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EXHIBIT 10.4(a)
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "AGREEMENT") is made and entered
into this 19th day of March, 1996, by and between COLUMBIA DBS SAN XXXX OBISPO,
L.P., a Delaware limited partnership ("BUYER") and PACIFIC COAST DBS, a
California corporation ("SELLER").
RECITALS
A. Seller owns and operates an exclusive distributorship of the
National Rural Telecommunications Cooperative's DBS Services and of Xxxxxx
Communications Galaxy, Inc.'s DirecTv service in San Xxxx Obispo County,
California (the "Business").
B. Seller desires to sell, and Buyer desires to purchase for the price
and on the terms hereinafter set forth, Seller's assets used and useful in the
operation of the business.
AGREEMENTS
NOW, THEREFORE, in order to implement said sale and purchase, and in
consideration of the mutual agreements set forth herein, the parties agree as
follows:
SECTION 1. DEFINITIONS.
1.1 DEFINED TERMS. As used herein, the following terms shall have the
following meanings:
ACCOUNTS RECEIVABLE shall have the meaning set forth in Section 3.7(e)
of this Agreement.
ACQUISITION DOCUMENTS shall mean this Agreement, the Security and
Pledge Agreement, the Security Agreement, Secured Promissory Note, Collateral
Assignment of Marketing and Distribution Agreement and any and all other
instruments of assignment or assumption or other agreements, documents, letters,
certificates or instruments executed pursuant to or in connection with this
Agreement or the transactions contemplated hereby.
AFFILIATE, when used with reference to a specified Person, shall mean
any Person that is a spouse, parent, grandparent, lineal descendant, sibling or
other relative of such Person or any Person that, directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, the specified Person.
ASSETS means assets and rights of every kind and nature, real, personal
and mixed, tangible and intangible, other than the Excluded Assets, owned by
Seller or in which
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Seller has an interest (as lessee, licensee or otherwise), including all assets
and rights acquired by Seller between the date hereof and the Closing Date, and
which are used or usable in connection with the operation of the Business,
including, without limitation:
(a) All Tangible Assets and, to the extent assignable, all Asset
Warranties;
(b) the NRTC/Member Agreement;
(c) the DirecTv Agreement;
(d) the Other Assumed Contracts;
(e) all files, books and records including, without limitation,
computer programs, tapes and electronic data processing software, accounting
journals and ledgers, copies of NRTC reports and correspondence and other
documents relating to the NRTC/Member Agreement and the DirecTv Agreement and
compliance therewith;
(f) All Customers, and all additional customers obtained between the
date hereof and the Closing Date in accordance with this Agreement;
(g) All goodwill, know-how, slogans, jingles, trademarks, trade names,
service marks, logos, copyrights, customer lists and other intangible assets
used or usable in connection with the Business; and
(h) Accounts Receivable.
ASSET WARRANTIES shall mean all manufacturer's, distributor's or
seller's warranties with respect to the Tangible Assets.
BUSINESS shall have the meaning ascribed to it in Recital A.
BUSINESS DAY shall mean any day except a Saturday, Sunday or other day
on which commercial banks are required or authorized to close in New York.
CABLE PROGRAMMING shall have the meaning ascribed to such term in the
NRTC/Member Agreement.
CLOSING AND CLOSING DATE shall have the meanings set forth in Section
2.5 of this Agreement.
COLLATERAL ASSIGNMENTS shall mean the Collateral Assignment of
Marketing and Distribution Agreement substantially in the form attached hereto
as Exhibit A, the execution and delivery by Seller, Buyer, NRTC and Xxxxxx shall
be a condition to Closing.
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COMMERCIAL ESTABLISHMENT shall have the meaning ascribed to such term
in the NRTC/Member Agreement.
COMMITTED MEMBER RESIDENCE shall have the meaning ascribed to such term
in the NRTC/Member Agreement.
CURRENT ASSETS shall mean the current assets of Seller, as shown on the
Closing Date Balance Sheet, acquired by Buyer at Closing.
CURRENT LIABILITIES shall mean the current liabilities of Seller, as
shown on the Closing Date Balance Sheet, assumed by Buyer at Closing.
CUSTOMER shall mean any user of the DBS Services or other services
distributed by Seller (including a Subscriber).
DBS SERVICES shall have the meaning ascribed to such term in the
NRTC/Member Agreement.
DIRECTV means DirecTv, Inc., a California corporation.
DIRECTV AGREEMENT shall mean any and all agreements between Seller and
DirecTv relating to Seller's application or authorization to act as a dealer of
DirecTv programming packages, together with any amendments thereto.
ELECTION DATE shall mean either the Early Election Date or the Late
Election Date, as applicable.
EQUIPMENT shall mean office equipment as outlined on Schedule 3.5(a)
(Fixed Assets and Fixed Assets-Physical Listing) and all other tangible personal
property and facilities owned, used or held for use in the Business (other than
Inventory).
EXCLUDED ASSETS shall mean (a) Seller's corporate seal, minute books,
charter documents, corporate stock record books and such other books and records
relating to the organization, existence or capitalization of the Seller; (b) all
contracts of insurance and insurance proceeds relating to events arising prior
to the Closing Date, insurance claims made by Seller relating to property or
equipment repair, replaced or restored by Seller prior to the Closing Date; (c)
all pension, profit sharing or deferred (Section 401(k)) plans and trusts and
any assets thereof and any other employee benefit plan or arrangement and the
assets thereof, if any; (d) all claims in and to refunds for federal, state or
local income or other taxes payable for periods prior to the Closing Date; (e)
all contracts that have terminated or have expired prior to the Closing Date in
the ordinary course of business and as permitted under the terms hereof, and any
contracts which do not constitute the NRTC/Member Agreement, the DirecTv
Agreement or Other Assumed Contracts; (f) cash on hand; and (g) any assets
listed on
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SCHEDULE 1. 1.
FIXED FINAL PAYMENT shall mean Four Million Dollars ($4,000,000).
GAAP shall mean generally accepted accounting principles, consistently
applied
HGC DIRECTV shall have the meaning ascribed to such term in the
NRTC/Member Agreement.
XXXXXX shall mean Xxxxxx Communications Galaxy, Inc.
INDEPENDENT ACCOUNTANT shall mean a "Big 6 " Accounting Firm (or other
FIRM mutually acceptable to Buyer and Seller) which accounting firm shall not
have provided any services to Buyer, Seller or any of their Affiliates for the
prior five (5) years.
INVENTORY shall mean undamaged subscriber units contained in sealed
original cartons and recoverable units on consignment.
LICENSES shall mean all governmental or private licenses, permits,
authorizations and rights, including the NRTC/Member Agreement and the DirecTv
Agreement, all rights in pending applications, and all additions thereto,
including renewals and modifications and applications therefor, with respect to
the Business, all of which Licenses are described in Schedule 3.10 of this
Agreement.
LIEN shall mean with respect to any property or asset, any mortgage,
lien, pledge, charge, security interest, encumbrance or other adverse claim or
restriction of any kind in respect of such property or asset. For purposes of
this Agreement, any restriction or limitation with respect to a security or
other ownership interest (including any restriction on the right to vote, sell
or otherwise dispose of such security or ownership interest) shall constitute a
"Lien" thereon. For the purposes of this Agreement, a Person shall be deemed to
own subject to a Lien any property or asset which it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
relating to such property or asset.
NON-SELECT SERVICES shall have the meaning ascribed to such term in the
NRTC/Member Agreement.
NOTE shall have the meaning ascribed to such term in Section
2.2(a)(ii).
NRTC shall mean the National Rural Telecommunications Cooperative, a
District of Columbia corporation.
NRTC MEMBER AGREEMENT shall mean that certain NRTC/Member Agreement for
Marketing and Distribution of DBS Services dated December 16, 1992, by and
between
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Seller and NRTC, as amended by that certain Amendment to NRTC/Member Agreement
for Marketing and Distribution of Services dated March 22, 1994, and as further
amended from time to time.
OTHER ASSUMED CONTRACTS shall mean all equipment leases, real estate
leases and other contracts and agreements described in SCHEDULE 3.19 to this
Agreement other than the NRTC/Member Agreement and the DirecTv Agreement,
together with any additional contracts entered into by Seller between the date
hereof and the Closing Date in accordance with this Agreement which Buyer
expressly elects to assume.
PERSON shall mean an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a government or political subdivision or agency or instrumentality thereof.
PROGRAMMING shall mean Cable Programming and HCG DirecTv.
SECURITY AGREEMENT means that certain Security Agreement substantially
in the form attached hereto as EXHIBIT C, the execution and delivery of which is
a condition to Closing.
SECURITY AND PLEDGE AGREEMENT means that certain Security and Pledge
Agreement executed by all of the partners of Buyer substantially in the form
attached hereto as Exhibit D, the execution and delivery of which is a condition
to Closing.
SUBSCRIBER as of any date shall mean a Customer of the Business who, at
a minimum, is an active subscriber subscribing to a package of basic services
and: (1) on the last date of the calendar month prior to such date, whose
account is not more than sixty (60) days past due from the date payment is due
in an amount greater than $ 10; (2) who is not an employee or agent of the
service provider or charged a fee that is nominal (eg., demonstration unit) or
substantially below the service provider's published rates or substantially
below its rates included in any generally available discount package; and (3)
who has not given notice of intent to discontinue service. The Active Subscriber
number shall be derived from the NRTC Ad-Hoc Report - Active Subscriber Listing.
Notwithstanding any other provision of this Agreement, clause (1) of the
preceding definition shall only be applicable to the determination of the number
of Subscribers for which Seller is the service provider and shall not be
applicable to the determination of the number of Subscribers for which Buyer is
the service provider.
SUBSCRIBER SETTLEMENT DATE shall mean the Subscriber Settlement Date
determined in accordance with Section 2.2(a)(iii).
TANGIBLE ASSETS shall mean those certain assets (including Equipment)
identified on Schedule 3.5(a) to this Agreement, together with any additional
such assets
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relating to the Business acquired by the Seller between the date hereof and the
Closing Date.
1.2 OTHER DEFINITIONAL PROVISIONS. For purposes of this Agreement and
the other Acquisition Documents, the following additional rules of construction
shall apply:
(a) wherever from the context it appears appropriate, each term
stated in either the singular or plural shall include the singular and the
plural, and pronouns stated in the masculine, feminine or neuter gender shall
include the masculine, the feminine and the neuter;
(b) the term "including" shall not be limiting or exclusive, unless
specifically indicated to the contrary; and
(c) all references to "sections" or "subsections" in an Acquisition
Document shall be to sections or subsections of such Acquisition Document,
unless otherwise specifically provided.
SECTION 2. PURCHASE AND SALE OF ASSETS.
2.1 SALE OF ASSETS; ASSUMPTION OF CERTAIN LIABILITIES.
(a) Subject to the provisions of this Agreement, Seller agrees to
sell, and Buyer agrees to purchase, at Closing, Seller's right, title and
interest in and to the Assets.
(b) Upon the sale and purchase of the Assets, Buyer shall assume
Seller's obligations to be performed after 12:01 A.M. on the day following the
Closing Date (but not obligations to have been performed by Seller prior to such
time) under, and as set forth in the NRTC/Member Agreement, the DirecTv
Agreement, and the Other Assumed Contracts, but only to the extent that such
obligations arise out of the operation of the Business by Buyer on or after the
Closing Date (including, without limitation, any obligations of Seller pursuant
to any NRTC Wholesale Invoice); provided, that as to any Other Assumed Contract
which, for the assignment thereof by Seller, requires the consent of a party
thereto other than the Seller and as to which such consent has not been
obtained, Buyer shall assume Seller's obligations to be performed under such
Other Assumed Contract only with respect to the period that Buyer receives the
benefits to which Seller is entitled under such Other Assumed Contract.
(c) Except as expressly set forth in Section 2. 1 (b), above, Buyer
shall not assume or be deemed to have assumed under this Agreement, the
Acquisition Documents or otherwise by reason of the transactions contemplated by
this Agreement or the Acquisition Documents, any liabilities, obligations or
commitments of Seller of any nature whatsoever, absolute or contingent, known or
unknown, and the execution, delivery and performance of this Agreement and the
Acquisition Documents shall not render Buyer liable for any such liability,
obligation, undertaking, expense or agreement. Without limiting the generality
of the
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foregoing, Buyer shall in no event assume or be liable for any liability or
obligation of Seller arising out of any collective bargaining agreement,
insurance, pension, retirement. deferred compensation, incentive bonus or profit
sharing or employee benefit plan or trust, or any litigation, proceeding or
claim by any person or entity relating to the Business or the operations thereof
prior to Closing, whether or not such litigation, proceeding or claim is
pending, threatened or asserted before, on or after the Closing Date.
(d) Buyer shall purchase, at Closing, the Inventory. The purchase price
for the Inventory in sealed original cartons shall be equal to Seller's
wholesale cost of the Inventory. Recoverable Inventory units on consignment
shall be purchased at fifty percent (50%) of Seller's wholesale cost. Buyer and
Seller shall use their best efforts to agree in good faith on an Inventory count
at the Closing. Within thirty (30) days after Closing, Buyer shall conduct a
physical Inventory count, accompanied by Seller's representatives and the
difference between the value of Inventory estimated at Closing and the value of
Inventory determined pursuant to the physical count shall be included as part of
the Final Closing Adjustment pursuant to Section 2.4(b).
2.2 PURCHASE PRICE; DEPOSIT
(a) Purchase Price. The purchase price for the Assets (the "Purchase
Price") shall be $1,500,000 (the "Closing Payment"), payable at Closing, plus
twenty-four (24) equal monthly payments of $20,000 (the "Monthly Payments"),
plus a final payment (the "Subscriber Settlement Payment") payable on the date
that is twenty-four (24) months or the date that is thirty (30) months after
Closing, at Seller's election, payable as follows:
(i) the Closing Payment will be paid by Buyer to Seller at
Closing by wire transfer of immediately available funds to an
account designated in writing by Seller at least three
Business Days prior to the Closing Date;
(ii) the Monthly Payments and the Subscriber Settlement
Payment will be evidenced by, and paid to Seller in accordance
with the terms of a secured promissory note of Buyer to be
issued to Seller at Closing in the form attached hereto as
Exhibit B (the "Note"); and
(iii) the Subscriber Settlement Payment will be paid by Buyer
to Seller on the Subscriber Settlement Date in accordance with
the terms of the Note. For purposes of this Section
2.2(a)(iii), the Subscriber Settlement Payment and the
Subscriber Settlement Date shall be determined as follows:
(A) If, within thirty (30) days prior to the date that is
eighteen (18) months from the Closing Date (the
"Early Election Date"), Seller delivers written
notice to Buyer (an "Early Election Notice") that it
so elects, the Subscriber Settlement Date shall be
the date that is twenty-four (24)
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months after the Closing Date, or, if such date is
not a Business Day, the next following Business Day.
(B) If the Seller does not deliver an Early Election
Notice, the Subscriber Settlement Date shall be the
date that is thirty (30) months after the Closing
Date, or if such date is not a Business Day, the next
following Business Day.
(C) On the Subscriber Settlement Date, the Seller shall
receive Four Million Dollars ($4,000,000.00) (the
"Fixed Final Payment") or the Contingent Final
Payment, whichever is greater.
(D) For purposes of this Section 2.2(a)(iii), the
"Contingent Final Payment" shall be equal to the
total of the following amounts per Subscriber as of
the applicable Subscriber Settlement Date:
NUMBER OF AMOUNT PER (EXAMPLE @ 15,000
SUBSCRIBERS SUBSCRIBER SUBSCRIBERS)
----------- ---------- ------------
0 - 1,000 $ 0 $ 0
1,001 - 3,300 $1,500 $ 3,450,000
3,301 - 6,600 $ 750 $ 2,475,000
6,601 - 9,900 $ 600 $ 1,980,000
9,901 - 13,200 $ 550 $ 1,815,000
13,201 or above $ 400 $ 720,000
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$10,440,000
(b) Pro Rations. All expenses and prepayments in connection with the
Assets shall be prorated among Buyer and Seller as of 12:01 A.M. on the day
following the Closing Date, and the net amount thereof shall be paid to Seller
or Buyer, as appropriate. Such prorations shall include, without limitation, all
Customer programming prepayments, rental payments, business and license fees
(but only for Licenses transferred hereunder) and utility expenses. Seller shall
be responsible for all expenses arising out of contracts, agreements and
commitments of the Business (other than the NRTC/Member Agreement, DirecTv
Agreement and the Other Assumed Contracts, performance of which shall be
prorated pursuant to Section 2.1 hereof) for all periods prior to the Closing
Date. Buyer shall in no event be responsible for any amounts associated with the
Excluded Assets. Expenses, costs and liabilities incurred shall be allocated to
the time of occurrence of such programs and announcements without regard to the
date of payment therefor. All prorations shall, to the extent feasible, be
determined and paid on the Closing Date, with a final settlement and payment
thereof to be made as part of the Final Consideration Adjustment pursuant to
Section 2.4. If any dispute arises under this Agreement regarding amounts
determined in accordance
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with this Section, it shall be referred to an Independent Accountant. The
determination made by the Independent Accountant shall be conclusive and binding
on each party and the fees of the Independent Accountant shall be divided
equally between Buyer and Seller.
2.3 ALLOCATION OF PURCHASE PRICE AMONG ASSETS. The Purchase Price shall
be allocated among the Assets by mutual agreement which Buyer and Seller shall,
reasonably and in good faith, determine prior to Closing. Buyer and Seller agree
to be bound by any such agreement to file all returns and reports (tax and
otherwise) on the basis of such allocation.
2.4 CONSIDERATION ADJUSTMENTS. (a) The Closing Payment shall be reduced
by the parties' good faith estimate of the amount by which Current Liabilities
exceed Current Assets, or increased by the amount that Current Assets exceed
Current Liabilities (the "CLOSING ADJUSTMENT").
(b) Promptly after the Closing, Seller shall prepare a balance
sheet of Seller as of the Closing Date. Such balance sheet is hereinafter
called the "CLOSING DATE BALANCE Sheet" and shall be prepared on a basis
consistent with the "Pro Forma Balance Sheet attached hereto as Exhibit 2.4(b).
The Closing Date Balance Sheet shall include all assets and liabilities of
Seller. Buyer shall be permitted to net accounts payable to and accounts
receivable from Coast TV, Inc.
The NRTC accounting data in the Closing Date Balance Sheet shall be
derived from NRTC Central Billing System Reports, including, but not limited to:
Report 18A (Subscriber Accounts Receivable), Report 19A (Accounts Receivable
Summary), Report 17 (Unearned Revenue Report), and the NRTC Wholesale Invoice.
The NRTC accounting data for the Closing Date Balance Sheet shall be prepared in
compliance with NRTC recommendations as stated in the following documents: NRTC
DBS Member Audit Guide, DBS Participant Accounting Handbook, NRTC DBS Member
Standard Journal Entry Reference Manual.
As soon as practicable after the Closing Date, Seller shall also
provide to Buyer A list of Customers including account type in the form of
NRTC's Ad Hoc Report Active Subscribers Listing, dated as of the Closing Date.
Seller shall also provide a list of employees and agent accounts to adjust the
total active subscriber amount.
(c) No later than 30 days after the Closing, or within three days
after receipt of the necessary accounting data, whichever is later, Seller
shall deliver to Buyer a copy of the Closing Date Balance Sheet together with
its determination of the Closing Adjustment pursuant to the Closing Date
Balance Sheet. The Closing Date Balance Sheet and the determination of the
Closing Adjustment shall be subject to review by Buyer and its auditors on
behalf of Buyer at Buyer's expense. Such review by Buyer shall be completed
within fifteen (15) business days after delivery of the Closing Date Balance
Sheet to Buyer. In the event of any disagreement between Seller and Buyer
regarding the amount of the Closing Adjustment which has not been resolved
within sixty (60) days after the Closing
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Date, unless said date shall have been extended by mutual agreement of the
parties, the dispute shall be referred to an Independent Accountant, whose
determination shall be made within thirty (30) days of such referral, and shall
be final and binding upon the parties. The fees and expenses of said Independent
Accountant shall be borne by Seller and the Buyer equally. The determination of
the Closing Adjustment pursuant to this Section 2.4(b) shall be referred to as
the "FINAL CLOSING ADJUSTMENT".
(d) If the Final Closing Adjustment is greater than the Closing
Adjustment agreed to pursuant to Section 2.4(a), then the Seller shall pay the
difference to Buyer in cash, within 30 days after delivery to it of the Closing
Date Balance Sheet. If the Final Closing Adjustment is less than the Closing
Adjustment agreed to pursuant to Section 2.4(a), then Buyer shall pay the
difference to Seller within thirty (30) days after the delivery of the Closing
Date Balance Sheet; provided, however, in either case that if the Buyer shall
disagree with the Closing Date Balance Sheet, the payment shall be made within
thirty (30) days of the final determination of such disagreement. The parties
agree to add or deduct such payment from the next payment to be made under the
Note.
2.5 TIME AND PLACE OF CLOSING: TERMINATION OF AGREEMENT. The closing of
the purchase and sale provided for in this Agreement (herein called the
"CLOSING") shall be held at the office of Xxxxx and Xxxxxxxx, 0000 Xxxxxxx
Xxxxxx, Xxx Xxxx Xxxxxx, Xxxxxxxxxx at 10:00 A.M. (the "CLOSING DATE") (i) on
the last Business Day of the month in which all of the conditions precedent set
forth in Section 7 hereof shall have been satisfied or waived, (ii) at Buyer's
election, on the calendar day of such month on which NRTC's accounting period
closes, or (iii) such other place, time or date as the parties may agree upon in
writing. Either party may terminate this Agreement by written notice to the
other party if the Closing has not occurred by April 30, 1996.
2.6 THE CLOSING. At the Closing:
(a) Seller shall transfer and assign to Buyer the Assets, and shall
deliver to Buyer such instruments or agreements of conveyance, transfer and
assignment as shall be sufficient to effectuate such conveyance, transfer and
assignment. All instruments shall be in form and substance reasonably
satisfactory to Buyer;
(b) Seller shall deliver to Buyer all originals or copies, as
provided herein, of Seller's files and records which are relevant to the
Assets, such relevance to be determined in Buyer's reasonable discretion, and
Seller shall put Buyer in actual possession of the Assets; and
(c) Seller and Buyer shall execute and deliver, each to the other.
the documents required to be executed and delivered by such parties pursuant to
Sections 7.2 and 7.3, respectively.
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(d) Buyer shall have completed the wire transfer referred to in
Section 2.2(a)(i), above.
2.7 FURTHER ASSURANCES. From and after Closing, Seller and Buyer shall
do, execute, acknowledge and deliver or cause to be done, executed, acknowledged
and delivered, all such further acts, deeds, assignments, documents,
instruments, transfers, conveyances, discharges, releases, assurances and
consents as the other party may, from time to time, reasonably request to
confirm, perfect and evidence the transfers and transactions contemplated by
this Agreement.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER.
In order to induce Buyer to enter into this Agreement, Seller hereby
represents and warrants to Buyer that the following statements are true, correct
and complete. The representations and warranties of Seller set forth in this
Agreement-and in any other Acquisition Document are continuing in nature and
Seller shall promptly inform Buyer of any matter which would cause any such
representations or warranties to be untrue, incorrect or incomplete.
3.1 INCORPORATION. The Seller is a duly organized and validly existing
corporation in good standing under the laws of the State of California. The
Seller has full corporate power and authority to carry on its business and
operations as presently conducted and as planned to be conducted and is duly
qualified to do business in each jurisdiction in which it is either doing
business or in which the failure to qualify would have an adverse effect on the
Seller. Seller does not directly or indirectly own or otherwise control any
capital stock of, or have any ownership interest in, any corporation,
partnership or other entity. The current ownership structure has been approved
by all necessary governmental agencies. Attached hereto as Schedule 3.1 is a
complete and correct copy of the Articles of Incorporation and Bylaws (together
with all amendments thereto and restatements thereof) of the Seller.
3.2 CORPORATE AND GOVERNMENTAL AUTHORIZATIONS.
(a) The Seller has full corporate power and authority to execute
and deliver this Agreement and the other Acquisition Documents to which it is a
party, to perform its obligations hereunder and thereunder and to consummate
the transactions(s) contemplated by this Agreement. The execution, delivery and
performance of this Agreement and the other Acquisition Documents to which the
Seller is a party have been duly authorized by all requisite corporate action
of the Seller.
(b) No consent or authorization of, or filing with, any Person is
required on the part of the Seller in connection with the Seller's execution,
delivery or performance of this Agreement and the other Acquisition Documents to
which it is a party except for (a) those consents and authorizations listed on
Schedule 3.2(b), all of which have been obtained
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or made or will be obtained or made prior to Closing. Notwithstanding the
foregoing, Seller makes no representation or warranty with regard to the
application of California franchise law to the NRTC/Member Agreement. Buyer
shall have made Buyer's own determination with regard to such determination.
3.3 BINDING EFFECT. This Agreement has been duly and validly
authorized, executed and delivered by Seller. This Agreement constitutes, and,
on the Closing Date, the other Acquisition Documents executed and delivered by
the Seller will constitute the legal, valid and binding obligation of Seller
enforceable against Seller in accordance with their respective terms, subject to
bankruptcy, insolvency and similar laws of general application affecting
creditors' rights and remedies.
3.4 NO CONFLICT. Neither the execution and delivery by Seller of this
Agreement or the other Acquisition Documents nor the consummation of the
transactions contemplated by this Agreement, and the other Acquisition Documents
(i) violate any applicable law, regulation, order, judgment, injunction, decree,
rule or ruling of any governmental authority, (ii) violate any provision of the
articles of incorporation or bylaws of Seller, (iii) result in any breach of, or
constitute (with due notice or lapse of time or both) a default under any
agreement, instrument, license or permit to which Seller is a party or by which
or to which Seller or any of its assets are subject or bound, (iv) result in the
creation or imposition of any lien, charge or encumbrance on any of the Assets
other than as set forth in this Agreement, or (v) require the consent of any
third party not referenced herein.
3.5 TITLE TO PROPERTIES: LIENS: CONDITION OF PROPERTIES.
(a) Schedule 3.5(a) lists all Tangible Assets of Seller which
consists of all tangible assets used or otherwise necessary to conduct the
Business. Seller has good and valid title to the Tangible Assets free and clear
of any Lien. All Tangible Assets material to the operation of the Business are
in good working order and repair and comply in all material respects with
applicable rules, regulations and standards regarding their intended use.
Without limiting the generality of the foregoing, except as indicated in
Schedule 3.5(a), the Seller uses no furniture, fixtures or equipment which it
does not own.
(b) All leases of personal property to which Seller is a party are
valid, binding and enforceable in accordance with their terms, and neither
Seller nor, to Seller's knowledge, any other party thereto is in default
thereunder. Seller is the sole and exclusive owner of all right, title and
interest in and to all Assets. All of the Assets are free and clear of all
security interests, pledges, liens, conditional sales agreements and
encumbrances.
(c) Schedule 3.5(c) contains a description of all of Seller's
interests, including leasehold interests and easements, and rights in and
agreements with respect to real property used or intended for use in connection
with the operations of the Business (the "Real Property").
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(d) Seller has good title to the non-fee estates identified on
Schedule 3.5(c). The contracts with respect to Real Property listed on Schedule
3.5(c) constitute valid and binding obligations of Seller and of all other
parties thereto, and are in full force and effect as of the date hereof. Seller
is not in default under any of the contracts with respect to Real Property and,
to the best of Seller's knowledge, the other parties to such contracts are not
in default thereunder. Seller has not received or given written notice of any
default thereunder from or to any of the other parties thereto. Schedule 3.5(c)
lists all third party consents necessary to assign such contracts. Except as
disclosed on Schedule 3.5(c), Seller has full legal power and authority to
assign its rights under the contracts with respect to Real Property listed and
described on Schedule 3.5(c) to Buyer in accordance with this Agreement on
terms and conditions no less favorable than those in effect on the date hereof,
and such assignment will not affect the validity, enforceability or continuity
of any such contracts.
3.6 [INTENTIONALLY OMITTED.]
3.7 FINANCIAL CONDITION OF SELLER.
(a) Copies of the following financial statements (the "FINANCIAL
STATEMENTS") have heretofore been delivered to the Buyer:
(i) the unaudited balance sheet of the Seller as of December
31, 1994, and statements of operations, retained earnings and
cash flows for the fiscal year then ended; and
(ii) the unaudited balance sheet of the Seller as of February
9, 1996, and statements of operations, retained earnings and
cash flows for the previous two (2) month accounting period
close, prepared by the Seller (the "LATEST FINANCIAL
STATEMENTS").
The Financial Statements, together with the notes thereto, (i) are in accordance
with the books and records of the Seller, (ii) present fairly and accurately the
financial condition of the Seller as of the dates of the balance sheets, (iii)
present fairly and accurately in all material respects the results of operations
of the Seller for the periods covered by such statements, and (iv) have been
prepared in accordance with GAAP except as noted therein, and in the.. case of
the Latest Financial Statements, subject to normal year-end adjustments. As of
the Closing, the Seller shall have no debts, liabilities or obligations of any
nature (whether absolute, accrued or contingent and whether due or to become
due) that are not reflected on the Financial Statements or that are not
otherwise disclosed on schedules delivered pursuant to this Agreement. The
Financial Statements include appropriate reserves for all taxes and other
liabilities accrued as of the date of such statements but not yet payable.
Notwithstanding the foregoing, the parties acknowledge that certain calculations
of credits and debits relating to the accounting with the NRTC, including, but
not limited to the calculation of unearned revenues and advance payments, may
not be capable of calculation prior to Closing, and will
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therefore be addressed,pursuant to the Closing Adjustment concepts outlined in
Section 2.4, above.
(b) Except to the extent provided in the Latest Financial
Statements, there are no material liabilities or obligations of Seller or
otherwise relating to the Business. Since the date of the Latest Financial
Statements, there has been no change in the financial condition of Seller or
results of operations of the Business, or either of them, nor has any other
event or condition occurred which may have or has had a material adverse effect
on the Seller or the Business.
(c) All federal, state, county and local tax returns, reports and
declarations of estimated tax or estimated tax deposit forms required to be
filed by Seller have been duly and timely filed or extensions taken in timely
fashion. Seller has timely paid all taxes which have become due pursuant to such
returns or pursuant to any assessment received by it, and has paid in full all
installments of estimated taxes due. All taxes, levies and other assessments
which Seller is required by law to withhold or to collect have been duly
withheld and collected, and have been paid over to the proper governmental
authorities or are held by Seller for such payment.
(d) Seller's books and records are complete and accurately and
fairly reflect the transactions and dispositions of the Seller's assets. The
Seller has consistently maintained a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are executed
in accordance with management's general or specific authorization, (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP or any other criteria applicable to such
statements and to maintain accountability for such assets, (iii) access to
assets is permitted only in accordance with management's general or specific
authorization and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable intervals and appropriate action is taken
with respect to any differences. Notwithstanding the foregoing, the parties
acknowledge that certain calculations of credits and debits relating to the
accounting with the NRTC, including, but not limited to the calculation of
unearned revenues and advance payments, may not be capable of calculation prior
to Closing, and will therefore be addressed pursuant to the Closing Adjustment
concepts outlined in Section 2.4, above.
(e) The accounts receivable of the Seller relating to the
Business as set forth in the Latest Financial Statements, and such accounts
receivable that have arisen since the date of the Latest Financial Statements
(collectively, the "ACCOUNTS RECEIVABLE"), are and will be, unless previously
collected, valid and enforceable obligations due to the Seller, collectible by
the Seller in the ordinary course of business, and are not subject to any
contest, valid defense, claim or set-off, except routine customer complaints of
an immaterial nature.
3.8 ABSENCE OF CERTAIN CHANGES. Since February 9, 1996, or as otherwise
provided, except as expressly disclosed in this Agreement or the Schedules
thereto, there has
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not been (a) any pending or threatened union organizational activity, labor
dispute or grievance, strike or work stoppage affecting the Business; (b) any
physical damage, destruction or loss affecting the Business where the affected
assets have not been restored, repaired or replaced with assets of similar
quality, value and utility; (c) any material contract, commitment or transaction
entered into or consummated respecting the Business; (d) any sale, assignment,
lease or other transfer or disposition of any of Seller's properties or assets
except in the normal course of business; (e) any increase in compensation
payable or to become payable to, or any bonus paid or agreed to be paid to, any
employee or agent of the Business; or (f) any change in the service area of the
Business or any electronic interference with the Business or the System.
3.9 COMPLIANCE WITH LAWS AND OTHER INSTRUMENTS. Seller is not in
violation or breach of, or in default under, (a) any provision of its or other
organizational documents, (b) any provision of any law or regulation applicable
to it or to which any of its assets are subject, or any other state, federal, or
municipal administrative agency, which violation or breach would have a material
adverse effect on the Seller or the Business (and no notice has been received of
any violation or breach of law or regulation whatsoever), except as may be
listed in the Schedules to this Agreement, (c) any order, judgment or award of
any court, tribunal or state, federal, or municipal administrative or regulatory
authority applicable to it or to which any of its assets are subject, or (d) any
material agreement or instrument to which it is a party or to which any of its
assets is bound, including, without limitation, the NRTC/Member Agreement and
the DirecTv Agreement.
3.10 INTELLECTUAL PROPERTY. Schedule 3.10 lists all material
copyrights, trademarks, tradenames, service marks, Licenses, patents, permits,
jingles, privileges and other similar intangible property rights and interests
(exclusive of those required to be listed in other Schedules) applied for,
issued to or owned by Seller, or under which Seller is licensed or franchised,
and used or useful in the conduct of the businesses and operations of the
Business, all of which rights and interests are issued to or owned by Seller, or
if licensed or franchised to Seller, are valid and uncontested. Seller has
delivered to Buyer copies of all material documents, if any, establishing such
rights, Licenses or other authority. To Seller's knowledge, there is no pending
or threatened proceeding or litigation affecting or with respect to the
Intellectual Property. Seller has received no notice and has no knowledge of any
infringement or unlawful use of such property. The intellectual property listed
in Schedule 3.10 includes all such property necessary to conduct the Business as
now conducted.
3.11 LITIGATION.
(a) Except as set forth in Schedule 3.11 (a), there are no
actions, suits, proceedings or investigations (whether or not purportedly on
behalf of Seller) pending or threatened against or affecting Seller or the
Business at law or in equity or admiralty, or before or by any federal, state,
municipal or other governmental department, commission, board, agency or
instrumentality, domestic or foreign which could have a material adverse
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effect on Seller or the Business, nor has any such action, suit, proceeding or
investigation been pending during the 12-month period preceding the date of this
Agreement.
(b) Except as listed in Schedule 3.11(b), Seller is not operating
under or subject to, or in default with respect to, any order, writ, injunction
or decree of any court or federal, state, municipal or other governmental
department, commission, board, agency or instrumentality, domestic or foreign.
3.12 EMPLOYEE INFORMATION.
(a) Schedule 3.12(a) contains a true and complete list of all
Persons employed in connection with the Business. Except as set forth on
Schedule 3.12(a), there are no employment contracts or other compensation
arrangements respecting any employees of the Seller. It is acknowledged that
Buyer shall not be responsible to hire any of the employees of Seller, nor be
bound by any employment contracts or other compensation agreements regarding
employees of Seller.
3.13 FINDER'S FEE. No agent, broker or finder has acted for Seller in
connection with this Agreement, and the transactions contemplated hereby, and
Seller hereby agrees to indemnify and save Buyer harmless from any claims of
Persons claiming by or through Seller for commissions or fees by reason of this
Agreement or the transactions contemplated by this Agreement.
3.14 [INTENTIONALLY OMITTED.]
3.15 NON-FOREIGN STATUS. Seller is not a "non-resident alien", "foreign
corporation", "foreign partnership", "foreign trust" or "foreign estate" within
the meaning of the Internal Revenue Code of 1986, as amended, and the
regulations thereunder and Seller agrees, at the Closing, to deliver to Buyer
any affidavit or certificate required pursuant to the Internal Revenue Code or
any regulations thereunder specifically relating to the matters represented in
this Section.
3.16 [INTENTIONALLY OMITTED.]
3.17 INSOLVENCY. No insolvency proceedings of any character, including
without limitation, bankruptcy, receivership, reorganization, composition or
arrangement with creditors, voluntary or involuntary, affecting Seller or any of
the Business Assets, are pending or threatened, and Seller has not made any
assignment for the benefit of creditors or taken any action in contemplation of
or which would constitute the basis for the institution of such insolvency
proceedings.
3.18 SECURITIES LAW. Seller is not now and has never been subject to
the reporting requirements of the Securities and Exchange Commission ("SEC").
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3.19 CONTRACTS. Except for the contracts, plans, agreements, and leases
listed in Schedule 3.19, true and complete copies of which have been furnished
to Buyer as of the date hereof, Seller is not a party to any (i) contracts for
the future purchase of materials, supplies, equipment or services; (ii)
contracts not made in the ordinary and usual course of business; (iii)
employment or consulting contracts; (iv) contracts with any labor union or other
labor organization; (v) guarantees or accommodations; (vi) leases of personal or
real property; (vii) or shareholders of Seller, or (viii) contracts continuing
for a period of more than six (6) months from their respective dates. Seller has
performed all obligations required to be performed by it to date (including
having paid any amounts required to have been paid to date under any agreements
including, but not limited to, Programming agreements, all franchise fees, and
all payments to NRTC, Xxxxxx, or DirecTv and has not breached and is not in
default under any agreement listed in Schedule 3.19 or to which it is -a party
or by which it is bound, and all of the same are enforceable in accordance with
their terms. All such agreements are in full force and effect and there does not
exist any default or event or condition which, after notice or lapse of time or
both, would constitute a default thereunder by Seller or to the knowledge of
Seller, by any other party thereto.
3.20 NRTC MEMBERSHIP; DBS DISTRIBUTION RIGHTS
(a) Attached hereto as Schedule 3.20(a), is a true and complete
copy of the NRTC/Member Agreement together with all exhibits thereto.
(b) Attached hereto as Schedule 3.20(b) is a true and complete
copy of the DirecTv Agreement, with all exhibits thereto.
(c) Pursuant to the NRTC/Member Agreement, Seller has the
exclusive right to market, sell and retain revenue from Programming (except
Non-Select Services) transmitted over the NRTC/Member Agreement directly to
Committed Member Residences under the terms and conditions set forth in the
NRTC/Member Agreement. Seller also has the right to market, sell and retain
revenue from the distribution of Programming (except NonSelect Services)
directly to Commercial Establishments under the terms and conditions set forth
in the NRTC/Member Agreement.
(d) Pursuant to the NRTC/Member Agreement, Seller has (i) the
right to establish the terms and conditions upon which it will market and sell
Programming (except Non-Select Services) to Committed Member Residences or
Commercial Establishments, or both, and is entitled to all revenues from such
marketing and sales to such Committed Member Residences or Commercial
Establishments, or both, subject only to those Programming agreements set forth
on Schedule 3.20(d) ("Marketing Revenues"), and (ii) Seller has paid all sums
to NRTC or Xxxxxx, as appropriate, required under the NRTC/Member Agreement
such that Seller is entitled to the Marketing Revenues. Seller has the right to
receive from NRTC, on a pro rata basis, all other net revenues received by NRTC
from Xxxxxx in connection with the Programming which are directly attributable
to the
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Committed Member Residences or the Commercial Establishments.
(e) Seller is in full compliance in all material respects with
any and all membership, affiliation, licensing or other requirements or
arrangements as may have been established by NRTC, Xxxxxx or DirecTv, if any,
pursuant to the NRTC/Member Agreement, the DirecTv Agreement, or otherwise.
(f) Seller is not in breach of the NRTC/Member or the DirecTv
Agreement Agreement nor has Seller failed to perform any material obligation
under the NRTC/Member Agreement or the DirecTv Agreement. Seller has not
received notice of any such breach or non-performance at any time.
(g) Except as disclosed on Schedule 3.20(g), none of the DBS
Services distributed by Seller has been suspended at any time since inception.
(h) Schedule 3.20(h)(i) sets forth all Customers, identified as
Committed Member Residence and Commercial Establishment, including the number of
months such Customer has been a Customer and whether such Customer's account is
past due.
3.21 TRUE AT CLOSING. The representations, warranties, covenants and
agreements of the Seller set forth in this Section 3, are and will be true both
on the date of this Agreement and on and as of the Closing, except for
representations, warranties, covenants and agreements made as of a specific
date, which will be true as of such specific date. All of the representations
and warranties by Seller shall survive the Closing for a period of thirty (30)
months with the exception of the tax representations and warranties, which will
survive for the respective tax statute of limitation periods.
3.22 DISCLOSURE BY SELLER. No representation or warranty made by Seller
in this Agreement and no statement made in any certificate to be delivered at
the Closing, Exhibit or Schedule furnished or to be furnished in connection with
the transactions herein contemplated contains or will contain any untrue
statement of a material fact or omits or will omit to state any material fact
necessary to make such representation or warranty or any such statement not
misleading to a prospective purchaser of assets of Seller who is seeking full
information with respect to Seller and the Business.
3.23 NO REPRESENTATIONS OR WARRANTIES RE PROFITABILITY. Seller does not
make any representations or warranties with regard to the potential
profitability of a company acquiring the assets of Seller. While Seller has
fully and accurately disclosed information necessary to give a financial history
of Seller's operation of such business for the past two years, Buyer is aware
that Seller is involved in a highly competitive business, and Buyer has made its
own determinations as to the potential profitability of a company utilizing the
assets of Seller in the future.
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3.24 RESOLUTION OF DISPUTES REGARDING SELLER'S REPRESENTATIONS AND
WARRANTIES. If a dispute or controversy arises between the parties relating to
an allegation of Seller's breach of any representation or warranty made
hereunder, the parties agree that Buyer shall not be entitled to withhold or
delay any payments due under Section 2.2, above, and the parties agree to use
the following procedures to resolve such disputes or controversies:
(a) A meeting will be held promptly between the parties in San
Luis Obispo, California, attended by individuals with
decision-making authority to attempt in good faith to
negotiate a resolution of the dispute. If either xxxxx intends
to be accompanied at a meeting by an attorney, the other party
will be given at least three (3) business days' notice of such
intention, and that party also may be accompanied by an
attorney. All negotiations pursuant to this Section 3.24(a)
are confidential and will be treated as compromise and
settlement negotiations for purposes of the Federal and State
Rules of Evidence.
(b) If within five (5) days after such meeting, the parties have
not succeeded in negotiating a resolution of the dispute, they
will jointly appoint a mutually acceptable neutral person not
affiliated with either of the parties (the "Neutral"), seeking
assistance in such regard from the Center for Public Resources
("CPR") if they have been unable to agree upon such
appointment within ten (10) days from the initial meeting. The
obligation for payment of the fees of the Neutral will be
shared equally by the parties. In consultation with the
Neutral, the parties will select or devise an alternative
dispute resolution procedure ("ADR") by which they will
attempt to resolve the dispute, and a time for the ADR to be
held, with the Neutral making the decision as to the procedure
and time (but unless circumstances require otherwise, not
later than twenty (20) days after selection of the Neutral) if
the parties have been unable to agree on any of such matters
within ten (I 0) days after initial consultation with the
Neutral. Any ADR proceeding will be held in San Luis Obispo,
California, at a location mutually agreeable to the parties
or, if they are unable to agree, selected by the Neutral. The
parties agree to participate in good faith in the ADR to its
conclusion as designated by the Neutral.
(c) If the parties are not successful in resolving the dispute as
provided in Sections 3.24(a) or (b) above, then the parties
agree that such dispute will be settled by binding arbitration
conducted on a confidential basis pursuant to the CPR Rules
for Non-Administered Arbitration of Business Disputes by a
sole arbitrator selected from the CPR Panels of Neutrals. Any
decision or award as a result of any such arbitration
proceeding will include the assessment of costs. expenses and
reasonable
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attorneys' fees in favor of the prevailing party, which will
be selected in the discretion of the arbitrator. Absent an
agreement by the parties to the contrary, any such arbitration
will be conducted at a location, in San Luis Obispo,
California, selected by the arbitrator. The parties reserve
the right to object to any proposed arbitrator who is employed
by or affiliated with a competing organization or entity.
Prior to issuing the arbitrator's final award of arbitration,
the arbitrator will provide each party with the arbitrator's
written tentative award, which will include the findings of
fact as determined by the arbitrator upon which such tentative
award is based. Each party will have five (5) business days
from the delivery of such tentative award to submit to the
arbitrator a written rebuttal to the findings of fact set
forth in the tentative award, and the arbitrator will promptly
forward a copy of each party's rebuttal, if any, to the other
party. If neither party submits such a rebuttal, the tentative
award will be deemed final; if either or both parties submits
such a rebuttal, the arbitrator will promptly review the same
and will deliver a final award, in writing, to each of the
parties. An award of arbitration will be final and binding on
the parties hereto and may be confirmed in any appropriate
court with jurisdiction.
(d) All applicable statutes of limitation and defenses based upon
the passage of time will be tolled while the procedures
specified in this Section 3.24 are pending. The parties will
take all such actions, if any, necessary to effectuate such
tolling.
(e) The provisions of this Section 3.24 are intended solely to
address an allegation by Buyer of Seller's breach of any
representation or warranty made hereunder, and this dispute
resolution process shall not apply to any other dispute or
action between the parties including, but not limited to, any
action by Seller to enforce the terms and conditions of this
Agreement, the Note, the Collateral Assignment Agreement, the
Security and Pledge Agreement, or the Security Agreement.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER.
In order to induce Seller to enter into this Agreement, Buyer
represents and warrants to Seller that the following statements are true,
correct and complete. The representations and warranties of Seller set forth in
this Agreement and in any other Acquisition Document are continuing in nature
and Seller shall promptly inform Buyer of any matter which would cause any such
representations or warranties to be untrue, incorrect or incomplete.
4.1 ORGANIZATION, OWNERSHIP, ETC., OF BUYER. Buyer is a Delaware
limited
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partnership duly organized, validly existing and in good standing under the laws
of the State of Delaware with full power and authority to carry on its business
and operations as presently conducted and is duly qualified to do business in
each jurisdiction in which it is doing business. The current ownership structure
has been approved by all necessary governmental agencies. Attached hereto as
Schedule 4.1 is a complete and correct copy of the Certificate of Limited
Partnership of Buyer, the Limited Partnership Agreement (together with all
amendments thereto and restatements thereof), and Articles of Incorporation and
Bylaws of any corporate general partner of Buyer.
4.2 AUTHORITY OF BUYER. Buyer has the power to execute, deliver, and
perform this Agreement, and the other Acquisition Documents to which it is a
party. Buyer has taken all necessary action to authorize the execution, delivery
and performance of this Agreement and the other Acquisition Documents to which
it is a party, and has full partnership power to perform its obligations
hereunder and thereunder and to consummate the transactions(s) contemplated by
this Agreement. No consent or authorization of, or filing with, any person is
required on the part of the Buyer in connection with the Buyer's execution,
delivery or performance of this Agreement, and the other Acquisition Documents
to which it is a party.
4.3 BINDING EFFECT. This Agreement and the other Acquisition Documents
have been duly and validly authorized, executed and delivered by Buyer. This
Agreement constitutes, and the other Acquisition Documents to which it is a
party, on the Closing Date, will constitute, the legal, valid, and binding
obligations of Buyer enforceable against it in accordance with the respective
terms hereof and thereof, subject to bankruptcy, insolvency, and similar laws of
general application affecting creditors' rights and remedies.
4.4 NO VIOLATION. Neither the execution and delivery by Buyer of this
Agreement or any other Acquisition Document nor the consummation of the
transactions contemplated hereby or thereby violate or will violate any
provision of law applicable to, or any provision of the certificate of limited
partnership or agreement of limited partnership of the Buyer or conflict with or
result in any breach of any term, condition or provision of, or constitute (with
due notice or lapse of time or both) a default under, or, except as contemplated
by the Security Agreement, result in the creation or imposition of any lien,
charge or encumbrance upon any of the properties or assets of Buyer pursuant to
the terms of, any mortgage, deed of trust or other agreement or instrument to
which Buyer is a party or by which or to which Buyer or any of its assets are
subject or bound.
4.5 FINDER'S FEE. No agent, broker or finder has acted for Buyer in
connection with this Agreement, and the transactions contemplated hereby, and
Buyer hereby agrees to indemnify and save Seller harmless from any claims of
Persons claiming by or through Buyer for commissions or fees by reason of this
Agreement or the transactions contemplated by this Agreement.
4.6 CONSENTS. Except as contemplated in Section 7.1 of this Agreement,
no
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consent or approval by, or filing with, any governmental authority is required
in connection with the execution or delivery of this Agreement by Buyer or the
performance of its obligations hereunder.
4.7 CAPITALIZATION OF BUYER. As of Closing, Buyer shall have been
capitalized with equity capital of no less than $1,000,000.00, exclusive of the
Closing Payment to be paid to Seller at Closing.
4.8 TRUE AT CLOSING. The representations, warranties, covenants and
agreements of the Buyer set forth in this Section 4 are, and will be true, both
on the date of this Agreement and on and as of the Closing, except for
representations, warranties, and agreements made as of a specific date, which
will be true as of such specific date. All of the representations and warranties
by Buyer shall survive the Closing for a period of thirty (30) months.
4.9 DISCLOSURE BY BUYER. No representation or warranty made by Buyer in
this Agreement, or to be furnished in connection with the transactions herein
contemplated contains or will contain any untrue statement of a material fact,
or omits or will omit to state any material facts necessary to make such
representation or warranty, or any such statement not misleading to a
prospective creditor of Buyer, who is seeking full information with respect to
Buyer's creditworthiness.
SECTION 5. COVENANTS OF SELLER.
Seller agrees that from the date hereof through and until the Closing
Date:
5.1 APPROVALS. It shall diligently prosecute any required applications
to NRTC,, Xxxxxx and DirecTv for all consents, authorizations and approvals
necessary for assignment of the NRTC/Member Agreement and the DirecTv Agreement
to Buyer, (including, to the extent reasonably required, attendance by
representatives of Seller at meetings with NRTC, Xxxxxx or DirecTv) and use its
best efforts to obtain such consents and approvals as promptly and expeditiously
as possible.
5.2 ACCESS. Buyer shall have the right, itself or through its
representatives, subject to the conditions and limitations set forth in this
Agreement, to inspect the properties of Seller and to inspect and make abstracts
and reproductions of all books and records of Seller including, without
limitation, applications and reports to and correspondence with NRTC, Xxxxxx and
DirecTv, and Seller shall furnish Buyer with such information respecting the
Assets and the Business as Buyer may, from time to time, reasonably request.
Buyer and Seller agree to use such reasonable discretion so as to preserve the
confidentiality of the transaction.
5.3 CONDUCT OF BUSINESS. Unless performance of the following
obligations is waived by Buyer (made in its sole discretion) in advance and in
writing, Seller shall:
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(a) not sell or dispose of any of the Assets, other than in the
ordinary course of business, in which case such Assets disposed of shall be
replaced by assets of like kind, quality and utility;
(b) not modify, amend, alter or terminate the NRTC/Member
Agreement, the DirecTv Agreement or any of the Other Assumed Contracts, or
waive any default or breach thereunder except as may be coordinated with Buyer;
(c) comply in all material respects with the NRTC/Member
Agreement, the DirecTv Agreement and all Other Assumed Contracts, use its best
efforts to cure any material default or breach thereunder, and promptly notify
Buyer upon receipt of notice of any default or breach thereunder;
(d) maintain all applicable insurance policies in full force and
effect;
(e) maintain its books and records in accordance-with prior
practice, maintain all of its property and assets in their present condition,
ordinary wear and tear excepted, maintain supplies of technical materials,
supplies, inventory and spare parts consistent with past practice, and
otherwise use its best efforts to operate the Business in the ordinary course
in accordance with practices during the twelve (12) months preceding the date
of this Agreement;
(f) not increase the compensation payable or to become payable to,
and not pay or agree to pay any bonus to, any employee or agent of Seller
except in accordance with plans or policies set forth on SCHEDULE 3.12(a);
(g) not enter into any contract or renewal of any existing
contract for the employment of any employee of Seller other than contracts
which may be terminated by the employer without penalty on not more than thirty
(30) days' notice;
(h) not, without the prior written consent of Buyer, enter into any
other contract or commitment materially affecting the Business;
(i) use its best efforts to keep its business organization intact,
make available the services of key employees, and maintain good relationships
with its key employees, suppliers, advertisers and other having business
relations with it;
(j) use its best efforts to obtain prior to the Closing Date
consents from all third parties under the Other Assumed Contracts listed on
SCHEDULE 3.19 hereto;
(k) operate the Business in all material respects in accordance
with the Licenses, comply in all material respects with all laws, rules and
regulations applicable to it, including the regulations and policies of NRTC,
Xxxxxx and DirecTv, and use its best efforts
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to cure any material violations of the Licenses;
(l) within ten (10) days after the accounting period close of each
month (commencing with the month in which this Agreement is executed) prior to
the Closing Date, furnish to Buyer or unaudited balance sheet and a statements
of operations, retained earnings and cash flows in respect of the Business for
the elapsed portion of the then current fiscal year of Seller, which financial
statements shall be prepared in accordance with GAAP, except for required
disclosures necessary under GAAP, and shall fairly present the results of such
operations of Seller as of the dates and for the periods covered thereby
(subject to normal year-end adjustments and subject to the availability of
information from the NRTC necessary to prepare such balance sheets);
(m) provide to Buyer, concurrently with filing thereof and at
Buyer's request, copies of all reports to and other filings and correspondence
with the NRTC, Xxxxxx and DirecTv;
(n) not surrender or voluntarily modify any of the Licenses, or
take any action which would cause the institution of proceedings for the
suspension, revocation or limitation of rights under any of the Licenses;
(o) provide to Buyer, promptly upon receipt thereof by Seller, a
copy of (i) any notice of the revocation, suspension, or limitation of the
rights under, or of any proceeding for the revocation, suspension, or
limitation of the rights under any License, and (ii) copies of all protests,
complaints, challenges or other documents submitted to or FILED with the NRTC,
Xxxxxx or DirecTv by third parties concerning the Business and, promptly upon
the filing or making thereof, copies of Seller's responses thereto; and
(p) notify Buyer in writing immediately upon learning of the
institution or threat of any action against Seller in any court, or any action
against Seller before any governmental agency, and notify Buyer in writing
promptly upon receipt of any administrative or court order relating to the
Business.
5.4 LIEN SEARCHES. As soon as practicable after the date hereof and in
any event not later than ten days prior to the Closing, the Seller shall obtain
and deliver to the Buyer at the Seller's expense Uniform Commercial Code, tax
lien, bankruptcy and judgment lien searches for the Seller. Such searches shall
be conducted under the present name of the Seller and such other names as it has
used during the past five years. All such names are listed in SCHEDULE 5.4
attached hereto.
SECTION 6. COVENANTS OF BUYER BEFORE AND AFTER CLOSING.
Buyer agrees that from the date hereof through and until the Closing Date:
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6.1 APPROVALS. It shall diligently prosecute any required applications
to NRTC, Xxxxxx and DirecTv for all consents, authorizations and approvals
necessary for the assignment of the NRTC/Member Agreement and the DirecTv
Agreement to Buyer (including, to the extent necessary reasonably required,
attendance by representatives of Buyer at NRTC, Xxxxxx and DirecTv meetings) and
use its best efforts to obtain such consents and approvals as promptly and
expeditiously as possible.
6.2 CONTROL OF BUSINESS. Subject to the provisions of Section 5.3.
Buyer shall not exercise any control over or supervise, directly or indirectly,
the operations or policies -of the Business, all of which shall be Seller's sole
right and responsibility.
6.3 COOPERATION FOR CONSENTS. Buyer agrees to make reasonable efforts
to respond to reasonable and customary inquiries relating to Buyer made by a
party (other than Seller) from whom, pursuant to Section 7.2(c) hereof, a
consent to the assignment of an assumed contract is a condition precedent to
Buyer's obligation to consummate the transaction contemplated hereby.
6.4 CONDUCT OF BUSINESS AFTER CLOSING. Buyer agrees that after the
Closing Date and until payment in full of the Subscriber Settlement Payment,
Buyer shall
(a) own or lease assets sufficient to operate the Business;
(b) not modify, amend, assign, alter or terminate the NRTC/Member
Agreement, the DirecTv Agreement or any of the Other Assumed Contracts or any
other material agreement relating to the Business which Buyer has entered into
with NRTC, DirecTv or Xxxxxx, or waive any default or breach thereunder, except
as may be coordinated with Seller;
(c) comply in all material respects with the NRTC/Member
Agreement, the DirecTv Agreement and all Other Assumed Contracts or any
agreement which Buyer has entered into with NRTC, DirecTv or Xxxxxx, use its
best efforts to cure any material default or breach thereunder, and promptly
notify Seller upon receipt of notice of any default of breach thereunder;
(d) maintain insurance adequate for the conduct of its business;
(e) maintain its books and records in accordance with sound
business practice;
(f) use its commercially reasonable efforts to keep its business
organization intact, make available the services of key employees, and maintain
good relationships with its employees, suppliers, advertisers and others having
business relations with it;
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(g) operate the Business in all material respects in accordance
with the Licenses (including any Licenses obtained by Buyer after Closing),
comply in all material respects with all laws, rules and regulations applicable
to it, including the regulations and policies of NRTC, Xxxxxx and DirecTv, and
use its commercially reasonable efforts to cure any material violations of the
Licenses;
(h) within ten (10) days of receipt of applicable information
from NRTC after the end of each month (commencing with the month in which the
Closing occurs), furnish to Seller (if available) monthly updates on the
applicable subscriber counts, churn rates, program package breakdowns, and any
other marketing reports prepared or utilized in the Business;
(i) provide to Seller reasonable access to all reports to and other
filings and correspondence with the NRTC, Xxxxxx and DirecTv and copies of any
written notice of default from the NRTC, Xxxxxx or DirecTv received by Buyer;
(j) not surrender or voluntarily modify any of the Licenses, or
take any action which would cause the institution of proceedings for the
suspension, revocation or limitation of rights under any of the Licenses;
(k) provide to Seller (i) promptly upon receipt thereof by Buyer, a
copy of any notice of the revocation, suspension, or limitation of the rights
under, or of any proceeding for the revocation, suspension, or limitation of the
rights under any License, and (ii) reasonable access to Buyer's customer
complaint file, which shall include copies of all protests, complaints,
challenges or other documents submitted to or filed with the NRTC, Xxxxxx or
DirecTv by third parties concerning the Business and provided to Buyer, as well
as copies of Buyer's responses thereto;
(l) notify Seller in writing immediately upon learning of the
institution or threat of any action against Buyer in any court, or any action
against Buyer before any governmental agency, and notify Seller in writing
promptly upon receipt of any administrative or court order relating to the
Business;
(m) maintain strict compliance with the requirements of the
Business Plan attached hereto as SCHEDULE 6.4(m);
(n) provide to Seller within thirty (30) days after the close of
each quarter, financial statements of Buyer;
(o) not make any distributions, including, but not limited to,
dividends, bonuses, or advances, to the partners of Buyer, the officers,
directors, or shareholders of Columbia DBS, Inc., or the limited partners of
Columbia DBS Investors, L.P., except for
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distributions to the partners of Buyer to pay such partners' income taxes
directly arising from said partners' operation of the business and as may be
otherwise permitted under the Security Agreement;
(p) not amend or modify the partnership agreement governing the
operation of Buyer, nor admit any additional partners thereto, without Seller's
prior written consent; and
(q) utilize good faith efforts to maximize the number of qualified
Subscribers, as that term is defined herein, as of the Subscriber Settlement
Date.
SECTION 7. CONDITIONS TO CLOSING.
7.1 MUTUAL CONDITIONS. The obligations of Buyer and Seller to
consummate the transactions contemplated hereby are subject to satisfaction at
the time of the Closing of, in addition to all other conditions set forth
herein, the condition precedent that NRTC, Xxxxxx and DirecTv shall have issued
all necessary authorizations, consents and approvals in connection with the
transactions contemplated by this Agreement, without conditions which are
materially adverse to Buyer or Seller or which in any material way diminish the
operating rights with respect to the Assets or the Business.
7.2 CONDITIONS TO OBLIGATIONS OF BUYER. The obligations of Buyer to
consummate the transactions contemplated by the Closing shall be subject to (1)
receipt by Buyer of the Schedules required to be provided by Seller hereunder in
such form and substance as shall be satisfactory to Buyer and (2) the
fulfillment (or waiver by Buyer), on or prior to the Closing Date, of each of
the following conditions:
(a) The representations and warranties of Seller contained herein
shall have been true and correct in all material respects when made and shall
be repeated and be true and correct in all material respects as of the Closing
Date;
(b) Seller shall have performed and complied in all material
respects with all agreements, covenants and conditions contained in this
Agreement, and the other Acquisition Documents required to be performed or
complied with by it prior to or at the Closing Date;
(c) All authorizations and approvals of or consents of, or filings
with, any governmental authority or other Person required to be obtained or made
by Seller in connection with the Closing shall have been obtained or made and
shall be in full force and effect;
(d) Each of the Acquisition Documents to which Seller is a party
shall have been duly authorized, executed and delivered by Seller and complete
and correct copies thereof shall have been delivered to Buyer.
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(e) At Closing, the Seller shall have not less than 3,200
Subscribers; provided, however, that Buyer may, in its sole discretion, elect
to waive compliance with this condition and proceed to Closing;
(f) Seller shall have delivered to Buyer a certificate executed
by an authorized officer of Seller, dated the Closing Date, to the effect that
the conditions set forth in paragraphs (a) through (e) of this Section 7.2 have
been fulfilled;
(g) All corporate and other proceedings of Seller in connection
with the transactions contemplated by this Agreement and the other Acquisition
Documents, and all documents and instruments incident to such corporate
proceedings, shall be satisfactory in substance and form to Buyer and its
counsel, and Buyer and its counsel shall have received all such documents and
instruments, or copies thereof, certified if requested, as may be reasonably
requested;
(h) Other than as referenced in Schedule 3.11(a), no action or
proceeding shall have been instituted or threatened against Seller which could
have a material adverse effect on the Seller or the Business; no action or
proceeding shall have been instituted or threatened against any of the parties
to this Agreement or their directors or officers, before any court or
governmental department, agency or commission to restrain or prohibit, or to
obtain substantial damages in respect of, this Agreement or the consummation of
the transactions contemplated hereby; and neither Seller nor Buyer shall have
received written notice from any court or governmental department, agency or
commission of its intention to institute any action or proceeding to restrain or
enjoin or continence any investigation (other than a routine letter of inquiry)
into the consummation of this Agreement and the transactions contemplated hereby
or to nullify or render ineffective this Agreement or such transactions if
consummated, which in the opinion of Buyer would make it inadvisable to
consummate such transactions;
(i) Prior to the Closing, there shall not have occurred any
material adverse change in the financial condition, operations, business or
prospects of Seller, including, but not limited to, becoming subject to any
state or federal regulatory proceedings which could culminate in an order or
other action which could cause such a material adverse change;
(j) Prior to the Closing, there shall not have occurred any damage,
destruction or loss to Tangible Assets exceeding $10,000 or other loss that has
a material adverse effect on the products, properties, business operations or
prospects of Seller;
(k) Seller shall have obtained and delivered to Buyer consents
from all third parties under the Other Assumed Contracts, where such consents
are required in order to transfer and assign such Other Assumed Contracts, and
neither Seller nor, to Seller's knowledge, any third party shall be in material
breach or default under the NRTC/Member Agreement, the DirecTv Agreement or any
Other Assumed Contract;
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(l) None of the Licenses shall have been revoked or suspended, or
modified in any manner which could have a material adverse effect on the
Business or its operation and no proceeding for such revocation, suspension, or
modification shall be in effect;
(m) Seller shall have executed and delivered the Security
Agreement; and
(n) Seller shall have executed and delivered the Security and
Pledge Agreement.
7.3 CONDITIONS TO OBLIGATIONS OF SELLER. Seller's obligation to
consummate the transactions contemplated by this Agreement is subject to
satisfaction at the time of Closing of each of the following conditions
precedent, any of which may be waived by Seller:
(a) Each of the representations and warranties of Buyer contained
in this Agreement shall be true and correct in all material respects on the
Closing Date as though made on and as of the Closing Date; and Buyer shall, on
or before the Closing Date, have performed in all material respects all of its
covenants and obligations hereunder which by the terms hereof are to be
performed on or before the Closing Date;
(b) No action or proceeding shall have been instituted or
threatened against Buyer or Seller before any court or governmental agency or
commission seeking to restrain or prohibit this Agreement or consummation of
the transactions contemplated hereby;
(c) All authorizations and approvals of or consents of, or filings
with, any governmental authority or other person required to be obtained or made
by Buyer in connection with the Closing shall have been obtained or made and
shall be in full force and effect;
(d) Each of the Acquisition Documents to which Buyer is a party
shall have been duly authorized, executed and delivered by Buyer and complete
and correct copies thereof shall have been delivered to Seller;
(e) Buyer shall have delivered to Seller the certificate of Buyer,
dated as of the Closing Date, certifying as to the matters set forth in the
foregoing clauses (a) and (b) (except that, with regard to clause (b), such
certificate shall not certify as to matters relating to Seller);
(f) All of the partners of Buyer shall have executed and
delivered the Security and Pledge Agreement;
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(g) All corporate, partnership, and other proceedings of the
Buyer in connection with the transactions contemplated by this Agreement and
the other Acquisition Documents, and all documents and instruments incident to
such corporate proceedings, shall be satisfactory in substance and form to
Seller and its counsel, and Seller and its counsel shall have received all such
documents and instruments, or copies thereof, certified if requested, as may be
reasonably requested;
(h) No action or proceeding shall be instituted or threatened
against Buyer or the partners of Buyer which could have a materially adverse
effect on the Buyer or; no action or proceeding shall be instituted or
threatened against any of the parties to this Agreement or their directors,
officers, or partners, before any court or governmental department, agency, or
commission to restrain or prohibit, or to obtain substantial damages in respect
of, this Agreement or the consummation of the transactions contemplated herein
by; and neither Seller nor Buyer shall have received written notice from any
court or governmental department, agency or commission of its intention to
institute any action or proceeding to restrain or enjoin or commence any
investigation (other than a routine letter of inquiry) into the consummation of
this Agreement and the transactions contemplated hereby or to nullify or render
ineffective this Agreement or such transactions if consummated, which in the
opinion of Seller make it inadvisable to consummate such transactions;
(i) Buyer shall have executed and delivered the Security Agreement;
(j) Buyer shall have executed and delivered the Note;
(k) Buyer, NRTC and Xxxxxx shall have executed and delivered to
Seller the Collateral Assignment Agreement;
(l) Seller shall have received confirmation satisfactory to
Seller and Seller's accountants that Buyer has been capitalized with at least
$1,000,000 in equity capital for purposes specified in the Business Plan
attached as Schedule 6.4(m) after Closing; and (in) Buyer shall have completed
the wire transfer referred to in Section 2.2(a)(i) above.
SECTION 8. INDEMNIFICATION.
8.1 RIGHT TO INDEMNIFICATION.
(a) Seller shall indemnify, reimburse, and hold harmless Buyer
from and against all claims, losses, damages, costs (including, without
limitations, court costs and attorneys' fees), expenses and liabilities
suffered, incurred, or sustained by Buyer on account of (i) any
misrepresentation, breach of warranty, or nonfulfillment of any agreement on
the part of Seller under this Agreement, or under any Acquisition Document,
(ii) the failure of Seller to pay and perform promptly when due all of its
obligations, liabilities and debts, (iii) the operation of
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the Business prior to the Closing, (iv) any breach of the NRTC/Member Agreement,
the DirecTv Agreement or any of the Other Assumed Contracts, (v) any other
matter or event respecting Seller and which occurs with respect to the period
prior to the Closing (other than liabilities specifically assumed by Buyer under
the NRTC/Member Agreement, the DirecTv Agreement or any of the Other Assumed
Contracts).
(b) Buyer shall indemnify, reimburse, and hold harmless Seller
from and against all claims, losses, damages, costs (including, without
limitation, court costs and attorneys' fees), expenses and liabilities
suffered, incurred, or sustained by Seller on account of (i) any
misrepresentation, breach of warranty, or nonfulfillment of any agreement on
the part of Buyer under this Agreement, or under any Acquisition Document, (ii)
the failure of Buyer to pay and perform promptly when due all of its
obligations, liabilities, and debts as provided under this Agreement and under
any of the Acquisition Documents, (iii) the operation of the Business after the
Closing, and (iv) any breach or default after the Closing Date by Buyer under
the NRTC/Member Agreement, the DirecTv Agreement or any of the Other Assumed
Contracts or any agreement which Buyer has entered into with NRTC, DirecTV or
Xxxxxx; provided, however, that Seller shall not be entitled to indemnification
hereunder with respect to matters arising under contracts, commitments or
agreements of Seller not assumed by Buyer hereunder.
8.2 RIGHT TO CONTEST. Before being required to make any payment
pursuant to Section 8.1 hereof, Seller or Buyer, whichever is the indemnifying
party (the "Indemnifying Party"), may, at its expense, elect to undertake and
control the defense of, and take all necessary steps properly to contest any,
claim, liability or action in respect thereof involving third parties or to
prosecute such contest or action to conclusion or settlement satisfactory to the
party to be indemnified (the "Indemnified Party"). The Indemnified Party shall
notify the Indemnifying Party of any claims to indemnification involving third
parties it may wish to assert pursuant to Section 8.1 hereof as soon as
reasonably practicable; thereafter, the Indemnified Party shall, at the expense
of the Indemnifying Party, cooperate fully with the Indemnifying Party in the
conduct of any such contest or action. If the Indemnifying Party makes the
foregoing election, then the Indemnified Party shall have the right to
participate, at its own expense, in all proceedings. If the Indemnifying Party
does not make such election, it shall be bound by whatever result is obtained by
the Indemnified Party respecting such third party matter.
8.3 LIMITATION OF CLAIMS. Any claim by a party hereunder arising from a
claimed breach by the other party of any representation, warranty or covenant
hereunder (other than tax claims in respect of which there shall be no
limitation period) shall be made in writing and delivered to such other party no
later than thirty (30) months after the Closing Date.
SECTION 9. ACCESS.
9.1 ACCESS. Buyer and Seller each acknowledges that, to the best of its
knowledge, it has been afforded such opportunity to obtain information, inspect
and examine the other party and the Assets as it deems necessary to enter into
this Agreement; however, the
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foregoing acknowledgment of present belief shall not be deemed to relieve either
party under, or impair or otherwise affect, any representation, warranty or
covenant contained in this Agreement, the Interim Management Agreement or any of
the other Acquisition Documents or the rights and obligations of either party in
respect of a breach thereof.
9.2 NOTICE OF BREACH. Buyer and Seller each agrees to give to the other
prompt written notice of a breach by such other party of any of its
representations, warranties and covenants of which Buyer or Seller, as the case
may be, obtains actual knowledge prior to the Closing Date. The term "actual
knowledge" shall be deemed to include information which is actually known and in
good faith recognized to be such a breach, it being the intention hereby that a
party be afforded as much opportunity as reasonably possible to cure prior to
Closing breaches which hereafter are found to exist.
SECTION 10. MISCELLANEOUS.
10.1 FEES AND EXPENSES.
(a) Unless otherwise provided in this Agreement, all costs of
transferring the Assets in accordance with this Agreement, including
recordation, transfer and documentary taxes and fees, shall be paid equally by
Buyer and Seller.
(b) Each of the parties shall bear its own expenses in
connection with the negotiation and the consummation of the transactions
contemplated by this Agreement.
10.2 LAW GOVERNING. This Agreement and the Acquisition Documents shall
be construed under and governed by the laws of the state of California. The
parties agree that, except as set forth in Section 3.24 hereof, any suit,
action, or proceeding arising out of or relating to this Agreement, or the
interpretation, performance, or breach of this Agreement, shall be instituted in
the Superior Court for the County of San Xxxx Obispo, State of California, and
each party irrevocably submits to the jurisdiction of that court and waives all
objections to jurisdiction or venue that it may have under the laws of the State
of California or otherwise in those courts in any suit, action, or proceeding.
10.3 NOTICE. All notices, requests, demands, or other communications
under this Agreement shall be in writing. Notice shall be sufficiently given for
all purposes as follows:
(a) Personal Delivery. When personally delivered to the recipient.
Notice is effective on delivery.
(b) Certified Mail. When mailed certified mail, return receipt
requested. Notice is effective on receipt, if delivery is confirmed by a return
receipt.
(c) Overnight Delivery. When delivered by Federal Express,
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Airborne, United Parcel Service, or DHL WorldWide Express, charges prepaid or
charged to the sender's account. Notice is effective on delivery, if delivery is
confirmed by the delivery service.
(d) Telex or Facsimile Transmission. When sent by telex or fax
to the last telex or fax number of the recipient known to the party giving
notice. Notice is effective on receipt, provided that (a) a duplicate copy of
the notice is promptly given by first-class or certified mail or by overnight
delivery, or (b) the receiving party delivers a written confirmation of
receipt. Any notice given by telex or fax shall be deemed received on the next
business day if it is received after 5:00 p.m. (recipient's time) or on a
nonbusiness day.
Addresses for purpose of giving notice are as follows:
SELLER: PACIFIC COAST DBS, INC.
0000 Xx Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
With Copy (which, standing alone, shall not constitute notice) to:
Xxxxxxxx X. Xxxxxxxx
Xxxxx & Xxxxxxxx
0000 Xxxxxxx
Xxx Xxxx Xxxxxx, XX 00000
Facsimile: (000) 000-0000
BUYER: Columbia DBS San Xxxx Obispo L.P.
000 X. Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, III
Facsimile: (000) 000-0000
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With Copy (which, standing alone, shall not constitute notice) to:
Xxxxxxx & Berlin, Chartered
0000 X Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxx X. Xxxxxxxxx, Esq..
Facsimile: (000) 000-0000
Any correctly addressed notice that is refused, unclaimed, or
undeliverable because of an act or omission of the party to be notified shall be
deemed effective as of the first day that said notice was refused, unclaimed, or
deemed undeliverable by the postal authorities, messenger, or overnight delivery
service.
Any party may change its address or telex or fax number by giving the
other party notice of the change in any manner permitted in this Agreement.
10.4 CONSTRUCTION.
(a) The headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
(b) Words such as "herein" and "hereof" shall be deemed to refer
to this Agreement as a whole and not to any particular provision of this
Agreement.
10.5 ASSIGNMENT; BINDING EFFECT. This Agreement may not be assigned by
Buyer or Seller prior to the Closing without the prior written consent of the
other party. This Agreement shall be binding upon, and shall inure to the
benefit of, the parties hereto and their successors and permitted assigns.
10.6 AMENDMENT; WAIVER. This Agreement may be amended only by a written
instrument signed by Buyer and Seller. No provisions of this Agreement may be
waived except by an instrument in writing signed by the party sought to be
bound. No failure or delay by any party in exercising any right or remedy
hereunder shall operate as a waiver thereof, and a waiver of a particular right
or remedy on one occasion shall not be deemed a waiver of any other right or
remedy or a waiver on any subsequent occasion.
10.7 ENTIRE AGREEMENT. Except as provided in Section 10.9 hereof, this
Agreement and the Acquisition Documents set forth the entire understanding
between the parties relating to the subject matter hereof, any and all prior
correspondence, conversations and memoranda or other writings being merged
herein and replaced. No promises, covenants or representations of any character
or nature other than those expressly stated herein have
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been made to induce either party to enter into this Agreement and the
Acquisition Documents.
10.8 INITIAL NOTICE TO PUBLIC. Seller and Buyer shall mutually agree in
advance on the manner in which the public is first informed of the execution of
this Agreement.
10.9 TERMINATION OF LETTER OF INTENT. All provisions of those certain
Letters of Intent dated November 28, 1995 and February 27, 1996, between Seller
and Columbia Capital Corporation ("Columbia"), an affiliate of Buyer, are hereby
terminated, other than the confidentiality provisions set forth in Paragraphs 2
thereof. Buyer hereby assumes and agrees to be bound by the obligations imposed
upon Columbia pursuant to such Paragraphs 2.
10.10 EXECUTION IN COUNTERPARTS. This Agreement may be executed in two
or more counterparts, all of which together shall constitute one and the same
Agreement.
10.11 FACSIMILE SIGNATURES. Facsimile signatures shall be considered
original signatures for purposes of execution and enforcement of the rights
delineated in this Agreement.
IN WITNESS WHEREOF, Seller and Buyer have caused this Agreement to be
executed by their respective duly authorized general partners as of the date
first above written.
ATTEST/WITNESS: SELLER:
PACIFIC COAST DBS, INC.
-------------------
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
BUYER:
COLUMBIA DBS SAN XXXX OBISPO, L.P.
------------------- By: COLUMBIA DBS, INC.
Its: General Partner
By:
---------------------
Name:
---------------------
Title:
---------------------
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