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Exhibit 2.7(b)
PURCHASE AND SALE AGREEMENT
by and among
THE SELLERS LISTED ON
THE SIGNATURE PAGES HERETO,
XXXXXX ACQUISITION PARTNERS, L.L.L.P.
and
CHARTER COMMUNICATIONS, INC.
Dated as of April 26, 1999
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ARTICLE I DEFINITIONS.....................................................1
ARTICLE II PURCHASE AND SALE OF PURCHASED INTERESTS......................10
2.1 PURCHASE AND SALE OF PURCHASED INTERESTS...........................10
2.2 PURCHASE PRICE.....................................................10
2.3 PAYMENT OF PURCHASE PRICE..........................................10
2.4 ADJUSTMENTS AND PRORATIONS.........................................11
2.5 INDEMNITY ESCROW...................................................14
ARTICLE III CLOSING......................................................14
3.1 CLOSING DATE.......................................................14
3.2 DEFAULT; SPECIFIC PERFORMANCE......................................15
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF SELLERS.....................15
4.1 TITLE TO PURCHASED INTERESTS.......................................15
4.2 ENFORCEABILITY OF AGREEMENT........................................15
4.3 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.........................16
4.4 BROKERS' FEES......................................................16
4.5 ORGANIZATION AND QUALIFICATION.....................................16
4.6 AUTHORITY RELATIVE TO THIS AGREEMENT...............................17
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY..................17
5.1 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.......................17
5.2 ORGANIZATIONAL DOCUMENTS...........................................17
5.3 EFFECT OF AGREEMENT................................................18
5.4 CAPITALIZATION.....................................................18
5.5 AUTHORITY RELATIVE TO THIS AGREEMENT...............................19
5.6 FINANCIAL STATEMENTS...............................................19
5.7 UNDISCLOSED LIABILITIES............................................20
5.8 TAX RETURNS AND AUDITS.............................................20
5.9 FRANCHISES AND NECESSARY CONTRACTS.................................21
5.10 MATERIAL AGREEMENTS AND OBLIGATIONS..............................22
5.11 SYSTEMS' CAPACITY, CUSTOMERS AND RATES...........................23
5.12 EMPLOYEES........................................................24
5.13 ABSENCE OF CERTAIN DEVELOPMENTS..................................25
5.14 REAL PROPERTY....................................................26
5.15 TITLE TO ASSETS; PERSONAL PROPERTY...............................26
5.16 COMPLIANCE WITH LAWS.............................................27
5.17 TRANSACTIONS.....................................................29
5.18 LITIGATION AND LEGAL PROCEEDINGS.................................29
5.19 BROKERS' FEES....................................................29
5.20 PLANS; ERISA.....................................................29
5.21 INSURANCE, SURETY BONDS, DAMAGES.................................31
5.22 ENVIRONMENTAL LAWS...............................................32
5.23 NO OTHER COMMITMENT TO SELL......................................32
5.24 YEAR 2000........................................................32
5.25 TRADEMARKS, PATENTS AND COPYRIGHTS...............................33
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF BUYER.......................33
6.1 ORGANIZATION.......................................................33
6.2 AUTHORITY RELATIVE TO THIS AGREEMENT...............................33
6.3 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.........................34
6.4 FINANCIAL CAPABILITY...............................................34
6.5 LITIGATION.........................................................34
6.6 NO VIOLATION OF FCC CROSS OWNERSHIP RULES..........................35
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6.7 INVESTMENT INTENT; SOPHISTICATED BUYER.............................35
6.8 FINDERS' AND BROKERS' FEES.........................................35
ARTICLE VII COVENANTS....................................................35
7.1 ACCESS.............................................................35
7.2 ENVIRONMENTAL ASSESSMENT...........................................36
7.3 INTERIM PERIOD OPERATIONS..........................................36
7.4 DELIVERY OF DOCUMENTS TO BUYER.....................................38
7.5 NO IMPAIRMENT OF TITLE.............................................39
7.6 NO AMENDMENT TO ORGANIZATIONAL DOCUMENTS...........................39
7.7 FRANCHISE RENEWALS; REQUIRED CONSENTS; HSR FILINGS.................39
7.8 NOTIFICATION.......................................................41
7.9 REASONABLE EFFORTS; ADDITIONAL ACTIONS.............................41
7.10 TAX MATTERS......................................................42
7.11 RESTRUCTURING....................................................44
7.12 YEAR 2000 REMEDIATION PROGRAM....................................45
7.13 EXCULPATION AND INDEMNIFICATION..................................45
7.14 CREDIT FACILITY; SENIOR SUBORDINATED NOTES.......................46
7.15 ADMISSION OF BUYER AS A SUBSTITUTE LIMITED PARTNER...............46
7.16 PUBLICITY........................................................46
7.17 SERVICES PROVIDED BY AND TO ALLIANCE.............................46
ARTICLE VIII CONDITIONS PRECEDENT TO THE OBLIGATIONS OF ALL PARTIES......46
8.1 ORDERS PROHIBITING CONSUMMATION OF TRANSACTIONS....................47
8.2 HSR ACT............................................................47
ARTICLE IX CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS...................47
9.1 COMPLIANCE WITH AGREEMENT..........................................47
9.2 CORRECTNESS OF REPRESENTATIONS AND WARRANTIES......................47
9.3 NO ADVERSE CHANGE IN BUSINESS OR PROPERTIES........................47
9.4 CERTIFICATE OF OFFICER.............................................48
9.5 PROCEEDINGS AND DOCUMENTS..........................................48
9.6 OPINION OF COUNSEL.................................................48
9.7 OPINION OF FCC COUNSEL.............................................48
9.8 CONSENTS...........................................................48
9.9 PURCHASE OF INTERESTS UNDER INTERLINK AGREEMENT....................48
9.10 SERVICES AGREEMENT...............................................48
ARTICLE X CONDITIONS PRECEDENT TO SELLERS' OBLIGATIONS...................49
10.1 CORRECTNESS OF REPRESENTATIONS AND WARRANTIES....................49
10.2 COMPLIANCE WITH AGREEMENT........................................49
10.3 CERTIFICATE OF OFFICER...........................................49
10.4 PROCEEDINGS AND DOCUMENTS........................................49
10.5 OPINION OF COUNSEL...............................................49
10.6 SALE OF INTERESTS UNDER INTERLINK AGREEMENT......................49
10.7 SERVICES AGREEMENT...............................................50
ARTICLE XI RIGHTS TO TERMINATE; BREACH...................................50
11.1 TERMINATION......................................................50
ARTICLE XII [INTENTIONALLY OMITTED]......................................51
ARTICLE XIII MISCELLANEOUS...............................................51
13.1 SELLER LIABILITY SEVERAL AND NOT JOINT...........................51
13.2 APPOINTMENT OF SELLERS' REPRESENTATIVE...........................51
13.3 EXPENSES.........................................................51
13.4 KNOWLEDGE........................................................52
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13.5 ASSIGNMENT.......................................................52
13.6 SUCCESSORS.......................................................52
13.7 ENTIRE AGREEMENT.................................................52
13.8 THIRD PARTIES....................................................52
13.9 AMENDMENTS IN WRITING............................................52
13.10 GOVERNING LAW....................................................53
13.11 INTERPRETATION...................................................53
13.12 CERTAIN PROVISIONS RELATING TO R&A MANAGEMENT LLC'S 401(K) PLAN..53
13.13 NOTICES..........................................................54
13.14 SEVERABILITY.....................................................55
13.15 COUNTERPARTS.....................................................55
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THIS PURCHASE AND SALE AGREEMENT is made and entered into as of April 26,
1999 by and among the sellers listed on the signature pages hereto as of the
date hereof (collectively, "Sellers"), and Xxxxxx Acquisition Partners,
L.L.L.P., a Colorado registered limited liability limited partnership (the
"Company"), and Charter Communications, Inc., a Delaware corporation ("Buyer").
WHEREAS, Sellers collectively own all of the outstanding partnership
interests in the Company, with the exception of a limited partnership interest
owned by Greenwich Street (RAP) Partners I, L.P., a Subsidiary of InterLink
Communications Partners, LLLP ("InterLink"), which interest Buyer will be
indirectly purchasing pursuant to a Purchase and Sale Agreement dated as of the
date hereof (the "InterLink Agreement") among InterLink, the general and limited
partners of InterLink, and Buyer;
WHEREAS, the Company and its subsidiaries own and operate cable television
systems and businesses in respect thereof serving customers in various areas in
the States of Georgia, Illinois, and Tennessee (which areas of service are
hereinafter collectively referred to as the "Service Areas");
WHEREAS, Sellers, severally and not jointly, in reliance upon the
representations and warranties of Buyer, desire to sell to Buyer, and Buyer, in
reliance upon the representations and warranties of Sellers and the Company,
desires to purchase from Sellers, all of the outstanding partnership interests
of the Company owned by Sellers, on the terms and subject to the conditions set
forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein set forth, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
1.1 "1992 Act" means the Cable Television Consumer Protection and
Competition Act of 1992, as amended.
1.2 "Accrued Vacation Pay" means the obligation of the Company to its
employees for accrued vacation pay through the Closing Date.
1.3 "Additional Financial Statements" means (i) as to monthly statements,
the Company's unaudited Statement of Operations for each monthly period after
the period ended December 31, 1998, and (ii) as to quarterly statements, the
Company's unaudited Balance Sheet and related Statements of Operations and
Statements of Changes in Financial Position for each quarterly period after the
period ended December 31, 1998.
1.4 "Affiliate" has the meaning given to such term in the Securities
Exchange Act of 1934, as amended.
1.5 "Assets" means collectively all of the Company's business, assets,
properties and rights used or useful by the Company in conducting its Business.
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1.6 "Audited Financial Statements" has the meaning set forth in Section
5.6.
1.7 "Basic Customers" means (i) all bona fide Non-Delinquent CATV
customers of the Systems (i.e., the first connections) that have paid in full,
on a nondiscounted basis (other than senior citizen discounts and seasonal
customer discounts), for at least one Monthly Billing Period for the services
ordered by the respective customer, and to whom the respective System is
rendering its basic (or expanded basic, as the case may be) CATV service
(whether or not in conjunction with any tiered or premium services) at that
System's then applicable monthly rate therefor, plus (ii) all Basic Customer
Equivalents.
1.8 "Basic Customer Equivalents" means equivalent bona fide Non-Delinquent
CATV customers of the Systems that are commercial establishments and
multi-dwelling units (e.g., bars, taverns, apartment buildings, dormitories,
hospitals, etc.) that are billed on a bulk basis for basic (or expanded basic)
service, which have paid in full the charges for at least one Monthly Billing
Period. The number of Basic Customer Equivalents shall be deemed to be equal to
the quotient that is derived from dividing: (a) the gross basic (or, if
applicable, expanded basic) xxxxxxxx to all such commercial establishments,
multi-dwelling units, or other customers that are billed on a bulk basis for
basic (or expanded basic) service (but excluding xxxxxxxx from a la carte tiers
or premium services, installation or other non-recurring charges, converter
rental, any fees or charges for any outlet or connection other than the first
outlet or connection in any single family household or (with respect to a bulk
account, in any residential unit, e.g., an individual apartment or rental unit),
pass-through charges for sales taxes, line-itemized franchise fees, fees charged
by the FCC and the like) attributable to such commercial establishment,
multi-dwelling unit or other customer during the most recent Monthly Billing
Period ended prior to the date of calculation (but excluding xxxxxxxx in excess
of a single Monthly Billing Period's charge) by (b) the rate charged by the
respective System to individual homes as of December 31, 1998, for basic service
(or, (i) if the respective commercial establishment, multi-dwelling unit or
other customer also takes expanded basic service, then by the rate charged by
that System to individual homes as of December 31, 1998, for basic and expanded
basic service and (ii) if the respective commercial establishment,
multi-dwelling unit or other customer takes services which are neither expanded
basic or basic services, then by a rate which is an equivalent retail rate for
such service), exclusive of any charges for the additional services, franchise
fees, taxes, etc. which are excluded from the calculation of gross basic (or, if
applicable, expanded basic) xxxxxxxx set forth in clause (a) above, such rate to
be not less than the respective System's standard rate for such service.
1.9 "Basic Customer Threshold" has the meaning set forth in Section
2.4(a).
1.10 "Basic Services" means the lowest tier of CATV programming sold to
customers of the Systems for which such customers pay a fixed monthly fee,
excluding Expanded Basic Services, a la carte tiers, premium services,
pay-per-view television and any charges for additional outlets and installation
fees and any revenues derived from the rental of converters, remote control
devices and other like charges for equipment.
1.11 "Business" means the provision of CATV and related ancillary services
by the Company Group through the Systems in and around the Service Areas.
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1.12 "Buyer" has the meaning set forth in the first paragraph of this
Agreement.
1.13 "Buyer Confidentiality Agreement" means the Confidentiality Agreement
between Buyer and the Company dated as of January 18, 1999.
1.14 "CARS" means CATV relay service.
1.15 "CATV" means cable television.
1.16 "Charter Plan" has the meaning set forth in Section 13.12.
1.17 "Charter Transfer Plan" has the meaning set forth in Section
13.12(c).
1.18 "Closing" has the meaning set forth in Section 3.1.
1.19 "Closing Adjustment Certificate" means the certificate to be
delivered by the Company to Buyer, not less than five business days prior to the
Closing Date, pursuant to Section 2.4(c).
1.20 "Closing Date" has the meaning set forth in Section 3.1.
1.21 "Closing Escrow Agreement" means an indemnification escrow agreement
substantially in the form of Exhibit 2.5 hereto.
1.22 "Communications Act" means the Communications Act of 1934, as
amended.
1.23 "Company Group" means the Company and each of its Subsidiaries.
1.24 "Company's 401(k) Plan" has the meaning set forth in Section 13.12.
1.25 "Computer Systems" means any hardware or software embedded systems,
equipment and cable plant, or headend, building and other facilities used in
connection with the Business, including any firmware, application programs,
billing systems, operating systems, user interfaces, files and databases, that
are date dependent or which process date related data, and that might be
adversely affected by the advent or changeover to the year 2000 or by the advent
or changeover to any leap year.
1.26 "Contract" means any contract, mortgage, deed of trust, bond,
indenture, lease, license, permit, note, Franchise, certificate, option,
warrant, right or other instrument, document, obligation or agreement, whether
written or oral.
1.27 "Continuing Employees" has the meaning set forth in Section 13.12.
1.28 "Credit Facility" means loans to the Company in the maximum principal
amount of $145 million pursuant to an Amended and Restated Credit Agreement
dated as of March 1, 1996 among the Company, First Union National Bank of North
Carolina, as Administrative Agent, Bankers Trust Company, as Syndication Agent
and the lenders party thereto.
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1.29 "DeMinimis Agreements" means (i) the Company Group's written or
verbal agreements with customers (other than bulk customers) entered into in the
ordinary course of business for the provision of CATV service at the standard
rates charged by the respective System for such service, and (ii) Contracts that
are not Material Agreements because those Contracts involve payments of less
than $25,000 individually over the life of such Contracts and less than $250,000
in the aggregate for all such Contracts over the life of such Contracts.
1.30 "Disbursement Agent" means R&A Management, LLC, a Colorado limited
liability company.
1.31 "Effective Time" means the time on which the Closing has been
consummated on the Closing Date.
1.32 "Encumbrances" means, collectively, all debts, claims, liabilities,
obligations, taxes, liens, mortgages, security interests and other encumbrances
of any kind, character or description, whether accrued, absolute, contingent or
otherwise (and whether or not reflected or reserved against in the balance
sheets, books of account and records of the Company).
1.33 "Environmental Law" means any applicable federal, state, or local
law, statute, standard, ordinance, rule, regulation, code, license, permit,
authorization, approval, and any consent order, administrative or judicial
order, judgment, decree, injunction, or settlement agreement between any member
of the Company Group and a governmental entity relating to the protection,
preservation or restoration of the environment (including, without limitation,
air, water, land, plant and animal life or any other natural resource).
1.34 "Environmental Permit" means any permit, license, approval, consent
or other authorization required by any applicable Environmental Law.
1.35 "Escrow Agent" means U.S. Bank, National Association.
1.36 "Expanded Basic Services" means an optional tier of video services
offered by any member of the Company Group to its customers under various
different names, as such term is commonly used in the CATV industry.
1.37 "FAA" means the Federal Aviation Administration.
1.38 "FCC" means the Federal Communications Commission.
1.39 "FCC Licenses" means all licenses, permits, earth station
registrations and other authorizations issued by the FCC and used in conjunction
with the operation of any System or the Business.
1.40 "Final Closing Certificate" means the certificate to be delivered by
Buyer to Disbursement Agent within ninety (90) days after the Closing Date
pursuant to Section 2.4(d).
1.41 "Franchise" means, with respect to any System, the respective
franchise agreement (or, in lieu thereof, the respective license, consent,
permit, approval or
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authorization) entered into, issued or otherwise granted by any state or local
(e.g., city, county, parish, town or village) governmental body, for the
construction, installation or operation of that System, together with all
relevant instruments, resolutions and franchise-related statutes and ordinances.
1.42 "GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board, or in such other statements by such other
entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of
determination.
1.43 "Governmental Authority" has the meaning set forth in Section 4.3(b).
1.44 "Hazardous Substance" means any substance or material, whether solid,
liquid or gas, listed, defined, designated or classified as hazardous, toxic,
radioactive or dangerous, or otherwise regulated, under any Environmental Law,
whether by type or by quantity; Hazardous Substance includes, without
limitation, any toxic waste, pollutant, contaminant, hazardous substance, toxic
substance, hazardous waste, special waste, industrial substance or petroleum or
any derivative or by-product thereof, radon, radioactive material, asbestos,
asbestos-containing material, urea formaldehyde foam installation, lead and
polychlorinated biphenyl classified as hazardous, toxic, radioactive or
dangerous, or otherwise regulated under any Environmental Law.
1.45 "Homes Passed" means all single family homes, and all residential
units in multi-dwelling units, capable of being serviced by any System without
further trunk or feeder line construction.
1.46 "HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
1.47 "Improvements" means all buildings, structures, CATV towers and
fixtures, and other improvements now or hereafter actually or constructively
attached to the Real Estate, and all modifications, additions, restorations or
replacements of the whole or any part thereof.
1.48 "Indemnifiable Damages" means any and all liabilities in respect of
losses, suits, proceedings, demands, judgments, damages, expenses and costs
(including, without limitation, reasonable counsel fees and costs and expenses)
incurred in the investigation, defense or settlement of any claims covered by
the indemnification set forth in this Agreement, other than special, incidental,
punitive or consequential damages. For avoidance of doubt, "Indemnifiable
Damages" does not include any liability that has been fully accrued, accounted
for and satisfied by means of the Final Closing Certificate described in Section
2.4(d).
1.49 "Indemnification Provisions" has the meaning set forth in Section
7.13.
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1.50 "Indemnity Fund" means the sum of Twenty Million Dollars
($20,000,000) to be deposited by Buyer or guaranteed by the Letter(s) of Credit
at the Closing with the Escrow Agent pursuant to the Closing Escrow Agreement,
plus accrued interest thereon, in order to fund the indemnification obligations
of the Sellers and the InterLink Sellers under the RAP Indemnity Agreement. Such
$20,000,000 amount shall be deposited by Buyer with the Escrow Agent, and shall
be comprised of (a) a portion of the purchase price under the InterLink
Agreement reflecting the InterLink Sellers' pro rata portion of the RAP Equity
Value, and (b) a portion of the Purchase Price hereunder (and Letter(s) of
Credit) reflecting the Sellers' pro rata interest in the RAP Equity Value.
1.51 "Indenture" means the Indenture, dated as of January 15, 1996, by and
among the Company and Xxxxxx Acquisition Capital Corp., as Issuers, certain
subsidiary guarantors and Marine Midland Bank, as Trustee.
1.52 "InterLink" means InterLink Communications Partners, LLLP, a Colorado
registered limited liability limited partnership.
1.53 "InterLink Agreement" has the meaning set forth in the Recitals.
1.54 "InterLink Sellers" has the meaning given the term "Sellers" in the
InterLink Agreement.
1.55 "Legal Proceedings" has the meaning set forth in Section 5.18.
1.56 "Letter(s) of Credit" means one or more letter(s) of credit delivered
to the Escrow Agent at the Closing, in form and substance reasonably
satisfactory to Buyer (such that Buyer is in substantially the same position as
if cash had been deposited by Buyer into the Indemnity Fund), guaranteeing one
or more Sellers' payment of their aggregate pro rata allocation of the Indemnity
Fund.
1.57 "License" means that certain License Agreement between the
Disbursement Agent and an Affiliate of Buyer, dated the Closing Date.
1.58 "Material Adverse Effect" means any effect that is or is reasonably
likely to be materially adverse to the Assets, the Business or the results of
operations or financial condition of the Company Group, taken as a whole, except
for effects due to general economic conditions or changes in regulatory and
competitive conditions affecting the CATV industry generally.
1.59 "Material Agreement" means any Contract of any nature (other than one
required to be listed by Section 5.9) to which any member of the Company Group
is a party, or by which any member of the Company Group or any of their
properties is bound, which (i) by its terms obligates the Company Group to pay
more than $25,000, (ii) in the aggregate with all such Contracts obligates the
Company Group to pay more than $250,000, (iii) provides for the provision of
internet access or internet services to the Company Group's customers, or (iv)
restricts or prohibits a member of the Company Group or any Affiliate of the
Company Group from engaging in any business anywhere in the world.
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1.60 "Monthly Billing Period" means the respective monthly period (whether
such period is a calendar month or, as in the case of any System that engages in
cycle billing, any other monthly period) to which any System-generated customer
xxxx for CATV services relates.
1.61 "Necessary Contract" means any Contract to which any member of the
Company Group is a party and which is necessary for any member of the Company
Group's (i) use of any tower, office or headend site, (ii) pole attachments,
(iii) rights-of-way, (iv) service to any residential development or any
commercial or residential dwelling unit, (v) material licenses and easements, or
(vi) operation of the Business or the Systems.
1.62 "Neutral Accounting Firm" shall mean KPMG Peat Marwick.
1.63 "Non-Delinquent" means a customer who does not have a past due
balance of more than two (2) Monthly Billing Periods (except as otherwise set
forth on Schedule 1.1(A) with respect to the bulk accounts itemized thereon)
from the first day of the initial Monthly Billing Period to which a xxxx relates
(except for past due amounts representing late fees and other minimal ancillary
charges) totaling $5.00 or less.
1.64 "Outside Date" has the meaning set forth in Section 11.1(a)(ii).
1.65 "Partnership Agreement" means the Second Amended and Restated
Agreement of Limited Partnership of the Company, dated August 31, 1995, as
amended.
1.66 "Permitted Encumbrances" means (a) materialmen's, mechanic's,
carriers', or other like liens arising in the ordinary course of business, or
deposits to obtain the release of such liens, securing obligations aggregating
less than $250,000, (b) liens for current taxes not yet due and payable; (c)
imperfections of title that do not interfere with the use or detract from the
value of such property; (d) liens to be released at or prior to Closing; and (e)
in the case of the Real Estate owned or real property leased by any member of
the Company Group, (i) such leases for real property, (ii) municipal and zoning
ordinances, (iii) such rights of way as do not interfere with the use or detract
from the value of the property, (iv) standard (printed) title insurance
exceptions and (v) easements for public utilities, recorded building and use
restrictions and covenants which do not materially interfere with the present
use of or materially detract from the value of the property, and other minor
encumbrances.
1.67 "Person" means an individual, corporation, limited liability company,
partnership, sole proprietorship, association, joint venture, joint stock
company, trust, incorporated organization, or governmental agency or other
entity.
1.68 "Premium Customer" means a Basic Customer who subscribes to and has
been (or is to be) charged for any optional single channel or a la carte service
for which there is a specified charge.
1.69 "Purchase Price" has the meaning set forth in Section 2.2.
1.70 "Purchase Price Adjustment Holdback" means the sum of Two Million
Dollars ($2,000,000) to be paid by Buyer to Disbursement Agent at the Closing
and retained
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by Disbursement Agent as described in Section 2.3. Such $2,000,000 shall be paid
by Buyer to Disbursement Agent, and shall be comprised of (a) a portion of the
purchase price under the InterLink Agreement reflecting the pro rata portion of
the aggregate percentage interest in the RAP Equity Value indirectly owned by
the InterLink Sellers, and (b) a portion of the Purchase Price hereunder
reflecting the Sellers' pro rata interest in the RAP Equity Value.
1.71 "Purchase Price Allocation Schedule" means a schedule, to be
delivered by the Company (on behalf of the Sellers) to Buyer at least five (5)
days prior to the Closing, containing (a) each Seller's pro rata percentage
interest in the RAP Equity Value, (b) the portion of the Purchase Price,
expressed in dollars, to be delivered to each Seller at the Closing and (c) the
pro rata percentage interest of each InterLink Seller in the RAP Equity Value.
1.72 "Purchased Interests" means, collectively, the partnership interests
of the Company owned by Sellers, to be purchased by Buyer pursuant to this
Agreement.
1.73 "RAM" means Xxxxxx Acquisition Management, L.P., a Colorado limited
partnership, the general partner of the Company.
1.74 "RAP Equity Value" has the meaning set forth in Section 2.2.
1.75 "RAP Indemnity Agreement" means the RAP Indemnity Agreement attached
hereto as Exhibit 1.75 hereto, providing for certain indemnities of the parties
hereunder and under the InterLink Agreement.
1.76 "Real Estate" means each parcel of real property owned by a member of
the Company Group at the date hereof together with any other parcels of real
property acquired by a member of the Company Group between the date hereof and
the Closing Date.
1.77 "Required Consents" means those approvals and consents set forth on
Schedule 5.3 separately designated as consents required for Closing.
1.78 "Xxxxxx Transfer Plan" has the meaning set forth in Section 13.12(c).
1.79 "RT" means RT Investments Corp., a Colorado corporation, the general
partner of RAM.
1.80 "Sellers" has the meaning set forth in the first paragraph of this
Agreement.
1.81 "Senior Subordinated Notes" means $125 million of senior subordinated
notes issued by the Company and Xxxxxx Acquisition Capital Corp. pursuant to the
Indenture, together with a $3.0 million promissory note containing equivalent
rights issued by the Company to Xxxxxx X. Xxxxxx.
1.82 "Service Areas" has the meaning set forth in the third paragraph of
this Agreement.
1.83 "Services Agreement" has the meaning set forth in Section 7.17.
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1.84 "Signals" has the meaning set forth in Section 5.16(b).
1.85 "Subsidiaries" means, with respect to any Person, any Affiliate
directly or indirectly controlled by such Person.
1.86 "System" means all of the assets, property and business constituting
any CATV system of the Company Group, each of which Systems (together with the
respective Service Areas served thereby) is described in Schedule 1.1(B) hereto.
1.87 "Tax" and "Taxes" means all federal, state, local, foreign or other
taxing authority gross income, gross receipts, gains, profits, net income,
franchise, sales, use, ad valorem, property, value added, recording, business
license, possessory interest, payroll, withholding, excise, severance, transfer,
employment, alternative or add-on minimum, stamp, occupation, premium,
environmental or windfall profits taxes, and other taxes, charges, fees, levies,
imposts, customs, duties, licenses or other assessments, together with any
interest and any penalties, additions to tax or additional amounts imposed by
any Governmental Authority.
1.88 "Tax Return" means any return, report, statement, information
statement and the like required to be filed with any Governmental Authority with
respect to Taxes.
1.89 "Third Party" means any Person other than the Company, Buyer, Sellers
or any Affiliate of Buyer.
1.90 "Third Party Systems" means Computer Systems of any supplier,
distributor, partner, customer or technology infrastructure provider used in
connection with the Business, including, without limitation, such Computer
Systems of electric utilities, telephone companies and offsite data processors
with whom any member of the Company Group has an ongoing or anticipated
contractual or commercial relationship.
1.91 "Unaudited Financial Statements" has the meaning set forth in Section
5.6.
1.92 "Vehicles" means the vehicles utilized by the Company in the
operation of the Business as set forth on Schedule 1.1(C).
1.93 "Year 2000 Ready" or "Year 2000 Readiness" means that the Computer
Systems are designed to be used prior to, during and after the calendar year
2000 A.D., and that such item can successfully manipulate, interpret, accept,
generate or otherwise process date-dependent or date-related data without
generating incorrect or abnormal results, or experiencing a loss or disruption
of functionality due to an inability to correctly handle dates in, or relating
to, the 21st century, including, without limitation, correctly calculating leap
years.
1.94 "Year 2000 Remediation Program" means an enterprise-wide program
implemented by the Company and affecting all members of the Company Group, to
make Year 2000 Ready Computer Systems and other items related to Business. Such
Year 2000 Remediation Program must (i) include a plan for implementing solutions
recommended by vendors, distributors and manufacturers of the Computer Systems,
and (ii) be conducted by Persons with qualifications or experience related to
Year 2000 Readiness and such Persons
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must have organized an enterprise wide program management office that reports
to, or an enterprise wide program management structure with oversight by,
executive level management.
1.95 "Year Disbursement Amount" has the meaning set forth in Section 2.5.
The plural of any term defined in the singular, and the singular of any
term defined in the plural, shall have a meaning correlative to such defined
term.
ARTICLE II
PURCHASE AND SALE OF PURCHASED INTERESTS
2.1 Purchase and Sale of Purchased Interests.
On the terms and subject to the conditions set forth in this Agreement,
each Seller hereby severally and not jointly agrees to sell to Buyer, and Buyer
hereby agrees to purchase from each Seller, the Purchased Interests owned by
such Seller, as listed opposite the name of such Seller on Schedule 2.1 hereof.
2.2 Purchase Price.
The aggregate purchase price payable by Buyer for the Purchased Interests
(the "Purchase Price") shall be equal to the product of (x) Six Hundred
Forty-Three Million Dollars ($643,000,000), as adjusted pursuant to Sections
2.4(a) and (b), minus the aggregate principal amount of the Company's
outstanding indebtedness on the Closing Date pursuant to the Credit Facility and
the Senior Subordinated Notes (the "RAP Equity Value"), times (y) the aggregate
percentage interest in the RAP Equity Value represented by the Purchased
Interests set forth on the Purchase Price Allocation Schedule, expressed as a
decimal.
2.3 Payment of Purchase Price.
The Purchase Price, less (i) the Sellers' pro rata portion of the
Indemnity Fund (excluding amounts guaranteed by the Letter(s) of Credit) and
(ii) the Sellers' pro rata portion of the Purchase Price Adjustment Holdback,
will be paid at the Closing to Sellers (by federal wire transfer of immediately
available funds to accounts of Sellers designated in writing to Buyer by the
Company (on behalf of Sellers) at least five (5) business days prior to the
Closing) in accordance with the Purchase Price Allocation Schedule. Concurrently
with such payment, (i) Buyer shall deposit the Purchase Price Adjustment
Holdback with the Disbursement Agent for use and disbursement in accordance with
Sections 2.4(f) and 2.4(g) and (ii) Buyer and those Sellers delivering the
Letter(s) of Credit shall deposit the Indemnity Fund and deliver the Letter(s)
of Credit pursuant to Section 2.5. Buyer shall be entitled to rely exclusively
on the Purchase Price Allocation Schedule and shall have no responsibility to
determine whether the Purchase Price Allocation Schedule was properly prepared.
The aggregate (i) consideration to Sellers in connection with the transactions
contemplated hereby, (ii) consideration to the InterLink Sellers pursuant to
clause (y) of Section 2.2 of the InterLink Agreement, and (iii) any continuing
liabilities of the Company, shall be allocated between the tangible assets and
Franchises of the Company by allocating an amount to the tangible assets of the
Company equal to the adjusted basis for federal income tax purposes
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of such tangible assets, and the remainder to the stock of Subsidiaries and
Franchises. The parties shall not take any tax position inconsistent with such
allocation.
2.4 Adjustments and Prorations.
The RAP Equity Value shall be adjusted as follows (with a corresponding
adjustment to be made to the Purchase Price hereunder and under the InterLink
Agreement), with all such adjustments being effective as of the Effective Time:
(a) The RAP Equity Value shall be reduced if the number of Basic Customers
is less than 188,531 (as adjusted below, the "Basic Customer Threshold"), by an
amount equal to $3,411 for each Basic Customer less than the Basic Customer
Threshold. Notwithstanding anything herein to the contrary, in the event that
any commercial establishments or multi-dwelling units that are served pursuant
to a right of entry agreement on December 31, 1998 are subsequently served
pursuant to a bulk agreement, the Basic Customer Threshold shall be reduced by
the number of individual retail customers served pursuant to such right of entry
agreement on the date of conversion to a bulk agreement, and shall be increased
by the number of Basic Customer Equivalents represented by such bulk agreement.
(b) The RAP Equity Value shall be increased at Closing if, as of the
Effective Time, the current assets of the Company Group exceed the current
liabilities of the Company Group by the amount by which such current assets
exceed current liabilities. The RAP Equity Value shall be decreased at Closing,
if, as of the Effective Time, the current liabilities of the Company Group
exceed the current assets of the Company Group by the amount by which such
current liabilities exceed current assets. Except as otherwise specified herein,
current assets and current liabilities shall be determined in accordance with
GAAP, with all normal year end adjustments for GAAP purposes having been
completed or posted as of the Effective Time. Notwithstanding anything else
contained herein, for purposes of making the calculations hereunder:
(i) Without limiting the applicability of GAAP with respect to other
items, current assets shall include (a) cash and cash equivalents, (b)
marketable securities, (c) customer and advertising accounts receivable
determined pursuant to subsection (iii) below, (d) non-customer deposits and
advance payments, (e) prepaid expenses and (f) other current assets; provided,
however, that current assets shall not include inventory.
(ii) Customer accounts receivable of the Company Group shall be
included as current assets in an amount for the Company's customer accounts
receivable for services rendered on or prior to the Closing Date by the Company
Group, equal to 99% of the face amount of the receivables which, as of the
Effective Time, are sixty (60) days or less past due from the first day of the
respective Monthly Billing Period to which a xxxx relates. Payments for any
advertising accounts receivable of a member of the Company Group as current
assets shall include only an amount for any Company Group member's advertising
accounts receivable for advertising run on or prior to the Closing Date, equal
to 95% of all advertising receivables that are less than 90 days past due from
the date of the applicable invoice;
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(iii) Without limiting the applicability of GAAP with respect to
other items, current liabilities shall include (a) the amount of customer
deposits (and any interest thereon that a member of the Company Group is
required to refund or credit its customers) and customer prepayments; (b)
Accrued Vacation Pay for those employees who are employees on the Closing Date;
(c) deferred revenue; (d) accruals for franchise fees, pole rental fees, other
rental or similar charges or payments payable in respect of any Company Group
Contracts not being terminated pursuant hereto, payrolls, payroll taxes,
insurance premiums to the extent that such insurance is not being terminated
pursuant hereto, sales and use taxes payable in respect of CATV service and
equipment furnished in connection with the operation of the Systems, power and
utility charges, real and personal property taxes and rentals, applicable
copyright or other fees, sales and service charges, taxes and similar items, in
each case relating to periods on or prior to the Closing Date; and (e) other
current liabilities; provided, however, that current liabilities shall not
include (i) the current portion of any long-term debt, (ii) deferred taxes, and
(iii) any obligations to pay access fees in connection with right of entry
agreements or bulk agreements that the Company becomes obligated to pay after
the date hereof, but only to the extent that Buyer has been informed of such
obligations and has granted its consent in writing to the payment of such access
fees.
(iv) Cash flow of the Company Group on the Closing Date shall be
allocated one-half prior to the Effective Time and one-half after the Effective
Time.
(c) The Company shall deliver to Buyer, not less than five (5) business
days prior to the Closing Date, a certificate (the "Closing Adjustment
Certificate") signed by an executive officer of RT, which shall set forth the
Company's reasonable good faith estimates of the respective amounts of the
adjustments set forth in Sections 2.4(a) and (b) above, as of the Effective
Time. The Closing Adjustment Certificate shall be in form and substance
reasonably acceptable to Buyer, and the Company shall therewith deliver to Buyer
a copy of such supporting evidence as shall be appropriate hereunder and as
Buyer may reasonably request. At the Closing, there will be a settlement between
Buyer and Disbursement Agent with respect to the adjustments set forth in
Sections 2.4(a) and (b) above, with all such adjustments made or estimated by
Disbursement Agent and Buyer and the amounts determined by Buyer and
Disbursement Agent pursuant to the provisions of this Section 2.4 shall be paid
to Buyer or Sellers, as appropriate, by an increase or decrease in the RAP
Equity Value, as appropriate, on the Closing Date, with a final settlement
within ninety (90) days after the Closing Date (as provided in Section 2.4(d)
below).
(d) Within ninety (90) days after the Closing Date, Buyer shall deliver to
Disbursement Agent a certificate (the "Final Closing Certificate") to be signed
by an executive officer of Buyer setting forth any changes to the adjustments
made as of the Closing pursuant to Sections 2.4(a) and (b), together with a copy
of such supporting evidence as shall be appropriate hereunder and as
Disbursement Agent may reasonably request. If Disbursement Agent shall conclude
that the Final Closing Certificate does not accurately reflect the changes to be
made to the closing adjustments pursuant to this Section 2.4, Disbursement Agent
shall, within thirty (30) days after its receipt of the Final Closing
Certificate, provide to Buyer its written statement (together with any
supporting documentation as Buyer may reasonably request) of any discrepancy or
discrepancies believed to exist. Disbursement Agent's representatives shall be
permitted reasonable access by Buyer to all personnel, books, records, billing
service reports and other documents
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reasonably deemed necessary or appropriate by Disbursement Agent for the
determination of the adjustments and pro rations. Buyer's representatives shall
be permitted reasonable access by Disbursement Agent, RAM and RT to all
personnel, books, records, billing service reports and other documents
reasonably deemed necessary or appropriate by Buyer for the determination of the
adjustments and pro rations.
(e) Buyer and Disbursement Agent shall attempt jointly to resolve any
discrepancies within thirty (30) days after receipt of Disbursement Agent's
discrepancy statement, which resolution, if achieved, shall be binding upon all
parties to this Agreement and not subject to dispute or review. If Buyer and
Disbursement Agent cannot resolve the discrepancies to their mutual satisfaction
within such thirty (30) day period, Buyer and Disbursement Agent shall, within
the following ten (10) days, jointly designate the Neutral Accounting Firm to
review the Final Closing Certificate together with Disbursement Agent's
discrepancy statement and any other relevant documents. The cost of retaining
the Neutral Accounting Firm shall be borne 50% by the Disbursement Agent (on
behalf of the Sellers and InterLink Sellers) and 50% by Buyer. The Neutral
Accounting Firm shall report its conclusions in writing to Buyer and
Disbursement Agent and such conclusions as to adjustments pursuant to this
Section 2.4 shall be conclusive on all parties to this Agreement and not subject
to dispute or review.
(f) The Disbursement Agent will hold the Purchase Price Adjustment
Holdback in a segregated, interest bearing account until the adjustments
required by Sections 2.4(a) and (b) have been determined, and will disburse the
Purchase Price Adjustment Holdback in accordance with Section 2.4(g).
(g) If, after such adjustments, (i) the aggregate RAP Equity Value is
increased from that delivered at the Closing (treating the cash amounts in the
Indemnity Fund and the Purchase Price Adjustment Holdback as having been
delivered at the Closing to Sellers and the InterLink Sellers), then Buyer shall
pay the Disbursement Agent (for the benefit of Sellers and the InterLink
Sellers) such increase in the RAP Equity Value in immediately available funds
within three (3) business days of such determination and the Disbursement Agent
shall pay the amount delivered by Buyer, together with the Purchase Price
Adjustment Holdback, to Sellers and the InterLink Sellers in accordance with the
percentages set forth on the Purchase Price Allocation Schedule, (ii) the
aggregate RAP Equity Value is reduced from that delivered at the Closing
(treating the cash amounts in the Indemnity Fund and the Purchase Price
Adjustment Holdback as having been delivered at the Closing to Sellers and the
InterLink Sellers) by an amount that is less than or equal to the Purchase Price
Adjustment Holdback, then the Disbursement Agent shall pay to Buyer, out of the
Purchase Price Adjustment Holdback, the reduction in the RAP Equity Value, in
immediately available funds within three (3) business days of such
determination, and shall pay any remaining portion of the Purchase Price
Adjustment Holdback to Sellers and the InterLink Sellers pro rata in accordance
with the percentages set forth on the Purchase Price Allocation Schedule, or
(iii) the aggregate RAP Equity Value is reduced from that delivered at the
Closing (treating the cash amounts in the Indemnity Fund and the Purchase Price
Adjustment Holdback as having been delivered at the Closing to Sellers and the
InterLink Sellers) by an amount that is in excess of the Purchase Price
Adjustment Holdback, then each Seller and each InterLink Seller will pay to the
Disbursement Agent its pro rata share of such excess, based on the percentages
indicated on the Purchase Price Allocation
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Schedule, and the Disbursement Agent shall pay such excess amount, together with
the Purchase Price Adjustment Holdback, to Buyer in immediately available funds
within five (5) business days of such determination.
2.5 Indemnity Escrow.
At the Closing, Buyer shall deposit with the Escrow Agent the Indemnity
Fund pursuant to the Closing Escrow Agreement. All amounts in the Indemnity Fund
in excess of the sum of (a) $10,000,000, and (b) the amount of all pending
claims made by Buyer for indemnification pursuant to Section 2.1 of the RAP
Indemnity Agreement, shall be paid to Disbursement Agent (for the benefit of the
Sellers and the InterLink Sellers) at the close of business on the first
business day after the date which is six months after the Closing Date. The
remainder of the Indemnity Fund, if any, less the amount of all pending claims
made by Buyer for indemnification pursuant to Section 2.1 of the RAP Indemnity
Agreement (the "Year Disbursement Amount"), shall be paid to Disbursement Agent
(for the benefit of the Sellers and the InterLink Sellers) at the close of
business on the first business day after the date which is one year after the
Closing Date. The Disbursement Agent shall disburse to Sellers and the InterLink
Sellers, in accordance with the percentages set forth on the Purchase Price
Allocation Schedule, any amount of the Indemnity Fund released pursuant to this
Section 2.5. Except as to claims arising from breaches of Sections 5.4, 5.8 and
(to the extent set forth in Section 2.1(b) of the RAP Indemnity Agreement) 5.22,
release of any amounts from the Indemnity Fund shall relieve Sellers and the
InterLink Sellers of obligations under Section 2.1 of the RAP Indemnity
Agreement to the extent of the amounts so released. Sellers expressly agree that
any post-Closing Date adjustments under Section 2.4 shall be paid in the manner
provided in Section 2.4(g) and, unless Buyer so elects (in its sole and absolute
discretion), any amounts owed by Sellers and the InterLink Sellers under such
sections shall not be paid from the Indemnity Fund. Any one or more Sellers may
elect to deliver at the Closing the Letter(s) of Credit, in which case (1) such
Sellers' allocable share of the Indemnity Fund shall be released to them at
Closing, and (2) any amount to be paid from the Indemnity Fund pursuant to
Article XII shall be paid proportionately (based on the relative aggregate
percentage interests of the Sellers delivering the Letter(s) of Credit) from the
cash portion of the Indemnity Fund and from draws upon the Letter(s) of Credit.
ARTICLE III
CLOSING
3.1 Closing Date.
Subject to the satisfaction of the terms and conditions of this Agreement,
the closing of the transactions contemplated hereby (the "Closing") shall occur
at 10:00 a.m., Mountain Time, at the offices of Xxxxx & Xxxxxxxxx LLP in Denver,
Colorado, on September 2, 1999, or, if later, as soon as practicable (and in any
event within five (5) business days) following the satisfaction or waiver of the
parties' conditions to the Closing, or such other date as may be mutually
agreeable to the Company and Buyer (the "Closing Date"). At any time after
September 2, 1999, Buyer may demand a Closing upon five (5) days' written notice
waiving all of Buyer's conditions to Closing provided that the conditions to
Closing set forth in Articles VIII and X have been satisfied or waived (other
than conditions to be satisfied at the Closing).
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3.2 Default; Specific Performance.
If Sellers or the Company shall fail or refuse to consummate the
transactions set forth in this Agreement on or prior to the Closing Date in
breach of this Agreement, or otherwise breach any other material obligation
hereunder, then, in addition to any other remedies available to Buyer, Buyer
may, at its option, invoke any equitable remedies it may have to enforce the
sale of the Purchased Interests hereunder or such other material provision,
including, without limitation, an action or suit for specific performance. Each
Seller acknowledges that in the event of such Seller's breach of its obligations
hereunder, Buyer will suffer irreparable harm and such Seller hereby irrevocably
waives the defense that Buyer has an adequate remedy at law. If Buyer shall fail
or refuse to consummate the transactions set forth in this Agreement on or prior
to the Closing Date in breach of this Agreement, or otherwise breach any other
material obligation hereunder, then, in addition to any other remedies available
to Sellers, any Seller may, at its option, invoke any equitable remedies it may
have to enforce the purchase of the Purchased Interests hereunder, including,
without limitation, an action or suit for specific performance. Buyer
acknowledges that in the event of Buyer's breach of its obligations hereunder,
Sellers will suffer irreparable harm and Buyer hereby irrevocably waives the
defense that Sellers have an adequate remedy at law.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF
SELLERS
Each Seller hereby, severally and not jointly, represents and warrants (as
of the date of this Agreement, except where a prior or future date is indicated)
as follows, and acknowledges that Buyer is relying on such representations and
warranties in connection with the purchase of the Purchased Interests:
4.1 Title to Purchased Interests.
Such Seller owns, beneficially and of record, all of the Purchased
Interests identified opposite such Seller's name on Schedule 2.1, free and clear
of all liens and encumbrances other than, (i) liens securing obligations under
the Credit Facility, and (ii) if applicable, any liens or encumbrances that will
be terminated or otherwise released prior to the Closing. Upon the Closing,
Buyer will have valid title to all of the Purchased Interests identified
opposite such Seller's name on Schedule 2.1, free and clear of all liens and
encumbrances, other than any liens or encumbrances created by Buyer or arising
through Buyer, and other than pledges required by the Credit Facility (which the
lenders are required to release in accordance with the terms of the Credit
Facility and associated pledge documents).
4.2 Enforceability of Agreement.
This Agreement has been duly and validly executed and delivered by such
Seller and constitutes a legal, valid and binding obligation of such Seller,
enforceable against such Seller in accordance with its terms, except as
enforcement may be limited by bankruptcy,
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insolvency, moratorium and other similar laws or principles affecting the rights
of creditors generally and except for limitations imposed by general principles
of equity.
4.3 No Conflict; Required Filings and Consents.
(a) Except as set forth on Schedule 4.3 hereto (and assuming compliance
with the HSR Act), the execution and delivery of this Agreement by such Seller
does not, and the performance by such Seller of its obligations under this
Agreement will not, (i) conflict with or violate the operating agreement,
agreement of limited partnership, certificate of limited partnership,
certificate of incorporation, by-laws or equivalent organizational documents of
such Seller, (ii) assuming receipt of consents described in Schedule 4.3 or 5.3
hereto, and except as set forth in Section 4.3(b)(i), conflict with or violate
any law, rule, regulation, order, judgment or decree applicable to such Seller
or by which any property or asset of such Seller is bound or affected or (iii)
result in any breach or violation of, or constitute any default (or an event
which with notice or lapse of time or both would become a default) under, or
give rise to any right of termination, cancellation or acceleration of any
obligation or the loss of a material benefit under, any Contract to which such
Seller is a party or by which such Seller or any property or asset of such
Seller is bound, except as would not impair such Seller's ability to perform its
obligations under this Agreement.
(b) The execution and delivery of this Agreement by such Seller does not,
and the performance of this Agreement by such Seller will not, require such
Seller to obtain or make any consent, approval, authorization or permit of,
filing with, or notification to, any governmental or regulatory authority,
domestic or foreign, including, without limitation, any governmental
administrative agency or franchising authority (each a "Governmental
Authority"), except for the matters disclosed in Schedule 4.3 hereto or except
(i) for applicable requirements, if any, of (A) federal or state securities or
"blue sky" laws, (B) the Communications Act, and (C) state and local
Governmental Authorities, including Franchise authorities listed on Schedule 5.3
hereto, and (ii) as required under the HSR Act.
4.4 Brokers' Fees.
Neither such Seller nor anyone authorized to act on his or its behalf has
retained any broker, finder or agent or agreed to pay any brokerage fee,
finder's fee or commission with respect to the transactions contemplated by this
Agreement.
4.5 Organization and Qualification.
Such Seller, if not a natural person, is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its formation and has
the requisite power and authority and all necessary governmental approvals to
own, lease and operate its properties and to carry on its business as it is now
being conducted, except where the failure to be so organized, existing or in
good standing or to have such power, authority and governmental approvals would
not materially interfere with such Seller's ability to enter into this Agreement
and perform its obligations hereunder.
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4.6 Authority Relative to this Agreement.
Such Seller, if not a natural person, has all necessary power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by such Seller and the consummation by such
Seller of the transactions contemplated hereby have been duly and validly
authorized by all necessary individual or entity action and no other individual
or entity action on the part of such Seller is necessary to authorize this
Agreement or to consummate the transactions contemplated hereby.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As an inducement to Buyer to enter into this Agreement and to consummate
the transactions contemplated hereby, the Company hereby represents and warrants
(as of the date of this Agreement, except where a prior or future date is
indicated) to Buyer as follows:
5.1 Organization and Qualification; Subsidiaries.
(a) Each member of the Company Group is a partnership, limited liability
company or corporation duly organized, validly existing and/or in good standing
under the laws of the jurisdiction of its incorporation or organization. Each
member of the Company Group has the requisite power and authority and all
necessary governmental approvals to own, lease and operate its properties and to
carry on its business as it is now being conducted except for those which would
not, in the aggregate, be material. Each member of the Company Group is duly
qualified or licensed as a foreign corporation to do business, and is in good
standing, in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its business makes such qualification
or licensing necessary, except for failures which, in the aggregate would not be
material.
(b) A complete and correct list of the members of the Company Group, which
list sets forth the amount of capital stock of or other equity interests in such
member owned by the Company, directly or indirectly, together with holdings of
all other equity holders (if applicable), is set forth on Schedule 5.1(B).
5.2 Organizational Documents.
The Company has heretofore delivered to Buyer a complete and correct copy
of each of the agreement of limited partnership, operating agreement, limited
liability company certificate, certificate of limited partnership, certificate
of incorporation and bylaws, or equivalent organizational documents, each as
amended to date, of each member of the Company Group. Such organizational
documents are in full force and effect and constitute all of the organizational
documents relating to the members of the Company Group. No member of the Company
Group is in violation of any provision of its agreement of limited partnership,
certificate of limited partnership, operating agreement, certificate of
incorporation, bylaws or equivalent organizational documents, as applicable.
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5.3 Effect of Agreement.
(a) All approvals and consents required under (i) any of the Company
Group's Franchises, FCC Licenses, Necessary Contracts or Material Agreements,
and (ii) any applicable government regulations, in any such case, in order for
the consummation of the sale of the Purchased Interests to Buyer pursuant to
this Agreement are listed in Schedule 5.3 hereto, with Franchise and FCC
approvals identified as such. Other than as set forth on Schedule 5.3, the
execution and delivery of this Agreement by Sellers and the Company does not,
and the performance of this Agreement by Sellers and the Company will not,
require any member of the Company Group to obtain or make any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Authority, except (i) for applicable requirements, if any, of federal or state
securities or "blue sky" laws, and (ii) as required under the HSR Act.
(b) Subject to obtaining the requisite approvals and consents listed in
Schedule 5.3 hereto, neither the execution, delivery and performance by Sellers
and the Company of this Agreement nor the consummation of the transactions
contemplated hereby, alone or in conjunction with any other event (such as a
voluntary or involuntary termination of employment), will (i) conflict with, or
result in a breach of the terms of, or constitute a default under, or a
violation of, or give rise to any termination right under, amendment or
extension of, or a loss of any benefit under, any Material Agreements,
Franchises and Necessary Contracts, (ii) result in the violation of any law,
rule, regulation, order, writ, judgment, decree, determination or award
presently in effect or having applicability to a member of the Company Group
(except to the extent of violations which, individually or in the aggregate
would not be material), (iii) conflict with or violate the certificate of
incorporation, by-laws, operating agreement or partnership agreement of any
member of the Company Group, or (iv) result in any payment becoming due to any
employee, former employee, officer, director, or consultant, or any of their
dependents (other than (1) the signing bonuses or stay put bonuses permitted
pursuant to Section 7.3(e) hereof, or (2) any benefits under the severance plans
listed on Schedule 5.20, of each Company Group member or any ERISA Affiliates);
(v) increase any benefits otherwise payable under any Plan; or (vi) result in
the acceleration of the time of payment or vesting of any benefits under any
Plan except as disclosed on Schedule 5.20. Subject to obtaining such approvals
and consents, such execution, delivery, performance or consummation will not
give to others any rights of termination, acceleration or cancellation in or
with respect to, or a loss of any material benefit under, any Material Agreement
of (or relating to the Business of) the Company Group.
5.4 Capitalization.
The Purchased Interests to be sold to Buyer pursuant to this Agreement, as
identified on Schedule 2.1 hereto, constitute all outstanding partnership
interests of the Company, with the exception of the limited partnership interest
owned by Greenwich Street (RAP) Partners I, L.P., a Subsidiary of InterLink. The
Company owns, directly or through one or more Subsidiaries, free and clear of
all liens and encumbrances, and free and clear of any other limitation or
restriction (other than liens securing obligations under the Credit Facility),
all of the outstanding general partner interests, limited partner interests, and
all other outstanding equity interests of each Subsidiary of the Company. Other
than as included in
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the Purchased Interests or as otherwise allocated from the Purchase Price on the
Purchase Price Allocation Schedule, there are no (i) options, warrants or other
rights or Contracts obligating any member of the Company Group to issue or sell
any shares of capital stock of, or other equity interests in, any member of the
Company Group or to pay cash in lieu thereof, (ii) equity equivalents, stock
appreciation rights, performance shares, interests in the ownership or earnings
of any member of the Company Group or other similar rights issued by a Company
Group member or (iii) outstanding obligations of any member of the Company Group
to purchase, redeem or otherwise acquire any equity interest therein.
5.5 Authority Relative to this Agreement.
The Company has all necessary power and authority to execute and deliver
this Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
by the Company and the consummation by the Company of the transactions
contemplated hereby have been duly and validly authorized by all necessary
partnership action and no other partnership proceedings on the part of the
Company are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by the Company and, assuming the due authorization,
execution and delivery by the other parties hereto, constitutes a legal, valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, moratorium and similar laws or principles affecting the rights of
creditors generally and except for limitations imposed by general principles of
equity.
5.6 Financial Statements.
Attached hereto as Schedule 5.6 are copies of (i) the Company's Balance
Sheet at December 31, 1998 and related Statement of Operations and Statement of
Changes in Financial Position of the Company for its fiscal year then ended,
which have been audited by the Company's independent certified public accountant
(the "Audited Financial Statements") and (ii) all completed monthly unaudited
statements of operations, together with month-end balance sheets, for the months
of January and February, 1999 (the "Unaudited Financial Statements"). The
Audited Financial Statements and Unaudited Financial Statements (i) were
prepared in conformity with GAAP consistently applied, and (ii) present fairly
the financial position of the Company at the dates indicated and the results of
operations of the Company and changes in financial position for the periods
indicated, subject to normal quarterly and year-end audit adjustments (none of
which are expected to be material in amount) and footnotes. The Additional
Financial Statements to be delivered pursuant to Section 7.4(ii) that are for
quarterly periods will (i) be prepared in conformity with GAAP applied
consistently with the Audited Financial Statements, and (ii) present fairly the
financial position of the Company at the dates indicated and the results of
operations of the Company and changes in financial position for the periods
indicated, subject to normal year-end and quarter-end audit adjustments (none of
which are expected to be material in amount) and footnotes. The Additional
Financial Statements to be delivered pursuant to Section 7.4(ii) that are for
monthly periods will (i) be prepared in conformity with generally accepted
accounting principles applied consistently with the Audited Financial
Statements, and (ii) present fairly the results of operations of the Company for
the
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periods indicated, subject to normal year-end and quarter-end audit adjustments
(none of which are expected to be material in amount) and footnotes. Whenever
references are made throughout this Agreement to Audited Financial Statements,
it will be understood that all notes and exhibits are included therein, except
as herein otherwise expressly provided.
5.7 Undisclosed Liabilities.
No member of the Company Group has any material liabilities or
obligations, whether accrued, absolute, contingent or otherwise, and whether due
or to become due, and the Company does not know of any basis for any claim
against any member of the Company Group for any such liabilities or obligations,
except (i) to the extent set forth in this Agreement or in the Schedules hereto,
including the Audited Financial Statements attached hereto, (ii) liabilities
under the DeMinimis Agreements, or (iii) liabilities, debts or obligations
incurred in the ordinary course of business of the Company since December 31,
1998, none of which individually or in the aggregate will have a Material
Adverse Effect.
5.8 Tax Returns and Audits.
(a) Each member of the Company Group has timely filed all material
federal, state, local and foreign Tax Returns required to be filed by it through
the date hereof and shall timely file all Tax Returns required to be filed at or
before the Closing. Such reports and returns are and will be true, correct and
complete in all material respects. Each member of the Company Group has paid and
discharged all Taxes due from it, other than such taxes that are being contested
in good faith by appropriate proceedings and are adequately reserved as shown in
the audited consolidated balance sheet of such entity dated December 31, 1998.
Neither the Internal Revenue Service (the "IRS") nor any other taxing authority
or agency, domestic or foreign, is now asserting or, to the knowledge of any
member of the Company Group, threatening to assert against any member of the
Company Group any material deficiency or material claim for additional Taxes.
Moreover, no member of the Company Group has knowledge of any facts on the basis
of which taxing authorities could assert material deficiencies or material
claims described in the preceding sentence. Each member of the Company Group has
withheld or collected and paid over to the appropriate Governmental Authorities
or is properly holding for such payment all Taxes required by law to be withheld
or collected. No member of the Company Group has any liability for the Taxes of
any Person (other than a member of the Company Group) pursuant to Section
1.1502-6 of the Treasury Regulations promulgated under the Code or comparable
provisions of any taxing authority in respect of a consolidated or combined Tax
Return. There are no liens for Taxes upon the assets of any member of the
Company Group other than (i) liens for current Taxes not yet due and payable,
(ii) liens for Taxes that are being contested in good faith by appropriate
proceedings and (iii) other liens which, in the aggregate, are not material.
(b) Each member of the Company Group has had and will continue to have
through the Closing Date the federal tax status (i.e., partnership or C
corporation) such entity reported on its December 31, 1997 federal Tax Returns,
except as results from any actions taken pursuant to this Agreement. There are
no outstanding agreements or waivers extending the statutory period of
limitation applicable to any Tax Returns required to be filed by, or which
include or are treated as including, any member of the Company Group.
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(c) Except as set forth on Schedule 5.8, no Member of the Company Group is
involved in or subject to any joint venture, partnership or other arrangement or
contract which is treated as a partnership for federal, state, local or foreign
income tax purposes (a "Tax Partnership"), except for a Tax Partnership which is
a Subsidiary.
(d) No consent to the application of section 341(f)(2) of the Code has
been filed with respect to any property or assets held, acquired, or to be
acquired by any member of the Company Group.
(e) Except as set forth on Schedule 5.8, there are no tax sharing
agreements or similar arrangements with respect to or involving any member of
the Company Group.
(f) Except as set forth in Schedule 5.8, no member of the Company Group
was included or is includable in any consolidated or unitary Tax Return with any
entity other than a Tax Return filed that includes only members of the Company
Group.
(g) No member of the Company Group has agreed to or is required to make
any material adjustment under section 481(a) of the Code.
(h) Except as set forth in Schedule 5.8, no member of the Company Group
has entered into any compensatory agreements with respect to the performance of
services which payment thereunder would result in a non-deductible expense to
such company pursuant to Section 280G of the Code or an excise Tax to the
recipient of such payment pursuant to Section 4999 of the Code.
5.9 Franchises and Necessary Contracts.
Each member of the Company Group has validly and legally obtained and duly
holds the Franchises, the FCC Licenses and the Necessary Contracts. Attached
hereto as Schedule 5.9(A) is a true and accurate list of each Franchise held by
the Company Group (including the member of the Company Group holding each
Franchise, the Franchising Authority which granted each Franchise, the stated
expiration date of each Franchise, and the System to which the Franchise
applies), each pending application relating to any Franchise, and a list of any
System or portion thereof which does not, for the reason set forth on such
Schedule, require a franchise authorizing the installation, construction,
development, ownership or operation of the same, which list is true, correct and
complete. No member of the Company Group is providing CATV service in any area
other than as set forth on Schedule 5.9(A). Attached hereto as Schedule 5.9(B)
is a true and accurate list of each FCC License (including the expiration date
thereof) and each Necessary Contract. The Company Group is in compliance (and
the operations of the Systems and the Assets are being conducted in compliance)
in all material respects with the provisions of all Franchises, FCC Licenses and
the Necessary Contracts, all of the Franchises, the FCC Licenses and Necessary
Contracts are in full force and effect, and there are no pending (or to
Company's knowledge, threatened) modifications, amendments (other than
extensions of the term) or revocations by the issuers of the Franchises, the FCC
Licenses or any other third parties with respect to the Necessary
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Contracts. The Company does not have any knowledge of any material breach of any
Franchise or Necessary Contract by any other parties thereto. Except as
disclosed in Schedule 5.9(C) or as specifically contained in the Franchises, the
Necessary Contracts, or other Material Agreements, no promises or commitments
which are to be fulfilled after the Closing Date have been made with respect to
capital improvements relating to the Systems. Except as described on Schedule
5.9(C), the Company Group holds all of the Franchises and material FCC Licenses
necessary to operate the Business in the manner in which it is currently being
operated. The Company Group has received no notice, either formal or informal,
that any Franchise or FCC License would not be renewed in the ordinary course
and is aware of no basis for the denial, revocation or modification of any
Franchise or FCC License. Pursuant to subsections (a) through (g) of Section 626
of the Cable Communications Policy Act of 1984, as amended, the Company Group
has timely submitted proposals for renewal of all Franchises having a remaining
term of thirty-six (36) months or less as of the date hereof, and has provided
Buyer with copies of all proposals for renewal, preliminary assessments and
franchisor determinations described in subsection (c) of said Section 626.
5.10 Material Agreements and Obligations.
(a) Schedule 5.10(A) hereto lists the Material Agreements. Except for
those contracts listed on the Schedules hereto, the DeMinimis Agreements, the
Credit Facility, and the Senior Subordinated Notes, no member of the Company
Group is a party to any written or oral contract with respect to the Systems
that is not cancelable without penalty upon thirty (30) days' notice or less,
including any:
(i) bonus, incentive, pension, profit sharing, retirement,
hospitalization, insurance, or other plan providing for deferred or other
compensation to employees, or any other employee benefit or "fringe benefit"
plan, including, without limitation, vacation, sick leave, medical or other
insurance plans or any union collective bargaining or any other contract with
any labor union;
(ii) employment contract for any Person on a full-time, part-time,
consulting or other basis;
(iii) agreement or indenture relating to the borrowing of money or
to mortgaging, pledging or otherwise placing a lien on any asset or group of
assets of any member of the Company Group;
(iv) guarantee of any obligation;
(v) lease or agreement under which it is lessee or lessor, or holds
or operates any property, real or personal, owned by any other party, except for
any lease under which the aggregate annual rental payments do not exceed
$25,000;
(vi) Contract or group of related Contracts with the same party or
any group of affiliated parties which requires or may in the future require
aggregate consideration by or to any member of the Company Group in excess of
$25,000;
(vii) Contract in effect between any member of the Company Group and
any Seller (or an Affiliate thereof) or any of the officers, directors or
Affiliates of any member of the Company Group;
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(viii) obligations of any member of the Company Group to make
payments to any Seller (or an Affiliate thereof) or any Affiliate of any member
of the Company Group;
(ix) loans by any member of the Company Group to any Seller (or any
Affiliate thereof) or any of the officers, directors or Affiliates of each
member of the Company Group.
(b) Each member of the Company Group has, in all material respects,
performed all obligations required to be performed by it and is not in material
default under, or in material breach of, or in receipt of any claim of material
default under, any Material Agreement; and the Company does not have any
knowledge of any material breach by the other parties to any Material Agreement.
(c) There is no term or provision of any Contract not included on the
Schedules hereto to which any member of the Company Group is a party or by which
it or any of its properties is bound that would have a Material Adverse Effect.
There is no term or provision of any federal or state judgment, decree or order
applicable to or binding upon any member of the Company Group, the enforcement
of which would have a Material Adverse Effect.
5.11 Systems' Capacity, Customers and Rates.
(a) Schedule 5.11(A) hereto lists, as of December 31, 1998 (or as of the
respective date therein specified), (i) the system bandwidth for each System,
(ii) programming offered, (iii) approximate linear miles of aerial and
underground plant (i.e., main trunk and distribution or feeder cable); provided,
that for purposes of this subsection (iii), the term "approximate" shall allow a
variance of plus or minus 10% from the number of linear miles of aerial and
underground plant set forth on Schedule 5.11(A), (iv) the approximate number of
Homes Passed, (v) the total number of retail and bulk equivalent basic customers
(including an approximate breakdown of the number of retail customers among
Franchises) as reported by Cable Data, (vi) the aggregate number of premium
units subscribed to by the Company Group's Premium Subscribers, (vii) subscriber
rates for all services including basic and premium services, tier services,
additional outlets and converter rental charges in and for each of the Service
Areas, (viii) the community unit identification number ("CUID Number") for each
franchise community; (ix) a list of all free, discount or other promotional
service obligations (other than those free, discount or other promotional
service obligations which are regularly offered or arise in the ordinary course
of business); and (x) the Signals carried by each System and the channel
position of each such Signal and, with respect to TV station signals, whether
carried pursuant to must-carry requirements or retransmission consent, which
information is true and correct, in all material respects. Except where
specifically indicated on Schedule 5.11(A), each of the respective channel
lineups set forth in Schedule 5.11(A) is capable of being viewed in its entirety
by each Subscriber in the applicable System (subject to ordinary course service
interruptions).
(b) Except as set forth in Schedule 5.11(B), all reports or other
documents, payments (including, without limitation, all franchise fees and FCC
regulatory fees) or submissions required to be filed by the Company Group with
respect to any Franchise or the
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Business have, in all material respects, been duly and timely filed and/or paid
with the appropriate authority and were correct in all material respects when
filed.
5.12 Employees.
(a) The Company is not aware that any officer, executive employee or any
group of employees of the Company Group has or have any plans to terminate his,
her or their employment with the Company Group. Each member of the Company Group
has complied in all material respects with all applicable laws relating to the
employment of labor, including provisions thereof relating to wages, hours,
equal opportunity, collective bargaining and the payment of social security and
other taxes, and except as set forth in Schedule 5.12 hereto, no member of the
Company Group has received any notice of any claim at the date of this Agreement
and during the preceding three years that it has not complied in any material
respect with any laws relating to the employment of employees or that it is
liable for any arrearages of wages or any taxes or penalties for failure to
comply with any laws. No member of the Company Group has written policies and/or
employee handbooks or manuals except those set forth in Schedule 5.12.
(b) Except as set forth in Schedule 5.12 hereto, no member of the Company
Group is, and during the 12 months prior to the date of this Agreement no member
of the Company Group has been, involved in any labor discussion with any unit or
group seeking to become the bargaining unit for any of its employees. Except as
set forth in Schedule 5.12 hereto, no member of the Company Group is a party to
any collective bargaining agreement and there are no unfair labor practice or
arbitration proceedings pending with respect to any member of the Company Group
or, to the knowledge that the Company, threatened and there are no facts or
circumstances known to the Company that could reasonably be expected to give
rise to such a claim. To the knowledge of the Company, there are no
organizational efforts presently underway or threatened involving any employees
of the Company Group or any of the employees performing work for the Company but
provided by an outside employment agency, if any. Within the last 12 months,
there has been no work stoppage, strike or other consorted activity by any
employees of the Company Group.
(c) Except as set forth in the Schedule 5.12 and as to those employees (if
any) represented by a labor organization, all employees of the Company Group are
employed at-will. Except as set forth in Schedule 5.12, completion of the
transactions contemplated by this Agreement will not result in any payment or
increased payment becoming due from any member of the Company Group to any
officer, director, or employee of, or consultant to, a member of the Company
Group.
(d) No member of the Company is a party to any agreement for the provision
of labor from any outside agency except as set forth in Schedule 5.12. To the
knowledge of the Company, at the date of this Agreement and during the preceding
three years, there have been no claims by employees of such outside agencies, if
any, with regard to employees assigned to work for the Company Group, and no
claims by any governmental agency with regard to such employees except as set
forth in Schedule 5.12.
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5.13 Absence of Certain Developments.
Except as set forth on Schedule 5.13 hereto, and except for the
transactions contemplated by this Agreement, no Company Group member has,
insofar as the Systems or the Assets are concerned, since December 31, 1998:
(i) except for borrowings under the Credit Facility in the ordinary
course of business, borrowed any amount or incurred or become subject to any
liabilities (absolute or contingent) except liabilities incurred in the ordinary
course of business;
(ii) mortgaged or pledged any of its assets, tangible or intangible,
or subjected them to any lien, charge or other encumbrance, except Permitted
Encumbrances and liens securing indebtedness under the Credit Facility;
(iii) sold, assigned or transferred any of its tangible assets,
except in the ordinary course of business, or canceled any debts or claims
(other than unpaid subscriber debts and claims in the ordinary course of
business);
(iv) suffered any substantial losses other than consistent with
recent operating history;
(v) except in the ordinary course of business, waived or released
any material right or claim;
(vi) made any changes in employee compensation or personnel
policies, including the establishment of any bonus, insurance, severance,
deferred compensation, pension, retirement, profit sharing, option, stock
purchase or other Plan (as defined below), declared, paid or committed to pay a
bonus or additional salary or compensation to any Person (other than the stay
put bonuses or signing bonuses permitted pursuant to Section 7.3 (e) hereof), or
made any other increase in the compensation payable to or to become payable to
any executive officers of any member of the Company Group, except in the
ordinary course of business and consistent with past practices;
(vii) entered into any other transaction other than in the ordinary
course of business;
(viii) amended or terminated any Contract listed in any Schedule
hereto, except in the ordinary course of business and except for Contracts that
have expired by their own terms;
(ix) suffered any material damage, destruction or casualty loss,
whether or not covered by insurance; or
(x) has suffered a Material Adverse Effect, or has had any event or
events occur that, individually or in the aggregate, are reasonably likely to
result in a Material Adverse Effect;
(xi) materially changed any of its accounting principles or
practices, or revalued such Assets or Systems for financial reporting, property
tax or other purposes;
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(xii) entered into any Contract or understanding to do any of the
foregoing.
5.14 Real Property.
Schedule 5.14 hereto contains a legal description of each parcel of Real
Estate owned by the Company Group together with a description of the type of use
of each such parcel. The Company has furnished to Buyer a copy of any title
insurance policy or other evidence of title issued with respect to each owned
parcel of Real Estate owned by the Company Group in the possession of the
Company Group. Except for any Permitted Encumbrances, the Company or a
Subsidiary thereof is the sole owner (both legal and equitable) of, and has good
and marketable title in fee simple absolute to, each parcel of Real Estate
listed on Schedule 5.14 and all buildings, structures and improvements thereon,
and the unfettered right to occupy the leased property free and clear of any
options to lease or purchase. The location and use (i.e., headend, tower or
office site) of each real property leased by the Company Group is identified on
Schedule 5.9(B). All of the Real Estate, and all of the real property leased by
the Company Group, utilized as a headend, office or tower site has unfettered
access to public roads or streets and all utilities and services necessary for
the proper conduct and operation of the Systems. The Real Estate and all of the
real property leased by the Company Group complies and is operated in material
compliance with all applicable laws. There are no defects in the physical
condition of the Real Estate or the improvements located on the Real Estate
which could impair or prevent the current or proposed use thereof by the Company
Group. No member of the Company Group has received any notice from any
governmental body (a) requiring it to make any material repairs or changes to
the Real Estate or the improvements located on the Real Estate or (b) giving
notice of any material governmental actions pending. There is no action,
proceeding or litigation pending (or, to the best knowledge of the Company,
contemplated or threatened): (i) to take all or any portion of the Real Estate,
or any interest therein, by eminent domain; or (ii) to modify the zoning of, or
other governmental rules or restrictions applicable to, the Real Estate or the
use or development thereof in any manner which could impair or prevent the
current or proposed use thereof by the Company Group. There are no contracts or
other obligations outstanding for the sale, exchange or transfer of any of the
Real Estate.
5.15 Title to Assets; Personal Property.
A member of the Company Group is the sole owner (both legal and equitable)
of and has good and marketable title to the Assets constituting personal
property, tangible and intangible, free and clear of all mortgages, liens,
security interests, charges, claims, restrictions and other encumbrances of
every kind other than with respect to the liens securing the Company Group's
indebtedness and the Permitted Encumbrances. The material items of machinery,
equipment and other tangible assets included in the Assets are in satisfactory
operating condition, reasonable wear and tear excepted, and conform, in all
material respects, to all applicable ordinances, rules, regulations and
technical standards, including the rules, regulations and technical standards of
the FCC and the local franchise authorities, and all applicable building, zoning
and other laws. As of the Closing, the amount of Assets constituting inventory
of set-top cable boxes will be adequate to cover usage projected by the budget
provided to Buyer for thirty days after the Closing Date for
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each of the following types of boxes: (i) standard analog, (ii) advanced analog,
and (iii) digital.
5.16 Compliance with Laws.
(a) The operations of the Systems have been, and are being, conducted in
material compliance with all applicable laws, rules, regulations and other
requirements of all federal, state, county or local governmental authorities or
agencies.
(b) (i) The Company Group is permitted under all applicable Franchises and
FCC rules, regulations and orders to distribute the transmissions (whether
television, satellite, radio or otherwise) of video programming or other
information that the Systems make available to customers of the Systems (the
"Signals") presently being carried to such customers and to utilize all carrier
frequencies generated by the operations of the Systems, and are licensed to
operate all the facilities required by law to be licensed, including without
limitation, any business radio and any CARS system being operated as part of the
Systems; and (ii) other than requests for network nonduplication and syndex
protection and sports league (e.g., NBA, NHL, MLB) blackout requests, no written
requests or orders have been received by any member of the Company Group during
the three years preceding the date of this Agreement from the FCC, the United
States Copyright Office, any local or other television station or system or from
any other Person (x) challenging or questioning the legal right of a member of
the Company Group to distribute the Signals, own or operate any System or to
own, operate or use any FCC licensed or registered facility owned, operated
and/or used by the Company Group in conjunction with the Company Group's
operation of any System or (y) requiring any System to carry a television
broadcast signal or to terminate carriage of a television broadcast signal with
which the Company Group has not complied, and (iii) except as disclosed in
Schedule 5.16(B), the Company Group has complied with all written and bona fide
requests or demands received from television broadcast stations to carry or to
terminate carriage of a television broadcast signal on a System, including,
without limitation, all retransmission consent agreements to which any member of
the Company Group is a party.
(c) The Company Group is in compliance with the applicable Cumulative
Leakage Index and Equal Employment Opportunity requirements of the FCC.
(d) The Company Group has deposited with the United States Copyright
Office all statements of account and other documents and instruments, and has
paid all such royalties, supplemental royalties, fees and other sums to the
United States Copyright Office with respect to the business and operations of
the Systems as are required under the Copyright Act to obtain, hold and maintain
the compulsory license for CATV systems prescribed in Section 111 of the
Copyright Act. The Company Group and the Systems are in material compliance with
the Copyright Act and the rules and regulations of the Copyright Office. The
Company Group and the Systems are entitled to hold and do hold the compulsory
copyright license described in Section 111 of the Copyright Act, which
compulsory copyright license is in full force and effect and has not been
revoked, canceled, encumbered or adversely affected in any manner. The carriage,
transmission or use of the Signals has not and does not subject the Systems or
any Company Group member to any
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FCC proceedings or any suits or actions, including without limitation, suits or
actions for copyright infringement.
(e) All necessary FAA and FCC approvals and registrations have been
obtained and/or filed with respect to the height and location of those towers
owned by the Company or the appropriate member of the Company Group, and those
towers are being operated in material compliance with applicable FCC and FAA
rules.
(f) There is no inquiry, claim, action or demand pending before the United
States Copyright Office or the Copyright Royalty Tribunal which questions the
copyright filings or payments made by any Company Group member with respect to
the Systems other than routine inquiries or proposed corrections. The Company
will provide Buyer with copies of any and all additional inquiries, claims,
actions or demands during the period between the date of this Agreement and the
Closing Date.
(g) Copies of all aeronautical frequency notices filed with the FCC with
respect to the Systems have been delivered to Buyer.
(h) Schedule 5.16(H) sets forth a list of all Governmental Authorities
that are certified to regulate rates of the Systems pursuant to the
Communications Act and FCC Regulations as of the date of this Agreement. Except
as set forth on Schedule 5.16(H), no rate complaints are pending with the FCC
against the Systems, no Company Group member has received any written (or to the
Company's knowledge other) notice from any Governmental Authority that it has
any obligation or liability to rollback its rates for Basic or Expanded Basic
Service or otherwise to refund to customers of the Systems any portion of the
revenue received by the Company Group from such customers (excluding revenue
with respect to deposits for converters, encoders, decoders and related
equipment and other prepaid items) that has not been resolved. The Company Group
has made a good faith effort to set its rates in accordance with applicable
statutory provisions, rules, regulations and orders and is aware of no basis for
rollbacks or refunds. The Company has delivered to Buyer complete and correct
copies of all FCC forms relating to rate regulation of the Systems filed with
any Governmental Authority, copies of all correspondence with any Governmental
Authority relating to such rate regulation and any other documentation
justifying the rates charged to customers of, or otherwise supporting an
exemption from the rate regulation provisions of the Communications Act claimed
with respect to, any of the Systems. The customer records of the Systems contain
the names, addresses and payment histories of, and services delivered to, all
Persons known by the Company to be receiving any CATV service from any member of
the Company Group with respect to the Systems.
(i) Except as set forth on Schedule 5.16(I), as of the date of this
Agreement, (i) no construction programs relating to the provision or proposed
provision of CATV service have been undertaken by any Person in any of the
Service Areas and, to the Company's knowledge, without investigation but upon
inquiry of its regional managers and as should reasonably be known to a
reasonable CATV operation, no such construction programs are proposed or
threatened to be undertaken, (ii) no franchise or other applications or requests
of any Person to provide CATV service in the Service Areas have been filed or to
the Company's knowledge are threatened or proposed; (iii) there is no other CATV
or other video services provider (excluding DBS providers) within any of the
Service Areas
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which is providing or, to the Company's knowledge, has applied for a franchise
or otherwise intends to provide CATV services or other video services (excluding
DBS services) to any of the Service Areas in competition with any of the
Systems. Except as set forth in Schedule 5.16(I), no Company Group member is a
party to any agreement restricting the ability of any Third Party to operate
CATV systems or any other video programming distribution business within any of
the Service Areas.
5.17 Transactions.
Except as disclosed on Schedule 5.17 hereto, since December 31, 1998, no
member of the Company Group has entered into any transaction outside the
ordinary course of its business, and there has not been any material change in
the manner in which the Company Group conducts its business. Since December 31,
1998, there has not been any Material Adverse Effect.
5.18 Litigation and Legal Proceedings.
Set forth on Schedule 5.18 hereto is a complete and accurate list and
description of all suits, claims, actions and administrative, arbitration or
other similar proceedings relating to the Company Group (including proceedings
concerning labor disputes or grievances, civil rights discrimination cases and
affirmative action proceedings) and all governmental investigations pending or,
to the knowledge of the Company, threatened, in each case to which any member of
the Company Group is a party, or against its properties or business, and each
judgment, order, injunction, decree or award relating to a member of the Company
Group or the Assets (whether rendered by a court or administrative agency, or by
arbitration pursuant to a grievance or other procedure) to which a member of the
Company Group is a party that is unsatisfied or requires continuing compliance
therewith (such suits, actions, claims, judgments, orders, injunctions, decrees
and awards are herein referred to as "Legal Proceedings"). To the Company's
knowledge, there are no facts or circumstances that would give rise to any
material claims against the Systems or the Assets, other than such claims as may
be applicable to the CATV industry generally. The foregoing warranty
specifically excludes matters undertaken by or pending before Congress, the FCC,
the Copyright Royalty Tribunal or any state governmental authority in any state
in which any System is located which would have applicability to CATV systems in
general but to which no Company Group member is expressly a party.
5.19 Brokers' Fees.
Neither, RT, RAM nor any member of the Company Group has employed any
broker or finder or incurred any liability for any brokerage fees, commissions
or finders' fees in connection with the transactions contemplated by this
Agreement.
5.20 Plans; ERISA.
(a) Existence of Plans. For purposes of this Agreement, the term "Plans"
shall mean (i) all "employee benefit plans" (as such term is defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), of which any member of the Company Group, or any member of the same
controlled group as a member of the Company Group within the meaning of Section
4001(a)(14) of ERISA (an "ERISA
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Affiliate") is or ever was a sponsor or participating employer or as to which a
member of the Company Group or any of their ERISA Affiliates makes contributions
or is required to make contributions, and (ii) any similar employment, severance
or other arrangement or policy of any of the Company Group members or any of
their ERISA Affiliates (whether written or oral) providing for health, life,
vision or dental insurance coverage (including self-insured arrangements),
workers' compensation, disability benefits, supplemental unemployment benefits,
vacation benefits or retirement benefits, fringe benefits, or for profit
sharing, deferred compensation, bonuses, stock options, stock appreciation or
other forms of incentive compensation or post-retirement insurance, compensation
or benefits. Except as disclosed on Schedule 5.20, neither a member of the
Company Group nor any of their respective ERISA Affiliates maintains or sponsors
(or ever maintained or sponsored), or makes or is required to make contributions
to, any Plans. None of the Plans is or was a "multi-employer plan," as defined
in Section 3(37) of ERISA. None of the Plans is or was a "defined benefit
pension plan" within the meaning of Section 3(35) of ERISA. None of the Plans
provides or provided post-retirement medical or health benefits. None of the
Plans is or was a "welfare benefit fund," as defined in Section 419(e) of the
Code, or an organization described in Sections 501(c)(9) or 501(c)(20) of the
Code. No member of the Company Group or any ERISA Affiliate is or was a party to
any collective bargaining agreement. Except as disclosed on Schedule 5.20, no
member of the Company Group or any ERISA Affiliate has announced or otherwise
made any commitment to create or amend any Plan. Notwithstanding any statement
or indication in this Agreement to the contrary, except as disclosed on Schedule
5.20, there are no Plans which the Company will not be able to terminate
immediately after the Closing in accordance with their terms and ERISA. The
Company has made available to Buyer true and complete copies of: (i) each of the
Plans and any related funding agreements thereto (including insurance contracts)
including all amendments, all of which are legally valid and binding and in full
force and effect and there are no defaults thereunder, (ii) the currently
effective Summary Plan Description pertaining to each of the Plans, as
applicable, (iii) the three (3) most recent annual reports for each of the Plans
(including all related schedules), (iv) the most recent Internal Revenue Service
determination or opinion letter, as applicable, for each Plan which is intended
to constitute a qualified plan under Section 401 of the Code and each amendment
to each of the foregoing documents, and (v) for each unfunded Plan, financial
statements which shall fairly present the financial condition and the results of
operations of such Plan in accordance with GAAP, consistently applied, as of
such dates.
(b) Penalties. To the Company's knowledge, no member of the Company Group
or any of their respective ERISA Affiliates is subject to any material
liability, tax or penalty whatsoever to any Person or agency whomsoever as a
result of engaging in a prohibited transaction under ERISA or the Code, and no
member of the Company Group or any of their respective ERISA Affiliates has any
knowledge of any circumstances which reasonably might result in any material
liability, tax or penalty, including but not limited to, a penalty under Section
502 of ERISA, as a result of a breach of any duty under ERISA or under other
applicable laws. Each Plan which is required to comply with the provisions of
Sections 4980B and 4980C of the Code, or with the requirements referred to in
Section 4980D of the Code, has complied in all material respects. No event has
occurred which could subject any Plan to tax under Section 511 of the Code.
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(c) Qualification. Each of the Plans which is intended to be a qualified
plan under Section 401(a) of the Code has received a favorable determination or
opinion letter from the Internal Revenue Service, and has been operated in all
material respects in accordance with its terms and with the provisions of the
Code. All of the Plans have been administered and maintained in substantial
compliance with ERISA, the Code and all other applicable laws. All contributions
required to be made to each of the Plans under the terms of that Plan, ERISA,
the Code or any other applicable laws have been timely made. Each Plan intended
to meet the requirements for tax-favored treatment under Subchapter B of Chapter
1 of the Code meet such requirements. Except as set forth in Schedule 5.20, the
Company Group members have not made any payments, are not obligated to make any
payments, and are not parties to any Contract or Plan that under certain
circumstances, considered either individually or in the aggregate, could require
any of them to make any payments, that are not deductible as a result of the
provisions set forth in Section 280G of the Code or the treasury regulations
thereunder or would result in an excise tax to the recipient of any such payment
under Section 4999 of the Code. The Audited Financial Statements and the
Unaudited Financial Statements properly reflect all amounts required to be
accrued as liabilities to date under each of the Plans. Except as disclosed on
Schedule 5.20 or as set forth in Section 13.12, the execution and performance of
this Agreement will not (i) result in any obligation or liability (with respect
to accrued benefits or otherwise) of any member of the Company Group or Buyer to
any Plan, or any present or former employee of a member of the Company Group,
(ii) be a trigger event under any Plan that will result in any payment (whether
of severance pay or otherwise) becoming due to any present or former employee,
officer, director, shareholder, contractor, or consultant, or any of their
dependents, or (iii) accelerate the time of payment or vesting, or increase the
amount, of compensation due to any employee, officer, director, shareholder,
contractor, or consultant of a member of the Company Group. With respect to any
insurance policy which provides, or has provided, funding for benefits under any
Plan, (I) there is and will be no liability of the any member of the Company
Group or Buyer in the nature of a retroactive or retrospective rate adjustment,
loss sharing arrangement, or actual or contingent liability as of the Closing
Date, nor would there be any such liability if such insurance policy were
terminated as of the Closing Date, and (II) no insurance company issuing any
such policy is in receivership, conservatorship, bankruptcy, liquidation, or
similar proceeding, and, to the knowledge of the Company, no such proceedings
with respect to any insurer are imminent.
(d) Litigation. Other than routine claims for benefits under the Plans,
there are no pending, or, to the best knowledge of the Company Group,
threatened, investigations, proceedings, claims, lawsuits, disputes, actions,
audits or controversies involving the Plans, or the fiduciaries, administrators,
or trustees of any of the Plans or the Company, any Subsidiary or any of their
respective ERISA Affiliates as the employer or sponsor under any Plan, with any
of the IRS, the Department of Labor, the PBGC, any participant in or beneficiary
of any Plan or any other Person whomsoever. The Company Group knows of no
reasonable basis for any such claim, lawsuit, dispute, action or controversy.
5.21 Insurance, Surety Bonds, Damages.
Set forth on Schedule 5.21 hereto is a correct list of all insurance
policies and surety bonds of the Company Group now in effect, including the
names of the insureds and their addresses. The premiums on such insurance
policies and bonds have been currently paid,
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and such policies and bonds are valid, outstanding and enforceable, in full
force and effect and insure against risks and liabilities and provide for
coverage to the extent and in a manner required of or deemed reasonably
appropriate and sufficient by the Company. The Company Group will maintain
coverage of similar kinds and amounts and will pay the premium for such coverage
through the Closing Date.
5.22 Environmental Laws.
Except as set forth in Schedule 5.22: (i) each member of the Company Group
is in material compliance with all Environmental Laws; (ii) no member of the
Company Group has received, since January 1, 1994, any order, directions or
notices relating to any release or threatened release of any Hazardous
Substance, or alleging a violation of any Environmental Law and no government
agency has submitted to any member of the Company Group any request for
information pursuant to any Environmental Law relating to the Systems; (iii) to
the best of the Company's knowledge, there are no material Environmental Permits
required under any Environmental Law in connection with the operation of the
Systems; and (iv) there has been no generation, use, treatment, disposal, or
actual or threatened release of any Hazardous Substance by the Company Group or,
to the Company's knowledge (without any obligation of further investigation), by
any other party at, in, under, or about any of the real property currently or
formerly owned, leased, occupied or used by any member of the Company Group.
Except as set forth on Schedule 5.22, no Company Group member has received,
since January 1, 1994, any notification pursuant to any Environmental Laws that:
(i) any work, repairs, construction or capital expenditures are required to be
made in respect of any of the Assets as a condition of continued compliance with
any Environmental Laws; or (ii) any currently held material Environmental Permit
relating to the Systems is about to be made subject to materially different
limitations or conditions, or is about to be revoked, withdrawn or terminated.
The Company has provided Buyer with complete and correct copies of all studies,
reports or surveys in the possession of RAM, RT or any Company Group member
relating to the presence or alleged presence of Hazardous Substances at, on or
affecting the Real Estate or leased or occupied real property.
5.23 No Other Commitment to Sell.
No part of the Systems or any of the Assets is directly or indirectly
subject in any manner to any written or oral commitment or any arrangement for
the sale, transfer, assignment, or disposition thereof, in whole or in part,
except (i) as provided in any of the Company's Franchises or in the general
security provisions of any of the Company's debt instruments, (ii) the sale any
Asset in the ordinary course of business which has been or will be replaced by
the Company on or before the Closing Date with a replacement Asset of equal or
greater value, or (iii) as otherwise set forth in Schedule 5.23 hereto.
5.24 Year 2000.
The Company Group has used diligent efforts to ensure that its Computer
Systems are Year 2000 Ready and that there shall be no Material Adverse Effect
on the Company by reason of the advent of the year 2000. Without limiting the
generality of the foregoing, the Company Group has (A) with respect to its own
Computer Systems, (i) initiated a review and assessment of all Computer Systems;
(ii) developed the Year 2000 Remediation Program delivered to Buyer; (iii) has
complied in all material respects with the Year 2000 Remediation
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Program delivered to Buyer, and (iv) has taken all steps to date such that it
reasonably expects to complete the Year 2000 Remediation Program by December 31,
1999, and (B) with respect to Third Party Systems, has no reason to believe,
after due inquiry, that such Third Party Systems will adversely impact the Year
2000 Readiness of the Computer Systems.
5.25 Trademarks, Patents and Copyrights.
Each member of the Company Group owns or possesses adequate licenses or
other valid rights, title and interest to use all patents, patent rights,
trademarks, trademark rights, trade names, trade name rights, copyrights,
service marks, trade secrets, applications for trademarks and for service marks,
know-how and other proprietary rights and information (collectively,
"Intellectual Property") used or held for use in connection with the business of
each member of the Company Group as currently conducted or as contemplated to be
conducted, except for Intellectual Property owned by the Disbursement Agent and
to be licensed to Buyer pursuant to the License. The Company is unaware of any
assertion or claim challenging the validity of any of the foregoing (or any
basis therefor). To the knowledge of the Company, the conduct of the business of
each member of the Company Group as currently conducted does not infringe,
either directly or indirectly, any patent, patent right, license, trademark,
trademark right, trade name, trade name right, service xxxx or copyright of any
Third Party. To the knowledge of the Company, there are no infringements of any
proprietary rights owned by or licensed by or to each member of the Company
Group. The Disbursement Agent owns all right, title and interest in the
trademarks "Cablevision Communications," "Total TV" and "Total Web," including
without limitation all intellectual property therein, which trademarks will be
licensed to the Company pursuant to the License, covering a period of 180 days
from the Closing Date.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER
As an inducement to Sellers to enter into this Agreement and to consummate
the transactions contemplated hereby, Buyer hereby represents (as of the date of
this Agreement) and warrants as follows:
6.1 Organization.
Buyer is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware and has the power and authority
to own and use its properties and to transact the business in which it is
engaged and to acquire the Purchased Interests pursuant to this Agreement.
6.2 Authority Relative to this Agreement.
Buyer has all necessary corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement by Buyer and the consummation by Buyer of the transactions
contemplated hereby have been duly and validly
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authorized by all necessary corporate action and no other corporate proceedings
on the part of Buyer are necessary to authorize this Agreement or to consummate
the transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Buyer and, assuming the due authorization, execution
and delivery by the other parties hereto, constitutes a legal, valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms.
6.3 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement and all other instruments
or documents executed by Buyer in connection herewith and the consummation of
the transactions contemplated hereby will not (i) conflict with or violate the
certificate of incorporation, or bylaws of Buyer, (ii) conflict with or violate
any law, rule, regulation, order, judgment or decree applicable to Buyer or by
which any property or asset of Buyer is bound or affected or (iii) result in any
breach of or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, any Contract to which Buyer is a
party or by which Buyer or any property or asset of Buyer is bound except, in
the case of clauses (ii) and (iii), for any such conflicts, violations,
breaches, defaults or other occurrences that would not prevent or delay
consummation of the Closing, or otherwise prevent Buyer from performing its
obligations under this Agreement.
(b) The execution and delivery of this Agreement by Buyer does not, and
the performance of this Agreement by Buyer will not, require Buyer to obtain or
make any consent, approval, authorization or permit of, or filing with or
notification to, any Governmental Authority, except (i) for applicable
requirements, if any, of (A) federal or state securities or "blue sky" laws, (B)
the Communications Act, and (C) state and local governmental authorities,
including state and local Franchise authorities, (ii) as required under the HSR
Act and (iii) where failure to obtain such consents, approvals, authorizations
or permits, or to make such filings or notifications, would not prevent or delay
consummation of the Closing or otherwise prevent Buyer from performing its
obligations under this Agreement.
6.4 Financial Capability.
Buyer has the financial ability to purchase the Purchased Interests in
accordance with terms of this Agreement. Buyer has available and will have
available as of the Closing Date funds sufficient to pay the Purchase Price in
accordance with Section 2.2.
6.5 Litigation.
There is no claim, action or proceeding pending or threatened against
Buyer of which Buyer has received notice, which if determined adversely would
prevent or delay the consummation of the transactions contemplated by this
Agreement, and no judgement, order or decree has been entered nor any such
liability incurred having such effect.
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6.6 No Violation of FCC Cross Ownership Rules.
On the Closing Date, Buyer will not be in violation of any FCC
restrictions regarding the ownership of competing media and related businesses
that materially adversely affect the ability of Buyer to own the Business.
6.7 Investment Intent; Sophisticated Buyer.
Buyer (a) is an informed sophisticated entity with sufficient knowledge
and experience in investing so as to be able to evaluate the risks and merits of
its investment in securities of the Company to be acquired pursuant hereto, (b)
is financially able to bear the risks of investing in the Company, (c) has had
an opportunity to discuss the business, management and financial affairs of the
Company Group with the management of the Company Group, (d) is acquiring such
securities for its own account for the purpose of investment and not with a view
to or for sale in connection with any distribution thereof, (e) understands that
(i) such securities have not been registered under the Securities Act, (ii) such
securities must be held indefinitely unless a subsequent disposition thereof is
registered under the Securities Act or is exempt from such registration, (f) has
no present need for liquidity in connection with its purchase of such
securities, (g) understands that the purchase of such securities involves a high
degree of risk, and (h) acknowledges that the purchase of such securities is
consistent with its general investment objectives.
6.8 Finders' and Brokers' Fees.
Except for the fees of Communications Equities Associates, which will be
paid solely by Buyer, no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transaction provided for in this Agreement based upon arrangements made by or on
behalf of Buyer.
ARTICLE VII
COVENANTS
7.1 Access.
Between the date of this Agreement and the Closing Date, the Company
shall, and shall cause RAM, RT and each other member of the Company Group and
their respective officers and employees to, (i) give Buyer and its respective
officers, employees, accountants, counsel, financing sources and other agents
and representatives full access, during normal business hours, to all buildings,
offices, properties, plants and other facilities and to all contracts, internal
reports, data processing files and records, Federal, state, local and foreign
tax returns and records, commitments, books, records and affairs of the Company
Group, whether located on the premises of the Company or at another location;
(ii) furnish promptly to Buyer a copy of each report, schedule, registration
statement and other document filed or received by any member of the Company
Group during such period pursuant to the requirements of Federal securities laws
or regulations; (iii) permit Buyer to make such inspections as it may reasonably
require; (iv) cause its officers and employees and the other Company Group
officers and employees to furnish Buyer such financial, operating, technical and
product data and other information with respect to the business and properties
of the Company Group as Buyer from time to time may reasonably request,
including
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without limitation financial statements and schedules; (v) allow Buyer the
opportunity to interview such employees and other personnel and Affiliates of
the Company Group as they may reasonably request; and (vi) cooperate with Buyer
and its Affiliates and representatives in arranging for an orderly transition in
connection with the transfer of control of the Company; provided, however, that
no investigation pursuant to this Section 7.1 shall affect or be deemed to
modify any representation or warranty made by the Company herein. Materials
furnished to Buyer pursuant to this Section 7.1 may be used by Buyer for
strategic and integration planning purposes relating to accomplishing the
transactions contemplated hereby. Prior to the Closing, any information provided
to Buyer or its representatives pursuant to this Agreement shall be held by
Buyer and its representatives in confidence in accordance with and subject to
the terms of the Buyer Confidentiality Agreement.
7.2 Environmental Assessment.
Buyer shall have the right to commission, at Buyer's cost and expense, a
so-called "Phase I" environmental site assessment of the Company Group's assets
(a "Phase I Assessment"), provided that no such Phase I Assessment shall be
commenced more than forty-five days after the date hereof. If the Phase I
Assessment indicates that a so-called "Phase II" assessment (a "Phase II
Assessment") or other additional testing or analysis of the Real Estate or other
leased or occupied real property is advisable, then, subject to any enforceable
and reasonably nonnegotiable restrictions placed thereon by a Third Party owner
or lessor of any real property involved, Buyer may elect to cause its agents to
conduct such testing and analysis, provided, however, that to the extent
reasonably requested by the Company, (i) such testing shall be conducted under
the Company's reasonable oversight and in a manner that does not materially
interfere with the Business, and (ii) Buyer shall provide reasonable assurance
that tested property will not be damaged or, if damaged, will be repaired at
Buyer's expense. The Company shall use its commercially reasonable efforts to
comply with any reasonable request for information made by Buyer or its agents
in connection with any such investigation. The Company covenants that any
response to any such request for information will be complete and correct in all
material respects. The Company will afford Buyer and its agents access to all
operations of the Company at all reasonable times and in a reasonable manner in
connection with any such investigation subject to any reasonably required
approval of the Company's landlords, which approval the Company will use its
commercially reasonable efforts to obtain.
7.3 Interim Period Operations.
From the date hereof until the Closing, the Company shall use its
commercially reasonable efforts to operate pursuant to the terms of the budget
previously provided by the Company to Buyer. The Company shall proceed with the
capital expenditure projects set forth on Schedule 7.3(A) in accordance with the
capital expenditure budget provided to Buyer. Notwithstanding anything herein to
the contrary, neither the Sellers nor the Company shall be liable to Buyer for
any delays in connection with such capital expenditure projects due to factors
outside their control including, but not limited to, weather delays, material
shortages, and labor strikes. From the date hereof until the Closing, except as
otherwise contemplated by this Agreement or with Buyer's prior consent, not to
be unreasonably withheld, RT, RAM and each member of the Company Group shall
carry on its business in the ordinary course consistent with past practice and
use commercially
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reasonable efforts to preserve intact its business organizations and material
relationships with Third Parties. Without limiting the generality of the
foregoing, RT, RAM and each member of the Company Group shall not without the
prior written consent of Buyer, which consent shall not be unreasonably
withheld:
(a) make any material capital expenditures, as determined in accordance
with GAAP, except for capital expenditures referred to in Schedule 7.3(A)
hereto;
(b) agree or commit to dispose of any material assets out of the ordinary
course of business where the proceeds of disposition or the net book value of
the relevant assets exceed $50,000;
(c) merge or consolidate with any Person, acquire any stock or other
ownership interest in any Person or, the assets of any business as an entirety ;
(d) except as required by law, adopt, amend, modify, spin-off, transfer or
assume any of the assets or liabilities of, terminate or partially terminate any
benefit plan;
(e) (i) except in the ordinary course of business consistent with past
practice, (x) make any change in the compensation payable or to become payable
to any officer, director, employee, agent, Affiliate or consultant, or (y) enter
into any severance, termination or other similar agreement, (ii) enter into or
amend any employment agreement, (iii) make any loans to any of its officers,
directors, employees, agents, Affiliates or consultants, (iv) make any material
change in its existing borrowing or lending arrangements for or on behalf of any
of such Persons, or (v) otherwise enter into any transactions with or make any
payment to or for any Affiliate of any member of the Company Group (other than
payment of management fees consistent with past practice), in each case whether
contingent on consummation of the transactions contemplated hereby or otherwise.
Notwithstanding anything provided herein to the contrary, this Section 7.3(e)
shall not apply with respect to signing bonuses, stay put bonuses or similar
items paid directly or indirectly by Sellers (including through a resulting
adjustment to the RAP Equity Value under Section 2.4);
(f) declare, set aside or pay any dividend or other distribution other
than a cash distribution, in respect of the equity of any member of the Company
Group (other than any such dividend or distribution paid to another member of
the Company Group), or redeem or otherwise acquire any of its respective
securities;
(g) issue, sell, deliver or agree or commit to issue, sell or deliver
(whether through the issuance or granting of options, warrants, commitments,
subscription, rights to purchase or otherwise) any stock of any class or any
other securities or partnership interests of any member of the Company Group or
amend any of the terms of any securities of any member of the Company Group
outstanding on the date hereof ;
(h) except as previously disclosed to Buyer, change the rates or marketing
practices applicable to any System without notifying Buyer;
(i) enter into any Contract or Contracts relating to the Business that
individually or in the aggregate call for payments, or otherwise involving
expenditures, over their terms in excess of $100,000, except in the ordinary
course of business consistent with past
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practice, and except for the renewal of any such Contract that would, but for
such renewal, terminate in accordance with its terms prior to Closing;
(j) enter into, or amend in any material respect, any Contract with @Home
or any other party providing for Internet access to the Company Group's
customers.
(k) engage in any line of business, or enter into any Contract, unrelated
to the Business;
(l) incur any debt not having market terms for bank debt and that is not
repayable without penalty or premium within six months of the Closing Date;
(m) become a guarantor or surety of any indebtedness of any other Person;
(n) take any action that could reasonably be expected to cause the
condition described in Section 9.2 to become untrue; or
(o) take, or agree in writing or otherwise to take, any of the foregoing
actions or any actions.
7.4 Delivery of Documents to Buyer.
The Company covenants that, to the extent that it has not already done so,
the Company will insofar as practicable deliver or otherwise make available to
Buyer for inspection, at the locations where RT, RAM or the Company Group
maintains such information, the following within thirty (30) days after the date
hereof, or as specifically delineated below:
(i) the Company's most recently prepared managerial reports and
customer accounting records, which shall include a customer accounts receivable
aging report summarizing, respectively, customers whose accounts are at least
one, two, and three or more Monthly Billing Periods overdue, for the last (or
then most recently concluded) regular Monthly Billing Period. The Company
further covenants to deliver to Buyer the monthly customer accounting records
within 20 days after the end of each calendar month prior to the Closing and to
deliver the managerial reports as soon as practicable.
(ii) Copies of the Additional Financial Statements as soon as
possible after completion, but in any case, within forty-five (45) days of the
end of the period covered by any such Additional Financial Statement.
(iii) Copies of such as-built engineering drawings as the Company
has in its possession for the Systems, or, if not available, such design maps
and plant drawings and as-built engineering drawings as the Company has in its
possession will be made available to Buyer for inspection and at the Closing
will be left on site at the respective System office for Buyer.
(iv) Copies of any and all bonds in force with regard to the Systems
and the Company Group.
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(v) Copies of all written Contracts and other documents listed in
the Schedules hereto, including any and all contracts in force with any union or
collective bargaining unit representing any employee of any member of the
Company Group together with a certificate of a duly authorized executive
officer, certifying that to the best of such officer's knowledge the copies so
delivered are true and complete in all material respects.
(vi) Copies of any required Registration Statements filed with the
FCC pursuant to 47 C.F.R. ss.76.12.
(vii) The Initial Notice of Identity and Signal Carriage, and all
subsequent statements of account filed with the Copyright Office within the past
three years and all Notices of Change of Identity or Signal Carriage filed
within the past three years shall be made available for inspection by Buyer or
its representatives upon reasonable notice.
(viii) Copies of radio licenses, earth station licenses and CARS
licenses.
(ix) Copies of must carry elections and retransmission consent
agreements subject to any confidentiality restrictions contained in such
agreements;
To the extent that any of the items referred to above are received or
filed after a date which is 30 days from the date hereof, the Company covenants
to deliver such items to Buyer as soon as practicable after receipt or filing.
7.5 No Impairment of Title.
From the date hereof until the Closing, no Seller shall sell, dispose of,
mortgage, pledge or otherwise encumber any of the Purchased Interests, except as
required under the current terms of the Credit Facility.
7.6 No Amendment to Organizational Documents.
From the date hereof until the Closing, the Company shall not, and shall
not permit any other member of the Company Group to, amend, in any material
respect, the agreement of limited partnership, certificate of limited
partnership, certificate of incorporation, bylaws or other organizational
documents of such entity.
7.7 Franchise Renewals; Required Consents; HSR Filings.
(a) Until the Closing, the Company shall, and shall cause each other
member of the Company Group to, timely file valid requests for renewal of the
Franchises in accordance with Section 626 of the Communications Act (47 USC ss.
546) and shall use its diligent, good faith, commercially reasonable efforts to
renew on substantially the same terms any Franchise that will expire within
thirty-six (36) months after the date hereof in accordance with its terms.
(b) The Company will use, and will cause each member of the Company Group
to use, its diligent, good faith, commercially reasonable efforts to (i) obtain
in writing, as promptly as possible and at its expense, all of the Required
Consents and any other consent, authorization or approval required to be
obtained in connection with the transactions
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contemplated by this Agreement, and deliver to Buyer copies of such Required
Consents and such other consents, authorizations or approvals promptly after
they are obtained; and (ii) give any required written notice in connection with
the transactions; provided, that the Company will afford Buyer the opportunity
to review, approve and revise the form of letter or application proposed to
request the Required Consent or the form of written notice prior to delivery to
the Third Party or the Affiliate of a party whose consent is sought or to whom
notification is required. The Company and Buyer will, and the Company will cause
each member of the Company Group to, cooperate with and assist each other in
obtaining all Required Consents and no party shall intentionally take any action
or steps or refrain from taking any action or steps where the result would
prejudice or jeopardize the obtaining of any Required Consent. Without limiting
the generality of the foregoing, the Company and Buyer agree to attend City
Council or similar meetings and hearings before local and county administrative
bodies. If, in connection with the process of obtaining any Required Consent, a
Governmental Authority makes a bona fide claim that any amount is owed by the
franchise holder as a result of a default under, or breach of, the corresponding
Franchise by a member of the Company Group or any predecessor in interest, the
Company Group shall satisfy all outstanding monetary obligations in respect of
any such bona fide default or breach except to the extent any member of the
Company Group is contesting such claim in good faith. No member of the Company
Group will accept or agree or accede to any material modifications or amendments
to, or the imposition of any material condition to the transfer of, any of the
Franchises, FCC Licenses or Necessary Contracts that are not acceptable to
Buyer. Notwithstanding the foregoing, as soon as practicable after the date of
this Agreement (and in no event more than twenty (20) business days hereafter),
Buyer will deliver to the Company, and the Company will cause each member of the
Company Group to deliver to Buyer, its portion, complete and executed, of
requests or applications for approval of the transfer of control or assignment
of the Franchises, FCC Licenses and Necessary Contracts, and as soon as
practicable thereafter (but in no event more than ten (10) business days) the
Company shall deliver, or cause to be delivered, to the appropriate Governmental
Authority, (i) a FCC Form 394 with respect to each Franchise other than to any
Governmental Authority that the parties have agreed will not initially receive
FCC Form 394; provided, that if either party subsequently requests that FCC Form
394 be completed, executed and delivered to any such Governmental Authority that
did not initially receive a FCC Form 394 with respect to any Franchise, then
each party will deliver to the other its portion, completed and executed, of
appropriate FCC Form 394, and the Company shall deliver, or cause to be
delivered, the completed FCC Form 394 to such Governmental Authority as soon as
practicable but in any event within fifteen (15) business days after a party has
made such request; and (ii) such other FCC forms as are necessary to obtain the
FCC's consent to the assignment or transfer of control of the FCC Licenses.
Without the prior consent of the other party, neither party shall agree with any
Governmental Authority to extend or to toll the time limits applicable to such
Governmental Authority's consideration of any FCC Form 394 filed with such
Governmental Authority. The foregoing notwithstanding, neither party (nor their
respective employees, agents, representatives or any other Person acting on
behalf of a party) shall be precluded from making statements or inquiries to,
attending meetings of, making presentations to, or from responding to requests
initiated by, Governmental Authorities or other Persons from which a consent is
sought, and each party shall apprise the other of all such requests.
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(c) Each of the Company and Buyer, to the extent required, shall file (or
shall cause its ultimate parent entity to file, if applicable) as soon as
practicable (but in any event within thirty (30) days) following the date of
this Agreement, the appropriate notifications required under the HSR Act in
connection with the transactions contemplated by this Agreement. The Company or
Buyer, as the case may be, shall promptly inform the other of any material
communication from the FCC, the Federal Trade Commission, the Department of
Justice or any other Governmental Authority regarding any matter related to any
antitrust or trade regulatory laws of any Governmental Authority ("Antitrust
Laws") as they bear upon the purchase and sale of the Purchased Interests under
this Agreement. If Buyer or any member of the Company Group receives a request
for additional information or documentary material from any such Governmental
Authority with respect to the transactions contemplated hereby, such party will
endeavor in good faith and will use commercially reasonable efforts to make or
cause to be made, as soon as reasonably practicable and after consultation with
the other party, an appropriate response in compliance with such request. Buyer
and the Company shall, and shall cause their filing affiliates to, use their
respective commercially reasonable efforts to overcome any objections that may
be raised by the Federal Trade Commission, the Department of Justice or any
other Governmental Authority having jurisdiction over antitrust matters. The
Company and Buyer shall, and shall cause their respective filing affiliates to,
cooperate to prevent inconsistencies between their respective filings and
between their respective responses to all such inquiries and responses, and will
furnish to each other such necessary information and reasonable assistance as
the other may reasonably request in connection with its preparation of necessary
filings or submissions under the HSR Act. Notwithstanding the foregoing, no
party shall be required to make any significant change in the operations or
activities of the business (or any material assets employed therein) of such
party or any of its Affiliates, if a party determines in good faith that such
change would be materially adverse to the operations or activities of the
business (or any material assets employed therein) of such party or any of its
Affiliates having significant assets, net worth or revenue. The Company and
Buyer shall split equally the applicable filing fees under the HSR Act.
7.8 Notification.
RT, RAM, each member of the Company Group, on the one hand, and Buyer, on
the other hand, shall:
(a) prior to the Closing, in the event of the occurrence of any fact or
circumstance that would cause or constitute a breach of any of its
representations and warranties set forth herein, give notice thereof to the
other party;
(b) promptly notify the other party of any material notice or other
material communication from any Governmental Authority received by it in
connection with the transactions contemplated by this Agreement.
7.9 Reasonable Efforts; Additional Actions.
Buyer, the Company and, with respect to Sections 9.1, 9.2, and 9.5, each
Seller (as to those matters reasonably within such Seller's control), shall use,
and the Company shall cause each member of the Company Group to use,
commercially reasonable efforts to cause
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all conditions in Articles VIII, IX and X to be satisfied and the Closing
contemplated hereby to occur. Buyer and each Seller that is a party to the
InterLink Agreement (or that controls a party to the InterLink Agreement), to
the extent within such Seller's control, shall use commercially reasonable
efforts to cause the transactions contemplated by the InterLink Agreement to be
consummated. Without limiting the foregoing, subject to the terms and conditions
of this Agreement, (i) Buyer, the Company and (as to those matters reasonably
within such Seller's control) each Seller shall use, and the Company shall cause
each member of the Company Group to use, all reasonable efforts to take, or
cause to be taken, all action and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations, or to
remove any injunctions or other impediments or delays, and to consummate the
transactions contemplated by this Agreement and (ii) in any vote of the
Company's limited partners necessary to authorize any action contemplated
hereby, including without limitation the restructurings described in Section
7.11. Sellers agree to vote their Purchased Interests in favor of such action.
In case at any time after the Effective Time any further action is necessary or
desirable to carry out the purposes of this Agreement or to vest Buyer with full
title in and to the Purchased Interests and all properties, assets, rights,
approvals, immunities and Franchises of the Company Group, Sellers and the
proper officers, members, partners and directors of each Person that is a party
to this Agreement shall take all such necessary action.
7.10 Tax Matters.
(a) Cooperation on Tax Matters.
(i) Buyer and Sellers shall reasonably cooperate in connection with
the preparation and filing of any Tax Return with respect to members of the
Company Group.
(ii) Buyer and Sellers further agree, upon request, to use
commercially reasonable efforts to obtain any certificate or other document from
any Governmental Authority or any other Person as may be necessary to mitigate,
reduce or eliminate any Tax that could be imposed (including Taxes with respect
to the transactions contemplated hereby).
(iii) Buyer and the Company, on one hand, and Sellers, on the other
hand, agree that if any of them receives any notice of an audit or examination
from any Governmental Authority with respect to Taxes of any Company Group
member for any taxable period or portion thereof ending on or prior to the
Closing Date, then the recipient of such notice shall, within three (3) business
days of the receipt thereof, notify and provide copies of such notice to the
other party, as the case may be, in accordance with the notice provisions of
Section 13.13.
(iv) The Disbursement Agent (on behalf of Sellers) shall prepare and
file all federal and state income tax returns of the Company for all periods
ending on or prior to the Closing Date, and Buyer agrees to cause the Company to
execute each such return, except as provided below in this paragraph. The
Disbursement Agent (on behalf of Sellers) shall cause each such return to be
prepared and, together with all related work papers, delivered to Buyer for
review at least 15 business days prior to the due date for filing of such
return. Such returns shall be prepared in accordance with assumptions and
practices for returns filed
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by the Company in recent years with respect to the timing of income, deductions,
gains and losses to the extent that such assumptions and practices affect the
inclusion of such items in pre-Closing versus post-Closing taxable periods. If
Buyer (x) reasonably determines that any such return does not comply with the
previous sentence, or that the execution of any such return would likely subject
the Company or the Person executing the return on behalf of the Company to civil
or criminal penalties, and (y) within five business days after receipt of such
return, provides written notice of such determination and the specific reasons
for such determination to the Disbursement Agent, then such return shall be
forwarded to the Neutral Accounting Firm for review. The Neutral Accounting Firm
shall report its conclusions to the Disbursement Agent and Buyer within seven
business days after receipt of such return indicating whether it concurs with
all or part of Buyer's determination and, if so, specifying the changes to such
return needed to comply with the requirements of this paragraph and to avoid
civil or criminal penalties. Buyer shall cause the Company to promptly execute
such return without any changes thereto (if the Neutral Accounting Firm does not
indicate that changes are needed) or with the changes specified by the Neutral
Accounting Firm (if the Neutral Accounting Firm indicates that changes are
needed). The conclusions of the Neutral Accounting Firm shall be conclusive and
binding on all parties to this Agreement and shall not be subject to dispute or
review. The cost of retaining the Neutral Accounting Firm to review any return
shall be borne 50% by the Disbursement Agent (on behalf of the Sellers) and 50%
by Buyer.
(b) Section 754 Elections; Allocation of Purchase Price.
(i) To the extent not already in effect, each Company Group member
that is treated as a partnership for federal income tax purposes shall timely
file an election under Section 754 of the Code so that such entities shall be
able to adjust the tax basis of their assets (collectively, the "Partnership
Assets") under Section 743(b) of the Code as a result of the transactions
contemplated herein.
(ii) The aggregate amount described in the penultimate sentence of
Section 2.3 shall be allocated among the Partnership Assets in an allocation
agreement (the "Allocation Agreement") to be prepared in accordance with Section
2.3 hereof and the rules under Sections 743(b), 751, 755 and 1060 of the Code.
Buyer shall deliver a draft of the Allocation Agreement to the Company at least
thirty (30) days prior to the Closing Date for approval and consent, and Buyer
and the Company shall mutually agree upon the Allocation Agreement prior to the
Closing Date. Neither Buyer nor the Company shall unreasonably withhold its
approval and consent with respect to the Allocation Agreement. Buyer and Sellers
agree that the Allocation Agreement shall be amended to reflect any post-Closing
adjustments determined under Section 2.4 of this Agreement. Unless otherwise
required by applicable law, Buyer, Sellers and the Company Group agree to act,
and cause their respective affiliates to act, in accordance with the
computations and allocations contained in the Allocation Agreement in any
relevant Tax Returns or similar filings (including any forms or reports required
to be filed pursuant to Section 1060 of the Code ("1060 Forms")), to cooperate
in the preparation of any 1060 Forms, to file such 1060 Forms in the manner
required by applicable law and to not take any position inconsistent with such
Allocation Agreement upon examination of any tax refund or refund claim, in any
litigation or otherwise.
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(c) Certain Taxes. All transfer, documentary, sales, use, stamp,
registration and other such Taxes and fees (including any penalties and interest
but excluding any income tax) incurred in connection with the transactions
consummated pursuant to this Agreement shall be borne equally by Buyer and the
Disbursement Agent (on behalf of Sellers). If and to the extent that such Taxes
and fees are included in current liabilities pursuant to Section 2.4, Seller's
share of such Taxes and fees shall be paid by the Company Group. Buyer and
Sellers will cooperate in all reasonable respects to prepare and file all
necessary Tax Returns and other documentation with respect to all such transfer,
documentary, sales, use, stamp, registration and other Taxes and fees.
(d) Tax Elections. From and after the date of this Agreement, the Company
and each Company Group Member shall not without the prior written consent of the
Buyer (which consent shall not be unreasonably withheld) make, or cause or
permit to be made, any Tax election that would bind the Company or Buyer in any
material respect.
(e) Contests.
(i) In the case of an audit or administrative proceeding that
relates to taxable periods ending on or before the Closing Date with respect to
any income Tax Return of the Company, Disbursement Agent (on behalf of Sellers)
shall assume, defend and control the conduct of such audit or proceeding. In the
event that issues relating to a potential adjustment are required to be dealt
with in the same proceeding as separate issues relating to a potential
adjustment for which the Buyer would be liable, Buyer shall have the right, at
its expense, to control the audit or proceeding with respect to the latter
issues.
(ii) Buyer shall not enter into any compromise or agree to settle
any claim pursuant to any Tax audit or proceeding which would bind the Company
for any pre-Closing period without the written consent of the Disbursement
Agent, which consent shall not be unreasonably withheld or delayed. Sellers
shall not enter into any compromise or agree to settle any claim pursuant to any
Tax audit or proceeding which would bind the Company or Buyer for any
post-Closing period without the written consent of Buyer, which consent shall
not be unreasonably withheld or delayed. Buyer and Sellers agree to cooperate,
and Buyer agrees to cause the Company Group to cooperate, in the defense against
or compromise of any claim in any audit or proceeding, at the expense (excluding
general and administrative expenses) of the defending party.
(iii) The members of the Company Group shall not take a position on
any Tax Return with respect to such entity's federal tax status (i.e.,
partnership, S corporation or C corporation) different than that which such
entity reported on its 1997 federal Tax Returns.
7.11 Restructuring.
The Company agrees to cooperate, and to cause each member of the Company
Group to cooperate, with Buyer, at Buyer's cost and expense (other than general
and administrative expenses), prior to the Effective Time in restructuring the
legal form or ownership of any member of the Company Group, changing the form of
equity ownership of any member of the Group, permitting Buyer or any of its
Affiliates to purchase interests in,
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or assets of, Subsidiaries of the Company from either the Company or a
Subsidiary of the Company or effecting other restructurings of the transactions
contemplated herein; provided, however, that such cooperation may be withheld if
and to the extent the Company reasonably determines that such cooperation would
likely have an adverse effect (including, without limitation, with respect to
Taxes, but excluding any effect for which Buyer agrees to provide reasonable
compensation) on (i) the Company or InterLink (unless all conditions to Closing
under Articles VIII, IX and X have or will be satisfied or waived prior to the
effective time of any proposed restructurings and such restructurings would be
effected on the Closing Date), (ii) any of the Sellers or InterLink Sellers or
(iii) any of the direct or indirect owners of the Sellers or InterLink Sellers.
7.12 Year 2000 Remediation Program.
The Company shall, and shall cause RAM, RT and each other member of the
Company Group and their respective officers and employees to: (i) until the
Closing Date, use diligent, commercially reasonable efforts to implement the
Year 2000 Remediation Program by the Closing Date, (ii) assist and cooperate
with Buyer in the refinement and implementation of the Year 2000 Remediation
Program, (iii) assist and cooperate with Buyer in developing and implementing
plans for Buyer to continue the Year 2000 Remediation Program after the Closing
Date, and (iv) implement all solutions identified as reasonably necessary to
members of the Company Group by vendors, distributors and manufacturers of the
Computer Systems and Third Party Systems in order to ensure Year 2000 Readiness,
except for those solutions that the vendor cannot provide by the Closing Date.
7.13 Exculpation and Indemnification.
Buyer shall ensure that the Company's obligations provided for in Section
13 of the Company's Partnership Agreement, with respect to the indemnification
of RAM, the limited partners of the Company, the members of the Company's
Advisory Committee, and any of their respective partners and Affiliates (the
"Indemnification Provisions") shall continue in effect, and shall not be amended
or eliminated, for a period of at least five years following the Closing Date.
During such five year period, neither the Buyer nor any of its successors or
assigns shall permit any other Person to acquire effective control of the
Company unless (i)such Person undertakes that it will not permit the
Indemnification Provisions to be amended or eliminated during such period or
(ii) Buyer assumes such obligations during such period. Neither the Company nor
any of its successors or assigns will transfer all or the majority of its assets
to any one or more Persons in a single transaction or series of related
transactions (including but not limited to any transfer in connection with the
liquidation or termination of the Company or any merger or consolidation
involving the Company), unless either Buyer or such transferee agrees to assume
and be responsible for the obligations of the Company under the Indemnification
Provisions during the five year period commencing on the Closing Date. At the
Closing, Buyer will assume the obligations of Sellers under the Company's
Partnership Agreement.
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7.14 Credit Facility; Senior Subordinated Notes.
The Company, upon Buyer's request and with Buyer's assistance, will use
commercially reasonable efforts, at Buyer's expense, to obtain any consents of
lenders under the Credit Facility that are necessary to permit the Company to
keep the Credit Facility in place following the Closing. Following the Closing,
Buyer will comply with the terms of the Credit Facility and the Indenture,
including, but not limited to, the giving of any required notice of change of
control of the Company and offer to repurchase to each holder of the Senior
Subordinated Notes within 30 days of the Closing Date, in accordance with the
terms of the Senior Subordinated Notes. If the Credit Facility is required to be
prepaid, Buyer agrees to do so at the Closing.
7.15 Admission of Buyer as a Substitute Limited Partner.
Each party will take such action as is required on its part pursuant to
the Company's Partnership Agreement in order that, upon the Closing, Buyer will
be admitted as a Substitute Limited Partner (as defined in the Company's
Partnership Agreement) under the provisions of the Company Partnership
Agreement.
7.16 Publicity.
Except as required by applicable law, prior to the Closing (i) the Company
and Buyer shall consult with and cooperate with the other prior to the Closing
Date with respect to the content and timing of all press releases and other
public announcements concerning this Agreement and the transactions contemplated
hereby and (ii) neither the Company nor Buyer shall make any such release or
announcement without the prior written consent and approval of the other, which
consent and approval shall not be unreasonably withheld. After the Closing Date,
except as required by applicable law, (i) Disbursement Agent and Buyer shall
consult with and cooperate with the other with respect to the content and timing
of all press releases and other public announcements concerning this Agreement
and the transactions contemplated hereby and (ii) neither Disbursement Agent nor
Buyer shall make any such release or announcement without the prior written
consent and approval of the other, which consent and approval shall not be
unreasonably withheld.
7.17 Services Provided by and to Alliance.
At the Closing, the Company will execute and deliver, and will cause
Alliance Communications, LLC to execute and deliver, a Services Agreement
substantially in the form of Exhibit 7.17 (the "Services Agreement").
ARTICLE VIII
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF ALL PARTIES
The obligations of each of the parties to consummate the transaction
contemplated hereby are subject to the conditions that:
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8.1 Orders Prohibiting Consummation of Transactions.
At the Closing Date, there shall exist no applicable law, rule,
regulation, order, judgment or injunction the effect of which is to prohibit
consummation of the transactions contemplated by this Agreement, other than any
rule, regulation or order relating to Franchises, which shall be governed by
Section 9.8 hereof.
8.2 HSR Act.
All necessary pre-merger notification filings required under the HSR Act
will have been made with the Federal Trade Commission and the United States
Department of Justice and the prescribed waiting periods (and any extensions
thereof) will have expired or been terminated.
ARTICLE IX
CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
All obligations of Buyer under this Agreement are subject to the
fulfillment (or waiver in whole or in part by Buyer in writing) on or before the
Closing Date (or such earlier date as may be specified), of each of the
following conditions:
9.1 Compliance with Agreement.
The Company and Sellers shall have performed and complied in all material
respects with all of their obligations under this Agreement to be performed by
them at or prior to Closing and there shall be no material uncured default of
the Company or Sellers under any term of this Agreement. Without limiting the
generality of the foregoing, all Purchased Interests shall have been tendered
for sale to Buyer, using instruments of conveyance in form and substance
reasonably satisfactory to Buyer, accompanied by all certificates, if any exist,
representing certificated Purchased Interests.
9.2 Correctness of Representations and Warranties.
Each of the representations and warranties of the Company and Sellers set
forth in this Agreement shall be true and correct in all respects on the Closing
Date (without giving effect to the materiality or Material Adverse Effect
qualifiers set forth therein) with the same force and effect as if such
representations and warranties had been made on and as of such date (except to
the extent such representations and warranties expressly speak as of an earlier
date (other than the general qualifiers in the lead in to Articles IV, V and
VI)), except for such failures to be true and correct that would not in the
aggregate have a Material Adverse Effect.
9.3 No Adverse Change in Business or Properties.
Since December 31, 1998, there shall not have been a Material Adverse
Effect.
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9.4 Certificate of Officer.
The Company shall deliver to Buyer a certificate of an authorized
executive officer of RT dated the Closing Date, certifying as to the fulfillment
of the conditions set forth in Sections 9.1, 9.2 and 9.3 above, together with a
certified authorizing resolution and incumbency certificate.
9.5 Proceedings and Documents.
All Company Group and Seller corporate and other proceedings, taken in
connection with the transactions contemplated hereby and all documents incident
thereto shall be reasonably satisfactory in form and substance to Buyer and its
counsel.
9.6 Opinion of Counsel.
Buyer shall have received from Xxxxx & Xxxxxxxxx LLP, a favorable opinion
of such counsel, dated as of the Closing Date, substantially in the form of
Exhibit 9.6 hereto.
9.7 Opinion of FCC Counsel.
Buyer shall have received from Seller's FCC counsel, Cole, Raywid, &
Xxxxxxxxx LLP, a favorable opinion of such counsel, dated as of the Closing
Date, substantially in the form of Exhibit 9.7 hereto.
9.8 Consents.
All consents, waivers, approvals or authorizations of franchisors,
Governmental Authorities and other Third Parties that are Required Consents in
connection with the change of control of the Company to Buyer and the other
transactions contemplated by this Agreement shall have been obtained in
substantially the form set forth in Exhibit 9.8 hereto, and the Company shall
have delivered to Buyer copies of all such consents and approvals so obtained;
provided, however, that with respect to Franchise approvals, this condition
shall have been deemed to have been met if the Franchises with respect to which
such consents, waivers, approvals or authorizations which have not been obtained
do not cover more than five percent (5%) of the customers of the Company Group,
taken as a whole.
9.9 Purchase of Interests under InterLink Agreement.
The transactions contemplated by the InterLink Agreement shall have been
consummated, or will be consummated simultaneously with the transactions
contemplated hereunder.
9.10 Services Agreement.
Alliance Communications, LLC shall have executed and delivered the
Services Agreement.
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ARTICLE X
CONDITIONS PRECEDENT TO SELLERS' OBLIGATIONS
All obligations of Sellers under this Agreement are subject to fulfillment
(or waiver in whole or in part by Sellers in writing) on or before the Closing
Date (or such earlier date as may be specified) of each of the following
conditions:
10.1 Correctness of Representations and Warranties.
Each of the representations and warranties of Buyer set forth in this
Agreement shall be true and correct in all respects on the Closing Date (without
giving effect to the materiality or Material Adverse Effect qualifiers set forth
therein) with the same force and effect as if such representations and
warranties had been made on and as of such date (except to the extent such
representations and warranties specifically speak as of an earlier date), except
for such failures to be true and correct that would not in the aggregate
materially impair Buyer's ability to perform its obligations hereunder or
subject any Seller to any material liability or loss of benefit.
10.2 Compliance with Agreement.
Buyer shall have performed and complied in all material respects with all
of its obligations under this Agreement to be performed by it at or prior to
Closing and there shall be no material uncured default of the Buyer under any
term of this Agreement.
10.3 Certificate of Officer.
Buyer shall have delivered to Sellers a certificate of an executive
officer dated the Closing Date, certifying as to the fulfillment of the
conditions set forth in Sections 10.1 and 10.2 above, together with a certified
authorizing resolution and incumbency certificate.
10.4 Proceedings and Documents.
All Buyer corporate and other proceedings taken in connection with the
transactions contemplated hereby and all documents incident thereto shall be
reasonably satisfactory in form and substance to the Disbursement Agent, the
Company and the Company's counsel.
10.5 Opinion of Counsel.
Seller shall have received from Buyer's counsel, Irell & Xxxxxxx LLP, a
favorable opinion of such counsel, dated as of the Closing Date, substantially
in the form of Exhibit 10.5 hereto.
10.6 Sale of Interests under InterLink Agreement.
Buyer and the InterLink Sellers shall have consummated, or will
simultaneously consummate, the transactions contemplated by the InterLink
Agreement, except that this condition shall not apply if one or more InterLink
Sellers have failed to deliver their interests in breach of the InterLink
Agreement and Buyer and the remaining InterLink
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Sellers have consummated, or will simultaneously consummate, the transactions
contemplated thereby.
10.7 Services Agreement.
Buyer shall have executed and delivered the Services Agreement.
ARTICLE XI
RIGHTS TO TERMINATE; BREACH
11.1 Termination.
(a) This Agreement may be terminated prior to the Closing:
(i) at any time by mutual consent of the Disbursement Agent (on
behalf of Sellers) and Buyer;
(ii) by either the Disbursement Agent (on behalf of Sellers) or
Buyer by written notice to the other, if the Closing has not occurred on or
prior to December 31, 1999 (the "Outside Date"); provided further that (x) Buyer
shall only be permitted to terminate this Agreement under this paragraph (ii) if
Buyer is not in material breach of this Agreement or the InterLink Agreement and
no prior breach of either such agreement by Buyer has materially contributed to
the delay in the consummation of the Closing, and (y) the Disbursement Agent (on
behalf of Sellers) shall only be permitted to terminate this Agreement under
this paragraph (ii) if the Company, InterLink, the Sellers and the InterLink
Sellers are not in material breach of this Agreement or the InterLink Agreement
and no prior breach of either such agreement by any such Person has materially
contributed to the delay in the consummation of the Closing;
(iii) by Buyer, upon a breach of one or more representations or
warranties of Company or Sellers herein (without giving effect to the
materiality or Material Adverse Effect qualifiers set forth therein) such as
would, in the aggregate, have a Material Adverse Effect, or upon any material
breach of any covenant or agreement on the part of the Company or any Seller set
forth in this Agreement, in each case that has not been cured within 30 days
following receipt by the Company of written notice of such breach;
(iv) by the Disbursement Agent (on behalf of Sellers), upon a breach
of one or more representations or warranties of Buyer herein (without giving
effect to the materiality or Material Adverse Effect qualifiers set forth
therein) such as would, in the aggregate, materially impair Buyer's ability to
perform its obligations hereunder or subject any Seller to any material
liability or loss of benefit, or upon any material breach of any covenant or
agreement on the part of Buyer set forth in this Agreement, in each case that
has not been cured within 30 days following receipt by Buyer of written notice
of such breach.
(b) In the event either the Disbursement Agent or Buyer shall terminate
this Agreement pursuant to Section 11.1(a), the terminating party shall give
prompt written notice thereof to the other parties hereto, and this Agreement
shall thereupon terminate, without further action by any of the parties hereto.
If the Agreement is terminated as provided herein:
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(i) except as otherwise provided herein, the termination of this
Agreement shall not relieve any party of any liability for breach of this
Agreement prior to the date of termination; and
(ii) all filings, applications and other submissions relating to the
assignment of the Purchased Interests made pursuant to this Agreement shall, to
the extent practicable, be withdrawn from the agency or other Person to which
made.
ARTICLE XII
[INTENTIONALLY OMITTED]
ARTICLE XIII
MISCELLANEOUS
13.1 Seller Liability Several and not Joint.
Buyer acknowledges and agrees that the obligations of the Sellers under
this Agreement are several and not joint. Wherever this Agreement refers to the
several liability of the Sellers or a Seller's "pro rata portion" of any amount,
such liability or portion shall be determined based on the respective percentage
interest of such Seller in the RAP Equity Value set forth on the Purchase Price
Allocation Schedule. Wherever this Agreement refers to the several liability of
the InterLink Sellers or an InterLink Seller's "pro rata portion" of any amount,
such liability or portion shall be determined based on the respective indirect
percentage interest in the RAP Equity Value of such InterLink Seller set forth
in the Purchase Price Allocation Schedule.
13.2 Appointment of Sellers' Representative.
Each of Sellers hereby irrevocably appoints Disbursement Agent as the
agent and attorney-in-fact of such Seller, with full power of substitution and
resubstitution to do such things and to take such actions (including without
limitation to execute on such Seller's behalf the Closing Escrow Agreement
regarding Buyer's retention of a portion of the Indemnity Fund in certain
circumstances) in the name and on behalf of such Seller, as this Agreement
provides may be done or taken on behalf of Sellers. Each of Sellers acknowledges
and agrees that this appointment and power of attorney is irrevocable during the
term of this Agreement and is coupled with an interest. Each of Sellers hereby
agrees to indemnify and hold harmless Disbursement Agent for all actions or
inactions of Disbursement Agent taken or not taken in good faith in connection
with, and permitted under, this Agreement.
13.3 Expenses.
Except as otherwise provided in this Agreement, each party shall pay its
own expenses, taxes and other costs incident to or resulting from this Agreement
whether or not the transactions contemplated hereby are consummated. Buyer's
costs include, but are not limited to, fees for the filing or recording of
instruments of transfer. The Sellers and Buyer shall each pay one-half of any
sales or use tax arising out of or resulting from this
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Agreement, with the Sellers' portion being paid pro rata in accordance with the
percentages indicated on the Purchase Price Allocation Schedule.
13.4 Knowledge.
For purposes of this Agreement, the Company shall be deemed to have
knowledge of and be aware of all facts, circumstances and information of which
Xxxxxx X. Xxxxxx, Xxxxx X. Xxxxx, Xxxxxxx X. Xxxxxx, Xxxx X. Xxxxxx, Xxxxx X.
Xxxxx and Xxxx Xxxxxx have knowledge or are aware.
13.5 Assignment.
Neither this Agreement, nor any right hereunder, may be assigned by any of
the parties hereto, except that at any time, Buyer may (upon at least seven (7)
days prior written notice to the Company) at any time prior to the first filing
of Forms 394 with franchisors, assign all of its rights hereunder to an entity
owned and controlled by Xxxx X. Xxxxx, provided, that, notwithstanding any such
assignment, Buyer shall (with such entity) be and remain liable to Sellers for
the performance and fulfillment of all of Buyer's covenants, duties and
obligations hereunder.
13.6 Successors.
This Agreement shall be binding upon and inure to the benefit of Buyer and
its heirs, successors or assigns, and Sellers and their respective heirs,
successors or permitted assigns, subject in all respects to Section 13.5 hereof.
13.7 Entire Agreement.
This Agreement, including the Schedules and Exhibits hereto, constitutes
the entire agreement of the parties, and supersedes all prior documents,
agreements (including, without limitation, that certain letter of intent between
the Company and Buyer dated February 8, 1999), promises, covenants,
arrangements, communications, representations or warranties, whether oral or
written, by or on behalf of either party hereto or any officer, employee,
representative or agent of either party hereto.
13.8 Third Parties.
Except as specifically set forth or referred to herein, nothing herein
expressed or implied is intended or shall be construed to confer upon or give to
any Person, other than the parties hereto and their permitted successors or
assigns, any rights or remedies under or by reason of this Agreement.
13.9 Amendments in Writing.
The terms of this Agreement may not be amended, modified or waived except
by written agreement among the parties. The failure of any party to enforce any
right arising under this Agreement on one or more occasions will not operate as
a waiver of that or any other right on that or any other occasion.
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13.10 Governing Law.
This Agreement shall be construed in accordance with and governed by the
laws of the State of New York, without regard to the conflicts of laws
provisions thereof.
13.11 Interpretation.
The headings of the Articles and Sections of this Agreement are inserted
for convenience of reference only and shall not constitute a part hereof or
affect in any way the meaning or interpretation of this Agreement. Each of the
parties hereto acknowledges that it has actively participated in the
preparation, drafting and review of this Agreement, and each party hereby waives
any claim that this Agreement or any provision hereof (or any Exhibit or
Schedule hereto) is to be construed against the other party hereto as the
draftsperson thereof.
13.12 Certain Provisions Relating to R&A Management LLC's 401(k) Plan.
(a) As of the Closing Date, the Company or any Affiliate thereof shall
cause the account balances in the Xxxxxx & Associates, Inc. 401(k) Retirement
Savings Plan, a plan qualified and exempt under Sections 401(a), 401(k) and
501(a) of the Internal Revenue Code of 1986, as amended ("Company's 401(k)
Plan") of all participants who continue to be employees of the Company after the
Closing Date ("Continuing Employees") to become fully vested and nonforfeitable.
Each Continuing Employee's period of service with Company or its Affiliates
before the Closing shall be counted in determining eligibility for, and vesting
of, benefits under each employee benefit plan maintained or sponsored by the
Company, Buyer or their Affiliates after the Closing, or to which the Company,
Buyer or their Affiliates contribute after the Closing. Each Continuing Employee
shall be covered as of the Closing under any employee benefit plan maintained or
sponsored by the Company, Buyer or their Affiliates, or to which the Company,
Buyer, or their Affiliates contribute, providing health care benefits (whether
or not through insurance) without regard to any waiting period or any condition
or exclusion based on any pre-existing conditions, medical history, claims
experience, evidence of insurability, or genetic factors. After the Closing, R&A
Management, LLC and its Affiliates will continue to provide continuation
coverage under Section 4980B of the Code to "qualified beneficiaries" who had
"qualifying events" (as such terms are defined in Section 4980B of the Code) on
or before the Closing Date.
(b) As soon as reasonably practicable following the Closing Date, an
amount in cash equal to the aggregate value of the account balances in the
Company's 401(k) Plan attributable to Continuing Employees, which account
balances shall include any employer matching contributions in respect of
employee contributions made prior to the Closing Date and shall be valued, to
the extent administratively feasible, so as to include earnings and losses to a
date not more than thirty (30) days prior to the date of transfer, will be
transferred to the Charter Communications, Inc. 401(k) Plan (the "Charter
Plan"), along with corresponding liabilities to Persons entitled to payment of
benefits pursuant to the terms of Company's 401(k) Plan; provided, however, that
Buyer shall have no obligation to cause the Charter Plan to accept such a
transfer if such a transfer (i) would violate Section 414(l) of the Code, (ii)
could not be accomplished unless the Charter Plan were amended to provide any
form of benefit distribution not available as of the Closing Date under the
Charter Plan,
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or (iii) would not be commercially reasonable or administratively practicable.
After the aforesaid transfer of account balances, the payment of benefits under
Charter Plan for Continuing Employees shall be the sole responsibility of Buyer
or any Affiliate thereof, and Buyer acknowledges and warrants to the Company
that neither it nor any Affiliate thereof shall have any responsibility or
obligation whatsoever therefor.
(c) As soon as reasonably practicable following the later of the Closing
Date or the date of the receipt by the Xxxxxx & Associates, Inc. Et Al Defined
Contribution Transfer Plan (the "Xxxxxx Transfer Plan") of a favorable
determination letter from the Internal Revenue Service, Charter shall establish
a plan similar to the Xxxxxx Transfer Plan (the "Charter Transfer Plan"), and an
amount in cash equal to the aggregate value of the account balances in the
Xxxxxx Transfer Plan attributable to Continuing Employees, which account
balances shall be valued, to the extent administratively feasible, so as to
include earnings and losses to a date not more than thirty (30) days prior to
the date of transfer, will be transferred to the Charter Transfer Plan, along
with corresponding liabilities to Persons entitled to payment of benefits
pursuant to the terms of the Xxxxxx Transfer Plan. After the aforesaid transfer
of account balances, the payment of benefits under the Charter Transfer Plan for
Continuing Employees shall be the sole responsibility of Buyer or any Affiliate
thereof, and Buyer acknowledges and warrants to the Company that neither it nor
any Affiliate thereof shall have any responsibility or obligation whatsoever
therefor.
13.13 Notices.
All notices hereunder shall be in writing and shall be deemed to have been
delivered on the date of the first attempted delivery by (i) the United States
Postal Service, unless otherwise provided herein, to the respective party if
mailed by certified mail, return receipt requested, or (ii) a reputable
overnight delivery service, to the respective party at its address set forth
below or such other address as either party may designate to the other by
written notice in accordance herewith:
If to Sellers:
R&A Management, LLC
000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Telecopy: (000) 000-0000
with a complete copy under separate cover (which copy by itself shall not
constitute notice) to:
Xxxxxx X. Xxxxxx, Esq.
Xxxxx & Xxxxxxxxx
000 Xxxx 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Telecopy: (000) 000-0000
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If to Buyer:
Charter Communications, Inc.
00000 Xxxxxxxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx, President
Telecopy: (000) 000-0000
with a complete copy under separate cover (which copy by itself shall not
constitute notice) to:
Charter Communications, Inc.
00000 Xxxxxxxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
Senior Vice President & General Counsel
Telecopy: (000) 000-0000
and to:
Irell & Xxxxxxx LLP
1800 Avenue of the Stars
Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Esq.
Telecopy: (000) 000-0000
13.14 Severability.
Any provision hereof which is prohibited or unenforceable shall be
ineffective only to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof.
13.15 Counterparts.
This Agreement may be executed in one or more counterparts and each
executed copy shall constitute an original.
[SIGNATURES BEGIN ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereunto have duly executed this
Agreement.
BUYER:
CHARTER COMMUNICATIONS, INC.
By: /s/ Xxxxxx X. Xxxx
________________________________________
Name: Xxxxxx X. Xxxx
Title: Senior Vice President
COMPANY:
XXXXXX ACQUISITION PARTNERS, L.L.L.P.
By: Xxxxxx Acquisition Management, L.P., its General Partner
By: RT Investments Corp., its General Partner
By: /s/ Xxxxx X. Xxxxx
________________________________________
Xxxxx X. Xxxxx, Vice President
DISBURSEMENT AGENT:
R&A MANAGEMENT, LLC
By: Xxxxxx & Associates, Inc., its Manager
By: /s/ Xxxxx X. Xxxxx
________________________________________
Xxxxx X. Xxxxx, Chief Executive Officer
[SIGNATURES CONTINUE ON FOLLOWING PAGE]
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SELLERS:
XXXXXX ACQUISITION MANAGEMENT, L.P.,
By: RT INVESTMENTS CORP., its General Partner
By: /s/ Xxxxx X. Xxxxx
________________________________________
Xxxxx X. Xxxxx, Vice President
VS&A COMMUNICATIONS PARTNERS II, L.P.
By: VS&A EQUITIES II, L.P.
its General Partner
By: /s/ S. Xxxxxx Xxxxxxx
________________________________________
S. Xxxxxx Xxxxxxx, a General Partner
VS&A-RAP, INC.
By: /s/ S. Xxxxxx Xxxxxxx
________________________________________
S. Xxxxxx Xxxxxxx, Vice President
GREENWICH STREET (RAP) PARTNERS I, L.P.
By: GSP RAP (GP) ACQUISITION, LLC, its General Partner
By: INTERLINK COMMUNICATIONS PARTNERS, LLLP,
its Sole Member
By: Xxxxxx, Co., its General Partner
By: /s/ Xxxxx X. Xxxxx
________________________________________
Xxxxx X. Xxxxx, Vice President
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IEP HOLDINGS I LLC
By: HAMPSHIRE EQUITY PARTNERS, L.P. I
By: LEXINGTON PARTNERS, L.P.,
its General Partner
By: LEXINGTON PARTNERS, INC.,
its General Partner
By: /s/ Xxxxx X. Xxxxx
________________________________________
Xxxxx X. Xxxxx, Vice President
PAINEWEBBER CAPITAL INC.
By: /s/ Xxxxxxxxx Xxx
________________________________________
Xxxxxxxxx Xxx, President
PW PARTNERS 1995, L.P.
By: PAINEWEBBER PARTNERS II INC.,
its General Partner
By: /s/ Xxxxxxxxx Xxx
________________________________________
Xxxxxxxxx Xxx, Vice President
XXXXXX CHILDREN'S TRUST
By: /s/ Xxxxxx X. Xxxxxx
________________________________________
Xxxxxx X. Xxxxxx, Co-Trustee
XXXXXX CHILDREN TRUST-II
By: /s/ Xxxxxx X. Xxxxxx
________________________________________
Xxxxxx X. Xxxxxx, Co-Trustee
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XXXXXX CHILDREN'S TRUST III
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------
Xxxxxx X. Xxxxxx, Co-Trustee
360 GROUP, INC.
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Xxxx X. Xxxxxx, Treasurer
XXXXXX FAMILY INVESTMENT COMPANY, L.L.L.P.
By: its General Partners
/s/ Xxxxxx X. Xxxxxx
---------------------------------------
Xxxxxx X. Xxxxxx, General Partner
/s/ Xxxxxx X. Xxxxxx
---------------------------------------
Xxxxxx X. Xxxxxx, General Partner
/s/ Xxxxx X. Xxxxxx
---------------------------------------
Xxxxx X. Xxxxxx, General Partner
/s/ Xxxx X. Xxxxxx
---------------------------------------
Xxxx X. Xxxxxx, General Partner
/s/ Xxxxxxx X. Xxxxxx, III
---------------------------------------
XXXXXXX X. XXXXXX, III
/s/ Xxxxxxx X. Xxxxxx
---------------------------------------
XXXXXXX X. XXXXXX
/s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
XXXXXXX X. XXXXXXX
/s/ Xxxx X. Xxxxxx
---------------------------------------
XXXX X. XXXXXX
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INDEX TO EXHIBITS
Exhibit 1.75 Form of RAP Indemnity Agreement
Exhibit 2.5 Form of Closing Escrow Agreement
Exhibit 7.17 Form of Services Agreement
Exhibit 9.6 Form of Seller's Counsel Opinion
Exhibit 9.7 Form of Seller's FCC Counsel Opinion
Exhibit 9.8 Form of Consent or Approval to Change of Control
Exhibit 10.5 Form of Buyer's Opinion of Counsel
INDEX OF SCHEDULES
Schedule Title
-------- -----
1.1(A) Slow Pay Bulk Accounts
1.1(B) Description of Systems
1.1(C) Vehicles
2.1 Purchased Interests
4.3 Sellers' Required Consents
5.1(B) Company Group
5.3 Company's Required Consents
5.6 Financial Statements
5.8 Taxes
5.9(A) Franchises and CATV Service Areas
5.9(B) Necessary Contracts and FCC Licenses
5.9(C) Unfulfilled Commitments Under Franchises and
Necessary Contracts
5.10(A) Material Agreements
5.11(A) Systems' Capacity, Customers and Rates
5.11(B) Unfiled or Untimely Filed Reports
5.12 Labor Matters
5.13 Absence of Certain Developments
5.14 Real Estate
5.16(B) Carriage Noncompliance
5.16(H) Rate Regulating Governmental Authorities
5.16(I) Overbuild and Franchise Competition
5.17 Transactions Outside of Ordinary Course of
Business
5.18 Litigation
5.20 Retirement Plans
5.21 Insurance Policies and Surety Bonds
5.22 Noncompliance with Environmental Laws
5.23 Sale Commitments
7.3(A) Capital Expenditure Projects
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