1
EXECUTION VERSION
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
ENSTAR INCOME PROGRAM 1984-1, L.P.,
ENSTAR INCOME PROGRAM IV-3, L.P.,
ENSTAR INCOME/GROWTH PROGRAM SIX-A, L.P.,
ENSTAR VII, ENSTAR VIII AND ENSTAR X, LTD.,
AS SELLERS,
AND
MULTIMEDIA ACQUISITION CORP.,
AS BUYER
Dated as of June 21, 2000
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TABLE OF CONTENTS
PAGE
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Terms Defined in this Section . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2. SALE OF ASSETS; ASSUMPTION OF CERTAIN LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.1 Sales of Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.2 Assumed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.1 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.2 Manner and Time of Closing and Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.3 Adjustment of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.4 Instrument of Assignment and Assumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.5 Deposit Escrow Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.6 Purchase Price Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4. REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.1 Organization, Qualification and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.2 Capacity; Due Authorization; Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.4 Financial Statements; Absence of Undisclosed Liabilities; Accounts Receivable . . . . . . . . . . . 15
4.5 Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.6 Real Property; Leases; Condemnation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.7 Personal Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.8 Governmental Authorizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.9 Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.10 Pole Attachment Agreements; Related Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.11 Retransmission Consent and Must-Carry; Rate Regulation; Copyright Compliance . . . . . . . . . . . 18
4.12 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.13 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.14 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.15 Labor Relations; Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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4.16 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.17 Bonds; Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.18 Information on the Systems and Subscribers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.19 Broker; Brokers' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.1 Organization, Qualification and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.2 Capacity; Due Authorization; Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.4 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.5 Financial Capability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.6 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6. COVENANTS OF SELLER AND BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.1 Continuity and Maintenance of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.2 Access to Seller; Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.3 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.4 No Public Announcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.5 Regulatory Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.6 Employees; Employee Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.7 Required Consents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.8 Use of Transferor's Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.9 Delivery of Subscriber Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.10 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.11 Further Assurances; Satisfaction of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.12 Environmental Reports; Title Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.13 Limited Partner Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.14 ▇▇▇▇ Office Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.15 Acquisition Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.16 Noncompetition Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.17 Upgrade of ▇▇▇▇▇▇▇▇▇ System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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7. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.1 Representations and Warranties of Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.2 Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.3 Transferable Franchise Areas; Material Consents; Franchise Renewals; Franchise Extensions . . . . . 32
7.4 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.5 Judgment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.6 Delivery of Certificates and Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.7 Opinion of Sellers' Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
7.8 Opinion of Sellers' FCC Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
7.9 Limited Partner Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8. CONDITIONS PRECEDENT TO SELLERS' OBLIGATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.1 Representations and Warranties of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.2 Covenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.3 Transferable Franchise Areas; Material Consents . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.4 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.5 Judgment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.6 Limited Partner Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.7 Delivery of Certificates and Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.8 Opinion of Buyer's Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
8.9 Payment for Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9. RETAINED FRANCHISES AND ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.1 Non-Transferable Franchise Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.2 Retained Franchise Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.3 Subsequent Closings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.4 Final Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.5 Franchise Purchase Price; Discounted Franchise Purchase Price . . . . . . . . . . . . . . . . . . . 36
9.6 Management Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . 36
10.1 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.2 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.3 Assertion of Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.4 Notice of and Right to Defend Third Party Claims . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.5 Limitations of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.6 Indemnity Escrow Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
11. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.2 Breakup Fee; Acquisition Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.3 Reimbursement of Expenses. Reimbursement of Expenses . . . . . . . . . . . . . . . . . . . . . . . 40
11.4 Surviving Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11.5 Attorney's Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
12. EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
13. ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
14. PARTIES OBLIGATED AND BENEFITED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
15. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
16. AMENDMENTS AND WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
17. SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
18. SECTION HEADINGS AND TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
19. COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
20. GOVERNING LAW; CONSENT IN JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
21. SPECIFIC PERFORMANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
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LIST OF EXHIBITS AND SCHEDULES
Exhibits
A Form of Deposit Escrow Agreement
B Form of Indemnity Escrow Agreement
C Form of ▇▇▇▇ of Sale and Assignment and Assumption Agreement
D Form of Opinion of Sellers' Counsel
E Form of Opinion of Sellers' FCC Counsel
F Form of Opinion of Buyer's Counsel
Schedules
1.1A Purchase Price Allocation; Subscriber Adjustment Amounts;
Minimum Subscriber Numbers; Indemnification Allocation
1.1B Permitted Encumbrances
2.1(b)(i) Programming and Retransmission Consent Agreements Being
Assigned
2.1(b)(viii) Excluded Assets
4.3 Required Consents
4.4 Financial Statements
4.6(a) Owned Real Property
4.6(b) Leased Real Property
4.7(b) Personal Property Leases
4.8 Governmental Authorizations
4.8A Agreements and Governmental Authorizations Not Delivered
4.9 Agreements
4.10 Pole Attachment Agreements; Related Agreements
4.11 Retransmission Consent and Must-Carry; Rate Regulation
4.14(a) Systems Plans
4.16 Environmental Matters
4.17 Bonds; Guaranties; Letters of Credit
4.18 Information on the Systems and Subscribers
7.3 Required Transferable ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇ PURCHASE AGREEMENT
THIS AGREEMENT, made as of the 21st day of June, 2000, is by
and between Multimedia Acquisition Corp., a Pennsylvania corporation ("Buyer"),
and Enstar Income Program 1984-1, L.P., a Georgia limited partnership, Enstar
Income Program IV-3, L.P., a Georgia limited partnership, Enstar Income/Growth
Program Six-A, L.P., a Georgia limited partnership, Enstar VII, a Georgia
limited partnership, Enstar VIII, a Georgia limited partnership, and Enstar X,
Ltd., a Georgia limited partnership (collectively, "Sellers," and each
individually, a "Seller").
W I T N E S S E T H:
WHEREAS, Sellers own and operate cable television systems in
the communities of Brownsville, ▇▇▇▇ and Ripley, Tennessee; ▇▇▇▇▇▇, Kentucky;
Snowhill, North Carolina; and Pageland and Chesterfield, South Carolina, as
more particularly described in Schedule 4.18 hereto (the "Systems");
WHEREAS, Sellers have agreed to convey to Buyer substantially
all of their respective assets comprising or used or usable in connection with
their operation of their respective Systems, upon the terms and conditions set
forth herein;
WHEREAS, Buyer has agreed to assume certain specified
liabilities of Sellers, upon the terms and conditions set forth herein; and
NOW, THEREFORE, in consideration of the representations and
warranties and the mutual covenants and agreements herein contained, and other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Sellers and Buyer do hereby agree as follows:
1. Definitions.
1.1 Terms Defined in this Section. In addition to the terms
defined elsewhere in this Agreement, the following terms shall have the
following meanings when used herein with initial capital letters:
"Accounts Receivable" means the sum of 99% of the book value
of all subscriber accounts receivable that are outstanding as of the Closing
Date and no part of which other than $5.00 is more than sixty (60) days past
due (with an account being past due one day after the first day of the period
to which the applicable billing relates); plus 95% of the book value of all
advertising and other accounts receivable that are outstanding as of the
Closing Date and no part of which other than $5.00 is more than ninety (90)
days from the invoice date.
"Affiliate" means, with respect to any Person, any other
Person controlling, controlled by or under common control with, such Person,
with "control" for such purpose meaning the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of voting securities or voting
interests, by contract or otherwise.
8
"Basic Cable Service" means the tier of cable television
service that includes the retransmission of local broadcast signals as defined
by the Cable Act.
"Business Day" means any day other than Saturday, Sunday or a
day on which banking institutions in New York, New York are required or
authorized to be closed.
"Cable Act" means Title VI of the Communications Act of 1934,
as amended, 47 U.S.C. Sections 151 et seq., all other provisions of the Cable
Communications Policy Act of 1984 and the provisions of 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" means Charter Communications, Inc., a Delaware
Corporation.
"Code" means the Internal Revenue Code of 1986, as amended,
and the rules and regulations promulgated thereunder as in effect from time to
time.
"Communications Act" means the Communications Act of 1934, as
amended by 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, and as may be further amended, and the rules and regulations, policies
and published decisions of the FCC thereunder, as in effect from time to time.
"Compensation Arrangement" means any plan or compensation
arrangement, other than an Employee Plan or a Multiemployer Plan, whether
written or unwritten, which provides to employees or former employees of Seller
or any ERISA Affiliate any compensation or other benefits, whether deferred or
not, in excess of base salary or wages and excluding overtime pay, and
including, but not limited to, any bonus (including any bonus given to motivate
employees to work for Seller through the Closing), incentive plan, stock rights
plan, deferred compensation arrangement, stock purchase plan, severance pay
plan and any other perquisites and employees fringe benefit plans.
"Deposit Amount" means the amount of $1,800,000 (which amount
shall be allocated among Sellers on a pro rata basis based on the allocation of
the aggregate Purchase Price among Sellers), being deposited by Buyer with the
Escrow Agent pursuant to the Deposit Escrow Agreement to secure Buyer's
performance of its covenants and obligations to the respective Sellers
hereunder.
"Deposit Escrow Agreement" means the Deposit Escrow Agreement
among Buyer, Sellers and the Escrow Agent substantially in the form of Exhibit
A.
"Employee" means any person employed by Seller.
"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 (other than a
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Multiemployer Plan) to which any Seller or any of its ERISA Affiliates
contributes or has any obligation to contribute or to which any Seller or any
of its ERISA Affiliates sponsors, maintains or otherwise has liability.
"Encumbrance" means any mortgage, lien, security interest,
security agreement, conditional sale or other title retention agreement,
pledge, option, charge, assessment, restriction, encumbrance, adverse interest,
adverse claim, voting agreement, restriction on transfer or any exception to or
defect in title.
"Environmental Claim" means any claim or charge of a violation
of or noncompliance with any Environmental Law.
"Environmental Laws" means any and all federal, state or local
laws, statutes, rules, regulations, ordinances, orders, decrees and other
binding obligations: (i) related to releases or threatened releases of any
Hazardous Substance to soil, surface water, groundwater, air or any other
environmental media; (ii) governing the use, treatment, storage, disposal,
transport or handling of Hazardous Substances; or (iii) related to the
protection of the environment and human health. Such Environmental Laws shall
include, but are not limited to, RCRA, CERCLA, EPCRA, the Clean Air Act, the
Clean Water Act, the Safe Drinking Water Act, the Toxic Substances Control Act,
the Endangered Species Act and any other federal, state or local laws,
statutes, ordinances, rules, orders, permit conditions, licenses or any terms
or provisions thereof related to clauses (i), (ii) or (iii) above.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations thereunder, as in effect from
time to time.
"ERISA Affiliate" means, with respect to any Seller, (i) any
corporation which at, or at any time before, the Closing Date is or was a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as Seller; (ii) any partnership, trade or business
(whether or not incorporated) which, at or any time before, the Closing Date is
or was under common control (within the meaning of Section 414(c) of the Code)
with such Seller; (iii) any entity, which at, or at any time before, the
Closing Date is or was a member of the same affiliated service group (within
the meaning of Section 414(m) of the Code) as either such Seller, any
corporation described in clause (i) or any partnership, trade or business
described in clause (ii); and (iv) any entity which at any time before the
Closing Date is or was required to be aggregated with such Seller under Section
414(o) of the Code.
"Escrow Agent" means The Bank of New York, or any other bank
reasonably acceptable to Seller and Buyer.
"Expanded Basic Service" means the tier of cable television
service offered separately from Basic Cable Service and for a charge in
addition to that charged for Basic Cable Service, and that can only be
purchased by subscribers that also receive Basic Cable Service, but not
including any a la carte programming tier or other programming offered on a per
channel or per program basis.
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"FAA" means the Federal Aviation Administration.
"FCC" means the Federal Communications Commission.
"Franchise" means all franchise agreements and similar
governing agreements, instruments and resolutions and franchise-related
statutes and ordinances that are necessary or required in order to operate any
of the Systems and to provide cable television services in any of the Systems.
"Franchise Area" means, with respect to any Franchise, the
geographic area in which a Seller is authorized to operate any of the Systems
pursuant to such Franchise.
"Franchise Extension" means the extension of the expiration
date for any Franchise that shall, by its terms, expire during the thirty-month
period subsequent to the Closing Date, such extension being on such terms and
conditions as shall be satisfactory to Buyer in its reasonably exercised
discretion.
"Franchise Renewal" means, for each Franchise that has expired
or shall expire prior to the Closing Date, the issuance of a new Franchise that
shall be on such terms and conditions as shall be satisfactory to Buyer in its
reasonably exercised discretion.
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States of America.
"General Partner" means Enstar Communications Corporation, a
Georgia corporation.
"Governmental Authority" means (i) the United States of
America or (ii) any state of the United States of America and any political
subdivision thereof, including counties, municipalities and the like.
"Governmental Authorizations" means, collectively, all
Franchises and other authorizations, agreements, Licenses and permits for and
with respect to the construction and operation of any of the Systems obtained
from any Governmental Authority.
"Hazardous Substance" means any substance, hazardous material
or other substance or compound regulated under Environmental Laws, including,
without limitation, petroleum or any refined product or fraction or derivative
thereof.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended, and the rules and regulations thereunder, as in effect
from time to time.
"Indemnity Escrow Agreement" means the Indemnity Escrow
Agreement or Agreements among Buyer, Sellers and the Escrow Agent,
substantially in the form of Exhibit B.
"Indemnity Fund" means the aggregate amount of $1,800,000,
being deposited by Buyer with the Escrow Agent pursuant to the Indemnity Escrow
Agreement(s) in accordance
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with Section 10.6 and the terms of the Indemnity Escrow Agreement(s) to provide
funds for the payment of any indemnification to which any Buyer Indemnitee
shall be entitled under Section 10 hereof.
"Knowledge of Seller" or "Seller's Knowledge" means the actual
knowledge of the chief financial officer of the General Partner or, with
respect to any System, the general manager with respect to such system.
"Leases" means the Personal Property Leases and the Real
Property Leases.
"Legal Requirement" means any statute, ordinance, code, law,
rule, regulation, permit or permit condition, administrative or judicial
decree, order or other requirement, standard or procedure enacted, adopted or
applied by any Governmental Authority, including judicial decisions applying
common law or interpreting any other Legal Requirement.
"License" means any license, permit or other authorization
(other than a Franchise) issued by a Governmental Authority, including, but not
limited to, the FCC, used or useful in the operation of any of the Systems
(including but not limited to TV translator station licenses, microwave
licenses (including but not limited to Cable Television Relay Services "CARS")
and TVRO earth station registrations).
"Limited Partner" means each of the limited partners of each
Seller.
"Limited Partner Consents" means the written consents of the
Limited Partners of each Seller that are necessary for the consummation of the
transactions contemplated by this Agreement by such Seller in accordance with
the terms hereof, which shall be in form and substance satisfactory to such
Seller.
"Management Agreement" means any of the Management Agreements
entered into between Buyer and one or more of the Sellers pursuant to Section
9.6, which shall be in form and substance reasonably satisfactory to Buyer and
the applicable Seller(s), with Buyer having broad management authority and the
applicable Seller(s) receiving no compensation thereunder.
"Material Adverse Effect" means a material adverse effect on
any of the business, financial condition, results of operations, assets or
liabilities of any Seller or the Systems, taken as a whole.
"Material Consents" means the Required Consents designated as
Material Consents in Schedule 4.3.
"Minimum Subscriber Number" means 16,800 Subscribers, which
shall be allocated among the individual Sellers as set forth in Schedule 1.1A.
"Multiemployer Plan" means a plan, as defined in Section 3(37)
or 4001(a)(3) of ERISA, to which any Seller or any trade or business that would
be considered a single employer
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with such Seller under Section 4001(b)(1) of ERISA contributed, contributes or
is required to contribute.
"Outside Closing Date" means March 31, 2001.
"Past Practices" means the practices used since November 12,
1999, in the Systems and in any cable system directly or indirectly controlled
by Charter that is of comparable size to the Systems and is located in a
geographic area comparable to those in which the Systems are located.
"Permitted Encumbrances" means the following: (i) statutory
landlord's liens and liens for current taxes, assessments and governmental
charges not yet due and payable (or being contested in good faith); (ii) zoning
laws and ordinances and similar Legal Requirements; (iii) rights reserved to
any Governmental Authority to regulate the affected property; (iv) as to
interests in Real Property, any easements, rights-of-way, servitudes, permits,
restrictions and minor imperfections or irregularities in title that are
reflected in the public records and that do not individually or in the
aggregate materially interfere with the right or ability to own, use, lease or
operate the Real Property as presently utilized; and (v) Encumbrances set forth
in Schedule 1.1B, provided that such Encumbrances set forth in Schedule 1.1B do
not individually or the in the aggregate materially interfere with Buyer's
right to own, use, lease or operate the Assets subject to such Encumbrances.
"Person" means any natural person, corporation, partnership,
trust, unincorporated organization, association, limited liability company,
Governmental Authority or other entity.
"Real Property" means all of the fee and leasehold estates
and, to the extent of the interest, title, and rights of Sellers 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 Sellers 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.
"Related Agreements" means all written agreements,
instruments, affidavits, certificates and other documents, other than this
Agreement, that are executed and delivered by Buyer or Seller pursuant to this
Agreement or in connection with Buyer's purchase of the Assets or any other
transactions contemplated by this Agreement, regardless of whether such
agreements, instruments, affidavits, certificates and other documents are
expressly referred to in this Agreement.
"Release" means any release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment or into or out of any Real
Property (owned, leased or used by easement), including the movement of
contaminants through or in the air, soil, surface water or groundwater above,
in or below any parcel of Real Property.
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"Remedial Action" means any and all actions required to (i)
clean up, remove, treat or in any other way address contaminants in the indoor
or outdoor environment, (ii) prevent the Release or threat of Release or
minimize the further Release of contaminants so they do not migrate or endanger
public health or welfare of the indoor or outdoor environment or (iii) perform
pre-remedial studies and investigations and post-remedial monitoring and care.
"Required Consents" means any consent of any Governmental
Authority or other Person under any License, Franchise, Agreement or other
instrument which is necessary as a condition to the transfer or assignment of
any such License, Franchise, Agreement or other instrument or as a condition to
the consummation of the transaction contemplated by this Agreement and the
Related Agreements.
"SEC" means the United States Securities and Exchange
Commission.
"Subscriber" means an active customer of one of the Systems
who subscribes for Basic Cable Service in a single household (excluding "second
connections", as such term is commonly understood in the cable television
industry, and any account duplication), commercial establishment or in a
multi-unit dwelling (including motels and hotels), and has paid the applicable
full non-discounted rate for at least one month's Basic Cable Service
(including deposit and installation charges consistent with the applicable
Seller's applicable past practice); provided, however, that the number of
customers in a multi-unit dwelling or commercial establishment that obtains
service on a "bulk-rate" basis shall be determined on a System-by- System basis
by dividing the gross bulk-rate revenue for Basic Cable Service and Expanded
Basic Service (but not revenues from tier or premium services, installation or
converter rental) attributable to such multi-unit dwelling or commercial
establishment in each System by the subscription rate for individual households
within such System for the higher level of Basic Cable Service and Expanded
Basic Service offered by such System. For purposes of this definition, an
"active customer" shall mean any customer: (i) who has not given or been given
notice of termination and who, consistent with the applicable Seller's
policies, should not have been given notice of termination; provided, that the
number of subscribers referred to in this clause (i) shall be net of the number
of prospective subscribers whose connection to a system is pending; (ii) who
has become a subscriber only pursuant to customary marketing promotions
conducted in the ordinary course of business consistent with Past Practices,
excluding any customers who became subscribers as a result of any such
promotions conducted within the preceding thirty (30) days; and (iii) whose
account does not have an outstanding balance (other than an amount of $5.00 or
less) more than 60 days past due (with an account being past due one day after
the first day of the period to which the applicable billing relates).
"Subscriber Adjustment Amount" means with respect to a Seller,
the Subscriber Adjustment Amount for such Seller, as set forth in Schedule
1.1A.
"Systems" means the cable television systems listed in
Schedule 4.18.
"Taxes" or "Tax" means and includes, without limitation, all
net income, capital gains, gross income, gross receipt, property, franchise,
sales, use, excise, withholding and other taxes, assessments, levies, fees,
duties, tariffs and other charges of any kind imposed upon any
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Seller or any of the Assets, as applicable, by federal, foreign, state or local
law, together with any interest and any penalties, or additions to tax and
additional amounts, validly imposed with respect to such taxes.
"Transferable Franchise Area" means any Franchise Area with
respect to which (A) any Required 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
Required Consent is necessary under a Franchise in connection with the
consummation of the transactions contemplated by this Agreement.
"Voting Period" means the period during which the Limited
Partners of any Seller are entitled to vote to approve or disapprove the
transactions contemplated by this Agreement with respect to such Seller,
pursuant to Section 6.13.
"WARN Act" means the Worker Adjustment Retraining and
Notification Act.
1.2 Other Definitions. The following terms are defined in the
Sections indicated:
Term Section
---- -------
Adjusted Purchase Price 3.1
Agreements 4.9(a)(iv)
Acquisition Proposal 6.15
Assets 2.1(a)
Assumed Liabilities 2.2
▇▇▇▇ of Sale and Assignment
and Assumption Agreements 3.4
Breakup Fee 11.2(a)
Broker 4.19
Buyer Preamble
Buyer Acquisition Proposal 11.2(a)
Closing 3.2
Closing Date 3.2
Confidential Information 6.2(b)
Copyright Act 4.11(b)
Discounted Franchise Purchase Price 9.5
Environmental Defects 6.12(c)
Environmental Reports 6.12(a)(i)
Excluded Assets 2.1(b)
Final Closing 9.4
Financial Statements 4.4
Franchise Purchase Price 9.5
Indemnitee 10.4
Indemnitor 10.4
Indemnity Period 10.1
Interest 6.15
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Term Section
---- -------
Personal Property Leases 4.7(b)
Pole Attachment Agreements 4.10
Post-Closing Certificate 3.3(b)
Pre-Closing Certificate 3.3(a)
Purchase Price 3.1
Real Estate Inspection Period 6.12(a)(i)
Real Property Leases 4.6(b)
Retained Assets 9.1
Retained Franchise 9.1
Retained Franchise Consent 9.2
Seller Preamble
Seller's Health Plans 6.6(b)
Subsequent Closing 9.3
Surveys 6.12(a)(i)
Systems Plans 4.14(a)
Title Commitments 6.12(a)(i)
Title Company 6.12(a)(i)
Title Defect 6.12(b)
Transferred Employee 6.6(a)
2. Sale of Assets; Assumption of Certain Liabilities.
2.1 Sales of Assets.
(a) Subject to the terms, provisions and conditions
contained in this Agreement, and on the basis of the representations and
warranties herein set forth, on the Closing Date, each Seller agrees to sell,
assign, transfer, convey and deliver to Buyer, and Buyer agrees to purchase and
acquire from each Seller, all right, title and interest of such Seller in the
Assets (as defined herein), free and clear of all Encumbrances other than
Permitted Encumbrances. The "Assets" shall mean all of the assets (tangible
and intangible, real and personal), owned, leased or otherwise held by such
Seller and used or usable in connection with the operation of the Systems;
provided, that the Assets shall not include any of the "Excluded Assets," as
defined in Section 2.1(b). Except as expressly set forth in this Agreement,
the Assets will be conveyed to Buyer on an "AS IS, WHERE IS" basis without
representations or warranties of any kind or manner whatsoever. The Assets
shall include, without limitation, the following:
(i) all of Sellers' rights under the Agreements,
Franchises, Licenses and other Governmental Authorizations and any other
instruments relating to operation of the Systems, and all intangibles relating
to operation of the Systems, including, but not limited to, all claims and
goodwill, if any, with respect to the operation of the Systems;
(ii) all tangible personalty, electronic devices,
trunk and distribution cable, amplifiers, power supplies, conduit, vaults and
pedestals, grounding and pole hardware, subscriber devices (including, without
limitation, converters, traps, decoders, switches, and
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fittings), "headend" (origination, signal processing and transmission)
equipment, facilities, vehicles, inventories, supplies and other personal
property used or usable in the operation of the Systems;
(iii) all realty, towers, fixtures, leasehold and
other interests in Real Property;
(iv) all accounts receivable of Sellers relating
to their operation of the Systems; and
(v) all business, operational, maintenance, tax
and financial (relating primarily to the Systems or the Assets) and engineering
records, files, data, drawings, blueprints, schematics and maps, if any, of the
Systems and reports and records concerning suppliers, customers, subscribers
and others customary to the management and operation of the Systems.
(b) Notwithstanding the foregoing, the Assets shall not
include, and Buyer shall not acquire any interest in or to, any of the
following (the "Excluded Assets"):
(i) programming and retransmission consent
agreements of Sellers other than those listed on Schedule 2.1(b)(i);
(ii) insurance policies of Sellers and rights and
claims thereunder;
(iii) bonds, letters of credit, surety instruments
and other similar items and any stocks, bonds, certificates of deposit and
similar investments of Sellers;
(iv) cash and cash equivalents and notes
receivable of Sellers;
(v) Sellers' trademarks, trade names, service
marks, service names, logos and similar proprietary rights, subject to Section
6.8;
(vi) Sellers' minute books and other books and
records related to internal matters and financial relationships with Sellers'
lenders and affiliates;
(vii) all Employee Plans, Multiemployer Plans and
Compensation Arrangements;
(viii) the assets and properties set forth in
Schedule 2.1(b)(viii); and
(ix) installment sale agreements and other
agreements under which Buyer would be obligated to pay the deferred purchase
price of property, except any such agreements that are listed in Schedule 4.9
hereto and except any such agreements permitted to be entered into by Sellers
pursuant to Section 6.1(b)(viii).
2.2 Assumed Liabilities. Subject to the terms, provisions and
conditions contained in this Agreement, and on the basis of the representations
and warranties herein set forth on the
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Closing Date, Buyer agrees to pay, discharge and perform the following to the
extent related to the Assets received by Buyer (the "Assumed Liabilities"):
(i) liabilities and obligations under any
Agreements, Governmental Authorizations, Licenses and other instruments
included within the Assets and accruing and relating to the period from and
after the Closing Date;
(ii) liabilities and obligations of Sellers to the
extent there is a reduction in the Purchase Price pursuant to Section
3.3(a)(ii) with respect thereto; and
(iii) liabilities and obligations arising out of
Buyer's ownership or operation of the Systems from and after the Closing Date,
except to the extent that any such liability or obligation relates to any of
the Excluded Assets.
All other obligations and liabilities of Sellers, including (a) obligations
with respect to the Excluded Assets, (b) any obligations under the Agreements
assumed by Buyer relating to the time period prior to or on the Closing Date
and (c) any claims or pending litigation or proceedings relating to the
operation of the Systems prior to or on the Closing Date shall remain the
obligations and liabilities of Sellers.
3. Closing.
3.1 Purchase Price. The aggregate purchase price payable for the
Assets shall be Twenty-Seven Million Six Hundred Twenty-One Thousand Five
Hundred Dollars ($27,621,500), subject to Sections 9.1 and 9.5, and as adjusted
at the Closing pursuant to Section 3.3(a) (the "Purchase Price"), and as
further adjusted post-Closing pursuant to Section 3.3(b) (as so adjusted, the
"Adjusted Purchase Price"). The Purchase Price shall be allocated among the
Sellers as set forth in Schedule 1.1A.
3.2 Manner and Time of Closing and Payment. The closing of the
transactions contemplated herein (the "Closing") shall take place at 9:00 a.m.
at the offices of ▇▇▇▇ Marks & ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, or at such other time and location mutually determined by Sellers and
Buyer, on the last Business Day of the calendar month that is at least five (5)
Business Days after the satisfaction or waiver of all conditions set forth in
Sections 7.3, 7.4, 7.9, 8.3, 8.4 and 8.6 hereof, but, subject to Section
11.1(b) hereof, no later than the Outside Closing Date (such date on which the
Closing actually occurs, the "Closing Date"). At Closing, (a) Buyer shall
deliver to Sellers, the Purchase Price (as it may be reduced pursuant to
Section 9.1 and as adjusted pursuant to Section 3.3(a)), less (i) the amount of
the Deposit Amount and all interest and other earnings accrued thereon and (ii)
the amount of the Indemnity Fund, in immediately available funds by wire,
inter-bank or intra-bank transfer to Sellers in accordance with Sellers'
written instructions, to be delivered to Buyer at least three (3) Business Days
prior to Closing; (b) Buyer and Sellers shall cause the Escrow Agent to deliver
to Sellers the Deposit Amount and all interest and other earnings accrued
thereon, in accordance with the terms of the Deposit Escrow Agreement, which
amount shall be credited against the Purchase Price payable to each Seller on a
pro rata basis based on the allocation of the aggregate Purchase Price among
Sellers; and (c) Buyer shall deliver the Indemnity Fund to the Escrow
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Agent, in accordance with the terms of the Indemnity Escrow Agreement and the
Escrow Agent's instructions.
3.3 Adjustment of Purchase Price.
(a) The Purchase Price payable to each Seller shall be
subject to adjustment, as of 11:59 p.m. (New York City time) on the Closing
Date, to reflect, in accordance with GAAP, the principle that all revenues and
refunds, and all costs, expenses and liabilities, attributable to the operation
of such Seller's Systems for any period prior to such time on the Closing Date
are for the account of the applicable Seller, and all revenues and refunds, and
all costs, expenses and liabilities (other than liabilities and obligations
under contracts or other obligations of such Seller that Buyer does not assume)
attributable to the operation of such Seller's Systems from and after such time
on the Closing Date are for the account of Buyer. The adjustments to be made to
the Purchase Price payable to each Seller pursuant to this Section 3.3(a) shall
consist of the following:
(i) an increase in the Purchase Price by an
amount equal to the sum of:
(A) all prepaid items relating to the
ownership or operation of the Assets or the Systems and for which Buyer will
receive a benefit after the Closing, which prepaid items shall be prorated
between the applicable Seller and Buyer as of the Closing Date on the basis of
the period covered by the respective prepayment, and shall be deemed to
include, without limitation, all such prepaid items attributable to: real and
personal property taxes and assessments levied against the Assets; real and
personal property rentals; pole rentals; and power and utility charges; and
(B) the amount of the Accounts
Receivable with respect to such Seller; and
(ii) a decrease in the Purchase Price by an amount
equal to the sum of:
(A) the amount of all subscriber
prepayments, credit balances and deposits held by Seller as of the Closing Date
with respect to such Seller's Systems;
(B) all accrued and unpaid expenses
relating to the ownership or operation of such Seller's Assets and Systems,
including accrued and unpaid franchise fees (which accrued and unpaid expenses
shall be prorated between such Seller and Buyer as of the Closing Date on the
basis of the period to which the respective expense relates, and shall be
deemed to include, without limitation, accrued and unpaid expenses of the kind
itemized in Section 3.3(a)(i)(A) above);
(C) in the event that the total number
of Subscribers on the Closing Date is less than 16,800, the product of the
Subscriber Adjustment Amount with respect to such Seller and the number of
Subscribers by which the actual number of Subscribers in such Seller's Systems
on the Closing Date is less than the amount of the Minimum Subscriber Number
allocated to such Seller, as set forth in Schedule 1.1A.
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(D) with respect to Transferred
Employees, accrued obligations for vacation and sick days, subject to Section
6.6(c); and
(E) any amounts by which the Purchase
Price is decreased pursuant to Section 6.12(a), (b) or (c) or Section 6.14.
Sellers shall deliver to Buyer, not less than seven (7) Business Days prior to
the Closing Date, a certificate signed by Sellers (the "Pre-Closing
Certificate"), which shall specify each Seller's good faith best estimate of
the adjustments to the Purchase Price payable to such Seller required under
this Section 3.3(a) above, calculated as of the Closing Date and prepared
consistent with GAAP. The Pre-Closing Certificate shall be accompanied by
reasonably detailed documentation supporting the calculations set forth
therein. Buyer shall have the right to challenge the content of the
Pre-Closing Certificate within four (4) Business Days of delivery if Buyer
believes, in good faith, that it is in error. Buyer and the applicable Seller
shall use good faith efforts to resolve any disputes with respect to the
Pre-Closing Certificate(s) prior to the Closing Date. If any such dispute is
not resolved prior to the Closing, the amount of the Purchase Price paid to the
applicable Seller(s) at Closing shall be based on the adjustments to the
Purchase Price for such Seller(s) set forth in the Pre-Closing Certificate.
(b) Within 120 days after the Closing Date, Buyer shall
deliver to Sellers a certificate signed by Buyer (the "Post-Closing
Certificate"), which shall set forth Buyer's final adjustments to the Purchase
Price payable to each Seller to be made as of the Closing Date pursuant to
Section 3.3(a) above, together with such documentation as may be necessary to
support Buyer's determination thereof; and, thereafter, Buyer shall provide
each Seller with such other documentation relating to the Post-Closing
Certificate as such Seller may reasonably request. If a Seller wishes to
dispute the final adjustments to the Purchase Price to be made as of the
Closing Date pursuant to Section 3.3(a) above, as reflected in the Post-Closing
Certificate, such Seller shall, within thirty (30) days after its receipt of
the Post-Closing Certificate, serve Buyer with a written description of the
disputed items together with such documentation as Buyer may reasonably
request. If any Seller notifies Buyer of its acceptance of the amounts set
forth in the Post-Closing Certificate, or if Seller fails to deliver its report
of any proposed adjustments within the thirty (30)-day period specified in the
preceding sentence, the amounts set forth in the Post-Closing Certificate for
such Seller shall be conclusive, final and binding on Buyer and such Seller as
of the last day of such thirty (30)-day period. If Buyer and any Seller cannot
resolve any dispute within thirty (30) days after Buyer's receipt of such
Seller's written objection, Buyer and such Seller, shall, within the ten (10)
days following expiration of such thirty (30)-day period, appoint KPMG or such
other independent public accounting firm of national reputation as is agreed
upon by the parties to resolve the dispute, provided such firm is not the
auditor for either Buyer or the applicable Seller. The cost of retaining such
firm shall be borne one-half by Buyer and one-half by such Seller. Such firm
shall report its determination in writing to Buyer and the applicable Seller,
and such determination shall be conclusive and binding on Buyer and the
applicable Seller and shall not be subject to further dispute or review.
(c) If, as a result of any resolution reached by Buyer and any
Seller, or any determination made by an accounting firm, in either case
pursuant to Section 3.3(b), Buyer is finally determined to owe any amount to
any Seller, or any Seller is finally determined to owe
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any amount to Buyer, the obligor shall pay such amount to the other party
hereto within three (3) Business Days of such determination. Notwithstanding
the foregoing, Buyer shall pay to the applicable Seller or such Seller shall
pay to Buyer, as the case may be, the amount due such other party with respect
to any item that is not in dispute within three (3) Business Days of the date
on which a dispute no longer exists in immediately available funds to an
account or accounts specified in writing by the obligee. Sellers acknowledge
and agree that any amount determined to be payable to Buyer by any Seller
pursuant to Section 3.3(b) shall be paid by such Seller and shall not be
limited by nor disbursed from the Indemnity Fund.
3.4 Instrument of Assignment and Assumption. At the Closing,
Buyer and each Seller will execute and deliver a ▇▇▇▇ of Sale and Assignment
and Assumption Agreement, in the form of Exhibit C (the "▇▇▇▇ of Sale and
Assignment and Assumption Agreements").
3.5 Deposit Escrow Agreement. Concurrent with the execution
hereof Buyer and Sellers shall execute and deliver the Deposit Escrow
Agreement, and Buyer shall deposit the Deposit Amount with the Escrow Agent in
accordance with the terms thereof.
3.6 Purchase Price Allocation. Buyer and each Seller will use
good faith efforts to agree on the allocation of the Purchase Price payable to
such Seller among the Assets being conveyed by such Seller. As soon as
practicable following the date hereof, Buyer shall deliver to each Seller a
proposed allocation with respect to such Seller. Buyer and Sellers shall file
the form required to be filed under Section 1060 of the Code consistent with
such allocation.
4. Representations And Warranties Of Seller.
Each Seller hereby represents and warrants to Buyer that the following
statements are true and correct, solely with respect to itself and the Assets
and Systems being conveyed by it pursuant to this Agreement.
4.1 Organization, Qualification and Power.
(a) Seller is a limited partnership duly organized,
validly existing and in good standing under the laws of the State of Georgia,
with full power and authority to own, lease or license its properties and
assets and to carry on the business in which it is engaged in the manner in
which such business is now carried on.
(b) General Partner is a corporation, duly incorporated,
validly existing and in good standing under the laws of the State of Georgia,
with full power and authority to carry on the business in which it is engaged
in the manner in which such business is now carried on. General Partner is the
sole general partner of Seller.
4.2 Capacity; Due Authorization; Enforceability. Subject to
obtaining the Limited Partner Consents, all requisite limited partnership
action required to be taken by Seller for the execution, delivery and
performance by Seller of this Agreement and all Related Agreements to which it
is a party have been duly performed. Seller has the full legal capacity and
legal right, power and authority to enter into this Agreement and the Related
Agreements and to consummate the transactions contemplated hereby and thereby.
General Partner has the full
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legal capacity and legal right, power and authority to execute this Agreement
and any of the Related Agreements to which Seller is a party on behalf of
Seller. Subject to obtaining the Limited Partner Consents, this Agreement has
been duly executed and delivered by Seller, and this Agreement and each of the
Related Agreements to which Seller is a party, upon execution and delivery,
will be a legal, valid and binding obligation of Seller, enforceable in
accordance with its respective terms, except in each case to the extent that
such enforcement may be subject to applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws of general application affecting the
rights and remedies of creditors or secured parties, and that the availability
of equitable remedies including specific performance and injunctive relief may
be subject to equitable defenses and the discretion of the court before which
any proceeding therefor may be brought.
4.3 Absence of Conflicting Agreements.
(a) The execution and delivery of this Agreement and the
Related Agreements to which Seller is a party and the consummation of the
transactions contemplated hereby and thereby (provided that all of the Required
Consents and the Limited Partner Consents are obtained and the applicable
waiting period(s) under the HSR Act shall have expired or been terminated) will
not (a) violate Seller's certificate of formation or limited partnership
agreement; (b) violate any Legal Requirement applicable to Seller, the Assets
or the Systems; (c) conflict with or result in any breach of or default under
any contract, note, mortgage or agreement to which Seller is a party or by
which Seller is bound.
(b) Except for the Required Consents listed in Schedule
4.3 and the Limited Partner Consents and the expiration or termination of the
applicable waiting period(s) under the HSR Act, no approval, consent,
authorization or act of or any declaration, filing, application, registration
or other action with any Person or any foreign, federal, state or local court
or Governmental Authority is necessary for the consummation of the transactions
contemplated in this Agreement and the Related Agreements in accordance with
the terms hereof and thereof.
4.4 Financial Statements; Absence of Undisclosed Liabilities;
Accounts Receivable. Seller has delivered to Buyer true and correct copies of
the financial statements identified in Schedule 4.4 (collectively, the
"Financial Statements"). The Financial Statements are in accordance with the
books and records of Seller and have been prepared in accordance with GAAP.
The Financial Statements present fairly the financial condition and results of
operations of Seller at the respective dates thereof and throughout the
respective periods covered thereby subject, in the case of unaudited financial
statements, to normal year-end accruals and audit adjustments and to the
absence of footnotes thereto.
4.5 Absence of Certain Changes. Since December 31, 1999, Seller
has operated the Systems in the ordinary course of business and has not:
(a) made any sale, assignment, lease or other transfer of
assets used or usable in connection with the Systems other than in the ordinary
course of business (unless such assets were unnecessary or obsolete);
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(b) made or promised any material increase in the salary
or other compensation payable or to become payable to any Employee of Seller
other than in the ordinary course of business or as contemplated under any
employment arrangement currently in effect; or
(c) experienced any occurrence or been involved in any
transaction which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
4.6 Real Property; Leases; Condemnation.
(a) Schedule 4.6(a) contains a list of the parcels of
Real Property owned by Seller and included within the Assets. Seller has good
title to each such parcel of Real Property and all buildings, structures and
other improvements thereon, in each case free and clear of all Encumbrances
other than Permitted Encumbrances.
(b) Schedule 4.6(b) contains a list of the leases under
which Seller is lessee of any Real Property owned by any third party ("Real
Property Leases"). Copies of all written Real Property Leases listed in
Schedule 4.6(b) have been delivered to Buyer. Such Real Property Leases are in
full force and effect.
4.7 Personal Property.
(a) Seller owns and has good title to all of the tangible
personal properties and intangible properties included within the Assets.
(b) Schedule 4.7(b) contains a list, as of the date
hereof, of each lease or other agreement or right, under which Seller is lessee
of, or holds or operates, any machinery, equipment, vehicle or other tangible
personal property owned by a third party ("Personal Property Leases") other
than any such Personal Property Lease involving, individually, payments of
$25,000 or less or that is terminable on sixty (60) days' notice or less.
4.8 Governmental Authorizations.
(a) Identified in Schedule 4.8 are all of the
Governmental Authorizations held by Seller and issued in connection with the
Systems or the operation thereof or held by Seller or issued by any
Governmental Authority with respect to the Systems authorizing Seller to
install, construct, own or operate a cable television system within the
jurisdiction of the issuing body or authority thereof. Except as set forth in
Schedule 4.8A, copies of all the Governmental Authorizations listed in Schedule
4.8 have been delivered to Buyer. Except as set forth in Schedule 4.8 or as
may otherwise be disclosed pursuant to Section 4.8(b), each such Governmental
Authorization is in full force and effect. Except as set forth in Schedule
4.8, to Seller's Knowledge, a written request for renewal has been timely filed
pursuant to Section 626(a) of the Cable Act with the proper Governmental
Authority with respect to any Franchise expiring within thirty (30) months
after the date of this representation.
(b) Not more than thirty (30) days following the date of
this Agreement, each Seller shall have delivered to Buyer a true and complete
description of any material
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noncompliance with the terms of, or material default under, any Governmental
Authorization by such Seller of which such Seller has Knowledge as of the date
of such delivery.
(c) On the Closing Date, Seller shall be in compliance in
all material respects with the terms of all Governmental Authorizations to
which it is a party or by which it is bound or affected, and there shall be no
material uncured defaults thereunder; provided, that the foregoing
representation and warranty shall not apply to any Governmental Authorization
with respect to which a Franchise Renewal or Franchise Extension shall have
been obtained.
4.9 Agreements.
(a) Except as set forth in Schedule 4.9, as of the date
as of this Agreement, with respect to the Assets or operation of the Systems,
Seller is not a party to or bound by:
(i) any contract for the purchase, sale or
lease of real property or any option to purchase or sell real property;
(ii) any installment sale agreement or
liability for the deferred purchase price of property with respect to any of
the Assets involving payments exceeding $25,000 individually;
(iii) any multiple dwelling unit agreement
(covering fifty (50) or more units), written agreement with subscribers for
cable television service or written hotel and motel agreement, except for such
agreements as have been entered into in the ordinary course of business; or
(iv) any other contract, agreement,
commitment, understanding or instrument, including any retransmission consent
agreement, that is material to Seller, the Systems or the Assets, other than
those instruments referred to in Sections 4.6(b), 4.7(b) and 4.10 and other
than agreements and instruments involving payments, individually, of $25,000 or
less or that are terminable on sixty (60) days' notice or less (collectively,
with such other agreements described in clauses (a)(i) through (iii), and the
Pole Attachment Agreements and other agreements and instruments referred to in
Sections 4.6(b), 4.7(b) and 4.10, as well as such Agreements as are not
required to be listed in any Schedule hereto, the "Agreements"). Except as set
forth in Schedule 4.8A, Seller has delivered to Buyer copies of all Agreements
that are identified in Schedule 4.9. All of the Agreements are in full force
and effect.
(b) Seller is in compliance in all material respects with
the terms of all Agreements to which it is a party or by which it is bound or
affected, and there are no material uncured defaults thereunder.
4.10 Pole Attachment Agreements; Related Agreements. Schedule 4.10
contains a list, as of the date hereof, of all contracts, agreements and
understandings (other than the Governmental Authorizations listed in Schedule
4.8 and the Agreements described in Section 4.9) with respect to the Assets or
Systems to which Seller is a party or by which it is bound relating to: (i)
the use of any public utility facilities including, without limitation, all
pole line, joint pole or master contracts for pole attachment rights and the
use of conduits (herein called
- ▇▇ -
▇▇
"▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇"), (▇▇) the use of any microwave or satellite
transmission facilities or (iii) the sale of cablecast time to third parties
for advertising or other purposes. Except as set forth in Schedule 4.8A,
Seller has delivered to Buyer copies of all Pole Attachment Agreements and
other agreements and instruments referred to in Schedule 4.10.
4.11 Retransmission Consent and Must-Carry; Rate Regulation;
Copyright Compliance.
(a) Set forth in Schedule 4.11 is a list of the stations
within the Systems that have elected "must-carry" or retransmission consent
status pursuant to the Cable Act. Seller has delivered to Buyer copies of all
retransmission consent agreements and copies of all must-carry election notices
that are in Seller's possession. To Seller's Knowledge, each station carried
by any of the Systems is carried pursuant to a retransmission consent
agreement, "must-carry" election or other programming agreement.
(b) Seller has filed with the Copyright Office all
required statements of account with respect to the Systems that were required
to have been filed since July 1, 1999 in accordance with the Copyright Act of
1976 and regulations promulgated pursuant thereto (collectively referred to
herein as the "Copyright Act"), and Seller has paid all royalty fees payable
with respect to the Systems since July 1, 1999. Seller has delivered to Buyer
copies of all Statements of Account referred to in this Section 4.11(b).
(c) Seller has not, since November 12, 1999, received any
written notice that, and Seller has no Knowledge that since January 1, 1999, it
or any of the Systems operated by it: (i) is not or has not been in compliance
in all material respects with the Communications Act and all applicable rules
of the FCC, except for such compliance which would not be reasonably expected
to have a Material Adverse Effect; or (ii) has not made all material filings
required to be made by it with the FCC in connection with the Systems or
provided all material notices to customers of the Systems required under the
Communications Act and the FCC's rules and regulations, other than such filings
and notices, the failure of which to be made or provided would not be
reasonably expected to have a Material Adverse Effect. Schedule 4.11 sets
forth the cable television service rates charged in each of the Systems.
Seller has not, since November 12, 1999, received any notice that any of such
rates are not permitted rates under the rules and regulations of the FCC.
Schedule 4.11 also sets forth a list, as of the date hereof, of all pending
rate complaints on file at the FCC with respect to the Systems.
4.12 Litigation. Except as may be disclosed pursuant to Section
4.8(b), there is no claim, legal action, arbitration or other legal,
governmental, administrative or tax proceeding or any order, complaint, decree
or judgment pending, or to Seller's Knowledge threatened, against or relating
to Seller or the Systems other than (i) FCC and other proceedings generally
affecting the cable television industry and not specific to Seller; and (ii)
routine collection actions with respect to the payment by subscribers for
services rendered by Seller and other proceedings and actions arising in the
ordinary course of business that are covered by Seller's insurance policies.
4.13 Compliance with Laws. Except as may be disclosed pursuant to
Section 4.8(b), Seller has not, since November 12, 1999, received any notice of
any claim by any Governmental
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Authority, and Seller has no Knowledge that Seller has not been or is not in
compliance with any Legal Requirement applicable to it, the Systems or the
Assets.
4.14 Employee Benefit Plans.
(a) All Employee Plans and Compensation Arrangements
providing benefits to Employees or Employees of the Systems whose employment
terminated since November 12, 1999 ("Systems Plans") are listed in Schedule
4.14(a). Except as disclosed in Schedule 4.14(a), there is no new Employee
Plan or Compensation Arrangement or any amendment to an existing Employee Plan
or Compensation Arrangement that will affect the benefits of Employees or
former Employees of the Systems and that is to become effective after the date
of this Agreement.
(b) Each Employee Plan and Compensation Arrangement has
been established, maintained, operated and administered in accordance with its
own terms and, where applicable, ERISA, the Code, and any other applicable
Legal Requirement.
(c) To Seller's Knowledge no lien has arisen under
Section 412 of the Code or Section 302 of ERISA in favor of any Employee Plan.
4.15 Labor Relations; Employees.
(a) Seller is not a party to any collective bargaining
agreement or other contract with any labor organization regarding any of the
Employees of the Systems; Seller has not recognized any union or other
collective bargaining representative of any group of Employees of the Systems;
and no union or other collective bargaining representative has been certified
as representing any of the Employees of the Systems;
(b) there currently is no (i) unfair labor practice
charge or complaint against Seller involving any Employee of the Systems
pending before the National Labor Relations Board, any state labor relations
board or any court or tribunal, (ii) grievance or other claim involving any
Employee of the Systems pending before any Governmental Authority against
Seller, or (iii) arbitration proceeding arising out of or under any collective
bargaining agreement pending before any Governmental Authority against Seller
involving any Employee of the Systems;
(c) Except with respect to ongoing disputes of a routine
nature or involving immaterial amounts, Seller has paid in full to all of its
Employees providing services to the Systems all wages, salaries, commissions,
bonuses, benefits and other compensation due and payable to such Employees.
4.16 Environmental Matters. Except as set forth in Schedule 4.16,
and except for any such noncompliance of an insubstantial nature that has been
remedied as required by applicable Environmental Laws: (a) Seller's operations
with respect to the Systems have complied and comply in all material respects
with all applicable Environmental Laws; (b) Seller has not 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,
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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 Remedial Action, and (c) to Seller's Knowledge, the Real Property
complies and has complied in all material respects with all applicable
Environmental Laws. Except as set forth in Schedule 4.16, to Seller's
Knowledge, no underground storage tank is located under any of the Real
Property, and to Seller's Knowledge, none of the Real Property has been used as
a gasoline service station or any other facility for storing, pumping,
dispensing or producing gasoline or any other petroleum products or wastes.
Seller has delivered to Buyer copies of all assessments, studies, reports and
surveys relating to the environmental condition of the Real Property, including
but not limited to the presence or alleged presence of Hazardous Substances at
or on the Real Property, that are in the possession or under the control of
Seller. To Seller's Knowledge, no ambient asbestos is present at the Real
Property.
4.17 Bonds; Letters of Credit. Schedule 4.17 sets forth a list of
all franchise, construction, fidelity, performance and other bonds, guaranties
in lieu of bonds and letters of credit posted by Seller in connection with its
operation of any of the Systems.
4.18 Information on the Systems and Subscribers.
(a) Schedule 4.18 sets forth a list of the Systems that
are owned and operated by Seller and for each System a materially accurate
statement of the following information:
(i) the total number of Subscribers served by
such System;
(ii) the bandwidth capacity of the System
specified in Mhz; and
(iii) the channel line-up and rate card for
such System.
(b) Seller has made available to Buyer all existing
system engineering drawings and "as built" maps with respect to the Systems
that are in the possession of Seller and that have been requested by Buyer or
its representatives for review.
4.19 Broker; Brokers' Fees. Except for ▇▇▇▇▇▇ & Associates, Inc.,
which has been retained by and whose fee shall be paid by Sellers, neither
Seller nor any Person acting on its behalf has dealt with any broker or finder
in connection with the transactions contemplated by this Agreement or incurred
any liability for any finders' or brokers' fees or commissions in connection
with the transactions contemplated by this Agreement. Sellers agree to
indemnify and hold harmless Buyer against any fee, commission, loss or expense
arising out of any claim by any other broker or finder employed or alleged to
have been employed by them.
5. Representations And Warranties of Buyer.
Buyer represents and warrants to Seller that the following statements
are true and correct:
5.1 Organization, Qualification and Power. Buyer is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Pennsylvania, with full power and authority to own, lease or license
its properties and assets and to carry on the business
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in which it is engaged in the manner in which such business is now carried on.
On the Closing Date, Buyer will be duly qualified to do business in all
jurisdictions where the ownership and operation of the Assets and Systems
requires such qualification.
5.2 Capacity; Due Authorization; Enforceability. All requisite
corporate action required to be taken by Buyer for the execution, delivery and
performance by Buyer of this Agreement and all Related Agreements to which
Buyer is a party have been duly performed. Buyer has the full legal capacity
and legal right, power and authority to enter into this Agreement and the
Related Agreements and to consummate the transactions contemplated hereby and
thereby. This Agreement has been duly executed and delivered by Buyer and is,
and this Agreement and each of the Related Agreements to which Buyer is a
party, upon execution and delivery, will be, a legal, valid and binding
obligation of Buyer, enforceable in accordance with its respective terms,
except in each case to the extent that such enforcement may be subject to
applicable bankruptcy, reorganization, insolvency, moratorium or similar laws
of general application affecting the rights and remedies of creditors or
secured parties, and that the availability of equitable remedies including
specific performance and injunctive relief may be subject to equitable defenses
and the discretion of the court before which any proceeding therefor may be
brought.
5.3 Absence of Conflicting Agreements. The execution and delivery
of this Agreement and the Related Agreements to which Buyer is a party and the
consummation of the transactions contemplated hereby and thereby (provided all
of the Required Consents are obtained and the applicable waiting period(s)
under the HSR Act shall have expired or been terminated) will not (a) violate
Buyer's certificate of incorporation or bylaws; (b) violate any Legal
Requirement applicable to Buyer, the Assets on the Systems; (c) conflict with
or result in a breach of or default under any contract, note, mortgage or
agreement to which Buyer is a party or by which Buyer is bound.
5.4 Litigation. There is no claim, legal action, arbitration or
other legal, governmental, administrative or tax proceeding, or any order,
complaint, decree or judgment pending, or, to Buyer's knowledge, threatened,
that would prevent, limit, delay or otherwise interfere with Buyer's ability to
consummate the transactions contemplated by this Agreement in accordance with
the terms hereof.
5.5 Financial Capability. Buyer has the financial capability,
including to obtain financing, necessary to consummate the transactions
contemplated in this Agreement, in accordance with the terms hereof, including
payment of the Purchase Price.
5.6 Brokers. Neither Buyer nor any Person acting on its behalf
has dealt with any broker or finder in connection with the transactions
contemplated by this Agreement or incurred any liability for any finders' or
brokers' fees or commissions in connection with the transactions contemplated
by this Agreement.
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6. Covenants of Seller and Buyer.
6.1 Continuity and Maintenance of Operations.
(a) Except as Buyer may otherwise agree in writing, until
the Closing each Seller shall operate its respective Systems in the ordinary
course of business consistent with Past Practices and shall:
(b) (i) maintain and repair the Assets in the ordinary course
of business consistent with its year 2000 budgets, and at Closing the Assets
will be in substantially the same condition as they are in as of the date
hereof, subject to ordinary wear and tear;
(ii) maintain its inventory and other supplies and
spare parts at levels consistent with its year 2000 budgets;
(iii) make capital expenditures substantially in
accordance with its year 2000 capital budget;
(iv) use commercially reasonable efforts to comply
with Legal Requirements applicable to the Systems;
(v) not conduct promotional activities
inconsistent with Past Practices;
(vi) continue its procedures for disconnection and
discontinuance of service to subscribers whose accounts are delinquent, in
accordance with Past Practices; and
(vii) not enter into installment sale agreements
and other agreements under which Buyer would be obligated to pay the deferred
purchase price of property, which agreements collectively will involve
aggregate payments in excess of $25,000 following the Closing Date.
(c) Except as required by law and except as budgeted by
Seller, after the date of this Agreement, Seller will not, without giving prior
written notice to Buyer, change customer rates for any tier of service or
charges for remote or installation, make channel additions, channel
substitutions, change the channel lineups or implement any retiering or
repackaging of cable television programming offered by any of the Systems, or
change billing, collection or installation practices.
6.2 Access to Seller; Confidentiality.
(a) Upon reasonable advance notice, each Seller shall
afford to the officers, employees and authorized representatives of Buyer and
to the employees and authorized representatives of Buyer's equity and financing
sources reasonable access during normal business hours to its respective
Systems and to its offices, properties and business and financial records
(including computer files, retrieval programs and similar documentation) that
relate to its respective Systems and the operation thereof.
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(b) Until Closing Buyer (i) shall use reasonable efforts
to cause its directors, officers, employees and representatives and the
employees, representatives and agents of Buyer's equity and financing sources
to hold in strict confidence all information furnished to any of them by
Sellers in connection with the transactions contemplated by this Agreement that
is not otherwise available to the public (the "Confidential Information"), and
(ii) shall not, without the prior written consent of the Seller or Sellers to
which such Confidential Information pertains, release or disclose any
Confidential Information to any other person, except (A) to the extent required
by applicable law, (B) as necessary in connection with filings, approvals and
rulings to be obtained from any governmental agency, including, but not limited
to, the Federal Trade Commission, the Department of Justice, the Securities and
Exchange Commission and the Internal Revenue Service (it being understood that
any such filing may include the filing of a copy of this Agreement), (C) to
Buyer's equity and financing sources and its directors, officers, employees or
representatives who are informed by Buyer of the confidential nature of the
Confidential Information, (D) as necessary to obtain consents to the transfer
of any Franchise or otherwise necessary for the consummation of the
transactions contemplated by this Agreement, and (E) as otherwise permitted by
the remainder of this Section 6.2(b). In the event Buyer or any person to whom
Buyer transmits Confidential Information pursuant to this Agreement becomes
legally compelled to disclose any of the Confidential Information, Buyer shall
provide the Seller or Sellers to which such Confidential Information pertains
with prompt notice so that such Seller(s) may seek a protective order or other
appropriate remedy or waive compliance with the provisions of this Section
6.2(b), or both. In the event that such protective order or other remedy is
not obtained, or that Seller waives compliance with the provisions of this
Section 6.2(b), Buyer shall furnish only that portion of the Confidential
Information which is legally required.
(c) Following the Closing, upon reasonable notice by
Buyer, each Seller shall afford to Buyer's officers, employees, accountants and
other authorized representatives, reasonable access to such Seller's business
and financial records and accountants that relate to such Seller's Systems to
enable Buyer to obtain information and data reasonably required in connection
with the preparation of Buyer's financial statements and any regulatory filings
relating to such Seller's Systems.
6.3 Notification.
(a) Each party shall promptly notify the other of any
action, suit, proceeding or investigation that is instituted or threatened
against such party to restrain, prohibit or otherwise challenge the legality or
propriety of any transaction contemplated by this Agreement.
(b) If Buyer or any Seller acquires actual knowledge
before the Closing Date that a material breach of any of Sellers' or Buyer's
(as the case may be) representations or warranties has occurred, the party
acquiring such actual knowledge shall provide prompt written notice to Buyer or
the applicable Seller (as the case may be) describing such breach.
Notwithstanding the foregoing, no notice or information delivered by or to any
party shall affect the other party's right to rely on any representation or
warranty made by such party or relieve such party of any obligations under this
Agreement as the result of a breach of any of its representations and
warranties.
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6.4 No Public Announcement. Prior to the Closing Date, no party
hereto shall, without the approval of the other party, make any press release
or other public announcement concerning the transactions contemplated by this
Agreement, except as and to the extent that any such party shall be so
obligated by law, in which case the other party shall be advised and the
parties shall use their reasonable efforts to cause a mutually agreeable
release or announcement to be issued.
6.5 Regulatory Filings. As soon as may be reasonably practicable,
but in no event later than thirty (30) days after the date hereof, Buyer and
Sellers shall file or cause to be filed with the Federal Trade Commission and
the Antitrust Division of the United States Department of Justice such
Notifications and Report Forms relating to the transactions contemplated hereby
as are required by the pre-merger notification rules issued under the HSR Act.
Buyer and each applicable Seller shall: (i) promptly supply each other with
any information provided in response to any requests for additional information
made by either of such agencies, and (ii) use all reasonable efforts to cause
the waiting period under the HSR Act to terminate or expire at the earliest
possible date. Buyer and the applicable Sellers shall share equally all filing
fees associated with each Notification and Report Form required to be filed in
connection with this Agreement.
6.6 Employees; Employee Benefits.
(a) Subject to the following sentence, effective as of
and contingent upon the Closing, Buyer shall make offers of employment to such
Employees who render services to the Systems as Buyer shall determine, in its
sole and absolute discretion (each Employee who accepts Buyer's offer of
employment and who becomes an employee of Buyer effective as of the Closing
hereinafter called a "Transferred Employee"). Not less than thirty (30) days
prior to the Closing, Buyer shall notify each Seller in writing of the
Employees of such Seller to whom Buyer intends offer employment, and Buyer
shall make offers of employment to such Employees in accordance with the
preceding sentence. Prior to Closing each Seller shall, with respect to its
Employees, take all actions reasonably necessary to comply with the WARN Act,
if applicable, and any applicable comparable state laws. Seller shall pay when
required all compensation and shall provide all benefits to its respective
Employees as are required, and, except as set forth in Section 6.6(b) Seller
shall retain liability for all obligations and liabilities owed to its
respective Employees that relate to periods prior to the Closing Date.
(b) Buyer shall offer group health plan coverage to all
Transferred Employees and their spouses and eligible dependents who are covered
on the Closing Date under a group health plan maintained or contributed to by
Sellers, and such coverage shall be the same, and shall be subject to the same
terms and conditions, as Buyer provides to similarly situated employees,
provided that such coverage shall be effective as of the Closing and that no
pre-existing condition limitation shall be applied to any such Transferred
Employees, their spouses and eligible dependents unless, and only to the same
extent that, such persons are subject to pre-existing condition limitations
under Sellers' group health plan. Each Seller shall have full responsibility
and liability for offering and providing "continuation coverage" to any
"covered employee" who is an Employee, and to any "qualified beneficiary" of
such Employee, and who is covered by a "group health plan" sponsored or
contributed to by such Seller (all such group
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31
health plans of Sellers individually and collectively called "Sellers' Health
Plans") to the extent that such continuation coverage is required to be
provided by such Seller under Code Section 4980B, and the regulations
promulgated thereunder, as a result of a "qualifying event" experienced by such
covered employee or qualified beneficiary with respect to or in connection with
the transactions contemplated by this Agreement. "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.
(c) Sellers have delivered to Buyer separately
descriptions of Sellers' vacation and sick leave policies. Within ten (10)
days following Buyer's delivery to Sellers of the notices referred to in
Section 6.6(a) (regarding the Employees to whom Buyer intends to make offers of
employment), each Seller shall provide to Buyer a list of the accrued vacation
and sick leave of each of its Employees to whom Buyer has indicated it intends
to offer employment. Each Transferred Employee shall be credited under Buyer's
vacation and sick leave policy with the full amount of vacation leave accrued
by such Transferred Employee but unused as of the Closing Date under the
vacation policies of Sellers' applicable to such Transferred Employee.
6.7 Required Consents.
(a) Following the execution hereof, until the Closing
Date, each Seller shall use commercially reasonable efforts, and Buyer shall
cooperate in good faith with Sellers, to obtain all Required Consents,
including Required Consents under the Franchises, Licenses and Agreements.
Each Seller and Buyer shall 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, to the extent such Seller determines they are
necessary or appropriate) required to be filed with the FCC and any other
Governmental Authority that are necessary for the assignment to Buyer, in
connection with the consummation of the transactions contemplated by this
Agreement, of the Governmental Authorizations. The parties shall also make
appropriate requests, as soon as practicable after the date hereof, for any
Required Consent required under any Agreement. Notwithstanding subsection
(d)(i) hereof, and subject to subsection (d)(ii) hereof, nothing in this
Section 6.7 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 or
Sellers, provided that Sellers shall be liable for all obligations or
liabilities under each Governmental Authorization or Agreement during the
period prior to the Closing Date.
(b) In connection with and as part of the parties'
efforts to obtain the Required Consents of each applicable Governmental
Authority to the transfer of any Franchise issued thereby from each applicable
Seller to Buyer, such Seller shall use commercially reasonable efforts to
obtain, with Buyer's cooperation, a Franchise Renewal for each such Franchise
that has expired or shall expire prior to the Closing Date, and a Franchise
Extension for each such Franchise that shall, by its terms, expire during the
thirty-month period subsequent to the Closing Date.
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(c) Sellers shall also use commercially reasonable
efforts to cause each such Required Consent relating to a Franchise or
Agreement to include provisions that permit (i) Buyer to grant a security
interest in such Franchise or Agreement to its lender(s) providing financing to
Buyer with respect to the transaction contemplated hereby, and (ii) Buyer to
transfer such Franchise or Agreement to any Affiliate of Buyer that agrees in
writing as a condition to such transfer to be bound by any and all obligations
of Buyer in connection therewith; provided, that Sellers shall have no
additional obligation with respect to obtaining such provisions if the
inclusion of such provisions would cause such Required Consent to be
unreasonably withheld, delayed or otherwise conditioned.
(d) (i) Buyer agrees that if in connection with the process
of obtaining any Required Consent, Franchise Renewal or Franchise Extension, a
Governmental Authority or other Person purports to require any condition or any
change to a Franchise, License or Agreement to which such Required Consent,
Franchise Renewal or Franchise Extension relates that would be applicable to
either Buyer or Sellers as a requirement for granting such Required Consent,
Franchise Renewal or Franchise Extension, which condition or change involves a
monetary payment or commitment to such Governmental Authority or other Person,
either Buyer or Sellers may elect, in its or their sole discretion, to satisfy
such monetary payment or commitment, in which case, Buyer and Sellers will
accept any condition or change in the Franchise, License or Agreement to which
such Required Consent, Franchise Renewal or Franchise Extension relates to the
extent provided herein.
(ii) Subject to the terms of subsection (i) above,
no Seller shall agree, without Buyer's prior written consent, which consent
Buyer shall grant or withhold in its reasonably exercised discretion, to any
adverse change (other than immaterial, non-monetary changes) to the terms of
any Governmental Authorization or Agreement as a condition to obtaining any
Required Consent to the assignment of such Governmental Authorization or
Agreement to Buyer. If in connection with the obtaining of any Required
Consent, a Governmental Authority or other third party seeks to impose any
condition or adverse change to any Governmental Authorization or Agreement to
which such Required Consent relates that would be applicable to Buyer as a
requirement for granting such Required Consent, Sellers shall promptly notify
Buyer of such fact and Sellers shall not agree to such condition or adverse
change unless Buyer shall, in its reasonably exercised discretion, consent to
such condition or change in writing.
(e) Buyer shall promptly furnish to any Governmental
Authority or other Person from which a Required Consent, Franchise Extension or
Franchise Renewal is requested such accurate and complete information regarding
Buyer and its Affiliates, including financial information relating to the cable
and other media operations of Buyer and its Affiliates, as a Governmental
Authority or other Person may reasonably require in connection with obtaining
any Required Consent, Franchise Extension or Franchise Renewal.
(f) It is understood and agreed that nothing herein shall
prevent Buyer or its Affiliates (or their employees, agents, representatives
and any other Person acting on behalf of Buyer and its Affiliates) from making
statements or inquiries to, attending meetings of, making presentations to, or
from responding to requests initiated by, Governmental Authorities or other
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33
Persons from which a Required Consent, Franchise Extension or Franchise Renewal
is sought, and Buyer shall use commercially reasonable efforts to apprise
Sellers of all such requests.
6.8 Use of Transferor's Name. For a period of 180 days after the
Closing Date, Buyer may continue (but only to the extent reasonably necessary)
to operate the Systems using the name "Enstar" and all derivations and
abbreviations of such name and related trade names and marks in use in the
Systems on the Closing Date, such use to be in a manner consistent with the way
in which Sellers have used the marks. Within 180 days after the Closing Date,
Buyer will discontinue using and will dispose of all items of stationery,
business cards and literature bearing such name or marks. Notwithstanding the
foregoing, Buyer will not be required to remove or discontinue using any such
name or ▇▇▇▇ that is affixed to converters or other items in or to be used in
customer homes or properties, or as are used in similar fashion making such
removal or discontinuation impracticable for Buyer.
6.9 Delivery of Subscriber Information. Between the date of this
Agreement and the Closing Date, promptly after the preparation thereof, each
Seller shall deliver to Buyer true, correct and complete copies of (i)
quarterly financial information, including a balance sheet, a statement of
income and expenses and a statement of cash flows (ii) quarterly statements of
capital expenditures with respect to such Seller's Systems and (iii) monthly
subscriber counts for its Systems prepared by such Seller for its internal use.
6.10 Tax Matters. All transfer, documentary, sales, use, stamp,
registration and other Taxes and fees (including any penalties and interest),
incurred in connection with the transactions consummated pursuant to this
Agreement with respect to the Assets conveyed by any Seller shall be shared
equally by Buyer and such Seller. Buyer and Sellers will cooperate in all
reasonable respects to prepare and file all necessary federal, state and local
tax returns, tax information returns, reports and estimates and other
documentation with respect to all such transfer, documentary, sales, use,
stamp, registration and other Taxes and fees.
6.11 Further Assurances; Satisfaction of Covenants. Sellers and
Buyer each shall execute such documents and other papers and take or cause to
be taken such further action as may be reasonably required to carry out the
provisions hereof and to consummate and make effective the transactions
contemplated hereby. Sellers and Buyer shall each use commercially reasonable
efforts to satisfy each of its covenants and obligations under this Agreement
and to satisfy each condition to Closing it is required to satisfy hereunder.
6.12 Environmental Reports; Title Commitments.
(a) (i) Buyer shall be entitled to obtain, at its own
expense, during the period of sixty (60) days after the date hereof (the "Real
Estate Inspection Period") (A) commitments of title insurance ("Title
Commitments") issued by a nationally-recognized title insurance company
selected by Buyer and reasonably acceptable to Sellers (a "Title Company"),
committing to insure fee title to the parcels of Real Property owned by Sellers
and leasehold title to those parcels of Real Property leased by Sellers, by
ALTA (1992) owner's policies of title insurance, (B) surveys of said parcels of
Real Property, in such form as is necessary to obtain the title insurance to be
issued pursuant to the Title Commitments, with the standard printed exceptions
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relating to survey matters deleted ("Surveys"), certified to Buyer and to the
Title Company issuing the Title Commitment with respect to that parcel of Real
Property, and (C) Phase I environmental reports concerning the owned or leased
Real Property, which shall be performed by environmental consulting or
engineering firms reasonably acceptable to Buyer and Sellers (together with any
Phase II report, "Environmental Reports"). Buyer shall deliver to Sellers true
and complete copies of all such Title Commitments, Surveys and Environmental
Reports within five (5) Business Days after Buyer's receipt thereof.
(ii) If any Phase I Environmental Report discloses
a potential presence of Hazardous Substances or a violation of any
Environmental Law that is sufficiently material to reasonably warrant a Phase
II study, or shall otherwise recommend performance of a Phase II study, then
Buyer shall have the right (subject to the provisions of this Paragraph
(a)(ii)) beyond such 60 day period, to obtain a Phase II report with respect to
the subject parcel of Real Property, in which event the Real Estate Inspection
Period shall be extended accordingly (but not more than 45 days) with respect
to such parcel of Real Property. Any such Phase II report shall be ordered
promptly after receipt and analysis of the respective Phase I report. If Buyer
proposes to undertake a Phase II environmental study on any parcel of Real
Property, Buyer shall provide to the applicable Seller a plan for such proposed
study prior to commencing the same, and such Seller shall have the right (which
such Seller shall exercise by written notice to Buyer within ten (10) Business
Days after receipt of Buyer's proposal) to deny by Buyer's request to perform
such Phase II environmental study on such Real Property. If such Seller
refuses to allow such Phase II study, Buyer may terminate this Agreement by
written notice to Sellers within ten (10) Business Days of such Seller's
refusal, or Buyer may elect to close notwithstanding such refusal. If Buyer
elects to close notwithstanding such refusal, (A) Buyer may not thereafter
terminate this Agreement based on Title Defects or Environmental Defects of the
applicable parcel of Real Property, (B) Buyer shall not have any recourse
against Sellers based on such Title Defects or Environmental Defects except as
provided in clause (C) of this sentence, and (C) if within six (6) months after
Closing, Buyer incurs environmental remediation expenses in respect of
Environmental Defects at the site(s) for which a Seller refused to allow a
Phase II study, such Seller will reimburse Buyer for the reasonable costs of
such remediation; provided, that (I) in no event shall the aggregate amount of
reimbursement by Sellers under this clause (C) and any remediation costs
incurred by Sellers prior to Closing in respect of Environmental Defects and
Title Defects (other than as set forth in Section 6.14 and other than monetary
Encumbrances that Seller is required to remove regardless of the amount
thereof) exceed $35,000 in the aggregate, and (II) this clause (C) shall be
inapplicable if a Purchase Price reduction is made under Subsection (b) or (c)
of this Section 6.12.
(b) In the event that a Title Commitment or Survey
reveals the existence of any matter that renders title to the subject Real
Property to be other than as represented herein (a "Title Defect"), and Buyer
requests in writing, within ten (10) days of Buyer's receipt of the relevant
Title Commitment or Survey, that the applicable Seller remedy the same, then
such Seller shall use commercially reasonable efforts to either cure the Title
Defect or cause the Title Company to insure over it; provided, that Sellers
shall not be obligated to expend more than an aggregate amount of $35,000 for
remediation of all Title Defects and Environmental Defects required to be
remedied hereunder (other than as set forth in Section 6.14 and other than
monetary Encumbrances that Seller is required to remove regardless of the
amount thereof); and
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if it is reasonably expected that the cost of such remediation together with
the actual or estimated expense of remedying Environmental Defects will exceed
$35,000 in the aggregate, such Seller shall have no obligation to undertake
such remediation. A Seller's decision regarding whether to undertake
remediation shall be made by written notice to Buyer within ten (10) Business
Days after all Title Defects and Environmental Defects are disclosed to
Sellers. If under such circumstances the applicable Seller elects to not
undertake such remediation, Buyer may, by notice to such Seller given within
ten (10) Business Days after such Seller's election to not remediate, terminate
this Agreement, or Buyer may, by notice to Sellers given within ten (10)
Business Days after such Seller's election to not remediate, elect to close
notwithstanding such election. If Buyer elects to close notwithstanding such
election, (i) Buyer may not thereafter terminate this Agreement based on Title
Defects or Environmental Defects (other than as set forth in Section 6.14);
(ii) Buyer shall have no recourse against Sellers based on any such Title
Defects or Environmental Defects (including any claim for indemnification
pursuant to Section 10 hereof) except as set forth in Section 6.14; and (iii)
at Closing the Purchase Price shall be reduced by $35,000; provided, that there
shall be no such reduction in the Purchase Price under this subsection (b) if
there is a Purchase Price reduction under Subsection (c) below.
(c) In the event that an Environmental Report reveals the
presence of Hazardous Substances on the Real Property that could reasonably
result in liability to the owner or user thereof or reveals noncompliance with
any Environmental Law (either, an "Environmental Defect"), and Buyer requests
in writing, within ten (10) days of Buyer's receipt of the relevant
Environmental Report, that the applicable Seller remedy the same, such Seller
shall use commercially reasonable efforts to cure any such Environmental
Defect; provided, that Sellers shall not be obligated to expend more than an
aggregate of $35,000 for remediation of all Environmental Defects and Title
Defects (other than as set forth in Section 6.14 and other than monetary
Encumbrances that Seller is required to remove regardless of the amount
thereof); and, if it is reasonably expected that the cost of such remediation
together with the actual or estimated cost of remedying Title Defects (other
than monetary Encumbrances that Seller is required to remove regardless of the
amount thereof) will exceed $35,000 in the aggregate, such Seller shall have no
obligation to undertake such remediation. A Seller's decision as to whether to
undertake remediation shall be made by written notice to Buyer within ten (10)
Business Days after all Title Defects and Environmental Defects are disclosed
to Sellers. If under such circumstances the applicable Seller elects to not
remediate, Buyer may, by notice to Sellers given within ten (10) Business Days
after such Seller's election to not remediate, proceed to close notwithstanding
such election. If Buyer elects to close notwithstanding such election, (i)
Buyer may not thereafter terminate this Agreement based on Title Defects or
Environmental Defects (except as set forth in Section 6.14); (ii) Buyer shall
have no recourse against Sellers based on Title Defects or Environmental
Defects (including any claim for indemnification pursuant to Section 10 hereof)
except as set forth in Section 6.14; and (iii) at Closing the Purchase Price
shall be reduced by $35,000; provided, that there shall be no such reduction in
the Purchase Price under this Subsection (c) if there is a Purchase Price
reduction under Subsection (b) above.
(d) After the Real Estate Inspection Period (as it may be
extended pursuant to Subsection (a)(ii) hereof) Buyer shall not be entitled to
terminate this Agreement based on Title Defects or Environmental Defects
(except as set forth in Section 6.14), nor shall Buyer be
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entitled to make any claim for indemnification pursuant to Section 10 hereof
based on Title Defects or Environmental Defects.
(e) Buyer shall indemnify each Seller and hold each
Seller harmless from and against any losses incurred by such Seller relating to
damage to Real Property in connection with Buyer's obtaining any Environmental
Reports.
6.13 Limited Partner Consents. As soon as reasonably practicable
following the execution hereof, Sellers shall file with the SEC proposed proxy
materials relating to Sellers' solicitation of the Limited Partner Consents.
Each Seller shall use reasonable efforts (i) to have such proxy materials
cleared by the SEC so as to enable it to disseminate definitive proxy materials
to its respective Limited Partners, (ii) to disseminate such materials, upon
receipt of SEC clearance, to its respective Limited Partners and (iii)
thereafter to obtain the Limited Partner Consents. Sellers shall give Buyer
prompt notice when the Limited Partner Consents have been obtained and when any
material development has occurred that causes substantial doubt as to whether
the Limited Partner Consents will be obtained.
6.14 ▇▇▇▇ Office Facility. Notwithstanding the provisions of
Section 6.12, following the execution of this Agreement, Enstar Income/Growth
Program Six-A, L.P. ("Enstar Six") shall commission a Phase I and/or Phase II
environmental survey, as appropriate, to determine whether any violation of
applicable Environmental Laws exists with respect to the underground storage
tank located at the parcel of Real Property on which the ▇▇▇▇, Tennessee office
facility is located, which survey(s) shall be conducted by an environmental
consulting firm reasonably acceptable to Buyer and Enstar Six. If any such
violation exists, either (i) Enstar Six shall cause such remediation to be
performed as it determines is reasonably necessary to cure any such violation,
up to an aggregate amount of $75,000, or (ii) Enstar Six shall not undertake
such remediation, and the amount of the Purchase Price payable to Enstar Six
shall be reduced by an amount representing a reasonable estimate of the cost of
the remediation described in clause (i), up to the aggregate amount of $75,000.
In the event that the reasonable estimate of the cost of the remediation
described in clause (i) exceeds $75,000, Enstar Six shall be entitled to elect
to not perform such remediation, and, if Enstar Six elects to not perform such
remediation, Buyer shall be entitled to terminate this Agreement pursuant to
Section 11.1.
6.15 Acquisition Proposals. If, prior to obtaining all the Limited
Partner Consents, any Seller or any Person acting on behalf of any Seller
receives a solicitation from a third party regarding an Acquisition Proposal
(as defined herein), which Acquisition Proposal such Seller intends to submit
to its respective Limited Partners for their approval, such Seller shall,
within five (5) Business Days following receipt of such solicitation, notify
Buyer in writing of the price and other material terms of such Acquisition
Proposal, and Buyer shall be entitled, within five (5) Business Days following
receipt of such notification, to submit an Acquisition Proposal in response to
the third party's Acquisition Proposal (a "Buyer Acquisition Proposal"), which
Buyer Acquisition Proposal shall contain all the terms and conditions of this
Agreement other than the Purchase Price. For purposes hereof, an "Acquisition
Proposal" means any bona fide proposed (i) asset acquisition or exchange or
similar transaction providing for any third party's acquisition of any of the
Assets or Systems or (ii) acquisition of partnership interests, merger,
consolidation, exchange of partnership or other equity interests or similar
transaction that would
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result in the acquisition by any third party of a percentage of the Interests
(as defined herein) in any Seller sufficient to give such third party voting
control over the applicable Seller. For purposes hereof, an "Interest" in any
Seller means an interest in the capital and profits of such Seller that is
acquired by the making of a capital contribution to such Seller or as otherwise
provided under the general or limited partnership agreement applicable to such
Seller.
6.16 Noncompetition Agreement. Charter agrees, on behalf of itself
and its direct and indirect subsidiaries, that prior to the third anniversary
of the Closing Date it will not, without the written consent of Buyer, directly
or indirectly, own, manage, operate or control, engage or participate in the
ownership, management, operation or control of or be connected as a
shareholder, partner, manager, agent or otherwise with any business or company
any part of which operates hardwire cable television systems (or which obtains
or holds any franchises therefor) within any of the Franchise Areas.
Notwithstanding the foregoing, nothing in this provision shall be construed to
prohibit the following: (i) the ownership of a company's securities that
constitute less than ten percent (10%) of the outstanding voting stock of such
company or does not otherwise constitute control over such company, (ii) the
operation by Charter or any of its subsidiaries that are bound by this
provision of cable television systems (or the holding of franchises therefor)
in those geographical areas included in the Franchise Areas for which Charter
or any such subsidiary holds a cable franchise on the date hereof or (iii) the
direct or indirect ownership, management, operation or control by Charter or
any of its subsidiaries that are bound by this provision of any cable business
as the result of a transaction in which the subscribers involved that are
located within the Franchise Areas constitute a minority of the subscribers
involved in such transaction.
6.17 Upgrade of ▇▇▇▇▇▇▇▇▇ System. As soon as practicable following
the date of this Agreement, Enstar Income Program 1984-1, L.P. ("Enstar 1984")
shall commence an upgrade of the System serving Covington, Tennessee in
accordance with Enstar 1984's existing obligations to the relevant Governmental
Authority (the "▇▇▇▇▇▇▇▇▇ Upgrade"). From the date hereof through the Closing
Date Enstar 1984 shall work in consultation with Buyer toward completion of the
▇▇▇▇▇▇▇▇▇ Upgrade. Provided that the Closing occurs, and subject to the
foregoing, Buyer shall reimburse Enstar 1984 for Enstar 1984's reasonable
out-of-pocket costs and expenses incurred in connection with the ▇▇▇▇▇▇▇▇▇
Upgrade. For purposes determining the amount of said reimbursement, Enstar
1984 shall deliver to Buyer true and complete copies of all invoices received
by it in connection with the ▇▇▇▇▇▇▇▇▇ Upgrade.
7. Conditions Precedent To Buyer's Obligations.
The obligations of Buyer to purchase and accept assignment, transfer
and delivery of the Assets to be sold, assigned, transferred and delivered to
Buyer hereby are subject to the satisfaction or waiver, at or prior to the
Closing Date (as provided herein), of the following conditions:
7.1 Representations and Warranties of Sellers. As to the
representations and warranties of Sellers set forth in Section 4, (1) each of
those representations and warranties set forth in Section 4 which is 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
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the materiality or Material Adverse Effect qualifiers set forth therein, and
(2) each of the other representations and warranties of Sellers set forth in
Section 4 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; and
provided, further, that the representations and warranties referred to in this
Section 7.1 shall not include the representations and warranties contained in
Section 4.8(c) with respect to any Governmental Authorization with respect to
which a Franchise Extension or Franchise Renewal shall have been obtained.
7.2 Covenants. Each Seller 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 it prior to or at the Closing.
7.3 Transferable Franchise Areas; Material Consents; Franchise
Renewals; Franchise Extensions. (i) The Franchise Areas covering at least
ninety percent (90%) of Subscribers shall have become Transferable Franchise
Areas; (ii) the Franchise Areas set forth in Schedule 7.3 shall have become
Transferable Franchise Areas; (iii) the Material Consents (other than those
that pertain solely to non-Transferable Franchise Areas or Retained Assets)
shall have been obtained; and (iv) the Franchise Renewals and Franchise
Extensions shall have been obtained.
7.4 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act. All necessary pre-merger notification
filings required under the HSR Act shall have been made with the Federal Trade
Commission and the United States Department of Justice and the prescribed
waiting period(s) (and any extensions thereof) will have expired or been
terminated.
7.5 Judgment. There shall not be in effect on the date on which
the Closing is to occur any judgment, decree, order or other prohibition having
the force of law that would prevent or make unlawful the Closing; provided,
that the Buyer shall have used commercially reasonable efforts to prevent the
entry of any such judgment, decree, order or other legal prohibition and to
appeal as expeditiously as possible any such judgment, decree, order or other
legal prohibition that may be entered.
7.6 Delivery of Certificates and Documents. Sellers shall have
furnished to Buyer the following:
(a) a certificate of the Secretary or Assistant Secretary
of each Seller or, if applicable, such Seller's ultimate corporate general
partner, as to (i) the limited partnership agreement of Seller; (ii) all
actions taken by and on behalf of Seller and its partners to authorize the
execution, delivery and performance of this Agreement and the Related
Agreements and (iii) the incumbency of officers signing this Agreement and any
Related Agreement on behalf of such Seller;
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(b) a certificate of good standing of such Seller that is
a limited partnership from the Secretary of State of its state of formation and
a certificate of foreign qualification for each such Seller from each state in
which any of such Seller's Assets are located;
(c) a certificate of an executive officer of the General
Partner, certifying on behalf of Sellers that the conditions set forth in
Sections 7.1 and 7.2 have been met;
(d) the ▇▇▇▇ of Sale and Assignment and Assumption
Agreements, duly executed by Sellers;
(e) the Indemnity Escrow Agreement(s) duly executed by
Sellers;
(f) if necessary, the Management Agreement(s), duly
executed by the appropriate Seller(s);
(g) a deed, in form and substance reasonably satisfactory
to the applicable Seller and Buyer, conveying title to each parcel of Real
Property owned by such Seller to Buyer;
(h) copies of all Material Consents obtained on or prior
to Closing; and
(i) all other documents as are reasonably necessary to
transfer title to the Assets to Buyer.
7.7 Opinion of Sellers' Counsel. Sellers shall have furnished
Buyer with an opinion letter, dated the Closing Date, of ▇▇▇▇ Marks & ▇▇▇▇▇
LLP, counsel for Sellers, in the form set forth in Exhibit D hereto.
7.8 Opinion of Sellers' FCC Counsel. Sellers shall have furnished
Buyer with an opinion letter, dated the Closing Date, of Cole Raywid &
▇▇▇▇▇▇▇▇▇, L.L.P., FCC counsel for Sellers, in the form set forth in Exhibit E
hereto.
7.9 Limited Partner Consents. The Limited Partner Consents shall
have been obtained.
8. Conditions Precedent to Sellers' Obligations.
The obligations of Sellers to sell, assign, transfer and deliver the
Assets to Buyer hereunder are subject to the satisfaction or waiver at or prior
to the Closing Date (as provided herein) of the following conditions:
8.1 Representations and Warranties of Buyer. As to the
representations and warranties of Buyer set forth in Section 5, (1) each of
those representations and warranties set forth in Section 5 which is 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) each of the other representations and warranties of Buyer set forth in
Section 5 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
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40
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.
8.2 Covenants. Buyer 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 it prior to or at the Closing.
8.3 Transferable Franchise Areas; Material Consents. (i) The
Franchise Areas covering at least ninety percent (90%) of Subscribers shall
have become Transferable Franchise Areas; (ii) the Franchise Areas set forth in
Schedule 7.3 shall have become Transferable Franchise Areas; and (iii) the
Material Consents issued by Governmental Authorities (other than those that
pertain solely to non-Transferable Franchise Areas or Retained Assets) shall
have been obtained.
8.4 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act. All necessary pre-merger notification
filings required under the HSR Act will have been made with the Federal Trade
Commission and the United States Department of Justice, and the prescribed
waiting period(s) (and any extensions thereof) will have expired or been
terminated.
8.5 Judgment. There shall not be in effect on the date on which
the Closing is to occur any judgment, decree, order or other prohibition having
the force of law that would prevent or make unlawful the Closing; provided that
Sellers shall have used commercially reasonable efforts to prevent the entry of
any such judgment, decree, order or other legal prohibition and to appeal as
expeditiously as possible any such judgment, decree, order or other legal
prohibition that may be entered.
8.6 Limited Partner Consents. The Limited Partner Consents shall
have been obtained.
8.7 Delivery of Certificates and Documents. Buyer shall have
furnished to Sellers the following:
(a) a certificate of the Secretary or Assistant Secretary
of Buyer as to (i) the certificate of incorporation and bylaws of Buyer, (ii)
resolutions of Buyer authorizing the execution, delivery and performance of
this Agreement and the Related Agreements; and (iii) the incumbency of officers
signing this Agreement and the Related Agreements on behalf of Buyer;
(b) a certificate of legal existence and good standing of
Buyer from the Secretary of State of Buyer's state of organization and a
certificate of foreign qualification of Buyer in any state in which any of the
Systems or Assets is located;
(c) a certificate of an executive officer of Buyer
certifying that the conditions set forth in Sections 8.1 and 8.2 have been met;
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(d) the ▇▇▇▇ of Sale and Assignment and Assumption
Agreements, duly executed by Buyer; and
(e) the Indemnity Escrow Agreement(s), duly executed by
Buyer; and
(f) if necessary, the Management Agreement(s), duly
executed by Buyer.
8.8 Opinion of Buyer's Counsel. Buyer shall have furnished
Sellers with an opinion letter, dated the Closing Date, of Dow ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇, PLLC, counsel for Buyer, in the form set forth in Exhibit F.
8.9 Payment for Assets. Buyer shall have delivered the Purchase
Price as provided in Section 3.2.
9. Retained Franchises and Assets.
9.1 Non-Transferable Franchise Areas. In the event that on the
Closing Date any Franchise Area is not a Transferable Franchise Area, then the
Franchise covering such Franchise Area ("Retained Franchise") and any other
Assets used solely in connection with any Seller's operations within such
Franchise Area ("Retained Assets") shall be excluded from the Assets conveyed
on the Closing Date, and the provisions of this Section 9 shall apply. In the
event there are any Retained Franchises and Assets on the Closing Date, the
amount of the Purchase Price paid by Buyer at Closing with respect to such
Retained Franchises and Assets shall be the Discounted Franchise Purchase Price
(as defined in Section 9.5) with respect thereto.
9.2 Retained Franchise Consents. From and after the Closing Date
the Seller(s) owning any Retained Franchises or Retained Assets shall continue
to use commercially reasonable efforts to obtain the Required Consent with
respect to any Retained Franchise ("Retained Franchise Consent"), and the terms
and conditions of Section 6.7, insofar as they apply to Franchise Required
Consents, shall govern the obtaining of any such Retained Franchise Consent.
9.3 Subsequent Closings. Subject to Section 9.4, at such time as
the Franchise Area covered by any Retained Franchise shall become a
Transferable Franchise Area, Buyer and the applicable Seller shall conduct a
closing (each, a "Subsequent Closing") at which such Seller shall assign,
transfer, convey and deliver to Buyer, and Buyer shall acquire from such
Seller, the Retained Franchise covering such Franchise Area and any Retained
Assets with respect thereto. Each Subsequent Closing shall take place on a
Business Day on which the relevant parties shall agree and that is not less
than five (5) nor more than ten (10) Business Days from the date on which Buyer
receives notice that the Retained Franchise Consent is obtained or the relevant
Franchise Area has otherwise become a Transferable Franchise Area. At such
Subsequent Closing, (i) Buyer shall deliver to the applicable Seller, in the
manner set forth in Section 3.2(a), the amount of the difference between the
Franchise Purchase Price and the Discounted Franchise Purchase Price with
respect to such Retained Franchise and any such Retained Assets; and (ii) Buyer
or the applicable Seller, as the case may be, shall deliver the instruments
described in
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Sections 7.6(d), (g), (h) and (i) and 8.7(d) with respect to such Retained
Franchise and Retained Assets.
9.4 Final Closing. If, on the date that is one (1) year from the
date of the Closing Date, any Franchise Area shall not have become a
Transferable Franchise Area, Buyer and the Seller with respect thereto shall
nevertheless conduct a final Closing with respect to the Retained Franchise and
Retained Assets relating to any such Franchise Area ("Final Closing"), at which
such Seller shall assign, transfer, convey and deliver to Buyer, and Buyer
shall acquire from such Seller, such Retained Franchise and Retained Assets.
Such Final Closing shall occur on such one year anniversary date or, if such
date is not a Business Day, on the next Business Day. At such Final Closing,
Buyer or the applicable Seller, as the case may be, shall deliver the
instruments described in Sections 7.6(d), (g), (h) and (i) and 8.7(d) with
respect to such Retained Franchise and Retained Assets.
9.5 Franchise Purchase Price; Discounted Franchise Purchase Price.
The "Franchise Purchase Price" with respect to any Retained Franchise (and the
Retained Assets with respect thereto), shall be the product of (i) the number
of Subscribers covered by such Retained Franchise as of the Closing Date, based
on the Pre-Closing Certificate, as it may be modified to reflect the resolution
of any pre-Closing disputes with respect thereto, and (ii) the Subscriber
Adjustment Amount applicable to the Seller of such Retained Franchise and
Assets. The "Discounted Franchise Purchase Price" with respect to any Retained
Franchise (and the Retained Assets with respect thereto) shall be the amount of
eighty percent (80%) of the Franchise Purchase Price with respect to such
Retained Franchise and Assets.
9.6 Management Agreement. If there are any Retained Franchises,
the Systems covered by such Retained Franchises shall be operated pursuant to
the Management Agreement from the Closing until the Subsequent Closing with
respect thereto or the Final Closing, as the case may be.
10. Survival of Representations and Warranties; Indemnification.
10.1 Survival of Representations and Warranties. Subject to
Section 6.12, the representations and warranties of the parties provided for in
this Agreement shall survive the Closing for a period of six (6) months, except
representations and warranties relating to environmental matters and title to
Real Property, which representations and warranties shall be governed by
Section 6.12, and to Taxes, title to Assets other than Real Property and
authority, which representations and warranties shall survive the Closing for
the duration of the applicable statute of limitations (the "Indemnity Period").
No claim for indemnification for breach of a representation or warranty may be
asserted after the expiration of the applicable Indemnity Period; provided,
that the written assertion of any claim by a party against the other hereunder
with respect to the breach or alleged breach of any representation, warranty
(or of a series of facts which would support such breach) shall extend the
Indemnity Period with respect to such claim through the date such claim is
conclusively resolved.
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10.2 Indemnification.
(a) Subject to the provisions of Sections 10.1 and 10.5,
Buyer agrees to indemnify and hold harmless each Seller, after the Closing,
from and against any and all claims to the extent such claims are based upon,
arise out of or are related to (i) a breach of any representation or warranty,
or any failure to perform or comply with any of the covenants, conditions or
agreements of Buyer set forth in this Agreement or in any Related Agreement, or
(ii) the assertion of any claim or legal action against such Seller by any
Person or Governmental Authority based upon, arising out of or relating to the
ownership or operation of the Assets occurring, arising or accruing after the
Closing Date.
(b) Subject to the provisions of Sections 10.1 and 10.5,
each Seller agrees to indemnify and hold harmless Buyer, after the Closing,
from and against any and all claims to the extent such claims are based upon,
arise out of or relate to (i) a breach of any representation or warranty, or
any failure to perform or comply with any of the covenants, conditions or
agreements of such Seller set forth in this Agreement or in any Related
Agreement or (ii) any liability of such Seller arising or accruing on or prior
to, or existing on, the Closing Date, except any such liability for which an
adjustment to the Purchase Price is made pursuant to Section 3.3(a)(ii); or
(iii) any obligation or liability of such Seller not assumed by Buyer pursuant
to the terms of this Agreement.
10.3 Assertion of Claims.
(a) If Buyer, on the one hand, or any Seller, on the
other hand believes that it has a claim for indemnification, it shall notify
the other (the particular Seller, in the case of a claim against a particular
Seller) promptly in writing describing such claim with reasonable particularity
and containing a reference to the provisions of this Agreement under which such
claim has arisen.
(b) As used in this Section 10 the word "claim" shall
mean any and all liabilities, obligations, losses, damages, deficiencies,
demands, claims, fines, penalties, interest, assessments, judgments, actions,
proceedings and suits of whatever kind and nature and all costs and expenses
relating thereto (including, without limitation, reasonable attorneys' fees
incurred in connection with the investigation or defense thereof or in
asserting rights hereunder).
(c) Neither this Section 10 nor any other provision of
this Agreement is intended to confer any third party beneficiary rights,
including but not limited to any extension of any statute of limitations
pertaining to suits, actions or proceedings brought by third parties.
10.4 Notice of and Right to Defend Third Party Claims. Promptly
upon receipt of notice of any claim or the commencement of any suit, action or
proceeding by a third party in respect of which indemnification may be sought
on account of an indemnity agreement contained in Section 10.2, the party
seeking indemnification (the "Indemnitee") shall give notice in writing to the
party from whom indemnification is sought (the "Indemnitor"). The omission by
such Indemnitee to so notify promptly such Indemnitor of any such claim or
action shall not relieve such Indemnitor from any liability which it may have
to such Indemnitee in connection
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therewith. In case any claim shall be asserted or suit, action or proceeding
commenced against an Indemnitee, the Indemnitor will be entitled to participate
therein, and, to the extent that it may wish, subject to Indemnitor's written
confirmation of its indemnity obligations hereunder with respect to such claim,
to assume the defense or conduct the settlement thereof. Anything herein to
the contrary notwithstanding, Indemnitor shall not be entitled to settle any
such suit, action or proceeding without Indemnitee's consent, which consent
shall be not unreasonably withheld. After notice from the Indemnitor to the
Indemnitee of its election so to assume the defense, conduct or settlement
thereof (along with its written confirmation of its indemnity obligations), the
Indemnitor will not be liable to the Indemnitee for any legal or other expenses
subsequently incurred by the Indemnitee in connection with the defense, conduct
or settlement thereof following such notice. The Indemnitee will reasonably
cooperate with the Indemnitor in connection with any such claim assumed by the
Indemnitor to make available to the Indemnitor all Persons and all pertinent
information under the Indemnitee's control.
10.5 Limitations of Liability.
(a) For purposes of this Agreement, claims for
indemnification for breach of any representation, warranty, covenant or
agreement shall not take into account, give effect to or be qualified by any
considerations of materiality or knowledge which may be expressed in such
representation or warranty.
(b) The amount of any claim indemnifiable by an
Indemnitor pursuant to Section 10.2 shall be reduced by the amount of any
insurance proceeds and the amount of any tax benefit resulting from the subject
matter of such claim received by the Indemnitee in respect of such claim.
(c) A Seller shall not be required to indemnify Buyer
under Section 10.2(b) with respect to claims arising from breaches of such
Seller's representations or warranties hereunder, and Buyer shall not be
required to indemnify any Seller under Section 10.2(a) with respect to Claims
arising from Buyer's representations or warranties hereunder, until the
aggregate amount of all such Claims against Sellers or Buyer, as the case may
be, exceeds the aggregate amount of $125,000, in which case the indemnifying
party shall be liable for the total amount of all of such claims starting from
the first dollar.
(d) Sellers' aggregate liability to Buyer for Claims
arising from breaches of Sellers' representations and warranties hereunder
shall be limited to losses or damages not exceeding the aggregate amount of
$1,800,000, as allocated among the Sellers as set forth in Schedule 1.1A,
except that such limit shall not apply to Claims arising out of representations
and warranties relating to title to Assets other than Real Property, Taxes and
authority. Buyer's liability to Sellers for Claims arising out of breaches of
its representations and warranties hereunder shall be limited to losses or
damages not exceeding the aggregate amount of $1,800,000, which shall be
allocated among the Sellers as set forth in Schedule 1.1A.
10.6 Indemnity Escrow Agreement. At the Closing, Buyer, Sellers
and the Escrow Agent shall execute the Indemnity Agreement, in accordance with
which Buyer will deposit the Indemnity Fund with the Escrow Agent on the
Closing Date in order to provide a fund for the
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45
payment of any indemnification to which any Buyer Indemnitee is entitled under
this Section 10; provided, that at any Seller's request, at the Closing a
separate Indemnity Escrow Agreement shall be entered into with respect to each
Seller.
11. Termination.
11.1 Termination. This Agreement may be terminated prior to the
Closing only in accordance with the following:
(a) At any time by mutual consent of the Sellers and
Buyer;
(b) By either Sellers or Buyer if the Closing hereunder
has not taken place on or before the Outside Closing Date other than by reason
of a breach or default of any of the covenants or agreements contained in this
Agreement by the party seeking to terminate; provided, that, either party may,
at its sole option, extend such date for an additional three (3) months if as
of such date the conditions to Closing set forth in Sections 7.3 and 8.3 shall
have not been satisfied; or
(c) By either Sellers or Buyer, at any time, if the other
party is in material breach or material default of its covenants and agreements
under this Agreement and the party in breach or default does not cure such
breach or default within thirty (30) days after written notice thereof is
delivered to the non-terminating party, provided that the terminating party is
not also in material breach or material default hereunder;
(d) By either Sellers or Buyer, if the representations
and warranties of the other party (without regard to the materiality or
Material Adverse Effect qualifiers set forth therein) are not true and correct
in all respects (or, with respect to representations and warranties made as of
a specific date, are not true and correct in all respects as of such date), and
such failure is not cured by the Outside Closing Date, provided that all of the
representations and warranties of the terminating party are true and correct in
all respects; provided, that for purposes of this Section 11.1(d), the
representations and warranties of a party 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;
(e) By Buyer, pursuant to Section 6.12(a), (b) or (c) or
Section 6.14; or
(f) By Buyer in the event that any of the following shall
occur: (i) as of the date that is one hundred twenty (120) days following the
date hereof, the Limited Partners holding forty percent (40%) or more of the
Interests of any Seller shall have affirmatively disapproved the transactions
contemplated by this Agreement (unless the Limited Partners holding fifty
percent (50%) or more of the Interests of such Seller shall have approved the
transactions contemplated hereby); (ii) as of any date, the Limited Partners
holding fifty percent (50%) or more of the Interests of any Seller shall have
affirmatively disapproved the transactions contemplated by this Agreement or
approved any Acquisition Proposal; or (iii) as of the termination of the
Voting Period applicable to any Seller, the Limited Partner Consents of such
Seller shall not have been obtained; provided, however, that for purposes of
clauses (i) and (ii)
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the percentage of Interests disapproving the transactions contemplated by this
Agreement or approving an Acquisition Proposal shall not include any
disapprovals or approvals (as the case may be) that shall have been rescinded,
revoked or otherwise withdrawn as of the date of such termination.
11.2 Breakup Fee; Acquisition Proposals.
(a) Each Seller shall pay to Buyer a Breakup Fee (as
defined herein), in accordance with the terms of this Section 11.2, in the
event that (i) this Agreement is terminated by Buyer pursuant to Section
11.1(f), (ii) as of the date of such termination any Seller's Limited Partners
shall have given their consent to an Acquisition Proposal submitted by a third
party; and (iii) Buyer shall have performed and complied in all material
respects with all covenants and agreements required to be performed or complied
with by it under this Agreement during the period prior to the first to occur
of (x) the date on which any Seller's Limited Partners shall have either
disapproved the transactions contemplated by this Agreement or given their
consent to an Acquisition Proposal submitted by a third party, or (y) the
first-occurring date of termination of the Voting Period of any Seller during
which the Limited Partner Consents for such Seller shall not have been
obtained. Sellers shall pay the Breakup Fee to Buyer by wire transfer of
immediately available funds or by certified check (in accordance with Buyer's
written instructions) within five (5) Business Days following the date of
termination pursuant to Section 11.1(f). For purposes hereof, the "Breakup
Fee" with respect to any Seller means a pro rata portion of the aggregate
amount of $750,000, which shall be determined by allocating the amount of
$750,000 among Sellers based on the allocation of the aggregate Purchase Price
among Sellers.
(b) In the event that the Closing does not occur and this
Agreement is terminated with respect to a Seller solely as a result of the
failure to satisfy the conditions to Closing set forth in Sections 7.9 and 8.6
with respect to such Seller, and within six (6) months following the
termination of the applicable Voting Period, such Seller receives an
Acquisition Proposal from a third party, which Acquisition Proposal such Seller
intends to submit to its respective Limited Partners for their approval, such
Seller shall notify Buyer in writing of the price and other material terms of
such Acquisition Proposal, and Buyer shall be entitled, within five (5)
Business Days of such notification, to submit a Buyer Acquisition Proposal.
11.3 Reimbursement of Expenses. Reimbursement of Expenses. In the
event that (i) this Agreement is terminated by Buyer pursuant to Section
11.1(f), (ii) as of the date of such termination no Seller's Limited Partners
shall have given their consent to an Acquisition Proposal submitted by a third
party; and (iii) Buyer shall have performed and complied in all material
respects with all covenants and agreements required to be performed or complied
with by it under this Agreement during the period prior to the first to occur
of (x) the date on which any Seller's Limited Partners shall have disapproved
the transactions contemplated by this Agreement, or (y) the first-occurring
date of termination of the Voting Period of any Seller during which the Limited
Partner Consents for such Seller shall not have been obtained, such Seller(s)
for which the Limited Partner Consents shall not have been obtained will
reimburse Buyer for Buyer's actual out-of-pocket costs and expenses incurred in
connection with the negotiation and performance of this Agreement; provided,
however, that if Buyer shall
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47
consummate this Agreement with those Seller(s) for which the Limited Partner
Consents shall have been obtained, such reimbursement shall be reduced by the
amount of such costs and expenses allocated to the consummating Sellers based
on the allocation of the aggregate Purchase Price among Sellers.
11.4 Surviving Obligations. In the event of termination of this
Agreement by either Buyer or Sellers pursuant to this Section 11, prompt
written notice thereof shall be given to the other party; and this Agreement
shall terminate, without further action by any of the parties hereto, and all
obligations of the parties hereunder shall terminate, except for the
obligations set forth in Sections 4.19, 6.4, 11.2, 11.3, 11.5, 12 and 21.
11.5 Attorney's 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.
12. 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 other representatives.
13. Entire Agreement.
Buyer and Sellers agree that this Agreement, including the Schedules
and all Exhibits hereto and any other written document or instrument delivered
in connection herewith, constitutes the entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior
understandings and agreements with respect thereto.
14. Parties Obligated and Benefited.
Subject to the limitations set forth below, this Agreement will be
binding upon the parties and their respective assigns and successors in
interest and will inure solely to the benefit of the parties and their
respective assigns and successors in interest, and no other Person will be
entitled to any of the benefits conferred by this Agreement. Without the prior
written consent of the other parties, no party will assign any of its rights
under this Agreement or delegate any of its duties under this Agreement, except
that Buyer shall have the right to assign this Agreement to any Affiliate of
Buyer without the prior consent of Sellers.
15. Notices.
All notices, requests, consents, and other communications under this
Agreement shall be in writing and shall be delivered in person or mailed by
first-class certified or registered mail, return receipt requested, postage
prepaid, by reputable overnight mail or courier or by telecopier, in either
case, with receipt confirmed, addressed as follows:
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If to Seller: Enstar Communications Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Senior Vice President - Treasurer
with a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq., Senior Vice President,
General Counsel & Secretary
With a copy to: ▇▇▇▇ Marks & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
and
If to Buyer: Multimedia Acquisition Corp.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
With a copy to: Dow ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, PLLC
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
or at such other address or addresses as may have been furnished in writing by
any party to the others in accordance with the provisions of this Section 15.
Notices and other communications provided in accordance with this Section 15
shall be deemed delivered upon receipt. The furnishing of any notice or
communication required hereunder may be waived in writing by the party entitled
to receive such notice. Failure or delay in delivering copies of any notice to
persons designated above to receive copies shall in no way adversely affect the
effectiveness of such notice or communication.
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49
16. Amendments and Waivers.
Except as otherwise expressly set forth in this Agreement, any term of
this Agreement may be amended and the observance of any term of this Agreement
may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of Sellers and
Buyer. Any amendment or waiver effected in accordance with this Section 16
shall be binding upon each party. No waivers of or exceptions to any term,
condition or provision of this Agreement, in any one or more instances, shall
be deemed to be, or construed as, a further or continuing waiver of any such
term, condition or provision.
17. Severability.
If any provision of this Agreement shall be held or deemed to be, or
shall in fact be, invalid, inoperative or unenforceable because of the conflict
of such provision with any constitution or statute or rule of public policy or
for any other reason, such circumstance shall not have the effect of rendering
any other provision or provisions herein contained invalid, inoperative or
unenforceable, but this Agreement shall be reformed and construed as if such
invalid, inoperative or unenforceable provision had never been contained herein
and such provision reformed so that it would be valid, operative and
enforceable to the maximum extent permitted.
18. Section Headings and Terms.
The section headings in this Agreement are for convenience and
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
19. Counterparts.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument, and shall become effective when counterparts which
together contain the signatures of each party hereto shall have been delivered
to Seller and Buyer.
20. Governing Law; Consent in Jurisdiction.
This Agreement shall be governed by and construed and enforced in
accordance with the law (without giving effect to the law governing the
principles of conflicts of law) of the State of New York. Any action to
enforce, arising out of, or relating in any way to, any of the provisions of
this Agreement may be brought and prosecuted in any such court or courts
located within the State of New York as is prohibited by law, and the parties
consent to the jurisdiction of said court or courts located within the State of
New York and to service of process by registered mail, return receipt
requested, or by any other manner provided by law. Each party hereto agrees not
to assert, by way of motion, as a defense or otherwise, in any such action,
suit or proceeding any claim that it is not subject personally to the
jurisdiction of such court, that the action, suit or proceeding is brought in
an inconvenient forum, that the venue of the action, suit or proceeding is
improper or that this Agreement, or any other agreement or transaction related
hereto or the subject matter thereof or thereof may not be enforced in or by
such court.
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50
21. Specific Performance.
The parties hereto acknowledge that money damages are not an adequate
remedy for violations of this Agreement and that any party may, in its sole
discretion, apply to a court of competent jurisdiction for specific performance
or injunctive or other relief (without the posting of any bond or other
security) as such court may deem just and proper in order to enforce this
Agreement or prevent any violation hereof by any of the parties hereto and, to
the extent permitted by applicable Legal Requirements, each party hereof waives
any objection to the imposition of such relief. Any such specific or equitable
relief granted shall not be exclusive and an Indemnitee shall also be entitled
to seek money damages.
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51
IN WITNESS WHEREOF, the parties have executed this Asset Purchase
Agreement as of the date and year first above written.
BUYER:
-----
MULTIMEDIA ACQUISITION CORP.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
SELLERS:
-------
ENSTAR INCOME PROGRAM ▇▇▇▇-▇, ▇.▇.
By: Enstar Communications Corporation,
its General Partner
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
ENSTAR INCOME PROGRAM IV-3, L.P.
By: Enstar Communications Corporation,
its General Partner
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
ENSTAR INCOME GROWTH PROGRAM
SIX-A, L.P.
By: Enstar Communications Corporation,
its General Partner
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
52
ENSTAR VII
By: Enstar Communications Corporation,
its General Partner
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
ENSTAR VIII
By: Enstar Communications Corporation,
its General Partner
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
ENSTAR X, LTD.
By: Enstar Communications Corporation,
its General Partner
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
Solely for purposes of Section 6.16:
CHARTER COMMUNICATIONS, INC.
By:/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
53
EXHIBIT A
DEPOSIT ESCROW AGREEMENT
This DEPOSIT ESCROW AGREEMENT, dated as of June ___, 2000
("Agreement"), is by and among Enstar Income Program 1984-1, L.P., a Georgia
limited partnership, Enstar Income Program IV-3, L.P., a Georgia limited
partnership, Enstar Income/Growth Program Six-A, L.P., a Georgia limited
partnership, Enstar VII, a Georgia limited partnership, Enstar VIII, a Georgia
limited partnership, and Enstar X, Ltd., a Georgia limited partnership
(collectively, "Sellers," and each individually, a "Seller"), Multimedia
Acquisition Corp., a Pennsylvania corporation ("Buyer"), The Bank of New York, a
New York banking corporation (the "Escrow Agent"), and, solely for purposes of
Section 3.3(a) hereof, Charter Communications, Inc. ("Charter") and ▇▇▇▇
Multimedia Partnership ("▇▇▇▇").
WITNESSETH:
WHEREAS, Sellers and Buyer have entered into an Asset Purchase
Agreement dated as of the date hereof (the "Purchase Agreement"), pursuant to
which Sellers have agreed to sell, transfer, convey and deliver to Buyer certain
assets owned or held for use by Sellers and used in connection with the
operation of certain cable television systems, as more particularly described in
the Purchase Agreement; and
WHEREAS, in Section 3.5 of the Purchase Agreement, Buyer and Sellers
have agreed that concurrent with the execution of the Purchase Agreement, Buyer
shall deposit the aggregate sum of $1,800,000 (the "Deposit Amount") with the
Escrow Agent in order to secure Buyer's performance of its covenants and
obligations to each of the Sellers.
NOW, THEREFORE, in consideration of the foregoing and of the promises
contained herein, the parties, intending legally to be bound, agree as follows:
SECTION 1
ESCROW DEPOSIT
1.1 Delivery. Concurrent with the execution of the Purchase Agreement,
Buyer is depositing the Deposit Amount with the Escrow Agent, to be held and
disbursed by the Escrow Agent pursuant to the terms of this Agreement.
1.2 Receipt. The Escrow Agent acknowledges receipt of the Deposit
Amount and agrees to hold and disburse the Deposit Amount in accordance with the
terms and conditions of this Agreement. The Escrow Agent has established a
segregated escrow account (the "Escrow Account") for deposit of the Deposit
Amount, into which the Escrow Agent shall deposit the Deposit Amount prior to
the investment thereof pursuant to Section 1.4.
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1.3 Escrowed Funds. For purposes hereof, the "Escrowed Funds" shall
refer to the Deposit Amount together with all interest, income, dividends and
other earnings with respect thereto ("Earnings").
1.4 Investment and Income. The Escrow Agent shall, pending the
disbursement of the Escrowed Funds pursuant to this Agreement, invest the
Escrowed Funds in accordance with written instructions of Buyer in (a) direct
obligations of, or obligations fully guaranteed by, the United States of America
or any agency thereof, (b) certificates of deposit issued by a commercial bank
having a combined capital surplus and undivided profits of not less than
$100,000,000, (c) money market funds investing solely in any of the above or (d)
other investments of equal or greater security as instructed in writing by
Buyer.
SECTION 2
DISBURSEMENT OF ESCROWED FUNDS
The Escrowed Funds shall not be disbursed except as set forth in this
Section 2.
2.1 Disbursement of Escrowed Funds Upon Closing. In the event that the
closing on the transactions contemplated in the Purchase Agreement (the
"Closing") shall occur, Buyer and Sellers shall, on the date of the Closing,
telecopy to the Escrow Agent joint notice instructing the Escrow Agent to
disburse the Escrowed Funds to Sellers and setting forth any other instructions
for payment. The Escrow Agent shall promptly comply with such instructions in
their entirety within one (1) Business Day (as defined herein) of the Escrow
Agent's receipt of such joint notice, unless the joint notice contains a
different time period for compliance therewith. For purposes of this Agreement,
"Business Day" means any day on which the New York Stock Exchange (or any
successor securities exchange) and the Chase Manhattan Bank, N.A. (or any
successor bank) are officially open for business in New York City.
2.2 Disbursement of Escrowed Funds in Accordance with Sellers'
Instructions. If the Escrow Agent and Buyer receive a written notice signed by
any Seller stating that such Seller is entitled to any portion of the Escrowed
Funds ("Seller Claim Notice"), the Escrow Agent shall confirm Buyer's receipt of
such Seller Claim Notice, and Buyer shall be entitled to object to such Seller's
claim to any portion of the Escrowed Funds by giving notice of its objection
("Dispute Notice") to such Seller and the Escrow Agent within seven (7) Business
Days of its receipt of the Seller Claim Notice. If the Escrow Agent does not
receive a Dispute Notice from Buyer within such seven (7) Business Day period,
the Escrow Agent shall deliver the portion of the Escrowed Funds stated in the
Seller Claim Notice to such Seller within seven (7) Business Days of the
expiration of such seven (7) Business Day period. If the Escrow Agent receives a
Dispute Notice from Buyer within such seven (7) Business Day period, the Escrow
Agent shall continue to hold such portion of the Escrowed Funds until it
receives an order or instructions in accordance with Section 2.4 hereof.
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2.3 Disbursement of Escrowed Funds in Accordance with Buyer's
Instructions. If the Escrow Agent and Sellers receive a written notice signed by
Buyer stating that Buyer is entitled to any portion of the Escrowed Funds
("Buyer Claim Notice"), the Escrow Agent shall confirm Sellers' receipt of such
Buyer Claim Notice, and each Seller shall be entitled to object to Buyer's claim
to the Escrowed Funds by delivering a Dispute Notice to the Escrow Agent within
seven (7) Business Days of its receipt of the Buyer Claim Notice. If the Escrow
Agent does not receive a Dispute Notice from any Seller within such seven (7)
Business Day period, the Escrow Agent shall deliver the Escrowed Funds (or the
portion thereof specified in the Buyer Claim Notice) to Buyer within seven (7)
Business Days of the expiration of such seven (7) Business Day Period. If the
Escrow Agent receives a Dispute Notice from any Seller within such seven (7)
Business Day period, the Escrow Agent shall hold the Escrowed Funds until it
receives an order or instructions in accordance with Section 2.4 hereof.
2.4 Dispute. In the event of any dispute among any of the parties to
this Agreement, the Escrow Agent shall not comply with any claim or demands from
Buyer and/or Seller as long as any such dispute may continue, and the Escrow
Agent shall make no delivery or other disposition of any portion of the Escrowed
Funds until (a) the Escrow Agent receives a final nonappealable court order from
a court of competent jurisdiction directing disposition of the Escrowed Funds,
(b) the Escrow Agent has received an order of an arbitrator designated in
writing jointly by Buyer and Sellers, or in accordance with the Purchase
Agreement, directing disposition of the Escrowed Funds or any portion thereof or
(c) the Escrow Agent has received written instructions signed by Buyer and
Sellers directing disposition of the Escrowed Funds. Upon receipt of the order
or instructions referred to in (a), (b) or (c) the Escrow Agent shall deliver
the Escrowed Funds, or a portion thereof, as the case may be, in accordance with
such order or instructions and shall comply in all respects with such order or
instructions.
2.5 Disbursement of Escrowed Funds in Accordance with Joint
Instructions or an Order. If at any time the Escrow Agent receives (a) joint
instructions signed by Buyer and Sellers regarding disposition of the Escrowed
Funds, (b) a final and nonappealable court order from a court of competent
jurisdiction regarding disposition of the Escrowed Funds or (c) an order of an
arbitrator designated in writing jointly by Buyer and Sellers regarding
disposition of the Escrowed Funds, the Escrow Agent shall disburse the Escrowed
Funds in accordance with, and shall otherwise comply with, such instructions or
order.
2.6 Remaining Balance in Escrow Account. If the Escrow Agent disburses
a portion of but less than all of the Escrowed Funds pursuant to any order or
instructions in accordance with this Agreement, that portion of the Escrowed
Funds not disbursed shall continue to be held in escrow by the Escrow Agent
subject to the terms of this Agreement.
2.7 Interpleader. In the event that any dispute should arise hereunder,
the Escrow Agent shall be entitled to deposit the Escrowed Funds with the clerk
of any court of
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competent jurisdiction and to interplead Buyer and Sellers, and upon doing so,
the Escrow Agent shall promptly give notice thereof to Sellers and Buyer.
SECTION 3
ESCROW AGENT
3.1 Appointment. Buyer and Sellers hereby appoint the Escrow Agent to
serve hereunder, and the Escrow Agent hereby accepts such appointment and agrees
to perform all duties expressly set forth in this Agreement.
3.2 Compensation.
(a) In consideration of the Escrow Agent's acceptance of its
appointment hereunder, Sellers and Buyer shall pay the Escrow Agent the fees set
forth in Exhibit 1 hereto. Such sum is intended as compensation for the Escrow
Agent's ordinary services as contemplated by this Agreement, including without
limitation (i) the investment of the Escrowed Funds and (ii) the disbursement
thereof to Sellers and/or Buyer, as the case may be.
(b) If any fees, expenses or costs incurred by, or any obligations
owed to, the Escrow Agent hereunder are not promptly paid when due, the Escrow
Agent may reimburse itself therefor from the Escrowed Funds and may sell, convey
or otherwise dispose of any portion of the Escrowed Funds for such purpose.
(c) As security for the due and punctual performance of any and all
of Buyer's and Sellers' obligations to the Escrow Agent hereunder, now or
hereafter arising, Buyer and Sellers, individually and collectively, hereby
pledge, assign and grant to the Escrow Agent a continuing security interest in,
and a lien on, the Escrowed Funds, including all Earnings and other additions
thereto (whether such additions and Earnings are the result of deposits by Buyer
or any Seller or the investment of the Escrowed Funds). The Escrow Agent's
security interest created hereunder shall at all times be valid, perfected and
enforceable by Escrow Agent against Buyer and Sellers and all third parties in
accordance with the terms of this Agreement.
3.3 Indemnification.
(a) Buyer and Sellers, jointly and severally, shall be liable for
and shall reimburse and indemnify the Escrow Agent and hold it harmless from and
against any and all claims, losses, liabilities, costs, damages or expenses
(including reasonable attorneys' fees and expenses) (collectively, "Losses")
arising from or in connection with or related to this Agreement or from its
position as Escrow Agent hereunder (including without limitation Losses incurred
by the Escrow Agent in connection with its successful defense, in whole or in
part, of
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any claim of gross negligence or willful misconduct on its part); provided, that
nothing contained herein shall require indemnification of the Escrow Agent for
Losses caused by its gross negligence or willful misconduct. If Buyer and
Sellers fail to indemnify the Escrow Agent pursuant to this Section 3.3, ▇▇▇▇
(with respect to Buyer) and Charter (with respect to Sellers) shall be jointly
and severally responsible for the indemnification of the Escrow Agent pursuant
to this Section 3.3.
(b) The Escrow Agent shall not be liable for any action taken or
omitted or for any loss or injury resulting from its actions or its performance
or lack of performance of its duties hereunder in the absence of gross
negligence or willful miscoduct on its part. In no event shall the Escrow Agent
be liable (i) for acting in good faith in accordance with or relying in good
faith upon any instruction, notice, demand, certificate or document from Buyer
or any Seller or any entity the Escrow Agent believes in good faith to be acting
on behalf of Buyer or any Seller, (ii) for any consequential, punitive or
special damages, other than any such damages resulting from the Escrow Agent's
gross negligence or willful misconduct, (iii) for the acts or omissions of its
nominees, correspondents, designees, subagents or subcustodians, other than any
such acts or omissions that result from the Escrow Agent's gross negligence or
willful misconduct, (iv) for an amount in excess of the value of the Escrowed
Funds, valued as of the date of deposit thereof pursuant to this Agreement or
(v) with respect to any action taken or omitted in good faith upon the advice of
its counsel given with respect to any question relating to the Escrow Agent's
duties and responsibilities under this Agreement.
3.4 Resignation.
(a) The Escrow Agent may resign at any time upon giving Buyer and
Sellers thirty (30) days' prior written notice, and in such event, the successor
Escrow Agent shall be such person, firm or corporation as shall be mutually
agreed by Buyer and Sellers. It is understood and agreed that the Escrow Agent's
resignation shall not be effective until a successor escrow agent agrees to act
hereunder; provided, that if no successor is appointed and acting hereunder
within thirty (30) days after such notice is given, the Escrow Agent may, in its
sole discretion, apply to a court of competent jurisdiction for the appointment
of a successor escrow agent or for other appropriate relief. The cost and
expenses (including reasonable attorneys' fees and expenses) incurred by Escrow
Agent in connection with such proceeding shall be paid by, and be deemed a joint
and several obligation of, Buyer and Sellers.
(b) Upon receipt of the identity of the successor escrow agent
appointed pursuant to Section 3.4(a), the Escrow Agent shall either deliver the
Escrowed Funds then held hereunder to such successor escrow agent (less the
amount of any fees, costs and expenses or other obligations then owed to the
Escrow Agent), or hold such Escrowed Funds (or any portion thereof) pending
distribution, until all such fees, costs and expenses or other obligations are
paid.
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(c) Upon delivery of the Escrowed Funds to a successor escrow
agent, the Escrow Agent shall have no further duties, responsibilities or
obligations hereunder.
3.5 Collateral Agreements. The Escrow Agent shall not be bound in any
way by any contract or agreement between the other parties hereto, regardless of
whether the Escrow Agent has knowledge of such contract or agreement or of its
terms or conditions.
SECTION 4
TERMINATION
4.1 Termination. This Agreement shall be terminated upon the earliest
to occur of (a) disbursement or release of the entire amount of the Escrowed
Funds by the Escrow Agent in accordance with the terms hereof, (b) written
consent signed by all parties hereto, or (c) payment of the amount of all
Escrowed Funds then held into a court of competent jurisdiction in accordance
with Section 2.7. This Agreement shall not be otherwise terminated. The
provisions of Sections 3.3 and 5.5(b) shall survive termination of this
Agreement and/or the resignation or removal of the Escrow Agent.
SECTION 5
OTHER PROVISIONS
5.1 Notices.
(a) Any notice, demand or request required or permitted to be given
under the provisions of this Agreement shall be in writing and shall be deemed
to have been duly delivered (i) on the date of personal delivery, (ii) on the
date of the receipt of the appropriate printed confirmation, if sent by
facsimile transmission, (iii) upon receipt, if mailed by registered or certified
mail, postage prepaid and return receipt requested or (iv) in the case of
notices delivered to the Escrow Agent, when actually received by Escrow Agent's
Corporate Trust Department. Any such notices shall be sent to the following
addresses, or to such other address as any party may request in a notice
delivered in accordance with this Section 5.1 to the other parties hereto:
(A) If to any Seller or Charter:
c/o Enstar Communications
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Vice President,
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Finance & Acquisitions
With copies sent by the same means of delivery to:
▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Senior Vice President, General Counsel & Secretary
and to:
▇▇▇▇ Marks & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
(B) If to Buyer or ▇▇▇▇:
Multimedia Acquisition Corp.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
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With copies sent by the same means of delivery to:
Dow ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, PLLC
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
(C) If to the Escrow Agent:
The Bank of New York/Insurance Trust & Escrow Dept.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Reference: A/C No. 108190
A/C Name: Multimedia/Enstar Escrow
(b) The Escrow Agent is authorized to comply with and rely upon any
notice, instruction or other communication believed in good faith by it to have
been sent or given by Buyer or any Seller or by a person or persons believed in
good faith by the Escrow Agent to be authorized to so act by Buyer or any
Seller. Whenever under the terms hereof the time for giving a notice or
performing an act falls on a Saturday, Sunday or banking holiday, such time
shall be extended to the next day on which Escrow Agent is open for business.
5.2 Benefit and Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto without the
prior written consent of the others; except that (a) if Buyer assigns its
rights, interests and/or obligations under the Purchase Agreement in accordance
with Section 14 of the Purchase Agreement, Buyer shall be entitled to assign its
rights, interests or obligations hereunder to such assignee; and (b) if a
successor escrow agent is appointed pursuant to Section 3.4(a) hereof, upon
written instructions by Sellers and Buyer, the Escrow Agent shall assign its
rights, interests and obligations hereunder to such successor.
5.3 Entire Agreement; Amendment. This Agreement contains all the terms
agreed upon by the parties with respect to the subject matter hereof. This
Agreement may be amended only by a written instrument signed by the party
against which enforcement of any waiver, change, modification, extension or
discharge is sought.
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5.4 Headings. The headings of the sections and subsections of this
Agreement are for ease of reference only and do not evidence the intentions of
the parties.
5.5 Tax Reporting.
(a) For tax reporting purposes, all Earnings attributable to any
portion of the Escrowed Funds shall be deemed to be for the account of Buyer,
unless determined otherwise in accordance with the terms of this Agreement.
(b) The Escrow Agent has no interest in the Escrowed Funds but is
serving as escrow holder only and has only possession of the Escrowed Funds.
Buyer and Sellers shall pay or reimburse the Escrow Agent upon the Escrow
Agent's request for any transfer taxes or other taxes relating to the Escrowed
Funds incurred in connection herewith, and shall indemnify and hold harmless the
Escrow Agent for any amounts the Escrow Agent is obligated to pay in respect of
such taxes. Any payments of income from the Escrow Account shall be subject to
withholding regulations then in force with respect to United States taxes. Buyer
and Sellers will provide the Escrow Agent with appropriate W-9 forms for tax
I.D. number certifications. It is understood that the Escrow Agent shall be
responsible for income reporting only with respect to Earnings on any portion of
the Escrowed funds and shall not be responsible for any other reporting.
5.6 Fees, Expenses and Indemnification. All amounts payable to the
Escrow Agent by Buyer and Sellers pursuant to this Agreement, including all
fees, expenses and indemnification payable pursuant to Sections 3.2(a) and 3.3
(other than indemnification for income taxes alleged to be payable by Buyer or
any Seller), shall be shared equally by Buyer, on the one hand, and Sellers, on
the other hand.
5.7 Governing Law. This Agreement shall be interpreted, construed,
enforced and administered in accordance with the internal substantive laws (and
not the choice of law rules) of the State of New York. Buyer and each Seller
hereby submits to the personal jurisdiction of, and each agrees that all
proceedings relating to this Agreement shall be brought in courts located
within, the City and State of New York. Buyer and each Seller hereby waives the
right to trial by jury in any such proceeding. To the extent that in any
jurisdiction Buyer and any Seller may be entitled to claim, for itself or its
assets, immunity from suit, execution, attachment (whether before or after
judgment) or other legal process, each hereby irrevocably agrees to not claim,
and each hereby waives, such immunity. Buyer and each Seller hereby waives
personal service of process and consents to service of process by certified or
registered mail, return receipt requested, directed to it at the address last
specified by it for notices hereunder, and such service shall be deemed
completed ten (10) calendar days after the same is so mailed.
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5.8 Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if the signatures on all counterparts were
on the same instrument.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
BUYER:
MULTIMEDIA ACQUISITION CORP.
By:
------------------------------
Name:
Title:
Tax Identification No.:
--------
SELLERS:
ENSTAR INCOME PROGRAM ▇▇▇▇-▇, ▇.▇.
By Enstar Communications Corporation,
its General Partner
By:
---------------------
Name:
Title:
Tax Identification No.▇▇-▇▇▇▇▇▇▇
ENSTAR INCOME PROGRAM IV-3, L.P.
By Enstar Communications Corporation,
its General Partner
By:
---------------------
Name:
Title:
Tax Identification No.▇▇-▇▇▇▇▇▇▇
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ENSTAR INCOME GROWTH PROGRAM
SIX-A, L.P.
By Enstar Communications Corporation,
its General Partner
By:
------------------------------
Name:
Title:
Tax Identification No.▇▇-▇▇▇▇▇▇▇
ENSTAR VII
By Enstar Communications Corporation,
its General Partner
By:
------------------------------
Name:
Title:
Tax Identification No.▇▇-▇▇▇▇▇▇▇
ENSTAR VIII
By Enstar Communications Corporation,
its General Partner
By:
------------------------------
Name:
Title:
Tax Identification No.▇▇-▇▇▇▇▇▇▇
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ENSTAR X, LTD.
By Enstar Communications Corporation,
its General Partner
By:
------------------------------
Name:
Title:
Tax Identification No.▇▇-▇▇▇▇▇▇▇
ESCROW AGENT:
THE BANK OF NEW YORK
By:
----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Assistant Vice President
Solely for purposes of Section 3.3:
CHARTER COMMUNICATIONS, INC.
By:
----------------------------------------
Name:
Title:
[▇▇▇▇ MULTIMEDIA PARTNERSHIP]
By:
----------------------------------------
Name:
Title:
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Exhibit 1
Escrow Agent's Fee Schedule
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EXHIBIT B
INDEMNITY ESCROW AGREEMENT
This INDEMNITY ESCROW AGREEMENT, dated as of [Closing Date]
("Agreement"), is by and among Enstar Income Program 1984-1, L.P., a Georgia
limited partnership, Enstar Income Program IV-3, L.P., a Georgia limited
partnership, Enstar Income Growth Program Six-A, L.P., a Georgia limited
partnership, Enstar VII, a Georgia limited partnership, Enstar VIII, a Georgia
limited partnership, and Enstar X, Ltd., a Georgia limited partnership
(collectively, "Sellers," and each individually, a "Seller"),(1) Multimedia
Acquisition Corp., a Pennsylvania corporation ("Buyer"), and The Bank of New
York, a New York banking corporation (the "Escrow Agent") [and, solely for
purposes of Section 4.3(a) hereof, Charter Communications, Inc. ("Charter") and
▇▇▇▇ Multimedia Partnership ("▇▇▇▇")].
W I T N E S S E T H:
WHEREAS, Sellers and Buyer have entered into an Asset Purchase
Agreement dated as of June 21, 2000 (the "Purchase Agreement"), pursuant to
which Sellers have agreed to sell, transfer, convey and deliver to Buyer
certain assets owned or held for use by Sellers and used in connection with the
operation of certain cable television systems, as more particularly described
in the Purchase Agreement; and
WHEREAS, in Sections 3.2(c) and 10.6 of the Purchase Agreement,
Buyer and Sellers have agreed that the aggregate sum of $1,800,000, to be
allocated among Sellers as set forth in Exhibit 1 hereto (the "Indemnity
Fund"), shall be deposited in escrow with the Escrow Agent in order to provide
a fund for the payment of claims giving rise to indemnification by Sellers
under the Purchase Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties, intending legally to
be bound, agree as follows:
SECTION 1
INDEMNIFICATION FUND
1.1 Delivery. Concurrent with the closing of the transactions
contemplated by the Purchase Agreement (the "Closing"), Buyer will deposit with
the Escrow Agent, by wire transfer of immediately available funds, the amount
of the Indemnity Fund, to be held by the Escrow Agent pursuant to the terms of
this Agreement. For purposes of this Agreement, the term "Indemnity Fund," as
of any time during the term of this Agreement, shall refer to the
----------------------
(1) At any Seller's request, at Closing, a separate Indemnity Escrow
Agreement, substantially in the form hereof, will be entered for
each Seller, and this form will be modified accordingly.
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amount of the Indemnity Fund then existing and all Earnings (as defined in
Section 1.3) with respect thereto.
1.2 Receipt. The Escrow Agent agrees to hold and disburse the
Indemnity Fund in accordance with the terms and conditions of this Agreement
and for the uses and purposes stated herein. Upon receipt of the Indemnity
Fund, the Escrow Agent shall acknowledge receipt thereof by notice to Buyer and
Sellers. The Escrow Agent shall deposit the portion of the Indemnity Fund
allocable to each Seller into a separate account, to be maintained and
disbursed in accordance with the terms of this Agreement.
1.3 Investment and Income. After receipt of the Indemnity
Fund, the Escrow Agent shall, pending the disbursement of the Indemnity Fund
and all interest, income and other earnings with respect thereto (collectively,
"Earnings") pursuant to this Agreement, invest the Indemnity Fund in accordance
with written instructions of Sellers in (a) direct obligations of, or
obligations fully guaranteed by, the United States of America or any agency
thereof, (b) certificates of deposit issued by a commercial bank having a
combined capital surplus and undivided profits of not less than $100,000,000,
(c) money market funds investing solely in any of the above or (d) other
investments of equal or greater security as instructed in writing by Sellers.
SECTION 2
PROCEDURES FOR DISBURSEMENT OF INDEMNITY FUND
2.1 Claims Procedure. The following procedures shall govern
the application of the Indemnity Fund to satisfy any claims by Buyer which may
be brought pursuant to Section 10.2(b) of the Purchase Agreement:
(a) Buyer shall give written notice to the Seller
against which such claim is being made and the Escrow Agent of any claim
against such Seller that could constitute a claim against the Indemnity Fund
(each, a "Claim Notice"). The Claim Notice shall specify (i) in detail, the
factual basis for such claim, (ii) the amount of the Indemnity Fund to be
reserved against the claim and (iii) that Buyer has given a copy of such Claim
Notice to the applicable Seller.
(b) Upon receipt of a Claim Notice from Buyer,
the Escrow Agent shall reserve the amount set forth in the Claim Notice and
shall confirm that the applicable Seller has received from Buyer a copy of the
Claim Notice and the date of such Seller's receipt thereof.
(c) The applicable Seller shall have thirty (30)
days from the date of its receipt of a Claim Notice from Buyer to make such
investigation of the claim as such Seller deems necessary or desirable. For
purposes of such investigation, Buyer shall, upon request,
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deliver to such Seller or its authorized representative(s) copies of all
material written information relied upon by Buyer to substantiate the claim,
and shall describe in reasonable detail such other information relied upon by
Buyer to substantiate the claim. If such Seller disagrees with the validity or
amount of Buyer's claim, such Seller shall deliver to Buyer and Escrow Agent a
written notice thereof ("Dispute Notice"), setting forth the factual basis for
such disagreement, at or prior to the expiration of said thirty (30) day
period. If Buyer and such Seller agree at or prior to the expiration of said
thirty (30) day period (or any mutually agreed upon extension thereof) to the
validity and amount of such claim, they shall promptly give the Escrow Agent
joint instructions in writing to disburse such portion of the Indemnity Fund as
Buyer and such Seller shall have agreed. If Buyer and such Seller do not agree
within said thirty (30) day period (or any mutually agreed upon extension
thereof), the matter shall be resolved as provided for in Section 3.1 hereof,
and, except as provided in Section 3.1 regarding release of any undisputed
amounts, the Escrow Agent shall continue to hold the Indemnity Fund until it
receives a final and nonappealable court order or joint written instructions
from the applicable Seller and Buyer in accordance with Section 3.1.
Notwithstanding the foregoing, if the applicable Seller shall not have
delivered a Dispute Notice to the Escrow Agent within said thirty (30) day
period, the Escrow Agent shall, without further inquiry, disburse to Buyer the
portion of the Indemnity Fund set forth in the Claim Notice.
2.2 Final Release of Indemnity Fund. On the date that is six
(6) months after the date of the Closing (the "Release Date"), if no claim for
indemnification is pending against any Seller, the Escrow Agent shall deliver
to such Seller, by wire transfer of immediately available funds, bank check or
certified check or by other means mutually acceptable to such Seller and the
Escrow Agent, the entire amount of the Indemnity Fund allocable to such Seller
then remaining. If on such date Buyer has any indemnification claims pending
against any Seller, the Escrow Agent shall retain from the portion of the
Indemnity Fund allocable to such Seller an amount equal to the total amount of
any such claims and shall remit the remaining balance of such portion of the
Indemnity Fund to such Seller.
SECTION 3
OTHER CLAIMS AND DISBURSEMENT PROCEDURES
3.1 Dispute. In the event of any disagreement between Buyer
and any Seller with respect to disbursement of any amount of the Indemnity Fund
allocable to such Seller, the Escrow Agent shall not comply with any claim or
demand of Buyer or such Seller pertaining to such disagreement as long as such
disagreement shall continue, and the Escrow Agent shall not deliver or
otherwise dispose of any portion of the Indemnity Fund allocable to such Seller
then held by it under this Agreement until it has received (i) a final and
nonappealable court order from a court of competent jurisdiction directing
disposition of such funds, or (ii) joint written instructions signed by Buyer
and the applicable Seller.
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3.2 Interpleader. Notwithstanding anything to the contrary in
this Agreement, the Escrow Agent may at any time deposit the portion of the
Indemnity Fund then held by it, together with all Earnings attributable
thereto, with the clerk of any court of competent jurisdiction upon
commencement of an action in the nature of interpleader or in the course of
court proceedings relating to the Indemnity Fund.
3.3 Court Order or Joint Written Instructions.
Notwithstanding anything to the contrary in this Agreement, if at any time the
Escrow Agent receives a final nonappealable order of a court of competent
jurisdiction, or written instructions signed by any Seller or Sellers and
Buyer, directing delivery of any part of the Indemnity Fund allocable to such
Seller(s) and/or the Earnings, the Escrow Agent shall comply with such order or
instructions in their entirety.
3.4 Allocation of Liability. The provisions of the Purchase
Agreement relating to the relative liability of each Seller to Buyer and the
limitations of each Seller's liability to Buyer shall be controlling for all
purposes of determining any indemnification liability of each Seller to Buyer.
The provisions of the Purchase Agreement relating to the Purchase Price and the
Adjusted Purchase Price (each as defined in the Purchase Agreement) shall be
controlling for all purposes of determining the Adjusted Purchase Price. If any
such provision of the Purchase Agreement is inconsistent with any provision
hereof, the Purchase Agreement shall be controlling as between each Seller and
Buyer.
3.5 Disbursement of Earnings. In the event that the Escrow
Agent shall disburse any portion of the Indemnity Fund to Buyer or any Seller
pursuant to Section 2.1(c), 2.2 or 3.1 of this Agreement, the Escrow Agent
shall disburse to Buyer or such Seller (as the case may be) all Earnings
attributable to the portion of the Indemnity Fund disbursed to such party.
SECTION 4
ESCROW AGENT
4.1 Appointment. Buyer and Sellers hereby appoint the Escrow
Agent to serve hereunder, and the Escrow Agent hereby accepts such appointment
and agrees to perform all duties expressly set forth in this Agreement.
4.2 Compensation.
(a) In consideration of the Escrow Agent's
acceptance of its appointment hereunder, Sellers and Buyer shall pay the Escrow
Agent the fees set forth in Exhibit 1 hereto. Such sum is intended as
compensation for the Escrow Agent's ordinary services as contemplated by this
Agreement, including without limitation (i) the investment of the Indemnity
Fund and (ii) the disbursement thereof to Sellers and/or Buyer, as the case may
be.
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(b) If any fees, expenses or costs incurred by,
or any obligations owed to, the Escrow Agent hereunder are not promptly paid
when due, the Escrow Agent may reimburse itself therefor from the Indemnity
Fund and may sell, convey or otherwise dispose of any portion of the Indemnity
Fund for such purpose.
(c) As security for the due and punctual
performance of any and all of Buyer's and Sellers' obligations to the Escrow
Agent hereunder, now or hereafter arising, Buyer and Sellers, individually and
collectively, hereby pledge, assign and grant to the Escrow Agent a continuing
security interest in, and a lien on, the Indemnity Fund, including all Earnings
and other additions thereto (whether such additions and Earnings are the result
of deposits by Buyer or any Seller or the investment of the Indemnity Fund).
The Escrow Agent's security interest created hereunder shall at all times be
valid, perfected and enforceable by Escrow Agent against Buyer and Sellers and
all third parties in accordance with the terms of this Agreement.
4.3 Indemnification.
(a) Buyer and Sellers, jointly and severally,
shall be liable for and shall reimburse and indemnify the Escrow Agent and hold
it harmless from and against any and all claims, losses, liabilities, costs,
damages or expenses (including reasonable attorneys' fees and expenses)
(collectively, "Losses") arising from or in connection with or related to this
Agreement or from its position as Escrow Agent hereunder (including without
limitation Losses incurred by the Escrow Agent in connection with its
successful defense, in whole or in part, of any claim of gross negligence or
willful misconduct on its part); provided, that nothing contained herein shall
require indemnification of the Escrow Agent for Losses caused by its gross
negligence or willful misconduct.
(b) The Escrow Agent shall not be liable for any
action taken or omitted or for any loss or injury resulting from its actions or
its performance or lack of performance of its duties hereunder in the absence
of gross negligence or willful misconduct on its part. In no event shall the
Escrow Agent be liable (i) for acting in good faith in accordance with or
relying in good faith upon any instruction, notice, demand, certificate or
document from Buyer or any Seller or any entity the Escrow Agent believes in
good faith to be acting on behalf of Buyer or any Seller, (ii) for any
consequential, punitive or special damages, other than any such damages
resulting from the Escrow Agent's gross negligence or willful misconduct, (iii)
for the acts or omissions of its nominees, correspondents, designees, subagents
or subcustodians, other than any such acts or omissions that result from the
Escrow Agent's gross negligence or willful misconduct, (iv) for an amount in
excess of the value of the Indemnity Fund, valued as of the date of deposit
thereof pursuant to this Agreement or (v) with respect to any action taken or
omitted in good faith upon the advice of its counsel given with respect to any
question relating to the Escrow Agent's duties and responsibilities under this
Agreement.
4.4 Resignation.
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(a) The Escrow Agent may resign at any time upon
giving Buyer and Sellers thirty (30) days' prior written notice, and in such
event, the successor escrow agent shall be such person, firm or corporation as
shall be mutually agreed by Buyer and Sellers. It is understood and agreed
that the Escrow Agent's resignation shall not be effective until a successor
escrow agent agrees to act hereunder; provided, that if no successor is
appointed and acting hereunder within thirty (30) days after such notice is
given, the Escrow Agent may, in its sole discretion, apply to a court of
competent jurisdiction for the appointment of a successor escrow agent or for
other appropriate relief. The cost and expenses (including reasonable
attorneys' fees and expenses) incurred by Escrow Agent in connection with such
proceeding shall be paid by, and be deemed a joint and several obligation of,
Buyer and Sellers.
(b) Upon receipt of the identity of the successor
escrow agent appointed pursuant to Section 4.4(a), the Escrow Agent shall
either deliver the Indemnity Fund then held hereunder to such successor escrow
agent (less the amount of any fees, costs and expenses or other obligations
then owed to the Escrow Agent), or hold such Indemnity Fund (or any portion
thereof) pending distribution, until all such fees, costs and expenses or other
obligations are paid.
(c) Upon delivery of the Indemnity Fund to a
successor escrow agent, the Escrow Agent shall have no further duties,
responsibilities or obligations hereunder.
SECTION 5
LIABILITIES OF ESCROW AGENT
5.1 Limitations. The Escrow Agent shall be obligated only to
accept, hold and deliver the Indemnity Fund in accordance with the provisions
of this Agreement and any amendments hereto; provided, that the Escrow Agent
shall not incur any liability with respect to (a) any action taken or omitted
in good faith upon the advice of its counsel given with respect to any
questions relating to the duties and responsibilities of the Escrow Agent under
this Agreement, or (b) any action taken or omitted in reliance upon any
instrument which the Escrow Agent shall in good faith believe to be genuine
(including the execution of such instrument, the identity or authority of any
person executing such instrument, its validity and effectiveness, and the truth
and accuracy of any information contained therein), to have been signed by a
proper person or persons and to conform to the provisions of this Agreement.
The Escrow Agent shall not be liable to any person by reason of any loss of any
portion of the Indemnity Fund by reason of its being deposited in any single
bank that qualifies under Section 1.3 hereof on the date of such deposit.
5.2 Collateral Agreements. Anything in this Agreement to the
contrary notwithstanding, the Escrow Agent shall not be bound in any way by any
contract or agreement between the other parties hereto, regardless of whether
the Escrow Agent has knowledge of such contract or agreement or of its terms or
conditions.
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SECTION 6
TERMINATION
6.1 Termination. This Agreement shall be terminated upon the
earliest to occur of (a) disbursement or release of the entire amount of the
Indemnity Fund and all Earnings thereon by the Escrow Agent in accordance with
the terms hereof, (b) written consent signed by all parties hereto, or (c)
payment of the amount of all Indemnity Fund held hereunder and all Earnings
attributable thereto into a court of competent jurisdiction in accordance with
Section 3.2(a). This Agreement shall not be otherwise terminated. The
provisions of Sections 4.3 and 7.5(b) shall survive termination of this
Agreement and/or the resignation or removal of the Escrow Agent.
SECTION 7
OTHER PROVISIONS
7.1 Notices.
(a) Any notice, demand or request required or
permitted to be given under the provisions of this Agreement shall be in
writing and shall be deemed to have been duly delivered on (i) the date of
personal delivery, (ii) the date of the receipt of the appropriate printed
confirmation, if sent by facsimile transmission, (iii) upon receipt, if mailed
by registered or certified mail, postage prepaid and return receipt requested
or (iv) in the case of notices delivered to the Escrow Agent, when actually
received by Escrow Agent's Corporate Trust Department. Any such notices shall
be sent to the following addresses, or to such other address as any party may
request in a notice delivered in accordance with this Section 7.1 to the other
parties hereto:
(A) If to any Seller:
c/o Enstar Communications Corporation
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇,
Vice President, Finance &
Acquisitions
With copies sent by the same means of delivery to:
▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.,
Senior Vice President, General Counsel & Secretary
and to
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▇▇▇▇ Marks & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
(B) If to Buyer:
Multimedia Acquisition Corp.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
With copies sent by the same means of delivery to:
Dow ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, PLLC
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
(C) If to the Escrow Agent:
The Bank of New York/Insurance Trust & Escrow Dept.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Reference: A/C No._____________
A/C Name: Multimedia/Enstar
Indemnity Escrow
(b) The Escrow Agent is authorized to comply with
and rely upon any notice, instruction or other communication believed in good
faith by it to have been sent or given by Buyer or any Seller or by a person or
persons believed in good faith by the Escrow Agent to be authorized to so act
by Buyer or any Seller. Whenever under the terms hereof the time for giving a
notice or performing an act falls on a Saturday, Sunday or banking holiday,
such time shall be extended to the next day on which Escrow Agent is open for
business.
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7.2 Benefit and Assignment. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the others; except that (a)
if Buyer assigns its rights, interests and/or obligations under the Purchase
Agreement in accordance with Section 14 of the Purchase Agreement, Buyer shall
be entitled to assign its rights, interests or obligations hereunder to such
assignee; and (b) if a successor escrow agent is appointed pursuant to Section
4.4(a) hereof, upon written instructions by Sellers and Buyer, the Escrow Agent
shall assign its rights, interests and obligations hereunder to such successor.
7.3 Entire Agreement; Amendment. This Agreement contains all
the terms agreed upon by the parties with respect to the subject matter hereof.
This Agreement may be amended only by a written instrument signed by the party
against which enforcement of any waiver, change, modification, extension or
discharge is sought.
7.4 Headings. The headings of the sections and subsections of
this Agreement are for ease of reference only and do not evidence the
intentions of the parties.
7.5 Tax Reporting.
(a) For tax reporting purposes, all Earnings
attributable to the portion of the Indemnity Fund allocable to any Seller shall
be deemed to be for the account of such Seller, unless determined otherwise in
accordance with the terms of this Agreement.
(b) The Escrow Agent has no interest in the
Indemnity Fund but is serving as escrow holder only and has only possession of
the Indemnity Fund. Buyer and Sellers shall pay or reimburse the Escrow Agent
upon the Escrow Agent's request for any transfer taxes or other taxes relating
to the Indemnity Fund incurred in connection herewith, and shall indemnify and
hold harmless the Escrow Agent for any amounts the Escrow Agent is obligated to
pay in respect of such taxes. Any payments of income from the Indemnity Fund
shall be subject to withholding regulations then in force with respect to
United States taxes. Buyer and Sellers will provide the Escrow Agent with
appropriate W-9 forms for tax I.D. number certifications. It is understood
that the Escrow Agent shall be responsible for income reporting only with
respect to Earnings on any portion of the Indemnity Fund and shall not be
responsible for any other reporting.
7.6 Fees, Expenses and Indemnification. All amounts payable
to the Escrow Agent by Buyer and Sellers pursuant to this Agreement, including
all fees, expenses and indemnification payable pursuant to Sections 4.2(a) and
4.3 (other than indemnification for
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income taxes alleged to be payable by Buyer or any Seller), shall be shared
equally by Buyer, on the one hand, and Sellers, on the other hand.
7.7 Governing Law. This Agreement shall be interpreted,
construed, enforced and administered in accordance with the internal
substantive laws (and not the choice of law rules) of the State of New York.
Buyer and each Seller hereby submits to the personal jurisdiction of, and each
agrees that all proceedings relating to this Agreement shall be brought in
courts located within, the City and State of New York. Buyer and each Seller
hereby waives the right to trial by jury in any such proceeding. To the extent
that in any jurisdiction Buyer and any Seller may be entitled to claim, for
itself or its assets, immunity from suit, execution, attachment (whether before
or after judgment) or other legal process, each hereby irrevocably agrees to
not claim, and each hereby waives, such immunity. Buyer and each Seller hereby
waives personal service of process and consents to service of process by
certified or registered mail, return receipt requested, directed to it at the
address last specified by it for notices hereunder, and such service shall be
deemed completed ten (10) calendar days after the same is so mailed.
7.8 Counterparts. This Agreement may be executed in any
number of counterparts with the same effect as if the signatures on all
counterparts were on the same instrument.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the date first above written.
BUYER:
-----
MULTIMEDIA ACQUISITION CORP.
By:
-----------------------------
Name:
Title:
Tax Identification No.:
-----------
SELLERS:
-------
ENSTAR INCOME PROGRAM ▇▇▇▇-▇, ▇.▇.
By Enstar Communications Corporation,
its General Partner
By:
---------------------
Name:
Title:
Tax Identification No.
------------
ENSTAR INCOME PROGRAM IV-3, L.P.
By Enstar Communications Corporation,
its General Partner
By:
---------------------
Name:
Title:
Tax Identification No.
------------
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ENSTAR INCOME GROWTH PROGRAM
SIX-A, L.P.
By Enstar Communications Corporation,
its General Partner
By:
--------------------------
Name:
Title:
Tax Identification No.
------------
ENSTAR VII
By Enstar Communications Corporation,
its General Partner
By:
---------------------
Name:
Title:
Tax Identification No.
------------
ENSTAR VIII
By Enstar Communications Corporation,
its General Partner
By:
---------------------
Name:
Title:
Tax Identification No.
------------
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ENSTAR X, LTD.
By Enstar Communications Corporation,
its General Partner
By:
-------------------------------
Name:
Title:
Tax Identification No.
-------------------
ESCROW AGENT:
------------
THE BANK OF NEW YORK
By:
--------------------------------
Name:
Title:
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Exhibit 1
Allocation of Indemnity Fund Among Sellers
81
Exhibit 2
Escrow Agent's Fee Schedule