EXHIBIT 10.1
------------
(Arvida)
ASSET PURCHASE AGREEMENT
by and between
GULF AND PACIFIC COMMUNICATIONS LIMITED PARTNERSHIP
and
SCHURZ COMMUNICATIONS, INC.
Dated as of July 15, 1998
TABLE OF CONTENTS
RECITALS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 1. DEFINITIONS AND REFERENCES. . . . . . . . . . . . . . . 1
Schedule 2.1 (e) . . . . . . . . . . . . . . . . 4
ARTICLE 2. SALE AND PURCHASE OF ASSETS; PURCHASE PRICE;
ADJUSTMENTS; ASSUMPTION OF LIABILITIES . . . . . . . . . . . . 5
2.1 Asset Sale and Purchase of Assets. . . . . . . . . . . . 5
2.1(a) Franchise. . . . . . . . . . . . . . . . . . . . 5
Schedule 2.1 (a) . . . . . . . . . . . . . . . . 5
2.1(b) FCC Licenses . . . . . . . . . . . . . . . . . . 5
Schedule 2.1 (b) . . . . . . . . . . . . . . . . 5
2.1(c) Real Property. . . . . . . . . . . . . . . . . . 5
Schedule 2.1 (c) . . . . . . . . . . . . . . . . 5
2.1(d) Owned Personal Property. . . . . . . . . . . . . 5
Schedule 2.1 (d) . . . . . . . . . . . . . . . . 5
2.1(e) Material Contracts . . . . . . . . . . . . . . . 5
Schedule 2.1 (e) . . . . . . . . . . . . . . . . 5
2.1(f) Additional Agreements. . . . . . . . . . . . . . 5
Schedule 2.1 (f) . . . . . . . . . . . . . . . . 5
2.1(g) Files and Records. . . . . . . . . . . . . . . . 6
2.1(h) Third-Party Claims . . . . . . . . . . . . . . . 6
2.1(i) Permits and Licenses . . . . . . . . . . . . . . 6
2.1(j) Accounts Receivable. . . . . . . . . . . . . . . 6
2.2 Excluded Assets. . . . . . . . . . . . . . . . . 6
2.2(a) Third Party Claims . . . . . . . . . . . . . . . 6
2.2(b) Personal Property Disposed Of. . . . . . . . . . 7
2.2(c) Insurance. . . . . . . . . . . . . . . . . . . . 7
2.2(d) Certain Books and Records. . . . . . . . . . . . 7
2.2(e) Rights under this Agreement. . . . . . . . . . . 7
2.2(f) Excluded Contracts . . . . . . . . . . . . . . . 7
Schedules 2.1 (e) and 2.1 (f) . . . . . . . . . 7
2.2(g) Cash, Receivables and Cash Equivalents.. . . . . 7
2.3 Consideration . . . . . . . . . . . . . . . . 7
2.4 Payment of Purchase Price. . . . . . . . . . . . 7
2.5 Adjustments. . . . . . . . . . . . . . . . . . . 7
2.6 Assumption of Liabilities. . . . . . . . . . . . 9
ARTICLE 3. REPRESENTATIONS AND WARRANTIES BY SELLER. . . . . . . . 10
3.1 Organization and Standing. . . . . . . . . . . . 10
3.2 Authorization. . . . . . . . . . . . . . . . . . 10
3.3 Compliance with Laws . . . . . . . . . . . . . . 10
Schedule 3.3 . . . . . . . . . . . . . . . . . . 10
3.4 Required Consents; No Conflicts. . . . . . . . . 10
Schedule 2.1(e). . . . . . . . . . . . . . . . . 10
3.5 Absence of Litigation. . . . . . . . . . . . . . 11
Schedule 3.5 . . . . . . . . . . . . . . . . . . 11
3.6 Ownership and Condition of Assets. . . . . . . . 11
3.6(a) Owned Real Property . . . . . . . . . . . . . . 11
Schedule 3.6 (a) . . . . . . . . . . . . . . . . 11
3.6(b) Leased Real Property . . . . . . . . . . . . . 11
Schedule 3.6 (b) . . . . . . . . . . . . . . . . 11
Schedule 3.6 (b) . . . . . . . . . . . . . . . . 11
3.6(c) Owned Personal Property. . . . . . . . . . . . 12
Schedule 2.1(d . . . . . . . . . . . . . . . . . 12
Schedule 2.1(d). . . . . . . . . . . . . . . . . 12
3.6(d) Leased Personal Property. . . . . . . . . . . . 12
Schedule 3.6 (d) . . . . . . . . . . . . . . . . 12
3.7 Material Contracts.. . . . . . . . . . . . . . . 12
Schedule 2.1 (e) . . . . . . . . . . . . . . . . 12
Schedule 2.1 (e)). . . . . . . . . . . . . . . . 12
3.8 Environmental Matters. . . . . . . . . . . . . . 13
3.8(a) Environmental Compliance . . . . . . . . . . . . 13
3.8(b) Environmental Law. . . . . . . . . . . . . . . . 13
3.9 Insurance. . . . . . . . . . . . . . . . . . . . 13
Schedule 3.9 . . . . . . . . . . . . . . . . . . 13
3.10 Cable System . . . . . . . . . . . . . . . . . . 13
Schedule 3.10. . . . . . . . . . . . . . . . . . 13
3.11 No other Representations. . . . . . . . . . . 13
ARTICLE 4. REPRESENTATIONS AND WARRANTIES BY PURCHASER . . . . . . 14
4.1 Organization and Standing. . . . . . . . . . . . 14
4.2 Authorization. . . . . . . . . . . . . . . . . . 14
4.3 Required Consents; No Conflicts. . . . . . . . . 14
4.4 Absence of Litigation. . . . . . . . . . . . . . 14
4.5 Qualification of Purchaser . . . . . . . . . . . 14
4.6 HSR Filings. . . . . . . . . . . . . . . . . . . 15
ARTICLE 5. PRE-CLOSING FILINGS AND UNDERTAKINGS . . . . . . . . . . 16
5.1 Franchise Transfer Application; FCC
Assignment Applications.. . . . . . . . . . . . . . . . . . . . . . 16
5.2 Sharing Information. . . . . . . . . . . . . . . 16
5.3 Environmental Reports. . . . . . . . . . . . . . 16
ARTICLE 6. COVENANTS AND AGREEMENTS OF SELLER. . . . . . . . . . . 17
6.1 Negative Covenants . . . . . . . . . . . . . . . 17
6.1(a) Dispositions; Mergers. . . . . . . . . . . . . . 17
6.1(b) Additional Agreements/Material Contracts. . . . 17
6.1(c) Contract Breaches. . . . . . . . . . . . . . . . 17
6.2 Affirmative Covenants. . . . . . . . . . . . . . 17
6.2(a) Normal Operations. . . . . . . . . . . . . . . . 17
6.2(b) Actions. . . . . . . . . . . . . . . . . . . . . 17
6.2(c) Access . . . . . . . . . . . . . . . . . . . . . 18
6.2(d) Encumbrances . . . . . . . . . . . . . . . . . . 18
6.2(e) Insurance. . . . . . . . . . . . . . . . . . . . 18
6.2(f) Violations . . . . . . . . . . . . . . . . . . . 18
6.2(g) Interruption in Cable System Operation . . . . . 18
6.2(h) Environmental Matters. . . . . . . . . . . . . . 18
6.2(i) Consents . . . . . . . . . . . . . . . . . . . . 19
6.2(j) Updating . . . . . . . . . . . . . . . . . . . . 19
6.2(k) Consent of Lenders . . . . . . . . . . . . . . . 19
6.3 Confidentiality. . . . . . . . . . . . . . . . . 20
ARTICLE 7. COVENANTS AND AGREEMENTS OF PURCHASER . . . . . . . . . 21
7.1 Confidentiality. . . . . . . . . . . . . . . . . 21
7.2 Actions. . . . . . . . . . . . . . . . . . . . . 21
7.3 Access . . . . . . . . . . . . . . . . . . . . . 21
7.4 Notice of Certain Events . . . . . . . . . . . . 21
ARTICLE 8. MUTUAL COVENANTS AND UNDERSTANDINGS
OF SELLER AND PURCHASER. . . . . . . . . . . . . . . . . . . . 22
8.1 Possession and Control.. . . . . . . . . . . . . 22
8.2 Risk of Loss . . . . . . . . . . . . . . . . . . 22
8.3 Cable System Employees . . . . . . . . . . . . . 22
ARTICLE 9. CONDITIONS PRECEDENT TO
PURCHASER'S OBLIGATION TO CLOSE. . . . . . . . . . . . . . . . 23
9.1 Representations and Covenants. . . . . . . . . . 23
9.2 Consents . . . . . . . . . . . . . . . . . . . . 23
9.3 Delivery of Documents. . . . . . . . . . . . . . 23
9.4 Franchise Renewal. . . . . . . . . . . . . . . . 23
9.5 Franchise Transfer . . . . . . . . . . . . . . . 23
9.6 Legal Proceedings. . . . . . . . . . . . . . . . 23
ARTICLE 10. CONDITIONS PRECEDENT TO
SELLER'S OBLIGATION TO CLOSE . . . . . . . . . . . . . . . . . 24
10.1 Representations and Covenants. . . . . . . . . . 24
10.2 Delivery by Purchaser. . . . . . . . . . . . . . 24
10.3 Franchise Transfer . . . . . . . . . . . . . . . 24
10.4 Franchise Renewal. . . . . . . . . . . . . . . . 24
10.5 Legal Proceedings. . . . . . . . . . . . . . . . 24
11.1 Closing. . . . . . . . . . . . . . . . . . . . . 25
11.1(a) Closing Date . . . . . . . . . . . . . . . . . . 25
11.1(b) Closing Venue. . . . . . . . . . . . . . . . . . 25
11.2 Delivery by Seller . . . . . . . . . . . . . . . 25
11.2(a) Contracts; Agreements and Instruments. . . . . . 25
11.2(b) Consents . . . . . . . . . . . . . . . . . . . . 25
11.2(c) UCC Report . . . . . . . . . . . . . . . . . . . 26
11.2(d) Certified Consents; Certificates.. . . . . . . . 26
11.2(e) Certified Resolutions and Corporate Documents. . 26
11.2(f) Other Documents. . . . . . . . . . . . . . . . . 26
11.3 Delivery by Purchaser. . . . . . . . . . . . . . 26
11.3(a) Purchase Price Payment . . . . . . . . . . . . . 26
11.3(b) Purchaser Documents. . . . . . . . . . . . . . . 26
11.3(c) Certified Resolutions and Corporate Documents. . 27
11.3(d) Officer's Certificate. . . . . . . . . . . . . . 27
11.3(e) Allocation . . . . . . . . . . . . . . . . . . . 27
11.3(f) Other Documents. . . . . . . . . . . . . . . . . 27
ARTICLE 12. NO SURVIVAL; INDEMNIFICATION . . . . . . . . . . . . . 28
12.1 No Survival of Representations . . . . . . . . . 28
12.2 Indemnification by Seller. . . . . . . . . . . . 28
12.3 Indemnification by Purchaser . . . . . . . . . . 28
12.4 Conditions of Indemnification. . . . . . . . . . 29
12.4(a) Losses.. . . . . . . . . . . . . . . . . . . . . 29
12.4(b) Defense. . . . . . . . . . . . . . . . . . . . . 29
12.4(c) Costs and Expenses . . . . . . . . . . . . . . . 29
12.4(d) Compromise or Settlement of Losses . . . . . . . 30
12.4(e) Claim for Indemnification. . . . . . . . . . . . 30
12.4(f) Expiration of Indemnification Obligations. . . . 30
12.4(g) Hazardous Material Clean-Up. . . . . . . . . . . 30
ARTICLE 13. TERMINATION. . . . . . . . . . . . . . . . . . . . . . 31
13.1 Termination. . . . . . . . . . . . . . . . . . . 31
13.2 Effect of Termination. . . . . . . . . . . . . . 31
ARTICLE 14. REMEDIES . . . . . . . . . . . . . . . . . . . . . . . 32
14.1 Default by Purchaser . . . . . . . . . . . . . . 32
14.2 Default by Seller. . . . . . . . . . . . . . . . 32
ARTICLE 15. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . 32
15.1 Further Assurances . . . . . . . . . . . . . . . 32
15.2 Mail . . . . . . . . . . . . . . . . . . . . . . 33
15.3 Brokers. . . . . . . . . . . . . . . . . . . . . 33
15.4 Expenses . . . . . . . . . . . . . . . . . . . . 33
15.5 Notices. . . . . . . . . . . . . . . . . . . . . 33
15.6 Waiver . . . . . . . . . . . . . . . . . . . . . 35
15.7 Purchaser's Assignment . . . . . . . . . . . . . 35
15.8 Successors and Assigns . . . . . . . . . . . . . 35
15.9 Entire Agreement; Amendment. . . . . . . . . . . 35
15.10 Severability . . . . . . . . . . . . . . . . . . 36
15.11 Headings . . . . . . . . . . . . . . . . . . . . 36
15.12 Governing Law. . . . . . . . . . . . . . . . . . 36
15.13 Signature in Counterparts. . . . . . . . . . . . 36
15.14 Assignment . . . . . . . . . . . . . . . . . . . 36
15.15 Seller's Liability . . . . . . . . . . . . . . . 37
ARTICLE 16. ALLOCATION OF PURCHASE PRICE AND ASSUMED LIABILITIES . 38
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is entered into as of the
_________ day of July, 1998 by and between GULF AND PACIFIC COMMUNICATIONS
LIMITED PARTNERSHIP, a Delaware limited partnership ("Seller") and SCHURZ
COMMUNICATIONS, INC., an Indiana corporation ("Purchaser").
RECITALS
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WHEREAS, Seller is the owner of a cable company in Weston, Florida, which
is operating at 550 MHz ("Cable Company"); and
WHEREAS, Seller wishes to sell, and Purchaser wishes to buy, all of the
assets used or useful in connection with the ownership and operation of the
Cable Company, other than the Excluded Assets (as defined below), all in
accordance with and subject to the terms and conditions set forth below;
and
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto hereby
agree as follows:
ARTICLE 1.
DEFINITIONS AND REFERENCES
--------------------------
Unless the context otherwise specifies or requires, terms used herein shall
have the respective meanings assigned thereto as follows (such definitions
to be equally applicable to both the singular and plural forms of the terms
defined). Unless otherwise specified, references herein to "Articles" or
"Sections" are to Articles or Sections of this Agreement.
ADDITIONAL AGREEMENTS means any and all contracts, agreements and leases
executed and delivered by Seller between the date hereof and the Closing
Date, excluding Material Contracts.
ADJUSTMENT DATE shall have the meaning specified in Section 2.5.
AFFILIATE shall have the meaning specified in Section 15.14.
ASSETS shall have the meaning specified in Section 2.1.
ASSIGNMENT OF CONTRACTS means an Assignment of Contracts, dated as of the
Closing Date and executed by Seller, in form and substance reasonably
satisfactory to Purchaser and Seller with respect to agreements as to which
consents have been obtained pursuant to Section 6.2(k).
ASSIGNMENT OF LEASES means an Assignment of Leases, dated as of the Closing
Date and executed by Seller, in form and substance reasonably satisfactory
to Purchaser and Seller, pursuant to Sections 3.6 (b) and 3.6 (d).
ASSUMED LIABILITIES means the Material Contracts and the Additional
Agreements, and any liabilities and agreements assumed by Purchaser
hereunder.
▇▇▇▇ OF SALE means a ▇▇▇▇ of Sale dated as of the Closing Date and executed
by Seller, in form and substance reasonably satisfactory to Purchaser and
Seller.
CABLE ORDINANCE means the City of Weston Cable Television Ordinance No. 98-
10 dated March 2, 1998.
CABLE SYSTEM means Seller's cable system operated in the City of Weston
pursuant to the Cable Ordinance and the Franchise.
CABLE SYSTEM SITE shall mean that building site located at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
CLOSING means the closing of the purchase and sale of the Assets (other
than the Excluded Assets) and the assumption of the Assumed Liabilities.
CLOSING DATE means the time and date on which the Closing takes place, as
established by Section 11.1
CODE means the Internal Revenue Code of 1986, as amended.
COMMUNICATIONS ACT means the Communications Act of 1934, as amended, and
the rules and regulations of the FCC promulgated pursuant thereto.
ENCUMBRANCES means any mortgages, pledges, liens, claims, security
interests, agreements, restrictions, defects in title, easements or
encumbrances.
ENVIRONMENTAL LAWS means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), as amended by the
Superfund Amendments and Reauthorization Act of 1986 ("▇▇▇▇"), 42 U.S.C.
Section 9601 et seq.; the Toxic Substances Control Act ("TSCA"), 15 U.S.C.
Section 2601 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C.
Section 1802 et seq.; the Resource Conservation and Recovery Act ("RCRA"),
42 U.S.C. Section 9601 et seq.; the Clean Water Act ("CWA"), 33 U.S.C.
Section 1251 et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 300f
et seq; the Clean Air Act ("CAA"), 42 U.S.C. Section 7401 et seq.; or any
other applicable federal, state, or local laws, regulations, ordinances,
decrees, rules, judgments,
orders or directives now or hereinafter in effect relating to the
protection of human health, safety or the environment, or otherwise
relating to Hazardous Materials generation, production, use, storage,
treatment, transportation or disposal.
EQUIVALENT BASIC SUBSCRIBER means a subscriber on the Adjustment Date that:
(i) is receiving cable television service provided by the Cable System;
(ii) is not more than sixty (60) days delinquent in payment for such
service, excluding balances of $5.00 or less; and (iii) pays Seller's
standard rate for cable television service. In addition, Equivalent Basic
Subscribers shall include the quotient resulting from dividing the standard
basic rate for the Cable System into the total amount billed for any bulk
accounts billed for the last full month preceding the Adjustment Date. In
addition, Equivalent Basic Subscribers shall include the sum, calculated
from the date of this Agreement to the Adjustment Date, of the following:
(i) additional homes closed in Weston, (ii) additional apartments or rental
units rented in Weston; and (iii) commercial accounts.
ESCROW AGENT shall have the meaning specified in Section 2.4(a).
ESCROW AGREEMENT shall have the meaning specified in Section 2.4(a).
ESCROW DEPOSIT shall have the meaning specified in Section 2.4(a).
EXCLUDED ASSETS shall have the meaning specified in Section 2.2.
FCC means the Federal Communications Commission.
FCC ASSIGNMENT APPLICATIONS shall have the meaning specified in Section 5.1
(b).
FCC LICENSES means any license granted to the Seller by the FCC that
authorizes the use of any communications system, microwave system or other
telecommunications system used in the operation of the Cable System.
FRANCHISE/FRANCHISE RENEWAL means a cable television franchise ordinance
(Ordinance No. 98-29 dated June 15, 1998) to operate the Cable System in
the City of Weston pursuant to the Cable Ordinance.
FRANCHISE TRANSFER APPLICATION means the application for the transfer of
the Franchise with the City of Weston in accordance with all of the
requirements of the Cable Ordinance and the Communications Act.
GAAP means generally accepted accounting principles.
GOVERNMENTAL APPROVALS shall have the meaning specified in Section 3.3.
GOVERNMENTAL AUTHORITY means any agency, board, bureau, court, commission,
department, instrumentality or administration of the United States
government, any state government or any local or other governmental body in
a state of the United States or the District of Columbia.
HAZARDOUS MATERIALS means any wastes, substances, or materials (whether
solids, liquids or gases) that are defined or regulated as hazardous or
toxic under any Environmental Law, including without limitation, substances
defined as "hazardous wastes," "hazardous substances," "toxic substances,"
"radioactive materials," or other similar designations in any Environmental
Laws. "Hazardous Materials" includes, without limitation, polychlorinated
biphenyls (PCBs), asbestos, lead-based paints and petroleum and petroleum
products.
HSR ACT means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended, and the rules and regulations thereunder.
INDEMNIFIED PARTY and INDEMNIFYING PARTY shall have the respective meanings
specified in Section 12.4(a).
INCLUDING means "including without limitation".
IRS means the Internal Revenue Service.
IMPROVEMENTS shall have the meaning specified in Section 3.6(a).
LEASED REAL PROPERTY shall have the meaning specified in Section 3.6(b).
LEASES shall have the meaning specified in Section 3.6(b).
LOSSES means any and all demands, claims, complaints, actions or causes of
action, suits, proceedings, investigations, arbitrations, assessments,
losses, damages (including diminution in value), liabilities, obligations
(including those arising out of any action, such as any settlement or
compromise thereof or judgment or award therein) and any costs and
expenses, including, without limitation to, interest, penalties and
reasonable attorneys' fees and disbursements.
MATERIAL ADVERSE EFFECT means, except as otherwise specifically provided
herein, any event or condition which has a material adverse effect
(financial or otherwise) on the Assets, other than the Excluded Assets, to
be acquired hereunder, taken as a whole.
MATERIAL CONTRACTS means those contracts that are designated as Material
Contracts in Schedule 2.1 (e), excluding Additional Agreements.
ORDINARY COURSE OF BUSINESS means, with respect to Seller, the ordinary
course of business consistent with past practices of Seller.
PERMITTED ENCUMBRANCES means (a) easements that do not materially adversely
affect the full use and enjoyment of the Real Property for the purposes for
which it is currently used or detract from the value of the Real Property
in any material respect; (b) imperfections of title and consensual
encumbrances , if any, which, in the aggregate, do not detract from the
marketability or value of the properties subject thereto in any material
respect and do not impair the operations of the Cable System thereof; and
(c) liens for taxes not yet due and payable.
PURCHASER DOCUMENTS means, collectively, this Agreement and any other
agreement to be executed and delivered by Purchaser hereunder or as
otherwise contemplated herein.
PURCHASER INDEMNIFIED PARTIES shall have the meaning specified in Section
12.2.
PURCHASE PRICE shall have the meaning specified in Section 2.3.
REAL PROPERTY shall have the meaning specified in Section 2.1(c).
SELLER INDEMNIFIED PARTIES shall have the meaning specified in Section
12.3.
SELLER'S OFFICE means a nineteen hundred twenty five (1,925) square foot
business office and operating complex located at: ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇-▇▇▇▇.
TAX/TAXES means all federal, state and local taxes (including, without
limitation, income, profit, franchise, sales, use, real property, personal
property, ad valorem, excise, employment, social security and wage
withholding taxes) and installments of estimated taxes, assessments,
deficiencies, levies, imports, duties, license fees, registration fees,
withholdings, or other similar charges of every kind, character or
description imposed by any Governmental Authorities, and any interest,
penalties or additions to tax imposed thereon or in connection therewith.
TRANSACTION DOCUMENTS means, collectively, this Agreement, the Assignment
of Leases, the ▇▇▇▇ of Sale, the FCC Assignment Applications, the
Assignment of Contracts and any other agreements to be executed and
delivered by Seller hereunder or as otherwise contemplated herein.
ARTICLE 2.
SALE AND PURCHASE OF ASSETS; PURCHASE PRICE;
ADJUSTMENTS; ASSUMPTION OF LIABILITIES
--------------------------------------------
2.1 Asset Sale and Purchase of Assets.
Subject to the terms and conditions hereof and in reliance upon the
representations, warranties, covenants and agreements contained herein, at
the Closing, Seller shall sell, assign, transfer, convey and deliver to
Purchaser, and Purchaser agrees to purchase from Seller, all of Seller's
right, title and interest in the following property, free and clear of all
mortgages, security interests, liens or similar claims by third parties
(other than Permitted Encumbrances), but excluding the Excluded Assets
described in Section 2.2 (collectively, the "Assets"). Subject to the
provisions of Sections 2.2 and 6.1 (a), Assets shall include all such
assets (excluding the Excluded Assets) owned by Seller on the date hereof
and all such assets acquired between the date hereof and midnight (Eastern
Time) on the date immediately preceding the Closing Date.
The Assets shall consist of all of Seller's right, title and interest
in, to and under the following:
2.1(a) Franchise. The Franchise described in Schedule 2.1 (a);
2.1(b) FCC Licenses. The FCC Licenses described in Schedule 2.1 (b),
subject to the FCC Assignment Applications;
2.1(c) Real Property. All realty, fixtures, easements, rights of way,
buildings and improvements owned by Seller, including any undivided
interest in any of the foregoing, located at or pertaining to the Cable
System Site ("Real Property"), including but not limited to those listed or
described in Schedule 2.1 (c) ;
2.1(d) Owned Personal Property. All of the furniture, fixtures,
furnishings, machinery, computers, equipment (mobile or otherwise) and
computer software applications (including, but not limited to the Great
Lakes billing system and WordPerfect 5.1), inventory, supplies, cable
plant, antenna installations, tower, satellite dishes, office materials and
other tangible property owned by Seller, used or useful in the operation of
the Cable System, including but not limited to the property listed or
described in Schedule 2.1 (d);
2.1(e) Material Contracts. The contracts, commitments, plans,
agreements, leases, arrangements, and licenses, that relate to the
ownership, operation, business or use of the Cable System or any of the
Assets, and that are listed or described in Schedule 2.1 (e);
2.1(f) Additional Agreements. The contracts, commitments, plans,
agreements, leases, arrangements, and licenses, that relate to the
ownership, operation, business or use of the Cable System or any of the
Assets, and that are listed or described in Schedule 2.1 (f);
2.1(g) Files and Records. All engineering plans or reports, customer
lists, logs, files and records pertaining to the Assets; originals of all:
(i) books, records, accounts, checks, payment records, Tax records
(including payroll, unemployment, real estate and other Tax records) and
other similar books, records and information of the Seller relating to the
Assets, (ii) all records prepared by or on behalf of Seller in connection
with the sale of the Cable System, (iii) all records and documents located
at Seller's affiliate company corporate offices including, but not limited
to Seller's accounts payable, general ledger and payroll systems (original
and supporting documentation);
2.1(h) Third-Party Claims. All rights and claims of Seller which
accrue or arise after the Closing, against third parties relating to the
Assets (other than the Excluded Assets), whether in tort, contract, or
otherwise, under or pursuant to all warranties, representations and
guarantees made by manufacturers, suppliers or vendors;
2.1(i) Permits and Licenses. All other permits, approvals, orders,
authorizations, consents, licenses, certificates, exemptions of, or filings
or registrations with, any Governmental Authority in any jurisdiction,
which have been issued or granted to or are owned or used by Seller in
connection with the business and operation of the Cable System and
ownership of the Assets and all pending applications therefor;
2.1(j) Accounts Receivable. The amount of accounts receivable for
cable services which are less than 60 days old on the Adjustment Date; and
2.1 (k) Miscellaneous. Any other Assets of the Cable System which
Purchaser determines in its reasonable discretion are required in order to
provide continual ongoing cable television service.
2.2 Excluded Assets.
Notwithstanding anything to the contrary in this Agreement, there shall be
excluded from the Assets and retained by Seller, to the extent in existence
at midnight (Eastern Time) on the date immediately preceding the Closing
Date, all assets not specified in Section 2.1, including the following
assets (collectively, the "Excluded Assets"):
2.2(a) Third Party Claims. All rights and claims of Seller, including
any Affiliate thereof, which accrue or arise prior to the Closing, whether
mature, contingent or otherwise, against third parties relating to the
Assets, operation of the business or employees of the Cable System, whether
in tort, contract, or otherwise, under or pursuant to all warranties,
representations and guarantees made by manufacturers, suppliers or vendors;
and those obligations in connection with such litigation (as referenced on
Schedule 3.5) by Pacific Properties, Inc. v. ▇▇▇▇▇ ▇▇▇▇▇▇▇;
2.2(b) Personal Property Disposed Of. All tangible personal property
disposed of in the Ordinary Course of Business as permitted by this
Agreement;
2.2(c) Insurance. All contracts of insurance and any insurance plans
and the assets thereof, including, without limitation, prepaid insurance
expenses; and all insurance proceeds or claims of Seller relating to
property or equipment repaired, replaced or restored by Seller, or any
claims in connection with the Assets, the business operations, or the
employees of the Cable System prior to the Closing;
2.2(d) Certain Books and Records. Originals of all records and
documents relating to any Excluded Assets;
2.2(e) Rights under this Agreement. All of Seller's rights under or
pursuant to this Agreement or any other rights in favor of Seller pursuant
to the other agreements contemplated hereby;
2.2(f) Excluded Contracts. All Additional Agreements that have
terminated or expired prior to the Closing in the Ordinary Course of
Business or as otherwise permitted by this Agreement and all contracts,
commitments, plans, agreements, leases, arrangements, undertakings and
licenses not identified in Schedules 2.1 (e) and 2.1 (f), including,
without limitation, all employment agreements; and
2.2(g) Cash, Receivables and Cash Equivalents. All cash,
inter-company receivables, note receivables, bank deposits, overpayments,
other cash equivalents and investment securities.
2.3 Consideration.
The consideration for the conveyance and assignment of the Assets described
herein, in addition to the assumption of Assumed Liabilities by Purchaser
as set forth in Section 2.6 (the "Purchase Price"), shall be Thirty One
Million Six Hundred Eighty Seven Thousand Five Hundred and 00/100 Dollars
($31,687,500). At Closing, the Purchase Price shall be adjusted pursuant
to Section 2.5.
2.4 Payment of Purchase Price.
(a) Upon the execution of this Agreement, Purchaser shall deposit the
amount of One Million and 00/100 Dollars ($1,000,000) into escrow ("Escrow
Deposit"). The total Escrow Deposit shall be held by the law firm of
Gunster, Yoakley ▇▇▇▇▇▇ - ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.A. (together with any
successor thereto, "Escrow Agent") pursuant to the terms and conditions of
the escrow agreement executed on the date hereof ("Escrow Agreement") in
the form of Exhibit A hereto. At the Closing, the Escrow Deposit, together
with any interest earned thereon, shall be paid by Escrow Agent to Seller
and credited to the Purchase Price at Closing. If the Closing does not
occur due to the reason specified in Section 14.1 hereof, the total Escrow
Deposit, together with any interest earned thereon, shall be paid to Seller
as liquidated damages as specified in Section 14.1. If the Closing does not
occur for any other reason, the total Escrow Deposit, together with any
interest earned thereon, shall be returned to Purchaser.
(b) Thirty Million Six Hundred Eighty Seven Thousand Five Hundred and
00/100 Dollars ($30,687,500), plus or minus any adjustments or increases
made pursuant to Section 2.5, shall be paid by the Purchaser on the Closing
Date by wire transfer of immediately available funds to such bank or other
financial institution as shall be designated by Seller.
2.5 Adjustments.
Operation of the Cable System through 11:59 p.m. on the Adjustment Date
shall be for the account of Seller. Operation of the Cable System after
11:59 p.m. on the Adjustment Date shall be for the account of Purchaser.
The revenue and expenses associated with the operation of the Cable System
and the ownership of the Assets shall be prorated between Seller and
Purchaser as of the Adjustment Date in accordance with GAAP. The Purchase
Price shall be paid on the Closing Date and possession and operation of the
Cable System by Purchaser shall be effectuated as of the Closing Date.
However, revenues and expenses shall be prorated as of the Adjustment Date.
In addition, the Purchase Price shall be adjusted on the Closing Date with
the following adjustments as of the Adjustment Date:
(a) The Purchase Price shall be reduced by the sum of the following
amounts:
1. The amount of Seller's liabilities with respect to any
converter deposits;
2. The amount of prepayments related to services which
Purchaser shall be obligated to provide after the Adjustment Date; and
3. In the event that there are fewer than 9,750
Equivalent Basic Subscribers on the Adjustment Date, the amount calculated
by subtracting the number of Equivalent Basic Subscribers on the Adjustment
Date from 9,750 and multiplying the resulting difference by $3,250.
(b) The Purchase Price shall be increased by the sum of the
following:
1. The amount of accounts receivable for cable services
which are less than 60 days old on the Adjustment Date; and
2. In the event that there are more than 9,750 Equivalent
Basic Subscribers on the Adjustment Date, the amount calculated by
subtracting 9,750 from the number of Equivalent Basic Subscribers on the
Adjustment Date and multiplying the resulting difference by $3,250.
(c) All other revenue, prepaid expenses and direct expenses
relating to the Cable System and the Assets shall be prorated, with Seller
being entitled to all revenues and liable for such expenses relating to the
period prior to the Adjustment Date and Purchaser being entitled to all
revenues and liable for all such expenses relating to the period after the
Adjustment Date.
(d) At Closing, there will be a settlement between Seller and
Purchaser with respect to the above adjustments and prorations ( such
adjustments and prorations shall be made as if the effective date of
Closing was October 31, 1998) based on estimates by Seller and Purchaser,
with a final settlement to occur within sixty (60) days after the
Adjustment Date and the net amount, if any, due to or due from Purchaser
as the result of such prorations and adjustments shall be paid to or by
Purchaser, as the case may be, within fifteen (15) business days following
such final accounting. To the extent that the dollar amount of the items of
revenue and expense used as the basis for the adjustments and prorations
prove to be incorrect, each party shall have a continuing duty to make
appropriate credits and payments to the other party. Such adjustments and
prorations shall include any accounts receivable for cable services which
are determined by Purchaser to be uncollectible between the Adjustment Date
and the final settlement. Each party shall be permitted access to all
books, records, billing service reports and other documents necessary for
the determination of such adjustments and prorations.
2.6 Assumption of Liabilities.
At the Closing, Purchaser shall assume and become liable for the following:
(i) the liabilities and obligations of Seller arising after the Closing
Date under the Material Contracts and Additional Agreements, and (ii) the
liabilities and obligations of Seller arising after the Closing Date under
any Additional Agreements entered into after the date hereof in compliance
with Section 6.1(b) ("Assumed Liabilities").
Except for: (i) those liabilities and obligations expressly assumed by
Purchaser pursuant to this Section 2.6 hereof, (ii) those liabilities for
which Purchaser has received a credit under Section 2.5, (iii) liabilities
and obligations of Seller arising under contracts (exclusive of Additional
Agreements) which are not Material Contracts but which Purchaser, in its
sole discretion, elects to assume on or after the Closing Date, and (iv)
those obligations arising after the Closing Date in connection with such
litigation (as referenced on Schedule 3.5) before the Federal
Communications Commission for Request for Carriage Complaint of Hispanic
Keys Broadcasting, Corp. ("Carriage Litigation"), Purchaser shall have no
responsibility for any liabilities or obligations of any kind or
description whether connected with the business and operations of the Cable
System or the Seller, including any employee of Seller, or otherwise
arising from the ownership or operation of any of the Assets or the
business and operations of the Cable System or the Seller prior to the
Closing Date (collectively, "Seller's Retained Liabilities").
After the Closing Date, Seller shall have no responsibility: (i) for any
Assumed Liabilities, (ii) in connection with any Permitted Encumbrances,
(iii) for any costs that Purchaser agrees to assume pursuant to Section 5.3
hereof, or (iv) those obligations arising after the Closing Date in
connection with the Carriage Litigation.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES BY SELLER
----------------------------------------
Seller represents and warrants to Purchaser as follows:
3.1 Organization and Standing.
Seller is a Limited Partnership duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
power and authority to own and lease its assets and to conduct its business
as presently conducted. Seller has all requisite power and authority to
execute and deliver this Agreement and the other Transaction Documents and
to consummate the transactions contemplated hereby and thereby. Neither the
nature of the business of the Cable System, nor the character of the
properties owned, leased or otherwise held by Seller for use in the Cable
System's business makes any qualification necessary in any state other than
Florida.
3.2 Authorization.
The execution, delivery and performance of this Agreement and the other
Transaction Documents to be executed and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary partnership or other proceedings on the part of
Seller and no other partnership or other proceedings or actions on the part
of Seller is necessary therefor. This Agreement constitutes, and upon
execution and delivery each Transaction Document will constitute, a valid
and binding agreement and obligation of Seller, enforceable in accordance
with their respective terms.
3.3 Compliance with Laws.
Except as disclosed in Schedule 3.3, Seller is in material compliance with
all applicable laws, ordinances, regulations, including payment of all
taxes due, and the terms, conditions, rules and regulations of the Cable
Ordinance, the Franchise and with all rules and regulations of the FCC
("Governmental Approvals") except where the failure to be in compliance is
of such a minor nature as to not materially affect the ability of Seller to
conduct its business in a manner consistent with its current operations.
3.4 Required Consents; No Conflicts.
Except as set forth in Schedule 3.4 or in connection with the filings
referred to in Section 5.1, the execution, delivery and performance by
Seller of the Transaction Documents will not require the consent, approval,
authorization or permit of, or filing with, or notification to any person,
entity or Governmental Authority, except the consents of third parties to
the assignment of the Material Contracts as indicated on Schedule 2.1(e)
and those for which the failure to obtain would not materially affect the
ability of Seller to conduct its business in a manner consistent with its
current operations or which would not materially affect Seller's ability to
consummate the transactions contemplated by this Agreement.
3.5 Absence of Litigation.
Except as set forth and described in Schedule 3.5, there is no action,
suit, investigation, claim, arbitration or litigation pending or, to the
actual knowledge of Seller (which shall be deemed to mean the actual
knowledge of ▇▇▇ ▇▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇), threatened against, affecting or
involving the Assets, the Cable System or the business and operations of
the Cable System, or the transactions contemplated by this Agreement or any
other Transaction Document, at law or in equity, or before or by any
court, arbitrator or other Governmental Authority, that would, individually
or in the aggregate, if resolved adversely to Seller: (i) materially impair
the ability of Seller to perform its obligations under this Agreement, or
(ii) prevent the timely consummation of any of the transactions
contemplated by this Agreement.
3.6 Ownership and Condition of Assets.
3.6(a) Owned Real Property. Seller currently owns and operates Seller's
Office. Schedule 3.6 (a) contains a description of all Owned Real
Property. Copies of: (i) all deeds, title insurance commitment and surveys
of the Owned Real Property, and (ii) all documents evidencing any
Encumbrances upon the Owned Real Property have been delivered to Purchaser.
Purchaser shall be able to obtain from A&D Title, an owner's policy in the
form of an ALTA Form B Owners Policy of Title Insurance in the amount of
the purchase price allocated for the Owned Real Property, subject only to
matters which do not adversely affect marketability (as determined by the
standards adopted by the Florida Bar) of title to the Owned Real Property
or affect the ability of Purchaser to utilize the Owned Real Property in
the same manner that Seller has utilized the Owned Real Property.
The uses for which the buildings, facilities, and other improvements
located on the Owned Real Property ("Improvements") are zoned do not
materially restrict, or in any material manner impair, the use of the
Improvements for purposes of the business of Seller and the construction of
the Improvements complies in all material respects with all applicable
building and zoning codes, deed restrictions, ordinances and rules.
3.6(b) Leased Real Property. All of the real property leased by Seller
as tenant or lessee is identified on Schedule 3.6 (b) (collectively
referred to herein as "Leased Real Property").
Copies of the leases of any of the Leased Real Property (collectively,
"Leases" ) as set forth on Schedule 3.6 (b) have been delivered to
Purchaser. There are no material defaults, and no events or circumstances
have occurred that, with or without notice or lapse of time or both, would
constitute material defaults by Seller (nor, to Seller's knowledge [which
shall be deemed to mean the actual knowledge of ▇▇▇ ▇▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇],
any other party) under any of the Leases.
3.6(c) Owned Personal Property. The Cable System's channel capacity
is seventy-seven (77) channels across a five hundred fifty (550) MHz
bandwidth. The Cable System's Headend utilizes Scientific Atlanta
processing equipment, and addressable scrambling encryption in conjunction
with an eighty (80) foot off air reception tower and four (4) TVRO
satellite dishes. Schedule 2.1(d) contains a complete description of all
of Seller's machinery, equipment and other tangible personal property that
is located at the Cable System Site and is material to the operation of the
Cable System (other than Excluded Assets) (collectively, the "Equipment").
Seller has good and marketable title to all of the Equipment. None of such
Equipment is subject to any mortgage, pledge, lien, conditional sale
agreement, security agreement, encumbrance or other charge, except for
Permitted Encumbrances. The Equipment is sufficient for Purchaser to
continue the operations of the Cable System in accordance with applicable
law as conducted by Seller. Except as otherwise specified in Schedule
2.1(d), all Equipment of Seller is in good repair and working order,
ordinary wear and tear excepted, and Seller has maintained all Equipment in
compliance with good engineering and customary business practice.
3.6(d) Leased Personal Property. All personal property leased by Seller
as tenant or lessee as identified on Schedule 3.6 (d). Purchaser shall have
no obligation to accept assignment of the Leased Personal Property.
However, if Purchaser desires to have the Leased Personal Property assigned
to Purchaser, and if such leases are not assignable, then (i) Seller shall
not be required by Purchaser to incur any additional costs in order to
transfer said Leased Personal Property to Purchaser or in the termination
of such leases, and (ii) Purchaser shall not be required by Seller to
incur any additional costs in the termination or transfer of such leases.
3.7 Material Contracts.
Schedule 2.1 (e) contains a listing of all Material Contracts as of the
date hereof. Seller has delivered to Purchaser true and complete copies of
all Material Contracts, including any and all amendments and other
modifications thereto. There are no material defaults by Seller (nor, to
Seller's knowledge [which shall be deemed to mean the actual knowledge of
▇▇▇ ▇▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇], any other party) under any of the Material
Contracts and there are no events or circumstances that, with the giving of
notice or lapse of time or both, would constitute material defaults by
Seller under any of the Material Contracts. The execution of this
Agreement and the consummation of the transactions contemplated hereby will
not, with respect to any Material Contract: (i) constitute a default
thereunder, (ii) require the consent of any person or party (excluding the
Programming/Licensing Agreements as referenced on Schedule 2.1 (e)), or
(iii) affect the continuation, or the terms thereof. With respect to the
Programming/Licensing Agreements, if Purchaser determines not to assume
such Programming/Licensing Agreements, then Seller shall be required to
terminate the same. With respect to the Service Agreement as referenced on
Schedule 2.1 (e), Arvida/JMB Partners ("Developer"), as successor to Arvida
Corporation shall provide Purchaser with an agreement ("Arvida Agreement"),
prior to Closing, wherein Developer (and its successors and assigns)
agrees: (i) not to consent to the termination of the Service Agreement by
The Town Foundation, Inc., (ii) not to grant a third party the right to
provide Service (as defined in the Service Agreement) to the Community (as
defined in the Service Agreement); and (iii) not to engage in providing
Service to the Community itself or through an Affiliate (as defined in
Section 15.14 herein); all of the above for the fifteen (15) year term of
the Franchise.
3.8 Environmental Matters.
3.8(a) Environmental Compliance. To the actual knowledge of Seller
(which shall be deemed to mean the actual knowledge of ▇▇▇ ▇▇▇▇▇▇ and ▇▇▇
▇▇▇▇▇), there are no pending or threatened actions, suits, claims, legal
proceedings or other proceedings based on, and Seller has not received any
written notice of, any complaint, order, directive, citation, notice of
responsibility, notice of potential responsibility, or information request
from any Governmental Authority, with respect to any Environmental Laws.
3.8(b) Environmental Law. To the best of Seller's actual knowledge
(which shall be deemed to mean the actual knowledge of ▇▇▇ ▇▇▇▇▇▇ and ▇▇▇
▇▇▇▇▇), Seller is in compliance, in all material respects, with all
applicable Environmental Laws, including having obtained and maintained all
permits, licenses, certificates, and approvals required under any
Environmental Law.
3.9 Insurance.
Schedule 3.9 contains a list of all policies of property, fire, casualty,
liability, workmen's compensation, relating to the Assets (other than the
Excluded Assets) of the business and operations of the Cable System and
owned or held by Seller as of the date hereof. All such policies are in
full force and effect.
3.10 Cable System.
Schedule 3.10 contains lists with respect to the Cable System of the
approximate number of: (a) Homes Passed as reported in the Cable System's
records; (b) miles of installed plant; (c) Basic Equivalent Subscribers;
(d) the minimum channels and MHz capacity of the Cable System; (e) a
description of basic and optional services available from the Cable System,
the rates charged for each, and the number of Basic Equivalent Subscribers
receiving each optional service; and (f) a current channel line-up for the
Cable System. Seller shall update Schedule 3.10 as of the Closing Date.
3.11 No other Representations. Seller shall not be deemed to have
made any representation or warranty other than as set forth in this
Agreement. THE ASSETS ARE BEING TRANSFERRED "AS IS" AND NO OTHER
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, ARE GIVEN OTHER THAN AS
EXPRESSLY CONTAINED HEREIN, INCLUDING, WITHOUT LIMITATION, MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES BY PURCHASER
-------------------------------------------
Purchaser represents and warrants to Seller as follows:
4.1 Organization and Standing.
Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the State of Indiana and has all requisite power
and authority to carry on its business as now being conducted. Purchaser
has all requisite power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby.
4.2 Authorization.
The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate proceedings on the part of
Purchaser and no other corporate proceedings or actions on the part of
Purchaser, its board of directors or its shareholders is necessary
therefor. This Agreement constitutes a valid and binding agreement and
obligation of Purchaser, enforceable in accordance with its terms.
4.3 Required Consents; No Conflicts.
Except in connection with the filings referred to in Section 4.6 and
Section 5.1, the execution, delivery and performance by Purchaser of this
Agreement will not require the consent, approval, authorization or permit
of, or filing with, or notification to any person, entity or Governmental
Authority, except which would not materially affect Purchaser's ability to
consummate the transactions contemplated by this Agreement.
4.4 Absence of Litigation.
There is no action, suit, investigation, claim, arbitration or litigation
pending or, to the best of Purchaser's knowledge, threatened against,
affecting or involving the transactions contemplated by this Agreement or
that would affect Purchaser's ability to perform its obligations under this
Agreement, at law or in equity, or before or by any court, arbitrator or
Governmental Authority, and Purchaser is not operating under or subject to
an order, award, judgment, writ, decree, determination or injunction of any
court, arbitrator or Governmental Authority that would affect the
transactions contemplated by this Agreement or its ability to perform its
obligations under this Agreement.
4.5 Qualification of Purchaser.
Purchaser knows of no facts or circumstances that would cause Purchaser not
to meet any qualification to be the transferee of the Franchise or that
Purchaser believes will delay a routine grant of the FCC Assignment
Applications (as defined in Article 5.1).
4.6 HSR Filings.
Purchaser shall, as promptly as practicable following the execution of this
Agreement, and Seller shall cooperate with Purchaser in connection
therewith, file with the Department of Justice and the Federal Trade
Commission any documents required under the HSR Act, and Purchaser shall
use its best efforts to obtain early termination of all waiting periods
under the HSR Act. All fees assessed in connection with the filing of such
forms and documents shall be borne by the Purchaser.
ARTICLE 5.
PRE-CLOSING FILINGS AND UNDERTAKINGS
------------------------------------
5.1 Franchise Transfer Application; FCC Assignment Applications.
5.1(a) Franchise Transfer Application. By August 15, 1998, Seller and
Purchaser shall have a completed transfer application submitted to the City
of Weston in full compliance with the Cable Ordinance and the Franchise
("Franchise Transfer Application"). Seller and Purchaser will diligently
take, or fully cooperate in the taking of, all necessary and proper steps,
and provide any additional information reasonably requested, and use their
respective best efforts to resolve objections that may be asserted by the
City of Weston or any third party, in order to obtain promptly the
requested consent and approval of the transfer of the Franchise. Purchaser
shall pay for all of the costs and fees associated with the Franchise
Transfer Application.
5.1(b) FCC Assignment Applications. As promptly as practicable
following the execution of this Agreement, Seller and Purchaser shall
jointly file one or more applications with the FCC requesting its consent
to the assignment of any FCC Licenses to be assigned to Purchaser ("FCC
Assignment Applications"). Seller and Purchaser will diligently take, or
fully cooperate in the taking of, all necessary and proper steps, and
provide any additional information reasonably requested, and use their
respective reasonable commercial efforts to resolve objections that may be
asserted by the FCC or any third party, in order to obtain promptly the
requested consent and approval of the FCC Assignment Applications.
Purchaser shall pay for all of the costs and fees associated with the FCC
Assignment Applications.
5.2 Sharing Information.
Each party hereto shall as promptly as possible, and in any event within
two (2) business days, inform the other of any material communications
between such party and the FCC or any other Governmental Authority
regarding this Agreement or the transactions contemplated hereby. If any
party receives a request for additional information or documentary material
from any such Governmental Authority, then such party shall endeavor in
good faith to make, or cause to be made, as promptly as practicable and
after consultation with the other party, an appropriate response to such
request.
5.3 Environmental Reports.
By July 13, 1998, Seller shall cause to be delivered to Purchaser, at
Seller's sole cost and expense, a Phase I environmental site assessment of
the Real Property, prepared by: Dames & ▇▇▇▇▇ with offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("Phase I Report"). Upon Seller's
receipt of the Phase I Report (which has been certified to Purchaser),
Seller shall send a copy of such report to Purchaser. If, upon receipt of
the Phase I Report, the Purchaser has reasonable grounds to believe that
there is contamination of the Cable System Site with Hazardous Materials,
Purchaser shall contact Seller and be required to obtain Seller's written
consent prior to conducting a Phase II environmental site assessment, or
any invasive testing or laboratory analyses ("Phase II Report").
ARTICLE 6.
COVENANTS AND AGREEMENTS OF SELLER
----------------------------------
Subject to Section 8. 1 below, Seller covenants and agrees with Purchaser
as follows:
6.1 Negative Covenants.
Pending and prior to the Closing, Seller will not, without the prior
written consent or approval of Purchaser, which shall not be unreasonably
withheld or delayed, do or agree to do any of the following, as such
actions relate to the Cable System or the Assets:
6.1(a) Dispositions; Mergers. Sell, assign, lease or otherwise
transfer or dispose of any of the Assets; or merge or consolidate with or
into any other entity or enter into any contracts relating thereto;
provided, however, that Seller may sell, assign, lease or otherwise
transfer or dispose of any Asset in the Ordinary Course of Business
provided that either: (i) it is replaced, or (ii) the sale proceeds with
respect to such Asset are held for the benefit of the Purchaser.
6.1(b) Additional Agreements/Material Contracts. Acquire or enter
into any Additional Agreements except in the Ordinary Course of Business,
or renew, extend, amend, alter, modify, replace or otherwise change any
Material Contract, except in the Ordinary Course of Business.
6.1(c) Contract Breaches. Do or omit to do any act (or permit such
action or omission) which will cause a material breach of any Material
Contract to which Seller is a party or by which Seller is bound.
6.2 Affirmative Covenants.
Prior to the Closing Date, Seller will, as such actions relate to the Cable
System or the Assets:
6.2(a) Normal Operations. Subject to the terms and conditions of this
Agreement (including, without limitation, Section 6.1) (i) carry on the
business and activities of the Cable System in the Ordinary Course of
Business; (ii) pay or otherwise satisfy all obligations of the Cable System
in the Ordinary Course of Business; (iii) maintain all Assets in customary
repair, order and condition; and (iv) maintain its books of account,
records, and files in substantially the same manner as heretofore
maintained.
6.2(b) Actions. Take all actions under the applicable laws and
regulations of the State of Florida that in Seller's opinion are
reasonably necessary to effectuate the transactions contemplated by this
Agreement and by the other Transaction Documents.
6.2(c) Access. Seller shall: (i) give to Purchaser and Purchaser's
authorized representatives access during normal business hours to Seller's
properties, books, records, contracts, commitments, Cable System
facilities, premises, and equipment and to Seller's officers and employees,
agents and representatives (including, without limitation, the independent
accountants of Seller) relating to the Assets, and (ii) permit Purchaser
and Purchaser's consulting engineers and independent contractors, at
Purchaser's expense, to conduct engineering and other inspections of the
Cable System and the Assets, provide that all access under subparagraphs
(i) and (ii) shall be upon reasonable prior notice and in a manner that
will not interfere with the Cable System's operations and all such
information obtained by Purchaser shall be kept confidential and used only
in connection with its purchase of the Assets (other than the Excluded
Assets).
6.2(d) Encumbrances. Pay in full all liabilities associated with and
use its reasonable commercial efforts to obtain discharges of all
mortgages, security interests, liens and similar claims by third parties
encumbering the Assets (other than Permitted Encumbrances) at or prior to
the Closing Date.
6.2(e) Insurance. Maintain in full force and effect all of their
existing casualty, liability, and other insurance through the Closing Date
in amounts not less than those in effect on the date hereof.
6.2(f) Violations. Upon receiving notice or otherwise becoming aware
of any material violations under any applicable laws and regulations,
promptly notify Purchaser and, at Seller's expense, use reasonable
commercial efforts to cure all such violations prior to the Closing Date.
6.2(g) Interruption in Cable System Operation . Promptly notify
Purchaser in writing if the Cable System ceases to operate at its activated
bandwidth for more than 48 consecutive hours. Such notice shall specify the
reason or reasons for such cessation and the corrective measures taken or
to be taken by Seller.
6.2(h) Environmental Matters. (i) Promptly furnish to Purchaser
written notice of any material discharge of any Hazardous Materials or of
any actions or notices described in Section 3.8, and (ii) any material
change in the information set forth in Section 3.8.
6.2(i) Consents. Use commercially reasonable efforts to obtain any
third party consents required to assign to Purchaser all Material Contracts
and to obtain third party consents to all other Additional Agreements. If,
on the Closing Date, Seller has not obtained any required consent for the
assignment of any Material Contract to Purchaser and the Closing occurs,
then after the Closing Date, Seller will continue to use commercially
reasonable efforts, and the Purchaser will cooperate with Seller, to obtain
any such consent and/or to remove any other impediments to the assignment
of any such Material Contract. From and after the Closing, until the valid
assignment of all such Material Contracts, Seller will take such lawful
actions as are reasonably necessary to assure that Purchaser shall receive
the benefits of, and Purchaser shall be obligated to perform the
obligations of Seller under, all such Material Contracts after the Closing
Date to the same extent as if Purchaser were a party thereunder (and
Purchaser agrees to cooperate with Seller in connection with any such
actions and to enter into, at the time of the Closing, any lawful
arrangements in furtherance thereof, but at no additional cost to Purchaser
other than such costs as Purchaser would incur as a party to such Material
Contracts). This provision shall survive the Closing.
6.2(j) Updating . Five (5) days prior to the Closing Date, provide
Purchaser with documentation regarding any material changes to the
Schedules hereto including, without limitation, copies of Additional
Agreements.
6.2(k) Consent of Lenders. Use commercially reasonable efforts to
obtain the consents of its lenders under any and all existing credit
facilities which are required to consummate the transactions contemplated
by this Agreement. If such consents are not obtained by the Closing, Seller
shall have the right to terminate this Agreement pursuant to the terms of
Section 13 hereof. If such consents are not obtained by the Closing, and
if it results in Seller's inability to assign the Assets or Material
Contracts to Purchaser, or if in connection therewith, Purchaser will be
assuming a debt, liability, third party claim or obligation under any such
credit facilities, then Purchaser shall have the right to terminate this
Agreement pursuant to the terms of Section 13 hereof. This provision
shall survive the Closing.
6.3 Confidentiality.
Seller shall maintain strict confidentiality with respect to all documents
and information furnished to Seller by or on behalf of Purchaser or
retained by Seller pursuant to this Agreement. Nothing shall be deemed to
be confidential information that: (a) is known to Seller at the time of its
disclosure to Seller; (b) becomes publicly known or available other than
through disclosure by Seller; (c) is received by Seller from a third party
not actually known by Seller to be bound by a confidentiality agreement
with or obligation to Purchaser; or (d) is independently developed by
Seller as clearly evidenced by its records. Notwithstanding the foregoing
provisions of this Section 6.3, Seller may disclose such confidential
information: (i) to the extent required or deemed advisable to comply with
applicable laws and regulations, (ii) to its officers, managers, members,
employees, representatives, financial advisors, attorneys, accountants,
lenders and agents and to its members, officers and directors as necessary
with respect to the transactions contemplated hereby (so long as such
parties are informed of the confidentiality of such information), and (iii)
as necessary, to any Governmental Authority in connection with the
transactions contemplated hereby. If this Agreement is terminated, Seller
will return to Purchaser all confidential information prepared or furnished
by Purchaser relating to the transactions contemplated hereunder, whether
obtained before or after the execution of this Agreement. This provision
shall survive the Closing.
ARTICLE 7.
COVENANTS AND AGREEMENTS OF PURCHASER
-------------------------------------
Purchaser covenants and agrees with Seller as follows:
7.1 Confidentiality.
Purchaser shall maintain strict confidentiality with respect to all
documents and information furnished to Purchaser by or on behalf of Seller.
Nothing shall be deemed to be confidential information that: (a) is known
to Purchaser at the time of its disclosure to Purchaser; (b) becomes
publicly known or available other than through disclosure by Purchaser; (c)
is received by Purchaser from a third party not actually known by Purchaser
to be bound by a confidentiality agreement with or obligation to Seller; or
(d) is independently developed by Purchaser as clearly evidenced by its
records. Notwithstanding the foregoing provisions of this Section 7.1,
Purchaser may disclose such confidential information: (i) to the extent
required or deemed advisable to comply with applicable laws and
regulations, (ii) to its officers, directors, employees, representatives,
financial advisors, attorneys, accountants, and agents as necessary with
respect to the transactions contemplated hereby (so long as such parties
are informed of the confidentiality of such information), and (iii) as
necessary, to any Governmental Authority in connection with the
transactions contemplated hereby. If this Agreement is terminated,
Purchaser will return to Seller all confidential information prepared or
furnished by Seller relating to the transactions contemplated hereunder,
whether obtained before or after the execution of this Agreement. This
provision shall survive the Closing.
7.2 Actions.
Prior to the Closing, Purchaser shall take all action under the applicable
laws and regulations of any state having jurisdiction over Purchaser
necessary to effectuate the transactions contemplated by this Agreement.
7.3 Access.
Purchaser agrees to: (i) maintain all of the books and records of the Cable
System existing on the Closing Date for a period of ten (10) years from the
Closing Date, unless earlier released by Seller, and (ii) give Seller and
Seller's authorized representatives full and complete access upon
reasonable notice during normal business hours to such books and records of
the Cable System existing on the Closing Date.
7.4 Notice of Certain Events.
Purchaser agrees to promptly notify Seller of any fact or circumstance of
which Purchaser becomes aware after the date of this Agreement that would
reasonably be expected to cause it not to meet any qualification of the:
(i) Cable Ordinance, (ii) the Franchise, or (iii) to be the assignee of any
FCC License. Purchaser will use its best efforts to remedy such fact or
circumstance. Purchaser will not take any action that Purchaser knows, or
has reason to believe, would result in the occurrence of any such fact or
circumstance.
ARTICLE 8.
MUTUAL COVENANTS AND UNDERSTANDINGS
OF SELLER AND PURCHASER
-----------------------------------
8.1 Possession and Control.
Notwithstanding any other provision of this Agreement or any Transaction
Document, between the date hereof and the Closing Date, Purchaser shall not
directly or indirectly control, supervise or direct, or attempt to control,
supervise or direct, the business and operations of the Cable System, and
such operation, including complete control and supervision of all
programming, finances and employment shall be the sole responsibility of
Seller until the Closing Date; provided, however, that Purchaser shall be
entitled to inspect the Assets as provided in Section 6.2 (c). On and after
the Closing Date, Seller shall have no control over, or right to intervene,
supervise, direct or participate in, the business and operations of the
Cable System.
8.2 Risk of Loss.
The risk of loss or damage by fire or other casualty or cause (including,
but not limited to eminent domain) to the Assets until the Closing Date
shall be upon Seller. In the event of such loss or damage prior to the
Closing Date, Seller shall use commercially reasonable efforts to restore,
replace or repair the damaged Assets in accordance with Seller's past
practices at Seller's sole cost and expense. Notwithstanding anything to
the contrary contained herein, if Seller's uninsured costs in connection
with restoring, replacing, or repairing the damaged Assets exceeds One
Million and 00/100 Dollars ($1,000,000), Seller or Purchaser shall have the
right to terminate this Agreement.
8.3 Cable System Employees.
All employees of the Cable System shall be and remain Seller's employees as
of the Closing Date, with Seller having full authority and control over
their actions, and Purchaser shall not assume the status of an employer or
incur or be subject to any liability or obligation of an employer with
respect to, any such employees unless and until actually hired by
Purchaser. Seller shall be solely responsible for any and all liabilities
and obligations Seller may have to the employees of the Cable System which
have accrued on or prior to the Closing Date, or as a result of or arising
from the termination of any employee on or prior to the Closing Date,
including, without limitation, compensation, severance pay, incentive
bonuses, health expenses, and accrued vacation time, sick leave and
obligations under any of Seller's employee benefit plans.
Notwithstanding anything to the contrary contained herein, if Purchaser
hires any employee of the Cable System, Purchaser shall be solely
responsible for any and all liabilities and obligations in connection with
such employee which have accrued after the Closing Date, or as a result of
or arising from the termination of any employee after the Closing Date
(which shall be an Assumed Liability), including, without limitation,
compensation, severance pay, incentive bonuses, health expenses, and
accrued vacation time and sick leave.
ARTICLE 9.
CONDITIONS PRECEDENT TO
PURCHASER'S OBLIGATION TO CLOSE
-------------------------------
The obligations of Purchaser to purchase the Assets and to proceed with the
Closing are subject to the satisfaction (or waiver in writing by Purchaser)
at or prior to the Closing of each of the following conditions:
9.1 Representations and Covenants.
Each of the representations and warranties (other than those
representations and warranties which by their terms are as of a specific
date) of Seller made in this Agreement or in any other Transaction Document
shall be true and correct in all material respects, as though made on or as
of the Closing Date, and Seller shall have performed and complied in all
material respects with all covenants and agreements required by this
Agreement or any other Transaction Document to be performed or complied
with by Seller prior to the Closing.
9.2 Consents.
Seller shall have either: (a) obtained prior to the Closing Date all
consents, authorizations or approvals necessary to effect valid assignments
to Purchaser of the Material Contracts (including any Additional Agreements
that either: (i) replace any Material Contract, or (ii) the subject matter
and value of which is substantially similar to any Material Contract, but
excluding those Material Contracts that have expired in the Ordinary Course
of Business prior to the Closing Date), or (b) entered into an arrangement
pursuant to Section 6.2(i) hereof with respect to such Material Contracts.
9.3 Delivery of Documents.
Seller shall have delivered to Purchaser the Transaction Documents required
to be delivered by Seller to Purchaser pursuant to Section 11.2.
9.4 Franchise Renewal.
The Franchise Renewal shall have been obtained by Seller.
9.5 Franchise Transfer.
The Franchise Transfer Application to Purchaser shall have been granted.
9.6 Legal Proceedings.
No Governmental Authority shall have enacted, enforced, issued or entered
any law, rule, regulation or order, including in connection with any action
or proceeding brought by a third party (not subsequently dismissed, settled
or otherwise terminated), which prohibits or invalidates the transactions
contemplated by this Agreement or any other Transaction Document or
materially and adversely prevents, limits, restricts or impairs the
ownership, use or operation of the Assets or the Cable System by Purchaser,
other than an action or proceeding instituted by Purchaser.
ARTICLE 10.
CONDITIONS PRECEDENT TO
SELLER'S OBLIGATION TO CLOSE
----------------------------
The obligations of Seller to sell, transfer, convey and deliver the Assets
(other than the Excluded Assets) and to proceed with the Closing are
subject to the satisfaction (or waiver in writing by Seller) at or prior to
the Closing of each of the following conditions:
10.1 Representations and Covenants.
Each of the representations and warranties of Purchaser made in this
Agreement shall be true and correct, in all material respects, as though
made on or as of the Closing Date, and Purchaser shall have performed and
complied in all material respects with all covenants and agreements
required by this Agreement or any other Transaction Document to be
performed or complied with by Purchaser prior to the Closing.
10.2 Delivery by Purchaser.
Purchaser shall have delivered to Seller: (i) the Purchase Price and (ii)
any other monies or document required to be delivered by Purchaser to
Seller pursuant to Section 11.3.
10.3 Franchise Transfer.
The Franchise Transfer Application to Purchaser shall have been granted.
10.4 Franchise Renewal.
The Franchise Renewal shall have been obtained by Seller.
10.5 Legal Proceedings.
No Governmental Authority shall have enacted, enforced, issued or entered
any law, rule, regulation or order, including in connection with any action
or proceeding brought by a third party, (not subsequently dismissed,
settled, or otherwise terminated) which prohibits or invalidates the
transactions contemplated by this Agreement, any other Purchaser Document
or any Transaction Document, other than an action or proceeding instituted
by Seller.
ARTICLE 11.
THE CLOSING
-----------
11.1 Closing.
11.1(a) Closing Date. Unless otherwise agreed upon in writing by
Purchaser and Seller, the Closing Date shall be October 30, 1998, but the
Adjustment Date shall be October 31, 1998. Time is of the essence with
respect to the Closing Date.
11.1(b) Closing Venue. The Closing shall be held at Seller's affiliate
company's corporate offices located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇.
11.2 Delivery by Seller.
At or before the Closing, Seller shall deliver to Purchaser the following
Transaction Documents:
11.2(a) Contracts; Agreements and Instruments. The following
Transaction Documents dated as of the Closing Date and duly executed by
Seller, in form and substance reasonably satisfactory to counsel to
Purchaser and sufficient to transfer and convey to Purchaser all of
Seller's right, title and interest in and to the Assets:
(i) the Assignment of Leases;
(ii) the ▇▇▇▇ of Sale;
(iii) an Allocation of Purchase Price and Assumed Liabilities pursuant to
Article 16;
(iv) the Assignment of Contracts;
(v) a Schedule of Purchase Price adjustments pursuant to Section 2.5;
(vi) the Arvida Agreement; and
(vii) all such other general instruments of transfer, assignment
and conveyance, deeds, certificates of title, assignments, evidences of
consent or waiver, and other instruments or documents in form and substance
satisfactory to Purchaser, as shall be necessary to evidence the sale,
assignment, transfer and conveyance of the Assets to Purchaser in
accordance with this Agreement.
11.2(b) Consents. Originals of all consents obtained pursuant to
Sections 6.2 (i) and 6.2(k).
11.2(c) UCC Report. A report dated not more than thirty (30) days prior
to the Closing Date evidencing no judgments, financing statements, tax
liens, mechanics's, materialmen's or other statutory liens on file with
respect to the Assets, and, if such report evidences that judgments,
financing statements, tax liens, mechanics's, materialmen's or other
statutory liens are on file with respect to any of the Assets, a
termination statement or other appropriate document signed by the secured
party or lienholder evidencing the release or termination of such financing
statement or such lien or a pay-off letter from such secured party or
lienholder indicating that such party or lienholder will provide such
release or termination statement upon receipt of payment from the proceeds
of the sale contemplated herein.
11.2(d) Certified Consents; Certificates. A copy of: (i) a written
consent signed by an officer of the general partner of Seller and certified
as being correct and complete and then in full force and effect,
authorizing the execution, delivery and performance of the Transaction
Documents, and the consummation of the transactions contemplated thereby,
as of the Closing Date. Certificates from Seller signed on behalf of Seller
by an officer of the general partner of Seller certifying that all
conditions set forth in Section 9.1 (giving effect to any updated Schedules
pursuant to Section 6.2(j)) have been satisfied; and (ii) Certificates
signed by the officers of Seller as to the authorization of the officers
executing any Transaction Document on behalf of such Seller.
11.2(e) Certified Resolutions and Corporate Documents. A copy of: (i)
the resolutions of the board of directors of the general partner of Seller,
certified as being correct and complete and then in full force and effect,
authorizing the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby, and (ii) a copy
of the limited partnership agreement of Seller, certified by the corporate
secretary of the general partner of Seller as being true, correct and
complete as of the Closing Date. A copy from the general partner of
Arvida/JMB Partners of a resolution of its board of directors, certified as
being correct and complete and then in full force and effect, authorizing
the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby.
11.2(f) Other Documents. Such other documents to be delivered by Seller
hereunder as are reasonably necessary for Purchaser to effectuate and
document the transactions contemplated hereby.
11.3 Delivery by Purchaser.
At or before the Closing, Purchaser shall deliver to Seller the following:
11.3(a) Purchase Price Payment. The Purchase Price.
11.3(b) Purchaser Documents. Such certificates, instruments or
documents as Seller may reasonably request in order to effect and document
the transactions contemplated hereby.
11.3(c) Certified Resolutions and Corporate Documents. A copy of: (i)
the resolutions of the board of directors of Purchaser, certified as being
correct and complete and then in full force and effect, authorizing the
execution, delivery and performance of this Agreement and the consummation
of the transactions contemplated hereby, and (ii) a copy of the certificate
of incorporation and by-laws of Purchaser, certified by the corporate
secretary of Purchaser as being true, correct and complete as of the
Closing Date.
11.3(d) Officer's Certificate. (i) A certificate of Purchaser signed by
its president and corporate secretary certifying that all conditions set
forth in Section 10.1 and Section 10.5 have been satisfied; and (ii) a
certificate signed by the corporate secretary of Purchaser as to the
incumbency of the officer of Purchaser executing this Agreement on behalf
of the Purchaser.
11.3(e) Allocation. The allocation of Purchase Price and Assumed
Liabilities made pursuant to Article 16.
11.3(f) Other Documents. Such other documents to be delivered by
Purchaser hereunder as are reasonably necessary for Seller to effectuate
and document the transactions contemplated hereby.
ARTICLE 12.
NO SURVIVAL; INDEMNIFICATION
----------------------------
12.1 No Survival of Representations.
Except as otherwise provided in this Article 12, or elsewhere specifically
provided in this Agreement, the representations and warranties of Seller
and Purchaser in this Agreement shall not survive after the Closing Date.
12.2 Indemnification by Seller.
Excluding Section 5.3 and subject to the conditions and provisions of
Section 12.4, Seller hereby agrees to indemnify, defend and hold harmless
Purchaser and Purchaser's respective directors, officers, partners,
shareholders, managers and employees ("Purchaser Indemnified Parties") from
and against and with respect to any and all Losses, asserted against,
resulting to, imposed upon or incurred by Purchaser Indemnified Parties,
directly or indirectly, by reason of or resulting from: (a) any of Seller's
Retained Liabilities; (b) any misrepresentation or breach of the
warranties of Seller contained in or made pursuant to any Transaction
Documents; (c) any noncompliance by Seller with any covenants, agreements
or undertakings of Seller contained in or made pursuant to any Transaction
Document; (d) any liability or obligation of or claims against Purchaser
Indemnified Parties (whether absolute, accrued, contingent or otherwise and
whether contractual, Tax or any other type of liability or obligation or
claim) arising out of, relating to or resulting from the business of
Seller, or relating to or resulting from the Excluded Assets or the
Excluded Liabilities, or the business and operations of the Cable System
prior to the Closing Date; and (e) any failure by Seller prior to the
Closing Date to obtain and hold any permit, license or approval from any
Governmental Authority necessary in order to conduct the operations of the
Cable System prior to the Closing Date in accordance with applicable law
and to own, use and maintain the Assets prior to the Closing Date.
12.3 Indemnification by Purchaser.
Subject to the conditions and provisions of Section 12.4, Purchaser hereby
agrees to indemnify, defend and hold harmless Seller, Seller's partners and
their respective directors, officers, partners, shareholders, managers and
employees ("Seller Indemnified Parties") from, against and with respect to
any and all Losses, asserted against, resulting to, imposed upon or
incurred by Seller Indemnified Parties, directly or indirectly, by reason
of or resulting from: (a) any liability or obligation of or claims against
Seller Indemnified Parties (whether absolute, accrued, contingent or
otherwise and whether contractual, Tax or any other type of liability or
obligation or claim) assumed by Purchaser pursuant to Section 2.6; (b) any
misrepresentation or breach of the warranties of Purchaser contained in or
made pursuant to any Purchaser Document; (c) any noncompliance by Purchaser
with any covenants, agreements or undertakings of Purchaser contained in or
made pursuant to any Purchaser Document; (d) any liability or obligation of
or claims against Seller Indemnified Parties (whether absolute, accrued,
contingent or otherwise and whether contractual, Tax or any other type of
liability or obligation or claim) arising out of, relating to or resulting
from the business of Purchaser, or relating to or resulting from the Assets
(other than the Excluded Assets) or the Assumed Liabilities, or the
business and operations of the Cable System after the Closing Date; (e) any
failure by Purchaser to obtain and hold any permit, license or approval
from any Governmental Authority necessary in order to conduct the
operations of the Cable System in accordance with applicable law and to
own, use and maintain the Assets; and (f) any decision by Purchaser to
close the transactions contemplated by this Agreement notwithstanding a
failure by Seller to obtain any consent, authorization or approval,
including Governmental Approvals relating to the assignment of governmental
permits, orders or authorizations, and consents, authorizations and
approvals of non-governmental third parties necessary to effect valid
assignments or transfers to Purchaser of any Asset, including any Material
Contract set forth on Schedule 2.1(e), or any Additional Agreements.
12.4 Conditions of Indemnification.
The obligations and liabilities of Seller and of Purchaser hereunder with
respect to their respective indemnities pursuant to this Article 12, shall
be subject to the following terms and conditions:
12.4(a) Losses. The party seeking indemnification (the "Indemnified
Party") must give the other party or parties, as the case may be (the
"Indemnifying Party"), notice specifying in reasonable detail the nature of
any such Losses promptly after the Indemnified Party receives notice
thereof; provided that the failure to give such notice shall not affect the
rights of the Indemnified Party hereunder except to the extent that the
Indemnifying Party's defense shall have been materially impaired.
12.4(b) Defense. The Indemnifying Party shall have the right, absent a
conflict of interest, to undertake, by counsel or other representatives of
its own choosing, the defense of such Losses at the Indemnifying Party's
risk and expense.
12.4(c) Costs and Expenses. In the event that the Indemnifying Party
shall elect not to undertake such defense, or, within a reasonable time
after notice from the Indemnified Party of any such Losses, shall fail to
defend, the Indemnified Party (upon further written notice to the
Indemnifying Party) shall have the right to undertake the defense,
compromise or settlement of such Losses, by counsel or other
representatives of its own choosing, on behalf of and for the account and
risk of the Indemnifying Party (subject to the right of the Indemnifying
Party to assume defense under Section 12.4(b) hereof at any time prior to
settlement, compromise or final determination thereof). In such event, the
Indemnifying Party shall pay to the Indemnified Party, in addition to the
other sums required to be paid hereunder, the reasonable costs and expenses
incurred by the Indemnified Party in connection with such defense,
compromise or settlement as and when such costs and expenses are so
incurred.
12.4(d) Compromise or Settlement of Losses. Anything in this Section
12.4 to the contrary notwithstanding, (i) if there is a reasonable
probability that Losses may materially and adversely affect the Indemnified
Party other than as a result of money damages or other money payments, the
Indemnified Party shall have the right, at its own cost and expense, to
participate in the defense, compromise or settlement of the Losses, (ii)
the Indemnifying Party shall not, without the Indemnified Party's written
consent, which shall not be unreasonably withheld, settle or compromise any
Losses or consent to entry of any judgment which does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to
the Indemnified Party of a release from all liability in respect of such
Losses in form and substance satisfactory to the Indemnified Party, and
(iii) in the event that the Indemnifying Party undertakes defense of any
Losses, the Indemnified Party, by counsel or other representative of its
own choosing and at its sole cost and expense, shall have the right to
consult with the Indemnifying Party and its counsel or other
representatives concerning such Losses and the Indemnifying Party and the
Indemnified Party and their respective counsel or other representatives
shall cooperate with respect to such Losses and (iv) in the event that the
Indemnifying Party undertakes defense of any Losses, the Indemnifying Party
shall have an obligation to keep the Indemnified Party informed of the
status of the defense of such Losses and furnish the Indemnified Party with
all documents, instruments and information that the Indemnified Party shall
reasonably request in connection therewith.
12.4(e) Claim for Indemnification. No claim for indemnification shall
be made by Purchaser against Seller unless the aggregate losses of
Purchaser exceed One Hundred Thousand and 00/100 Dollars ($100,000)
("Threshold Amount"), whereupon, Purchaser shall be entitled to
indemnification hereunder by the Seller for any such aggregate losses in
excess of the Threshold Amount. Notwithstanding any other provision of this
Agreement, the maximum liability that Seller shall have for indemnification
claims hereunder shall not exceed One Million Two Hundred Fifty Thousand
and 00/100 Dollars ($ 1,250,000) in the aggregate.
12.4(f) Expiration of Indemnification Obligations. The indemnification
obligations under this Article 12 with respect to Sections 12.2 and 12.3
shall expire two (2) years following the Closing Date; provided, that, if
any such indemnification claim under such Sections has been asserted in
writing prior to the stated expiration of the applicable period set forth
above, then any indemnification obligation with respect thereto shall
survive until final resolution thereof.
12.4(g) Hazardous Material Clean-Up. If any indemnity claim relates to
the cleanup of Hazardous Materials, such cleanup shall be required only to
the extent that it is required by a Governmental Authority pursuant to an
Environmental Law, regulation or ordinance.
ARTICLE 13.
TERMINATION
-----------
13.1 Termination.
This Agreement may be terminated at any time prior to the Closing by: (i)
the mutual consent, in writing, of Seller and Purchaser; (ii) Purchaser, by
written notice of termination delivered to Seller, if Seller is in material
default of its obligations hereunder and has failed to cure such default
within fifteen (15) days following written notice of such default sent by
Purchaser to Seller; (iii) Seller and Purchaser, pursuant to, and in
accordance with Section 6.2(k); (iv) Seller, by written notice of
termination delivered to Purchaser, if Purchaser is in material default of
its obligations hereunder and has failed to cure such default within
fifteen (15) days following written notice of such default sent by Seller
to Purchaser; (v) Purchaser if the Phase I Report indicates that there is
contamination of the Cable System Site from Hazardous Materials (Purchaser
shall then not be obligated to perform a Phase II Report), or if the Phase
I Report referenced in Section 5.3 recommends a Phase II Report and Seller
refuses to consent to such Phase II Report or if a Phase II Report confirms
that there is contamination from Hazardous Materials; (vi) Seller or
Purchaser pursuant to, and in accordance with Section 8.2, or (vii) by any
party not then in default hereunder if for any reason the Closing has not
occurred by November 30, 1998 (as such date may be extended by mutual
agreement of the parties).
13.2 Effect of Termination.
Subject to Article 14, in the event this Agreement is terminated as
provided in Sections 13.1(i), (iii), (v), (vi) or (vii), this Agreement
shall be deemed null, void and of no further force or effect, and the
parties hereto shall be released from all future obligations hereunder with
respect to the Cable System; provided, however, that the obligations of
Purchaser and Seller in Sections 6.3, 7.1, 13.2, 15.3 and 15.4, shall
survive such termination. In the event this Agreement is terminated as
provided in Sections 13.1(i), (iii), (v), (vi) or (vii), Purchaser shall
be paid the Escrow Deposit, together with any interest earned thereon. If
this Agreement is terminated as provided in Sections 13.1(ii) or (iv) the
rights of the parties shall be governed by Article 14.
ARTICLE 14.
REMEDIES
-----------
14.1 Default by Purchaser.
If this Agreement is terminated pursuant to Section 13.1(iv) and Seller is
not in material default or material breach of this Agreement, Seller shall
be paid the Escrow Deposit, together with any interest earned thereon, as
liquidated damages, and it being agreed that such payment shall constitute
full payment for any and all damages suffered by Seller by reason thereof
and that Seller shall have no rights to indirect, consequential or
punitive damages nor rights to claims for specific performance from
Purchaser or its Affiliates.
14.2 Default by Seller.
If this Agreement is terminated pursuant to Section 13.1(ii) and Purchaser
is not in material default or material breach of this Agreement, Purchaser
shall be reimbursed the Escrow Deposit, together with any interest earned
thereon, and Purchaser shall have the right to actual out-of-pocket damages
("Out-of-Pocket Damages"), and it being agreed that such payment of the
Escrow Deposit and Out-of-Pocket Damages shall constitute full payment for
any and all damages suffered by Purchaser by reason thereof and that
Purchaser shall have no rights to indirect, consequential or punitive
damages nor rights to claims for specific performance from Seller or its
Affiliates.
ARTICLE 15.
GENERAL PROVISIONS
-------------------
15.1 Further Assurances.
Subject to the terms and conditions herein provided, each of the parties
hereto agrees to use its commercially reasonable efforts to take or cause
to be taken all such further actions, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations
to consummate and make effective the transactions contemplated by this
Agreement or in order to fully effectuate the purposes, terms and
conditions of this Agreement (including, without limitation, executing,
delivering and filing or causing to be executed, delivered and filed such
further documents and instruments and obtaining such consents (including
Governmental Approvals), as may be necessary or reasonably requested in
connection with the consummation of the transactions contemplated hereby).
In case at any time after the Closing Date any further action is necessary
to carry out the purposes of this Agreement, including, without limitation,
the securing of consents of third parties, each party hereto shall use its
commercially reasonable efforts to take all such necessary action. This
provision shall survive the Closing.
15.2 Mail.
Seller hereby authorizes and empowers Purchaser from and after the Closing
Date: (a) to receive and open mail addressed to the Cable System, and (b)
to deal with the contents thereof in any manner Purchaser sees fit,
provided such mail and the contents thereof relate to the Cable System or
the Assets (other than the Excluded Assets) or to any of the Assumed
Liabilities for any period from and after the Closing Date. Seller agrees
to deliver to Purchaser any mail, checks or other documents received by it
pertaining to the Cable System or the Assets (other than the Excluded
Assets) or any of the Assumed Liabilities for any period from and after the
Closing Date. Purchaser agrees to deliver to Seller any mail which it
receives to which it is not entitled by reason of the Agreement or
otherwise and to which Seller is entitled. This provision shall survive the
Closing.
15.3 Brokers.
Seller represents to Purchaser that Seller has not engaged, or incurred any
liability (for any brokerage fees, finders' fees, commissions or otherwise)
to, any broker, finder or agent in connection with the transactions
contemplated by this Agreement, except ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice
President of Communications Equity Associates, Inc. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ phone number: (▇▇▇) ▇▇▇-▇▇▇▇,
fax number: (▇▇▇) ▇▇▇-▇▇▇▇. Seller shall be responsible to pay for
Communications Equity Associates, Inc.'s brokerage fee in connection
herewith pursuant to a separate agreement. Purchaser represents to Seller
that Purchaser has not engaged, or incurred any unpaid liability (for any
brokerage fees, finders' fees, commissions or otherwise) to, any broker,
finder or agent in connection with the transactions contemplated by this
Agreement; and Seller agrees to indemnify Purchaser, and Purchaser agrees
to indemnify Seller, against any claims asserted against the other parties
for any such fees or commissions by any person purporting to act or to have
acted for or on behalf of the indemnifying party. Notwithstanding any other
provision of this Agreement, this Section 15.3 shall survive the Closing
without limitation.
15.4 Expenses.
Each party hereto shall pay its own expenses incurred in connection with
this Agreement and in the preparation for and consummation of the
transactions provided for herein. Notwithstanding the foregoing, Purchaser
shall pay for any expenses in connection with any transfer, sales, filing
or use Taxes or fees applicable to, imposed upon or arising out of the
transactions contemplated hereby including, without limitation, any
transfer taxes, documentary stamp taxes, title insurance premiums and
filing or recording fees relating to the transfer of Real Property or
personal property, or filing or transfer fees and costs relating to the
Franchise Transfer Application, FCC Assignment Applications, or any fee for
a filing under, or relating to the HSR Act.
15.5 Notices.
All notices, demands, requests, or other communications which may be or are
required to be given or made by any party to any other party pursuant to
this Agreement shall be in writing and shall be hand delivered, mailed by
first-class registered or certified mail, return receipt requested, postage
prepaid, delivered by overnight air courier addressed as follows. Either
party may transmit by facsimile transmission in addition to any other form
of transmission as referenced herein. Facsimile transmission alone shall
not be deemed sufficient notice.
(i) If to Purchaser:
Advanced Cable Communications
▇▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice President
Phone: (▇▇▇) ▇▇▇-▇▇▇▇ Ext. 251
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇, McClosky, Smith, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
Schurz Communications, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: E. ▇▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to Seller:
▇▇▇▇▇ ▇. ▇▇▇▇▇
President
Arvida
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ ▇▇▇▇▇
General Counsel
Arvida
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
and with a copy (which shall not constitute notice) to:
▇▇▇▇ ▇▇▇▇▇▇▇
General Counsel
JMB Realty Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address as the addressee may indicate by written notice to
the other parties. Each notice, demand, request, or communication which
shall be given or made in the manner described above shall be deemed
sufficiently given or made for all purposes at such time as it is delivered
to the addressee (with the return receipt, the delivery receipt, or the
affidavit of messenger being deemed conclusive but not exclusive evidence
of such delivery) or at such time as delivery is refused by the addressee
upon presentation.
15.6 Waiver.
No delay or failure on the part of any party hereto in exercising any
right, power or privilege under this Agreement or under any other
instrument or document given in connection with this Agreement shall impair
any such right, power or privilege or be construed as a waiver of any
default or any acquiescence therein. No single or partial exercise of any
such right, power or privilege shall preclude the further exercise of such
right, power or privilege, or the exercise of any other right, power or
privilege. No waiver shall be valid against any party hereto unless made in
writing and signed by the party against whom enforcement of such waiver is
sought and then only to the extent expressly specified therein.
15.7 Purchaser's Assignment.
Purchaser shall not assign this Agreement (except as provided in Section
15.14 (b)), in whole or in part, whether by operation of law or otherwise,
without the prior written consent of Seller which such consent may be
unreasonably withheld in Seller's sole and absolute discretion. Any
purported assignment contrary to the terms hereof shall be null, void and
of no force and effect.
15.8 Successors and Assigns.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns as permitted
hereunder. No person or entity other than the parties hereto and their
respective successors and assigns is or shall be entitled to bring any
action to enforce any provision of this Agreement against any of the
parties hereto, and the covenants and agreements set forth in this
Agreement shall be solely for the benefit of, and shall be enforceable only
by the parties hereto or their respective successors and assigns as
permitted hereunder.
15.9 Entire Agreement; Amendment.
This Agreement, including the Schedules hereto and the other instruments
and documents referred to herein or delivered pursuant hereto contain the
entire agreement among the parties with respect to the subject matter
hereof and supersede all prior oral or written agreements, commitments or
understandings with respect to such matters. No amendment, modification or
discharge of this Agreement shall be valid or binding unless set forth in
writing and duly executed by the parties hereto.
15.10Severability.
If any part of any provision of this Agreement or any other contract,
agreement, document or writing given pursuant to or in connection with this
Agreement shall be invalid or unenforceable under applicable law, such part
shall be ineffective to the extent of such invalidity or unenforceability
only, without in any way affecting the remaining parts of such provisions
or the remaining provisions of said contract, agreement, document or
writing.
15.11Headings.
The headings of the sections and subsections contained in this Agreement
are inserted for convenience only and do not form a part or affect the
meaning, construction or scope thereof.
15.12Governing Law.
This Agreement, the rights and obligations of the parties hereto, and any
claims or disputes relating thereto, shall be governed by and construed
under and in accordance with the laws of the State of Florida.
15.13Signature in Counterparts.
This Agreement may be executed in separate counterparts, none of which need
contain the signatures of all parties, each of which shall be deemed to be
an original, and all of which taken together constitute one and the same
instrument.
15.14Assignment.
15.14 (a) Seller's Assignment.
Notwithstanding anything to the contrary contained herein, Seller may
assign and transfer its rights and obligations related to or arising out of
this Agreement to any corporation, partnership or other entity owned or
controlled by, or under common control with, Arvida/JMB Partners L.P.
("JMB"), a Delaware limited partnership, Pacific Properties Inc.,
("Properties") or any of their respective Affiliates. Notwithstanding the
foregoing, no assignment by Seller hereunder and no transfer by Seller of
its rights and obligations related to or arising out of this Agreement
shall relieve Seller of its responsibilities and liabilities hereunder.
This Agreement, including the rights and obligations related to or arising
out of it, shall be assignable by Seller to any Affiliate of Seller or to a
publicly owned entity in which at least Twenty Percent (20%) of the
ownership thereof is owned or controlled directly or indirectly by one (1)
or more Affiliates of Seller, JMB or Properties, without the prior consent
of the Purchaser. Any other assignment or transfer shall be governed by the
provisions of the Cable Ordinance and the Franchise.
15.14 (b) Purchaser's Assignment.
Notwithstanding anything to the contrary contained herein, Purchaser may
assign and transfer its rights and obligations related to or arising out of
this Agreement to any corporation, partnership or other entity owned or
controlled by, or under common control with Purchaser or any of its
respective Affiliates. Notwithstanding the foregoing, no assignment by
Purchaser hereunder and no transfer by Purchaser of its rights and
obligations related to or arising out of this Agreement shall relieve
Purchaser of its responsibilities and liabilities hereunder. Any other
assignment or transfer shall be governed by the provisions of this
Agreement, the Cable Ordinance and the Franchise.
AFFILIATE DEFINITION: "Affiliate" of a specified person or entity for the
purposes of this Agreement, means a person or entity which (either directly
or indirectly, through one or more intermediaries) controls, is under
common control with or is controlled by, the specified person or entity.
For purposes of this definition control of a specified person or entity
(including the correlative terms "controlled by" and "under common control
with") means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of the specified
person or entity, whether through ownership of voting securities, the
ability to appoint one or more of an entity's trustees, directors or
persons in a similar capacity, or otherwise.
15.15Seller's Liability.
Notwithstanding anything to the contrary in this Agreement, no present or
future constituent partner in or agent of Seller, nor any shareholder,
officer, director, employee, trustee, beneficiary or agent of any
corporation or trust that is or becomes a constituent partner in Seller,
shall be personally liable, directly or indirectly, under or in connection
with this Agreement, or any agreement, instrument or certificate executed
in connection with this Agreement, or any amendments or modifications to
any of the foregoing made at any time or times, heretofore or hereafter;
and the Purchaser and each of its successors and assignees waives and does
hereby waive any such personal liability. For purposes of this Agreement,
and any such agreements, instruments and certificates, and any such
amendments or modifications, neither the negative capital account of any
constituent partner in Seller, nor any obligation of any constituent
partner in Seller to restore a negative capital account or to contribute
capital to Seller or to any other constituent partner in Seller, shall at
any time be deemed to be the property or an asset of Seller or any such
other constituent partner (and neither the Purchaser nor any of its
successors or assignees shall have any right to collect, enforce or proceed
against or with respect to any such negative capital account or partner's
obligation to restore or contribute). As used in this paragraph, a
"constituent partner" in Seller shall mean any direct partner in Seller and
any person or entity that is a partner in any partnership that, directly or
indirectly through one or more other partnerships, is a partner in Seller.
ARTICLE 16.
ALLOCATION OF PURCHASE PRICE AND ASSUMED LIABILITIES
----------------------------------------------------
The Purchase Price shall be allocated for tax reporting purposes as agreed
to by Purchaser and Seller in a manner as set forth in an Allocation of
Purchase Price and Assumed Liabilities Schedule to be delivered by Seller
to Purchaser and shall be agreed upon by mutual consent of the parties
hereto, on or before September 15, 1998, in order to be finalized as a
Transaction Document pursuant to Section 11.2 (a) iii of this Agreement.
Purchaser and Seller declare that the valuation of the Assets and the
Assumed Liabilities has been determined in good faith and as the result of
arms' length bargaining and both parties agree to reasonably cooperate
with each other in such determination. Purchaser and Seller agree that no
position inconsistent with the allocation agreed to by Purchaser and Seller
shall be taken by either party before any governmental or judicial
authority. If Purchaser and Seller are unable to reach an agreement on the
allocation prior to the Closing, the dispute shall, within ten (10) days
thereafter, be submitted by either party to a mutually agreed upon
nationally recognized "Big 6" firm of independent certified public
accountants that shall make its determination of the allocation within
thirty (30) days of such submission. The determination of the allocation
by such accounting firm shall be final and binding upon Purchaser and
Seller. Purchaser and Seller agree to file Internal Revenue Service Form
8594 in accordance with the agreed upon allocation referenced in the
Allocation of Purchase Price and Assumed Liabilities Schedule.
IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement,
or has caused this Agreement to be duly executed and delivered in its name
on its behalf, all as of the day and year first above written.
SELLER:
GULF AND PACIFIC COMMUNICATIONS LIMITED PARTNERSHIP
By: Pacific Properties, Inc., its general partner
By: ___________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
Sworn to and subscribed before me this ______day of July, 1998.
______________________________
Notary Public
My Commission Expires:
PURCHASER:
SCHURZ COMMUNICATIONS, INC.
By: ____________________________
Name: E. ▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President
Sworn to and subscribed before me this ______day of July, 1998.
_______________________________
Notary Public
My Commission Expires: