Exhibit 2.2
AMENDMENT TO ASSET EXCHANGE AGREEMENT
AND POST-CLOSING PERFORMANCE AGREEMENT
This Amendment to Asset Exchange Agreement and Post-Closing Performance
Agreement (this "Amendment") is entered into as of April 15, 1997 (the
"Effective Date") by and between United CATV, Inc. ("TCI"), and Xxxxx
Communications of Colorado, Inc. ("Xxxxx").
BACKGROUND
TCI and Xxxxx entered into an Asset Exchange Agreement dated as of October
25, 1996 (the "Agreement"). The parties wish to amend the Agreement as set
forth in this Amendment, and to describe certain activities which will be
undertaken following the Closing. All capitalized terms used but not defined in
this Amendment will have the meanings set forth for such terms in the Agreement.
AMENDMENT
For valuable consideration the parties agree as follows:
1. Clause (i) of Section 7.25 is amended to read:
"(i) extended for a term of one year, or".
2. The first sentence of Section 7.26 is hereby amended to read in its
entirety as follows:
"By March 20, 1997, TCI shall conduct microwave proof-of-performance tests
in accordance with the memorandum dated October 7, 1996, from Xxxxxxx Xxxxx
to Xxxxxx Xxxxxxx, a copy of which is attached hereto as EXHIBIT 7.26 (the
"Microwave Memorandum")."
3. The following Sections are inserted into the Agreement after Section
7.26:
"Section 7.27. Idaho Springs Improvements. Prior to Closing, Xxxxx shall
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purchase, and, if possible, install the equipment necessary to provide an
active return path for the Idaho Springs High School as required by the
Idaho Springs franchise and shall also purchase and install in the Idaho
Springs System the equipment necessary to provide an emergency notification
system which meets all the requirements of
the Idaho Springs Franchise and all current or pending federal laws and
regulations."
"Section 7.28 Sprint Promotion. After the Closing Xxxxx will continue to
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honor the Sprint credit promotion which has been offered in the TCI Systems
prior to the Closing in accordance with this Section. Under such promotion,
subscribers who initiated Sprint service became entitled to monthly credits
for twelve months on their cable bills of either $4.95 (for subscribers
taking a cable package that includes Starz! and Encore) or $2.00 (for
basic/expanded basic subscribers). Attached as Exhibit 7.28 is a listing of
each Subscriber entitled to a credit (the "Sprint Subscribers"), and for
each, the amount of monthly credit, the number of months that TCI remains
obligated to provide the credit (the "Credit Period") and the total
remaining credit obligations of TCI. After Closing, Xxxxx will continue to
provide the appropriate credit to each Sprint Subscriber for each month
during the Credit Period, and TCI will reimburse Xxxxx for such credits;
provided that (a) if TCI is not receiving the applicable reimbursements
from Sprint for the Sprint Subscribers, TCI may discontinue such
reimbursements to Xxxxx at any time by giving 10 days written notice to
such effect to Xxxxx, which notice will be deemed to be TCI's authorization
for Xxxxx to discontinue the monthly credits to the Sprint Subscribers
pursuant to this Agreement and (b) Xxxxx may terminate its obligations
under this Section 7.28 upon 30 days' written notice to such effect to TCI
with an additional copy to Xx. Xxxxxx Xxxxx at TCI at facsimile number
(000) 000-0000. Any such termination will not relieve TCI of its
reimbursement obligation for credits provided by Xxxxx prior to the
effective date of such termination or Xxxxx of its obligation to provide
such credits prior to the effective date of termination. Xxxxx will give
TCI and Sprint a monthly report sent to Xx. Xxxxxx Xxxxx at the address
above, in form reasonably acceptable to TCI, calculating the amount to be
reimbursed by TCI and verifying that each Sprint Subscriber is in fact a
Sprint Subscriber of basic/expanded basic service (if such Sprint
Subscriber receives a monthly $2.00 credit) or Starz! and Encore (if the
Sprint Subscriber receives a monthly $4.95 credit). TCI will reimburse such
amounts within 10 days after receipt of such monthly report. Any agreement
between Sprint and TCI or TCI's Affiliate(s) with respect to such promotion
will constitute a TCI Excluded Asset."
4. Schedule 1.55, 1.60, 1.61, 1.62, 1.63 and 6.3 relating to the TCI
Systems and attached hereto shall amend and supersede the Schedules of the same
designation that were originally attached to the Agreement.
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5. Schedules 1.24, 1.29, 1.31, 1.32, 5.3, 5.12 and 5.14 relating to the
Xxxxx Systems and attached hereto shall amend and supersede the Schedules of the
same designation that were originally attached to the Agreement
6. The first and third sentences of 5.7.1 of the Agreement are hereby
amended to include the following italicized language:
"Except as otherwise indicated by those certain Phase I Environmental Site
Assessments prepared by HWS Consulting Group, Inc., both dated January 14,
1997 (HWS Project No. 73-47/1041.0100 and 73-47/1042.0100), copies of which
have been provided to TCI."
Notwithstanding the Environmental Reports, the indemnification regarding Xxxxx'
representations and warranties contained in Section 11.3(a) shall, subject to
the limitations contained in Section 11.6, continue to include indemnification
for the conditions disclosed in the Environmental Report to the extent such
indemnification obligations existed before this Amendment and this
indemnification shall be in addition to the indemnifications contained in
Section 11.3(g)
7. The parties hereby waive any requirement that the Environmental
Reports delivered pursuant to Section 7.20 include "such soil and groundwater
sampling and other testing as will enable the environmental engineers to
determine if Hazardous Substances are detected and to provide an estimate of the
cost to remove and dispose of the Hazardous Substances or otherwise remediate
the property in accordance with all applicable Environmental Laws." With
respect to certain environmental conditions reflected in the Environmental
Reports, TCI, Xxxxx and Xxxxx Cable Holdings, Inc. shall execute an
Indemnification Agreement of even date herewith in the form attached as Exhibit
A, which Indemnification Agreement shall also be a Transaction Document.
8. The parties hereby waive any rights or claims that either may have
against the other arising from the failure to timely deliver any report, list or
other document required by Section 7 of the Agreement to be delivered by one
party to the other between the date of the Agreement and the Closing Date.
9. Xxxxx agrees that the condition set forth in that certain letter from
Xxxxx to TCI, dated October 25, 1996 (the "Side Letter"), relating to the "Water
Tower Lease Agreement" is deemed satisfied.
10. TCI agrees that the condition set forth in the Side Letter relating to
the "Arapahoe County Franchise" is deemed satisfied.
11. TCI shall cause TCI Cable Management Corporation to assign to Xxxxx as
of the Closing Date, and Xxxxx will assume, that certain Retransmission Consent
Agreement, dated
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September 1993, with Paramount Stations Group of Washington Inc., as such
Agreement relates to the Annapolis, Maryland headend.
12. TCI shall if necessary cause its Affiliates to assign to Xxxxx as of
the Closing Date, and Xxxxx will assume, all contracts for the sale of
advertising on the TCI Systems.
13. Title Insurance and Survey Issues Pertaining to Xxxxx Owned Property
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and Xxxxx Leased Property.
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(a) Title Commitment for Hiwan Property. The title commitment (Order No.
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ABB552381-2) for the Evergreen Xxxxx Leased Property known as the Elks
Lodge headend (the "Elks Lodge Headend") reflects the headend is
encumbered by a possibility of reverter created in the 1988 deed
conveying the property to the Elks Lodge (the "Possibility of
Reverter"). Also, because the Elks Lodge has refused to permit
recording of the lease for the Elks Lodge Headend or a memorandum
thereof, the Title Company will not issue a leasehold title policy for
the Elks Lodge Headend.
(b) Improvement Location Certificate for Columbine Shopping Center. The
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Improvement Location Certificate ("ILC") (Job No. 9702-125) for the
Jefferson County Xxxxx Leased Property known as the Columbine Shopping
Center headend (the "Columbine Headend") discloses that the tower for
that headend has been constructed on a Public Service Company easement
which, by its terms, permits Public Service Company to require
relocation of the tower. The matter described in the preceding
sentence is referred to as the "Columbine Problems." Also, because
the ILC for the Columbine Headend does not provide a legal description
for the areas occupied by Xxxxx located inside of the building, the
Title Company has refused to include such indoor areas on its title
policy for the Columbine Headend.
(c) Title Commitment and ILC for Argo Mine Headend. The title commitment
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(Order No. TC51107) and the ILC for the Idaho Springs Xxxxx Leased
Property known as the Argo Mine headend (the "Argo Mine Headend")
disclose that (i) Xxxxx Xxxxxxx, the lessor under the lease for the
headend with Xxxxx, is not the record owner of the property on which
the Argo Mine Headend is located, (ii) the Argo Mine Xxxxxxx xxxxx
access to a public street, (iii) the legal description for the Argo
Mine Headend contained in the lease for such headend is insufficient
to permit the title company to issue title insurance therefor, and
(iv) the number of satellite dishes installed in Parcel 1 of the Argo
Mine Headend exceeds the number of dishes mentioned in the legal
description for said Parcel 1, contained in the lease for the Argo
Mine Headend. The matters described in clauses (i) through (iv) of the
preceding sentence are referred to as the "Idaho Springs Problems."
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(d) Title Commitment and ILC for Empire Headend. The title commitment
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(Order No. TC51108) and the ILC for the Empire Xxxxx Leased Property
known as the Empire headend (the "Empire Headend") disclose (i) the
earth station, wood shed, aluminum shed and other cable system
facilities are not located within the boundaries of the area leased to
Xxxxx, (ii) the Empire Xxxxxxx xxxxx access to a public street, and
(iii) a deed of trust for the benefit of Clear Creek National Bank to
secure repayment of $9,730.55 recorded May 21, 1996 (the "CCNB Deed of
Trust") encumbers the Empire Headend. The matters described in clauses
(i) through (iii) of the preceding sentence are referred to
collectively as the "Empire Problems."
(e) Evergreen Tower Site Lease.
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(i) Xxxxx leases certain property in Evergreen, Colorado
pursuant to a Lease dated April __, 1997 with Xxxxxx and Xxxxxxxxx
Tower (the "Evergreen tower Site Lease"). Pursuant to the Evergreen
Tower Site Lease, the lessors have the right to obtain, on or before
May 16, 1997, a Phase I environmental site assessment of the leased
premises (the "Site Assessment"). The lessors are further granted the
right to terminate, on or before May 31, 1997, the Evergreen Tower
Site Lease in the event that the Site Assessment discloses that
tenant's use of the leased premises is not in substantial compliance
with any environmental laws or poses an environmental risk to the
lessors' land, in the lessors' reasonable discretion.
(ii) With respect to the Evergreen Tower Site Lease, Xxxxx shall
(A) pay, with no prepayment adjustment, the $7,500 rental payment due
under section 3 for the initial three-year term, (B) reimburse the
lessors for the cost of the environmental assessment required under
section 8, and (C) obtain the performance bond required under Section
10 for the initial three-year term. In addition, Xxxxx shall
indemnify and hold harmless TCI and its shareholders and its and their
respective Affiliates and shareholders, officers, directors,
employees, agents, successors and assigns and any Person claiming by
or through any of them as the case may be, from and against any and
all Losses arising out of or resulting from the presence, generation,
removal or transportation of a Hazardous Substance on or from the
premises leased under the Evergreen Tower Site Lease (the "Site")
through and including the Closing Time, including the costs of removal
or clean-up of such Hazardous Substance and other compliance with the
provisions of any Environmental Laws (whether before or after
Closing). This indemnification shall include, without limitation, the
cost of relocating the equipment located on the Site to a new site
reasonably acceptable to TCI or, if less costly and technically
feasible in the reasonable judgment of TCI and Xxxxx, replicating the
functionality of the equipment located on the Site at the Elk's Lodge
Headend
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site in Evergreen, Colorado, in the event the lessors terminate the
Evergreen Tower Site Lease on or before May 31, 1997 pursuant to
Section 8 thereof. The foregoing indemnification is in addition to the
indemnifications contained in the Agreement and is not subject to any
limits on indemnifications set forth in the Agreement except for the
period of survival.
14. Indemnification Pertaining to Xxxxx Owned Property and Xxxxx Leased
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Property.
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Xxxxx indemnifies and holds harmless TCI and its shareholders and its and
their respective Affiliates, and the shareholders, directors, officers,
employees, agents, successors and assigns and any Person claiming by, through or
under any of them, from and against any and all Losses whatsoever arising out
of, or in any way relating to, the Possibility of Reverter, any matter
constituting a Title Defect which is not disclosed on Land Title Guarantee
Company Commitment No. ABB552381-2 dated March 28, 1997 and which would have
been insured against under an ALTA leasehold title policy, had such a policy
been issued for the Elks Lodge Headend in accordance with such title commitment,
the Columbine Problems, any matter constituting a Title Defect affecting the
portions of the building occupied by the Xxxxx System which would have been
insured against under an ALTA leasehold title policy, had such a policy been
issued for the indoor areas of the Columbine Headend, the Idaho Springs
Problems, any matter constituting a Title Defect affecting the Argo Mine Headend
which is not disclosed on Clear Creek - Xxxxxx Abstract & Title Corp. Commitment
No. TC57107.C-2 and which would have been insured against under an ALTA
leasehold title policy, had such a policy been issued for the Argo Mine Headend
in accordance with such title commitment, and the Empire Problems. The
indemnifications contained in this paragraph 14 shall survive the Closing
indefinitely and shall supersede the limitations on indemnification set forth in
Section 11.6 of the Agreement; provided, however, (x) if the Title Company
issues to TCI one or more leasehold title insurance policies insuring over any
of the conditions or matters subject to indemnification described in the
preceding sentence, Xxxxx' indemnification under this Amendment will terminate
as to any such condition or matter insured by the title policy or policies, (y)
except for Losses arising out of or in any way relating to the Empire Problems
described under clauses (i) and (ii) of subsection 13(d) of this Amendment or
the Idaho Springs Problems described under subsection 13(c) of this Amendment,
for which the indemnifications provided in this paragraph 14 shall continue
indefinitely, Xxxxx' indemnification under this Amendment as to any condition or
matter, if not sooner terminated under the preceding clause (x), will terminate
in any event if and when the current lease term for the Xxxxx Leasehold Property
affected by such condition or matter terminates, so long as no claim for
indemnification shall have been asserted under this Amendment prior to such
lease termination, and (z) that any termination of any indemnification under
this paragraph will in no event limit or terminate other indemnifications by
Xxxxx under the Agreement or any other agreement between the parties. In
pursuing any indemnification rights provided in this paragraph with respect to
any third party claim, the parties shall follow the procedures set forth in
Section 11.4 of the Agreement.
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15. Post-Closing Obligations Pertaining to Xxxxx Owned Property and Xxxxx
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Leased Property.
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As soon as practicable following the Closing, Xxxxx agrees to use
commercially reasonable efforts to:
(a) obtain boundary surveys of the Empire Headend and Argo Mine Headend
showing access to such properties from open public streets;
(b) obtain signatures of the owners of the Argo Mine Headend on an
agreement in which they amend the legal descriptions set forth in the
lease for the headend to reflect the legal descriptions developed by
the Surveyor and set forth on the ILC for the Argo Mine Headend,
accept assignment of the existing lease for that headend and agree to
assume and perform the landlord's obligations under such lease;
(c) obtain the signature of the owner of the Empire Headend on an
amendment to the existing lease substituting the legal description
for the headend developed by the surveyor and set forth in the title
commitment for the Empire Headend for the existing legal description,
and agreeing to provide access to the headend across property
adjacent thereto owned by such landlord;
(d) obtain a non-disturbance agreement to be recorded in the real estate
records in a form reasonably acceptable to TCI, executed by the
holder of the note secured by the CCNB Deed of Trust; provided, that,
with respect to this subparagraph 15(d), Xxxxx shall be deemed to
have used commercially reasonable efforts if it requests that the
note holder execute the aforementioned non-disturbance agreement; and
(e) execute and/or request that the landlord for any Xxxxx Leased
Property execute such affidavits and other documents required by TCI
to satisfy any of the requirements set forth in the title commitments
for the Columbine Headend, Argo Mine Headend or Empire Headend, or to
secure deletion of the standard exceptions set forth on such title
commitments from TCI Title Policies (excepting only the standard
exception for "discrepancies, conflicts in boundary lines, shortage
in area, encroachments, and any facts which a current survey of the
premises would disclose and which are not shown by public records.").
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16. Title Insurance and Survey Issues Pertaining to Xxxxx Owned Property
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and Xxxxx Leased Property.
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a. Annapolis Neck Headend Site. TCI owns certain real property
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located at 000 Xxx Xxxxxxxxx Xxxx Xxxx and Forest Drive in Xxxx
Arundel County, Maryland (the "Annapolis Neck Headend Site"). TCI
shall deliver to Xxxxx within 45 days after the Closing, a survey of
the Annapolis Neck headend Site in such form as is necessary to
obtain the title insurance to be issued pursuant to the title
commitment for the Annapolis Headend Site (Order No. A45041-97-2045)
issued by Old Republic National Title Insurance Company with the
standard printed exceptions relating to survey matters deleted,
certified to Xxxxx and to the title company issuing the title
commitment. Xxxxx shall have 20 days after its receipt of such survey
to notify TCI of any Liens (other than a Permitted Lien or a Lien set
forth in Schedule 6.4 of the Agreement) or other matter affecting
title to the Annapolis Neck Headend Site which prevents access to or
which could prevent or impede in any way the use or operation of the
Annapolis Neck Headend Site for the purposes for which it is
currently used or operated by TCI (each a "Title Defect"). TCI shall
exercise commercially reasonable efforts to remove or cause the title
company to commit to insure over, each such Title Defect.
b. Xxxx Arundel County Tower Lease.
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c. Navy Tower License. TCI licenses certain space at the Naval Surface
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Warfare Center, Annapolis, Maryland (the "Navy Tower License"). The
Department of the Navy has informed the parties that the Navy Tower
License is not assignable. Accordingly, the Navy Tower License shall
not be conveyed to Xxxxx at the Closing and shall be included in the
TCI Excluded Assets. Xxxxx has agreed to obtain a new license from
the Department of the Navy for continued use of the space. TCI shall
have no further obligation to Xxxxx following the Closing to obtain
the Navy Tower License.
17. Indemnification Pertaining to TCI Owned Property and TCI Leased
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Property.
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TCI indemnifies and holds harmless Xxxxx and its shareholders and its
and their respective Affiliates, and the shareholders, directors,
officers, employees, agents, successors and assigns and any Person
claiming by, through or under any of them, as the case may be, from
and against any and all Losses whatsoever arising out of, or in any
way relating to any matter constituting a Title Defect with respect
to the Annapolis Neck Headend Site which TCI fails to eliminate as a
title exception to the title policy to be issued for the Annapolis
Neck Headend Site. The indemnification contained in this Paragraph
shall survive the Closing until the Annapolis Neck Headend is sold or
otherwise conveyed by Xxxxx to any Person which is not an Affiliate
of
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Xxxxx and shall supersede the limitations on indemnification set
forth in Section 11.5 of the Agreement; provided, however, if the
Title Company issues to Xxxxx an owner's policy of title insurance
which insures over any Title Defect raised by Xxxxx, TCI's
indemnification under this Agreement will terminate as to any such
condition or matter insured by such title policy; provided, further,
however, that such termination of any indemnification under this
paragraph will in no event limit or terminate other indemnifications
by TCI under the Agreement or any other agreement between the
parties. In pursuing any indemnification rights provided in this
paragraph with respect to any third party claim, the parties shall
follow the procedures set forth in Section 11.4 of the Agreement.
18. Post Closing Obligations Pertaining to TCI Owned Property and TCI
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Leased Property.
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As soon as practicable following the Closing, TCI agrees to use
commercially reasonable efforts to (a) execute, and/or request that the
landlord for any TCI Leased Property which constitutes a tower or headend
site to execute, such affidavits and other documents required by Xxxxx to
satisfy any requirements set forth in the title commitments for such
properties, or to secure deletion of the standard exceptions set forth on
such title commitments for mechanics' liens and rights of parties in
possession, to the extent the Title Company offers such coverage on
leasehold policies without requiring surveys of the subject properties.
19. Continuation of Indemnities Contained in Agreement.
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Nothing in this Agreement is intended to limit, waive or release either
party's representations and warranties in the Agreement. Without limiting
anything in the Agreement, Xxxxx and TCI acknowledge that, in proceeding to the
Closing, each of them is not relying upon its own due diligence with respect to
the Real Property, but instead is relying upon the indemnifications of the other
party contained in the Agreement and in this Amendment, which constitute a
material inducement to each of them in the consummation of the transactions.
20. This Amendment may be signed in any number of counterparts each of
which will be an original and all of which together will constitute one
Amendment. This Amendment and the Agreement, as amended hereby, embody the
entire agreement between the parties hereto with respect to their subject matter
and supersedes all prior representations, agreements and understandings, oral or
written, with respect thereto. Except as amended by this Amendment, all of the
terms of the Agreement will remain in full force and effect. THE VALIDITY,
PERFORMANCE AND ENFORCEMENT OF THIS AMENDMENT WILL BE GOVERNED BY THE LAWS OF
THE STATE OF COLORADO, WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF
LAW OF SUCH STATE.
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This Amendment to Asset Exchange Agreement and Post-Closing Performance
Agreement, is signed by the parties as of the date first written above.
UNITED CATV, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxxx
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Title: Vice President
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XXXXX COMMUNICATIONS OF
COLORADO, INC.
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
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Title: Group Vice President/Operations
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