dear Xx. Xxxxxx:
The following should serve as legal notice that Xxxxxxx Telephone
Cooperative Corporation waives its right to the purchase of Chattanooga Regional
Interconnect, Inc. as those rights pertain to the contract between Xxxxxxx
Telephone Cooperative Corporation and CRI, particularly article 8, page 3.
Further note should be taken that Global Interconnect, Inc. may be
assigned under the same conditions and provisions as was CRI, Inc. in its
contract dated May 15, 1997.
Sincerely,
/s/ Xxxxxxx X. Xxxxxxxx/RS
---------------------------
Xxxxxxx X. Xxxxxxxx
General Manager
rfs
c: file
A Full Service
Telecommunications Company
Since 1953
CATV
Cellular
Paging
DBS
Satellite
SCHEUDLE 2.3
BALANCE SHEET
See Attached
BALANCE SHEET
AS OF
5/1/98
LIABILITIES
Accts. Payable 50,985.37
Note payable GMAC 8,071.70
----------
Lumina
59,057.07
ASSETS
Accts. Receivable 114,301.10
Operator Fee - Deposit 10,000.00
Helicon
SCHEDULE 2.4
FINANCIAL INFORMATION
(TO BE PROVIDED BY SELLER)
See Profit & Loss Statement Attached.
CRI
STATEMENT OF OPERATIONS
FOR CHATANOOGA REGIONAL INTERCONNECT
FOR THE 4 PERIODS ENDED APRIL 30, 1998
---------- PERIOD TO DATE --------- ----------- YEAR TO DATE -----------
ACTUAL PRIOR YEAR VARIANCE ACTUAL PRIOR YEAR VARIANCE
---------- ---------- --------- ---------- ---------- ---------
REVENUE:
SALES REVENUE - CABLE 560,434.95 50,522.19 9,912.76 219,513.70 185,061.04 33,492.66
SALES REVENUE-CABLE PRODUCTION 2,650.00 .00 2,650.00 13,675.00 .00 13,675.00
MISC. SALES REVENUE - CABLE 20.00 .00 20.00 20.00 269.84 (249.84)
---------- --------- --------- ---------- ---------- ---------
TOTAL REVENUE 63,104.95 50,522.19 12,582.76 232,208.70 185,330.88 46,877.82
---------- --------- --------- ---------- ---------- ---------
GROSS PROFIT 63,104.95 50,522.19 12,582.76 232,208.70 185,330.88 44,877.82
EXPENSES:
DIRECT COST
SALES DISCOUNTS - CABLE .00 .00 .00 .00 3,039.27 (3,039.27)
COMMISSIONS - CABLE .00 .00 .00 210.92 1,345.42 (1,134.50)
---------- --------- --------- ---------- ---------- ---------
TOTAL DIRECT COST .00 .00 .00 210.92 4,384.69 (4,173.77)
COST OF SALES
OPERATOR FEES - CABLE 16,855.75 12,612.00 4,243.75 61,086.05 53,911.43 7,174.62
SALARIES & WAGES - CABLE 8,035.14 3,972.32 4,062.82 37,461.41 20,689.58 16,771.83
PAYROLL TAX EXPENSE - CABLE 1,261.81 802.81 459.00 5,964.02 3,409.42 2,554.60
SALES COMMISSIONS - CABLE 7,461.74 5,698.52 1,763.22 30,175.42 22,919.66 7,255.76
PLACEMENT COST - CABLE 2,306.30 4,789.86 (2,483.58) 10,115.92 21,155.11 (11,039.19)
PRINT & OTHER COSTS - CABLE 55.00 .00 55.00 1,364.13 158.08 1,206.05
---------- --------- --------- ---------- ---------- ---------
TOTAL COST OF SALES 35,975.74 27,875.53 8,100.21 146,166.95 122,243.28 23,923.67
OPERATING EXPENSES
ADVERTISING EXPENSE - CABLE 3,060.00 50.00 3,010.00 3,060.00 50.00 3,010.00
AUTOMOBILE EXPENSE - CABLE .00 .00 .00 519.42 57.86 461.56
BAD DEBT EXPENSE - CABLE (454.20) .00 (454.20) 469.80 .00 469.80
DUES & SUBSCRIPTIONS - CABLE 100.00 .00 100.00 240.00 122.00 118.00
POSTAGE & FREIGHT - CABLE 318.63 .00 318.63 783.84 769.50 14.36
GROUP HEALTH INSURANCE - CABLE 961.67 .00 961.67 3,920.06 .00 3,920.06
401 K PLAN EXPENSE CABLE 166.78 .00 166.78 718.91 .00 718.91
MISCELLANEOUS EXPENSE - CABLE .00 .00 .00 .00 (284.90) 284.90
OFFICE EXPENSE - CABLE 472.97 .00 472.97 992.52 206.67 785.85
RENT EXPENSE - CABLE 1,689.51 .00 1,689.51 3,466.55 .00 3,466.50
REPAIRS & MAINTENANCE - CABLE .00 80.00 (80.00) 1,112.31 161.65 950.66
TELEPHONE EXPENSE - CABLE 874.93 1,078.67 (203.74) 3,886.17 7,029.70 (3,143.53)
TRAVEL EXPENSE - CABLE 169.63 247.75 (78.12) 495.57 586.48 (90.91)
UTILITIES/CABLE 305.45 .00 305.45 474.15 .00 474.15
CELLULAR PHONE EXPENSE - CABLE .00 125.64 (125.64) .00 125.64 (125.64)
PAGERS-CABLE 84.23 .00 84.23 245.03 .00 245.03
JANITORIAL/CABLE 137.50 .00 137.50 137.50 .00 137.50
---------- --------- --------- ---------- ---------- ---------
TOTAL OPERATING EXPENSES 7,687.10 1,582.06 6,305.04 20,521.85 8,824.60 11,697.25
---------- --------- --------- ---------- ---------- ---------
TOTAL EXPENSES 43,862.84 29,457.59 14,405.25 166,899.72 135,452.57 31,447.15
---------- --------- --------- ---------- ---------- ---------
NET INCOME FROM OPERATIONS 19,242.11 21,064.60 (1,822.49) 65,308.98 49,878.31 15,430.67
CRI
STATEMENT OF OPERATIONS
FOR CHATANOOGA REGIONAL INTERCONNECT
FOR THE 4 PERIODS ENDED APRIL 30, 1998
---------- PERIOD TO DATE --------- ----------- YEAR TO DATE -----------
ACTUAL PRIOR YEAR VARIANCE ACTUAL PRIOR YEAR VARIANCE
---------- ---------- --------- ---------- ---------- ---------
OTHER INCOME AND EXPENSE:
DEPRECIATION EXPENSE - CABLE (3,022.75) (3,022.75) .00 (12,091.00) (12,091.00) .00
---------- --------- --------- ---------- ---------- ---------
TOTAL OTHER INCOME AND EXPENSE (3,022.75) (3,022.75) .00 (12,091.00) (12,091.00) .00
---------- --------- --------- ---------- ---------- ---------
EARNINGS BEFORE INCOME TAX 16,219.36 18,041.85 (1,822.49) 53,217.98 37,787.31 15,430.67
---------- --------- --------- ---------- ---------- ---------
NET INCOME (LOSS) 16,219.36 18,041.85 (1,822.49) 53,217.98 37,787.31 15,430.67
========== ========= ========= ========== ========== =========
SCHEDULE 2.7
LOCATION OF ASSETS
See Attached.
SCHEDULE OF INSURANCE
XXXXXX XXXXXXX CORPORATION OF TENNESSEE
Xxx Xxxxxxxx Center Date Prepared : 18-MAR-1998
000 Xxxxxxxx Xx. Xxx. 0000 Reported As Of: 12-MAR-1998
Xxxxxxxxxxx, XX 00000 Binder : 00042441-01
(000) 000-0000 Page : 1
Prepared for: Chattanooga Regional Interconnect, Inc. Producer: Xxxxxxx Xxxxxxx, CIC
-----------------------------------------------------------------------------------------------------------------------------------
COVERAGE POLICY
------------------------------------------------------------------------------ ----------------------------------------------------
Description Limits Comments Period Carrier/Number
------------------------------- -------------------- ------------------------- ---------------- -----------------------------------
COMMERCIAL PACKAGE 12-MAR-1998 General Accident Insurance
12-MAR-1999 Binder: 00042441
----------------------------------------------------
Commercial Property
Section
Named Insured(s)
Chattanooga Regional Interconnect, Inc.
Chattanooga Regional Interconnect, Inc.
SPECIFIED LIMITS Location 0001 0000 Xxxxxxxxxxx Xxxx
Xxxxxx Xxxxx 000
Xxxxxxxxxxx, XX 00000
Bldg 0001 Office
200,000 80% Coinsurance
Replacement Cost
Special Cause of Loss
Deductible $500 Per Occurrence
-----------------------------------------------------------------------------------------------------------------------------------
This Schedule of insurance is for information purposes only. It does not alter,
amend or change your coverage. Please refer to specific policies for limits,
terms, conditions and exclusions
SCHEDULE OF INSURANCE
XXXXXX XXXXXXX CORPORATION OF TENNESSEE
Xxx Xxxxxxxx Center Date Prepared : 18-MAR-1998
000 Xxxxxxxx Xx. Xxx. 0000 Reported As Of: 12-MAR-1998
Xxxxxxxxxxx, XX 00000 Binder : 00042441-01
(000) 000-0000 Page : 2
Prepared for: Chattanooga Regional Interconnect, Inc. Producer: Xxxxxxx Xxxxxxx, CIC
-----------------------------------------------------------------------------------------------------------------------------------
COVERAGE POLICY
------------------------------------------------------------------------------ ----------------------------------------------------
Description Limits Comments Period Carrier/Number
------------------------------- -------------------- ------------------------- ---------------- -----------------------------------
COMMERCIAL PACKAGE 12-MAR-1998 General Accident Insurance
12-MAR-1999 Binder: 00042441
----------------------------------------------------
Crime Simplified
Section
Coverages:
Money & Securities - Inside 10,000
Special Cause of Loss
Deductible $250 Per Occurrence
Money & Securities - Outside 10,000 Special Cause of Loss
Deductible $250 Per Occurrence
-----------------------------------------------------------------------------------------------------------------------------------
This Schedule of insurance is for information purposes only. It does not alter,
amend or change your coverage. Please refer to specific policies for limits,
terms, conditions and exclusions.
SCHEDULE OF INSURANCE
XXXXXX XXXXXXX CORPORATION OF TENNESSEE
Xxx Xxxxxxxx Center Date Prepared : 18-MAR-1998
000 Xxxxxxxx Xx. Xxx. 0000 Reported As Of: 12-MAR-1998
Xxxxxxxxxxx, XX 00000 Binder : 00042441-01
(000) 000-0000 Page : 3
Prepared for: Chattanooga Regional Interconnect, Inc. Producer: Xxxxxxx Xxxxxxx, CIC
-----------------------------------------------------------------------------------------------------------------------------------
COVERAGE POLICY
------------------------------------------------------------------------------ ----------------------------------------------------
Description Limits Comments Period Carrier/Number
------------------------------- -------------------- ------------------------- ---------------- -----------------------------------
COMMERCIAL PACKAGE 12-MAR-1998 General Accident Insurance
12-MAR-1999 Binder: 00042441
----------------------------------------------------
Bloc Data Processing
Section
Coverages:
Hardware 10,200
Replacement Cost
Special Cause of Loss
Xxx 00 Xxxxx Xxxxxxxxxxx XX
Hardware 10,200
Replacement Cost
Special Cause of Loss
000 Xxxxxxxxxx, Xxxxxxxxx XX
Hardware 10,200
000 Xxxxx Xxx X. Xx. Xxxxx, XX
Hardware 10,200 0000 Xxxxxx Xxxx #00, Xxxxxxxxxx XX
Hardware 10,200 0000 Xxx 00 Xxxxxx XX
Hardware 10,200 0000 Xxxxxxxxx Xx. Xxxxxxxx XX
Hardware 10,200 000 X. Xxx 00 Xxxxxxxxxx XX
-----------------------------------------------------------------------------------------------------------------------------------
This Schedule of insurance is for information purposes only. It does not alter,
amend or change your coverage. Please refer to specific policies for limits,
terms, conditions and exclusions.
SCHEDULE OF INSURANCE
XXXXXX XXXXXXX CORPORATION OF TENNESSEE
Xxx Xxxxxxxx Center Date Prepared : 18-MAR-1998
000 Xxxxxxxx Xx. Xxx. 0000 Reported As Of: 12-MAR-1998
Xxxxxxxxxxx, XX 00000 Binder : 00042441-01
(000) 000-0000 Page : 4
Prepared for: Chattanooga Regional Interconnect, Inc. Producer: Xxxxxxx Xxxxxxx, CIC
-----------------------------------------------------------------------------------------------------------------------------------
COVERAGE POLICY
------------------------------------------------------------------------------ ----------------------------------------------------
Description Limits Comments Period Carrier/Number
------------------------------- -------------------- ------------------------- ---------------- -----------------------------------
COMMERCIAL PACKAGE 12-MAR-1998 General Accident Insurance
12-MAR-1999 Binder: 00042441
----------------------------------------------------
Bloc Data Processing
Section (Continued)
Hardware 10,200
000 Xxxxxx Xxxxxx Xxxxxx XX
Hardware 10,200
000 Xxxxxxxxx Xx. Xxxxxx XX
Hardware Coverage 374,740
Replacement Cost
Special Cause of Loss
0000 Xxxxxxxxxxx Xxxx, Xxx 000
Software Coverage 50,000
Replacement Cost
Special Cause of Loss
0000 Xxxxxxxxxxx Xxxx, Xxx 000
(ineligible) 20,000
0000 Xxxxxxxxxxx Xxxx, Xxx 000
-----------------------------------------------------------------------------------------------------------------------------------
This Schedule of insurance is for information purposes only. It does not alter,
amend or change your coverage. Please refer to specific policies for limits,
terms, conditions and exclusions.
SCHEDULE OF INSURANCE
XXXXXX XXXXXXX CORPORATION OF TENNESSEE
Xxx Xxxxxxxx Center Date Prepared : 18-MAR-1998
000 Xxxxxxxx Xx. Xxx. 0000 Reported As Of: 12-MAR-1998
Xxxxxxxxxxx, XX 00000 Binder : 00042441-01
(000) 000-0000 Page : 5
Prepared for: Chattanooga Regional Interconnect, Inc. Producer: Xxxxxxx Xxxxxxx, CIC
-----------------------------------------------------------------------------------------------------------------------------------
COVERAGE POLICY
------------------------------------------------------------------------------ ----------------------------------------------------
Description Limits Comments Period Carrier/Number
------------------------------- -------------------- ------------------------- ---------------- -----------------------------------
COMMERCIAL PACKAGE 12-MAR-1998 General Accident Insurance
12-MAR-1999 Binder: 00042441
----------------------------------------------------
Commercial Liability Simp
(illegible)
Occurrence Policy
Commercial General Liability
General Aggregate 2,000,000
Products & Completed
Operations Aggregate 2,000,000
Each Occurrence 1,000,000
Fire Damage 50,000 Any One Fire
Medical Expenses 5,000 Any One Person
-----------------------------------------------------------------------------------------------------------------------------------
This Schedule of insurance is for information purposes only. It does not alter,
amend or change your coverage. Please refer to specific policies for limits,
terms, conditions and exclusions.
SCHEDULE OF INSURANCE
XXXXXX XXXXXXX CORPORATION OF TENNESSEE
Xxx Xxxxxxxx Center Date Prepared : 18-MAR-1998
000 Xxxxxxxx Xx. Xxx. 0000 Reported As Of: 12-MAR-1998
Xxxxxxxxxxx, XX 00000 Binder : 00042441-01
(000) 000-0000 Page : 6
Prepared for: Chattanooga Regional Interconnect, Inc. Producer: Xxxxxxx Xxxxxxx, CIC
-----------------------------------------------------------------------------------------------------------------------------------
COVERAGE POLICY
------------------------------------------------------------------------------ ----------------------------------------------------
Description Limits Comments Period Carrier/Number
------------------------------- -------------------- ------------------------- ---------------- -----------------------------------
COMMERCIAL PACKAGE 12-MAR-1998 General Accident Insurance
12-MAR-1999 Binder: 00042441
----------------------------------------------------
Sign
Section
Coverages:
Rotation Sign & 50,000
Table Combo Replacement Cost
Special Cause of Loss
Deductible $250 Per Occurrence
Sign is of metal construction.
-----------------------------------------------------------------------------------------------------------------------------------
This Schedule of insurance is for information purposes only. It does not alter,
amend or change your coverage. Please refer to specific policies for limits,
terms, conditions and exclusions.
SCHEDULE 2.8
LIABILITIES TO BE SATISFIED AT CLOSING
None.
SCHEDULE 2.11
EMPLOYEE PLANS
See Attached.
EMPLOYEE PLANS
1. American United Life Insurance 401K Retirement Plan
2. Cariten Health Insurance Plan
3. Reliance Insurance Co. - Dental and Life Insurance
SCHEDULE 2.14
LISTING OF ALL LICENSES AND APPROVALS
None.
Secretary of State ISSUANCE DATE: 05/28/1998
Corporations Section REQUEST NUMBER: 98148136
Xxxxx X. Xxxx Building, Suite 1800 TELEPHONE CONTACT: (000) 000-0000
Xxxxxxxxx, Xxxxxxxxx 00000-0000
CHARTER/QUALIFICATION DATE: 03/18/1991
STATUS: ACTIVE
CORPORATE EXPIRATION DATE: PERPETUAL
CONTROL NUMBER: 0238556
JURISDICTION: TENNESSEE
TO: REQUESTED BY:
DELPHI COMMUNICATIONS, INC. DELPHI COMMUNICATIONS, INC.
000 XXXXXX XXXXXX 000 XXXXXX XXXXXX
XXXXXXXXX, XX 00000 XXXXXXXXX, XX 00000
CERTIFICATE OF EXISTENCE
I, XXXXX X. XXXXXXX, SECRETARY OF STATE OF THE STATE OF TENNESSEE
DO HEREBY CERTIFY THAT
--------------------------------------------------------------------------------
"CHATTANOOGA REGIONAL INTERCONNECT, INC."
--------------------------------------------------------------------------------
IS A CORPORATION DULY INCORPORATED UNDER THE LAW OF THIS STATE WITH DATE OF
INCORPORATION AND DURATION AS GIVEN ABOVE;
THAT ALL FEES, TAXES, AND PENALTIES OWED TO THIS STATE WHICH AFFECT THE
EXISTENCE OF THE CORPORATION HAVE BEEN PAID;
THAT THE MOST RECENT CORPORATION ANNUAL REPORT REQUIRED HAS BEEN FILED WITH THIS
OFFICE;
AND THAT ARTICLES OF DISSOLUTION HAVE NOT BEEN FILED; AND
THAT ARTICLES OF TERMINATION OF CORPORATE EXISTENCE HAVE NOT BEEN FILED
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FOR: REQUEST FOR CERTIFICATE ON DATE: 05/28/98
FEES
RECEIVED $60.00 $60.00
FROM:
DELPHI COMMUNICATIONS INC. TOTAL PAYMENT RECEIVED: $120.00
000 XXXXXX XXXXXX
XX. XXXXX CORNER RECEIPT NUMBER: 00002318600
XXXXXXXXX, XX 00000-0000 ACCOUNT NUMBER: 00000000
/s/ Riley C. Xxxxxxx
XXXXX X. XXXXXXX
SECRETARY OF STATE
Secretary of State ISSUANCE DATE: 05/28/1998
Corporations Section REQUEST NUMBER: 98148134
Xxxxx X. Xxxx Xxxxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000-0000 CHARTER QUALIFICATION DATE: 03/18/1991
STATUS: ACTIVE
CORPORATE EXPIRATION DATE: PERPETUAL
CONTROL NUMBER: 0238556
JURISDICTION: TENNESSEE
TO: REQUESTED BY:
DELPHI COMMUNICATIONS, INC. DELPHI COMMUNICATIONS, INC.
000 XXXXXX XXXXXX 000 XXXXXX XXXXXX
XXXXXXXXX, XX 00000 XXXXXXXXX, XX 00000
I, XXXXX X. XXXXXXX, SECRETARY OF STATE OF THE STATE OF TENNESSEE
DO HEREBY CERTIFY THAT
--------------------------------------------------------------------------------
"CHATTANOOGA REGIONAL INTERCONNECT, INC."
--------------------------------------------------------------------------------
WAS INCORPORATED OR QUALIFIED TO DO BUSINESS IN THE STATE OF TENNESSEE ON THE
ABOVE DATE, AND THAT THE ATTACHED DOCUMENT(S) WAS/WERE FILED IN OFFICE ON THE
DATE(S) AS BELOW INDICATED:
REFERENCE DATE FILED FILING TYPE FILING ACTION
NUMBER NAM DUR STK PRN OFC AGT INC MAL FYC
2118-1332 03/18/1991 CHART-PROFIT
3413-1252 11/21/1997 AN RPT X
3502-1347 04/01/1999 AN RPT
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
FOR: REQUEST FOR COPIES ON DATE: 05/28/98
FEES
RECEIVED $60.00 $60.00
FROM:
DELPHI COMMUNICATIONS INC. TOTAL PAYMENT RECEIVED: $120.00
000 XXXXXX XXXXXX
XX. XXXXX CORNER RECEIPT NUMBER: 00002318600
XXXXXXXXX, XX 00000-0000 ACCOUNT NUMBER: 00000000
/s/ Riley C. Xxxxxxx
XXXXX X. XXXXXXX
SECRETARY OF STATE
CHARTER
OF
CHATTANOOGA REGIONAL INTERCONNECT, INC.
The undersigned, acting as the incorporator of a corporation under the
Tennessee Business Corporation act, adopts the following charter for the
corporation:
1. NAME. The name of the corporation is:
Chattanooga Regional Interconnect, Inc.
2. SHARES. The corporation is authorized to issue one thousand (1,000)
common shares, which shares shall have unlimited voting rights and are
entitled to receive the net assets of the corporation upon
dissolution.
3. Address of Initial registered Office and Name of Initial Registered
Agent. The street address and zip code of the corporation's initial
registered office in the State of Tennessee is:
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
The corporation's initial registered office is located in Xxxxxxxx
County, Tennessee.
The name of the corporation's initial registered agent at that office
is:
Xxxxxx X. North, Jr.
4. INCORPORATOR. The name, address and zip code of the incorporator is:
Xxxxxx X. North, Jr.
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
5. ADDRESS OF PRINCIPAL OFFICE. The street address and zip code of the
principal office of the corporation is:
5600 Brainerd Road
Suite G-30
Xxxxxxxxxxx, Xxxxxxxxx 00000
6. LIABILITY OF DIRECTORS. To the fullest extent permitted by the
Tennessee Business Corporation Act, as the same exists or may
hereafter be amended, a director of this corporation shall not be
personally liable to the corporation or its shareholders for monetary
damages for breach of a fiduciary duty as a director.
7. FOR PROFIT. The corporation is for profit.
The corporation's existence shall begin when the charter is filed by the
Secretary of State.
Dated: March 14th, 1991
/s/ Xxxxxx X. North, Jr.
-----------------------------------
Xxxxxx X. North, Jr., Incorporator
[ ] CORPORATION APPRAISAL REPORT
STATE OF TENNESSEE
SECRETARY OF STATE
SUITE 1800, XXXXX X. XXXX BUILDING
NASHVILLE, TN 37243-(illegible)
Filing Fee - $10.00; Priviledge Tax - $10.00; Total Amount Due - $20.00
Month is December THIS REPORT IS DUE ON OR BEFORE April 1, 1997
1. Secretary of State Control Number: 0238556 OR Federal Employer
Identification Number:
2A) Name and Mailing Address of Corporation 2B) State or Country of
Incorporation
CHATTANOOGA REGIONAL INTERCONNECT, INC. Tennessee
0000 Xxxxxxxx Xxxx, Xxxxx X-00
Xxxxxxxxxxx, XX 00000 2C) ADD OR CHANGE MAILING
ADDRESS
0000 Xxxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
A. PRINCIPAL ADDRESS INCLUDING CITY, STATE ZIP CODE:
0000 Xxxxxxxx Xxxx, Xxxxx X-00
Xxxxxxxxxxx, XX 00000
B. CHANGE OF PRINCIPAL ADDRESS:
STREET CITY STATE ZIP CODE +4
0000 Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxxx, XX 00000
**BLOCKS 4A AND 4B MUST BE COMPLETED OR THE ANNUAL REPORT WILL BE RETURNED**
4A. NAME AND BUSINESS ADDRESS INCLUDING ZIP CODE OF THE PRESIDENT,
SECRETARY AND PRINCIPAL OFFICERS (ATTACH ADDITIONAL SHEET IF NECESSARY)
TITLE NAME ADDRESS CITY, STATE, ZIP CODE +4
President XXXXXXX X. XXXXXX 0000 Xxxxxxxxxxx Xx., Xxx 000, Xxxxxxxxxxx, XX 00000
Secretary XXXXXXX X. XXXXX 0000 Xxxxxxxxxxx Xx., Xxx 000, Xxxxxxxxxxx, XX 00000
B. BOARD OF DIRECTORS (NAMES, BUSINESS ADDRESS INCLUDING ZIP CODE
[X] Same as Above
[ ] None.
OR LIST BELOW NAME CITY, STATE ZIP CODE +4
A. NAME OF REGISTERED AGENT AS APPEARS ON SECRETARY OF STATE RECORDS
Xxxxxx X. North, Jr.
B. REGISTERED ADDRESS AS APPEARS ON SECRETARY OF STATE RECORDS:
000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxxx, XX 00000-0000
INDICATE BELOW ANY CHANGES TO THE REGISTERED AGENT NAME XXX/XX XXXXXXXXXX XXXXXX
XXXXX 0X XXX/XX 0X) THERE IS AN ADDITIONAL $10.00 FILING FEE AND $10.00
PRIVILEGE TAX FOR A TOTAL OF $20.00 REQUIRED FOR CHANGES MADE TO THIS
INFORMATION.
A. CHANGE OF REGISTERED PERMIT:
B. CHANGE OF REGISTERED OFFICE:
STREET CITY STATE ZIP CODE +4 COUNTY
TN
THIS BOX APPLIES ONLY TO NONPROFIT CORPORATIONS. OUR RECORDS REFLECT THAT
YOUR NONPROFIT CORPORATION IS A PUBLIC BENEFIT OR A MUTUAL BENEFIT
CORPORATION AS INDICATED BELOW.
IF BLANK OR CHANGE. PLEASE CHECK APPROPRIATE BOX:
[ ] PUBLIC
[ ] MUTUAL
IF A TENNESSEE RELIGIOUS CORPORATION, PLEASE CHECK BOX UNLESS OTHERWISE
INDICATED.
[ ] RELIGIOUS
SIGNATURE /s/ Xxxxxxx X. Xxxxxxx (10) DATE: Oct. 31, 1997
TYPE/PRINT NAME OF SIGNER: Xxxxxxx X. Xxxxxx. (11) TITLE OF SIGNER: President
**THIS REPORT MUST BE DATED AND SIGNED**
[ ] CORPORATION APPRAISAL REPORT
STATE OF TENNESSEE
SECRETARY OF STATE
SUITE 1800, XXXXX X. XXXX BUILDING
NASHVILLE, TN 37243-illegible
(illegible)
THIS REPORT IS DUE ON OR BEFORE 05/01/97
____MONTH IS____
Secretary of State Control Number: 0238556 OR Federal Employer
Identification Number: 00-0000000
2A) Name and Mailing Address of
Corporation 2B State or Country of Incorporation
CHATTANOOGA REGIONAL INTERCONNECT, INC. Tennessee
SUITE G-30
0000 Xxxxxxxx Xxxx,
Xxxxxxxxxxx, XX 00000 2C) ADD OR CHANGE MAILING ADDRESS
CHATTANOOGA REGIONAL INTERCONNECT, INC.
0000 Xxxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
D 03/10/1991 FOR PROFIT
A. PRINCIPAL ADDRESS INCLUDING CITY, STATE ZIP CODE:
SUITE G-30, 0000 XXXXXXXX XXXX, XXXXXXXXXXX, XX 00000
B. CHANGE OF PRINCIPAL ADDRESS:
STREET CITY STATE ZIP CODE
0000 Xxxxxxxxxxx Xxxx, Xxxxx 000 Xxxxxxxxxxx XX 00000
**BLOCKS 4A AND 4B MUST BE COMPLETED OR THE ANNUAL REPORT WILL BE RETURNED**
4A. NAME AND BUSINESS ADDRESS INCLUDING ZIP CODE OF THE PRESIDENT, SECRETARY
AND PRINCIPAL OFFICERS
TITLE NAME BUSINESS ADDRESS CITY, STATE, ZIP CODE +4
President XXXXXXX X. XXXXXX 0000 Xxxxxxxxxxx Xx. Xxx 000, Xxxxxxxxxxx, XX 00000
Secretary XXXXXXX X. XXXXX 0000 Xxx Xxxxxxx Xxxxxxxxxxx, XX 00000
B. BOARD OF DIRECTORS (NAMES, BUSINESS ADDRESS INCLUJDING ZIP CODE) (ATTACH
ADDITIONAL SHEET IF NECESSARY)
[X] Same as Above
[ ] None.
OR LIST BELOW NAME BUSINESS ADDRESS CITY, STATE ZIP CODE +4
5A. NAME OF REGISTERED AGENT AS APPEARS ON SECRETARY OF STATE RECORDS
XXXXXX X. NORTH, JR.
B. REGISTERED ADDRESS AS APPEARS ON SECRETARY OF STATE RECORDS:
000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxxx, XX 00000-0000
INDICATE BELOW ANY CHANGES TO THE REGISTERED AGENT NAME XXX/XX XXXXXXXXXX XXXXXX
XXXXX 0X XXX/XX 0X) THERE IS AN ADDITIONAL $10.00 REQUIRED FOR CHANGES MADE TO
THIS INFORMATION.
A. CHANGE OF REGISTERED PERMIT:
B. CHANGE OF REGISTERED OFFICE:
STREET CITY STATE ZIP CODE +4 COUNTY
THIS FORM APPLIES ONLY TO NONPROFIT CORPORATIONS. OUR RECORDS REFLECT THAT
YOUR NONPROFIT CORPORATION IS A PUBLIC BENEFIT OR A MUTUAL BENEFIT
CORPORATION AS INDICATED BELOW.
IF BLANK OR CHANGE, PLEASE CHECK APPRIATE BOX:
[ ] PUBLIC
[ ] MUTUAL
IF A TENNESSEE RELIGIOUS CORPORATION, PLEASE CHECK BOX UNLESS OTHERWISE
INDICATED.
[ ] RELIGIOUS
SIGNATURE /s/ Xxxxxxx X. Xxxxxxx (10) DATE: Oct. 31, 1997
TYPE/PRINT NAME OF OWNER: XXXXXXX X. XXXXXX. (11) TITLE OF OWNER: President
**THIS REPORT MUST BE DATED AND SIGNED**
THIS INSTRUMENT WAS PREPARED BY:
XXXXXXXXX, XXXXXX & XXXXXXX, P.C.
000 Xxxxxx Xxxxxxxx
Xxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Telephone: (000) 000-0000
XXXX OF SALE
Chattanooga Regional Interconnect, Inc., a Tennessee corporation,
(hereinafter "Seller"), for good and valuable consideration, the receipt and
legal sufficiency of which are hereby acknowledged, as is more specifically
described in the Asset Purchase Agreement dated May 29, 1998, between Seller and
Avalon-Xxxxxx Companies, Inc. (hereinafter "Buyer"), the terms of which are
incorporated herein and made a part hereof, does hereby sell, assign, transfer
and convey, unto Buyer its successors and assigns, all right, title and interest
in and to the following assets of Seller ("Assets"):
(i) Seller's tangible personal property and other assets used in
connection with the Seller's cable ad-insertion turn-key business located in
Chattanooga, Tennessee (the "Seller's Business") (such as machinery, equipment,
inventories, parts and supplies, furniture and furnishings) including those
properties and assets set forth on Schedule 1 attached to this Xxxx of Sale;
(ii) All Accounts Receivable, as defined in the Assets Purchase
Agreement, of Seller as of the date hereof, including any pre-billed yet unaired
advertising time relating in any way to Seller's Business;
(iii) Seller's intangible property used in connection with Seller's
Business, including Seller's trade name "Chattanooga Regional Interconnect" and
any trademarks, copyrights or other rights related to such trade name; and
(iv) The books and records of Seller relating to the Assets, including
any and all accounts receivable, aging and collection history reports.
TO HAVE AND TO HOLD all rights, title and interest in and to the Assets
hereby sold, assigned, transferred, conveyed and delivered to Buyer and its
successors and assigns for its and their own use and benefit forever.
Seller hereby represents and warrants to Buyer and its successors and
assigns that Seller has good and marketable title to the Assets and the good and
lawful right to sell and transfer the same and that the Assets are free and
clear of all claims,
liens, encumbrances and rights of others of any nature whatsoever.
Seller hereby covenants and agrees to defend such title forever against
all claims, liens, encumbrances and rights from any person and of any nature
whatsoever.
Except as otherwise specifically provided in this Xxxx of Sale, the
Assets are sold, assigned, transferred, conveyed and delivered AS IS, WHERE IS,
AND NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, IS MADE WITH RESPECT TO
THE QUALITY, QUANTITY, VALUE, PHYSICAL CONDITION, FITNESS FOR PURPOSE OR FOR
PARTICULAR USE OR MERCHANTABILITY OF THE ASSETS. ALL WARRANTIES, EXPRESS OR
IMPLIED, ARE HEREBY DISCLAIMED AND EXCLUDED. SELLER SHALL IN NO EVENT BE LIABLE
FOR ANY AND ALL RIGHT TO RECOVER SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES
INCLUDING, BUT LIMITED TO, ANY LOST PROFITS, DAMAGES RELATING TO INJURY TO OR
DEATH OF PERSON, OR DAMAGES TO PROPERTY WHETHER ON THEORIES OF NEGLIGENCE,
BREACH OR CONTRACT, BREACH OF WARRANTY, MISREPRESENTATION, STRICT LIABILITY OR
ANY OTHER LEGAL THEORY.
IN WITNESS WHEREOF, Seller has executed this Xxxx of Sale on this 29th
day of May, 1998.
SELLER:
CHATTANOOGA REGIONAL INTERCONNECT, INC.
By: /s/Xxxxxxx X. Xxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxx, President
STATE OF TENNESSEE )
)
COUNTY OF XXXXXXXX )
Before me, a Notary Public of the state and county aforesaid,
personally appeared Xxxxxxx X. Xxxxxx, to me known (or proved to me on the basis
of satisfactory evidence) to be the person described in and who executed the
foregoing instrument, and acknowledged that he executed the same as his free act
and deed.
WITNESS my hand and seal, at office in Chattanooga, Tennessee, this
29th day of May, 1998.
----------------------------------
Notary Public
My Commission Expires: 4-23-2000
2
CHARTER
OF
CHATTANOOGA REGIONAL INTERCONNECT, INC.
The undersigned, acting as the incorporator of a corporation under the
Tennessee Business Corporation Act, adopts the following charter for the
corporation:
1. NAME. The name of the corporation is:
Chattanooga Regional Interconnect, Inc.
2. SHARES. The corporation is authorized to issue one thousand (1,000)
common shares, which shares shall have unlimited voting rights and are
entitled to receive the net assets of the corporation upon dissolution.
3. Address of Initial registered Office and Name of Initial Registered
Agent. The street address and zip code of the corporation's initial
registered office in the State of Tennessee is:
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
The corporation's initial registered office is located in Xxxxxxxx
County, Tennessee.
The name of the corporation's initial registered agent at that office
is:
Xxxxxx X. North, Jr.
4. INCORPORATOR. The name, address and zip code of the incorporator is:
Xxxxxx X. North, Jr.
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
5. ADDRESS OF PRINCIPAL OFFICE. The street address and zip code of the
principal office of the corporation is:
5600 Brainerd Road
Suite G-30
Xxxxxxxxxxx, Xxxxxxxxx 00000
6. LIABILITY OF DIRECTORS. To the fullest extent permitted by the
Tennessee Business Corporation Act, as the same exists or may hereafter
be amended, a director of this corporation shall not be personally
liable to the corporation or its shareholders for monetary damages for
breach of a fiduciary duty as a director.
7. FOR PROFIT. The corporation is for profit.
The corporation's existence shall begin when the charter is filed by
the Secretary of State.
Dated: March 14th, 1991
/s/ Xxxxxx X. North, Jr.
------------------------------------
Xxxxxx X. North, Jr., Incorporator
[ ] CORPORATION APPRAISAL REPORT
STATE OF TENNESSEE
SECRETARY OF STATE
SUITE 1800, XXXXX X. XXXX BUILDING
NASHVILLE, TN 37243-illegible
FILING FEE - $10.00; PRIVELEGE TAX - $10.00; TOTAL AMOUNT DUE $20.00
CURRENT MONTH December THIS REPORT IS DUE ON OR BEFORE April 1, 1997
1) Secretary of State Control Number: 0238556 OR Federal Employer
Identification Number:
2A) Name and Mailing Address of Corporation 2B) State or Country of
Incorporation
CHATTANOOGA REGIONAL INTERCONNECT, INC. Tennessee
0000 Xxxxxxxx Xxxx, Xxxxx X-00
Xxxxxxxxxxx, XX 00000 2C) ADD OR CHANGE MAILING ADDRESS
0000 Xxxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
0X. XXXXXXXXX XXXXXXX XXXXXXXXX XXXX, XXXXX, XXX CODE:
0000 Xxxxxxxx Xxxx, Xxxxx X-00
Xxxxxxxxxxx, XX 00000
B. CHANGE OF PRINCIPAL ADDRESS:
STREET CITY STATE ZIP CODE +4
0000 Xxxxxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxxxx, XX 00000
**BLOCKS 4A AND 4B MUST BE COMPLETED OR THE ANNUAL REPORT WILL BE RETURNED**
4A. NAME AND BUSINESS ADDRESS INCLUDING ZIP CODE OF THE PRESIDENT, SECRETARY
AND PRINCIPAL OFFICERS
TITLE NAME ADDRESS CITY, STATE, ZIP CODE +4
President XXXXXXX X. XXXXXX 0000 Xxxxxxxxxxx Xx. Xxxxx 000, Xxxxxxxxxxx, XX 00000
Secretary XXXXXXX X. XXXXX 0000 Xxxxxxxxxxx Xx. Xxxxx 000, Xxxxxxxxxxx, XX 00000
B. BOARD OF DIRECTORS (NAMES, BUSINESS ADDRESS INCLUDING ZIP CODE)
(ATTACH ADDITIONAL SHEET IF NECESSARY)
[X] Same as Above
[ ] None.
OR LIST BELOW NAME CITY, STATE ZIP CODE +4
A. NAME OF REGISTERED AGENT AS APPEARS ON SECRETARY OF STATE RECORDS
Xxxxxx X. North, Jr.
B. REGISTERED ADDRESS AS APPEARS ON SECRETARY OF STATE RECORDS:
000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxxx, XX 00000-0000
INDICATE BELOW ANY CHANGES TO THE REGISTERED AGENT NAME XXX/XX XXXXXXXXXX XXXXXX
XXXXX 0X XXX/XX 0X) THERE IS AN ADDITIONAL $10.00 FILING FEE AND $10.00
PRIVILEGE TAX FOR A TOTAL OF $20.00 REQUIRED FOR CHANGES MADE TO THIS
INFORMATION.
A. CHANGE OF REGISTERED PERMIT:
B. CHANGE OF REGISTERED OFFICE:
STREET CITY STATE ZIP CODE +4 COUNTY
TN
THIS BOX APPLIES ONLY TO NONPROFIT CORPORATIONS. OUR RECORDS REFLECT THAT
YOUR NONPROFIT CORPORATION IS A PUBLIC BENEFIT OR A MUTUAL BENEFIT
CORPORATION AS INDICATED BELOW:
IF BLANK OR CHANGE, PLEASE CHECK APPRIATE BOX:
[ ] PUBLIC
[ ] MUTUAL
IF A TENNESSEE RELIGIOUS CORPORATION, PLEASE CHECK BOX UNLESS OTHERWISE
INDICATED.
[ ] RELIGIOUS
SIGNATURE /s/Xxxxxxx X. Xxxxxx (10) DATE: Oct. 31, 1997
TYPE/PRINT NAME OF OWNER: Xxxxxxx X. Xxxxxx. (11) TITLE OF OWNER: President
**THIS REPORT MUST BE DATED AND SIGNED**
[ ] CORPORATION ANNUAL REPORT
STATE OF TENNESSEE
SECRETARY OF STATE
SUITE 1800, XXXXX X. XXXX BUILDING
NASHVILLE, TN 37243-illegigle
illegigle THIS REPORT IS DUE ON OR BEFORE 05/01/97
Secretary of State Control Number: 0238556 OR Federal Employer Identification
Number: 00-0000000
2A) Name and Mailing Address of Corporation 2B) State or Country of
Incorporation
CHATTANOOGA REGIONAL INTERCONNECT, INC. Tennessee
0000 Xxxxxxxx Xxxx, Xxxxx X-00
Xxxxxxxxxxx, XX 00000 2C) ADD OR CHANGE MAILING ADDRESS
CHATTANOOGA REGIONAL INTERCONNECT, INC.
0000 Xxxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
D 03/10/1991 FOR PROFIT
A. PRINCIPAL ADDRESS RELOCATING CITY, STATE ZIP CODE:
SUITE G-30, 0000 XXXXXXXX XXXX, XXXXXXXXXXX, XX 00000
B. CHANGE OF PRINCIPAL ADDRESS:
STREET CITY STATE ZIP CODE
0000 Xxxxxxxxxxx Xxxx, Xxxxx 000 Xxxxxxxxxxx, XX 00000
**BLOCKS 4A AND 4B MUST BE COMPLETED OR THE ANNUAL REPORT WILL BE RETURNED**
4A. NAME AND BUSINESS ADDRESS INCLUDING ZIP CODE OF THE PRESIDENT, SECRETARY AND
PRINCIPAL OFFICERS
TITLE NAME ADDRESS CITY, STATE, ZIP CODE**
President XXXXXXX X. XXXXXX 0000 Xxxxxxxxxxx Xx. Xxx 000, Xxxxxxxxxxx, XX 00000
Secretary XXXXXXX X. XXXXX Xxx Xxxxxxx Xxxxxxxxxxx, XX 00000
B. BOARD OF DIRECTORS (NAMES, ( ineligible )
[X] Same as Above
[ ] None.
OR LIST BELOW NAME BUSINESS ADDRESS CITY, STATE ZIP CODE +4
G. NAME OF REGISTERED AGENT AS APPEARS ON SECRETARY OF STATE RECORDS
XXXXXX X. NORTH, JR.
H. REGISTERED ADDRESS AS APPEARS ON SECRETARY OF STATE RECORDS:
000 Xxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxxxx, XX 00000-0000
INDICATE BELOW ANY CHANGES TO THE REGISTERED AGENT NAME XXX/XX XXXXXXXXXX XXXXXX
XXXXX 0X XXX/XX 0X) THERE IS AN ADDITIONAL $10.00 FILING FEE AND $10.00
PRIVILEGE TAX FOR A TOTAL OF $20.00 REQUIRED FOR CHANGES MADE TO THIS
INFORMATION.
A. CHANGE OF REGISTERED PERMIT:
B. CHANGE OF REGISTERED OFFICE:
STREET CITY STATE ZIP CODE +4 COUNTY
A. THIS FORM APPLIES ONLY TO NONPROFIT CORPORATIONS. OUR RECORDS REFLECT THAT
YOUR NONPROFIT CORPORATION IS A PUBLIC BENEFIT OR A MUTUAL BENEFIT
CORPORATION AS INDICATED BELOW.
IF BLANK OR CHANGE, PLEASE CHECK APPRIATE BOX:
[ ] PUBLIC
[ ] MUTUAL
B. IF A TENNESSEE RELIGIOUS CORPORATION, PLEASE CHECK BOX UNLESS OTHERWISE
INDICATED.
[ ] RELIGIOUS
SIGNATURE /s/Xxxxxxx X. Xxxxxx (10) DATE: Oct. 31, 1997
TYPE/PRING NAME OF OWNER: XXXXXXX X. XXXXXX. (11) TITLE OF OWNER: President
**THIS REPORT MUST BE DATED AND SIGNED**
