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FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO ASSET PURCHASE AGREEMENT (this "Amendment"), dated
as of December 15, 1995, is by and between Star Cable Associates ("Seller") and
Telecable Associates, Inc. ("Buyer").
RECITALS:
A. Seller and Buyer entered into that certain Asset Purchase Agreement
(the "Purchase Agreement") dated August 28, 1995. Unless otherwise defined
herein, terms used herein with initial capital letters shall have the meaning
set forth in the Purchase Agreement.
B. At the Closing, Seller shall not have satisfied certain covenants and
Closing conditions, specifically (i) the condition to Buyer's obligations to
close set forth in Section 7.1(b) of the Purchase Agreement as such section
relates to covenants of Seller set forth in Section 6.4 of the Purchase
Agreement, (ii) Closing conditions set forth in Sections 7.1(h) and 7.1(j) of
the Purchase Agreement, and (iii) certain Closing deliveries required of Seller
under Section 8.2(b) of the Purchase Agreement (all such unsatisfied covenants
and conditions set forth as (i) and (ii) being, the "Requirements"; provided,
however, that "Requirements" shall not include obligations with respect to
Non-Disturbance Agreements referenced in Buyer's November 22, 1995 letter to
Seller regarding Title Defects (the "Non-Disturbance Agreements")).
C. Seller and Buyer now desire, pursuant to Section 11.5 of the Purchase
Agreement, to amend the Purchase Agreement to address the matters set forth in
Recital B.
NOW, THEREFORE, in consideration of the premises herein contained and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1
Amendments
Section 1.1 The following definitions, together with terms defined in the
Recitals to and elsewhere in this Amendment, are added to the definitions
contained in Article 1 of the Purchase Agreement:
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"Subject Leased Property" means the parcels of Leased Property listed as
numbers 1 through 17 on Exhibit 2.1 (b) to the Purchase Agreement.
"Subject Leased Property Subscribers" means the number of Subscribers
served on November 30, 1995 by a headend located on a particular Subject Leased
Property for which all Requirements have been satisfied.
"Total Subscriber Population" means the total number of subscribers served
by headends located on all parcels of the Subject Leased Property as shown on
Seller's most recent billing report prior to Closing.
"Holdback" means $500,000.
"Holdback Disbursement Amount" means the Holdback multiplied by the
quotient of the Subject Leased Property Subscribers for the applicable
disbursement divided by the Total Subscriber Population. For example, if the
Total Subscriber Population is 30,000 and, at the time of disbursement of the
Holdback the Requirements are satisfied as to three Subject Leased Properties
on which headends serving collectively 15,000 Subject Leased Property
Subscribers are located, the Holdback Disbursement Amount would be $250,000.
The Holdback Disbursement Amounts are incremental and not duplicative.
Accordingly, given the foregoing example, if at the next payment date, the
Requirements are satisfied as to two more Subject Leased Properties on which
headends serving collectively 6,000 Subject Leased Property Subscribers are
located, the Holdback Disbursement Amount at the time of disbursement would be
$100,000 (not $350,000).
Section 1.2 Holdback. Notwithstanding any provision in the Purchase
Agreement to the contrary, at the Closing, Buyer shall withhold from the
payment of the Purchase Price the Holdback. On January 31, 1996, February 29,
1996, and March 22, 1996, Seller shall be entitled to and Buyer shall pay to
Seller the Holdback Disbursement Amount, if any, to the extent the Requirements
with respect to particular Subject Leased Property have been satisfied in
accordance with the provisions of the Purchase Agreement so long as all
documentation Buyer reasonably requires to make a determination regarding
satisfaction of the Requirements have been delivered to Buyer five business
days in advance of each such date. Any portion of the Holdback to which Seller
is not entitled on or before March 22, 1996, shall remain the property of Buyer
with no further obligations of payment thereof to Seller. Retention by Buyer
of the remaining Holdback shall not relieve Seller of its obligations to
satisfy the Requirements, and failure to do so shall be subject to Seller's
indemnification obligations under the Purchase Agreement.
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Section 1.3 Indemnification by Seller. Section 10.1 of the
Purchase Agreement is hereby amended to add subsections (g) and (h)
immediately following the existing Section 10.1 (f):
(g) failure of Seller to obtain consents designated
as material in Exhibit 5.3 of the Purchase Agreement
(including the completion of all requirements to which a
consent may be subject); and
(h) failure of Seller to deliver vehicle titles to
vehicles listed as item numbers 1, 2, and 3 on page 43 of
Attachment 2.1(a)(i) to the Purchase Agreement, specifically a 1990
Chevrolet G20 Van, a 1992 Ford E150 Van, and a 1992 Ford Explorer
XLT.
Section 1.4 Time and Manner of Certain Claims. Section
10.5 of the Purchase Agreement is deleted in its entirety and replaced
with the following:
Section 10.5 Time and Manner of Certain Claims. The
representations and warranties of Buyer and Seller in this
Agreement and any Transaction Document shall survive Closing
for a period of two years, except (i) those stated in Section
5.9 (Tax Matters), which shall survive Closing for six months
beyond the expiration of all statutory periods of limitations
applicable to claims for which Buyer or Seller could incur any
liability if the representations and warranties stated therein
were not true and accurate, (ii) those stated in Section 5.12
(Legal Compliance), which shall survive Closing for one year
beyond the expiration of all statutory periods of limitations
applicable to claims for which Buyer or Seller could incur any
liability if the representations and warranties stated therein
were not true and accurate, (iii) those stated in Section 5.16
(Environmental Matters), which shall survive Closing for a
period of fifteen years, and (iv) those stated in Section 5.4
(Assets), which shall survive Closing indefinitely (the
"Survival Periods"). Neither party shall have any liability
under paragraphs 10.1(a) or 10.2(a), respectively, unless a
claim for Losses for which indemnification is sought thereunder
is asserted by the party seeking indemnification by written
notice to the party from whom indemnification is sought within
the respective Survival Periods and, in the case of claims for
indemnification by Buyer (other than claims for indemnification
by Buyer under Sections 10.1(g) and (h) of this Agreement),
unless and to the extent that the amount of such claimed Losses
exceeds an aggregate amount of $50,000. Notwithstanding
anything to the contrary contained herein, Buyer shall not be
entitled to recover more than the amount of the Purchase Price,
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as adjusted by the Adjustment Amount, if any, for all Losses
for which indemnification is sought under this Agreement,
absent fraud or willful misconduct on Seller's part.
ARTICLE 2
Ratification
The terms and provisions set forth in this Amendment shall modify and
supersede all inconsistent terms and provisions set forth in the Purchase
Agreement and except as expressly modified and superseded by this Amendment,
the terms and provisions of the Purchase Agreement are ratified and confirmed
and shall continue in full force and effect. Seller and Buyer agree that the
Purchase Agreement as amended hereby shall continue to be legal, valid, binding
and enforceable in accordance with its terms.
ARTICLE 3
Covenants
Section 3.1 Seller. Seller covenants to use its best
efforts, and to continue to use its best efforts following the Closing (as
defined in the Purchase Agreement), to:
(a) cause the Requirements to be satisfied as soon as
possible;
(b) obtain the Non-Disturbance Agreements;
(c) take all action necessary to obtain consents designated
as material in Exhibit 5.3 of the Purchase Agreement (including the
completion of all requirements to which a consent may be subject); and
(d) take all action necessary to obtain appropriate title
documentation to the vehicles described in Section 1.3 of this
Amendment so as to be able to transfer title to such vehicles
pursuant to Buyer's instructions.
Section 3.2 Buyer. Buyer shall update its November 22, 1995
letter to Seller regarding Title Defects as soon as reasonably possible (and
no later than 15 days) after Buyer has received revised Surveys and Title
Commitments for all parcels of the Subject Leased Property.
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ARTICLE 4
Miscellaneous
Section 4.1 Reference to Agreement. The Purchase Agreement and any and
all other agreements, documents, or instruments now or hereafter executed and
delivered pursuant to the terms hereof or thereof, are hereby amended so that
any reference to the Purchase Agreement shall mean a reference to the Purchase
Agreement as amended hereby.
Section 4.2 Severability. Any provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
Section 4.3 APPLICABLE LAW. THE VALIDITY, PERFORMANCE AND ENFORCEMENT
OF THIS AMENDMENT, UNLESS EXPRESSLY PROVIDED TO THE CONTRARY, SHALL BE GOVERNED
BY THE LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT TO THE PRINCIPLES OF
CONFLICTS OF LAW OF SUCH STATE.
Section 4.4 Successors and Assigns. This Amendment is binding upon and
shall inure to the benefit of Seller and Buyer and their respective successors
and assigns.
Section 4.5 Counterparts. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument. Telecopies of signatures shall be binding and effective as
originals.
Section 4.6 ENTIRE AGREEMENT. The Purchase Agreement, as amended by
this Amendment, and all other instruments, documents and agreements executed
and delivered in connection with the Purchase Agreement and this Amendment
embody the final, entire agreement among the parties hereto and supersede any
and all prior commitments, agreements, representations and understandings,
whether written or oral, relating to the Purchase Agreement and this Amendment,
and may not be contradicted or varied by evidence of prior, contemporaneous or
subsequent or oral agreements or discussions of the parties hereto. There are
no oral agreements among the parties hereto.
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This Amendment is executed and delivered on the date set forth on the
first page of this Amendment.
Seller:
STAR CABLE ASSOCIATES
By: STAR CABLE MANAGEMENT, INC. general
partner
By: XXXXXXX X. TALARNO
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Name: XXXXXXX X. TALARNO
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Title: EXECUTIVE VICE PRESIDENT - CFO
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Buyer:
TELECABLE ASSOCIATES, INC., a Texas
corporation
By: XXXX X. XXXXXXX
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Xxxx X. Xxxxxxx, President
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