1
ASSET PURCHASE AND SALE AGREEMENT
Dated as of August 27, 1997
by and between
INTERMEDIA PARTNERS OF CAROLINA, L.P.
and
▇▇▇▇▇ CABLE SYSTEMS, L.P.
as Sellers
and
NORTHLAND CABLE TELEVISION, INC.
as Buyer
2
TABLE OF CONTENTS
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ARTICLE 1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Assumed Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 Authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.8 Basic Subscriber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.9 Basic Subscriber Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.10 Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.11 Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.12 Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.13 Communications Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.14 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.15 Current Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.16 Current Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.17 Deferred Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.18 Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.19 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.20 FCC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.21 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.22 Franchises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.23 Franchise Areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.24 GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.25 Governmental Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.26 Governmental Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.27 Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.28 Legal Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.29 Necessary Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.30 Nonstandard Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.31 Other Current Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.32 Prepaid Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.33 Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.34 Required Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.35 Rules and Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.36 Signals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.37 Subscriber . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.38 Subscriber Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.39 Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.40 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.41 Working Capital Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.42 Other Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE 2 Purchase and Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.1 Purchase and Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.2 Assumed Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.3 Purchase Price and Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.4 Preliminary and Final Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.5 Disputed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.6 Completion of Purchase and Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ▇▇
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ARTICLE 3 Representations and Warranties of Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.1 Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.2 Sellers' Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.3 Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.4 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.5 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.6 Compliance with Other Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.7 Complete System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.8 Title and Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.9 Cable Plant and Homes Passed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.10 Franchises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.11 Authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.12 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.13 Real Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.14 Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.15 Carriage of Signals and Channel Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.16 FCC and Copyright . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.17 Profit and Loss Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.18 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.19 Employees and Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.20 Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE 4 Representations and Warranties of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.1 Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.2 Buyer Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.3 Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.4 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.5 Compliance with Other Instruments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.6 Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 5 Covenants of Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.1 Access to System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.2 Continuity and Maintenance of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.3 Compliance with Contracts and Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.4 Adverse Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.5 Line Extensions and Rebuilds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.6 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 6 Other Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.1 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.2 HSR Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.3 Required Consents and Estoppel Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.4 Franchise Transfer Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.5 Employee Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE 7 Conditions Precedent to Obligations of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.1 Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.2 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 8 Conditions Precedent to Obligations of Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.1 Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.2 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 9 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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9.2 Closing Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 10 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.1 Indemnification by Sellers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.2 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.3 Notice and Right To Defend Third-Party Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.4 Notice and Right to Remediate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.5 Mitigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.6 Exclusive Remedy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE 11 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.1 Termination Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.2 Manner of Exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
11.3 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE 12 General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
12.1 Covenant Not To ▇▇▇ and Nonrecourse to Partners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
12.2 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
12.3 Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
12.4 Time of Essence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
12.5 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
12.6 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
12.7 Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
12.8 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
12.9 Entire Understanding; Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
12.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
12.11 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
12.12 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
12.13 Further Acts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
12.14 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
12.15 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
12.16 Judicial Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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EXHIBITS
Exhibit A Escrow Agreement
Exhibit B Franchise Consent Form
Exhibit C Assignment, Assumption & Consent - Leases
Exhibit D Assignment, Assumption & Consent - Contracts
Exhibit E Receipt
Exhibit F ▇▇▇▇ of Sale
Exhibit G FIRPTA Certificate
Exhibit H Certificate of Sellers
Exhibit I Opinion of Sellers' Counsel
Exhibit J Assumption Agreement
Exhibit K Opinion of Buyer's Counsel
Exhibit L Certificate of Buyer
Exhibit M Post-Closing Escrow Agreement
SCHEDULES
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Schedule 1 The Businesses (including Rate Schedules)
Schedule 1.5 Assumed Contracts
Schedule 1.18 Vehicles
Schedule 1.19 Excluded Assets
Schedule 1.22 Franchises
Schedule 1.29 Necessary Consents
Schedule 1.34 Required Consents
Schedule 2.3 Purchase Price Allocation
Schedule 3.12 Contracts and Instruments
Schedule 3.13 Real Property
Schedule 3.14 Environmental Disclosure
Schedule 3.17(a) Financial Statements
Schedule 3.17(b) Material Changes
Schedule 3.18 Litigation
Schedule 3.19(a) Employees and Employment Agreement
Schedule 3.19(b) Collective Agreements
Schedule 3.19(c) Employment Benefit Plans
Schedule 6.5(d) Sellers' Welfare Plans
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ASSET PURCHASE AND SALE AGREEMENT
THIS ASSET PURCHASE AND SALE AGREEMENT is made as of August 27, 1997,
by and between INTERMEDIA PARTNERS OF CAROLINA, L.P., a California limited
partnership ("IP-Carolina"), and ▇▇▇▇▇ CABLE SYSTEMS, L.P., a California
limited partnership ("RCS," and together with IP-Carolina, each referred to
herein individually as "Seller," and collectively as "Sellers"), and NORTHLAND
CABLE TELEVISION, INC. ("Buyer").
RECITALS
A. RCS, through its ownership and operation of various assets,
provides cable television and related services to subscribers located in the
vicinities of Aiken, Allendale, Barnwell, Bamberg, Edgefield, ▇▇▇▇▇▇▇▇▇, Saluda
and ▇▇▇▇ Shoals, South Carolina, including all franchised communities listed on
SCHEDULE 1 (the "A System").
B. IP-Carolina, through its ownership and operation of various
assets, provides cable television and related services to subscribers located
in the vicinity of Bennettsville, South Carolina, including all franchised
communities listed on SCHEDULE 1 (the "B System") and Greenwood, South
Carolina, including all franchised communities listed on SCHEDULE 1 (the "C
System," and together with the A System and the B System, the "Systems").
▇. ▇▇▇▇▇▇▇ desire to sell to Buyer, and Buyer desires to purchase
from Sellers, subject to the terms and conditions contained in this Agreement,
substantially all of the assets, rights, privileges, interests, business and
properties owned, leased, held or utilized by Sellers to operate and maintain
the Systems.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, Sellers and Buyer
agree as follows:
ARTICLE 1
Definitions
As used in this Agreement, the following terms shall have the
following meanings:
1.1 Accounts Payable. The book value of all accounts payable of
the Systems relating to the conduct of the Businesses determined as of the
Closing Date in accordance with GAAP on a basis consistent with the application
of such principles in the preparation of the Financial Statements.
1.2 Accounts Receivable. All accounts receivable of the
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Sellers representing amounts owed to the Sellers in connection with their
operation of the Businesses.
1.3 Affiliate. With respect to any person or entity, any other
person or entity owning a majority interest in or controlling such person or
entity, or owned or controlled by or under common ownership or control with
such person or entity, where "control" (and its corollaries) includes ownership
of interests representing a majority of total voting power in an entity, and
"ownership" (and its corollaries) includes ownership of a majority of the
equity interests in an entity.
1.4 Agreement. This Asset Purchase and Sale Agreement dated as of
August 27, 1997 between Sellers and Buyer, as the same may be amended from time
to time.
1.5 Assumed Contracts. All contracts of the Businesses as set forth
on SCHEDULE 1.5.
1.6 Assets. All of Sellers' right, title and interest in all
properties, privileges, rights, interests and claims, real and personal,
tangible and intangible, of every type and description that are owned, leased,
held for or used exclusively in the Businesses in which Sellers have any right,
title or interest or in which Sellers acquire any right, title or interest on
or before the Closing Date, including Governmental Permits, Intangibles,
Contracts, Equipment and Real Property, but excluding any Excluded Assets.
1.7 Authorities. Any and all approvals, consents, rights,
certificates, orders, franchises, determinations, permissions, licenses,
authorities or grants issued, noticed, declared, designated or promulgated by
any Governmental Authority; excluding, however, the Franchises.
1.8 Basic Subscriber. As of any date and for each Franchise Area
served by the Systems, without duplication, the aggregate of all of the
following which are receiving basic cable television service ("Basic Services")
provided by the Systems: (a) private residential customer accounts that are
billed by individual unit (regardless of whether such accounts are in single
family homes or in individually billed units in apartment houses and other
multi-unit buildings) (excluding Nonstandard Charges (as defined herein)) each
of which shall be counted as one "Basic Subscriber;" and (b) all commercial,
bulk-billed and other accounts not billed by individual unit, such as hotels,
motels, apartment houses and multi-family homes, provided that the number of
"Basic Subscribers" serviced by each such account shall be deemed to be an
amount equal to the quotient of (x) the aggregate monthly Basic Services
revenue and expanded basic cable television service revenue derived by the
Systems from such accounts (excluding any Nonstandard Charges), in each case
for the last calendar month preceding the date of such determination, divided
by (y) the Basic Subscriber Rate in effect on the date of such
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determination. Notwithstanding the foregoing, the term "Basic Subscriber"
shall not include any commercial, residential or other subscriber who (A) has
not paid for at least one (1) month of service, or (B) is more than sixty (60)
days delinquent from the date of billing on five dollars ($5.00) or more due to
either Seller.
1.9 Basic Subscriber Rate. For each Franchise Area, the monthly fees
and charges for the provision of both "basic service" and "expanded basic
service" (as such terms are customarily used in the cable television industry
and excluding any charges for additional outlets and installation fees and
revenues derived from the rental of converters, remote control devices and
other like charges for equipment) charged to customers served by the Systems,
as of the end of the last full month prior to the Closing Date.
1.10 Businesses. The individual cable television businesses
conducted by Sellers on the date of this Agreement through the Systems in the
Franchise Areas, as described on SCHEDULE 1.
1.11 Business Day. Any day other than Saturday, Sunday or a day on
which banking institutions in either San Francisco, California or New York, New
York are required or authorized to be closed.
1.12 Code. The Internal Revenue Code of 1986, as amended.
1.13 Communications Act. The Communications Act of 1934, as amended,
including, but not limited to, by the Cable Communication Policy Act of 1984
and by the Cable Television Consumer Protection and Competition Act of 1992,
and the rules and regulations promulgated thereunder.
1.14 Contracts. Any and all leases of real and personal property,
private easements, rights-of-way, rights of access, contracts for easements,
pole line or pole attachment agreements, joint line agreements, underground
conduit agreements, wire or cable crossing agreements, contracts with
Subscribers, bulk and commercial service agreements relating to the Systems,
and any other agreements with third parties relating to the Systems.
1.15 Current Assets. The sum of (a) Accounts Receivable as of the
Closing Date which have not been outstanding for more than ninety (90) days,
net of any credit balances due to subscribers, and (b) Prepaid Expenses.
1.16 Current Liabilities. The sum of (a) Accounts Payable, (b)
Deferred Revenue, and (c) Other Current Liabilities.
1.17 Deferred Revenue. Liabilities to Subscribers
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representing advance ▇▇▇▇▇▇▇▇ for services to be performed by Buyer after the
Closing Date.
1.18 Equipment. All electronic devices, trunk and distribution
coaxial and optical fiber cable, amplifiers, power supplies, conduit, vaults
and pedestals, grounding and pole hardware, Subscriber's devices (including
converters, encoders, transformers behind television sets and fittings),
headend hardware (including origination, earth stations, transmission and
distribution system), test equipment, vehicles and other tangible personal
property owned, leased, used or held for use in the Businesses. SCHEDULE 1.18
lists each vehicle owned, used or held for use in the Businesses.
1.19 Excluded Assets. All (a) insurance policies and rights and
claims thereunder; (b) bonds, letters of credit, surety instruments, notes and
other similar items; (c) cash and cash equivalents; (d) Sellers' rights under
any agreement governing or evidencing an obligation of any Seller for borrowed
money; (e) Sellers' rights under any contract, license, authorization,
agreement or commitment other than those creating or evidencing Assumed
Contracts; (f) claims, rights and interests in and to any refunds for federal,
state or local franchise, income or other taxes or fees (including, without
limitation, copyright fees) of any nature whatsoever relating to such taxes or
fees payable for taxable periods, or portions thereof, ending on or prior to
the Closing Date; (g) assets or properties owned by Sellers that are unrelated
to the Businesses; (h) assets of any Employee Plan or arrangement, except as
expressly provided in Section 6.5; (i) Sellers' names and all trademarks,
servicemarks and copyrights owned by Sellers; (j) Sellers' billing contracts;
provided that Sellers shall offer Buyer billing services related to the
Businesses at Sellers' actual cost at the time of providing such service, for a
period of ninety (90) days following the Closing, which period shall be
extended at Buyer's option for an additional thirty (30) days, and shall
cooperate with Buyer to effect the transition of billing services from Sellers'
service provider to Buyer's service provider; (k) programming and carriage
agreements, except as described on SCHEDULE 6.6; and (l) the assets described
on SCHEDULE 1.19.
1.20 FCC. The Federal Communications Commission or any successor
agency.
1.21 Financial Statements. The financial statements attached as
SCHEDULE 3.17(a) and described in Section 3.17(a).
1.22 Franchises. The franchises set forth on SCHEDULE 1.22 hereof.
1.23 Franchise Areas. The areas in which Sellers are authorized to
provide cable television service under the Franchises, and the areas, if any,
served by the Systems in which Sellers provide cable television service without
a
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Franchise.
1.24 GAAP. Generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession, which are applicable to the circumstances as of the date of
determination.
1.25 Governmental Authority. Any nation or government, any state,
province or other political subdivision thereof or any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
1.26 Governmental Permits. All franchises, approvals,
authorizations, permits, licenses, easements, registrations, qualifications,
leases and similar rights obtained from any Governmental Authority.
1.27 Intangibles. All intangible assets, including subscriber lists,
accounts receivable, claims (excluding any claims relating to Excluded Assets),
patents, copyrights and goodwill, if any, owned, used or held for use in the
Businesses.
1.28 Legal Rules. The requirements of all federal, state, municipal
or local laws, codes, statutes, ordinances, orders, judgments, decrees,
injunctions, franchises, determinations, approvals, rules, regulations,
permits, licenses, authorizations, certificates, notices, demand letters,
circulars, opinion letters and directions, of all Governmental Authorities.
1.29 Necessary Consents. All material franchises, licenses,
authorizations, approvals and consents required under Governmental Permits,
Contracts or otherwise for (a) Sellers to transfer the Assets and the
Businesses to Buyer, (b) Buyer to conduct the Businesses and to own, lease, use
and operate the Assets at the places and in the manner in which the Businesses
are conducted as of the date of this Agreement and on the Closing Date and (c)
Buyer to assume and perform the Governmental Permits and Contracts. SCHEDULE
1.29 sets forth all Necessary Consents.
1.30 Nonstandard Charges. Any charges for taxes, second connects,
additional outlets, installation fees, deposits and other non- recurring items
and any charges for the rental of converters, remote control devices and other
like charges for equipment.
1.31 Other Current Liabilities. All current liabilities (including,
but not limited to, accrued vacation pay of
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employees of Sellers, subscriber security deposits and customer advance
payments, but excluding (i) Accounts Payable and (ii) Deferred Revenue) of the
Systems relating to the conduct of the Businesses determined as of the Closing
Date in accordance with GAAP on a basis consistent with the application of such
principles in the preparation of the Financial Statements.
1.32 Prepaid Expenses. The book value of prepaid expenses and
miscellaneous prepaids (in each case, only to the extent constituting a current
asset) of the Systems with respect to the Businesses determined as of the
Closing Date in accordance with GAAP on a basis consistent with the application
of such principles in the preparation of the Financial Statements, to the
extent that such prepaid expenses will accrue to the benefit of Buyer upon and
after the Closing Date.
1.33 Real Property. All assets consisting of realty, including
appurtenances, improvements and fixtures located on such realty, and any other
interests in real property, including fee interests in Sellers' offices and
headend sites and leasehold interests and easements, licenses, rights-of-way or
other real property rights used or held for use in the Businesses, but
excluding any Excluded Assets.
1.34 Required Consents. Those Necessary Consents which must be
obtained prior to Closing. SCHEDULE 1.34 sets forth all Required Consents.
1.35 Rules and Regulations. Rules and Regulations of the FCC, as in
effect from time to time.
1.36 Signals. The transmissions, except radio signals (whether
television, satellite or otherwise), of video programming or other information
that the Systems make available to all Subscribers generally.
1.37 Subscriber. A Basic Subscriber of the Systems.
1.38 Subscriber Adjustment. An amount equal to the product of (x)
$1,925 and (y) the difference between 47,000 and the actual number of Basic
Subscribers in the Systems as of the Closing Date if such difference is greater
than 470.
1.39 Systems. The individual cable television reception and
distribution systems operated in the conduct of the Businesses, each of which
is capable of being operated, without modification, as an independent system
without interconnections to other systems.
1.40 Taxes. Any and all governmental or quasi-governmental fees
(including, without limitation, license, filing and registration fees), taxes
(including, without limitation, income, gross receipts, franchise, sales, use,
property, real or personal, tangible or intangible taxes), interest
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equalization and stamp taxes, assessments, levies, imposts, duties, charges,
required contributions or withholdings of any kind or nature whatsoever,
together with any and all penalties, fines or interest thereon. For purposes
of determining any Tax cost or Tax benefit to any person, such amount will be
the actual cost or benefit recognized by such person at the time of actual
payment of the additional Tax or actual recognition of the Tax benefit. In the
event that any payment or other amount is required to be determined on an
after-Tax basis, such payment or other amount will initially be determined
without regard to any Tax cost or Tax benefit not actually recognized
currently, and appropriate adjustments will be made when and to the extent that
such Tax cost or Tax benefit is actually recognized.
1.41 Working Capital Adjustment. The number obtained by subtracting
(x) the sum of the Current Liabilities existing (as defined and determined in
accordance with GAAP) of Seller existing on the Closing Date which constitute
assumed Current Liabilities, from (y) the sum of the Current Assets (as defined
and determined in accordance with GAAP, except that inventory and cash shall
not be included as a current asset) of Sellers on the Closing Date which are
included within the Assets.
1.42 Other Definitions. In addition, the following terms have the
meanings given them in the following sections:
Term Section
---- -------
Adjustment Time 2.3(d)
Buyer's DC Plan 6.5(c)
Buyer's Welfare Plans 6.5(d)
CLI 3.16(a)
Closing 2.6
Closing Date 2.6
COBRA 6.5(d)(ii)(B)
Copyright Act 3.15
Deposit 2.3(c)
Employee Plans 3.19(c)
Employment Transfer Date 6.5(d)
Environmental Law 3.14(b)
ERISA 3.19(c)
ERISA Affiliate 6.5(b)
Final Adjustments Report 2.4(b)
Hazardous Substance 3.14(c)
HSR Act 6.2
HSR Adjustment 6.2
Indemnifiable Damages 10.1(a)
Indemnitee 10.3(a)
Indemnitor 10.3(a)
Lien 3.8
New Employees 6.5(a)
Nonrecourse 12.1(b)
Nontransferring Employees 6.5(a)
Preliminary Adjustments Report 2.4(a)
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Prospective Employees 6.5(a)
Purchase Price 2.3(a)
Sellers' DC Plan 6.5(c)
Sellers' Welfare Plans 6.5(d)(i)
Transaction Document 12.1(a)
ARTICLE 2
Purchase and Sale
2.1 Purchase and Sale of Assets. Subject to the terms and conditions
hereinafter set forth, Buyer hereby agrees to purchase from Sellers, and
Sellers hereby agree to sell to Buyer, the Assets. Sellers will retain, and
Buyer hereby does not purchase, the Excluded Assets.
2.2 Assumed Obligations. Concurrently with the purchase described in
Section 2.1 and subject to the terms and conditions hereinafter set forth,
Buyer shall assume and agree to pay when due, and perform, those obligations,
but only those obligations, that (i) constitute the Current Liabilities, (ii)
arise on or after the Closing Date under all Franchises and Assumed Contracts,
or (iii) arise out of its ownership and operation of the Assets after the
Closing Date.
2.3 Purchase Price and Payment.
(a) The consideration to be paid for the Assets shall be ninety
million, four hundred seventy-five thousand dollars ($90,475,000) in cash
adjusted as hereinafter provided (the "Purchase Price"). SCHEDULE 2.3 sets
forth the manner in which the Purchase Price is to be allocated among the
Assets. Notwithstanding the foregoing, in the event that after the adjustments
the Purchase Price is less than eighty-five million, nine hundred fifty-one
thousand, two hundred and fifty dollars ($85,951,250), at Seller's option, this
Agreement may be terminated prior to Closing and, if so terminated, the parties
shall have no further rights or obligations hereunder, except for the
respective obligations of the parties under Sections 6.1, 12.1 and 12.14.
(b) On the Closing Date, the Purchase Price shall be:
(i) either
(A) decreased by the Working Capital Adjustment to
the extent it is a negative amount as of the Closing Date; or
(B) increased by the Working Capital Adjustment to
the extent it is a positive amount as of the Closing Date; and
(ii) either increased (up to a maximum of
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$4,523,750) or decreased, as the case may be, for the
Subscriber Adjustment, if any.
(c) To secure Buyer's obligations under this Agreement and the
agreement to be entered into in connection with the acquisition by Buyer of
cable systems located in Royston and Toccoa, Georgia, among others (the
"Royston/Toccoa Sale"), immediately upon execution of this Agreement, Buyer
shall either (i) deposit the amount of $1,000,000 into an escrow account, under
an escrow agreement, the form of which is attached hereto as EXHIBIT A (the
"Escrow Agreement"), or (ii) obtain an irrevocable letter of credit in favor of
the Seller in the amount of $1,000,000 issued by a financial institution
reasonably acceptable to the Seller (in either case, the "Deposit").
(d) All revenues and all expenses arising from the operations of
the Systems until 12:01 a.m. on the Closing Date (the "Adjustment Time") shall
be prorated between Buyer and Sellers as of the Adjustment Time in accordance
with GAAP on the principle that Sellers shall receive all revenues (other than
with respect to Accounts Receivable being purchased by Buyer hereunder) and
shall be responsible for all expenses, costs and liabilities allocable to the
period prior to the Adjustment Time and Buyer shall receive all revenues and
shall be responsible for all expenses, costs and liabilities allocable to the
period after the Adjustment Time.
2.4 Preliminary and Final Adjustments. Preliminary and final
adjustments to the Purchase Price will be determined as follows:
(a) At least ten (10) Business Days prior to the Closing Date,
Sellers will deliver to Buyer a report (the "Preliminary Adjustments Report"),
prepared in good faith and on a reasonable basis and in a manner consistent
with the Financial Statements, setting forth in reasonable detail a pro forma
determination as of the Closing Date of the adjustments and prorations set
forth in Section 2.3. The Preliminary Adjustments Report shall: (i) contain
all information reasonably necessary to determine such adjustments and
prorations and such other information as may be reasonably requested by Buyer;
(ii) be prepared in accordance with GAAP; and (iii) be certified by an
authorized officer of Sellers to be true, correct and complete as of the date
thereof. Within five (5) Business Days after receipt of such report, Buyer
shall give Sellers written notice of any objections. If Buyer makes any such
objections, the parties shall agree on the amount, if any, which is not in
dispute within two (2) Business Days after Sellers' receipt of Buyer's
objections thereto. Any undisputed amounts shall be paid by the party
responsible therefor to the other party upon the Closing, and the remaining
disputed amounts shall be determined in the Final Adjustments Report.
(b) Within sixty (60) days after the Closing Date, Buyer
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shall deliver to Sellers a report (the "Final Adjustments Report"), prepared in
good faith and on a reasonable basis and similarly certified by Buyer, setting
forth in reasonable detail the final determination of all adjustments that were
not calculated as of the Closing Date and containing any corrections to the
Preliminary Adjustments Report.
(c) Within fifteen (15) days after receipt of the Final
Adjustments Report, Sellers shall notify Buyer of its objections, if any. Any
amount which is not in dispute shall, within five (5) Business Days of the
expiration of the review period, be paid in cash by wire or interbank transfer
in immediately available funds as follows: (i) if the Purchase Price calculated
based on the Final Adjustments Report is greater than the Purchase Price
calculated based on the Preliminary Adjustments Report, Buyer shall pay such
difference to Sellers, or (ii) if the Purchase Price is less, Sellers shall pay
such difference to Buyer. In the event any payment required by this Section
2.4(c) or by Section 2.4(d) is not made when due, Sellers or Buyer, as
appropriate, shall make the payment required by this Section 2.4(c) with
interest accruing from the date such payment was due at a rate of ten percent
(10%) per annum.
(d) Any disputed amounts will be determined within ninety (90)
days after the Closing Date by the San Francisco, California office of the
accounting firm of Price Waterhouse, whose determination will be conclusive.
Sellers and Buyer will bear equally the fees and expenses payable to such firm
in connection with such determination. The payment required after
determination of all disputed amounts will be made by the responsible party by
wire transfer of immediately available funds to the other party within three
(3) Business Days after the final determination.
2.5 Disputed Liabilities. If a proration or adjustment to the
Purchase Price is made in Buyer's favor for any liability assumed by Buyer but
is in good faith being contested by Sellers as of the Closing Date, and if
Buyer is relieved of this liability, Buyer shall pay to Sellers or its designee
in cash (by means of wire or interbank transfer in immediately available funds)
an amount equal to the portion of this liability so relieved within five (5)
Business Days after the date Buyer is relieved of this liability. In the event
any payment required by this Section 2.5 is not made by Buyer when due, Buyer
shall make the payment required by this Section 2.5 with interest accruing from
the date Buyer was relieved of such liability at a rate of ten percent (10%)
per annum.
2.6 Completion of Purchase and Sale. The purchase and sale of the
Assets shall be completed in accordance with Article 9 (the "Closing"). Within
five (5) Business Days of fulfillment of all conditions to Closing, Buyer and
Sellers shall mutually agree upon the date of Closing (the "Closing Date"),
which date shall not be later than December 31, 1997.
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The Closing shall take place in the offices of Pillsbury Madison & Sutro LLP,
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
ARTICLE 3
Representations and Warranties of Sellers
As a material inducement to Buyer to enter into this Agreement, each
Seller, severally and not jointly, represents and warrants to Buyer the
following:
3.1 Organization and Qualification. Each Seller is a limited
partnership duly organized, validly existing and in good standing under the
laws of California and has all requisite power and authority to own, lease and
use the Assets as they are currently owned, leased and used and to conduct the
Businesses as currently conducted. Each Seller is duly qualified or licensed
to do business and is in good standing under the laws of the State of South
Carolina.
3.2 Sellers' Authority. Each Seller has the partnership right,
power, legal capacity and authority to execute, deliver and (subject to the
receipt of the Necessary Consents) perform its obligations under this Agreement
and the documents, instruments and certificates to be executed and delivered by
Sellers pursuant to this Agreement. The execution and delivery of, and
performance of the obligations contained in, this Agreement by each Seller and
the transactions contemplated hereby have been, and all documents, instruments
and certificates have been or as of the Closing will be, duly authorized by all
necessary partnership action on the part of each Seller.
3.3 Enforceability. The terms and provisions of this Agreement and
all documents, instruments and certificates made or delivered from time to time
by Sellers hereunder and thereunder constitute valid and legally binding
obligations of Sellers, enforceable against Sellers in accordance with the
terms hereof and thereof, except as the same may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
generally the enforcement of creditors' rights and by general principles of
equity.
3.4 Approvals. SCHEDULE 1.29 sets forth all Necessary Consents.
Except for the Necessary Consents and compliance with the HSR Act, the
execution, delivery and performance of this Agreement by Sellers does not
require any material consent which has not been made, given or otherwise
accomplished.
3.5 Compliance with Laws. Each Seller is in material compliance with
all Legal Rules imposed by any Governmental Authority having jurisdiction over
Sellers, the Businesses, the Assets or the Systems, and of any jurisdiction in
which the
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Systems are being operated or conducted, including, but not limited to, the
Communications Act.
3.6 Compliance with Other Instruments.
(a) The execution and delivery of this Agreement and (subject to the
receipt of the Necessary Consents) the consummation of the transactions
contemplated hereunder do not and will not result in a breach or violation of
any term or provision of, or result in the imposition of any Lien upon any
Assets or any properties of Sellers pursuant to, or constitute a breach or
default (including any event that, with the passage of time or giving of
notice, or both, would become a breach or default) under the partnership
agreement of either Seller or under any material contract, agreement,
Authority, Legal Rule, license, lease, indenture, mortgage, loan agreement or
note, as to which either Seller is a party or by which any of the Assets may be
affected, except for such breaches or violations as would not have a material
adverse effect on the Businesses or materially impair the ability of either
Seller to perform its obligations under this Agreement.
(b) Each Seller has complied with all provisions of and is not in
breach or default (including any event that, with the passage of time or giving
of notice, or both, would become a breach or default) under its partnership
agreement or any contract, lease, instrument affecting any parcel of real
property, authority or franchise, or obligation to which it is a party or by
which it is or any of the Assets may be bound or affected, except for such
breaches or violations as would not have a material adverse effect on the
Businesses or materially impair the ability of Sellers to operate their
businesses as presently operated.
3.7 Complete System. The Assets constitute fully operational cable
television systems and include the assets, properties, franchises, licenses,
permits, consents, certificates, authorities, operating rights, leases,
easements, licenses, rights-of-way, contracts, agreements, commitments and
arrangements (excluding programming and carriage agreements) necessary to
operate and maintain the same as operated and maintained on the date hereof.
3.8 Title and Encumbrances. Sellers have good title to and
possession of all of the Assets, free and clear of all Liens, except for the
Permitted Liens. A "Lien" is any interest in property securing an obligation,
whether such interest is based on common law, statute or contract, and
including, but not limited to, any security interest or lien arising from a
mortgage, claim, encumbrance, pledge, charge, easement, servitude, security
agreement, conditional sale or trust receipt or a lease, consignment or
bailment for security purposes. The term "Lien" shall also include
reservations, exceptions, covenants, conditions, restrictions, leases,
subleases, licenses, occupancy agreements, pledges, equities,
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charges, assessments, covenants, reservations, defects in title, encroachments
and other burdens, and other title exceptions and encumbrances affecting
property of any nature, whether accrued or unaccrued, or absolute or
contingent. "Permitted Liens" are (a) Liens for taxes not yet due and payable;
(b) any carrier's, warehousemen's, mechanic's, materialmen's, repairmen's or
other like lien arising in the ordinary course of business; (c) easements,
rights-of-way, restrictions, minor encroachments and other similar nonmonetary
encumbrances (i) incurred in the ordinary course of business, and (ii) which do
not render the Asset subject thereto unusable for the purpose intended,
materially detract from the value of the Asset or interfere with the ordinary
use of the Asset in the ordinary course of business; and (d) in the case of
real property leased to Seller, the rights of the fee owner and any lien
encumbering the fee interest in such property.
3.9 Cable Plant and Homes Passed.
As of the Closing Date, the A System will pass no fewer than
forty-eight thousand three hundred (48,300) homes and will consist of no
greater than eleven hundred seventy (1,170) miles of cable plant, the B System
will pass no fewer than nine thousand ninety (9,090) homes and will consist of
no greater than one hundred eighty (180) miles of cable plant, and the C System
shall pass no fewer than twenty-three thousand seventy-five (23,075) homes and
will consist of no greater than four hundred ninety (490) miles of cable plant.
3.10 Franchises.
(a) SCHEDULE 1.22 lists each Franchise held by Sellers in
connection with the operation or maintenance of the Systems, and the coverage
area serviced thereby.
(b) To Sellers' knowledge, each Franchise is in full force and
effect and no proceeding to revoke, cancel, encumber or adversely affect in any
manner any such Franchise has been initiated or threatened, and Sellers are in
material compliance therewith.
3.11 Authorities. Sellers have all Authorities that are necessary to
carry on the business of the Systems as conducted on the date hereof, except
for such Authorities the failure of which to obtain would not have a material
adverse effect on the Systems. To Sellers' knowledge, each such Authority is
in full force and effect and no proceeding to revoke, cancel, encumber or
adversely affect in any manner any such Authority has been initiated or
threatened, and Sellers are in material compliance therewith.
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3.12 Contracts. SCHEDULE 3.12 lists all presently effective
Contracts that are material to the conduct of the Businesses as they are now
conducted. Copies of such Contracts as currently in effect have been, or prior
to the Closing will be, made available to Buyer. To Sellers' knowledge, each
Contract is in full force and effect and no action to revoke, cancel or
adversely affect in any manner any such Contract has been initiated or
threatened, and Sellers are in material compliance therewith.
3.13 Real Property.
SCHEDULE 3.13 contains a list of all Real Property owned in fee or
leased by Sellers which is used for headend equipment, microwave equipment and
satellite earth receiving stations and related facilities, tower and antenna
sites and office facilities in connection with the Systems.
3.14 Environmental Laws.
(a) Except as disclosed on SCHEDULE 3.14, to Sellers' Actual
Knowledge: (i) none of Sellers' operations on the Real Property is currently
subject to any judicial or administrative proceeding alleging the violation of
an Environmental Law; (ii) none of the Real Property is the subject of any
investigation by any Governmental Authority concerning any release of any
Hazardous Substance on the Real Property; (iii) Sellers have not filed any
written notice under any Environmental Law indicating past or present
treatment, storage or disposal of a hazardous waste on the Real Property or
reporting a spill or release of a Hazardous Substance into the environment from
its operations on the Real Property; (iv) Sellers have no material contingent
liability in connection with any release of any Hazardous Substance into the
environment from the Real Property; (v) no lien in favor of any Governmental
Authority for (A) any liability under Environmental Laws, or (B) damages
arising from or costs incurred in response to a release of any Hazardous
Substance into the environment has been filed or attached to any of the Real
Property; and (vi) no underground storage tanks are currently located on the
Real Property and no building or other structure on the Real Property contains
friable asbestos.
(b) "Environmental Law" means a law, regulation, statute or
ordinance pertaining to land use, air, soil, surface water, groundwater
(including the protection, cleanup, removal, remediation or damage thereof)
including, without limitation, the following laws: (i) Clean Air Act (42 U.S.C.
Section 7401, et seq.); (ii) Clean Water Act (33 U.S.C. Section 1251, et
seq.); (iii) Resource Conservation and Recovery Act (42 U.S.C. Section 6901, et
seq.); (iv) Comprehensive Environmental Response, Compensation and Liability Act
(42 U.S.C. Section 9601, et seq.); (v) Safe Drinking Water Act (42 U.S.C.
Section 300f, et seq.); and (vi) Toxic Substances Control Act (15 U.S.C.
Section 2601, et seq.).
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(c) "Hazardous Substance" means any matter that is designated or
regulated as a pollutant, contaminant or hazardous or toxic substance,
constituent or waste under any Environmental Law.
(d) "Sellers' Actual Knowledge" means that ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ or
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ has current actual knowledge of the accuracy of such statement,
without any duty of investigation or inquiry.
3.15 Carriage of Signals and Channel Capacity. Sellers have the
legal right and authority, including (without limitation) all necessary
authority from the FCC and the requisite compulsory copyright license under
section 111 of Title 17 of the United States Code, as amended, and all rules
and regulations promulgated thereunder, as amended (the "Copyright Act"), to
carry and use in the conduct of the Businesses all of the Signals. Other than
requests for network nonduplication and syndex protection, no written notices
have been received by Sellers from the FCC or the United States Copyright
Office challenging or questioning the right of Sellers or the Systems to carry
or furnish any of the Signals.
3.16 FCC and Copyright.
(a) Sellers have Cumulative Leakage Index, as defined by the Rules
and Regulations ("CLI"), monitoring equipment which is required by the Rules
and Regulations, and have in connection with their CLI obligations under the
Rules and Regulations (i) maintained appropriate log books and other
recordkeeping, and (ii) filed all annual FCC Form 320s with the FCC.
(b) Sellers have made all material submissions (including, without
limitation, registration statements) required under the Communications Act.
Sellers have delivered to Buyer complete and correct copies of all reports and
filings made or filed pursuant to the Communications Act with respect to the
Systems, a completed and accurate Form 393, Form 1200 Series or other FCC rate
document for the Systems, and all notices alleging noncompliance with the
Communications Act or the Franchises. Sellers have made all material filings
required to be made with the FCC, including cable television registration
statements, annual reports and aeronautical frequency usage notices. Sellers
have all material FCC licenses necessary to operate the Systems and operate
such licensed facilities in conformance with the terms and conditions of such
licenses. The Systems are in compliance with all "must carry" requirements and
have received all retransmission consents.
(c) Sellers have deposited with the United States Copyright Office
all statements of account and other documents and instruments, and paid all
royalties, supplemental royalties, fees and other sums to the United States
Copyright
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Office required under the Copyright Act with respect to the business and
operations of the Systems as are required to obtain, hold and maintain the
compulsory copyright license for cable television systems prescribed in section
111 of the Copyright Act.
3.17 Profit and Loss Statements.
(a) The profit and loss statements with respect to the Systems
furnished by Sellers to Buyer as SCHEDULE 3.17(a), which shall include the
profit and loss statements for the year ended December 31, 1996 (the "Financial
Statements") (other than information described as estimated) are (i) true,
complete and correct in all material respects for the respective dates and
periods thereof, subject to changes resulting from normal audit and year-end
adjustments; and (ii) prepared in accordance with GAAP (provided that there are
no footnotes and accompanying balance sheets, statement of sources and uses of
funds or statements of stockholders' equity), in each case consistently applied
throughout the applicable period.
(b) Except as disclosed on SCHEDULE 3.17(b), since June 30, 1997,
there has been no material adverse change in the condition, financial or
otherwise, results of operations, revenues, expenses, gross operating profits,
assets or liabilities (contingent or otherwise) of the Businesses.
3.18 Litigation. Except as set forth on SCHEDULE 3.18, (a) there is
no material claim, grievance, action, proceeding or governmental investigation
pending or, to Sellers' knowledge, threatened against Sellers or affecting any
of the Assets or the Systems; and (b) there is no material outstanding or
unsatisfied judgment, order or decree to which either Seller is a party or
which involves the transactions contemplated herein.
3.19 Employees and Employee Benefits.
(a) Employment Agreements. SCHEDULE 3.19(a) sets forth a list of
all employees of the Systems as of June 30, 1997 and the position and base
compensation paid or payable to each such individual. Except as described on
SCHEDULE 3.19(a), neither Seller is a party to any written employment contract,
agreement, commitment or arrangement with any individual identified on SCHEDULE
3.19(a).
(b) Collective Agreements. Except as described in SCHEDULE
3.19(b), (i) neither Seller is party to or subject to any labor union or
collective bargaining agreement with respect to any employee of the Systems,
(ii) neither Seller is party to any labor or employment dispute as it relates
to the Systems and their employees, and (iii) to the knowledge of Sellers, no
labor union or bargaining agent holds bargaining rights with respect to any
employee of the Systems or has applied or indicated an intention to apply to be
certified as the bargaining agent of any employee of the Systems.
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(c) Employee Benefit Plans. SCHEDULE 3.19(c) lists each pension
benefit, welfare benefit, stock option, stock purchase, disability, vacation
pay, incentive bonus, severance pay, deferred compensation, supplemental income
or other employee benefit plan, policy or arrangement or agreement, including
each "employee benefit plan" within the meaning of section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), maintained by or
contributed to by the Sellers covering current or former employees of the
Systems or their dependents or survivors (collectively referred to as "Employee
Plans"). Sellers have provided or, upon Buyer's request, will provide or make
available to Buyer prior to the Closing Date complete, accurate and current
copies of the plan document(s) of each Employee Plan, summary plan descriptions
and other descriptive materials provided to employees and, in the case of an
Employee Plan intended to qualify under section 401(a) of the Code, a copy of
the most recent Internal Revenue Service determination letter of such Employee
Plan's qualified status.
(d) Employee Benefit Plan Compliance. No material liabilities,
other than for payment of benefits in the ordinary course, have been incurred
with respect to the Employee Plans. Having made due inquiry, Sellers:
(i) Know of no circumstances relating to an Employee Plan
intended to qualify under section 401(a) of the Code that would likely
be treated by the Internal Revenue Service as a disqualifying defect;
(ii) Know of no facts reasonably likely to result in any
material liability (whether or not asserted as of the date hereof) of
Sellers arising by virtue of any event, act or omission occurring
prior to the Closing Date with respect to any Employee Plan; and
(iii) Know of no liens under Code section 412(n) or ERISA
section 4069(a), nor liabilities under ERISA section 4069(a) or
4201(a), in effect with respect to any Employee Plan that would have a
material adverse effect on the Assets, and know of no facts reasonably
likely to result in the assertion of any such liens or liabilities.
3.20 Commissions. Neither Seller has entered into an agreement,
commitment or obligation with regard to any brokerage commission or finder's
fee which would be payable by Buyer arising out of the execution, delivery or
performance of this Agreement or the transactions contemplated hereby. Sellers
have employed ▇▇▇▇▇▇▇ & Associates and will be responsible for their fees and
expenses.
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ARTICLE 4
Representations and Warranties of Buyer
As a material inducement to Sellers to enter into this Agreement,
Buyer represents and warrants to Sellers the following for the benefit of
Sellers:
4.1 Organization and Qualification. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Washington and, prior to Closing, will be authorized to transact business in
all states in which the Assets are located. Buyer has all necessary corporate
power and authority to own, lease and utilize its properties and assets and to
engage in the business or businesses in which it is presently engaged and in
the places where such property and assets are now owned, leased or utilized or
as such business is now conducted.
4.2 Buyer Authority. Buyer has the corporate right, power, legal
capacity and authority to execute, deliver and perform its obligations under
this Agreement and the documents, instruments and certificates to be executed
and delivered by Buyer pursuant to this Agreement. The execution, delivery and
performance of this Agreement by Buyer and the transactions contemplated hereby
have been, and all documents, instruments and certificates have been or as of
the Closing will be, duly authorized by all necessary corporate action on the
part of Buyer.
4.3 Enforceability. The terms and provisions of this Agreement and
all documents, instruments and certificates made or delivered from time to time
by Buyer hereunder and thereunder constitute valid and legally binding
obligations of Buyer enforceable against Buyer in accordance with the terms
hereof and thereof, except as the same may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
generally the enforcement of creditors' rights and by general principles of
equity.
4.4 Approvals. Except for compliance with the HSR Act, the
execution, delivery and performance of this Agreement by Buyer and the
consummation by Buyer of the transactions contemplated hereby do not require
any material consent which consent has not been made, given or otherwise
accomplished and satisfactory evidence thereof has been delivered to Sellers.
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4.5 Compliance with Other Instruments.
(a) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereunder do not and will not result in a
breach or violation of any term or provision of Buyer's articles of
incorporation or bylaws or under any contract, agreement, Authority, Legal
Rule, license, lease, indenture, mortgage, loan agreement or note, as to which
Buyer is a party, except for such breaches or violations as would not
materially impair the ability of Buyer to perform its obligations under this
Agreement.
(b) Buyer has complied with all provisions of and is not in breach or
default (including any event that, with the passage of time or giving of
notice, or both, would become a breach or default) under its articles of
incorporation or bylaws or any contract, lease, instrument affecting any parcel
of real property, authority or franchise, or obligation to which it is a party
or by which it is bound or affected, except for such breaches or defaults as
would not materially impair the ability of Buyer to operate the Businesses as
presently operated.
4.6 Commissions. Buyer has entered into no agreement, commitment or
obligation with regard to any brokerage commission or finder's fee which would
be payable by Sellers arising out of the execution, delivery or performance of
this Agreement or the transactions contemplated hereby.
ARTICLE 5
Covenants of Sellers
5.1 Access to System. Prior to the Closing Date, Sellers shall give
Buyer's employees and representatives, during normal business hours and with
reasonable prior notice, access to all of the properties, books, accounts,
records, contracts, agreements, commitments, arrangements and documents of or
relating to the Assets and the Systems, and shall permit the making of copies
or extracts thereof. Prior to the Closing Date, Sellers shall furnish to Buyer
and its representatives such existing documentation concerning the operation
and financial condition of the Assets and the Systems as Buyer or any such
representative shall reasonably request.
5.2 Continuity and Maintenance of Operations. Except as to actions
which Buyer has been advised and to which it has consented in writing and
except as specifically permitted or required by this Agreement or required by
any Legal Rule, Sellers shall from the date hereof to the Closing Date, operate
the Businesses in the ordinary course consistent with past practices, and use
reasonable efforts to preserve any beneficial business relationships with
customers, suppliers and others having business dealings with it that are
material to
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the Businesses and use reasonable efforts to keep available to Buyer the
services of present employees of the Systems.
5.3 Compliance with Contracts and Laws. From the date hereof to the
Closing Date, Sellers shall keep in full force and effect and shall comply in
all material respects with all Franchises, Authorities and material Contracts
to which it is a party or by which it or the Assets may be bound or affected
and which are material to the Businesses.
5.4 Adverse Changes. From the date hereof to the Closing Date,
Sellers shall promptly notify Buyer in writing of any material adverse
developments affecting the Systems which become known to Sellers, including,
without limitation: (a) any material adverse change in the condition,
financial or otherwise, of the Systems; (b) any damage, destruction or loss
(whether or not covered by insurance) materially adversely affecting any of the
Assets or the Systems; or (c) any material notice of violation, forfeiture or
complaint under any Franchise.
5.5 Line Extensions and Rebuilds. All line extensions made by
Sellers from the date hereof until the Closing Date shall be built and spaced
to operate at a minimum of 450 MHz. On the Closing Date, Buyer shall reimburse
Sellers for any and all rebuild expenditures incurred by Sellers and approved
by Buyer from the date hereof until the Closing Date.
5.6 Taxes.
(a) Sellers agree to timely file all sales or transfer tax returns
with respect to sales, including the sale of Assets hereunder, occurring on or
before the Closing Date, in connection with the Systems, and Sellers shall
timely pay all sales or transfer taxes applicable to the sales reported on such
tax returns, provided that Buyer cooperates, to the extent required, in the
preparation and execution of such tax returns and related filing.
(b) Sellers and Buyer shall cooperate fully as and to the extent
reasonably requested by the other party in connection with any audit,
litigation or other proceeding with respect to Taxes. Such cooperation shall
include the retention and (upon the other party's request) the provision of
records and information which are reasonably relevant to any such audit,
litigation or other proceeding and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder. Sellers and Buyer agree (i) to retain all books
and records with respect to Tax matters pertinent to the Assets relating to all
taxable periods until the statute of limitations (including any extensions) as
to any taxable year that may be affected thereby shall have run, (ii) to abide
by all record retention agreements entered into with any Governmental
Authority, and (iii) to give the other party reasonable written notice prior
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to destroying or discarding any such books and records and, if one party so
requests, shall allow the requesting party to take possession of such books and
records proposed for destruction or discard.
(c) No new elections with respect to Taxes or any changes in current
elections with respect to Taxes affecting the Assets shall be made after the
date of this Agreement without the prior written consent of Buyer.
ARTICLE 6
Other Covenants
6.1 Confidentiality.
(a) Neither of the parties hereto shall make any public
announcement regarding the transactions contemplated in this Agreement without
the prior written consent of the other party, which consent shall not be
unreasonably withheld or delayed; provided, however, that either of the parties
may at any time make announcements which are required by applicable law so long
as the party so required to make an announcement promptly upon learning of such
requirement notifies the other party of such requirement and discusses with the
other party in good faith the exact wording of any such announcement.
(b) Each party shall keep strictly confidential any and all
information furnished to it or to its Affiliates, agents or representatives in
the course of negotiations relating to this Agreement or any transaction
contemplated by this Agreement, and the business and financial reviews and
investigation conducted by such party in connection with this Agreement. Each
party has instructed its officers, employees and other representatives having
access to such information of such party's obligation of confidentiality. If
this Agreement is terminated, each party shall promptly deliver to the other
party or certify as to the destruction of all originals and copies (including
all notes, extracts and computer disks) of documents, work papers and other
written material concerning or obtained from such other party or its agents,
employees or representatives in connection with such negotiations and business
and financial reviews and investigations, whether so obtained before or after
the execution hereof. Neither party shall use any information so obtained
except in connection with the transactions contemplated by this Agreement or
disclose or divulge such information to any other person, and each party will
keep confidential any information so obtained.
(c) Notwithstanding the foregoing, either party may disclose any
information which such party is obligated under this Section 6.1 to keep
confidential after consultation with the other party as follows:
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(i) to which the other party consents in writing;
(ii) to representatives, agents, consultants and attorneys of
the disclosing party who need to know such confidential information
for the purpose of assisting or advising such party, provided that the
disclosing party informs each such representative, agent, consultant
and attorney of the confidential nature of such information and
requires them to be bound by the provisions of this Section 6.1 prior
to disclosure;
(iii) to third parties whose consent or approval is required
for consummating the transactions contemplated herein;
(iv) in compliance with applicable Legal Rules; or
(v) in order to use such information as evidence in or in
connection with any pending or threatened litigation related to this
Agreement or any transaction contemplated hereunder;
but in each case only to the extent such disclosure is necessary in connection
with the purpose for which disclosure is permitted. The obligations of
confidentiality set forth herein shall not apply to information generally
available to the public or in the possession of the receiving party on a
non-confidential basis.
6.2 HSR Notification. As soon as practicable, if required by
applicable Legal Rules, Sellers and Buyer shall complete and file, or cause to
be completed and filed, any notification and report required to be filed under
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended (the "HSR
Act"). Each of the parties will take or cause to be taken any additional
action that may be necessary, proper or advisable, will cooperate to prevent
inconsistencies between their respective filings and will furnish to each other
such necessary information and reasonable assistance as the other may
reasonably request in connection with its preparation of necessary filings or
submissions under the HSR Act. Buyer, on the one hand, and Sellers, on the
other hand, shall use commercially reasonable efforts (including the filing of
a request for early termination) to obtain the early termination of the waiting
period under the HSR Act. Buyer and Sellers shall share equally all HSR filing
fees and any other fees to a governmental authority in connection with the
transfer of the Assets.
6.3 Required Consents and Estoppel Certificates. Sellers will use
reasonable commercial efforts to obtain, as soon as possible, all the Required
Consents, in form and substance
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satisfactory to Buyer. Required Consents will be deemed to be satisfactory to
Buyer if they are similar in all material respects to the applicable form
attached as EXHIBIT B, C OR ▇. ▇▇▇▇▇▇▇ will provide copies of all
correspondence to or from, any parties in connection with the Required
Consents. Buyer will cooperate with Sellers to obtain all Required Consents.
Buyer, on the one hand, and Sellers, on the other hand, shall bear equally any
costs or fees in connection with obtaining the Required Consents.
6.4 Franchise Transfer Expenses.
Buyer and Sellers shall share equally all administrative fees and
expenses, if any, required by any Governmental Authority in connection with the
transfer to Buyer of all Franchises.
6.5 Employee Matters.
(a) Employment. SCHEDULE 3.19(a) sets forth a list of all
employees of the Systems as of June 30, 1997, showing then-current positions
and rates of compensation. At least forty-five (45) days prior to the Closing,
Buyer shall notify Sellers of the employees ("Prospective Employees") it
intends to hire and shall offer employment as of the Closing Date to all
Prospective Employees for a position with at least comparable responsibility.
Prospective Employees who accept Buyer's offer of employment and become
employees of Buyer within six (6) months of the Closing Date are referred to
herein as "New Employees" and all other employees of the Systems are referred
to as "Nontransferring Employees." Subject to the provisions of this Section
6.5 as to any particular benefit, Buyer shall provide New Employees with
compensation and employee benefits that are substantially similar to those
provided to similarly situated Buyer employees. Buyer shall indemnify and hold
Sellers and their Affiliates harmless from and against all claims, expenses
(including reasonable attorneys' fees), loss and liability arising either (i)
out of Sellers' submission of personnel records or information to Buyer about
the employees of the Systems, or (ii) with respect to the New Employees'
employment with Buyer after the Closing. Except as otherwise specifically
provided in this Agreement, Sellers and their Affiliates shall indemnify and
hold Buyer and its Affiliates harmless from and against all claims, expenses
(including reasonable attorneys' fees), loss and liability arising out of the
New Employees' and Nontransferring Employees' employment with Sellers or their
Affiliates prior to the Closing.
(b) Service Credit for New Employees. Subject to the provisions of
this Section as to any particular benefit, Buyer shall recognize all prior
service of New Employees with the Sellers and any Affiliate that is aggregated
with the Sellers under section 414(b), 414(c) or 414(m) of the Code ("ERISA
Affiliate") for tenure purposes, and for all benefit plan purposes, other than
benefit accrual under a defined benefit
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plan, at least to the extent recognized under the comparable Sellers employee
benefit plan as in effect on the Closing Date, but without regard to any
amendment increasing such service adopted or made effective less than twelve
(12) months prior to the Closing Date. On or before the Closing Date, Sellers
shall provide Buyer with a list setting forth the service accrued by each
Prospective Employee. Sellers agree that Buyer shall be under no obligation to
and shall not assume sponsorship of any Employee Plan.
(c) Qualified Defined Contribution Plan. Each Seller is currently
a participating company in the InterMedia Partners Tax-Deferred Savings Plan
("Sellers' DC Plan"). New Employees shall not accrue any further benefits
under the Sellers' DC Plan as of any date after the Closing (unless employed by
either Seller or its ERISA Affiliates).
Buyer is a participating company in the Northland Telecommunications
Corporation 401(k) Plan ("Buyer's DC Plan"). The account balances of New
Employees in the Sellers' DC Plan shall be transferred to the Buyer's DC Plan
as soon as reasonably practicable following the Closing in accordance with this
Subsection 6.5(c). Buyer represents and warrants that the Buyer's DC Plan and
related trust meet the requirements for qualification under section 401 and
related sections of the Code and shall continue to meet such requirements as of
the date of the transfer described in this Subsection 6.5(c). Prior to such
transfer, but in no event later than two (2) months after the Closing Date,
Buyer shall provide to Sellers satisfactory evidence that the Buyer's DC Plan
complies with such requirements, including copies of Buyer's DC Plan and the
most recent determination letter issued by the Internal Revenue Service (and
any subsequent determination letter application filed with the Internal Revenue
Service).
As soon as reasonably practicable after the Closing and provision of
satisfactory evidence pursuant to this Subsection 6.5(c), the trustee of
Sellers' DC Plan shall transfer to the trustee of Buyer's DC Plan cash and/or
assets, including plan loan obligations, equal to the value of the account
balances of each New Employee under Sellers' DC Plan as of the last valuation
date immediately preceding the transfer date, which amount shall be credited to
the respective account or accounts under Buyer's DC Plan. The foregoing
notwithstanding, the amount to be so transferred with respect to any New
Employee shall be reduced by any withdrawals and other distributions made from
Sellers' DC Plan to the New Employee between such valuation date and such
transfer date.
Buyer agrees that once the transfers made herein have been made, the
sole and exclusive responsibility for providing the benefits accrued by the New
Employees under Sellers' DC Plan as of the transfer date and transferred to
Buyer's DC Plan shall be that of Buyer's DC Plan and Buyer.
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(d) Welfare Plans. Each New Employee shall be eligible for
coverage as of the later of the Closing Date or the date on which he or she
becomes a New Employee (the "Employment Transfer Date") under any medical,
dental, vision, prescription drug, life insurance and other welfare benefit
plans (within the meaning of section 3(1) of ERISA) maintained by Buyer for its
employees ("Buyer's Welfare Plans"). Buyer agrees to (i) waive any waiting
periods and preexisting condition limitations in Buyer's Welfare Plans, except
to the extent coverage would have been denied or restricted on a similar basis
under the welfare benefit plans of Sellers for employees of the Systems
("Sellers' Welfare Plans") and (ii) coordinate deductibles, maximum benefit
restrictions and "out-of-pocket" maximums so that (A) New Employees receive
credit toward any deductibles under Buyer's Welfare Plans for deductibles paid
under the Sellers' Welfare Plans during the coverage year of the Buyer's
Welfare Plans in which the Employment Transfer Date occurs and (B) New
Employees receive credit for eligible claims incurred under the Sellers'
Welfare Plans during the coverage year of the Buyer's Welfare Plans in which
the Employment Transfer Date occurs toward any "out-of-pocket" maximums under
Buyer's Welfare Plans. As soon as reasonably practicable after the Closing
Date, Sellers shall prepare and deliver to Buyer SCHEDULE 6.5(d), setting forth
the information needed for Buyer to comply with the preceding sentence.
Sellers will pay or cause to be paid all eligible unpaid claims incurred by New
Employees prior to the Employment Transfer Date and which are timely submitted
for reimbursement in accordance with the Sellers' Welfare Plans. Sellers will
be responsible for providing continuation health care ("COBRA") coverage as
required by section 4980B of the Code and sections 601-608 of ERISA to or with
respect to any of Sellers' employees who incurs a "qualifying event" prior to
the Employment Transfer Date, including a qualifying event that occurs as a
result of the transaction contemplated by this Agreement. Buyer will be
responsible for providing COBRA coverage to or with respect to any New Employee
who incurs a "qualifying event" after the Employment Transfer Date.
(e) Vacation. As of the Closing Date, Buyer shall assume Sellers'
liability for each New Employee's vacation pay for up to and including four
weeks of vacation accrued under the Sellers' vacation policy but not taken
before the Closing Date. The aggregate dollar value of the liabilities so
assumed by Buyer shall be an "Other Current Liability."
(f) Sick Leave. As of the Closing Date, Buyer shall assume
Sellers' liability for each New Employee's sick (short-term disability) days
for up to and including ten (10) days of sick leave accrued under the Sellers'
sick leave policy but not taken before the Closing Date. The aggregate dollar
value of the liabilities so assumed by Buyer shall be an "Other Current
Liability."
(g) General. Sellers and Buyer shall give any notices
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required by law and take whatever other actions with respect to the plans
described in this Section as may be necessary to carry out the arrangements
described in this Section 6.5. Sellers and Buyer shall provide each other with
such plan documents and descriptions, employee data and other information as
may reasonably be required to carry out the arrangements described in this
Section. If any of the arrangements in this Section is determined by the
Internal Revenue Service or other applicable governmental authority, or by a
court of competent jurisdiction, to be prohibited by law, Sellers and Buyer
shall modify such arrangement to as closely as possible retain the intent of
the parties, as reflected herein, in a manner that is not so prohibited.
(h) No Third Party Beneficiaries. Except as set forth in Section
10.2, nothing in this Section 6.5 or elsewhere in this Agreement shall be
deemed to make any employee of Sellers a third party beneficiary of this
Agreement.
6.6 Programming Services. As of the Closing and notwithstanding
anything to the contrary contained herein, Buyer shall have entered into
programming agreements with each of TV Land, Home Shopping Network and TV Food
which provide for carriage of such programming to those customers of the System
as are currently receiving such programming. In the event that, as of the
Closing Date, Buyer has not entered into such an agreement with TV Land, Buyer
shall pay Sellers forty thousand six hundred twenty-two dollars ($40,622) in
cash.
ARTICLE 7
Conditions Precedent to Obligations of Buyer
7.1 Conditions Precedent. The obligations of Buyer to consummate the
transactions contemplated on the Closing Date are subject to the satisfaction,
on or before the Closing Date, of all the following conditions:
(a) If required under applicable Legal Rules, all filings required
under the HSR Act shall have been made and the applicable waiting period shall
have expired or been earlier terminated without the receipt of any objection or
the commencement or threat of any litigation by a Governmental Authority of
competent jurisdiction to restrain the consummation of the transactions
contemplated by this Agreement.
(b) Sellers shall have performed and complied in all material
respects with all covenants, conditions and obligations required by this
Agreement to be performed or complied with by Sellers on or before the Closing
Date.
(c) All representations and warranties of Sellers, including, without
limitation, those made to the knowledge of
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Sellers, contained in this Agreement, shall be true, correct and complete in
all material respects on and as though made on the Closing Date.
(d) Each of the Franchises transferred pursuant to this Agreement and
listed on SCHEDULE 1.22 hereof shall have a term expiring no earlier than one
(1) year after the Closing Date.
(e) Sellers shall have obtained and delivered to Buyer all Required
Consents.
(f) As of the Closing Date, no action or proceeding shall be
completed, pending or threatened against Buyer or Seller that has or may result
in a judgment, decree or order that would prevent or make unlawful the
consummation of the transactions under this Agreement or have a material
adverse effect on the Systems and there shall be in effect no order restraining
or prohibiting the consummation of the transactions contemplated by this
Agreement nor any proceedings pending with respect thereto.
(g) Sellers shall have tendered to Buyer all documents which Sellers
are required by Section 9.2(a) to deliver to Buyer.
7.2 Waiver. Buyer may waive any or all of the conditions set forth
in Section 7.1 hereof in whole or in part; however, no such waiver of a
condition shall constitute a waiver by Buyer of any of its other rights or
remedies under this Agreement or otherwise at law or in equity if Sellers
should be in default of any of the covenants, agreements, representations or
warranties of Sellers under this Agreement.
ARTICLE 8
Conditions Precedent to Obligations of Sellers
8.1 Conditions Precedent. The obligations of Sellers to consummate
the transactions contemplated on the Closing Date are subject to the
satisfaction, on or before the Closing Date, of all the following conditions:
(a) If required under applicable Legal Rules, all filings required
under the HSR Act shall have been made and the applicable waiting period shall
have expired or been earlier terminated without the receipt of any objection or
the commencement or threat of any litigation by a Governmental Authority of
competent jurisdiction to restrain the consummation of the transactions
contemplated by this Agreement.
(b) Buyer shall have performed and complied in all material respects
with all covenants, conditions and obligations required by this Agreement to be
performed or complied with by Buyer on or before the Closing Date.
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(c) All representations and warranties made by Buyer, including,
without limitation, those made to the knowledge of Buyer, contained in this
Agreement shall be true, correct and complete in all material respects at and
as of the Closing Date as though made on such date.
(d) Sellers shall have obtained all Required Consents, provided that
this condition shall be deemed to be satisfied as to Sellers with respect to
any Required Consent if Buyer at or prior to Closing waives the requirement
that such consent be obtained prior to Closing.
(e) The closing of the Royston/Toccoa Sale shall have occurred or
will occur simultaneously with the Closing hereunder.
(f) As of the Closing Date, no action or proceeding shall be
completed, pending or threatened against Sellers or Buyer that has or is likely
to result in a judgment, decree or order that would prevent or make unlawful
the consummation of the transactions under this Agreement and there shall be in
effect no order restraining or prohibiting the consummation of the transactions
contemplated by this Agreement nor any proceedings pending with respect
thereto.
(g) Buyer shall have tendered to Sellers the Purchase Price and all
documents which Buyer is required by Section 9.2(b) to deliver to Sellers.
8.2 Waiver. Sellers may waive any or all of such conditions set
forth in Section 8.1 hereof in whole or in part; however, no such waiver of a
condition shall constitute a waiver by Sellers of any of their other rights or
remedies under this Agreement or otherwise at law or in equity if Buyer should
be in default of any of the covenants, agreements, representations or
warranties made by Buyer under this Agreement.
ARTICLE 9
Closing
9.1 Closing. The Closing shall take place on the Closing Date at the
place set forth in Section 2.6. At the Closing, each of the parties shall take
all action and deliver all documents, instruments, certificates, agreements and
other items as required under this Agreement in order to perform, fulfill and
observe all covenants, conditions and agreements on its part to be performed,
fulfilled and observed at or prior to the Closing Date (and not theretofore
accomplished) and cause all conditions precedent to the other party's
obligations hereunder to be satisfied in full.
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9.2 Closing Documents.
(a) At the Closing, Sellers shall deliver to Buyer all of the
following:
(i) a certificate of each Seller that all appropriate action
authorizing the execution, performance and delivery of this Agreement
has been taken;
(ii) a copy of each instrument pursuant to which a
Governmental Authority or other person consents to the transfer of the
Franchise which it issued, substantially in the form of EXHIBIT B;
(iii) wire transfer instructions for the Purchase Price and a
receipt, substantially in the form of EXHIBIT E, for the Purchase
Price;
(iv) a ▇▇▇▇ of sale, substantially in the form of EXHIBIT F;
(v) for each parcel of Real Property a deed in the form
customarily used in the jurisdiction where the real property is
located;
(vi) Certification of Nonforeign Status for each Seller
pursuant to section 1.1445-2(b)(2) of the United States Treasury
Income Tax Regulations, substantially in the form of EXHIBIT G;
(vii) for each lease of real property listed on SCHEDULE 3.13
for which a consent is required, an assignment, assumption and
consent, if required, substantially in the form of EXHIBIT C, duly
executed by the relevant Seller and the third party, if any, whose
consent is required for the assignment of such lease;
(viii) for each Contract the assignment of which requires a
Required Consent, an assignment, assumption and consent substantially
in the form of EXHIBIT D, duly executed by the relevant Seller and the
third party to such Contract;
(ix) documents of title for any motor vehicles included
within the Assets;
(x) a certificate of each Seller, substantially in the form
of EXHIBIT H;
(xi) a written opinion dated the Closing Date, from Pillsbury
Madison & Sutro LLP, counsel to Sellers, in the form annexed hereto as
EXHIBIT I;
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(xii) all data, books and records which relate primarily to
the Systems and the Assets;
(xiii) a Certificate of Good Standing for each Seller
certified to by the Secretary of State of the State of California and
a Certificate of Qualification certified to by the Secretary of State
of the State of South Carolina;
(xiv) such other documents and certificates as Buyer may
reasonably request.
(b) At the Closing, Buyer shall deliver to Sellers the following
documents:
(i) a Certificate of Good Standing of Buyer certified to by
the Secretary of State of the State of Washington and a Certificate of
Qualification of Buyer certified to by the Secretary of State of the
State of South Carolina;
(ii) a Certificate of Buyer that all appropriate action
authorizing the execution, performance and delivery of this Agreement
has been taken;
(iii) an assumption agreement, substantially in the form of
EXHIBIT J and an executed counterpart of each assignment, assumption
and consent delivered by Sellers pursuant to and in accordance with
Section 9.2(a) hereof;
(iv) a written opinion dated the Closing Date, from Buyer's
counsel, in the form annexed hereto as EXHIBIT K;
(v) a certificate of Buyer, substantially in the form of
EXHIBIT L;
(vi) a wire transfer of the Purchase Price pursuant to
instructions received from Sellers; and
(vii) such other documents and certificates as Sellers may
reasonably request.
ARTICLE 10
Indemnification
10.1 Indemnification by Sellers.
(a) Each Seller agrees severally, and for its own account only, to
indemnify Buyer and hold it harmless on an after-Tax basis, from any and all
losses, liabilities, claims, suits, proceedings, demands, judgments, damages,
expenses and costs,
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including, without limitation, counsel fees and disbursements, expert fees and
costs and expenses incurred in the investigation, defense or settlement of any
claims covered by this indemnity (in this Section 10.1, collectively, the
"Indemnifiable Damages") which Buyer may suffer or incur by reason of (i) the
inaccuracy of any representation or warranty of such Seller contained in this
Agreement; (ii) the breach by such Seller of any covenant made by it in any of
the Transaction Documents; (iii) the ownership, operation or transfer of the
Assets or the Systems on or prior to the Closing Date and any liabilities
relating to the Systems not assumed by Buyer, provided that in no case shall
this Subsection 10.1(a)(iii) apply to or include Indemnifiable Damages caused
by, relating to or arising under Environmental laws, including contamination of
the Real Property, which are intended to be covered by Subsection 10.1(a)(i).
The foregoing obligation of Sellers shall be subject to and limited by each of
the qualifications set forth in this Article 10.
(b) Except as set forth in subparagraphs (i) and (ii) below or with
respect to bona fide and valid claims for which notice has been given within
twelve (12) months of the Closing Date, each representation, warranty and
covenant made by Sellers in this Agreement or pursuant hereto shall survive
until the date which is twelve (12) months following the Closing Date, and
thereafter all such representations, warranties and covenants shall be
extinguished:
(i) the representations, warranties and covenants made by
Sellers in Section 5.6 (Taxes) shall survive until the end of any
statutory limitation period with respect thereto; and
(ii) the representations, warranties and covenants made by
Sellers in the first sentence of Section 3.8 (title) shall survive
indefinitely.
(c) The indemnity obligations of Sellers hereunder shall not apply
(i) to the extent that Buyer is compensated for the same loss under Buyer's
insurance policies in the absence of any indemnity hereunder if the insurers
under such policy waive their rights of subrogation with respect thereto; (ii)
if the damages to Buyer do not exceed $500,000; and (iii) if such damages
exceed $500,000, the indemnity obligations hereunder shall only apply to that
portion of the damages that exceed such $500,000 threshold and thereafter
losses shall be paid up to a maximum of $9,750,000.
(d) Four hundred forty-four thousand and two hundred dollars
($444,200) of the Purchase Price shall be held in escrow pursuant to a mutually
acceptable form of escrow agreement, a form of which is attached hereto as
EXHIBIT M (the "Post-Closing Escrow Agreement") for a period of six (6) months
after the Closing as security for the indemnity obligations of Sellers
hereunder.
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10.2 Indemnification by Buyer.
(a) Buyer agrees to indemnify each Seller and its Affiliates,
directors, partners, agents and employees against and hold each of them
harmless on an after-Tax basis, from any and all Indemnifiable Damages which
any such indemnified party may suffer or incur by reason of or in connection
with (i) the inaccuracy of any representation or warranty of Buyer contained in
this Agreement or any document, certificate or agreement delivered pursuant
hereto; (ii) the breach by Buyer of any covenant made by it in any of the
Transaction Documents; (iii) the ownership and operation of the Assets after
the Closing Date; and (iv) any obligation or liability assumed by Buyer
hereunder or under any document, certificate or agreement delivered pursuant
hereto. The foregoing obligation of Buyer shall be subject to and limited by
each of the qualifications set forth below.
(b) Except as set forth in the next succeeding sentence, or with
respect to bona fide and valid claims for which notice has been given prior to
the date twelve (12) months from the Closing Date, each representation,
warranty and covenant made by Buyer in this Agreement or pursuant hereto and
the indemnity obligations set forth in this Section 10.2 shall survive until
the date twelve (12) months from the Closing Date, and thereafter all such
representations, warranties, covenants and indemnity obligations and any
liability thereunder shall be extinguished. The right of Sellers to assert
claims for Indemnifiable Damages arising out of the ownership or operation of
the Assets or the Systems after the Closing Date and any obligation or
liability assumed by Buyer hereunder or pursuant hereto shall survive
indefinitely.
(c) The indemnity obligations of Buyer hereunder shall not apply (i)
to the extent that Sellers or any Affiliates are compensated for the same loss
under Sellers' or any Affiliate's insurance policies in the absence of any
indemnity hereunder if the insurers under such policy waive their rights of
subrogation with respect thereto; (ii) if the damages to Sellers or any
Affiliates do not exceed $500,000; and (iii) if such damages exceed $500,000,
the indemnity obligations hereunder shall only apply to that portion of the
damages that exceed such $500,000 threshold and thereafter losses shall be paid
up to a maximum of $9,750,000. Notwithstanding anything to the contrary
contained herein, the limitations set forth in this Section 10.2(c) shall not
apply with respect to any liability related to Section 6.6 hereof.
10.3 Notice and Right To Defend Third-Party Claims.
(a) Upon receipt of written notice of any claim, demand or
assessment or the commencement of any suit, action or proceeding in respect of
which indemnity may be sought on account of an indemnity agreement contained in
this Article,
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the party seeking indemnification (the "Indemnitee") shall promptly, but in no
event later than twenty (20) days prior to the date a response or answer
thereto is due (unless a response or answer is due within fewer than twenty
(20) days from the date of Indemnitee's receipt of notice thereof), inform the
party against whom indemnification is sought (the "Indemnitor") in writing
thereof. The failure, refusal or neglect of such Indemnitee to notify the
Indemnitor within the time period specified above of any such claim or action
shall relieve such Indemnitor from any liability which it may have to such
Indemnitee in connection therewith, if the effect of such failure, refusal or
neglect is to prejudice materially the rights of the Indemnitor in defending
against the claim or action.
(b) In case any claim, demand or assessment shall be asserted or
suit, action or proceeding commenced against an Indemnitee, and such Indemnitee
shall have timely and properly notified the Indemnitor of the commencement
thereof, the Indemnitor shall assume the defense, conduct or settlement
thereof, with counsel selected by the Indemnitor. After assumption of the
defense, conduct or settlement thereof, the Indemnitor will not be liable to
the Indemnitee for expenses incurred by Indemnitee in connection with the
defense, conduct or settlement thereof, except for such expenses as may be
reasonably required to enable the Indemnitor to take over such defense, conduct
or settlement.
(c) The Indemnitee will at its own expense cooperate with the
Indemnitor in connection with any such claim, make personnel, witnesses, books
and records relevant to the claim available to the Indemnitor at no cost, and
grant such authorizations or powers of attorney to the agents, representatives
and counsel of the Indemnitor as the Indemnitor may reasonably request in
connection with the defense or settlement of any such claim.
(d) Notwithstanding the foregoing in this Section 10.3, the
Indemnitee shall have the right to employ separate counsel in any such action,
claim or proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be its fees and expenses unless (i) the
Indemnitor has agreed to pay such fees and expenses, (ii) the Indemnitor has
failed to assume the defense of such action, claim or proceeding or (iii) the
named parties to any such action, claim or proceeding (including any impleaded
parties) include both the Indemnitor and the Indemnitee and the Indemnitee has
been advised by counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
Indemnitor (in which case, if the Indemnitee informs the Indemnitor in writing
that it elects to employ separate counsel at the expense of the Indemnitor, the
Indemnitor shall not have the right to assume the defense of such action, claim
or proceeding on behalf of the Indemnitee, it being understood, however, that
the Indemnitor shall not, in
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connection with any one such action, claim or proceeding or separate but
substantially similar or related actions, claims or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys at any time for the Indemnitee, which firm shall be designated in
writing by the Indemnitee).
10.4 Notice and Right to Remediate. Anything in this Agreement to
the contrary notwithstanding, Sellers shall have no obligation to indemnify
Buyer with respect to Indemnifiable Damages arising under Environmental Laws,
including damages due to any necessary investigation, remediation or cleanup of
Hazardous Substances at the Real Property, unless Buyer first gives Sellers an
option to conduct any necessary response or perform any required work and
Sellers refuse to do so. Such an option should be given with the written
notice required by Section 10.3(a), but in any case, shall be given prior to
any Buyer expenditure of what it considers to be Indemnifiable Damages.
Sellers shall respond to the option in writing within thirty (30) Business
Days. If Sellers exercise their option, Sellers shall perform all work in a
safe and workmanlike manner in compliance with all applicable Environmental
Laws to the satisfaction of the appropriate Governmental Authority. In
addition, Sellers will afford Buyer a reasonable opportunity to comment (at
Buyer's sole expense) in advance of Sellers' proposed responses or submissions
to Governmental Authorities or third parties relating to activities on the
Property, including reports and workplans, provided that such comment period
does not delay or interfere with Sellers' obligations to any third party.
Sellers shall consider Buyer's comments in good faith, but are under no
obligation to accept or incorporate Buyer's comments. Buyer, its
representatives and agents will not make comments or submissions to any
Governmental Authority or third parties with respect to environmental
conditions as to which Sellers have exercised their option. Any conflicts
between Section 10.3 and this Section 10.4 shall be resolved in favor of this
Section 10.4.
10.5 Mitigation. Nothing herein contained shall affect a party's
legal duty to mitigate damages.
10.6 Exclusive Remedy. This Article 10 shall be the sole and
exclusive basis of any remedy that each party may have against the other party
for an inaccuracy or breach of a representation, warranty or covenant under
this Agreement or any agreement contemplated hereby, and each party hereby
waives any claim (other than under this Article 10) it may have against the
other party with respect to the inaccuracy or breach of any such
representation, warranty or covenant.
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ARTICLE 11
Termination
11.1 Termination Events. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned:
(a) at any time, by the mutual agreement of Buyer and Sellers;
(b) by either Buyer or Sellers, upon written notice to the other,
if the conditions to its obligations set forth in Sections 7.1 and 8.1,
respectively, shall not have been satisfied or waived on or before December 31,
1997 for any reason other than a breach or default by such party of its
respective covenants, agreements, or other obligations hereunder, or any of its
representations or warranties herein not being true and accurate when made or
when otherwise required by this Agreement to be true and accurate;
(c) By Sellers, in the event that the Closing does not occur by
reason of breach or default by the Buyer under this Agreement and provided that
Sellers have not breached or defaulted hereunder and have performed or stand
ready, willing, and able to perform, their obligations under this Agreement in
all material respects;
(d) By the Buyer, in the event that the Closing does not occur by
reason of a breach or default by the Sellers under this Agreement and provided
that the Buyer has not breached or defaulted hereunder and has performed or
stands ready, willing, and able to perform, its obligations under this
Agreement in all material respects; or
(e) By Sellers in the event that the Closing does not occur
because the Purchase Price, as adjusted, is less than the threshold set forth
in Section 2.3(a).
11.2 Manner of Exercise. In the event of the termination of this
Agreement by either Buyer or Sellers pursuant to this Article 11, notice
thereof shall forthwith be given to the other party and this Agreement shall
terminate and the transactions contemplated hereunder shall be abandoned
without further action by Buyer or Sellers.
11.3 Effect of Termination. In the event of the termination of this
Agreement pursuant to this Article 11 and prior to the Closing, all obligations
of the parties hereunder shall terminate, except for the respective obligations
of the parties under Sections 6.1 (Confidentiality) and 12.14 (Expenses);
provided, however, that no termination of this Agreement shall (a) relieve a
defaulting or breaching party from any liability to the other party or parties
hereto for or in respect of such
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default or (b) result in the rescission of any transaction theretofore
consummated hereunder. If this Agreement is terminated by Sellers in
accordance with Section 11.1(c) or by Buyer other than in accordance with
Section 11.1, Sellers shall be entitled to retain the Deposit.
ARTICLE 12
General
12.1 Covenant Not To ▇▇▇ and Nonrecourse to Partners.
(a) Buyer agrees that notwithstanding any other provision in this
Agreement, any agreement, instrument, certificate or document entered into
pursuant to or in connection with this Agreement or the transactions
contemplated herein or therein (each a "Transaction Document") and any rule of
law or equity to the contrary, to the fullest extent permitted by law, Sellers'
obligations and liabilities under all Transaction Documents and in connection
with the transactions contemplated therein shall be nonrecourse to all direct
and indirect general and limited partners of Sellers.
(b) "Nonrecourse" means that the obligations and liabilities are
limited in recourse solely to the assets of Sellers (for those purposes, any
capital contribution obligations of the general and limited partners of Sellers
or any negative capital account balances of such partners shall not be deemed
to be assets of Sellers) and are not guaranteed directly or indirectly by, or
the primary obligations of, any general or limited partner of Sellers, and
neither Sellers nor any general or limited partner or any officer, director,
partner, employee or agent of Sellers or any general or limited partner of any
successor partnership, either directly or indirectly, shall be personally
liable in any respect (except to the extent of their respective interests in
the assets of Sellers) for any obligation or liability of Sellers under any
Transaction Document or any transaction contemplated therein.
(c) "Direct" partners include all general and limited partners of
Sellers, and "indirect" partners include all general and limited partners and
members of each direct partner and all general and limited partners and members
of each such indirect partner and all such further indirect partners and
members thereof and each such indirect partner.
(d) Buyer hereby covenants for itself, its successors and assigns
that it, its successors and assigns will not make, bring, claim, commence,
prosecute, maintain, cause or permit any action to be brought, commenced,
prosecuted, maintained, either at law or equity, in any court of the United
States or any state thereof against any direct or indirect member or general or
limited partner of Sellers or any officer, director, partner, employee or agent
of Sellers or any direct or indirect
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member or general or limited partner of Sellers for (i) the payment of any
amount or the performance of any obligation under any Transaction Document or
(ii) the satisfaction of any liability arising in connection with any such
payment or obligation or otherwise, including without limitation, liability
arising in law for tort (including, without limitation, for active and passive
negligence, negligent misrepresentation and fraud), equity (including, without
limitation, for indemnification and contribution) and contract (including,
without limitation, monetary damages for the breach of representation or
warranty or performance of any of the covenants or obligations contained in any
Transaction Document or with the transactions contemplated herein or therein).
12.2 Assignment. Neither Buyer nor Sellers may assign its rights and
obligations under, or grant a security interest in, this Agreement to any
person or entity other than an Affiliate of such party without the consent of
the other parties hereto.
12.3 Parties in Interest. All of the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and permitted assigns of the parties hereto,
whether herein so expressed or not. Except as provided in Sections 10.1, 10.2
and 12.1, no person other than Buyer and Sellers and their respective
Affiliates may rely upon any provision of this Agreement or any agreement,
instrument, certificate or document executed pursuant to this Agreement.
12.4 Time of Essence. Time is of the essence in each and every
provision in this Agreement.
12.5 Severability. Any provision of this Agreement that is invalid
or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining provisions of this Agreement
or affecting the validity or enforceability of any provision of this Agreement
in any other jurisdiction.
12.6 Amendment. Except as otherwise provided herein, Buyer and
Sellers may amend, modify or supplement this Agreement at any time, but only in
writing duly executed by all parties hereto.
12.7 Terms. Defined terms used herein are equally applicable to the
singular and plural forms as appropriate. Unless otherwise expressly stated
herein, references to Articles and Sections are to articles and sections of
this Agreement and references to parties, Exhibits and Schedules are to the
parties, and the exhibits and schedules attached, to this Agreement.
12.8 Headings. The headings preceding the text of
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Sections of this Agreement are for convenience only and shall not be deemed a
part hereof.
12.9 Entire Understanding; Schedules. The terms set forth in this
Agreement including its Schedules and Exhibits are intended by the parties as a
final, complete and exclusive expression of the terms of their agreement and
may not be contradicted, explained or supplemented by evidence of any prior
agreement, any contemporaneous oral agreement or any consistent additional
terms. The Schedules and Exhibits attached to this Agreement are made a part
of this Agreement. All documents or information disclosed in the Schedules are
intended to be disclosed for all purposes under this Agreement and will also be
deemed to be incorporated by reference in each Schedule to which they may be
relevant without further disclosure.
12.10 Counterparts. This Agreement may be executed simultaneously in
any number of counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
12.11 Applicable Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of California.
12.12 Notices. Any notice or demand desired or required to be given
hereunder shall be in writing and deemed given when personally delivered, sent
by telecopier, overnight courier or deposited in the mail, postage prepaid,
sent certified or registered, return receipt requested, and addressed as set
forth below or to such other address as either party shall have previously
designated by such a notice. Any notice so delivered personally or by telecopy
shall be deemed to be received on the date of delivery or transmission by
telecopier; any notice so sent by overnight courier shall be deemed to be
received one (1) Business Day after the date sent; and any notice so mailed
shall be deemed to be received on the date stamped on the receipt (rejection or
other refusal to accept or inability to deliver because of a change of address
of which no notice was given shall be deemed to be receipt of the notice).
If to Sellers:
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
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Copy to:
Pillsbury Madison & Sutro LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to Buyer:
Northland Cable Television, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Copy to:
▇▇▇▇ ▇▇▇▇▇▇▇ & Cleveland
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
12.13 Further Acts. If, at any time before, on or after the Closing
Date, any further action by either party is necessary to carry out the purposes
of this Agreement, such party shall take all such necessary action or use such
party's reasonable best efforts to cause such action to be taken.
12.14 Expenses. Except as set forth in Sections 6.2, 6.3 and 6.4,
Sellers and Buyer shall each bear its own costs and expenses incurred in
connection with the negotiation, preparation or execution of this Agreement
(including, but not limited to, fees and expenses of attorneys, accountants,
brokers, consultants, finders and investment bankers), whether or not the
Closing occurs. In the event that one of the parties hereto breaches this
Agreement, however, and fails to consummate the transaction contemplated
hereby, such breaching party shall be responsible for all costs and expenses
incurred by the non-breaching party in connection herewith.
12.15 Attorneys' Fees. If any action or proceeding is commenced
between the parties with respect to the Transaction Documents, the prevailing
party shall be entitled to all fees and expenses incurred by it in connection
with such action or proceeding, including reasonable attorneys' fees.
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12.16 Judicial Proceedings. Each party consents to the jurisdiction
over it of the courts of the State of California in the City and County of San
Francisco, and of the United States Courts in the Northern District of
California and agrees that personal service of all process may be made by
registered or certified mail pursuant to the provisions of Section 12.12.
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IN WITNESS WHEREOF, the parties hereto have entered into and signed
this Agreement as of the date and year first above written.
SELLERS:
INTERMEDIA PARTNERS OF CAROLINA, L.P.
By: InterMedia Partners, a
California limited partnership
Its General Partner
By: InterMedia Capital Management I, LLC,
Its General Partner
By: InterMedia Management, Inc.
Its Managing Member
By: ___________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
▇▇▇▇▇ CABLE SYSTEMS, L.P.
By: MITGO CORP.,
Its general partner
By: ___________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Attorney-In-Fact
BUYER:
NORTHLAND CABLE TELEVISION, INC.
By: ___________________________________
Title: ________________________________
-▇▇- ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
AND SALE AGREEMENT
47
DO NOT DELETE THESE PAGES
References used in this doc - please update as needed
1.34 required consents
1.5 assumed contracts
1.19 excluded assets
2.1 purchase and sale of assets
2.3 purchase price & payment
2.3(a) purchase price
2.3(a) consideration for assets
2.3(d) adjustment time
2.4 preliminary & final settlements
2.4(a) preliminary adjustments report
2.4(b) final adjustments report
2.5 disputed liabilities
2.6 closing
? closing date
2.6 completion of purchase and sale
3.8 title & encumbrances
? franchises
3.12 contracts
3.13 real property
3.14 environmental laws
3.14(b) environmental law
3.14(c) hazardous substance
3.15 copyright act
3.16(a) cli
3.17(a) financial statements
3.17(a) profit (a)
3.17(b) material changes
5.6 sellers taxes
3.19 employees
3.19(a) employment agreements
3.19(b) collective agreements
3.19(c) employee benefit plans
3.19(c) employee plans
3.19(c) erisa
5.6 sellers taxes
6.1 confidentiality
6.2 hsr act
6.5 employee matters
6.5(a) nontransferring employees
6.5(a) new employees
? prospective employees
6.5(b) erisa affiliates
6.5(c) qualified defined contribution
6.5(c) buyer's dc plan
6.5(c) sellers' dc plan
6.5(d) welfare plans
6.5(d)(i) sellers' welfare plans
6.5(d) buyer's welfare plans
6.5(d)(ii)(B) cobra
6.5(d) employment transfer date
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7.1 buyers conditions precedent
Article 9 article 9
9.2(a) closing docs-seller delivers
9.2 closing documents
Article 10 article 10
10.1 indemnification by seller
10.1(a) indemnifiable damages
10.2 indemnification by buyer
10.3 notice and right
10.3(a) notice and right (a)
10.3(a) indemnitee
10.3(a) indemnitor
10.5 mitigation
Article 11 article 11
12.1 covenant not to ▇▇▇ & nonrecourse
12.1(a) transaction document
12.1(b) nonrecourse
12.12 notices
12.14 expenses
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