1
Exhibit 2.4
PURCHASE AGREEMENT
DATED AS OF FEBRUARY 23, 1999
BY AND AMONG
CHARTER COMMUNICATIONS, INC.,
CHARTER COMMUNICATIONS, LLC
RENAISSANCE MEDIA HOLDINGS LLC
AND
RENAISSANCE MEDIA GROUP LLC
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PURCHASE AGREEMENT
DATED AS OF FEBRUARY 23, 1999
TABLE OF CONTENTS
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SECTION 1 CERTAIN DEFINITIONS.............................................. 1
1.1 Terms Defined in this Section............................... 1
"Adjustment Time"................................................ 1
"Affiliate"...................................................... 2
"Assets"......................................................... 2
"Basic Subscriber"............................................... 2
"Bulk Subscriber"................................................ 2
"Cable Act"...................................................... 2
"Charter's Disclosure Schedules"................................. 2
"Closing"........................................................ 3
"Closing Date"................................................... 3
"Code"........................................................... 3
"Consents"....................................................... 3
"Contracts"...................................................... 3
"Copyright Act".................................................. 3
"Credit Agreement"............................................... 3
"Debt Documents"................................................. 3
"Employee Plan".................................................. 3
"Employment Agreements".......................................... 4
"Encumbrances"................................................... 4
"Enforceability Exceptions"...................................... 4
"Environmental Claim"............................................ 4
"Environmental Law".............................................. 4
"Equity Interests"............................................... 4
"Equivalent Subscribers"......................................... 5
"ERISA".......................................................... 5
"ERISA Affiliate" ............................................... 5
"Escrow Agent"................................................... 5
"Exchange Act"................................................... 5
"Excluded Assets"................................................ 5
"FCC"............................................................ 5
"FCC Regulations"................................................ 5
"Franchise"...................................................... 5
"Franchise Area"................................................. 6
"Franchising Authorities"........................................ 6
"GAAP"........................................................... 6
"Governmental Authority"......................................... 6
"Hazardous Substance"............................................ 6
"Headquarters Employees"......................................... 6
"HSR Act"........................................................ 6
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"Indemnity Agreement"............................................ 7
"Indenture"...................................................... 7
"Indenture Closing Documents".................................... 7
"Intangibles".................................................... 7
"Knowledge"...................................................... 7
"Legal Restrictions"............................................. 7
"Licenses"....................................................... 8
"Loss"........................................................... 8
"Material Contract".............................................. 8
"Material FCC Consent"........................................... 8
"Material Lease"................................................. 8
"Organizational Documents"....................................... 8
"Permitted Encumbrances"......................................... 8
"Person"......................................................... 9
"Pre-Closing Tax Period"......................................... 9
"Programming Agreement".......................................... 9
"Purchased Interests"............................................ 9
"Rate Regulatory Matter"......................................... 9
"Real Property".................................................. 9
"Renaissance Capital"........................................... 10
"Renaissance Companies"......................................... 10
"Renaissance's Disclosure Schedules"............................ 10
"Renaissance Louisiana"......................................... 10
"Renaissance Media"............................................. 10
"Renaissance Tennessee"......................................... 10
"SEC"........................................................... 10
"Securities Act"................................................ 10
"Senior Debt"................................................... 10
"Senior Debt Amount"............................................ 10
"Senior Discount Notes"......................................... 10
"Senior Discount Notes Accreted Value".......................... 10
"Subsidiary".................................................... 11
"Systems"....................................................... 11
"Tangible Personal Property".................................... 11
"Tax"........................................................... 11
"Tax Return".................................................... 11
"Transaction Documents"......................................... 11
"Upset Date".................................................... 12
1.2 Terms Defined Elsewhere in this Agreement.................. 12
1.3 Rules of Construction...................................... 13
SECTION 2 SALE AND PURCHASE OF PURCHASED INTERESTS; ASSUMPTION OF
LIABILITIES; CASH CONSIDERATION................................. 13
2.1 Agreement to Sell and Buy Purchased Interests.............. 13
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2.2 Cash Consideration for Purchased Interests................. 13
2.3 Cash Consideration Adjustments............................. 13
2.4 Payments at Closing........................................ 14
2.5 Post-Closing Payment of Cash Consideration Adjustments..... 16
SECTION 3: REPRESENTATIONS AND WARRANTIES OF GROUP......................... 17
3.1 Organization and Authority. .............................. 18
3.2 Authorization and Binding Obligation...................... 18
3.3 Organization and Ownership of Renaissance Companies....... 18
3.4 Absence of Conflicting Agreements; Consents............... 19
3.5 Financial Statements...................................... 19
3.6 Absence of Undisclosed Liabilities........................ 20
3.7 Absence of Certain Changes................................ 20
3.8 Franchises, Licenses, Material Contracts.................. 20
3.9 Title to and Condition of Real Property and Tangible
Personal Property......................................... 21
3.10 Intangibles............................................... 22
3.11 Information Regarding the Systems......................... 22
3.12 Taxes..................................................... 23
3.13 Employee Plans............................................ 25
3.14 Environmental Laws........................................ 26
3.15 Claims and Litigation..................................... 27
3.16 Compliance With Laws...................................... 27
3.17 Transactions with Affiliates.............................. 28
3.18 Certain Fees.............................................. 28
3.19 Inventory................................................. 28
3.20 Overbuilds; Competition................................... 28
3.21 Disconnections............................................ 29
3.22 Year 2000................................................. 29
3.23 Budgets................................................... 29
3.24 Cure...................................................... 29
SECTION 4: REPRESENTATIONS AND WARRANTIES OF HOLDINGS...................... 29
4.1 Organization; Authorization and Binding Obligation........ 29
4.2 Authorization and Binding Obligation...................... 29
4.3 Absence of Conflicting Agreements; Consents............... 30
4.4 Title to Purchased Interests.............................. 30
4.5 Claims and Litigation..................................... 30
4.6 Certain Fees.............................................. 31
4.7 Cure...................................................... 31
SECTION 5: REPRESENTATIONS AND WARRANTIES OF BUYER AND
CHARTER......................................................... 31
5.1 Organization.............................................. 31
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5.2 Authorization and Binding Obligation...................... 31
5.3 Absence of Conflicting Agreements; Consents............... 32
5.4 Claims and Litigation..................................... 32
5.5 Investment Purpose; Investment Company.................... 32
5.6 Ownership of Buyer........................................ 33
5.7 Certain Fees.............................................. 33
5.8 Availability of Funds..................................... 33
5.9 Cure...................................................... 33
SECTION 6: SPECIAL COVENANTS AND AGREEMENTS................................ 33
6.1 Operation of Business Prior to Closing.................... 33
6.2 Confidentiality; Press Release............................ 36
6.3 Cooperation; Commercially Reasonable Efforts.............. 37
6.4 Consents.................................................. 37
6.5 HSR Act Filing............................................ 38
6.6 Charter's Actions......................................... 39
6.7 Renaissance Debt Obligations.............................. 39
6.8 Retention and Access to the Renaissance Companies'
Records................................................... 40
6.9 Employee Matters.......................................... 40
6.10 Tax Matters............................................... 41
6.11 Renaissance Name.......................................... 43
6.12 No Recourse; Release of Claims............................ 43
6.13 Exculpation and Indemnification........................... 44
6.14 Rate Regulatory Matters................................... 44
6.15 Guaranty by Charter....................................... 45
6.16 Disclosure Schedules...................................... 46
SECTION 7: CONDITIONS TO OBLIGATIONS OF BUYER AND CHARTER.................. 46
7.1 Conditions to Obligations of the Buyer and Charter........ 46
7.2 Conditions to Obligations of Holdings..................... 47
SECTION 8: CLOSING AND CLOSING DELIVERIES.................................. 48
8.1 Closing................................................... 48
8.2 Deliveries by Holdings.................................... 49
8.3 Deliveries by Buyer and Charter........................... 50
SECTION 9: TERMINATION..................................................... 51
9.1 Agreement between Holdings and Buyer...................... 51
9.2 Termination by Holdings................................... 51
9.3 Termination by Buyer...................................... 52
9.4 Effect of Termination..................................... 52
9.5 Attorneys' Fees........................................... 53
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SECTION 10: SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES............................... 53
10.1 Survival.................................................. 53
10.2 Indemnification by Holdings............................... 53
10.3 Indemnification by Buyer and Charter...................... 54
10.4 Indemnity Agreement....................................... 54
10.5 Certain Limitations on Indemnification Obligations........ 54
10.6 Procedure for Indemnification............................. 57
10.7 Treatment of Indemnification Payments..................... 58
SECTION 11: MISCELLANEOUS................................................... 58
11.1 Fees and Expenses......................................... 58
11.2 Notices................................................... 58
11.3 Benefit and Binding Effect................................ 59
11.4 Further Assurances........................................ 60
11.5 GOVERNING LAW............................................. 60
11.6 WAIVER OF JURY TRIAL...................................... 60
11.7 SUBMISSION TO JURISDICTION; VENUE......................... 60
11.8 Severability.............................................. 60
11.9 Entire Agreement.......................................... 61
11.10 Amendments; Waiver of Compliance; Consents................ 61
11.11 Counterparts.............................................. 61
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Schedule Description
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Schedule 1.1 Licenses
Schedule 1.1(a) Buyer and Charter-Knowledge
Schedule 1.1(b) Holdings and Group-Knowledge
Schedule 1.2 Headquarters Employees
Schedule 3.1 Organization and Authority
Schedule 3.3 Organization and Ownership of the Renaissance
Companies
Schedule 3.4 Absence of Conflicting Agreements; Consents
Schedule 3.5 Financial Statements
Schedule 3.6 Absence of Undisclosed Liabilities
Schedule 3.7 Absence of Certain Changes
Schedule 3.8 Franchises, Licenses, Material Contracts
Schedule 3.9 Title to and Condition of Real Property and Tangible
Personal Property
Schedule 3.10 Intangibles
Schedule 3.11 Information Regarding the Systems
Schedule 3.12 Taxes
Schedule 3.13 Employee Plans
Schedule 3.14 Environmental Laws
Schedule 3.15 Claims and Litigation
Schedule 3.16 Compliance with Laws
Schedule 3.17 Transactions with Affiliates
Schedule 3.20 Overbuilds; Competition
Schedule 3.21 Disconnections
Schedule 3.23 Budgets
Schedule 4.3 Absence of Conflicting Agreements; Consents
Schedule 4.5 Claims and Litigation
Schedule 5.4 Claims and Litigation
Schedule 6.1 Operation of Business Prior to Closing
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TABLE OF EXHIBITS
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Exhibit Description
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Exhibit A Student Subscribers
Exhibit B Excluded Assets
Exhibit C Form of Opinion of Counsel to Holdings and Group
Exhibit D Form of Opinion of Counsel to Buyer and Charter
Exhibit E Indemnity Agreement
Exhibit F Adjustment Escrow Agreement
Exhibit G Form of Opinion of Counsel to Holdings and Group
with respect to certain FCC Matters
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PURCHASE AGREEMENT
This PURCHASE AGREEMENT (this "Agreement") is dated as of February 23,
1999, by and among CHARTER COMMUNICATIONS, INC., a Delaware corporation
("Charter"), CHARTER COMMUNICATIONS, LLC, a Delaware limited liability company
("Buyer"), RENAISSANCE MEDIA HOLDINGS LLC, a Delaware limited liability company
("Holdings"), and RENAISSANCE MEDIA GROUP LLC, a Delaware limited liability
company ("Group").
R E C I T A L S:
A. Holdings holds all the outstanding limited liability company interests in
Group.
B. Buyer is an indirect majority-owned subsidiary of Charter.
C. Buyer desires to acquire from Holdings all of its limited liability company
interests in Group.
D. The parties hereto desire to set forth the terms in accordance with which
Buyer shall acquire all the limited liability company interests in Group held by
Holdings for the consideration and on the terms and conditions set forth in this
Agreement.
A G R E E M E N T S:
In consideration of the above recitals and of the mutual agreements and
covenants contained in this Agreement, the parties to this Agreement, intending
to be bound legally, agree as follows:
SECTION 1 CERTAIN DEFINITIONS.
1.1 Terms Defined in this Section. The following terms, as used in this
Agreement, have the meanings set forth in this Section:
"Adjustment Escrow Agent" means the Escrow Agent named in the Adjustment
Escrow Agreement.
"Adjustment Escrow Agreement" means the Adjustment Escrow Agreement to be
executed and delivered by Buyer, Charter, Holdings and the Adjustment Escrow
Agent, substantially in the form of Exhibit F hereto.
"Adjustment Time" means (A) with respect to the purchase and sale of the
Purchased Interests and to Current Assets and Current Liabilities and other
items that primarily relate to the Renaissance Companies as a whole, 11:59 p.m.,
New York time, on the Closing Date, and (B) with respect to Current Assets and
Current Liabilities and other items that primarily relate to a particular
System, 11:59 p.m. local time for that System, on the Closing Date.
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"Affiliate" means, with respect to any Person, any other 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 all of the tangible and intangible assets that are owned,
leased or held by the Renaissance Companies and that are used or held for use in
connection with the conduct of the business or operations of the Systems, other
than the Excluded Assets, and less any such Assets that are sold, transferred or
otherwise conveyed by the Renaissance Companies to third Persons prior to the
Closing in accordance with the provisions of this Agreement, provided that with
respect to any assets that are leased by the Renaissance Companies or otherwise
not owned by the Renaissance Companies, "Assets" includes only the interest,
title and rights in such assets held by the Renaissance Companies.
"Basic Subscriber" means, with respect to any System, as of any date of
determination, any Subscriber to a System at the regular basic monthly
subscription rate (including discounted rates offered in the ordinary course of
business consistent with past practice) for at least broadcast basic cable
service (either alone or in combination with any other service) for such System,
who has rendered payment of one month's service and who has not more than Five
Dollars ($5.00) more than two (2) months past due.
"Bulk Subscriber" means, with respect to any System, as of any date of
determination, any Subscriber, other than a Basic Subscriber, to at least
broadcast basic cable service (either alone or in combination with any other
service) for a System which is billed to such Subscriber on a bulk basis to bulk
commercial accounts, such as hotels, motels, hospitals, apartment houses and
similar multiple dwelling units or other commercial accounts and who has
rendered payment for one month's service at such customer's regular basic
monthly subscription rate for such service and who does not have more than
$10.00 (excluding late charges and fees and amounts subject to a bona fide
dispute) that is two months or more past due from the last day of the period to
which any outstanding xxxx relates.
"Cable Act" means Title VI of the Communications Act of 1934, as amended,
47 U.S.C. Section 151 et seq., and all other provisions of the Cable
Communications Policy Act of 1984, the Cable Television Consumer Protection and
Competition Act of 1992, and the provisions of the Telecommunications Act of
1996 amending Title VI of the Communications Act of 1934, in each case as
amended and in effect from time to time.
"Charter's Disclosure Schedules" means the Disclosure Schedules referred
to in Section 5 of this Agreement and attached to this Agreement.
"Charter Parties" means Charter and Buyer, collectively.
"Closing" means the purchase and sale of the Purchased Interests pursuant
to this Agreement in accordance with the provisions of Section 8.
"Closing Date" means the date on which the Closing occurs.
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"Code" means the Internal Revenue Code of 1986, as amended, and the
Treasury Regulations promulgated thereunder, as amended and in effect from time
to time.
"Compensation Arrangement" means any plan or compensation arrangement
other than an Employee Plan, whether written or unwritten, which provides to
employees, former employees, officers, directors and shareholders of any
Renaissance Company or any ERISA Affiliate any compensation or other benefits,
whether deferred or not, in excess of base salary or wages, including, but not
limited to, any bonus or incentive plan, stock rights plan, deferred
compensation arrangement, life insurance, stock purchase plan, severance pay
plan and any other employee fringe benefit plan.
"Consents" means the consents, permits, approvals and authorizations of
Governmental Authorities and other Persons necessary to transfer the Purchased
Interests to Buyer and to consummate the other transactions contemplated by this
Agreement.
"Contracts" means all leases, easements, rights-of-way, rights of entry,
programming agreements, pole attachment and conduit agreements, customer
agreements and other agreements (other than Franchises), written or oral
(including any amendments and other modifications thereto), to which any
Renaissance Company is a party or which are binding upon any Renaissance Company
and (A) which are in effect on the date hereof, or (B) which are entered into by
any Renaissance Company between the date hereof and the Closing Date in
accordance with the provisions of this Agreement.
"Copyright Act" means the Copyright Act of 1976, as amended and in effect
from time to time.
"Credit Agreement" means the Credit Agreement dated as of April 9, 1998
among Renaissance Media, the Lenders party thereto, Xxxxxx Xxxxxxx Senior
Funding, Inc., as Syndication Agent and Arranger, CIBC, Inc., as Documentation
Agent, and Bankers Trust Company, as Administrative Agent, as the same may be
amended and in effect from time to time.
"Debt Documents" means the Indenture, the Indenture Closing Documents and
the Credit Agreement and all documents or instruments delivered in connection
therewith or pursuant thereto.
"Employee Plan" means any pension, retirement, profit-sharing, deferred
compensation, vacation, severance, bonus, incentive, medical, vision, dental,
disability, life insurance or any other employee benefit plan as defined in
Section 3(3) of ERISA to which any Renaissance Company or any ERISA Affiliate of
any Renaissance Company contributes or is required to contribute or which any
Renaissance Company or any such ERISA Affiliate sponsors or maintains.
"Employment Agreements" means the Employment Agreement dated April 9, 1998
between Renaissance Media LLC and Xxxx Xxxxxxx, the Employment Agreement dated
April 9,
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1998 between Renaissance Media LLC and Xxxxxx Xxxxxxxxx, the Employment
Agreement dated April 9, 1998 between Renaissance Media LLC and Xxxx Xxxxxx, the
Employment Agreement dated April 9, 1998 between Renaissance Media LLC and
Xxxxxxx X. Xxxx, the Employment Agreement dated April 9, 1998 between
Renaissance Media LLC and Xxxxxxx Xxxxx and the Employment Agreement dated April
9, 1998 between Renaissance Media LLC and Xxxxx X. Xxxxx.
"Encumbrances" means any pledge, claim, mortgage, lien, charge,
encumbrance or security interest of any kind or nature whatsoever.
"Enforceability Exceptions" means the exceptions or limitations to the
enforceability of contracts under bankruptcy, insolvency, or similar laws
affecting creditors' rights generally or by judicial discretion in the
enforcement of equitable remedies and by public policies generally.
"Environmental Claim" means any written claim or notice of any proceeding
before a Governmental Authority arising under or pertaining to any Environmental
Law or Hazardous Substance.
"Environmental Law" means any Legal Requirement pertaining to land use,
air, soil, surface water, groundwater (including the protection, cleanup,
removal, remediation or damage thereof), the handling, storage, treatment or
disposal of waste, including hazardous waste, and the handling, storage,
manufacture, treatment or transportation of hazardous materials, or to the
protection of public health and safety, occupational health and safety or worker
health and safety or any other environmental matter, including the following
laws as amended and as in effect at the relevant time (including, but not
limited to, the following statutes, any regulations promulgated pursuant to any
of them, any permits, licenses or authorizations issued thereunder, any state or
regional analogues thereto and any permits or regulations issued thereunder):
(A) Clean Air Act (42 U.S.C. Section 7401, et seq.); (B) Clean Water Act (33
U.S.C. Section 1251, et seq.); (C) Resource Conservation and Recovery Act (42
U.S.C. Section 6901, et seq.); (D) Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 9601, et seq.); (E) Safe
Drinking Water Act (42 U.S.C. 300f, et seq.); (F) the Hazardous Materials
Transportation Act; (G) the Federal Insecticide, Fungicide and Rodenticide Act
and (H) Toxic Substances Control Act (15 U.S.C. Section 2601, et seq.).
"Equity Interests" means any and all shares, interests, or other
equivalent interests (however designated) in the equity of any Person, including
capital stock, partnership interests and membership interests, and including any
rights, options or warrants with respect thereto.
"Equivalent Subscribers" means, with respect to any System, as of any date
of determination, the sum of: (A) the number of Basic Subscribers served by such
System as of such date; (B) the number of Basic Subscribers represented by the
Bulk Subscribers served by such System as of such date, which number shall be
calculated for full basic cable service provided by such System by dividing (1)
the monthly xxxxxxxx attributable to such System's Bulk Subscribers for full
basic cable service provided by such System for the calendar month immediately
preceding the date on which such calculation is made, by (2) the full,
non-
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discounted monthly rate charged by such System for full basic cable service
(excluding pass-through charges for sales taxes, line-itemized franchise fees,
fees charged by the FCC and other similar line-itemized charges); and (C) the
number of equivalent Basic Subscribers represented by the "Student Subscribers"
of the Renaissance Companies as of the date of determination, which number will
be determined as set forth on Exhibit A. For purposes of the foregoing, monthly
xxxxxxxx shall exclude xxxxxxxx for a la carte or optional service tiers and for
premium services, pass-through charges for sales taxes, line-itemized franchise
fees, fees charged by the FCC and other similar line-itemized charges, and
nonrecurring charges or credits which include those relating to installation,
connection, relocation and disconnection fees and miscellaneous rental charges
for equipment such as remote control devices and converters.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations thereunder, as amended and in effect from
time to time.
"ERISA Affiliate" means a trade or business affiliated within the meaning
of Sections 414(b), (c) or (m) of the Code.
"Escrow Agent" means the Escrow Agent named in the Indemnity Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder, as in effect from
time to time.
"Excluded Assets" means the assets listed on Exhibit B.
"FCC" means the Federal Communications Commission, or any successor agency
thereof.
"FCC Licenses" means any licenses issued or granted to a Renaissance
Company by the FCC, including all amendments thereto and renewals or
modifications thereof.
"FCC Regulations" means the rules, regulations and published policies and
decisions of the FCC as they are applicable to the Systems and promulgated by
the FCC with respect to the Cable Act, as in effect from time to time.
"Franchise" means any cable television franchise and related agreements,
ordinances, permits, instruments or other authorizations issued or granted to a
Renaissance Company by any Governmental Authority, including all amendments
thereto and renewals or modifications thereof.
"Franchise Area" means any geographic area in which a Renaissance Company
is authorized to provide cable television service pursuant to a Franchise or
otherwise provides cable television service for which area a Franchise is being
negotiated or is not required pursuant to applicable Legal Requirements.
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"Franchising Authorities" means all Governmental Authorities that have
issued or granted any Franchises relating to the operation of a System.
"GAAP" means generally accepted accounting principles as in effect in the
United States from time to time.
"Governmental Authority" means any federal, state, or local governmental
authority or instrumentality, including any court, tribunal or administrative or
regulatory agency, department, bureau, commission or board.
"Hazardous Substance" means any pollutant, contaminant, hazardous or toxic
substance, material, constituent or waste or any pollutant or any release
thereof that is labeled or regulated as such by any Governmental Authority
pursuant to an Environmental Law, including petroleum or petroleum compounds,
radioactive materials, asbestos or any asbestos-containing material, or
polychlorinated biphenyls.
"Headquarters Employees" means the employees of the Renaissance Companies
set forth in Schedule 1.2.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976,
and the regulations promulgated by the Federal Trade Commission with respect
thereto, as amended and in effect from time to time.
"Indebtedness" of any Person means, without duplication, (a) all
indebtedness for borrowed money; (b) all obligations issued, undertaken or
assumed as the deferred purchase price of property or services (other than trade
payables and accrued liabilities entered into in the ordinary course of business
on ordinary terms); (c) all non-contingent reimbursement or payment obligations
with respect to surety instruments; (d) all obligations evidenced by notes,
bonds, debentures or similar instruments, including obligations so evidenced
incurred in connection with the acquisition of property, assets or businesses;
(e) all indebtedness created or arising under any conditional sale or other
title retention agreement, or incurred as financing, in either case with respect
to property acquired by the Person (even though the rights and remedies of the
seller or bank under such agreement in the event of default are limited to
repossession or sale of such property) and all obligations under any linefill
agreements; (f) all capitalized lease obligations; (g) all net obligations with
respect to swap Contracts; (h) all indebtedness referred to in clauses (a)
through (g) above secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any lien upon or
in property (including accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
Indebtedness; and (i) all guaranty obligations in respect of indebtedness or
obligations of others of the kinds referred to in clauses (a) through (g) above;
provided, however, that "Indebtedness" shall not include any obligations such as
letters of credit, surety bonds or performance bonds or similar obligations
entered into in the ordinary course of business.
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"Indemnity Agreement" means the Indemnity Agreement to be executed and
delivered by Buyer, Charter, Holdings and the Escrow Agent, substantially in the
form of Exhibit E hereto, which agreement shall be executed and delivered on the
Closing Date.
"Indenture" means the Indenture dated as of April 9, 1998 among
Renaissance Louisiana, Renaissance Tennessee, Renaissance Capital, Group, as
guarantor, and United States Trust Company of New York, as Trustee as the same
may be amended and in effect from time to time.
"Indenture Closing Documents" means the Placement Agreement dated April 6,
1998 among Group, Renaissance Louisiana, Renaissance Tennessee, Renaissance
Capital and Xxxxxx Xxxxxxx & Co. Incorporated and the Registration Rights
Agreement dated April 6, 1998 among Group, Renaissance Louisiana, Renaissance
Tennessee, Renaissance Capital and Xxxxxx Xxxxxxx & Co. Incorporated, as each of
the same may be amended and in effect from time to time.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, patents, permits, proprietary information, technical
information and data, machinery and equipment warranties, and other similar
intangible property rights and interests (which shall in no event include
Franchises, Licenses or Contracts) issued to or owned by any of the Renaissance
Companies.
"Knowledge" means the actual knowledge of the persons listed in Schedule
1.1(a) with respect to Buyer and Charter and the actual knowledge of the persons
listed in Schedule 1.1(b) with respect to Holdings and Group.
"Legal Restrictions" means restrictions arising under the securities laws,
the Cable Act, FCC Regulations, the Franchises and the Licenses.
"Legal Requirements" means applicable common law and any applicable
statute, permit, ordinance, code or other law, rule, regulation, order,
technical or other standard, requirement or procedure enacted, adopted,
promulgated or applied by any Governmental Authority (including, without
limitation, the FCC), including any applicable order, decree or judgment which
may have been handed down, adopted or imposed by any Governmental Authority, all
as in effect from time to time.
"Licenses" means all domestic satellite, business radio and other FCC
Licenses, and all other licenses, authorizations and permits issued by any
Governmental Authority that are held by a Renaissance Company in the business
and operations of the Systems, excluding the Franchises.
"Loss" means any claims, losses, liabilities, damages, penalties, costs
and expenses (excluding any and all consequential, incidental and special
damages).
"Material Adverse Effect" means a material adverse effect on the business,
results of operations, assets, liabilities or financial condition of the
Renaissance Companies, taken as a whole or the Systems, taken as a whole, but
without giving effect to any effect resulting from (i) changes in conditions
(including economic conditions, Rate Regulatory Matters and other
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federal or state governmental actions, proposed or enacted legislation or
proposed or enacted regulations) that are applicable to the economy or the cable
television industry in general on a national, regional or state basis or (ii)
any changes in competition affecting the business of the Renaissance Companies.
"Material Contract" means any Contract that is material to the business,
financial condition or results of operations of the Renaissance Companies, taken
as a whole, including the Debt Documents, the Material Leases, and any other
Contract that requires payments in the aggregate of more than $50,000 per year
and has a remaining stated term of longer than twelve (12) months from the date
of this Agreement.
"Material FCC Consent" means any Consent of the FCC that is necessary for
the transfer of control to Buyer in connection with the consummation of the
transactions contemplated by this Agreement with respect to the Licenses
identified in Schedule 1.1.
"Material Lease" means any lease designated as a "Material Lease" in
Schedule 3.9.
"Organizational Documents" means, with respect any Person (other than an
individual), the articles or certificate of incorporation, bylaws, certificate
of limited partnership, partnership agreement, certificate of formation, limited
liability company operating agreement, and all other organizational documents of
any Person other than an individual.
"Permitted Encumbrances" means each of the following: (A) liens for
current taxes and other governmental charges that are not yet due and payable;
(B) liens for taxes, assessments, governmental charges or levies, or claims the
non-payment of which is being diligently contested in good faith or liens
arising out of judgments or awards against the Renaissance Companies with
respect to which at the time there shall be a prosecution for appeal or there
shall be a proceeding to review or the time limit has not yet run for such an
appeal or review with respect to such judgment or award; provided that with
respect to the foregoing liens in this clause (B), adequate reserves shall have
been set aside on the Renaissance Companies' books, and no foreclosure,
distraint, sale or similar proceedings shall have been commenced with respect
thereto that remain unstayed for a period of 60 days after their commencement;
(C) liens of carriers, warehousemen, mechanics, laborers, and materialmen and
other similar statutory liens incurred in the ordinary course of business for
sums not yet due or being diligently contested in good faith, and for which
adequate reserves have been set aside on the Renaissance Companies' books; (D)
liens incurred in the ordinary course of business in connection with worker's
compensation and unemployment insurance or similar laws; (E) statutory
landlords' liens; (F) with respect to the Real Property, leases, easements,
rights to access, rights-of-way, mineral rights or other similar reservations
and restrictions, defects of title, which are either of record or set forth in
Schedule 3.19 or in the deeds or leases to such Real Property or which (and,
with respect to owned Real Property only, and which) either individually or in
the aggregate, do not have any Material Adverse Effect; (G) Encumbrances arising
under or in respect of the Senior Debt and the Credit Agreement and the
documents and instruments delivered in connection therewith or pursuant thereto;
and (H) any other claims or encumbrances that are described in Schedule 3.9 and
that relate to liabilities and
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obligations that are to be discharged in full at the Closing or that will be
removed prior to or at Closing.
"Person" means an individual, corporation, association, partnership, joint
venture, trust, estate, limited liability company, limited liability
partnership, Governmental Authority, or other entity or organization.
"Pre-Closing Tax Period" means any Tax period (or portion thereof) ending
on or before the Closing Date.
"Programming Agreement" means the Program Management Agreement dated as of
April 9, 1998 by and between Renaissance Media and Time Warner Cable, a division
of Time Warner Entertainment Company, L.P., a Delaware limited partnership, as
the same may be amended and in effect from time to time.
"Purchased Interests" means 100% of the limited liability company
interests of Group.
"Rate Regulatory Matter" shall mean, with respect to any cable television
system, any matter or any effect on such system or the business or operations
thereof, arising out of or related to the Cable Act, any FCC Regulations
heretofore adopted thereunder, or any other present or future Legal Requirement
dealing with, limiting or affecting the rates which can be charged by cable
television systems to their customers (whether for programming, equipment,
installation, service or otherwise).
"Real Property" means all of the fee and leasehold estates and, to the
extent of the interest, title, and rights of the Renaissance Companies in the
following: buildings and other improvements thereon, easements, licenses, rights
to access, rights-of-way, and other real property interests that are owned or
held by any of the Renaissance Companies and used or held for use in the
business or operations of the Systems, plus such additions thereto and less such
deletions therefrom arising between the date hereof and the Closing Date in
accordance with this Agreement.
"Released Parties" means, collectively, Holdings and its Affiliates and
their respective officers, directors, shareholders, members, partners, employees
and agents.
"Renaissance Capital" means Renaissance Media Capital Corporation, a
Delaware corporation.
"Renaissance Companies" means, collectively, Group, Renaissance Media,
Renaissance Capital, Renaissance Louisiana and Renaissance Tennessee, each of
which may be referred to herein individually as a "Renaissance Company."
"Renaissance's Disclosure Schedules" means the Disclosure Schedules
referred to in Sections 3, 4 and 6.1 of this Agreement and attached to this
Agreement.
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"Renaissance Louisiana" means Renaissance Media (Louisiana) LLC, a
Delaware limited liability company.
"Renaissance Media" means Renaissance Media LLC, a Delaware limited
liability company.
"Renaissance Tennessee" means Renaissance Media (Tennessee) LLC, a
Delaware limited liability company.
"SEC" means the U.S. Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder, as in effect from time
to time.
"Senior Debt" means the outstanding indebtedness of the Renaissance
Companies under the Credit Agreement.
"Senior Debt Amount" means the aggregate principal amount, plus accrued
and unpaid interest, outstanding in respect of the Senior Debt pursuant to the
Credit Agreement as of the Closing Date.
"Senior Discount Notes" means the 10% Senior Discount Notes due 2008 in
the aggregate principal amount at maturity of $163,175,000 issued by Renaissance
Louisiana, Renaissance Tennessee and Renaissance Capital and guaranteed by
Group.
"Senior Discount Notes Accreted Value" means the Accreted Value (as
defined in the Indenture) of the Senior Discount Notes as of the Closing Date.
"Subscriber" means any Person to whom any Renaissance Company provides
cable television programming or other service through the Systems into a single
household, a multiple dwelling unit, a hotel or motel unit, a commercial
business or any other real property improvement.
"Subsidiary" means, with respect to any Person, any other Person of which
the outstanding voting Equity Interests sufficient to elect at least a majority
of its board of directors or other governing body (or, if there are no such
voting interests, of which 50% or more of the Equity Interests) are owned
(beneficially or otherwise) directly or indirectly by such first Person or any
Subsidiary thereof.
"Systems" means the cable television systems owned and operated by any
Renaissance Company or any combination of any of them, each of which may be
referred to herein individually as a "System."
"Tangible Personal Property" means all of the equipment, tools, vehicles,
furniture, leasehold improvements, office equipment, plant, converters, spare
parts, and other tangible
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personal property which are owned or leased by any of the Renaissance Companies
and used or held for use in the conduct of the business or operations of the
Systems, plus such additions thereto and less such deletions therefrom arising
between the date hereof and the Closing Date in accordance with this Agreement
and other than the Excluded Assets.
"Tax" means any and all taxes, fees, levies, duties, tariffs, imposts and
other charges of any kind imposed by any government or taxing authority,
including, without limitation: federal, state, local, or foreign income, gross
receipts, windfall profits, severance, property, production, sales, use,
license, excise, franchise, capital, transfer, employment, withholding, or other
tax or governmental assessment, together with any interest, additions, or
penalties with respect thereto and any interest in respect of such additions or
penalties.
"Tax Return" means any tax return, declaration of estimated tax, tax
report or other tax statement, or any other similar filing , including any
schedule or attachment thereto, and including any amendment thereof, required to
be submitted to any Governmental Authority with respect to any Tax.
"Transaction Documents" means this Agreement, the Adjustment Escrow
Agreement (if applicable), the Indemnity Agreement and the other documents,
agreements, certificates and other instruments to be executed, delivered and
performed by the parties in connection with the transactions contemplated by
this Agreement.
"Transferable Franchise Area" means any Franchise Area with respect to
which (A) any Consent necessary under a Franchise in connection with the
consummation of the transactions contemplated by this Agreement shall have been
obtained or shall have been deemed obtained by operation of law in accordance
with the provisions of the Cable Act, or (B) no Consent is necessary under a
Franchise in connection with the consummation of the transactions contemplated
by this Agreement.
"Upset Date" means the one year anniversary date of this Agreement,
subject to extension as provided in Section 8.1(a)(3) and 8.1(a)(4).
1.2 Terms Defined Elsewhere in this Agreement. For purposes of this
Agreement, and in addition to (i) the definitions set forth in the first
paragraph hereof and in Section 1.1, and (ii) certain defined terms that are
used solely within the section in which they are defined, the following terms
have the meanings set forth in the sections indicated:
Term Section
---- -------
Adjustment Escrow Amount Section 2.4(b)
Antitrust Division Section 6.5
Cash Consideration Section 2.2
CCH Section 5.6
Claimant Section 10.6(a)
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Closing Cash Payment Section 2.4
Closing Equivalent Subscribers Section 2.3(a)
Closing Net Liabilities Section 2.3(b)
Confidentiality Agreement Section 6.2(a)
Current Assets Section 2.3(b)(2)
Current Liabilities Section 2.3(b)(3)
DOL Section 3.13(d)(ix)
Fee Properties Section 3.9
Final Closing Statement Section 2.5(a)
Financial Statements Section 3.5(a)
FTC Section 6.5
Indemnity Fund Section 10.4
Indemnifying Party Section 10.6(a)
Inventory Section 3.19
Investment Person Section 3.3(a)
Preliminary Closing Statement Section 2.4
Preliminary Dispute Notice Section 2.4
Referee Section 2.4(a)
Tax Partnership Section 3.12(f)
Working Capital Section 2.3(b)(1)
Year 2000 Problem Section 3.22
1.3 Rules of Construction. Words used in this Agreement, regardless of the
gender and number specifically used, shall be deemed and construed to include
any other gender and any other number as the context requires. As used in this
Agreement, the word "including" is not limiting, and the word "or" is not
exclusive. Except as specifically otherwise provided in this Agreement in a
particular instance, a reference to a Section is a reference to a Section of
this Agreement, a reference to an Exhibit is a reference to an Exhibit to this
Agreement, and the terms "hereof," "herein," and other like terms refer to this
Agreement as a whole, including the Disclosure Schedules and the Exhibits to
this Agreement, and not solely to any particular part of this Agreement. The
descriptive headings in this Agreement are inserted for convenience of reference
only and are not intended to be part of or to affect the meaning or
interpretation of this Agreement.
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SECTION 2 SALE AND PURCHASE OF PURCHASED INTERESTS; ASSUMPTION OF
LIABILITIES; CASH CONSIDERATION.
2.1 Agreement to Sell and Buy Purchased Interests. Subject to the terms
and conditions set forth in this Agreement, Holdings hereby agrees to sell,
transfer, convey and deliver to Buyer at the Closing, and Buyer hereby agrees to
purchase at the Closing, the Purchased Interests free and clear of all
Encumbrances, subject to the Legal Restrictions.
2.2 Cash Consideration for Purchased Interests. Buyer shall pay and
deliver to Holdings at the Closing, as consideration for the sale of the
Purchased Interests, a cash payment equal to Four Hundred Fifty-Nine Million
Dollars ($459,000,000), subject to adjustment in accordance with Sections 2.3,
2.4 and 2.5 (the "Cash Consideration"), less the amounts to be deposited by
Buyer in escrow under the Adjustment Escrow Agreement pursuant to Section
2.4(b), to the extent applicable, and under the Indemnity Agreement and pursuant
to Section 10.4.
2.3 Cash Consideration Adjustments.
(a) Closing Equivalent Subscribers. The Cash Consideration shall be
decreased by the number, if any, by which the number of Closing Equivalent
Subscribers is less than 130,645 multiplied by $3,513. For purposes of this
Agreement, "Closing Equivalent Subscribers" means the total number of Equivalent
Subscribers for all of the Systems as of the Closing Date.
(b) Closing Net Liabilities. The Cash Consideration shall be
decreased by the amount of the Closing Net Liabilities. For purposes of this
Agreement, "Closing Net Liabilities" means:
(i) the Senior Discount Notes Accreted Value; plus
(ii) the Senior Debt Amount; plus
(iii) the principal amount and any accrued but unpaid
interest as of the Adjustment Time in respect of
any other indebtedness for borrowed money (not
included in the foregoing clauses (b)(i) and (ii)
of this Section 2.3), if any, of the Renaissance
Companies as of the Closing Date; minus
(iv) Working Capital if such number is greater than
zero; plus
(v) the absolute value of Working Capital if such
number is less than zero.
(1) Subject to the other provisions of this Section 2.3(b),
"Working Capital" means Current Assets as of the Adjustment Time minus Current
Liabilities as of the Adjustment Time.
(2) Subject to the other provisions of this Section 2.3(b),
"Current Assets" means the total current assets of the Renaissance Companies as
defined for purposes of
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GAAP, and prepayments in respect of performance bonds and long term rights of
way with a maturity in excess of one year, computed for the Renaissance
Companies as of the Adjustment Time on a consolidated basis and without
duplication in accordance with GAAP.
(3) Subject to the other provisions of this Section 2.3(b) and
Section 3.12(a), "Current Liabilities" means the total current liabilities of
the Renaissance Companies as defined for purposes of GAAP, including, without
limitation, vacation pay, computed for the Renaissance Companies as of the
Adjustment Time on a consolidated basis and without duplication in accordance
with GAAP; provided, however, that notwithstanding GAAP, or anything to the
contrary in this Agreement, Current Liabilities shall not include and no
adjustment to the Cash Consideration shall be made in respect of: (A) any amount
payable in respect of or pursuant to the Debt Documents; (B) any prepayment
penalty or premium, breakage costs, change of control penalty or premium or
other payment arising out of or resulting from the consummation of the
transactions contemplated by this Agreement, including the termination of any
Contract, under or pursuant to the Debt Documents or any other Contract or other
obligation to which any of the Renaissance Companies is a party or by which it
may be bound; or (C) any Taxes to be paid by the Buyer pursuant to Section 6.10.
2.4 Payments at Closing. No later than ten (10) days prior to the date
scheduled for the Closing, Holdings shall prepare and deliver to Buyer a written
report (the "Preliminary Closing Statement") setting forth Holdings' estimates
of Closing Net Liabilities and Closing Equivalent Subscribers, determined in
accordance with Section 2.3, and the Cash Consideration, as adjusted pursuant to
Section 2.3 and a list and description of the principal methodologies and the
principal accounting policies and practices used in the preparation thereof. The
Preliminary Closing Statement shall be prepared by Holdings in good faith and
shall be certified by Holdings to be its good faith estimate of the Closing Net
Liabilities and Closing Equivalent Subscribers as of the date thereof. Holdings
shall make available to Buyer such information as Buyer shall reasonably request
relating to the matters set forth in the Preliminary Closing Statement. If Buyer
does not agree with the Closing Net Liabilities, Closing Equivalent Subscribers
or Cash Consideration set forth in the Preliminary Closing Statement, then on or
prior to the third day prior to the date scheduled for the Closing, Buyer may
deliver to Holdings a written report (the "Preliminary Dispute Notice") setting
forth in reasonable detail Buyer's good faith estimates (supported by
substantial evidence) of any amount set forth in the Preliminary Closing
Statement with which Buyer disagrees. In the case of any such estimated amount
set forth in the Preliminary Dispute Notice, Holdings and Buyer shall endeavor
in good faith to agree prior to the Closing on the appropriate amount of such
estimates to be used in calculating the Closing Cash Payment (as defined below).
If Holdings and Buyer do not agree on any such amounts by the business day prior
to the date scheduled for the Closing, Holdings, at its election, may either:
(a) Elect to postpone the Closing and retain Price Waterhouse
Coopers (the "Referee") to make a determination as to the appropriate treatment
for purposes of agreeing on estimates to be made at Closing of any amounts under
dispute and the Closing shall thereafter take place on the third business day
following resolution of such dispute, subject to satisfaction or waiver of all
applicable conditions precedent. The Referee shall endeavor to resolve the
dispute as promptly as practicable and the Referee's resolution of the dispute
shall be final and
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binding on the parties for purposes of the estimates to be made at Closing;
provided, however, that in no event shall such resolution result in (i) amounts
less than the amounts therefor (in the case of liabilities) or greater than the
amounts therefor (in the case of assets) set forth in the Preliminary Closing
Statement or (ii) amounts greater than the amounts therefor (in the case of
liabilities) or less than the amounts therefor (in the case of assets) set forth
in the Preliminary Dispute Notice. The costs and expenses of the Referee and its
services rendered pursuant to this Section 2.4 shall be borne one-half by Buyer
and one-half by Holdings; or
(b) Elect to proceed to Closing and cause Buyer, at the Closing, to
deposit an amount in cash equal to the difference (the "Adjustment Escrow
Amount") between the Cash Consideration, adjusted pursuant to Section 2.3(a) and
(b) that would be calculated using the estimates set forth in the Preliminary
Closing Statement (with any changes thereto mutually agreed to by Buyer and
Holdings) and the Cash Consideration adjusted pursuant to Section 2.3(a) and (b)
that would be calculated using the estimates set forth in the Preliminary
Dispute Notice (with any changes thereto mutually agreed to by Buyer and
Holdings), to the Adjustment Escrow Agent, to be held and disbursed in
accordance with the terms of the Adjustment Escrow Agreement and Section 2.5.
At Closing, Buyer shall pay (x) to the Escrow Agent the sum of the
Indemnity Fund to be held by the Escrow Agent in escrow on behalf of Holdings in
accordance with the terms of the Indemnity Agreement and Section 10.4, (y) if
Holdings has made the election in clause (b) above, to the Adjustment Escrow
Agent, the Adjustment Escrow Amount to be held by the Adjustment Escrow Agent in
escrow on behalf of the parties in accordance with the terms of the Adjustment
Escrow Agreement and Section 2.5 and (z) to Holdings the amount of the Cash
Consideration adjusted pursuant to Section 2.3(a) and (b), as determined
pursuant to this Section 2.4 (including, without limitation, as determined
pursuant to Section 2.4(a) and as mutually agreed by Buyer and Holdings) (such
amount, the "Closing Cash Payment"), less the aggregate amount paid to the
Escrow Agent under clause (x) and, if applicable, the Adjustment Escrow Agent
under clause (y). None of the Adjustment Escrow Amount will be available for any
purpose, other than as described in Section 2.5(b), and the Adjustment Escrow
Amount shall not be available to satisfy any obligations of Holdings pursuant to
Section 10.
2.5 Post-Closing Payment of Cash Consideration Adjustments.
(a) Final Closing Statement. Within seventy-five (75) days after the
Closing Date, Buyer shall prepare and deliver to Holdings a written report (the
"Final Closing Statement") setting forth Buyer's final estimates of Closing Net
Liabilities and Closing Equivalent Subscribers to the extent not previously
determined pursuant to Section 2.4(a), determined in accordance with Section 2.3
and in accordance with the methodologies and the accounting policies and
practices consistent with those used in preparing the Preliminary Closing
Statement, and the Cash Consideration, as adjusted pursuant to Section 2.3. The
Final Closing Statement shall be prepared by Buyer in good faith and shall be
certified by Buyer to be, as of the date prepared, its good faith estimate of
the Closing Net Liabilities, Closing Equivalent Subscribers and Cash
Consideration, as so adjusted, as applicable. Buyer shall allow Holdings and its
agents access at all reasonable times after the Closing Date to copies of the
books, records
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and accounts of the Renaissance Companies and make available to Holdings such
information as Holdings reasonably requests to allow Holdings to examine the
accuracy of the Final Closing Statement. Within thirty (30) days after the date
that the Final Closing Statement is delivered by Buyer to Holdings, Holdings
shall complete its examination thereof and may deliver to Buyer a written report
setting forth any proposed adjustments to any amounts set forth in the Final
Closing Statement; provided, however, that if Buyer does not comply with its
obligations pursuant to the preceding sentence, such thirty (30) day period
shall run from the day after the date on which Buyer complies with such
obligations. After submission of the Final Closing Statement, Buyer shall have
no right to raise further adjustments in its favor and after submission of
Holdings' report of any proposed adjustments, Holdings shall have no right to
raise further adjustments in its favor. If Holdings notifies Buyer of its
acceptance of the amounts set forth in the Final Closing Statement, or if
Holdings fails to deliver its report of any proposed adjustments within the
period specified in the second preceding sentence, the amounts set forth in the
Final Closing Statement shall be conclusive, final and binding on the parties as
of the last day of such period. Buyer and Holdings shall use good faith efforts
to resolve any dispute involving the amounts set forth in the Final Closing
Statement. If Holdings and Buyer fail to agree on any amount set forth in the
Final Closing Statement within fifteen (15) days after Buyer receives Holdings'
report pursuant to this Section 2.5, (a) then Holdings shall retain the Referee
to make the final determination, under the terms of this Agreement, of any
amounts under dispute. The Referee shall endeavor to resolve the dispute as
promptly as practicable and the Referee's resolution of the dispute shall be
final and binding on the parties, and a judgment may be entered thereon in any
court of competent jurisdiction; provided that in no event shall such resolution
result in (i) amounts less than the amounts therefor (in the case of
liabilities) or more than the amounts therefor (in the case of assets) set forth
in Holdings' written report pursuant to this Section 2.5(a) or (ii) amounts
greater than the amounts therefor (in the case of liabilities) or less than the
amounts therefor (in the case of assets) set forth in the Final Closing
Statement. The costs and expenses of the Referee and its services rendered
pursuant to this Section 2.5 shall be borne one-half by Buyer and one-half by
Holdings.
(b) Payment of Cash Consideration Adjustments.
(1) After the amount of the Cash Consideration is finally
determined pursuant to Section 2.5(a), payments shall be made as follows:
(A) If the amount of the Cash Consideration as finally
determined pursuant to Section 2.5(a) exceeds the Closing Cash Payment, then
within three business days after the date the amount of Cash Consideration is
finally determined pursuant to Section 2.5(a), (i) Buyer will pay to Holdings in
cash the amount of such excess by wire or accounts transfer of immediately
available funds to an account designated by Holdings by written notice to Buyer
and (ii) Buyer and Holdings will direct the Adjustment Escrow Agent to pay to
Holdings in cash the Adjustment Escrow Amount, if any.
(B) If the amount of the Closing Cash Payment exceeds
the amount of the Cash Consideration as finally determined pursuant to Section
2.5(a), then within three business days after the date the amount of Cash
Consideration is finally determined
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pursuant to Section 2.5(a), (i) Holdings will direct the Adjustment Escrow Agent
to pay to Buyer in cash the amount of such excess to the extent of the
Adjustment Escrow Amount, if any, and (ii) if such excess is greater than the
amount paid to Buyer from the Adjustment Escrow Amount, Holdings will pay to
Buyer in cash the amount of such excess to the extent not paid from the
Adjustment Escrow Amount, by wire or accounts transfer of immediately available
funds to an account designated by Buyer by written notice to Holdings. If any
portion of the Adjustment Escrow Amount, if any, remains after payment to Buyer
of any amounts pursuant to the preceding sentence, Buyer and Holdings will
direct the Adjustment Escrow Agent to promptly pay such amounts to Holdings.
(2) Any amount which becomes payable pursuant to this Section
2.5 will constitute an adjustment to the Cash Consideration for all purposes.
SECTION 3: REPRESENTATIONS AND WARRANTIES OF GROUP
Subject to any provisions of this Agreement limiting, qualifying or
excluding any of the representations or warranties made herein, and to the
disclosures set forth in Renaissance's Disclosure Schedules, as such schedules
are referenced herein, Group hereby represents and warrants to Buyer as set
forth in this Section 3.
3.1 Organization and Authority. Each of the Renaissance Companies (other
than Renaissance Capital) set forth in Schedule 3.1 is a limited liability
company duly formed, validly existing and in good standing under the laws of the
State of Delaware. Renaissance Capital is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. Each of
the Renaissance Companies has the requisite limited liability company or
corporate (as the case may be) power and authority to own, lease and operate its
properties, to carry on its business in the places where such properties are now
owned, leased or operated and in the manner in which such business is now
conducted, and to execute, deliver and perform this Agreement and the other
Transaction Documents to which it is a party according to their respective
terms.
3.2 Authorization and Binding Obligation. The execution, delivery and
performance by Group of this Agreement and the other Transaction Documents to
which it is a party have been duly authorized by all necessary limited liability
company or corporate (as the case may be) action on its part. This Agreement and
the other Transaction Documents to which each Renaissance Company is a party
have been duly executed and delivered by such Renaissance Company (as the case
may be, or, in the case of Transaction Documents to be executed and delivered at
Closing, when executed and delivered will be duly executed and delivered) and
constitute (or, in the case of Transaction Documents to be executed and
delivered at Closing, when executed and delivered will constitute) the legal,
valid, and binding obligation of such Renaissance Company (as the case may be)
enforceable against such Renaissance Company (as the case may be) in accordance
with their terms, except as the enforceability of this Agreement and such other
Transaction Documents may be limited by Enforceability Exceptions.
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3.3 Organization and Ownership of Renaissance Companies.
(a) Schedule 3.3 sets forth the name of each Renaissance Company,
including the jurisdiction of incorporation or formation (as the case may be) of
each. Each Renaissance Company is duly qualified, validly existing and in good
standing as a foreign corporation or limited liability company, as the case may
be, in each jurisdiction listed in Schedule 3.3, which are all jurisdictions in
which such qualification is required. Except as disclosed in Schedule 3.3, no
Renaissance Company, directly or indirectly, owns, of record or beneficially,
any outstanding securities or other interest in any Person (each such Person
described in Schedule 3.3, an "Investment Person") or has the right or
obligation to acquire, any Equity Interests, outstanding securities or other
interest in any Person
(b) Schedule 3.3 sets forth the authorized, issued and outstanding
Equity Interests of each Renaissance Company and the record and beneficial owner
of each issued and outstanding Equity Interest of each of them. All of such
issued and outstanding Equity Interests of the Renaissance Companies have been
validly issued, are fully paid and non-assessable and have not been issued in
violation of any federal or state securities laws. Except as set forth in
Schedule 3.3, the owner of the Equity Interests of each Renaissance Company owns
such Equity Interests free and clear of all Encumbrances, but subject to the
Legal Restrictions (except that no representation is made in this Section 3 as
to the Purchased Interests held by Holdings). Except as disclosed in Schedule
3.3, there are no outstanding securities, options, warrants, calls, rights,
commitments, agreements, arrangements or undertakings of any kind to which any
Renaissance Company is a party or by which any of them is bound obligating such
Renaissance Company to issue, deliver or sell, or cause to be issued, delivered
or sold, any additional Equity Interests of such Renaissance Company or
obligating such Renaissance Company to issue, grant, extend or enter into any
such security, option, warrant, call, right, commitment, agreement, arrangement
or undertaking. The Renaissance Companies have delivered to Buyer complete and
correct copies of the Organizational Documents of each Renaissance Company as in
effect on the date hereof.
3.4 Absence of Conflicting Agreements; Consents. Except for the expiration
or termination of any applicable waiting period under the HSR Act, or as set
forth in Schedule 3.4 or Schedule 3.8 or as would not impair the ability of
Group to perform its obligations under the Transaction Documents, the execution,
delivery and performance by Holdings and Group of this Agreement and the other
Transaction Documents to which they are a party (with or without the giving of
notice, the lapse of time, or both): (a) do not require the Consent of, notice
to, or filing with any Governmental Authority or any other Person under any
Franchise, FCC License or Material Contract; (b) will not conflict with any
provision of the Organizational Documents of any Renaissance Company, each as
currently in effect; (c) assuming receipt of all Consents listed in Schedule 3.4
or Schedule 3.8, will not conflict with, in any material way, result in a
material breach of, or constitute a material default under any Legal Requirement
to which any Renaissance Company is bound; (d) assuming receipt of all Consents
listed in Schedule 3.4 or Schedule 3.8, will not conflict with, constitute
grounds for termination of, result in a breach of, constitute a default under,
or accelerate or permit the acceleration of any performance required by the
terms of any Franchise, FCC License, or Material Contract; and (e) assuming
receipt of all Consents, will not result in the creation of any Encumbrance upon
the Assets. Notwithstanding
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the foregoing, Group makes no representation or warranty regarding any of the
foregoing that may result from the specific legal or regulatory status of any of
the Charter Parties or as a result of any other facts that specifically relate
to the business or activities in which any of the Charter Parties is or proposes
to be engaged other than the cable television business.
3.5 Financial Statements.
(a) Holdings has furnished Buyer with true and complete copies of
the audited consolidated financial statements (including the notes thereto) of
Group for the year ended December 31, 1998 that are attached hereto as Schedule
3.5 (collectively, the "Financial Statements"), and such Financial Statements
are by that reference incorporated into and deemed a part of Renaissance's
Disclosure Schedules.
(b) Except as disclosed in Schedule 3.5, the Financial Statements:
(1) have been prepared from the books and records of the Renaissance Companies
to which they relate; (2) have been prepared in accordance with GAAP
consistently applied since the inception of Group (except as indicated in the
notes thereto); and (3) present fairly in all material respects the financial
condition of the Renaissance Companies to which they relate as at December 31,
1998, and the results of operations for the period then ended.
3.6 Absence of Undisclosed Liabilities.
(a) None of the Renaissance Companies has any indebtedness,
liability or obligation of a type required by GAAP to be reflected on a balance
sheet that is not reflected or reserved against in the balance sheet of the
Renaissance Companies included in the Financial Statements, other than
indebtedness, liabilities and obligations that were incurred in the ordinary
course of business after December 31, 1998, or that would not, in the aggregate,
reasonably be expected to be material in accordance with GAAP.
(b) As of the date hereof, except as provided in or arising pursuant
to the loan or credit agreements, notes, bonds, indentures and other agreements
and instruments listed in Schedule 3.6, or under certain of the property leases
listed in Schedule 3.8, the Renaissance Companies have no Indebtedness.
3.7 Absence of Certain Changes. Since December 31, 1998, except as
disclosed in Schedule 3.7 and except for matters occurring after the date hereof
that are permitted by the provisions of this Agreement or consented to by Buyer
and Charter no Renaissance Company has:
(a) made any sale, assignment, lease or other transfer of assets
other than in the ordinary course of business;
(b) issued any note, bond or other debt security or created,
incurred, assumed or guaranteed any Indebtedness; or
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(c) made or promised any material increase in the salary or other
compensation payable or to become payable to any executive officer or other
employee of any Renaissance Company other than in the ordinary course of
business or as contemplated under any employment or bonus arrangement currently
in effect.
3.8 Franchises, Licenses, Material Contracts. Schedule 3.8 contains a list
of the Franchises (including the Franchising Authority which granted each
Franchise, the stated expiration date of each Franchise), the System to which
the Franchise applies, FCC Licenses and Material Contracts in effect on the date
hereof, each pending application for a Franchise and a list of any System or
portion thereof owned or operated by the Renaissance Company which does not
require a Franchise authorizing the installation, construction, development,
ownership or operation of the same; which list is true, correct and complete.
The Renaissance Companies possess all Franchises and FCC Licenses necessary to
operate their business as currently conducted. Without material exception, the
Renaissance Companies possess all other Licenses necessary to operate their
business as currently conducted. Holdings has delivered to Buyer true and
complete copies of all Franchises, FCC Licenses and Material Contracts as in
effect on the date hereof. The Franchises, FCC Licenses and Material Contracts
are in full force and effect (subject to expiration at the end of their current
term) and are valid, binding and enforceable upon the Renaissance Company that
is a party thereto and, to Group's Knowledge, the other parties thereto in
accordance with their terms, except to the extent such enforceability may be
affected by Enforceability Exceptions. Except as disclosed in Schedule 3.8, the
Renaissance Companies are in compliance with the terms of the Franchises, FCC
Licenses and Material Contracts, except for such noncompliance which in the
aggregate is immaterial to the Renaissance Companies, taken as a whole, or would
not prevent the operation of the business of the Renaissance Companies as
currently conducted, and, as of the date of this Agreement, none of the
Renaissance Companies has received any written notice from a Franchising
Authority, a consultant representing a Franchising Authority, any state cable
regulatory authority or the FCC to the effect that any of the Renaissance
Companies are not currently in compliance with the terms of the Franchise
granted by such Franchising Authority or with any FCC License. Except as set
forth in Schedule 3.8, a valid request for renewal has been timely filed under
Section 626(a) of the Cable Act with the proper Franchising Authority with
respect to each Franchise that has expired prior to, or will expire within
thirty months after, the date of this Agreement.
3.9 Title to and Condition of Real Property and Tangible Personal
Property. Schedule 3.9 lists the street address for all Real Property owned in
fee by any of the Renaissance Companies as of the date of this Agreement
(excluding easements, rights-of-way, and similar authorizations) (the "Fee
Properties"). A true and correct copy of (i) each deed pursuant to which any of
the Renaissance Companies acquired any Fee Property, any survey and title
insurance policies issued to such Renaissance Company, (ii) any leases under
which any Renaissance Company is the lessor affecting such Fee Property or (iii)
any other easements, rights-of-way, covenants, conditions and restrictions,
document or agreement affecting title to such Fee Property (and, in the case of
this clause (iii), in the possession of the Renaissance Companies) have been
delivered or made available to Buyer. Schedule 3.9 lists the street address for
the Real Property leased by any of the Renaissance Companies, as lessee, as of
the date of this Agreement and sets forth the parties to the applicable lease
and any amendments,
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supplements or modifications thereto. Except as disclosed in Schedule 3.9: (a)
the Renaissance Company that owns a fee estate in a Real Property parcel has
good and marketable title thereto; (b) the Renaissance Company that owns any
material item of Tangible Personal Property has good and valid title thereto;
(c) the Renaissance Company that leases Real Property has a valid leasehold
interest therein (subject to expiration of such lease in accordance with its
terms), except to the extent that the failure to have any such valid leasehold
interests would not impair the operation of the Systems in any material respect;
and (d) the Renaissance Company that leases any material item of Tangible
Personal Property has a valid leasehold interest therein (subject to expiration
of such lease in accordance with its terms), in each case of (a), (b), (c) and
(d) above, free and clear of all Encumbrances, other than Permitted Encumbrances
and subject to the Legal Restrictions. Notwithstanding the express language of
this Section 3.9 or as may otherwise be provided in this Agreement, no
representation or warranty is being made as to title to the internal wiring,
house drops and unrecorded dwelling-unit easements, rights of entry or
rights-of-way held or used by the Renaissance Companies.
3.10 Intangibles. Schedule 3.10 contains a true and correct description
and list of the Intangibles (exclusive of those required to be listed in
Schedule 3.8), that are owned or leased by any of the Renaissance Companies and
that are necessary for the conduct of the business or operations of the Systems
as currently conducted. Except as to potential copyright liability arising from
the performance, exhibition or carriage of any music on the Systems or as
disclosed in Schedule 3.10, no Renaissance Company is infringing upon any
trademarks, trade names, copyrights or similar intellectual property rights of
others.
3.11 Information Regarding the Systems.
(a) Subscribers. Schedule 3.11 sets forth the approximate number of
Equivalent Subscribers as of the date indicated therein (including the
approximate number of Equivalent Subscribers served in each System) and sets
forth a true, complete and correct statement of all Subscribers' rates, tariffs
and other charges for cable television and other services provided by any
Renaissance Company, and a list of all free, discount or other promotional
service obligations (other than those obligations which are regularly offered or
arise in the ordinary course of the business and operations of the Renaissance
Companies) of any Renaissance Company, with respect to the Systems as of the
date of this Agreement. The Renaissance Companies' billing records are prepared
by CSG Systems, Inc. in accordance with its customary practices.
(b) Certain Systems Information. Schedule 3.11 sets forth the
approximate number of plant miles (aerial and underground) for each System, the
approximate bandwidth capability of each System, the channel lineup for each
System, and the monthly rates charged for each class of service offered by each
headend, the stations and signals carried by each System and the channel
position of each such signal and station, which information is true and correct
in all material respects, in each case as of the applicable dates specified
therein and subject to any qualifications set forth therein. Each of the
respective channel lineups set forth in Schedule 3.11 is capable of being viewed
in its entirety by each Subscriber in the applicable System (subject to ordinary
course service interruptions).
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(c) Franchise and FCC Matters. Except as set forth in Schedule 3.11,
all reports or other documents, payments or submissions required to be filed by
any of the Renaissance Companies with any of the Franchising Authorities or the
FCC have been duly filed and were correct in all material respects when filed.
Except as set forth in Schedule 3.11, the Renaissance Companies are permitted
under all applicable Franchises and FCC Regulations to distribute the television
broadcast signals distributed by the Systems and to utilize all carrier
frequencies generated by the operations of the Systems, and are licensed to
operate in all material respects all the facilities of the Systems required by
Legal Requirements to be licensed.
(d) Request for Signal Carriage. Except for nonduplication and
blackout notices received in the ordinary course of business, none of the
Renaissance Companies has received any FCC order requiring any System to carry a
television broadcast signal or to terminate carriage of a television broadcast
signal with which it has not complied, and, except as disclosed in Schedule
3.11, the Renaissance Companies have complied in all material respects with all
written and bona fide requests or demands received from television broadcast
stations to carry or to terminate carriage of a television broadcast signal on a
System.
(e) Rate Regulatory Matters. Schedule 3.11 sets forth a list of all
Governmental Authorities that are certified to regulate rates of the Systems
pursuant to the Cable Act and FCC Regulations as of the date of this Agreement.
No pending rate complaints have been filed with the FCC against the Systems
according to the FCC's log dated January 1, 1999, which reflects rate complaints
filed through December 31, 1998. Except as disclosed in Schedule 3.11, as of the
date of this Agreement, none of the Renaissance Companies has received any
written notice and, to Group's Knowledge, any notice (other than written notice)
from any Governmental Authority that it has any obligation or liability to
refund to subscribers of the Systems any portion of the revenue received by such
Renaissance Company from subscribers of the Systems (excluding revenue with
respect to deposits for converters, encoders, decoders and related equipment and
other prepaid items) that has not been resolved. Buyer and Charter acknowledge
that, except as expressly warranted in this Section 3.11(e), Group is not making
any representation or warranty regarding any Rate Regulatory Matter and Buyer
and Charter shall not be entitled to make any claim against Holdings or Group
arising out of or relating to any Rate Regulatory Matter, except as provided in
Section 10.2(b).
(f) Insurance. The Systems and Assets are insured against claims,
loss or damage in amounts generally customary in the cable television industry
and consistent with the Renaissance Companies' past practices. All such policies
are with financially sound insurers and are each outstanding and in full force
and effect on the date hereof. As of the date hereof, no insurance carrier has
denied any claim for insurance made by any Renaissance Company in respect of any
of the Systems and Assets or refused to renew any policy issued in respect of
any of the Systems and Assets.
(g) Right of First Refusal. Except as disclosed in Schedule 3.11, no
Person (including any Governmental Authority) has any right to acquire any
interest in any of the Systems (including, without limitation, any right of
refusal or similar right), other than rights of
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condemnation or eminent domain afforded by law or upon the termination of or
default under any Franchise.
3.12 Taxes.
(a) The Renaissance Companies have filed or have caused to be filed
in a timely manner all required Tax Returns with the appropriate Governmental
Authorities in all jurisdictions in which such Tax Returns are required to be
filed by the Renaissance Companies (except Tax Returns for which the filing date
has not expired or has been extended and such extension period has not expired),
and all Taxes shown on such Tax Returns (other than sales, use and property
Taxes in an aggregate amount not to exceed $50,000) have been properly accrued
or paid to the extent such Taxes have become due and payable. Schedule 3.12
lists all jurisdictions where material Tax Returns are required to be filed with
respect to the Renaissance Companies. Holdings has delivered to Buyer true,
correct and complete copies of such Tax Returns (in the form filed). The
Financial Statements reflect an adequate reserve in accordance with GAAP
(without regard to any amounts reserved for deferred taxes) for all material
unpaid Taxes payable by the Renaissance Companies for all Tax periods and
portions thereof through the date of such Financial Statements. Unpaid Taxes of
the Renaissance Companies (other than (i) any Taxes referred to in Section
6.10(d) and (ii) Taxes attributable to Buyer's actions on the Closing Date that
are not in the ordinary course of business) for all Pre-Closing Tax Periods
shall be included as Current Liabilities in the computation of Closing Net
Liabilities to the extent that such unpaid Taxes are not reflected on the
Financial Statements. Except as disclosed in Schedule 3.12, none of the
Renaissance Companies has executed any waiver or extension of any statute of
limitations on the assessment or collection of any Tax or with respect to any
liability arising therefrom. Except as disclosed in Schedule 3.12, none of the
federal, state or local income Tax Returns filed by the Renaissance Companies
has been audited by any taxing authority. Except as disclosed in Schedule 3.12,
(i) neither the Internal Revenue Service nor any other taxing authority has
asserted, or to the best Knowledge of Group, threatened to assert any deficiency
or claim for additional Taxes (other than sales, use and property Taxes in an
aggregate amount not to exceed $50,000) against, or any adjustment of Taxes
(other than sales, use and property Taxes in an aggregate amount not to exceed
$50,000) relating to, any of the Renaissance Companies and, to the best
Knowledge of Group, no basis exists for any such deficiency, claim or
adjustment, and (ii) there are no proposed reassessments of any property owned
by any of the Renaissance Companies that would affect the Taxes of any of the
Renaissance Companies. None of the Renaissance Companies has any liability for
the Taxes of any person (other than any Renaissance Company) pursuant to Section
1.1502-6 of the Treasury Regulations promulgated under the Code or comparable
provisions of any taxing authority in respect of a consolidated, combined or
unitary Tax Return. There are no material Tax liens on any assets of the
Renaissance Companies, other than liens for current Taxes not yet due and
payable and liens for Taxes that are being contested in good faith by
appropriate proceedings.
(b) Except as disclosed in Schedule 3.12, none of the Renaissance
Companies was included or is includible in any consolidated, combined or unitary
Tax Return with any entity.
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(c) None of the Renaissance Companies has entered into any
compensatory agreements with respect to the performance of services which
payment thereunder would result in a non-deductible expense to such Renaissance
Company pursuant to Section 280G of the Code or an excise Tax to the recipient
of such payment pursuant to Section 4999 of the Code. No acceleration of the
vesting schedule for any property that is substantially unvested within the
meaning of the regulations under Section 83 of the Code will occur in connection
with the transactions contemplated by this Agreement.
(d) No consent under Section 341(f) of the Code has been filed with
respect to any of the Renaissance Companies.
(e) Each of the Renaissance Companies has had since its inception
and will continue to have through the Closing Date the federal tax status (i.e.
partnership, C corporation or S corporation) such entity reported on its 1997
federal Tax Returns except as results from any actions taken pursuant to this
Agreement.
(f) Except as disclosed in Schedule 3.12, none of the Renaissance
Companies has been at any time a member of any partnership, joint venture or
other arrangement or contract which is treated as a partnership for federal,
state, local or foreign tax purposes (a "Tax Partnership") or the holder of a
beneficial interest in any trust for any period for which the statute of
limitations for any Tax has not expired, except for a Tax Partnership which is a
Renaissance Company.
(g) Except as disclosed in Schedule 3.12, there are no tax sharing
agreements or similar arrangements with respect to or involving any of the
Renaissance Companies.
(h) Except as disclosed in Schedule 3.12, none of the Renaissance
Companies has any (i) income reportable for a period ending after the Closing
Date but attributable to a transaction (e.g., an installment sale) occurring in
or a change in accounting method made for a period ending on or prior to the
Closing Date which resulted in a deferred reporting of income from such
transaction or from such change in accounting method (other than a deferred
intercompany transaction), or (ii) deferred gain or loss arising out of any
deferred intercompany transaction.
3.13 Employee Plans.
(a) Employee Plans. Schedule 3.13 contains a list of all Employee
Plans and material Compensation Arrangements. The Renaissance Companies have
delivered or made available to Buyer (or, in accordance with Section 6.1(b),
will deliver or make available to Buyer following execution of this Agreement)
true, complete and correct copies of each Employee Plan and each Compensation
Arrangement, if any, together with any other material documents relating to such
Employee Plan or Compensation Arrangement, including, without limitation, any
governmental filings relating to such Employee Plan or Compensation Arrangement.
None of the Renaissance Companies or any of their ERISA Affiliates is or has
been required to contribute to any "multiemployer plan," as defined in ERISA
Section 3(37), nor has any
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Renaissance Company or any such ERISA Affiliate experienced a complete or
partial withdrawal, within the meaning of ERISA Section 4203 or 4205, from such
a "multiemployer plan." Except as required under Code Section 4980B or ERISA
Sections 601-609, no Employee Plan provides health, life insurance or medical
coverage to former employees of the Renaissance Companies.
(b) Qualified Plans. Except as disclosed in Schedule 3.13, with
respect to each Employee Plan, and after taking into consideration the effect of
the payments to be made with respect to the Employee Plans: (1) each such
Employee Plan that is intended to be tax-qualified is the subject of a favorable
determination letter, and no such determination letter has been revoked, and to
the best of Group's Knowledge, no revocation has been threatened, no event has
occurred and no circumstances exist that would adversely affect the
tax-qualification of such Employee Plan; (2) no Employee Plan is subject to
Section 302 or Title IV of ERISA or Section 412 of the Code; (3) no non-exempt
prohibited transaction, within the definition of Section 4975 of the Code or
Title 1, Part 4 of ERISA, has occurred which would subject the Renaissance
Companies to any material liability; (4) there is no termination or partial
termination, or requirement to provide security with respect to any Employee
Plan; (5) the fair market value of the assets of any Employee Plan would equal
or exceed the value of all liabilities and obligations of such Employee Plan if
such plan were to terminate on the Closing Date; and (6) the transactions
contemplated by this Agreement will not result in liability under ERISA to any
Renaissance Companies or Buyer, or any of their respective ERISA Affiliates, or
any entitlement to any additional benefits or any acceleration of the time of
payment or vesting of any benefits under any Employee Plan of any Renaissance
Company for any employee of any Renaissance Company.
(c) Plan Administration. Each Employee Plan and each Compensation
Arrangement has been operated and administered in all material respect in
accordance with its terms and all applicable laws, including but not limited to
ERISA and the Code. To the best Knowledge of Group, there are no investigations
by any governmental agency or other claims (except claims for benefits payable
in the normal operation of the Plan), suits or proceedings against or involving
any Plan or asserting any rights to or claims for benefits under any Plan that
could give rise to any material liability, and there are not any facts that
could give rise to any material liability in the event of such investigation,
claim, suit or proceeding.
(d) Welfare Plan Funding. The list of Employee Plans in Schedule
3.13 discloses whether each Plan that is an "employee welfare benefit plan" as
defined in section 3(1) of ERISA is (i) unfunded, (ii) funded through a "welfare
benefit fund," as such term is defined in section 419(e) of the Code, or other
funding mechanism or (iii) insured.
(e) Each of the Renaissance Companies and their ERISA Affiliates
have properly classified individuals providing services to any Renaissance
Company or any ERISA Affiliates as employees or nonemployees except to the
extent that a misclassification would not be material.
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(f) Labor Unions. As of the date of this Agreement, other than as
disclosed in Schedule 3.13, none of the Renaissance Companies is party to or
bound by any collective bargaining agreement. As of the date of this Agreement,
other than as disclosed in Schedule 3.13, to the Knowledge of Group, (1) none of
the employees of the Renaissance Companies is presently a member of any
collective bargaining unit related to his or her employment and (2) no
collective bargaining unit has filed a petition for representation of any of the
employees of the Renaissance Companies.
3.14 Environmental Laws. Except as disclosed in Schedule 3.14: (a) the
Renaissance Companies' operations with respect to the Systems comply in all
material respects with all applicable Environmental Laws as in effect on the
Closing Date; and (b) none of the Renaissance Companies has used the Real
Property for the manufacture, transportation, treatment, storage or disposal of
Hazardous Substances except for gasoline and diesel fuel and such use of
Hazardous Substances (in cleaning fluids, solvents and other similar substances)
customary in the construction, maintenance and operation of a cable television
system and in amounts or under circumstances that would not reasonably be
expected to give rise to material liability for remediation. Except as disclosed
in Schedule 3.14, as of the date of this Agreement, no Environmental Claim has
been filed or issued against the Renaissance Companies. To Group's Knowledge,
the Renaissance Companies' operations with respect to the Systems have complied
with all applicable Environmental Laws, except such non-compliance that would
not reasonably be expected to have a Material Adverse Effect.
3.15 Claims and Litigation. Except as disclosed in Schedule 3.15, as of
the date of this Agreement, there is no claim, legal action, arbitration or
other legal, administrative or tax proceeding, order, decree, or judgment or
complaint or, to Group's Knowledge, investigation, dispute or controversy
reasonably likely to result in litigation against or relating to the Renaissance
Companies (or any of their respective Affiliates, directors, officers, employees
or agents related to the business or operations of any Renaissance Companies) or
the business or operations of any of the Systems (other than FCC and other
proceedings generally affecting the cable television industry and not specific
to the Renaissance Companies and other than rate complaints or certifications
filed by customers or Franchising Authorities), other than routine collection
matters or ordinary course matters expected to be covered by insurance policies
maintained by the Renaissance Companies, subject to applicable deductibles.
3.16 Compliance With Laws. Except as disclosed in Schedule 3.16 and except
for any such noncompliance as has been remedied, each of the Renaissance
Companies, the Systems and the Assets are in compliance in all material respects
with all Legal Requirements (including, without limitation, (i) the Code, ERISA,
the National Labor Relations Act, the Cable Act, FCC Regulations, and the
Copyright Act and (ii) the FCC's Cumulative Leakage Index). Group has delivered
to Buyer complete and correct copies of all FCC forms relating to rate
regulation filed by the Renaissance Companies with any Governmental Authority
with respect to the Systems and copies of all correspondence from or to the
Renaissance Companies with any Governmental Authority relating to rate
regulation generally and any other Rate Regulatory Matter or specific rates
charged to subscribers of the Systems, and any other documentation prepared by
the Renaissance Companies supporting an exemption from the rate regulation
provisions of the
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Cable Act claimed by any Renaissance Company with respect to any of the Systems.
Group has made available to Buyer, to the extent in the possession of the
Renaissance Companies, copies of all FCC forms relating to rate regulation filed
with any Governmental Authority with respect to the Systems by parties other
than the Renaissance Companies and copies of all correspondence from or to
parties other than the Renaissance Companies with any Governmental Authority
relating to rate regulation generally and any other Rate Regulatory Matter or
specific rates charged to subscribers of the Systems, and any other
documentation supporting any exemption from the rate regulation provisions of
the Cable Act claimed by the Systems by parties other than the Renaissance
Companies. Notwithstanding the foregoing or any other provision of this
Agreement to the contrary, and without limiting the provisions of Sections 6.14
and 10.2(b), Group does not make any representation or warranty with respect to
compliance with any Legal Requirements dealing with, limiting or affecting the
rates which can be charged by cable television systems to their customers
(whether for programming, equipment, installation, service or otherwise) or any
other Rate Regulatory Matter.
3.17 Transactions with Affiliates. Except to the extent disclosed in the
Financial Statements and the notes thereto or Schedule 3.17, none of the
Renaissance Companies is involved in any business arrangement or business
relationship or is a party to any agreement, contract, commitment or transaction
with any Affiliate of any of the Renaissance Companies (other than another
Renaissance Company), and no Affiliate of any of the Renaissance Companies
(other than another Renaissance Company) owns any property or right, tangible or
intangible, that is used in the business of the Renaissance Companies (other
than in its capacity as a direct or indirect equity or debt holder of the
Renaissance Companies).
3.18 Certain Fees. No finder, broker, agent, financial advisor or other
intermediary has acted on behalf of any Renaissance Company in connection with
this Agreement, any Transaction Document or the transactions contemplated hereby
or thereby, or is entitled to any payment in connection herewith or therewith
which, in either case, would result in any obligation or liability to Buyer or
Charter, except that Holdings has retained certain brokers and advisors and will
pay all fees and expenses of such brokers and advisors in connection with the
transactions contemplated hereby.
3.19 Inventory. Each Renaissance Company has inventory, spare parts and
materials relating to the Systems of the type and nature and maintained at a
level consistent with past practice (the "Inventory"), and such Inventory will
be sufficient to operate their respective businesses in the ordinary course for
at least thirty (30) days after the Closing.
3.20 Overbuilds; Competition. Except as set forth in Schedule 3.20, as of
the date of this Agreement, (i) no construction programs have been undertaken by
any Governmental Authority or other active cable television, multichannel
multipoint distribution system (as defined by the rules and regulations of FCC),
or multipoint distribution system provider in any of the Franchise Areas and, to
Group's Knowledge, without investigation but upon inquiry of its regional
managers and as should reasonably be known to a reasonable cable television
operator, no such construction programs are proposed or threatened to be
undertaken; (ii) no franchise or other applications or requests of any Person to
provide cable television service in the Franchise
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Areas have been filed more than two (2) weeks prior to the date hereof or, to
Group's Knowledge (subject to the same limitation referred to in clause (i)
above), have been filed less than two (2) weeks prior to the date hereof or are
pending, threatened, or proposed; (iii) there is no other cable television or
other video services provider within any of the Franchise Areas which is
providing or, to Group's Knowledge (subject to the same limitation referred to
in clause (i) above), has applied for a franchise to provide cable television
services or other video services to any of the Franchise Areas in competition
with any of the Renaissance Companies; and (iv) none of the Renaissance
Companies has received any written notice that any other provider of cable
television services or other existing or prospective video service provider
intends to provide such cable television or other video service in competition
with any Renaissance Company. Except as set forth in Schedule 3.20, no
Renaissance Company is, nor is any Affiliate of any Renaissance Company, a party
to any agreement restricting the ability of any third party to operate cable
television systems or any other video programming distribution business within
any of the Franchise Areas.
3.21 Disconnections. Schedule 3.21 sets forth (i) the number of
Subscribers which each of the Renaissance Companies have disconnected from
service during each of the six (6) months prior to the date hereof and (ii) a
general description of the Renaissance Companies' policies relating to the
connection and disconnection of Subscribers from service.
3.22 Year 2000. Each Renaissance Company has (i) initiated a review and
assessment of all areas within its business that would reasonably be expected to
be adversely affected by the "Year 2000 Problem" (that is, the risk that
computer applications used by such Renaissance Company may be unable to
recognize and perform properly date-sensitive functions involving certain dates
prior to and any date after December 31, 1999), (ii) developed a plan for
addressing the Year 2000 Problem on a timely basis, and (iii) to date,
implemented that plan.
3.23 Budgets. Schedule 3.23 sets forth true, correct and complete copies
of the Renaissance Companies' capital and operating budgets for 1999.
3.24 Cure. For all purposes under this Agreement, the existence or
occurrence of any events or circumstances which constitute or cause a breach of
a representation or warranty of Group (as modified by Renaissance's Disclosure
Schedules) on the date such representation or warranty is made shall be deemed
not to constitute a breach of such representation or warranty if such event or
circumstance is cured on or prior to the Closing Date or the earlier termination
of this Agreement.
SECTION 4: REPRESENTATIONS AND WARRANTIES OF HOLDINGS
Subject to any provisions of this Agreement limiting, qualifying or
excluding any of the representations or warranties made herein, and to the
disclosures set forth in Renaissance's Disclosure Schedules, Holdings hereby
represents and warrants to Buyer as set forth in this Section 4.
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4.1 Organization; Authorization and Binding Obligation. Holdings is a
limited liability company, duly organized, validly existing and in good standing
under the laws of the State of Delaware.
4.2 Authorization and Binding Obligation. Holdings has the requisite
limited liability company power and authority to execute, deliver and perform
this Agreement and the other Transaction Documents to which it is a party
according to their respective terms. The execution, delivery, and performance by
Holdings of this Agreement and the other Transaction Documents to which Holdings
is a party have been duly authorized by all necessary action on the part of
Holdings. This Agreement and the other Transaction Documents to which Holdings
is a party have been duly executed and delivered by Holdings (or, in the case of
Transaction Documents to be executed and delivered at Closing, when executed and
delivered will be duly executed and delivered) and constitute (or, in the case
of Transaction Documents to be executed and delivered at Closing, when executed
and delivered will constitute) the legal, valid, and binding obligation of
Holdings, enforceable against Holdings in accordance with their terms, except as
the enforceability of this Agreement and such other Transaction Documents may be
limited by Enforceability Exceptions.
4.3 Absence of Conflicting Agreements; Consents. Except for the expiration
or termination of any applicable waiting period under the HSR Act, or as set
forth in Schedule 4.3 or as would not impair the ability of Holdings to perform
its obligations under this Agreement and the Transaction Documents to which it
is a party, the execution, delivery and performance by Holdings of this
Agreement and the other Transaction Documents to which it is a party (with or
without the giving of notice, the lapse of time, or both): (a) do not require
the consent of, declaration to, notice to, or filing with any Governmental
Authority or any other Person under any material agreement or instrument to
which Holdings is bound; (b) will not conflict with any provision of the
Organizational Documents of Holdings as currently in effect; (c) assuming
receipt of all Consents, will not conflict in any material way with, result in
any material breach of, or constitute a default in any material respect under
any Legal Requirement to which Holdings is bound; (d) assuming receipt of all
Consents, will not conflict with, constitute grounds for termination of, result
in a breach of, constitute a default under, or accelerate or permit the
acceleration of any performance required by the terms of any material agreement
or instrument to which Holdings is bound; and (e) assuming receipt of all
Consents, will not result in the creation of any Encumbrance, but subject to the
Legal Restrictions, upon the Purchased Interests held by Holdings.
Notwithstanding the foregoing, Holdings makes no representation or warranty
regarding any of the foregoing that may result from the specific legal or
regulatory status of Buyer, Charter or their Affiliates or as a result of any
other facts that specifically relate to the business or activities in which any
of Buyer, Charter or their Affiliates is or proposes to be engaged other than
the cable television business.
4.4 Title to Purchased Interests. Holdings holds all legal and beneficial
rights to the Purchased Interests, free and clear of all Encumbrances, but
subject to the Legal Restrictions.
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4.5 Claims and Litigation. Except as disclosed in Schedule 4.5, as of the
date of this Agreement, there is no claim, legal action, arbitration or other
legal, administrative or tax proceeding pending or threatened in writing or, to
Holdings' Knowledge, threatened (other than in writing), nor is there
outstanding any order, decree or judgment against or relating to the Renaissance
Companies, the Assets or the business or operations of any of the Systems (other
than FCC and other proceedings generally affecting the cable television industry
and not specific to the Renaissance Companies and other than rate complaints or
certifications filed by customers or Franchising Authorities) that would have an
adverse effect on Holdings' ability to perform its obligations under this
Agreement.
4.6 Certain Fees. No finder, broker, agent, financial advisor or other
intermediary has acted on behalf of Holdings in connection with this Agreement
or the transactions contemplated by this Agreement, or is entitled to any
payment in connection herewith or therewith which, in either case, would result
in any obligation or liability to Buyer or Charter, except that Holdings has
retained certain brokers and advisors and will pay all fees and expenses of such
brokers and advisors in connection with the transactions contemplated hereby.
4.7 Cure. For all purposes under this Agreement, the existence or
occurrence of any events or circumstances which constitute or cause a breach of
a representation or warranty of Holdings (as modified by Renaissance's
Disclosure Schedules) on the date such representation or warranty is made shall
be deemed not to constitute a breach of such representation or warranty if such
event or circumstance is cured on or prior to the Closing Date or the earlier
termination of this Agreement.
SECTION 5: REPRESENTATIONS AND WARRANTIES OF BUYER AND CHARTER
Buyer and Charter jointly and severally represent and warrant to Group and
Holdings as set forth in this Section 5.
5.1 Organization. Each of Buyer and Charter is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware. Each of Buyer and Charter has the requisite corporate power and
authority to own, lease and operate its properties, to carry on its business in
the places where such properties are now owned, leased or operated and such
business is now conducted and to execute, deliver and perform this Agreement and
the other Transaction Documents to which Buyer or Charter (as the case may be)
is a party according to their respective terms. Each of Buyer and Charter is
duly qualified and in good standing as a foreign corporation in each
jurisdiction in which such qualification is required.
5.2 Authorization and Binding Obligation. The execution, delivery and
performance by each of Buyer and Charter (as the case may be) of this Agreement
and the other Transaction Documents to which it is a party have been duly
authorized by all necessary corporate, shareholder or other action on the part
of Buyer or Charter (as the case may be). This Agreement and the other
Transaction Documents to which Buyer or Charter (as the case may be) is a party
have been duly executed and delivered by Buyer or Charter (as the case may be)
(or, in the case of Transaction Documents to be executed and delivered at
Closing, when executed and delivered
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will be duly executed and delivered) and constitute (or, in the case of
Transaction Documents to be executed and delivered at Closing, when executed and
delivered will constitute) the legal, valid, and binding obligation of each of
Buyer or Charter (as the case may be), enforceable against Buyer or Charter (as
the case may be) in accordance with their terms, except as the enforceability of
this Agreement and such other Transaction Documents may be limited by
Enforceability Exceptions.
5.3 Absence of Conflicting Agreements; Consents. Except for the expiration
or termination of any applicable waiting period under the HSR Act, and the
filing by Charter with the SEC of any reports required to be filed in connection
with the consummation of the transactions contemplated hereby, the execution,
delivery and performance by each of Buyer and Charter of this Agreement and the
other Transaction Documents to which Buyer or Charter (as the case may be) is a
party (with or without the giving of notice, the lapse of time, or both): (a) do
not require any Consent, declaration to, or filing with any Governmental
Authority or any other Person that has not been obtained; (b) will not conflict
with any provision of the Organizational Documents of Buyer or Charter (as the
case may be), as currently in effect; (c) will not conflict with, result in a
material breach of, or constitute a default in any material respect under any
Legal Requirement to which Buyer or Charter (as the case may be) is bound; and
(d) will not conflict with, constitute grounds for termination of, result in a
breach of, constitute a default under, or accelerate or permit the acceleration
of any performance required by the terms of any material agreement or instrument
to which Buyer or Charter (as the case may be) is a party or bound.
Notwithstanding the foregoing, neither Buyer nor Charter makes any
representation or warranty regarding any of the foregoing that may result from
the specific legal or regulatory status of any Renaissance Company or as a
result of any other facts that specifically relate to the business or activities
in which Holdings or any Renaissance Company is or proposes to be engaged other
than the cable television business.
5.4 Claims and Litigation. As of the date of this Agreement, except as
disclosed in Schedule 5.4, there is no pending or written threat of a claim,
legal action, arbitration, governmental investigation or other legal,
administrative or tax proceeding pending, nor any order, decree or judgment in
progress or pending, or, to the Charter Parties' Knowledge, threatened other
than in writing, against or relating to any of Buyer or Charter or the assets or
business of Buyer or Charter or their respective Subsidiaries (other than FCC
and other proceedings generally affecting the cable television industry and not
specific to Buyer, Charter or their Subsidiaries and other than rate complaints
or certifications filed by customers or franchising authorities), that would
have an adverse effect on Buyer's or Charter's ability to perform its
obligations under this Agreement.
5.5 Investment Purpose; Investment Company. Buyer is acquiring the
Purchased Interests for investment for its own account and not with a view to
the sale or distribution of any part thereof within the meaning of the
Securities Act. Each of Buyer and Charter (either alone or together with its
advisors) has sufficient knowledge and experience in financial and business
matters so as to be capable of evaluating the merits and risks of its investment
in the Purchased Interests and is capable of bearing the economic risks of such
investment. Each of Buyer and Charter is an informed and sophisticated
purchaser, and has engaged expert advisors,
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experienced in the evaluation and purchase of companies such as the Renaissance
Companies as contemplated hereunder. Each of Buyer and Charter has undertaken
such investigation and has been provided with and has evaluated such documents
and information as it has deemed necessary to enable it to make an informed and
intelligent decision with respect to the execution, delivery and performance of
this Agreement. Each of Buyer and Charter acknowledges that Holdings and Group
have given Buyer and Charter complete and open access to the key employees,
documents and facilities of the Renaissance Companies. Each of Buyer and Charter
will undertake prior to Closing such further investigation and request such
additional documents and information as it deems necessary. Buyer agrees to
accept the Purchased Interests and the Systems in the condition they are in on
the Closing Date based upon its own inspection, examination and determination
with respect thereto as to all matters, and without reliance upon any express or
implied representations or warranties of any nature made by or on behalf of or
imputed to Holdings or Group, except as expressly set forth in this Agreement.
Buyer is not an "investment company" as defined in the Investment Company Act of
1940, as amended.
5.6 Ownership of Buyer. Charter holds of record and owns beneficially more
than fifty percent (50%) of all the outstanding Equity Interests of Charter
Communications Holdings LLC, a Delaware limited liability company ("CCH"). CCH
owns, indirectly through subsidiaries, all of the cable properties of the
Charter Companies (as defined in the draft Offering Circular dated February 23,
1999 (09:13) of CCH and Charter Communications Holdings Capital Corporation).
5.7 Certain Fees. No finder, broker, agent, financial advisor or other
intermediary has acted on behalf of Buyer or Charter in connection with this
Agreement or the transactions contemplated by this Agreement, or is entitled to
any payment in connection herewith or therewith which, in either case, would
result in any obligation or liability to Holdings or Group.
5.8 Availability of Funds. Buyer has, as of the date hereof, the ability
to obtain, and will have, as of the Closing Date, sufficient cash, lines of
credit or other immediately available funds to enable it to consummate the
transactions contemplated hereby.
5.9 Cure. For all purposes under this Agreement, the existence or
occurrence of any events or circumstances which constitute or cause a breach of
a representation or warranty of Buyer or Charter on the date such representation
or warranty is made shall be deemed not to constitute a breach of such
representation or warranty if such event or circumstance is cured on or prior to
the Closing Date or the earlier termination of this Agreement.
SECTION 6: SPECIAL COVENANTS AND AGREEMENTS
6.1 Operation of Business Prior to Closing. Except as required by
applicable Legal Requirements or as contemplated by this Agreement or Schedule
6.1, and subject to Group's obligation to comply with the terms and conditions
hereof and the operation of the Renaissance Companies' business in the ordinary
course, and except as consented to by Buyer, between the date hereof and the
Closing Date, Group will cause the Renaissance Companies to operate the Systems
in the ordinary course of business (subject to, and except as modified by,
compliance
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with the following negative and affirmative covenants) and abide by the
following negative and affirmative covenants:
(a) Negative Covenants. The Renaissance Companies shall not do any
of the following between the date hereof and the Closing Date:
(1) Franchises. Fail to timely file a valid request for
renewal in accordance with Section 626(a) of the Cable Act, or fail to use
commercially reasonable efforts to renew on substantially the same or on other
commercially reasonable terms any Franchise that will expire after the date
hereof and prior to the date which is thirty (30) months after the Closing Date
in accordance with its terms (it being understood that the Renaissance Companies
shall not be required to take any steps necessary to obtain renewals of any
Franchise earlier than such steps are required to be taken by applicable FCC
Regulations, and obtaining renewals of any Franchise shall not be a condition
precedent to Buyer's or Charter's obligations hereunder).
(2) Contracts. Modify or amend in any material respect, except
in the ordinary course of business, any Contract that shall survive the Closing;
or enter into any new Contracts that will be binding on the Renaissance
Companies following the Closing except: (A) agreements for the provision of
services to customers; (B) the renewal or extension of any existing Contract on
its existing terms, in all material respects, in the ordinary course of
business; (C) with respect to utility pole attachment agreements, Contracts with
terms as customarily required by the utility whose poles are utilized; (D)
Contracts in connection with capital expenditures made in accordance with
Section 6.1(b)(7); or (E) any other contracts or commitments entered into in the
ordinary course of business that are terminable on not more than sixty days
prior notice without the payment of any penalty or that do not involve
post-Closing obligations in excess of Fifty Thousand Dollars ($50,000) in any
one case or in excess of Five Hundred Thousand Dollars ($500,000) in the
aggregate.
(3) Disposition of Assets. Sell, assign, lease, swap or
otherwise transfer or dispose of any of the Assets, except for Assets consumed
or disposed of in the ordinary course of business.
(4) Encumbrances. Create, assume or permit to exist any
Encumbrance upon the Assets, except for Permitted Encumbrances or other
Encumbrances disclosed in Schedule 3.9 and subject to the Legal Restrictions.
(5) Indebtedness. Permit the Renaissance Companies to incur
any additional indebtedness for borrowed money, except to the extent (if not
repaid at or prior to the Closing) included in the computation of Closing Net
Liabilities; provided that any such incurrence shall be in the ordinary course
of business and the Renaissance Companies shall give Buyer prior notice of such
borrowing;
(6) Compensation. Increase annually recurring compensation by
more than 5%, on average, for the Renaissance Companies' employees retained in
connection with the conduct of the business or operation of the Systems, except
for customary merit or time-in-grade
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increases for qualifying employees or otherwise in accordance with the
Renaissance Companies' employee policies.
(7) Waivers. Waive any material right relating to the Systems
or the Assets.
(8) Marketing Plan. Implement any new marketing plans not
contemplated in the Renaissance Companies' budget, except as set forth in
Schedule 6.1 or as consented to by Buyer, such consent not to be unreasonably
withheld.
(b) Affirmative Covenants. Group shall, and shall cause the
Renaissance Companies to, do the following between the date hereof and the
Closing Date:
(1) Access to Information. Subject to Buyer's and Charter's
obligations hereunder and under the Confidentiality Agreement with respect to
confidentiality, allow Buyer and its authorized representatives reasonable
access during normal business hours to the Assets and the physical plant,
offices, properties and records of the Renaissance Companies for the purpose of
inspection, and furnish or cause to be furnished to Buyer or its authorized
representatives all information with respect to the Assets or the Renaissance
Companies that Buyer may reasonably request. Any investigation or request for
information shall be conducted in such a manner as not to interfere with the
business or operations of the Renaissance Companies and the Systems.
(2) Insurance. Maintain the existing insurance policies on the
Systems and the Assets (or comparable replacement policies).
(3) Books and Records. Maintain the Renaissance Companies'
books and records substantially in accordance with past practices.
(4) Financial Information. Furnish to Buyer (i) within
forty-five days after the end of each month and each calendar quarter between
the date hereof and the Closing Date, an unaudited consolidated balance sheet
and statement of operations for the Renaissance Companies for each such month
and each such calendar quarter and (ii) any other information (including,
without limitation, management notes) furnished to the Renaissance Companies'
senior lenders or filed by the Renaissance Companies with the SEC, which
financial information shall be prepared from the Renaissance Companies' books
and records maintained in the ordinary course of business substantially in
accordance with past practices.
(5) Compliance with Laws. Comply in all material respects with
all Legal Requirements applicable to the Renaissance Companies and the operation
of the Systems.
(6) Keep Organization Intact. Except with respect to any
voluntary departure of any of the Renaissance Companies' employees between the
date hereof and Closing, use commercially reasonable efforts to preserve intact
the Renaissance Companies' business and
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organization relating to the Systems and preserve for Buyer the goodwill of the
Renaissance Companies' suppliers, customers and others having business relations
with them.
(7) Capital Expenditure Program. Continue capital expenditures
in the ordinary course of business in a manner substantially consistent with
Schedule 6.1.
(8) Earth Stations. Within seven (7) days of the date hereof,
use commercially reasonable efforts to contract for frequency coordination
studies in preparation of filing an application to register with the FCC at
least one receive-only earth station ("TVRO") at each Systems' headend or other
site at which one or more TVROs are located as of the date hereof and which are
used to provide programming to such headends, and within seven (7) days of
receiving each coordination study, file such registration applications with the
FCC.
(c) Certain Permitted Actions. Notwithstanding anything in this
Agreement (including Sections 6.1(a) and (b) above) to the contrary, Buyer and
Charter consent and agree as follows:
(1) Contractual Commitments. The Renaissance Companies may
comply with all of their contractual commitments under their existing Contracts
and under any Contracts entered into after the date of this Agreement in
compliance with Section 6.1(a)(2) or with Buyer's and Charter's consent (in each
case, as such Contracts may be in effect from time to time in accordance with
Section 6.1(a)(2) or with Buyer's and Charter's consent). The Renaissance
Companies may take such actions as are contemplated by the other Sections of
this Agreement and otherwise comply with their obligations under the other
Sections of this Agreement.
(2) Excluded Assets. The Renaissance Companies may, prior to
Closing, terminate, transfer or assign to Holdings, its designee or any other
Person, each of the Excluded Assets on such terms as shall be determined by
Holdings, in its sole discretion.
6.2 Confidentiality; Press Release.
(a) Buyer, Charter and Holdings are parties to a Confidentiality
Agreement dated February 12, 1999 (the "Confidentiality Agreement").
Notwithstanding the execution, delivery and performance of this Agreement, or
the termination of this Agreement prior to Closing, the Confidentiality
Agreement shall remain in full force and effect in accordance with its terms,
but shall expire concurrently with the Closing hereunder.
(b) No party will issue any press release or make any other public
announcements concerning this Agreement or the transactions contemplated hereby
except with the prior approval (not to be unreasonably withheld) of the other
parties, except that if any such disclosure is required by law, no party will
make such disclosure without first providing to the other parties an advance
copy of any such disclosure and a reasonable opportunity to review and comment.
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6.3 Cooperation; Commercially Reasonable Efforts. Without limiting any of
the obligations of the parties hereunder, the parties shall cooperate with each
other and their respective counsel, accountants, agents and other
representatives in all commercially reasonable respects in connection with any
actions required to be taken as part of their respective obligations under this
Agreement, and otherwise use their commercially reasonable efforts to consummate
the transactions contemplated hereby and to fulfill their obligations hereunder
as expeditiously as practicable. Charter shall provide to Holdings such
information relating to Charter and its Subsidiaries and their businesses and
operations as Holdings shall reasonably request.
6.4 Consents.
(a) Following the execution hereof, until the Closing Date, Group
shall use its best efforts, and shall cause the Renaissance Companies to use
their best efforts, and Charter shall use its best efforts, and shall cause
Buyer to use its best efforts, to obtain as expeditiously as possible all
Consents required to be obtained by the Renaissance Companies, including
Consents under the Franchises, FCC Licenses and Contracts of the Renaissance
Companies. Group shall, and shall cause the Renaissance Companies to, and
Charter shall, and shall cause Buyer to, prepare and file, or cause to be
prepared and filed, within fifteen (15) days after the date hereof (subject to
extension for a period of up to an additional ten (10) days, if reasonably
necessary for a party to complete its application), all applications (including
FCC Forms 394 or other appropriate forms) required to be filed with the FCC and
any Franchising Authority that are necessary for the transfer of control to
Buyer in connection with the consummation of the transactions contemplated by
this Agreement of the Franchises and the FCC Licenses identified in Schedule
3.8. The parties shall also make appropriate requests, as soon as practicable
after the date hereof, for any Consents required under any Contract (other than
the Debt Documents, which shall be governed by Section 6.7). If, notwithstanding
their best efforts, Group and the other Renaissance Companies are unable to
obtain any of the Consents, none of the Renaissance Companies nor Holdings shall
be liable to Buyer or Charter for any breach of covenant, and, for the avoidance
of doubt, after the Closing, Holdings shall not have any obligation with respect
to obtaining any Consents or any liability for the failure of such Consents to
be obtained. Except as expressly set forth in Section 6.4(b) below, nothing
herein shall require the expenditure or payment of any funds (other than in
respect of normal and usual attorneys fees, filing fees or other normal costs of
doing business) or the giving of any other consideration by Buyer, Charter,
Holdings or, prior to consummation of the Closing, any Renaissance Company, or
any adjustment to the Cash Consideration to be paid to Holdings.
(b) (i) Without limiting Section 6.4(b)(i), (ii) or (iii), each of
Buyer and Charter agrees that if in connection with the process of obtaining any
Consent, a Governmental Authority or other Person purports to require any
condition or any change to a Franchise, License or Contract to which such
Consent relates that would be applicable to any of Buyer, Charter or any
Renaissance Company as a requirement for granting its Consent, which condition
or change involves a monetary payment or commitment to such Governmental
Authority or other Person, either of Buyer and Charter, on the one hand, or
Holdings, on the other hand, may elect, in its sole discretion, to satisfy such
monetary payment or commitment, in which case, Buyer and Charter will accept
(and agree that Holdings may cause any Renaissance Company to accept) any
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condition or change in the Franchise, License or Contract to which such Consent
relates to the extent provided herein.
(ii) If, in connection with the process of obtaining any
Consent from a Franchising Authority, such Franchising Authority makes a bona
fide claim that any amount is owed by the relevant Renaissance Company as a
result of a default under, or breach of, the corresponding Franchise, by such
Renaissance Company or any predecessor in interest, Holdings shall satisfy all
outstanding monetary obligations of such Renaissance Company or predecessor in
interest in respect of any such bona fide default or breach.
(iii) If a Governmental Authority or other Person imposes any
commercially reasonable non-monetary obligation in connection with granting its
Consent under a Franchise, License or Contract, Buyer and Charter will comply
with such obligation after Closing (and agree that Holdings may cause any
Renaissance Company to accept) any such commercially reasonable non-monetary
obligation.
(c) Buyer shall promptly furnish to any Governmental Authority or
other Person from whom a Consent is requested such accurate and complete
information regarding Buyer, Charter and their Subsidiaries, including financial
information concerning Buyer and Charter and other information relating to the
cable and other media operations of Buyer and Charter, as a Governmental
Authority or other Person may reasonably require in connection with obtaining
any Consent, and Buyer shall promptly furnish to Group a copy of any such
information provided to a Governmental Authority or other Person, and any other
information concerning Buyer and Charter as Group may reasonably request in
connection with obtaining any Consent. To the extent Group is required to supply
such information as to Buyer, Charter and their Subsidiaries to Persons from
whom Consents are sought, Group may supply such information and shall have no
obligation to Buyer or Charter with respect to the disclosure or use of such
information by such Persons.
(d) It is understood and agreed that nothing herein shall prevent
Buyer or Charter (or their employees, agents, representatives and any other
Person acting on behalf of Buyer or Charter) from making statements or inquiries
to, attending meetings of, making presentations to, or from responding to
requests initiated by, Governmental Authorities or other Persons from which a
Consent is sought, and Buyer shall use commercially reasonable efforts to
apprise Holdings of all such requests.
6.5 HSR Act Filing. As soon as practicable after the execution of this
Agreement, but in any event no later than fifteen (15) days after such execution
(subject to extension for a period of up to an additional ten (10) days, if
reasonably necessary for a party to complete its notification and report) if not
filed by the expiration of such fifteen (15) day period, the parties will each
complete and file, or cause to be completed and filed, any notification and
report required to be filed under the HSR Act; and each such filing shall
request early termination of the waiting period imposed by the HSR Act. The
parties shall use commercially reasonable efforts to respond as promptly as
reasonably practicable to any inquiries received from the Federal Trade
Commission (the "FTC") and the Antitrust Division of the Department of Justice
(the
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"Antitrust Division") for additional information or documentation and to respond
as promptly as reasonably practicable to all inquiries and requests received
from any other Governmental Authority in connection with antitrust matters. The
parties shall use commercially reasonable efforts to overcome any objections
which may be raised by the FTC, the Antitrust Division or any other Governmental
Authority having jurisdiction over antitrust matters.
6.6 Charter's Actions.
(a) No party hereto, nor any of their respective Affiliates, will
take any action that is inconsistent with its obligations under this Agreement
or which does, or would reasonably be expected to, hinder or delay the
consummation of the transaction contemplated by this Agreement. Without limiting
the generality of the foregoing, at all times between the date hereof and the
Closing Date, each of Buyer and Charter will take all necessary or advisable
actions to ensure, and each of Buyer and Charter will ensure, that Buyer is able
to deliver the Cash Consideration at Closing.
(b) At all times between the date hereof and the Closing Date, (i)
Charter shall continue to hold of record and own beneficially more than fifty
percent (50%) of all the outstanding Equity Interests of CCH, and (ii) Buyer
shall be a wholly-owned (direct or indirect) subsidiary of CCH.
6.7 Renaissance Debt Obligations.
(a) Buyer and Charter acknowledge and agree that all obligations of
the Renaissance Companies with respect to the Senior Discount Notes and the
Senior Debt (including all principal, accrued and unpaid interest and all other
amounts), shall remain obligations of the Renaissance Companies through and
after Closing, and each of Buyer and Charter will cooperate with the Renaissance
Companies with respect to any information relating to Buyer and Charter that
shall be reasonably requested by any of the holders of the Senior Debt.
(b) After the Closing, Buyer and Charter agree to cause the
Renaissance Companies to commence an Offer to Purchase (as defined in the
Indenture) in accordance with the terms and conditions of the Indenture and to
discharge all of their obligations under the Indenture in accordance with its
terms, and Buyer and Charter agree that Holdings shall not have any liability or
obligation in respect thereof, including, without limitation, any change of
control penalty or premium or other payment arising out of or resulting from the
consummation of the transactions contemplated by this Agreement under or
pursuant to the Indenture or the Senior Discount Notes.
(c) Simultaneously with the Closing and without limiting any other
obligations of Buyer and Charter, Buyer and Charter shall satisfy and discharge
all obligations of the Renaissance Companies in respect of the Senior Debt and
the Credit Agreement (including all principal, accrued and unpaid interest and
all other amounts, including any prepayment penalty or premium or any breakage
costs) that become due and payable concurrently with, or as a result, of the
consummation of the Closing.
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6.8 Retention and Access to the Renaissance Companies' Records. Except as
provided in Section 6.10(c)(1), Holdings shall, for a period of five years from
the Closing Date, have access to, and the right to copy, at its expense, during
usual business hours upon reasonable prior notice to Buyer and Charter, all of
the books and records relating to the Renaissance Companies, Assets and Systems
that were transferred to Buyer pursuant to this Agreement. Buyer shall retain
and preserve all such books and records for such five year period. Subsequent to
such five year period, Buyer shall only destroy such books and records if there
is no ongoing litigation, governmental audit or other proceeding, and subsequent
to thirty days' notice to Holdings of its right to remove and retain such books
and records or to copy such books and records prior to their destruction.
6.9 Employee Matters.
(a) At Closing, Group shall cause the appropriate Renaissance
Companies to terminate the employment of the Headquarters Employees and the
Employment Agreements, in each case, without liability in respect thereof to any
Renaissance Company, including, without limitation, pursuant to the Employment
Agreements.
(b) Except as any employment agreement between any Renaissance
Company and any employee may otherwise require, all employees of the Renaissance
Companies who continue in employment following the Closing shall be employed on
such terms and conditions as are substantially similar in the aggregate to the
terms and conditions of employment of Buyer's and Charter's employees. Each such
employee shall receive credit for all purposes other than benefit accrual
purposes under any retirement plan or program under any Employee Plan or
Compensation Arrangement of the Buyer for past service with any Renaissance
Company and, to the extent credited under any Employee Plan or Compensation
Arrangement of any Renaissance Company, for past service with any predecessor
employer.
(c) Buyer shall offer group health plan coverage to all of the
employees of the Renaissance Companies and to the spouse and dependents of such
employees who become employed by the Buyer or any ERISA Affiliate of the Buyer
as of the Closing on terms and conditions generally applicable to all of Buyer's
similarly situated employees. For purposes of providing such coverage, Buyer
shall waive all preexisting condition limitations for all such employees covered
by the health care plan of any Renaissance Company as of the Closing and shall
provide such health care coverage effective as of the Closing without the
application of any eligibility period for coverage. In addition, Buyer shall
credit all employee payments toward deductible, out-of-pocket and co-payment
obligation limits under the Renaissance Companies' health care plans for the
plan year which includes the Closing Date as if such payments had been made for
similar purposes under Buyer's health care plans during the plan year which
includes the Closing Date, with respect to employees of the Renaissance
Companies and the spouse and any dependents of such employees who become
employed by Buyer as of the Closing Date.
(d) Buyer shall assume full responsibility and liability for
offering and providing "continuation coverage" to any "covered employee" and any
"qualified beneficiary"
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who is covered by a "group health plan" sponsored or contributed to by any of
the Renaissance Companies who has experienced a "qualifying event" or is
receiving "continuation coverage" on or prior to the Closing. "Continuation
coverage," "covered employee," "qualified beneficiary," "qualifying event" and
"group health plan" all shall have the meanings given such terms under Section
4980B of the Code and Section 601 et seq. of ERISA. For purposes of this
Section, each employee of any Renaissance Company who experiences a loss of
healthcare coverage as the result of the transactions contemplated by this
Agreement together with his or her spouse and dependents, if any, shall be
deemed eligible for continuation coverage as provided herein.
(e) Holdings shall cause Renaissance Media to file or cause to be
filed an application for a determination letter from the Internal Revenue
Service with respect to the Renaissance Media LLC 401(k) Plan on or before the
close of the remedial amendment period applicable in the case of disqualifying
provisions under a new plan as described in 26 C.F.R. Section 1.401(b)-1.
6.10 Tax Matters.
(a) Tax Periods Ending on or Before the Closing Date. Holdings shall
prepare or cause to be prepared and file or cause to be filed all Tax Returns
for the Renaissance Companies (i) that are due on or before the Closing Date, or
(ii) that relate to taxable periods ending on or prior to the Closing Date but
are required to be filed after the Closing Date. Such Tax Returns shall be
prepared in accordance with each Renaissance Company's past custom and practice,
and, except as otherwise provided in this Agreement, allocations of items of
income and gain and loss and deduction shall be made using the
closing-of-the-books method. In the case of any Renaissance Company that is a
limited liability company, such Tax Returns shall be prepared in accordance with
the Organizational Documents of such Renaissance Company as in effect
immediately prior to the Closing Date. In preparing each Renaissance Company's
Tax Returns, Holdings shall consult with Buyer in good faith and shall provide
Buyer with drafts of such Tax Returns (together with the relevant back-up
information) for review and consent (which consent shall not be unreasonably
withheld) at least twenty days prior to filing; provided, however, if Buyer has
not provided comments on such Tax Returns to Holdings within such twenty-day
period, then such consent shall be deemed to be given and, if Buyer's comments
or refusal to provide such consent results in any penalties imposed upon
Holdings or any Renaissance Company for failing to file a timely Tax Return,
then Buyer shall be liable for and shall pay, such penalties; provided further,
however, if any such penalties for failure to file a timely Tax Return could be
avoided by filing an extension to file such Tax Return with the applicable
Governmental Authority, Holdings shall, or shall cause the appropriate
Renaissance Company to, timely file such extension. After the Closing, Buyer
shall not prepare or cause to be prepared or file or cause to be filed any Tax
Return for the Renaissance Companies for any period ending on or prior to the
Closing Date.
(b) Tax Periods Beginning Before and Ending After the Closing Date.
Buyer shall prepare or cause to be prepared and file or cause to be filed any
Tax Returns of the Renaissance Companies for Tax periods which begin before the
Closing Date and end after the Closing Date. Such Tax Returns shall be prepared
in accordance with each Renaissance
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Company's past custom and practice but, except as otherwise provided in this
Agreement, allocations of items of income and gain and loss and deduction shall
be made using the closing-of-the-books method. In preparing such Tax Returns,
Buyer shall consult with Holdings in good faith and shall provide Holdings with
drafts of such Tax Returns (together with the relevant back-up information) for
review at least ten days prior to filing.
(c) Cooperation on Tax Matters.
(1) Buyer and Holdings shall cooperate fully, as and to the
extent reasonably requested by the other party, in connection with the filing of
Tax Returns pursuant to this Section 6.10 and any audit, litigation, or other
proceeding with respect to Taxes. Such cooperation shall include the retention
and (upon the other party's request) the provision of records and information
which are reasonably relevant to any such audit, litigation or other proceeding
and making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder. Buyer
and Holdings agree (A) to retain all books and records with respect to Tax
matters pertinent to the Renaissance Companies relating to any taxable period
beginning before the Closing Date until the expiration of the statute of
limitations (and, to the extent notified by Buyer or Holdings, any extensions
thereof) of the respective taxable periods, and to abide by all record retention
agreements entered into with any taxing authority, and (B) to give the other
party reasonable written notice prior to transferring, destroying or discarding
any such books and records and, if the other party so requests, Buyer or
Holdings, as the case may be, shall allow the other party to take possession of
such books and records to the extent they would otherwise be destroyed or
discarded.
(2) Buyer and Holdings further agree, upon request, to use
commercially reasonable efforts to obtain any certificate or other document from
any Governmental Authority or any other Person as may be necessary to mitigate,
reduce or eliminate any Tax that could be imposed (including Taxes with respect
to the transactions contemplated hereby).
(d) Certain Taxes. All transfer, documentary, sales, use, stamp,
registration and other such Taxes and fees (including any penalties and
interest) incurred in connection with the transactions consummated pursuant to
this Agreement shall be paid one-half by Buyer and one-half by Holdings when
due. Buyer and Holdings will cooperate in all reasonable respects to prepare and
file all necessary Tax Returns and other documentation with respect to all such
transfer, documentary, sales, use, stamp, registration and other Taxes and fees.
Buyer shall be liable for any Taxes attributable to any election made by Buyer
or any Affiliate of Buyer with respect to any of the Renaissance Companies under
Section 338 of the Code or any comparable provision of state or local law.
(e) Buyer covenants that it will not, and it will not cause or
permit any Renaissance Company or any Affiliate of Buyer, (i) to take any action
on or after the Closing Date, including but not limited to the distribution of
any dividend or the effectuation of any redemption, that could give rise to any
tax liability of any holder of membership interests in Holdings or (ii) to make
or change any tax election, amend any Tax Return or take any tax
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position on any Tax Return, take any action, omit to take any action or enter
into any transaction that results in any increased tax liability of any holder
of membership interests in Holdings in respect of any Pre-Closing Tax Period.
(f) Except to the extent taken into account in Closing Net
Liabilities, Buyer shall promptly pay or cause to be paid to Holdings all
refunds of taxes and interest thereon received by Buyer, any Affiliate of Buyer,
or any Renaissance Company attributable to taxes paid by Holdings or any
Renaissance Company with respect to any Pre-Closing Tax Period.
(g) From and after the date of this Agreement, Holdings and each
Renaissance Company shall not without the prior written consent of the Buyer
(which consent shall not be unreasonably withheld) make, or cause or permit to
be made, any Tax election that would adversely affect any of the Renaissance
Companies or Buyer.
6.11 Renaissance Name. The parties agree that Holdings and its Affiliates
(other than the Renaissance Companies) shall retain the right to use the names
"Renaissance" and "Renaissance Media" and any and all derivations thereof,
including the Renaissance Companies' internet domain and the internet addresses,
"xxxxxxxx.xxx" and "X-Xxxxx.xxx"; provided that Buyer shall be entitled to have
the Renaissance Companies use such name, but not such internet domain and
internet addresses, for a period of one (1) year after the Closing. From and
after the expiration of such period, Holdings and its Affiliates (other than the
Renaissance Companies) shall retain the sole and exclusive right to use the name
"Renaissance" and any and all derivations thereof, including the Renaissance
Companies' internet domain and the internet addresses "xxxxxxxx.xxx" and
"X-Xxxxx.xxx" and Buyer agrees to have such name removed from all trucks, signs
and the other Assets used in the operation of the Systems.
6.12 No Recourse; Release of Claims. Anything in this Agreement or
applicable law to the contrary notwithstanding, other than claims against
Holdings or Group as and to the extent expressly provided for in Section 9.4 and
Section 10 of this Agreement (and other than any claim for fraud), neither Buyer
nor Charter will have any claim or recourse against any of the Released Parties
as a result of the breach of any representation, warranty, covenant or agreement
of Holdings or Group contained herein or otherwise arising in connection with
the transactions contemplated by or the Transaction Documents or the business or
operations of the Renaissance Companies prior to the Closing. Effective as of
the Closing, each of Buyer and Charter and each of their respective Subsidiaries
hereby releases and forever discharges each of the Released Parties from all
actions, causes of action, suits, debts and claims (other than claims for fraud)
arising out of facts or circumstances prior to the Closing, whether at law or in
equity or otherwise, which Buyer or Charter ever had or now or hereafter may
have for, upon or by reason of any matter, cause or thing whatsoever related to
the Renaissance Companies, whether, contingent, accrued or otherwise arising out
of facts or circumstances prior to the Closing; provided that the foregoing
shall not limit Buyer's indemnification rights provided for in Section 10.
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6.13 Exculpation and Indemnification. After the Closing, Buyer, Charter
and the Renaissance Companies will be bound by and will assume the same
obligations to satisfy (and Buyer and Charter will cause the Renaissance
Companies to continue to satisfy) the rights of exculpation, indemnification and
advancement of expenses to which the present and former members, stockholders,
directors, representatives, officers, employees and agents of the Renaissance
Companies and any of their respective Affiliates are entitled with respect to
any matter existing or occurring prior to the Closing and/or with respect to
this Agreement and the Transaction Documents, under each such Renaissance
Company's Organizational Documents, by contract or agreement or by resolution of
the Board of Representatives or Board of Directors (as the case may be) of such
Renaissance Company, in accordance with the terms and conditions of any such
exculpation and indemnification provisions as in effect on the date of this
Agreement. Without limiting the foregoing, Charter and Buyer agree to maintain
in place for a period of not less than six years from the Closing, for the
benefit of the parties mentioned in the foregoing sentence, directors' and
officers' insurance, on substantially the same terms and to the same extent as
presently in effect for the Renaissance Companies.
6.14 Rate Regulatory Matters. The parties acknowledge and agree that
notwithstanding anything in this Agreement or any other Transaction Document to
the contrary (including any representation or warranty made by Group in Sections
3.11(e), 3.15 or 3.16), any matter relating to, in connection with or resulting
or arising from any Rate Regulatory Matter, or any actions taken prior to or
after the date hereof by any Renaissance Company to comply with or in a good
faith attempt to comply with any Rate Regulatory Matter (including any rate
reduction, refund, penalty or similar action having the effect of reducing the
rates previously or subsequently paid by subscribers, whether instituted or
implemented by or imposed on any Renaissance Company and changes to rate
practices instituted or implemented by or imposed on any Renaissance Company),
shall not: (a) cause or constitute, directly or indirectly, a breach by Group or
Holdings of any of its representations, warranties, covenants or agreements
contained in this Agreement or any other Transaction Document (and such
representations, warranties, covenants, and agreements shall hereby be deemed to
be modified appropriately to reflect and permit the impact and existence of such
Rate Regulatory Matters and to permit any action by any Renaissance Company to
comply with or attempt in good faith to comply with such Rate Regulatory
Matters); (b) otherwise cause or constitute, directly or indirectly, a default
or breach by any Renaissance Company or Holdings under this Agreement or any
other Transaction Document; (c) result in the failure of any condition precedent
to the obligations of Buyer under this Agreement or any other Transaction
Document; (d) otherwise excuse Buyer's or Charter's performance of their
obligations under this Agreement or any other Transaction Document; or (e) give
rise to any claim for (i) any adjustment to the Cash Consideration or other
compensation or (ii) indemnification, except as provided in Section 10.2(b).
6.15 Guaranty by Charter. Subject to the provisions of this Section 6.15,
Charter hereby fully, unconditionally and irrevocably guarantees to Holdings the
due and punctual payment of the Cash Consideration and any other monetary
obligations of Buyer and the due and punctual performance of all other
obligations of Buyer to Holdings, all in accordance with the terms of this
Agreement. Charter hereby acknowledges that, with respect to all of Buyer's
obligations, including those to pay money, including, without limitation, the
Cash Consideration,
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this guaranty shall be a guaranty of payment and performance and not of
collection and shall not be conditioned or contingent upon the pursuit of any
remedies against Buyer. Charter hereby waives diligence, demand of payment,
filing of claims with a court in the event of merger or bankruptcy of Buyer, any
right to require a proceeding first against Buyer, the benefit of discussion,
protest or notice and all demands whatsoever, and covenants that this guaranty
will not be discharged as to any obligation except by satisfaction of such
obligation in full. Until Holdings has been paid in full any amounts due and
owing to it under this Agreement, Charter hereby irrevocably waives any claim or
other rights which it may now or hereafter acquire against Buyer that arise from
the existence, payment, performance or enforcement of its obligations under this
guaranty and this Agreement, including, without limitation, any right of
reimbursement, exoneration, contribution, indemnification, any right to
participate in any claim or remedy of Holdings against Buyer or any collateral
which Holdings hereafter acquires, whether or not such claim, remedy or right
arises in equity, or under contract, statute or common law, including, without
limitation, the right to take or receive from Buyer, directly or indirectly, in
cash or other property or by set-off or in any other manner, payment or security
on account of such claim or other rights. To the fullest extent permitted by
applicable law, the obligations of Charter hereunder shall not be affected by
(a) the failure of the applicable obligee to assert any claim or demand or to
enforce any right or remedy against Charter pursuant to the provisions of this
Agreement or otherwise, (b) any rescission, waiver, amendment or modification
of, or any release from any of the terms or provisions of this Agreement or the
invalidity or unenforceability (in whole or in part) of this Agreement, unless
consented to in writing by Charter, Holdings and Group and (c) any change in the
existence (corporate or otherwise) of Buyer, Charter or Holdings or any
insolvency, bankruptcy, reorganization or similar proceeding affecting any of
them or their assets. If any amount shall be paid to Charter in violation of the
fourth sentence of this Section 6.15, and the obligations of Buyer under this
Agreement shall not have been discharged in full, such amount shall be deemed to
have been paid to Charter for the benefit of, and held in trust for the benefit
of, Holdings, and shall forthwith be paid to Holdings. Charter acknowledges that
it will receive direct and indirect benefits from the consummation of the
transactions contemplated by this Agreement and that the waivers set forth in
this Section 6.15 are knowingly made in contemplation of such benefits. Nothing
contained in this Section 6.15 is intended to or shall impair, as among Charter
and Holdings, the obligations of Charter, which are absolute and unconditional,
upon failure by Buyer, to perform its obligations under this Agreement,
including, without limitation, its obligation to pay to Holdings the Cash
Consideration and any other monetary obligations of Buyer when payable in
accordance with the terms of this Agreement, or is intended to or shall affect
the relative rights of Holdings and creditors of Charter, nor shall anything
herein prevent Holdings from exercising all remedies otherwise permitted by
applicable law.
6.16 Disclosure Schedules. The parties acknowledge and agree that (i)
Renaissance's Disclosure Schedules and Charter's Disclosure Schedules may
include certain items and information solely for informational purposes for the
convenience of the parties hereto and (ii) the disclosure of any matter in
Charter's Disclosure Schedules or Renaissance's Disclosure Schedules shall not
be deemed to constitute an acknowledgment by Holdings or Group, in the case of
Renaissance's Disclosure Schedules, or Buyer or Charter, in the case of
Charter's Disclosure Schedules, that the matter is material.
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SECTION 7: CONDITIONS TO OBLIGATIONS OF BUYER AND CHARTER
7.1 Conditions to Obligations of the Buyer and Charter. All obligations of
Buyer and Charter at the Closing hereunder are subject to the fulfillment (or
waiver at the option of Buyer or Charter) prior to or at the Closing of each of
the following conditions:
(a) Representations and Warranties of Group. As to the
representations and warranties of Group set forth in Section 3 and of Holdings
set forth in Section 4, (1) those representations and warranties set forth in
Section 3 and Section 4 which are expressly stated to be made solely as of the
date of this Agreement or another specified date shall be true and correct in
all respects as of such date (without regard to the materiality or material
adverse effect qualifiers set forth therein), and (2) all other representations
and warranties of Group set forth in Section 3 and Section 4 respectively, shall
be true and correct in all respects at and as of the time of the Closing as
though made at and as of that time (without regard to the materiality or
material adverse effect qualifiers set forth therein); provided that for
purposes of each of clauses (1) and (2) above, the representations and
warranties shall be deemed true and correct in all respects to the extent that
the aggregate effect of the inaccuracies in such representations and warranties
as of the applicable times does not constitute a Material Adverse Effect.
(b) Covenants. Group and Holdings shall have performed and complied
in all material respects with all covenants and agreements required by this
Agreement to be performed or complied with by them prior to or at the Closing.
(c) Consents. The Material FCC Consents shall have been obtained.
The aggregate number of Equivalent Subscribers as of any applicable date, in
those Franchise Areas that are Transferable Franchise Areas shall be at least
ninety-five percent (95%) of the aggregate number of Equivalent Subscribers in
all Franchise Areas as of such applicable date.
(d) Xxxx-Xxxxx-Xxxxxx. The requisite waiting period under the HSR
Act shall have expired or been terminated, without the FTC or the Antitrust
Division, as applicable, taking any action which has not been terminated or
resolved.
(e) Judgment. There shall not be in effect on the date on which the
Closing is to occur any judgment, decree, order or other prohibition of a court
of competent jurisdiction having the force of law that would prevent the
Closing, provided that Buyer and Charter shall have used commercially reasonable
efforts to prevent the entry of any such judgment, decree, order or other
prohibition and to appeal as expeditiously as possible any such judgment,
decree, order or other prohibition that may be entered.
(f) Deliveries. Group and Holdings shall have made or stand willing
to make all the deliveries to Buyer and Charter described in Section 8.2.
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(g) Compliance with FIRPTA. Holdings shall have provided the Buyer
with a statement, in a form reasonably satisfactory to the Buyer, pursuant to
Section 1.1445-2(b)(2) of the Treasury Regulations, certifying that Holdings is
not a foreign person.
(h) Material Adverse Effect. From and after the date of this
Agreement until the Closing Date, no event shall have occurred which has had a
Material Adverse Effect.
(i) Holdings Franchise Notice. Holdings shall have delivered to
Buyer a notice that the condition set forth in the second sentence of Section
7.1(c) has been satisfied at least two (2) business days prior to the date
scheduled for Closing.
7.2 Conditions to Obligations of Holdings.
All obligations of Holdings at the Closing hereunder are subject to the
fulfillment (or waiver at the option of Holdings) prior to or at the Closing of
each of the following conditions:
(a) Representations and Warranties. As to the representations and
warranties of Buyer and Charter set forth in Section 5, (1) those
representations and warranties set forth in Section 5 which are expressly stated
to be made solely as of the date of this Agreement or another specified date
shall be true and correct in all material respects as of such date, and (2) all
other representations and warranties shall be true and correct in all material
respects at and as of the Closing as though made at and as of that time.
(b) Covenants. Buyer and Charter shall have performed and complied
with in all material respects all covenants and agreements required by this
Agreement to be performed or complied with by them prior to or at the Closing.
(c) Xxxx-Xxxxx-Xxxxxx. The requisite waiting period under the HSR
Act shall have expired or been terminated, without the FTC or the Antitrust
Division, as applicable, taking any action which has not been terminated or
resolved.
(d) Judgment. There shall not be in effect on the date on which the
Closing is to occur any judgment, decree, order or other prohibition of a court
of competent jurisdiction having the force of law that would prevent the
Closing, provided that Group and Holdings shall have used commercially
reasonable efforts to prevent the entry of any such judgment, decree, order or
other prohibition and to appeal as expeditiously as possible any such judgment,
decree, order or other prohibition that may be entered.
(e) Deliveries. Buyer and Charter shall have made or stand willing
to make all the deliveries described in Section 8.3.
SECTION 8: CLOSING AND CLOSING DELIVERIES
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8.1 Closing.
(a) Closing Date.
(1) Subject to satisfaction or, to the extent permitted by
law, waiver, of the closing conditions described in Section 7, and subject to
Section 8.1(a)(2), 8.1(a)(3) and 8.1(a)(4), the Closing shall take place on the
date specified by Holdings by notice to Buyer, which specified date shall be no
earlier than two business days and no later than five business days after
satisfaction or waiver of the conditions set forth in Sections 7.1(c) and (d)
and Sections 7.2(c), or on such earlier or later date as Holdings and Buyer
shall mutually agree; provided, however, subject to Section 8.1(a)(3) and
8.1(a)(4), the Closing shall not take place beyond the Upset Date.
(2) If on the date on which the Closing would otherwise be
required to take place pursuant to Section 8.1(a)(1) (A) there shall be in
effect any judgment, decree, order or other prohibition of a court of competent
jurisdiction having the force of law that would prevent or make unlawful the
Closing, or (B) any other circumstance beyond the reasonable control of the
Renaissance Companies, Holdings, Buyer or Charter (which shall in no event
include any matters relating to financing of the transactions contemplated
hereby) shall exist that would prevent the Closing or the satisfaction of any of
the conditions precedent to any party set forth in Section 7, then either
Holdings or Buyer may, at its option, postpone the date on which the Closing is
required to take place until such date, to be set by the party that elects to
postpone the date for Closing pursuant to this subsection (2) on at least five
business days' written notice to the other party, as soon as practicable after
such judgment, decree, order or other prohibition ceases to be in effect, or
such other circumstance ceases to exist; provided, however, that any
postponement of the date on which the Closing is required to take place to a
date beyond the Upset Date shall require the consent of both Holdings and Buyer.
(3) Notwithstanding anything in this Agreement to the
contrary, if on the date scheduled for Closing, the Closing has not occurred
because any notice period required by Section 8.1(a)(1) or (2) has not lapsed,
the Upset Date shall be extended until one business day after the lapse of such
period.
(4) If the date on which the Closing would otherwise be
required to take place pursuant to Section 8.1(a)(1), 8.1(a)(2) or 8.1(a)(3) the
Referee shall not have completed its determination pursuant to Section 2.4(a) of
any of the amount disputed by Holdings and Buyer, then Holdings may, at its
option, postpone the date on which the Closing is required to take place until
the third (3rd) business day after the date the Referee makes its final
determination pursuant to Section 2.4(a); provided, however, that if such
postponement results in the Closing taking place on a date after the Upset Date,
the Upset Date shall be extended until one business day after the date of the
Closing as postponed pursuant to this Section 8.1(a)(4).
(b) Closing Place. The Closing shall be held at the offices of Paul,
Hastings, Xxxxxxxx & Xxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000 or
any other place or time as Group and Buyer shall mutually agree.
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8.2 Deliveries by Holdings. Holdings shall deliver or cause to be
delivered to Buyer the following:
(a) Purchased Interests. An assignment agreement providing for the
assignment of the Purchased Interests by Holdings to Buyer, in a form reasonably
satisfactory to Buyer.
(b) Officer's Certificate of Group. A certificate executed by Group,
dated as of the Closing Date, certifying that the closing conditions specified
in Sections 7.1(a) and (b) have been satisfied as to Group, except as disclosed
in said certificate.
(c) Officer's Certificate of Holdings. A certificate executed by
Holdings, dated as of the Closing Date, certifying that the closing conditions
specified in Sections 7.1(a) and (b) have been satisfied as to Holdings, except
as disclosed in such certificate.
(d) Secretaries' Certificate. A certificate executed by each of
Holdings and Group, dated as of the Closing Date, (1) certifying that the
resolutions, as attached to said certificate, were duly adopted by the members
of Holdings and Group, as the case may be, authorizing and approving the
execution by such party of this Agreement and the other Transaction Documents to
which such party is a party and the consummation of the transactions
contemplated hereby and thereby and that such resolutions remain in full force
and effect; and (2) providing, as attachments thereto, Certificates of Good
Standing for each of the Renaissance Companies certified by an appropriate state
official of the State of their organization, all certified by such state
officials as of a date not more than fifteen days before the Closing Date.
(e) Consents. Copies of Consents which have been obtained by
Holdings or any of the Renaissance Companies prior to the Closing.
(f) Opinion of Counsel. Opinions of counsel to Holdings and Group,
dated as of the Closing Date, substantially in the forms of Exhibit C and
Exhibit G hereto.
(g) Indemnity Agreement. The Indemnity Agreement, duly executed by
Holdings and the Escrow Agent.
(h) Adjustment Escrow Agreement. The Adjustment Escrow Agreement,
duly executed by Holdings and the Adjustment Escrow Agent if required pursuant
to Section 2.4(b).
(i) Employment Agreement Releases. Releases, in form and substance
reasonably acceptable to Buyer, executed by each Person who is a party to the
Employment Agreements (other than the Renaissance Companies), releasing any
claims such Persons may have against any of the Renaissance Companies pursuant
to the Employment Agreements.
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(j) Securities Releases. If, as of the Closing Date, there are
outstanding any options, warrants or other similar claims or securities in
respect of the Equity Interests of the Renaissance Companies (collectively,
"Options"), other than Options held by any Renaissance Company, releases, in
form and substance reasonably acceptable to Buyer, executed by each holder of
such Options, releasing and terminating such Options and all rights of such
holder thereunder.
8.3 Deliveries by Buyer and Charter. Prior to or at the Closing, Buyer and
Charter shall deliver to Holdings the following:
(a) Purchase Consideration.
(1) As provided in Section 2.4, the Closing Cash Payment to
Holdings, by wire or accounts transfer of immediately available funds to one or
more accounts designated by Holdings by written notice to Buyer not less than
two days prior to the Closing.
(2) As provided in Sections 2.4 and 10.4, the Indemnity Fund
to the Escrow Agreement, by wire or accounts transfer of immediately available
funds to the account specified in the Indemnity Agreement.
(3) As and to the extent provided by Section 2.4(b), the
Purchase Price Escrow Amount to the Adjustment Escrow Agent, by wire or accounts
transfer of immediately available funds to the account specified in the
Adjustment Escrow Agreement.
(b) Officers' Certificate. A certificate executed by each of Buyer
and Charter, dated as of the Closing Date, certifying that the closing
conditions specified in Sections 7.2(a) and (b) have been satisfied, except as
disclosed in said certificate.
(c) Secretaries' Certificate. A certificate executed by each of
Buyer and Charter, dated as of the Closing Date, (1) certifying that the
resolutions, as attached to said certificate, were duly adopted by the Board of
Directors and shareholders of Buyer and Charter (as the case may be),
authorizing and approving the execution by Buyer and Charter of this Agreement
and the other Transaction Documents to which it is a party and the consummation
of the transactions contemplated hereby and thereby and that such resolutions
remain in full force and effect; and (2) providing, as attachments thereto, a
Certificate of Good Standing for Buyer and Charter (as the case may be)
certified by an appropriate state official of the State of Delaware, certified
by such state official as of a date not more than fifteen days before the
Closing Date.
(d) Opinion of Counsel. An opinion of counsel to Buyer and Charter,
dated as of the Closing Date, substantially in the form of Exhibit D hereto.
(e) Indemnity Agreement. The Indemnity Agreement, duly executed by
Buyer, Charter and the Escrow Agent.
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(f) Adjustment Escrow Agreement. The Adjustment Escrow Agreement,
duly executed by Buyer, Charter and the Adjustment Escrow Agent if required
pursuant to Section 2.4(b).
SECTION 9: TERMINATION
9.1 Agreement between Holdings and Buyer. This Agreement may be terminated
at any time prior to the Closing and the purchase and sale of the Purchased
Interests abandoned, by written agreement between Holdings and Buyer.
9.2 Termination by Holdings. This Agreement may be terminated at any time
prior to the Closing by Holdings and the purchase and sale of the Purchased
Interests abandoned, upon written notice to Buyer, upon the occurrence of any of
the following:
(a) Conditions. If on any date determined for the Closing in
accordance with Section 8.1 if each condition set forth in Section 7.1 has been
satisfied (or will be satisfied by the delivery of documents at the Closing) or
waived in writing by Buyer on such date and either (i) a condition set forth in
Section 7.2 has not been satisfied (or will not be satisfied by the delivery of
documents at the Closing) or waived in writing by Holdings on such date or (ii)
Buyer or Charter has nonetheless refused to consummate the Closing.
Notwithstanding the foregoing, Holdings may not rely on the failure of any
condition set forth in Section 7.2 to be satisfied if such failure was
principally caused by Holding's or any Renaissance Company's failure to act in
good faith or a breach of or failure to perform any of its representations,
warranties, covenants or other obligations in accordance with the terms of this
Agreement.
(b) Upset Date. If the Closing shall not have occurred on or prior
to the Upset Date as extended as provided in Section 8.1(a)(3) or Section
8.1(a)(4), unless the failure of the Closing to occur was principally caused by
Holding's or any Renaissance Company's failure to act in good faith or a breach
of or failure to perform any of its representations, warranties, covenants or
other obligations in accordance with the terms of this Agreement.
9.3 Termination by Buyer. This Agreement may be terminated at any time
prior to the Closing by Buyer and the purchase and sale of the Purchased
Interests abandoned, upon written notice to Holdings, upon the occurrence of any
of the following:
(a) Conditions. If on any date determined for the Closing in
accordance with Section 8.1 if each condition set forth in Section 7.2 has been
satisfied (or will be satisfied by the delivery of documents at the Closing) or
waived in writing by Holdings on such date and either (i) a condition set forth
in Section 7.1 has not been satisfied (or will not be satisfied by the delivery
of documents at the Closing) or waived in writing by Buyer on such date or (ii)
Holdings has nonetheless refused to consummate the Closing. Notwithstanding the
foregoing, Buyer may not rely on the failure of any condition set forth in
Section 7.1 to be satisfied if such failure was principally caused by Buyer's or
Charter's failure to act in good faith or a breach of or failure to perform any
of its representations, warranties, covenants or other obligations in accordance
with the terms of this Agreement.
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(b) Upset Date. If the Closing shall not have occurred on or prior
to the Upset Date as extended as provided in Section 8.1(a)(3) or Section
8.1(a)(4), unless the failure of the Closing to occur was principally caused by
any Buyer's or Charter's failure to act in good faith or a breach of or failure
to perform any of its representations, warranties, covenants or other
obligations in accordance with the terms of this Agreement.
9.4 Effect of Termination. If this Agreement is terminated as provided in
this Section 9, then this Agreement will forthwith become null and void and
there will be no liability on the part of any party to any other party or any
other Person in respect thereof, provided that:
(a) Surviving Obligations. The obligations of the parties described
in Sections 6.2, 9.4 and 11.1 (and all other provisions of this Agreement
relating to expenses) will survive any such termination.
(b) Withdrawal of Applications. All filings, applications and other
submissions relating to the consummation of the transaction contemplated hereby
shall, to the extent practicable, be withdrawn from the Governmental Authority
or other Person to whom made.
(c) Willful Breach by Buyer or Charter. No such termination will
relieve Buyer or Charter from liability for a willful breach by Buyer or Charter
of this Agreement (which shall in all events include, without limitation, a
failure to pay the Cash Consideration and discharge the Senior Debt and the
Credit Agreement), and in such event Holdings and Group shall have all rights
and remedies available at law and equity, including the remedy of specific
performance.
(d) Willful Breach by Holdings or Group. No such termination will
relieve Holdings or Group from liability for a willful breach of this Agreement,
and in such event Buyer and Charter shall have all rights and remedies available
at law or equity, including the remedy of specific performance.
9.5 Attorneys' Fees. Notwithstanding any provision in this Agreement that
may limit or qualify a party's remedies, in the event of a default by any party
that results in a lawsuit or other proceeding for any remedy available under
this Agreement, the prevailing party shall be entitled to reimbursement from the
defaulting party of its reasonable legal fees and expenses (whether incurred in
arbitration, at trial, or on appeal).
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SECTION 10: SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES
10.1 Survival. All representations, warranties and covenants of Holdings
and Group set forth herein will survive the Closing (i) until the expiration of
the applicable statute of limitations in the case of the representation and
warranty contained in Section 4.4 and (ii) until the nine (9) month anniversary
of the Closing Date in all other cases. All representations and warranties of
Buyer and Charter and all covenants of Buyer and Charter to be performed and
discharged in full prior to the Closing, in each case, set forth herein, will
survive the Closing until the nine (9) month anniversary of the Closing Date.
All covenants of Buyer and Charter to be performed in whole or in part after the
Closing will survive the Closing until performed and discharged in full.
Notwithstanding anything to the contrary contained herein, all claims made in
respect of such representations, warranties and covenants will be subject to any
applicable limitations set forth in this Section 10.
10.2 Indemnification by Holdings. After the Closing, but subject to
Sections 10.4 and 10.5, Holdings agrees to indemnify and hold Buyer and Charter
and either of their Affiliates and their respective officers, directors,
representatives, shareholders, members, partners, agents and employees harmless
against and with respect to, and shall reimburse Buyer and Charter and either of
their Affiliates for:
(a) any and all Losses resulting from any untrue representation or
breach of warranty by Holdings or Group or the nonfulfillment of any covenant to
be performed by Holdings or Group contained in this Agreement or in any other
document or instrument delivered pursuant hereto by Holdings or Group; provided,
however, that each representation and warranty (whether made as of the date of
this Agreement or made on and as of the Closing Date) contained in this
Agreement for which indemnification is sought hereunder shall be read (including
for purposes of determining whether a breach of such representation or warranty
has occurred) without regard to, and as if such representation or warranty did
not contain, materiality or material adverse effect qualifications that may be
contained therein; and
(b) any rate refund liability imposed on any of the Renaissance
Companies for any period arising prior to the Adjustment Time pursuant to the
existing provisions of the Cable Act or any FCC Regulations heretofore adopted
thereunder (but only to the extent of the out-of-pocket costs payable in respect
thereof and it being understood that any claim for indemnification in respect of
such liability may be made only pursuant to this Section 10.2(b) and not under
any other provision of this Section 10.2).
10.3 Indemnification by Buyer and Charter. After the Closing, but subject
to Section 10.5, Buyer and Charter jointly and severally agree to indemnify and
hold Holdings and its Affiliates and their respective officers, directors,
representatives, shareholders, members, partners, agents and employees harmless
against and with respect to, and shall reimburse Holdings for any and all Losses
resulting from any untrue representation, breach of warranty, or
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nonfulfillment of any covenant by Buyer or Charter contained in this Agreement
or any other document or instrument delivered pursuant hereto by Buyer or
Charter.
10.4 Indemnity Agreement. At the Closing, Buyer, Charter, Holdings and the
Escrow Agent shall execute the Indemnity Agreement, in accordance with which, at
the Closing, pursuant to Section 2.4, Buyer will deposit with the Escrow Agent
Seven Million Five Hundred Thousand Dollars ($7,500,000.00) on behalf of
Holdings in order to provide a fund for, and the exclusive source for, the
payment of any indemnification to which Buyer or Charter is entitled under this
Section 10 (such escrow, the "Indemnity Fund"), except that the Indemnity Fund
shall not be the exclusive source for the payment of any indemnification claims
made in respect of a breach of the representation and warranty contained in
Section 4.4. The Indemnity Fund will be administered in accordance with the
provisions of this Section 10 and the Indemnity Agreement.
10.5 Certain Limitations on Indemnification Obligations. Notwithstanding
anything in this Agreement to the contrary:
(a) (i) Holdings will not be required to indemnify and will not
otherwise be liable to Buyer or Charter for any matter described in Section 10.2
unless and until the aggregate amount of all Losses of Buyer and Charter in the
aggregate arising therefrom for which Holdings would have indemnification
liability to Buyer and Charter but for this Section 10.5(a) (i) exceeds, and
then only to the extent of the excess above, Seven Hundred Fifty Thousand
Dollars ($750,000.00).
(ii) Buyer and Charter will not be required to indemnify and
will not otherwise be liable to Holdings for a breach of their representations
and warranties set forth herein unless and until the aggregate amount of all
Losses of Holdings in the aggregate arising therefrom for which Buyer or Charter
would have indemnification liability to Holdings but for this Section
10.5(a)(ii) exceeds, and then only to the extent of the excess above, Seven
Hundred Fifty Thousand Dollars ($750,000.00); provided, however, that it is
understood and agreed that this Section 10.5(a)(ii) shall not apply to any
amount payable to Holdings in respect of the nonfulfillment of any covenant to
be performed by Buyer or Charter contained in this Agreement or any other
document or instrument delivered pursuant hereto by Buyer or Charter.
(iii) Buyer and Charter will not be required to indemnify, and
will not otherwise be liable to, Holdings for a breach of their representations
and warranties for any amount in excess of Seven Million Five Hundred Thousand
Dollars ($7,500,000) in the aggregate; provided, however, that it is understood
and agreed this Section 10.5(a)(iii) shall not apply to any amount payable to
Holdings in respect of the breach of any covenant to be performed by Buyer or
Charter contained in this Agreement or any other document or instrument
delivered pursuant hereto.
(b) (i) Holdings will not be required to indemnify and will not
otherwise be liable to Buyer or Charter with respect to any Losses arising under
Section 10.2 unless Buyer or Charter (as the case may be) gives Holdings written
notice of a claim pursuant to Section 10.6(a), (i) in respect of any breach of
the representation and warranty contained in Section 4.4,
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prior to the expiration of the applicable statute of limitations (without any
extension or waiver) in respect of such claim, and (ii) in respect of any other
claim, on or prior to the date that is nine (9) months after the Closing Date.
Notwithstanding the foregoing, all amounts held pursuant to the Indemnity
Agreement in excess of amounts previously notified by Buyer or Charter to
Holdings as subject to a then outstanding bona fide claim by Buyer or Charter
shall be released to Holdings on the first business day following the nine (9)
month anniversary of the Closing Date in accordance with the Indemnity
Agreement. Thereafter, any amounts remaining under the Indemnity Agreement shall
be released from escrow and paid over to Holdings in accordance with the
Indemnity Agreement.
(ii) Buyer and Charter will not be required to indemnify and
will not otherwise be liable to Holdings with respect to any Losses arising
under Section 10.3 with respect to any breach of the representations and
warranties of Buyer and Charter set forth herein unless Holdings gives Buyer or
Charter (as the case may be) written notice of such a claim pursuant to Section
10.6(a) on or prior to the date that is nine (9) months after the Closing Date.
(c) All payments required to be made by Holdings in respect of its
indemnification obligations under this Section 10 shall be made solely from the
Indemnity Fund (except in respect of any breach of the representation and
warranty contained in Section 4.4) and the sole and exclusive remedy available
to Buyer and Charter for any breach by Holdings or Group of its representations,
warranties, covenants, obligations or agreements hereunder or under any of the
documents or instruments delivered pursuant hereto by Group or Holdings shall be
a claim for indemnification pursuant to the terms of this Section 10.
(d) (i) Anything in this Agreement or applicable law to the
contrary notwithstanding, other than claims pursuant to Section 10, other than
claims against the Indemnity Fund as provided for in this Agreement, and subject
to the limitations set forth herein, after the Closing and except in respect of
any claim for a breach of the representation and warranty contained in Section
4.4, none of Holdings, its Affiliates or any of their respective officers,
directors, shareholders, members, partners, employees or agents shall have any
obligation or liability to Buyer or Charter under this Section 10 or otherwise,
and neither Buyer nor Charter will have any claim or recourse against Holdings,
its Affiliates or any of their respective officers, directors, shareholders,
members, partners, employees or agents as a result of the breach of any
representation, warranty, covenant or agreement of Holdings or Group contained
herein or otherwise arising out of or in connection with the transactions
contemplated by this Agreement or the Transaction Documents or the business or
operations of the Renaissance Companies prior to the Closing (except in respect
of any claim for a breach of the representation and warranty contained in
Section 4.4) and the provisions of this Section 10 shall be the sole and
exclusive remedy for any such claim by Buyer or Charter for any such matters
(except in respect of any claim for a breach of the representation and warranty
contained in Section 4.4), whether such claims are framed in contract, tort or
otherwise.
(ii) Anything in this Agreement or applicable law to the
contrary notwithstanding, other than claims pursuant to this Section 10, and
subject to the limitations set forth herein, after the Closing, none of Buyer,
Charter, their Affiliates or any of their respective
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officers, directors, shareholders, members, partners, employees or agents shall
have any obligation or liability to Holdings and, other than claims pursuant to
this Section 10, Holdings will not have any claim or recourse against Buyer,
Charter, their Affiliates or any of their respective officers, directors,
shareholders, members, partners, employees or agents, in each case, as a result
of the breach of any representation, warranty, covenant or agreement of Buyer or
Charter contained herein or otherwise arising out of or in connection with the
transactions contemplated by this Agreement or the Transaction Documents and the
provisions of Section 10 shall be the sole and exclusive remedy for any such
claim by Holdings for any such matters, whether such claims are framed in
contract, tort or otherwise. Notwithstanding anything to the contrary contained
herein, nothing in this Section 10.5(d)(ii) shall restrict, limit or affect any
covenant, agreement, liability or obligation of Buyer or Charter pursuant to the
terms and conditions of this Agreement, including, without limitation, pursuant
to Section 6.15 and this Section 10, and any liability Buyer or Charter may have
as the result of any untrue representation, breach of warranty or default or
nonperformance of any covenant, agreement, liability or obligation pursuant to
this Agreement or otherwise.
(e) The parties hereto agree to use commercially reasonable efforts
to collect any and all insurance proceeds and other amounts recoverable from
third parties to which it may be entitled in respect of any Loss prior to
seeking indemnity as Claimant from the Indemnifying Party.
(f) Holdings will not be liable with respect to any Loss to the
extent that the amount of such Loss was included in the computation of Closing
Net Liabilities in accordance with Section 2.
(g) Notwithstanding anything in this Agreement to the contrary,
Holdings shall not have any liability or obligation (for indemnification or
otherwise) arising as a result of the occurrence of the Closing without certain
Consents or any Buyer's or Charter's waiver of any closing condition, nor shall
any adjustment be made to the Cash Consideration in respect of the foregoing.
(h) Notwithstanding anything to the contrary contained herein,
Holdings shall not be required to indemnify or otherwise be liable to Buyer or
Charter, pursuant to this Section 10 or otherwise, in respect of any breach of
the representation and warranty contained in Section 4.4 in an aggregate amount
in excess of the Cash Consideration (as decreased by the amount of Closing Net
Liabilities), as finally determined pursuant to Section 2.5, received by
Holdings.
10.6 Procedure for Indemnification. The procedure for indemnification
shall be as follows:
(a) The party claiming indemnification (the "Claimant") shall
promptly give notice to the party from which indemnification is claimed (the
"Indemnifying Party") of any claim, whether between the parties or brought by a
third party, specifying in reasonable detail the factual basis for the claim and
the amount thereof (if known and quantifiable); provided,
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however, that the failure to give such notice shall not impair the Claimant's
rights hereunder unless the Indemnifying Party is materially prejudiced thereby.
(b) With respect to claims solely between the parties, following
receipt of notice from the Claimant of a claim, the Indemnifying Party shall
have thirty (30) days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and its authorized representatives the information relied upon by the Claimant
to substantiate the claim. If the Claimant and the Indemnifying Party agree at
or prior to the expiration of the thirty-day period (or any mutually agreed upon
extension thereof) to the validity and amount of such claim, the Indemnifying
Party shall immediately pay to the Claimant the full amount of the claim,
subject to the terms hereof and the terms of, and procedures set forth in, the
Indemnity Agreement. If the Claimant and the Indemnifying Party do not agree
within thirty (30) days following receipt of notice of the claim from the
Claimant (or any mutually agreed upon extension thereof), the Claimant may seek
an appropriate remedy.
(c) With respect to any claim by a third party as to which the
Claimant is entitled to indemnification under this Agreement, the Indemnifying
Party shall have the right at its own expense, to participate in or assume
control of the defense of such claim, and the Claimant shall cooperate fully
with the Indemnifying Party, subject to reimbursement for actual out-of-pocket
expenses incurred by the Claimant as the result of a request by the Indemnifying
Party; provided that notwithstanding the foregoing, if such claim is from a
Franchising Authority or other Governmental Authority and Charter or Buyer are
seeking indemnification against Holdings in respect of such claim, Charter and
Buyer may retain control of the defense of such claim, but Holdings shall have
the right, at its own expense, to participate in the defense of such claim, and
Buyer and Charter shall cooperate with Holdings in defending such claim and keep
Holdings informed of all material strategies and developments therein. Neither
Charter nor Buyer may settle any such claim by a Franchising Authority or other
Governmental Authority for which Holdings would be liable without the consent of
Holdings, which shall not be unseasonably withheld. If the Indemnifying Party
elects to assume control of the defense of any third-party claim, the Claimant
shall have the right to participate in the defense of such claim at its own
expense. If the Indemnifying Party does not elect to participate in or assume
control of the defense of any third-party claim, the Claimant will not enter
into any settlement of such claim which could result in indemnification
liability without the Indemnifying Party's prior written consent (which shall
not be unreasonably withheld). Any such settlement will be binding upon Buyer
and Charter or Holdings, as the case may be, for purposes of determining whether
any indemnification payment is required pursuant to this Section 10.
10.7 Treatment of Indemnification Payments. Buyer, Charter and Holdings
will treat all payments made pursuant to this Section 10 (including all payments
made to Buyer or Charter out of the Indemnity Fund but excluding the release of
any Indemnity Fund to Holdings) as an adjustment to the Cash Consideration for
all purposes.
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SECTION 11: MISCELLANEOUS
11.1 Fees and Expenses. Except as otherwise provided in this Agreement,
each party shall pay its own expenses incurred in connection with the
authorization, preparation, execution, and performance of this Agreement,
including all fees and expenses of counsel, accountants, agents, and
representatives.
11.2 Notices. All notices, demands, and requests required or permitted to
be given under the provisions of this Agreement shall be in writing, may be sent
by telecopy (with automatic machine confirmation), delivered by personal
delivery, or sent by commercial delivery service or certified mail, return
receipt requested, shall be deemed to have been given on the date of actual
receipt, which may be conclusively evidenced by the date set forth in the
records of any commercial delivery service or on the return receipt, and shall
be addressed to the recipient at the address specified below, or with respect to
any party, to any other address that such party may from time to time designate
in a writing delivered in accordance with this Section 11.2:
If to Buyer: Charter Communications, Inc.
00000 Xxxxxxxxxxx Xxxxx, Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx, President & C.E.O.
(with a copy to Xxxxxx X. Xxxx, General Counsel)
Telephone: 000-000-0000
Telecopier: 000-000-0000
with copies (which shall not Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
constitute notice) to: 000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
If to Group or Holdings: (prior Renaissance Media Group LLC
to the Closing) or or
Holdings (after the Renaissance Media Holdings LLC
Closing): 0 Xxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx, C.E.O.
Telephone: 000-000-0000
Telecopier: 000-000-0000
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with copies (which shall not Xxxxxx Xxxxxxx Xxxx Xxxxxx Capital Partners
constitute notice) to: 0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
Telephone: 000-000-0000
Telecopier: 000-000-0000
Dow, Xxxxxx & Xxxxxxxxx, PLLC
0000 Xxx Xxxxxxxxx Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxx X. Xxxxxx, Esq.
Telephone: 000-000-0000
Telecopier: 202-776-2222
and
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxx, Esq.
Telephone: 000-000-0000
Telecopier: 000-000-0000
11.3 Benefit and Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto (and, in the case of Sections 6.12
and 6.13, the parties specified therein) and their respective successors and
permitted assigns; provided that (a) neither this Agreement nor any of the
rights, interests or obligations hereunder may be assigned by Holdings or Group
without the prior written consent of Buyer and Charter (which consent shall not
be unreasonably withheld or delayed), and (b) neither this Agreement nor any of
the rights, interests or obligations hereunder may be assigned by Buyer or
Charter without the prior written consent of (i) Holdings or Group, prior to the
Closing, or (ii) Holdings, after the Closing (which consent shall not be
unreasonably withheld or delayed), except that Buyer may assign this Agreement,
and its rights, interests and obligations hereunder to an Affiliate of Buyer as
long as such assignment does not hinder or delay the consummation of the
transactions contemplated hereby and by the other Transaction Documents. Consent
shall be deemed to be reasonably withheld if the consenting party reasonably
determines that the assignment would be reasonably likely to hinder or delay the
Closing or adversely affect the payment of the Cash Consideration at the
Closing. This Agreement is not intended to confer upon any Person other than the
parties hereto (and, in the case of Section 6.12 and 6.13, the parties specified
therein) any rights or remedies hereunder.
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11.4 Further Assurances. After the Closing the parties shall take any
actions and execute any other documents that may be necessary or desirable to
the implementation and consummation of this Agreement upon the reasonable
request of any other party, at the expense of the requesting party.
11.5 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED, AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO
THE CHOICE OF LAW PROVISIONS THEREOF).
11.6 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
(WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR THE ACTIONS OF ANY PARTY IN THE NEGOTIATION, PERFORMANCE OR
ENFORCEMENT HEREOF.
11.7 SUBMISSION TO JURISDICTION; VENUE. EACH OF THE PARTIES HERETO AGREES
TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE FEDERAL AND STATE
COURTS SITTING IN THE BOROUGH OF MANHATTAN, STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE MATTERS
CONTEMPLATED HEREBY. EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES,
TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT IN ANY SUCH NEW YORK STATE OR FEDERAL
COURT. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE
MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.
11.8 Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by applicable law) not
invalidate or render unenforceable such provision in any other jurisdiction.
Notwithstanding the foregoing, in the event of any such determination the effect
of which is to affect materially and adversely any party, the parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible to the fullest extent permitted by
applicable law in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled and consummated to the maximum extent
possible.
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11.9 Entire Agreement. This Agreement, the Disclosure Schedules and the
Exhibits hereto, the other Transaction Documents to be delivered by the parties
pursuant to this Agreement and the Confidentiality Agreement collectively
represent the entire understanding and agreement between Buyer, Charter, Group
and Holdings with respect to the subject matter hereof and thereof and supersede
all prior agreements, understandings and negotiations between the parties. Buyer
and Charter acknowledge that none of Holdings or Group has made any, or makes
any, promises, representations, warranties, covenants or undertakings, express
or implied, other than those expressly set forth in this Agreement, the other
Transaction Documents and the Confidentiality Agreement.
11.10 Amendments; Waiver of Compliance; Consents. This Agreement may be
amended and any provision of this Agreement may be waived; provided that any
such amendment or waiver (a) will be binding upon Holdings or Group prior to the
Closing only if such amendment or waiver is set forth in a writing executed by
Holdings or Group, (b) will be binding upon Holdings after the Closing only if
such amendment or waiver is set forth in a writing executed by Holdings and (c)
will be binding upon Buyer or Charter only if such amendment or waiver is set
forth in a writing executed by Buyer and Charter.
11.11 Counterparts. This Agreement may be signed in counterparts with the
same effect as if the signature on each counterpart were upon the same
instrument.
11.12 Specific Performance. The parties recognize that in the event either
of Holdings or Group should refuse to perform at the Closing any of its
obligations under the provisions of this Agreement, monetary damages alone will
not be adequate. The Charter Parties shall therefore be entitled, in addition to
any other remedies which may be available, including money damages, to obtain
specific performance of any of the obligations of the Renaissance Parties under
the provisions of this Agreement to be performed at Closing. In the event of any
action to enforce this Agreement specifically pursuant to this Section 11.12,
Holdings or Group, as applicable, hereby waives the defense that there is an
adequate remedy at law.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURES ON FOLLOWING PAGES]
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IN WITNESS WHEREOF, this Agreement has been executed by each of Buyer,
Charter, Holdings and Group as of the date first written above.
CHARTER: BUYER:
CHARTER COMMUNICATIONS, INC. CHARTER COMMUNICATIONS, LLC
By: /s/ Xxxxxx X. Xxxx By: /s/ Xxxxxx X. Xxxx
--------------------------- -------------------------
Xxxxxx X. Xxxx Xxxxxx X. Xxxx
Senior Vice-President Senior Vice President
GROUP: HOLDINGS:
RENAISSANCE MEDIA GROUP LLC RENAISSANCE MEDIA HOLDINGS LLC
By: /s/ Xxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxxxx
---------------------------- ----------------------------
Name: Xxxx X. Xxxxxxx Name: Xxxx X. Xxxxxxx
Title: Chief Executive Officer Title: Chief Executive Officer
