1
EXHIBIT 10.50
================================================================================
ASSET PURCHASE AGREEMENT
DATED AS OF JANUARY 8, 1998
BY AND BETWEEN
DIGITAL TELEVISION SERVICES OF GEORGIA, LLC
AND
OCMULGEE COMMUNICATIONS, INC.
================================================================================
2
TABLE OF CONTENTS
ARTICLE I DEFINITIONS..............................................1
ARTICLE II SALE AND PURCHASE OF THE ASSETS..........................5
2.1. Sale and Purchase of Assets......................................5
ARTICLE III ASSUMPTION OF LIABILITIES/EXPRESS EXCLUSIONS.............6
3.1. Liabilities of Seller............................................6
ARTICLE IV PURCHASE PRICE; PAYMENT OF PURCHASE PRICE................7
4.1. Purchase Price...................................................7
4.2. Payment of Purchase Price........................................7
4.3. Adjustment to Purchase Price.....................................7
4.4. Allocation of Purchase Price.....................................8
ARTICLE V SELLER'S REPRESENTATIONS AND WARRANTIES..................8
5.1. Organization.....................................................8
5.2. Authority........................................................9
5.3. Title to the Purchased Assets....................................9
5.4. Condition of Fixed Assets........................................9
5.5. NRTC Membership; DBS Distribution Rights........................10
5.6. Inventory.......................................................10
5.7. Accounts Receivable.............................................10
5.8. Prepaid Expenses................................................11
5.9 Financial Statements............................................11
5.10. Absence of Certain Changes or Events............................11
5.11. Licenses and Permits............................................12
5.12. Tax Matters.....................................................12
5.13. Disclosures.....................................................12
5.14. Litigation......................................................13
5.15. Leased Subscriber Equipment.....................................13
5.16 Brokers, Finders................................................13
ARTICLE VI PURCHASER'S REPRESENTATIONS AND WARRANTIES..............13
6.1. Organization....................................................13
6.2. Authority.......................................................13
6.3. Disclosures.....................................................14
6.4. Brokers, Finders................................................14
ARTICLE VII COVENANTS...............................................15
7.1. Conduct of the Business Prior to Closing Date...................15
7.2. Access..........................................................16
7.3. Consent of NRTC, DirecTv and Others.............................17
7.4. Public Announcements; Confidentiality...........................17
7.5. Best Efforts....................................................17
7.6. Exclusive Dealing...............................................17
ii
3
7.7. Subscriber Leases...............................................17
7.8. Audit...........................................................18
ARTICLE VIII CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS.........18
8.1. Truth of Representations and Warranties.........................18
8.2. Performance.....................................................18
8.3. No Material Adverse Change......................................18
8.4. No Litigation Threatened........................................18
8.5. Consents........................................................19
8.6. Subscribers.....................................................19
8.7. Review of Seller................................................19
8.8. Seller's Closing Deliveries.....................................19
ARTICLE IX CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS............20
9.1. Truth of Representations and Warranties.........................20
9.2. Performance.....................................................20
9.3. No Litigation Threatened........................................20
9.4. Consents........................................................20
9.5. Purchaser's Closing Deliveries..................................21
ARTICLE X SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION.........................................21
10.1. No Survival of Representations and Warranties...................21
10.2. Indemnification of Purchaser....................................21
10.3. Indemnification of Seller.......................................22
10.4. Expiration of Indemnification Obligations.......................22
10.5. Right to Contest................................................22
ARTICLE XI MISCELLANEOUS...........................................23
11.1. Notices ........................................................23
11.2. Counterparts....................................................24
11.3. Governing Law...................................................24
11.4. Waivers.........................................................24
11.5. Severability....................................................24
11.6. Section and Article Heading References..........................24
11.7. Successors and Assigns; Assignment..............................25
11.8. Entire Agreement; Amendments....................................25
11.9. Expenses........................................................25
11.10. Knowledge of Seller.............................................25
11.11. Facsimile Signatures............................................25
11.12. Schedules.......................................................25
11.13. Termination of Agreement........................................26
11.14. Power of Attorney...............................................27
iii
4
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into as of this 8th day of January, 1998, by and between Digital Television
Services of Georgia, LLC, a Georgia limited liability company ("Purchaser") and
Ocmulgee Communications, Inc., a Georgia corporation ("Seller").
RECITALS
1. Seller owns and operates the National Rural Telecommunications
Cooperative's System No. 1017 (the "System") for the exclusive distribution in
certain areas in the States of Georgia and Florida of DBS Services offered by
DirecTv (the "Business").
2. Purchaser desires to acquire from Seller, and Seller desires to sell
to Purchaser all of Seller's rights under the NRTC/Member Agreement and the
NRTC/Retail Agreement relating to the Locations, any residual rights of Seller
as a member or affiliate of the NRTC to distribute DBS Services in the Locations
after the termination of the NRTC Agreements and certain of the assets used in
the Business, subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and legal sufficiency of which is hereby acknowledged, Purchaser and
Seller hereby agree as follows:
ARTICLE I
DEFINITIONS
The terms defined in this Article shall have the following respective
meanings for all purposes of this Agreement, and the following definitions are
equally applicable to both the singular and plural forms of the terms defined:
"Accounts Payable" shall mean all accounts payable of Seller to the
NRTC as of the Closing Date relating to the Business; including, without
limitation, accounts payable to the NRTC with respect to wholesale bills,
equipment and other services.
"Accounts Receivable" shall mean all of the accounts receivable of
Seller as of the Closing Date for all Customers which are listed on Report 19A
(Accounts Receivable Summary) of the NRTC Central Billing Systems Reports.
"Binder" shall mean the Two Hundred Fifty Thousand Dollars ($250,000)
Purchaser deposited with Seller on October 22, 1997, as a good ▇▇▇▇▇ ▇▇▇▇▇▇ to
proceed with the transactions contemplated by this Agreement.
"Cable Programming" shall have the meaning ascribed to such term in the
NRTC/Member Agreement.
5
"Cash" shall mean all cash in Seller's bank accounts at Huntington Bank
as of the Closing Date.
"Closing" shall mean the consummation and effectuation of the
transactions contemplated herein pursuant to the terms and conditions of this
Agreement and shall be held at 10:00 a.m. at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
& Scarborough, L.L.P., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ (i) at Purchaser's election, on the later of (a) the calendar day of such
month on which NRTC's accounting period closes after which all of the conditions
precedent set forth in Articles VIII and IX herein have been satisfied or
waived, or (b) January 30, 1998; or (ii) such other date or at such other time
or place (including via mail, overnight courier or facsimile transmission) as
the parties may mutually agree upon in writing. The Closing shall be as
effective as of the close of business on the Closing Date.
"Closing Date" shall mean the date on which the Closing actually
occurs.
"Commercial Establishment" shall have the meaning ascribed to such term
in the NRTC/Member Agreement.
"Committed Member Residence" shall have the meaning ascribed to such
term in the NRTC/Member Agreement.
"Current Assets" shall mean Cash, Accounts Receivable and Prepaid
Expenses of Seller, which will be acquired by Purchaser at Closing.
"Current Liabilities" shall mean Accounts Payables and Unearned Revenue
of Seller which will be assumed by Purchaser at Closing.
"Customers" shall mean those Persons, including Subscribers, which have
purchased DBS Services, or entered into a binding agreement to purchase DBS and
related services, from Seller at any time during the five (5) year period
immediately preceding the Closing Date.
"DBS Services" shall have the meaning ascribed to such term in the
NRTC/Member Agreement.
"DirecTv" shall mean DirecTv, Inc., a California corporation, the
successor in interest and rights holder to ▇▇▇▇▇▇ Communications Galaxy, Inc.
"Escrow Agent" shall mean Union Bank of California, N.A., a national
banking association with offices in San Francisco, California.
"Escrow Agreement" shall mean the Escrow Agreement dated as of the
Closing Date among the Escrow Agent, Purchaser and Seller which Escrow Agreement
shall be substantially in the form attached hereto as Schedule 1.1.
2
6
"Escrow Deposit" shall mean the Seven Hundred Fifty Thousand Dollars
($750,000) to be deposited by Purchaser with the Escrow Agent on the Closing
Date.
"Fixed Assets" shall mean the equipment and other tangible assets,
including, without limitation, any MTE terminals and demonstration units owned
by Seller and used or useable in connection with the Business, which equipment
and tangible assets are listed on Schedule 1.2 attached hereto.
"Franchise" shall mean any residual rights of Seller, if any, as a
member or affiliate of the NRTC to distribute DBS Services in the Locations
after the termination of the NRTC Agreements.
"GAAP" shall mean generally accepted accounting principles consistently
applied.
"Inventory" shall mean any DSS(R) subscriber equipment of Seller held
for resale, other than Leased Subscriber Equipment.
"Leased Subscriber Equipment" shall mean all DSS(R) subscriber
equipment of Seller leased or rented or to be leased or rented to Subscribers,
all accounts receivable arising therefrom and all records associated therewith.
"Lien" shall mean with respect to any property or asset, any mortgage,
lien, pledge, charge, security interest, encumbrance, claim, escrow, right of
first refusal, indenture, easement, license or other adverse claim or
restriction of any kind in respect of such property or asset. For purposes of
this Agreement, any restriction or limitation with respect to a security or
other ownership interest (including any restriction on the right to vote, sell
or otherwise dispose of such security or ownership interest) shall constitute a
"Lien" thereon. For the purposes of this Agreement, a Person shall be deemed to
own subject to a Lien any property or asset which it has acquired or holds
subject to the interest of a vendor or lessor under any conditional sale
relating to such property or asset.
"Locations" shall mean those counties in the States of Georgia and
Florida set forth on Schedule 1.3 attached hereto in which Seller has the
exclusive right to distribute DBS Services pursuant to the NRTC Agreements.
"Non-Select Services" shall have the meaning ascribed to such term in
the NRTC/Member Agreement.
"NRTC" shall mean the National Rural Telecommunications Cooperative, a
District of Columbia corporation.
"NRTC Agreements" shall mean the NRTC/Member Agreement and the
NRTC/Retail Agreement.
3
7
"NRTC/Member Agreement" shall mean the NRTC/Member Agreement for
Marketing and Distribution of DBS Services dated January 25, 1993 by and between
the NRTC and Seller, as amended by that certain Amendment as of March 25, 1994,
and as may be further amended from time to time, together with all schedules and
exhibits thereto, a copy of which is attached as Schedule 1.4.
"NRTC/Retail Agreement" shall mean the NRTC/Member DBS Product Retail
Agreement dated September 27, 1993 by and between the NRTC and Seller, as
amended from time to time, together with all schedules and exhibits thereto, a
copy of which is attached hereto as Schedule 1.5.
"Other Assumed Agreements" shall mean the contracts and agreements, if
any, set forth on Schedule 1.6 attached hereto, including any contracts and
agreements with DirecTv, and leases and rental agreements of Leased Subscriber
Equipment with Subscribers, copies of which are attached to such Schedule.
"Patronage Capital" shall mean the amount of patronage capital
dividends credited to the account of Seller at the NRTC for the period through
the Closing Date pursuant to Article XII of the NRTC Bylaws, as amended.
"Person" shall mean an individual, corporation, partnership, limited
liability company, association, trust, unincorporated organization, joint
venture or other entity or organization including a government, political
subdivision or agency or instrumentality thereof.
"Prepaid Expenses" shall mean all prepaid property taxes, prepaid
supplies, advances, deposits, deferred charges and other prepaid expenses (other
than prepaid insurance) shown on Seller's books and records as of the Closing
Date relating to the Business which Prepaid Expenses can be credited to
Purchaser's account after the Closing Date, as determined in accordance with
GAAP.
"Programming" shall mean Cable Programming and any programming provided
DirecTv pursuant to the NRTC Agreements.
"Purchase Price" shall mean the amount set forth in Section 4.1 herein.
"Purchased Assets" shall mean only (i) the NRTC Agreements, (ii) the
Other Assumed Agreements, (iii) Franchise, (iv) Current Assets, (v) Inventory,
(vi) Leased Subscriber Equipment, (vii) relationships, contracts and accounts
with Customers, (viii) Fixed Assets, (ix) Records, (x) telephone numbers used in
the Business, and (xi) all other assets of Seller, whether tangible or
intangible, used in connection with the Business, specifically excluding the
Patronage Capital.
"Records" shall mean all files, books and records relating to the
provisions of DBS Services by Seller in the Locations, including, without
limitation, copies of Customer and
4
8
prospective customer lists, computer programs, tapes and electronic data
processing software, accounting journals and ledgers, accounts receivable
records, and all NRTC reports, correspondence and other documents relating to
the NRTC Agreements and Other Assumed Agreements and compliance therewith.
"Subscriber" as of any date shall mean a Customer who, at a minimum (i)
is reported by the NRTC as an active subscriber subscribing to a core DirecTv
programming package (except commercial subscribers), (ii) on the last day of the
calendar month prior to such date, does not have an account more than sixty (60)
days past due from the date payment is due, (iii) is not an employee or agent of
the service provider or charged a fee that is nominal (e.g., demonstration unit)
or substantially below the service provider's published rates, and (iv) has not
given notice of intent to discontinue service and is not pending disconnection
for any reason, and (v) does not reside outside the Locations or is not
otherwise a Committed Member Residence (as defined in the NRTC/Member
Agreement).
"Survival Termination Date" shall mean March 15, 1999.
"Termination Date" shall mean March 31, 1998.
"Unearned Revenue" shall mean all unearned revenue, advance payments
and deposits associated with Customer credit balances of Seller as of the
Closing Date which are listed on Report 17 (Unearned Revenue Report) of the NRTC
Central Billing System Reports.
ARTICLE II
SALE AND PURCHASE OF THE ASSETS
2.1. SALE AND PURCHASE OF ASSETS. Subject to the terms and conditions
of this Agreement, Seller shall sell, transfer, assign and convey the Purchased
Assets to Purchaser, and Purchaser shall purchase, acquire and accept from
Seller all of Seller's right, title and interest in and to the Purchased Assets,
free and clear of any and all Liens, on the Closing Date for the consideration
set forth in this Agreement. The sale, transfer, assignment and conveyance of
the Purchased Assets shall be made by the execution and delivery at Closing of
(i) an Assignment and Assumption Agreement substantially in the form attached
hereto as Schedule 2.1(a) (the "Assignment"), and (ii) a ▇▇▇▇ of sale
substantially in the form attached hereto as Schedule 2.1(b) (the "▇▇▇▇ of
Sale"), and (iii) such other recordable instruments of assignment, transfer and
conveyance as Purchaser shall reasonably request.
ARTICLE III
ASSUMPTION OF LIABILITIES/EXPRESS EXCLUSIONS
3.1. LIABILITIES OF SELLER. As of the Closing Date, Purchaser shall
assume and agree to pay, perform and otherwise discharge all obligations of
Seller with respect to the following:
5
9
(a) the NRTC Agreements to the extent the obligations therein
arise out of the provision of DBS Services to Customers and accrue on or after
the Closing Date;
(b) the Other Assumed Agreements to the extent the obligations
therein arise on or after the Closing Date; and
(c) all Current Liabilities as of the Closing Date.
Anything in this Agreement to the contrary notwithstanding, except for
the liabilities specifically set forth in this Section 3.1, Purchaser shall not
assume or be deemed to have assumed under this Agreement, by reason of the
transactions contemplated by this Agreement, or otherwise, any other trade or
other accounts payable, accrued expenses, debts, liabilities, obligations or
commitments of Seller of any nature whatsoever, known or unknown, and the
execution, delivery and performance of this Agreement shall not render Purchaser
liable for any such debt, liability, obligation or commitment.
By way of example and not as an exhaustive list, the following
liabilities and obligations of Seller are expressly not assumed by Purchaser,
pursuant to this Agreement or otherwise:
A. any liabilities or obligations of Seller under or with
respect to any employment agreement or any pension, profit-sharing, retirement,
disability or other benefit plan entered into or established by Seller with or
for the benefit of any employee of Seller; and
B. any liabilities or obligations of any kind arising out of
incidents, occurrences, actions or failures to act by or pertaining to Seller,
which occurred prior to the Closing Date, including, without limitation,
liabilities or obligations arising from (i) the distribution, sale or provision
of any services of Seller, or (ii) any failure or alleged failure to comply with
any federal, state or local law, rule or regulation applicable to Seller or the
Business.
Purchaser agrees to promptly notify Seller of any claims which Purchaser obtains
knowledge of which arise out of or result from liabilities of Seller not assumed
by Purchaser pursuant to this Agreement.
ARTICLE IV
PURCHASE PRICE; PAYMENT OF PURCHASE PRICE
4.1. PURCHASE PRICE. The purchase price for the Purchased Assets (the
"Purchase Price") shall be Nine Million Five Hundred Thousand Dollars
($9,500,000), subject to adjustment as provided in Section 4.4 herein.
4.2. PAYMENT OF PURCHASE PRICE. On the Closing Date, Purchaser shall
pay the Purchase Price to Seller as follows:
6
10
(a) Seller shall be entitled to retain the Binder.
(b) The sum of Eight Million Five Hundred Thousand Dollars
($8,500,000), subject to adjustment as provided for in Section 4.3 herein, by
certified or cashier's check, or by wire transfer of immediately available funds
to an account or accounts designated in writing by Seller (the "Closing
Payment").
(c) Purchaser shall deliver the Escrow Deposit to the Escrow
Agent to be held by the Escrow Agent pursuant to the Escrow Agreement.
4.3. ADJUSTMENT TO PURCHASE PRICE.
(a) The Closing Payment shall be (i) increased by (A) the
parties' good faith estimate of the Current Assets of Seller, and (B) Five
Hundred Dollars ($500) times the excess of (1) the number of new Subscribers in
the Locations to the Total Choice Package (or its equivalent) on the Closing
Date over (2) the number of Subscribers in the Locations to the Total Choice
Package (or its equivalent) on January 9, 1998; and (ii) decreased by the
parties' good faith estimate of the Current Liabilities of Seller as of the
Closing Date (the "Closing Adjustment"), which adjustment shall be subject to
final adjustment as provided for in paragraph (c) below.
(b) No later than sixty (60) days after the Closing Date, or
within three (3) days after receipt of the necessary accounting data from the
NRTC Central Billing System, whichever is later, Purchaser shall prepare and
deliver to Seller a balance sheet reflecting the Current Assets and Current
Liabilities of Seller as of the Closing Date (the "Closing Date Balance Sheet"),
prepared on a basis consistent with GAAP. For purposes of the Closing Adjustment
and the Final Closing Adjustment (as hereinafter defined), the amount of
Accounts Receivable of Seller to be included in the Closing Date Balance Sheet
shall include only Accounts Receivable of Subscribers as reflected on Report 18A
(Subscriber Accounts Receivable Aging By Account) of the NRTC Central Billing
System Reports which are less than sixty (60) days past due. The Closing Date
Balance Sheet and the Final Closing Adjustment shall not include as a Current
Asset any accounts receivable arising from Leased Subscriber Equipment. Except
as set forth in this Section 4.3(b), no other assets or liabilities shall be
included in the Closing Date Balance Sheet, including, Leased Subscriber
Equipment or Inventory. Seller shall make available to Purchaser such
documentation, back-up, invoices, and books and records of Seller as Purchaser
may reasonably request.
(c) Seller and Purchaser shall negotiate in good faith to
reconcile any discrepancies which may arise in connection with the determination
of the Closing Date Balance Sheet. If Seller and Purchaser are unable to
reconcile such discrepancies, Seller shall have fifteen (15) days from
presentment of the Closing Date Balance Sheet by Purchaser to notify Purchaser
if Seller wishes to have Purchaser's determination examined. If Seller elects to
have Purchaser's determination examined, it shall be submitted to the
determination in Atlanta, Georgia, by the Certified Public Accounting firm of
KPMG Peat Marwick (or any other independent Certified Public Accounting firm
mutually acceptable to Seller and Purchaser), the cost of such examination
7
11
to be paid fifty percent (50%) by Seller and fifty percent (50%) by Purchaser.
The determination by Purchaser shall be final and binding on the parties unless
Seller elects to have an examination as provided herein, in which case the
results of the examination shall be made within thirty (30) days of such
referral, and shall be final and binding on the parties (the "Final Closing
Adjustment").
(d) To the extent the Final Closing Adjustment is less than
the Closing Adjustment, Seller shall pay the difference in cash to Purchaser
within five (5) days after the final determination. In the event the Final
Closing Adjustment is greater than the Closing Adjustment, Purchaser shall pay
such excess in cash to Seller within five (5) days after the final
determination. If, following any payment pursuant to this Section 4.3(d), an
error (in billing or reporting by NRTC or otherwise) is thereafter discovered
which would have affected the Final Closing Adjustment, the party in whose favor
the error was made shall immediately pay in cash the amount of such error to the
other party.
4.4. ALLOCATION OF PURCHASE PRICE. The parties have agreed, after
arms-length negotiations, to allocate the Purchase Price among the Purchased
Assets on the basis set forth on Schedule 4.4 to be delivered at the Closing,
and the parties shall make all federal, state and local tax filings consistent
therewith.
ARTICLE V
SELLER'S REPRESENTATIONS AND WARRANTIES
To induce Purchaser to enter into this Agreement and to consummate the
transactions contemplated hereby, Seller represents and warrants to Purchaser as
follows:
5.1. ORGANIZATION. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Georgia, with all
requisite power and authority to own and operate the Business as it is now
conducted and to own the Purchased Assets in the places where the Business is
now conducted and where the Purchased Assets are now owned or operated.
5.2. AUTHORITY.
(a) Seller has full power and authority to execute, deliver
and perform this Agreement and all agreements and transactions contemplated
hereby. The execution, delivery and performance of this Agreement and all
transactions contemplated hereby have been duly authorized by Seller and, except
for the consent of the NRTC, DirecTv and the other Persons set forth on Schedule
5.2(b) attached hereto, no other action or proceeding on the part of any other
party is necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by Seller and constitutes, and each of the other agreements to be
executed by Seller pursuant to the terms hereof will constitute upon execution
and delivery, a legal, valid and binding obligation of Seller enforceable in
accordance with its terms.
8
12
(a) Except for the NRTC, DirecTv and the other Persons set
forth on Schedule 5.2(b) attached hereto, the execution, delivery and
performance of this Agreement or any document related hereto by Seller and the
consummation by Seller of all of the transactions contemplated hereby or thereby
will not (with or without the giving of notice or the lapse of time or both) (i)
violate or require any consent or approval under any applicable provision of any
judgment, order, writ, injunction, decree, rule, regulation or law; (ii) require
any consent under, conflict with, result in termination of, accelerate the
performance required by, result in a breach of, constitute a default under or
otherwise violate the terms of any agreements, instruments or other obligations
to which Seller is a party or by which Seller or any of the Purchased Assets may
be bound or affected; (iii) require any consent or approval by, notice to or
registration with any governmental authority or any other Person; (iv) conflict
with or violate any provision of Seller's organizational documents; or (v)
result in the creation of a Lien upon any of the Purchased Assets howsoever
arising.
5.3. TITLE TO THE PURCHASED ASSETS.
(a) Seller has good and marketable title to all of the
Purchased Assets, free and clear of all Liens except those Liens disclosed on
Schedule 5.3(a) attached hereto and the transfer documents are effective to
transfer such title.
(b) Immediately following the Closing, Purchaser shall have
sufficient title in and to the Purchased Assets to operate and conduct the
Business in the same fashion as Seller was conducting the Business in the
ordinary course prior to the Closing Date.
5.4. CONDITION OF FIXED ASSETS. All of the Fixed Assets set forth on
Schedule 1.2 are in good operating condition, in a state of good maintenance and
repair, and are adequate and suitable for the purposes which are presently being
used. All appropriate repair and maintenance of the Fixed Assets has been
performed on a current basis. Except as set forth on Schedule 5.4 attached
hereto, none of the Fixed Assets are in need of any repairs which are outside
the ordinary course of maintenance and repairs routinely performed by Seller in
the past, and no currently needed repairs are reasonably likely to cost, either
singularly or in the aggregate with respect to all Fixed Assets, in excess of
Five Thousand Dollars ($5,000).
5.5. NRTC MEMBERSHIP; DBS DISTRIBUTION RIGHTS.
(a) Attached hereto as Schedules 1.4, 1.5 and 1.6 are true and
complete copies of each of the NRTC/Member Agreement, the NRTC/Retail Agreement,
and the Other Assumed Agreements, if any, respectively, together with all
amendments, schedules and exhibits thereto. The NRTC/Member Agreement grants
Seller the exclusive right to distribute DBS Services in the Locations, except
as set forth in the NRTC/Member Agreement.
9
13
(b) Seller has paid all sums to NRTC or DirecTv, as
appropriate, required under the NRTC/Member Agreement such that Seller is
entitled to the marketing and sales revenues as provided therein.
(c) Seller is in full compliance in all material respects with
any and all membership, affiliation, licensing or other requirements or
arrangements as may have been established by NRTC or DirecTv pursuant to the
NRTC Agreements, or otherwise.
(d) Seller is not in breach of the NRTC Agreements, nor has
Seller failed to perform any material obligation under the NRTC Agreements.
Seller has not received notice of any such breach or non-performance at any time
of such NRTC Agreements. To the best of Seller's knowledge, no other party to
any of the NRTC Agreements is in default thereunder or has failed to perform any
material obligation thereunder.
5.6. INVENTORY. The Inventory will not, as of the Closing Date, include
any items below standard quality, obsolete or sub-prime. The Inventory shall
consist solely of undamaged, original units in original, sealed cartons. Seller
owns all of the Inventory free and clear of any and all Liens and has full power
and authority to transfer the Inventory to Purchaser.
5.7. ACCOUNTS RECEIVABLE. The Accounts Receivable represent arms'
length transactions with Customers made in the ordinary course of business and
none of the Accounts Receivable are subject to any counterclaim or setoff.
5.8. PREPAID EXPENSES. Each of the Prepaid Expenses is reasonable in
amount, was incurred and paid in the ordinary course of business and can be
utilized in the Business after the Closing Date.
5.9 FINANCIAL STATEMENTS. Seller has delivered to Purchaser true and
complete copies of the audited financial statements of Seller as of December 31,
1996 and for the year then ended (the "Audited Financial Statements"). The
Audited Financial Statements (i) are correct and complete and in accordance with
the books and records of Seller, (ii) fairly present the financial conditions,
assets and liabilities of Seller as at their respective dates and the results of
the operations and changes in cash positions for the periods covered thereby,
(iii) have been prepared in accordance with GAAP consistently applied, and (vi)
have been audited by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP. Seller has also delivered to Purchaser
true and complete copies of the unaudited financial statements of Seller as of
December 31, 1996 and September 30, 1997 and for the months then ended
(collectively, the "Unaudited Financial Statements"). The Unaudited Financial
Statements (i) are correct and complete in accordance with the books and records
of Seller and (ii) fairly present the financial condition of Seller as of such
dates and the results of its operations for the periods covered thereby.
5.10. ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in
Schedule 5.10 attached hereto and other than changes or events which have
affected the DBS industry in general, since December 31, 1996 there has not
been:
10
14
(a) any change in the position, financial or otherwise,
assets, liabilities, earnings, book value, Business or operations of Seller
which is materially adverse, singularly or in the aggregate;
(b) any obligation or liability incurred by Seller (whether
absolute, accrued, contingent or otherwise and whether due or to become due)
other than obligations or liabilities incurred in the ordinary course of
business and consistent with past practices;
(c) any termination or waiver of any rights of Seller of
material value to the Business or to Seller;
(d) any damage, destruction or loss, whether or not covered by
insurance, adversely affecting the Business or the Purchased Assets;
(e) the adoption of any statute, rule, regulation or order
which adversely affects the Business or the Purchased Assets;
(f) any sale, transfer or other disposition of any of the
Purchased Assets to any party, except for dispositions of surplus or used
equipment or other dispositions in the ordinary course of business; or
(g) any agreement to do any of the foregoing.
5.11. LICENSES AND PERMITS. Attached hereto in Schedule 5.11 is a list
of all federal, state, local and foreign permits, certificates, licenses,
approvals and other authorizations necessary in the conduct of the Business. All
such licenses and permits of Seller are in full force and effect, and no
violations are or have been recorded in respect thereof, and no proceeding is
pending or threatened to revoke or limit any thereof. Seller and its conduct of
the Business is in compliance with all applicable laws, statutes, ordinances,
rules, regulations and order of any federal, foreign, state or local government
and any other government department or agency, and in any judgment, decision,
decree or order of any court or governmental agency, department or authority.
5.12. TAX MATTERS.
(a) Seller has timely filed all federal, state, local and
foreign tax returns and tax reports required to be filed with respect to the
Business with the appropriate governmental agency in all jurisdictions in which
such returns and reports are required to be filed. All such returns and reports
are true, correct and complete, and all amounts shown as owing on them have been
paid, including all interest, penalties, deficiencies and assessments heretofore
levied or assessed against Seller. Seller has duly withheld, collected and
timely paid over, or holds for such payment, to the proper governmental
authorities all taxes required to be withheld or collected by it. There is no
agreement for extension of time of assessment or payment of any taxes of
11
15
Seller. No waiver of any statute of limitations has been executed by Seller for
any tax year which remains open or unsettled. To the best knowledge, information
and belief of Seller, there is no examination or audit pending by the Internal
Revenue Service or by any state or local taxing authority with respect to the
tax matters of Seller. There is no liability for taxes or any tax deficiency or
the existence of any basis from which liability for taxes or tax deficiency,
including interest and penalties, might be asserted against Seller for any
period in excess of the applicable reserve for taxes, if any, and Seller has no
knowledge of any such liability or deficiency or the existence of any basis
therefor.
(b) All federal, state, local and foreign income, profits,
franchise, sales, use, occupation, property, excise and other taxes (including
interest and penalties), if any, payable by Seller or relating to or chargeable
against the Purchased Assets or chargeable against Seller's revenue or income
have been fully paid or are not past due and are fully disclosed and accrued on
the books and records of Seller and the proper amount of reserves exist for the
payment thereof.
5.13. DISCLOSURES. No representation or warranty made by Seller in this
Agreement, and no statement made in any schedule, exhibit, certificate or other
writing delivered or to be delivered in connection with the transactions
contemplated hereby contains or will contain any untrue statement of a material
fact, or omits or will omit any statement of a material fact necessary to make
the statements contained herein or therein not misleading.
5.14. LITIGATION. Except as set forth in Schedule 5.14 attached hereto,
there are no actions, suits, proceedings, orders, investigations or claims
pending or, to the best of Seller's knowledge, any threats against or affecting
Seller, the Purchased Assets or the Business, at law or in equity, before any
court, arbitration panel, tribunal or governmental department, commission,
board, bureau, agency or instrumentality.
5.15. LEASED SUBSCRIBER EQUIPMENT. To the best of Seller's knowledge,
none of the Leased Subscriber Equipment is in need of any repairs which are
outside the ordinary course of maintenance and repairs routinely performed by
Seller in the past.
5.16 BROKERS, FINDERS. No agent, broker, investment banker or other
person acting on behalf of Seller, or under its authority, is or will be
entitled to any broker's or finder's fee or any other commission or similar fee,
directly or indirectly, in connection with the transaction contemplated by this
Agreement.
ARTICLE VI
PURCHASER'S REPRESENTATIONS AND WARRANTIES
To induce Seller to enter into this Agreement and to consummate the
transactions contemplated hereby, Purchaser hereby represents and warrants to
Seller as follows:
12
16
6.1. ORGANIZATION. Purchaser is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Georgia, with all requisite power to own and operate its business as it is now
conducted.
6.2. AUTHORITY.
(a) Purchaser has full power and authority to execute,
deliver, and perform this Agreement. The execution, delivery and performance of
this Agreement and all transactions contemplated hereby have been duly
authorized by Purchaser and no other action or proceeding on the part of any
other party is necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Purchaser, and constitutes, and each of the other
agreements to be executed pursuant to the terms hereof upon execution and
delivery will constitute, a legal, valid and binding obligation of Purchaser,
enforceable in accordance with its terms.
(b) Except for the NRTC, DirecTv and the other Persons set
forth on Schedule 6.2(b) attached hereto, the execution, delivery and
performance of this Agreement or any other document related hereto by Purchaser
and the consummation by Purchaser of all of the transactions contemplated hereby
or thereby will not (with or without the giving of notice or the lapse of time
or both) (i) violate or require any consent or approval under any applicable
provision of any judgment, order, writ, injunction, decree, rule, regulation or
law; (ii) require any consent under, conflict with, result in the termination
of, accelerate the performance required by, result in the breach of, constitute
a default under or otherwise violate the terms of any agreements, instruments or
other obligations to which Purchaser is a party; (iii) require any consent or
approval by, notice to or registration with any governmental authority or any
other Person; or (iv) violate any provision of Purchaser's Articles of
Organization or Operating Agreement.
6.3. DISCLOSURES. No representation or warranty made by Purchaser in
this Agreement, and no statement made in any schedule, exhibit, certificate or
other writing delivered or to be delivered in connection with the transactions
contemplated hereby contains or will contain any untrue statement of a material
fact, or omits or will omit any statement of a material fact necessary to make
the statements contained herein or therein not misleading.
6.4. BROKERS, FINDERS. No agent, broker, investment banker or other
person acting on behalf of Purchaser, or under its authority, is or will be
entitled to any broker's or finder's fee or any other commission or similar fee,
directly or indirectly, in connection with the transaction contemplated by this
Agreement.
13
17
ARTICLE VII
COVENANTS
7.1. CONDUCT OF THE BUSINESS PRIOR TO CLOSING DATE. From the date
hereof through and until the Closing Date, unless performance of the following
obligations is waived by Purchaser (in its sole discretion) in advance and in
writing, Seller shall:
(a) consult with Purchaser on a regular basis with respect to
all decisions which might adversely affect the Business or the Purchased Assets;
(b) not modify, amend, alter or terminate any of the NRTC
Agreements or any of the Other Assumed Agreements, or waive any default or
breach thereunder;
(c) comply in all material respects with the NRTC Agreements
and the Other Assumed Agreements, use its best efforts to cure any default or
breach thereunder, and promptly notify Purchaser upon receipt of notice of any
default or breach thereunder;
(d) maintain its Records in accordance with prior practice,
maintain the Purchased Assets in their present condition, ordinary wear and tear
excepted, consistent with past practice, and otherwise use its best efforts to
operate the Business as currently operated and in the ordinary course in
accordance with practices during the twelve (12) months preceding the date of
this Agreement;
(e) not sell, transfer, dispose or permit a Lien, directly or
indirectly, on any of the Purchased Assets, except for sales or dispositions of
Inventory in the ordinary course of business;
(f) use its best efforts to preserve intact the current
business organization and relationships with employees, suppliers, advertisers,
Customers and other Persons having dealings with Seller relating to the
Business;
(g) operate the Business in all material respects in
accordance with the NRTC Agreements, comply in all material respects with all
laws, rules and regulations applicable to it, including the regulations and
policies of the NRTC and DirecTv;
(h) provide to Purchaser, concurrently with filing, sending or
receipt thereof, copies of all reports to and other filings and correspondence
with the NRTC and DirecTv;
(i) provide to Purchaser, promptly upon receipt thereof by
Seller, a copy of (i) any notice of the revocation, suspension or limitation of
the rights under, or of any proceeding for the revocation, suspension, or
limitation of the rights under, any of the NRTC Agreements, and (ii) copies of
all protests, complaints, challenges or other documents submitted to or filed
with the
14
18
NRTC or DirecTv by third parties concerning the Business and, promptly upon the
filing or making thereof, copies of Seller's responses thereto; and
(j) notify Purchaser in writing immediately upon learning of
the institution or threat of any action against Seller in any court, or any
action against Seller before any governmental agency, and notify Purchaser in
writing promptly upon receipt of any administrative or court order relating to
the Business. Without limiting the generality of the foregoing, Seller shall not
take any of the actions (over which Seller can exercise control) listed in
Section 5.9 herein.
7.2. ACCESS.
(a) Prior to the Closing, Purchaser may, through its
employees, agents and representatives, make or cause to be made such
investigation of Seller, its Records and the Business as Purchaser deems
necessary or advisable and shall have full access to the auditors and attorneys
of Seller. Seller shall permit Purchaser and its employees, agents and
representatives, on reasonable notice, to have access during normal business
hours to its premises, personnel and Records. Seller shall cooperate to provide
access to its Customers, suppliers, lenders and such other parties as Purchaser
may reasonably request. Seller shall, and shall cause its officers, attorneys
and accountants to, furnish Purchaser with such financial and operating data and
other information as Purchaser from time to time shall reasonably request. No
investigation by Purchaser shall in any way affect or otherwise diminish the
representations, warranties and covenants of Seller hereunder.
(b) Purchaser will hold, and will cause its authorized
representatives (including its investors and lending institutions) to hold, in
strict confidence, unless compelled to disclose by judicial or administrative
process or official request or by other requirements of law, all documents and
information concerning Seller and the Business furnished to Purchaser in
connection with the transactions contemplated by this Agreement (except to the
extent that such information can be shown to have been (i) previously known by
Purchaser, (ii) in the public domain through no fault of Purchaser, or (iii)
later lawfully acquired by Purchaser from other sources) and will not release or
disclose such information to any other Person, except its auditors, attorneys,
financial advisors and other consultants and advisors and lending institutions
(including banks) in connection with this Agreement, it being understood that
such Persons shall be informed by such party of the confidential nature of such
information and shall be directed by such party and shall have agreed to treat
such information as confidential. In the event that the transactions
contemplated herein are not consummated for any reason, Purchaser will, upon
request by Seller, promptly return to Seller all copies of any schedules,
statements, documents or other written information obtained in connection
herewith, without retaining any copies or summaries thereof, and shall maintain
such confidence except to the extent such information comes into the public
domain through no fault of Purchaser.
15
19
7.3. CONSENT OF NRTC, DIRECTV AND OTHERS. Seller and Purchaser shall
join in and deliver the requests for the consent of the NRTC and DirecTv to the
transfer of the NRTC Agreements, and such other requests for consent that
Purchaser reasonably determines may be necessary or appropriate to consummate
the transactions contemplated hereby and they will each diligently take all
steps necessary or desirable to obtain such consents. The failure of either of
the parties to timely file or diligently seek the consents, or to cooperate
fully with the other party with respect thereto, shall be deemed a material
breach of this Agreement.
7.4. PUBLIC ANNOUNCEMENTS; CONFIDENTIALITY. Seller and Purchaser (a)
shall agree in advance as to timing, form and content before issuing any press
release or otherwise making any public statements with respect to the
transactions contemplated hereby and shall not issue any press release or make
any public statement prior to reaching agreement, except as may be required by
law (including federal and state securities laws), contractual relationships
with the NRTC or DirecTv, or auditor or lender requirements; provided, however,
that no party shall disclose the Purchase Price hereunder without the prior
written consent of the other party hereto; and (b) agree to maintain the
confidentiality of this Agreement and the terms hereof and any information
exchanged by the parties in connection with the consummation of the transaction
contemplated hereby, except as may be required by law (including federal and
state securities laws), contractual relationships with the NRTC or DirecTv, or
auditor or lender requirements.
7.5. BEST EFFORTS. Subject to the terms and conditions herein provided,
Seller and Purchaser agree to use their best efforts to take, execute,
acknowledge and deliver, or cause to be taken, executed, acknowledged and
delivered, all actions, deeds, assignments, documents, instruments, transfers,
conveyances, discharges, releases, assurances and consents, and to do, or cause
to be done, all things necessary, proper or advisable under this Agreement and
all applicable laws and regulations to consummate, confirm, perfect, evidence
and otherwise make effective the transactions contemplated by this Agreement,
including actions necessary to obtain all requisite assignments of agreements
and contracts, and to fulfill the requirements of Articles VIII and IX hereof on
or prior to the Closing Date.
7.6. EXCLUSIVE DEALING. During the period from the date of this
Agreement to the Closing Date, Seller will refrain, and will cause all of its
agents and employees to refrain, from taking, directly or indirectly, any action
to encourage, initiate, solicit or continue any discussions or negotiations
with, or any other offers from, any other Person concerning a merger, sale of
substantial stock or any similar transaction concerning Seller which would
affect the Business, or the sale of the Purchased Assets or any portion thereof.
7.7. SUBSCRIBER LEASES. From and after the date hereof, Seller
covenants and agrees to use its best efforts to keep in full force and effect
all leases or rentals of Leased Subscriber Equipment between Seller and
Subscribers and shall refrain from taking, directly or indirectly, any action to
encourage any Subscribers to terminate such leases.
16
20
7.8. AUDIT. Seller agrees that from and after the date hereof,
Purchaser shall have the right, at its sole cost and expense, and upon
reasonable notice, to audit Seller's Records pertaining to the Business and the
Purchased Assets and Seller shall cooperate fully with Purchaser's auditors,
including, but not limited to, granting such auditors reasonable access to
Seller's premises, personnel and Records pertaining to the Business and the
Purchased Assets, and furnishing such auditors with any information and data
which they may reasonably request, related to the Business and the Purchased
Assets.
ARTICLE VIII
CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATIONS
Purchaser's obligations to perform this Agreement and consummate the
transactions contemplated hereby is subject to the satisfaction (or waiver by
Purchaser), on or before the Closing Date, of each of the following conditions
precedent:
8.1. TRUTH OF REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties of Seller contained in this Agreement, and all
representations and warranties set forth in any schedule or exhibit attached
hereto, shall have been true, complete and correct when made and as of the
Closing Date, without the necessity of any material amendment or modification,
with the same force and effect as if made as of the Closing Date.
8.2. PERFORMANCE. Each of the agreements, obligations, conditions and
covenants to be performed or complied with by Seller on or before the Closing
Date pursuant to the terms hereof shall have been duly performed or complied
with on or before the Closing Date.
8.3. NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date and except
as otherwise permitted by this Agreement, there shall not have occurred any
material adverse change in the financial condition, Business, assets or results
of operations of Seller or the Purchased Assets.
8.4. NO LITIGATION THREATENED. No action, suit or other proceeding
shall be pending before any court, tribunal or governmental authority seeking or
threatening to restrain or prohibit the consummation of the transactions
contemplated by this Agreement, or seeking to obtain substantial damages in
respect thereof, or involving a claim, the consummation of which would result in
the violation of any law, decree or regulation of any governmental authority
having appropriate jurisdiction.
8.5. CONSENTS. All authorizations and approvals of or consents of, or
filings with, any governmental authority or other Person required to be obtained
or made by Seller in connection with the Closing (including, without limitation,
the consent of the NRTC and DirecTv as provided for in Section 7.3 herein) shall
have been duly obtained by Seller and shall be in full force and effect without
conditions which are materially adverse to Purchaser.
17
21
8.6. SUBSCRIBERS. On the Closing Date, Seller shall have at least 4,600
Subscribers, which Subscribers shall have been acquired in the ordinary course
of business and shall have substantially the same distribution among programming
packages as the Subscribers on October 22, 1997.
8.7 REVIEW OF SELLER. The satisfactory completion, in Purchaser's sole
discretion, on or before November 15, 1997 of Purchaser's due diligence
investigation covering the Business as provided in Section 7.2 herein.
8.8. SELLER'S CLOSING DELIVERIES. Seller shall have delivered to
Purchaser the following at Closing:
(a) the Assignment, the ▇▇▇▇ of Sale and other instruments of
transfer to effectively assign, transfer and convey good and marketable title to
the Purchased Assets as Purchaser shall reasonably request, in form and
substance reasonably satisfactory to Purchaser;
(b) copies of the Records which Purchaser may reasonably
request;
(c) a certified copy of Resolutions of the Board of Directors
and Shareholders of Seller authorizing the execution, delivery and performance
of this Agreement;
(d) certificate of good standing of Seller from the Secretary
of State of Georgia;
(e) evidence satisfactory to Purchaser that all Liens on the
Purchased Assets have been removed or otherwise addressed to Purchaser's
satisfaction;
(f) a list of the Accounts Receivable from all Customers
(Reports 18A and 19A) and a list of the Unearned Revenue (Report 17), each as of
the most recently available NRTC billing period ending prior to the Closing
Date;
(g) a certificate signed by Seller's president, dated the
Closing Date, to the effect that the conditions set forth in this Article VIII
have been satisfied;
(h) an opinion of ▇▇▇▇▇, Cork & ▇▇▇▇▇▇, LLP counsel to Seller,
in form and substance reasonably acceptable to Purchaser;
(i) a certificate signed by Seller's president, dated the
Closing Date, regarding the transfer of Seller's accounts at Huntington Bank;
(j) Noncompetition Agreements with each of Seller and ▇▇.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, substantially in the form attached hereto as Schedule 8.8; and
18
22
(k) such other documents and instruments as may be reasonably
requested and satisfactory to Purchaser and its counsel in connection with
Seller's satisfaction of its obligations hereunder.
ARTICLE IX
CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
Seller's obligations to perform this Agreement and consummate the
transactions contemplated hereby is subject to the satisfaction (or waiver by
Seller), on or before the Closing Date, of each of the following conditions
precedent:
9.1. TRUTH OF REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties of Purchaser contained in this Agreement, and all
representations and warranties set forth in any schedule or exhibit attached
hereto, shall have been true, complete and correct when made and as of the
Closing Date, without the necessity of any material amendment or modification,
with the same force and effect as if made as of the Closing Date.
9.2. PERFORMANCE. Each of the agreements, obligations, conditions and
covenants to be performed or complied with by Purchaser on or before the Closing
Date pursuant to the terms hereof shall have been duly performed or complied
with on or before the Closing Date.
9.3. NO LITIGATION THREATENED. No action, suit or other proceeding
shall be pending before any court, tribunal or governmental authority seeking or
threatening to restrain or prohibit the consummation of the transactions
contemplated by this Agreement, or seeking to obtain substantial damages in
respect thereof, or involving a claim, the consummation of which would result in
the violation of any law, decree or regulation of any governmental authority
having appropriate jurisdiction.
9.4. CONSENTS. All authorizations and approvals of or consents of, or
filings with, any governmental authority or other Person required to be obtained
or made by Purchaser in connection with the Closing (including without
limitation, the consent of the NRTC and DirecTv as provided for in Section 7.3
herein) shall have been duly obtained by Purchaser and shall be in full force
and effect without conditions which are materially adverse to Seller.
9.5. PURCHASER'S CLOSING DELIVERIES. Purchaser shall have delivered to
Seller the following at Closing:
(a) the Closing Payment;
(b) a certified copy of Resolutions of the member of Purchaser
authorizing the execution, delivery and performance of this Agreement;
19
23
(c) a certificate signed by Purchaser's member, dated the
Closing Date, to the effect that the conditions set forth in this Article IX
have been satisfied;
(d) an opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Scarborough, L.L.P.,
counsel to Purchaser, in form and substance reasonably acceptable to Seller; and
(e) a certificate signed by Purchaser's member, dated the
Closing Date, regarding the transfer of Seller's accounts at Huntington Bank.
ARTICLE X
SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION
10.1. NO SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Except as
otherwise specifically provided herein, each and every representation and
warranty contained in this Agreement shall expire with, and be terminated and
extinguished by the Closing or the termination of this Agreement pursuant to
Section 11.13 hereof, and thereafter, except and to the extent otherwise
specifically provided herein, neither Purchaser, Seller or any member, director,
officer or representative thereof shall be under any liability whatsoever with
respect to any such representation or warranty. The representations and
warranties hereunder shall not be affected or diminished by any investigation at
any time by or on behalf of the party for whose benefit such representations and
warranties were made. All statements contained herein or in any schedule,
exhibit, certificate, list or other document delivered pursuant hereto or in
connection with the transactions contemplated hereby shall be deemed to be
representations and warranties.
10.2. INDEMNIFICATION OF PURCHASER. Seller, and its successors, and
assigns shall indemnify, reimburse and hold Purchaser and its members, officers,
subsidiaries, affiliates, successors, assigns and agents harmless from, against,
for and in respect of any and all damages, losses, settlement payments,
obligations, liabilities, claims, demands, actions or causes of action,
judgments, encumbrances, costs and expenses (including reasonable attorneys'
fees) (collectively, the "Indemnifiable Damages") relating to, resulting from or
arising out of (i) any misrepresentation, untruth, inaccuracy, breach or
nonfulfillment of any representation, warranty, agreement or covenant of Seller
contained in or made in connection with this Agreement or in any schedule,
exhibit, certificate or other document delivered pursuant hereto, (ii) the
failure of Seller to pay, perform or discharge promptly when due any of its
obligations, liabilities and debts except as provided under this Agreement,
(iii) any liability or obligation relating to the operation of the Business
prior to the Closing Date, (iv) any breach or default prior to the Closing Date
by Seller under any of the NRTC Agreements, (v) any state or local sales, use,
excise, personal property or similar tax liability (including penalties and
interest) of Seller, (vi) any liability or obligation relating to or arising
from the Multimedia Communications Group, Wireless Cable Associates, L.C.
litigation prior to or after the Closing Date; and (vii) any other liabilities,
obligations or claims, whether absolute or contingent, known or unknown, matured
or unmatured and not expressly assumed by Purchaser hereunder.
20
24
10.3. INDEMNIFICATION OF SELLER. Subject the limitations hereinafter
set forth, Purchaser shall indemnify, reimburse and hold Seller and its
shareholders, officers, directors, subsidiaries and affiliates harmless from,
against, for and in respect of any and all Indemnifiable Damages (as defined in
Section 10.2 above) relating to, resulting from or arising out of (i) any
misrepresentation, untruth, inaccuracy, breach or nonfulfillment of any
representation, warranty, agreement or covenant of Purchaser contained in or
made in connection with this Agreement or in any schedule, exhibit, certificate
or other document delivered pursuant hereto, (ii) the failure of Purchaser to
pay, perform or discharge promptly when due (a) its obligations set forth in
Section 4.2 herein, or (b) the Current Liabilities, (iii) the assertion against
Seller of any liability or obligation relating to Purchaser's operation of the
Business after the Closing Date, and (iv) any breach or default after the
Closing Date by Purchaser under the NRTC Agreements.
10.4. EXPIRATION OF INDEMNIFICATION OBLIGATIONS. The indemnification
obligations of Seller under Sections 10.2(i), (ii), (iii), (iv) and (vi) and
Purchaser under Section 10.3 above shall expire and terminate on the Survival
Termination Date, unless, prior to such termination, the party entitled to
indemnification hereunder (the "Indemnified Party") shall have provided written
notice to the other party hereto obligated to provide indemnification pursuant
to Sections 10.2 or 10.3 herein (the "Indemnifying Party") of an assertion by
the Indemnified Party of a right to indemnification under Sections 10.2 or 10.3
("Indemnification Claim").
10.5. RIGHT TO CONTEST.
(a) If the Indemnified Party receives notice or has knowledge
of any claim for which it believes the Indemnifying Party is obligated to
provide indemnification, the Indemnified Party shall provide the Indemnifying
Party with an Indemnification Claim within twenty (20) days of its receipt of
same, but in no event later than ten (10) days prior to the date a responsive
pleading with respect to such Indemnification Claim is due. The Indemnification
Claim shall set forth a brief description of the facts giving rise to such a
claim and the amount (or reasonable estimate) of the Indemnifiable Damages
suffered or which may be suffered by the Indemnified Party. The Indemnified
Party shall, at the expense of the Indemnifying Party, provide all information
regarding the contest or defense of the claim and cooperate fully with the
Indemnifying Party in the conduct of any such contest or defense. Before being
required to make any payment pursuant to Sections 10.2 or 10.3 herein, the
Indemnifying Party may, at its own expense, elect to undertake and control the
defense of, and take all necessary steps properly to contest any claim in
respect thereof involving third parties or to prosecute such claim to conclusion
or settlement satisfactory to the Indemnified Party. If the Indemnifying Party
makes the foregoing election, then the Indemnified Party shall have the right to
participate, at its own expense, in all proceedings but shall not admit any
liability, settle, compromise, pay or discharge the claim without the prior
written consent of the Indemnifying Party. If the Indemnifying Party does not
make such election, it shall be obligated to pay the costs of defending or
prosecuting such claim and shall be bound by whatever result is obtained by the
Indemnified Party respecting such claim.
21
25
(b) Except as otherwise specifically provided herein, the
remedies provided in this Agreement shall be cumulative and shall not preclude
assertion by any party of any other rights or the seeking of any other remedies
against any other party hereto.
ARTICLE XI
MISCELLANEOUS
11.1. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given, upon
personal delivery, upon receipted delivery by overnight courier, charges prepaid
or charged to the sender's account if delivery is confirmed by the delivery
service, upon receipt of a confirmed transmission if by facsimile transmission,
or three (3) days after mailing if mailed by certified or registered mail,
postage prepaid, return receipt requested, as follows (or at such other address
for a party as shall be specified by like notice; provided that notice of a
change of address shall be effective only upon receipt thereof):
To Purchaser: Digital Television Services of Georgia, LLC
Building C-200
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
with a copy to: C. ▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Scarborough, L.L.P.
NationsBank Corporate Center, Suite 2600
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
To Seller: Ocmulgee Communications, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to: ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ III, Esq.
▇▇▇▇▇, Cork & ▇▇▇▇▇▇, LLP
500 SunTrust Bank Building
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
11.2. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute one and the same
agreement.
22
26
11.3. GOVERNING LAW. This Agreement shall be governed by and
interpreted, construed and enforced in accordance with the laws of the State of
Georgia, without regard to the choice of law provisions thereof.
11.4. WAIVERS. No provisions of this Agreement may be waived except by
an instrument in writing signed by the party sought to be bound. No failure or
delay by any party in exercising any right or remedy hereunder shall operate as
a waiver thereof, and a waiver of a particular right or remedy on one occasion
shall not be deemed a waiver of any other right or remedy or of the same right
or remedy or a waiver on any future occasion.
11.5. SEVERABILITY. The invalidity or unenforceability of any term or
provision of this Agreement shall not affect the other provisions hereof, and
this Agreement shall be construed in all respects as if such invalid or
unenforceable provision were omitted.
11.6. SECTION AND ARTICLE HEADING REFERENCES. The Section and Article
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
11.7. SUCCESSORS AND ASSIGNS; ASSIGNMENT. This Agreement shall be
binding upon, inure to the benefit of, and be enforceable by, the respective
successors and permitted assigns, if any, of the parties hereto. Except as
otherwise expressly provided herein, nothing expressed or implied herein is
intended or shall be construed to confer upon or give any Person, other than the
parties hereto, any right or remedy hereunder or by reason hereof. This
Agreement may not be assigned by Purchaser (except to a party which, directly or
indirectly is controlled by, controls or is under common control with,
Purchaser) or Seller without the prior written consent of the other party
hereto.
11.8. ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the schedules
attached hereto constitute the entire agreement and understanding of the parties
in respect of the transactions contemplated hereby and supersede all prior
correspondence, conversations, agreements, arrangements, understandings and
other writings, including the Term Sheet dated October 22, 1997 between Seller
and Digital Television Services, LLC. No promises, covenants or representations
of any character or nature other than those expressly stated herein have been
made to induce any party to enter into this Agreement. This Agreement may be
amended or modified only by a written instrument signed by each of the parties
hereto.
11.9. EXPENSES. Each of the parties hereto shall pay its own expenses
incurred in connection with the negotiation and consummation of this Agreement,
including the charges of its respective attorneys, accountants and other
representatives. Seller shall pay up to Five Thousand Dollars ($5,000) of any
transfer or similar fees due the NRTC and up to one hundred twenty (120%) of the
NRTC's costs and expenses incurred to complete the transfer and assignment in
connection with the transactions contemplated by this Agreement. Purchaser shall
pay any transfer fees due the NRTC in excess of the amounts required to be paid
by Seller pursuant to the immediately preceding sentence.
23
27
11.10. KNOWLEDGE OF SELLER. Where any representation or warranty
contained in this Agreement is expressly qualified by reference to knowledge,
Seller confirms that it has made or caused to be made due and diligent inquiry
as to the matters that are the subject of such representations and warranties.
11.11. FACSIMILE SIGNATURES. Facsimile signatures shall be considered
original signatures for purposes of execution and enforcement of the rights
delineated in this Agreement.
11.12. SCHEDULES. The schedules referred to in this Agreement are
attached hereto, made a part hereof and incorporated herein by this reference.
11.13. TERMINATION OF AGREEMENT.
(a) Notwithstanding any other provision herein contained to the
contrary, this Agreement may be terminated at any time prior to the Closing Date
by (i) the written consent of Seller and Purchaser, (ii) any party upon written
notice to the other party if the Closing has not occurred on or before the
Termination Date, (iii) Seller, if Sections 9.1, 9.2 or 9.5 have not been
complied with or performed by Purchaser and such noncompliance and
nonperformance shall not have been cured or eliminated (or by its nature cannot
be cured or eliminated) by Purchaser on or before the sixtieth (60th) day
following written notice thereof from Seller; provided that Seller has not
defaulted in any material respect with respect to any of its obligations
hereunder, (iv) Purchaser, if the covenants and conditions set forth in Articles
VII and VIII (other than Section 8.7) required to be complied with and performed
by Seller have not been complied with or performed by Seller and such
noncompliance and nonperformance shall not have been cured or eliminated (or by
its nature cannot be cured or eliminated) by Seller on or before the sixtieth
(60th) day following written notice thereof from Purchaser; provided that
Purchaser shall not have defaulted in any material respect with respect to any
of its obligations hereunder, or (v) Purchaser if the conditions set forth in
Section 8.7 required to be complied with and performed by Seller have not been
complied with or performed by Seller on or prior to November 15, 1997; provided
that Purchaser shall not have defaulted in any material respect with respect to
any of its obligations hereunder.
(b) In the event of termination pursuant to this Section 11.13, written
notice thereof shall be given to the other party and this Agreement shall
terminate immediately. In the event of such termination pursuant to Section
11.13(a)(i) or (ii), no party hereto (or any of its respective directors,
officers or members) shall have any liability or further obligation to the other
party to this Agreement.
(c) In the event of termination pursuant to Section 11.13(a)(iii),
Purchaser recognizes that Seller would be damaged, the extent to which is
extremely difficult and impractical to ascertain. The parties, therefore, agree
that if this Agreement is terminated pursuant to Section 11.13(a)(iii), Seller
shall be entitled to retain the Binder. The parties agree that this sum shall
constitute liquidated damages and shall be in lieu of any and all other relief
to which Seller might
24
28
otherwise be entitled due to Purchaser's failure to consummate, or Purchaser's
default under, this Agreement.
(d) In the event of termination pursuant to Section 11.13(a)(iv) or
(v), Purchaser shall be entitled to recover from Seller all damages, losses,
costs and expenses (including reasonable attorneys' fees) provided by law.
(e) The parties hereto agree that if any provision in Articles VII or
VIII hereof is not complied with and performed by Seller in accordance with its
specific terms or otherwise breached, and such noncompliance and nonperformance
shall not have been cured (or by its nature cannot be cured) by Seller on or
before the sixtieth (60) day following written notice thereof from Purchaser,
and Purchaser shall not have defaulted in any material respect with respect to
any of its obligations hereunder, Purchaser shall, at its sole option, be
entitled to specific performance of the terms of this Agreement.
11.14. POWER OF ATTORNEY. Seller hereby appoints Purchaser, and all
agents, officers, and employees designated by Purchaser, irrevocably for six (6)
months from and after the Closing Date, as its true and lawful attorney-in-fact
and duly authorized agent to:
(i) open Seller's mail and endorse and collect any checks, notes,
drafts or any other items payable to Seller from Subscribers or
otherwise issued in connection with the Business, and deposit same to
the account of Purchaser in any depository institution;
(ii) sign receipts and other papers necessary for the collection of any
and all amounts due from Subscribers;
(iii) notify Subscribers that the accounts have been assigned to
Purchaser; and
(iv) direct such Subscribers to make all payments due from them
directly to Purchaser.
Purchaser shall furnish Seller with a copy of any notice issued pursuant to
Sections 11.14(iii) or (iv) above and Seller hereby agrees that any such notice,
in Purchaser's sole discretion, may be sent on Seller's stationary, in which
event Seller shall, upon demand, co-sign such notice with Purchaser.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
25
29
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
PURCHASER:
Digital Television Services of
Georgia, LLC
By: DTS Management, LLC
Its: Member
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
President and Manager
SELLER:
Ocmulgee Communications, Inc.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ III
--------------------------------
Its: President
---------------------------
26
30
SCHEDULE 1.1
ESCROW AGREEMENT
This Escrow Agreement (this "Agreement"), dated as of _____________,
199__ by and among Union Bank of California, N.A., a national banking
association with offices in Los Angeles, California as Escrow Agent (the "Escrow
Agent"), Digital Television Services of Georgia, LLC, a Georgia limited
liability company ("Purchaser"), and Ocmulgee Communications, Inc., a Georgia
corporation ("Seller").
RECITALS:
A. Purchaser and Seller entered into an Asset Purchase Agreement dated
__________, 199___ (the "Purchase Agreement") pursuant to which Purchaser agreed
to acquire all of Seller's right, title and interest in the National Rural
Telecommunications Cooperative's System No. 1017 for the exclusive distribution
in the Locations of DirecTv, Inc. DBS Services. Unless otherwise defined in this
Agreement, all capitalized terms used herein and defined in the Purchase
Agreement shall have the same meanings as set forth in the Purchase Agreement.
B. Pursuant to Section 4.2 of the Purchase Agreement, on the Closing
Date Purchaser is required to provide $950,000 to the Escrow Agent in
immediately available funds. The Escrow Agent shall hold such funds to satisfy
Indemnification Claims of Purchaser made pursuant to the Purchase Agreement.
C. Accordingly, pursuant to the Purchase Agreement, on the Closing Date
Purchaser shall wire transfer $950,000 to the Escrow Agent, in accordance with
the wire transfer instructions of the Escrow Agent set forth on Exhibit A
attached hereto.
D. The parties hereto desire to enter into this Agreement in order to
set forth the instructions to, and the duties, obligations, responsibilities and
rights of, the Escrow Agent with respect to all matters relating to the
administration, control, operation and disbursement of the amounts to be
deposited with the Escrow Agent.
AGREEMENT:
In consideration of the premises and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties hereto hereby agree as follows:
Section 1. Acceptance of Appointment; Fee. The Escrow Agent hereby
accepts its appointment as Escrow Agent and hereby agrees to perform all of the
duties, obligations and responsibilities required of it as Escrow Agent under
this Agreement. Upon the initial deposit of the Escrow Deposit (as defined
below) pursuant to Section 2 below, the Escrow Agent shall be entitled to deduct
One Thousand Eight Hundred Dollars ($1,800) from the amount deposited as its
administration fee for acting as Escrow Agent hereunder.
31
Section 2. Establishment of Escrow Account. Immediately upon the
receipt of the wire transfer of $950,000 from Purchaser, the Escrow Agent shall
(a) establish an escrow account which shall be maintained and administered in
accordance with the terms hereof, and (b) transmit to Purchaser via facsimile a
Receipt substantially in the form of Exhibit B hereto. The deposit received by
the Escrow Agent from Purchaser, not including any investment income earned on
the funds held by the Escrow Agent, is referred to herein as the "Escrow
Deposit".
The Escrow Deposit shall be held, invested and disbursed in accordance
with the terms and conditions set forth herein. The Escrow Agent shall furnish
to Purchaser and Seller at such times as they may reasonably request an
accounting of all funds held or disbursed by the Escrow Agent.
Section 3. Investment of Escrow Deposit; Payment of Income. The Escrow
Deposit and any investment income earned thereon shall be invested and
reinvested as directed in writing by Purchaser from time to time in the Highmark
U.S. Treasury Fund. The investment income earned as a result of investments made
pursuant to this subsection shall be paid to Seller when directed by Seller
following the disbursement of the Escrow Deposit pursuant to the terms hereof.
The payment of income to Seller shall be in such manner (wire, check, etc.) and
to such address as may be directed by Seller. Seller shall be liable for payment
of income taxes on all income earned on the Escrow Deposit.
Section 4. Disbursements.
A. Indemnification Claims. During the period beginning on the
Closing Date and ending with the close of business on March 15, 1999 (the
"Escrow Termination Date"), Purchaser shall be entitled to submit one or more
Indemnification Claims (as defined in Section 10.4 of the Purchase Agreements)
to the Escrow Agent, in addition to and at approximately the same time as such
Indemnification Claim is submitted to Seller pursuant to Section 10.5 of the
Purchase Agreement. Indemnification Claims shall be in substantially the same
form as Exhibit C hereto. Unless the Escrow Agent receives a written objection
from Seller within fifteen (15) days following receipt by Escrow Agent of an
Indemnification Claim, the Escrow Agent shall disburse funds to the Indemnified
Party identified on the Indemnification Claim in the amount set forth on the
Indemnification Claim; provided, however, in no event shall the Escrow Agent
disburse under this Section 4(A) amounts with respect to Indemnification Claims
received by it after the Escrow Termination Date. Amounts disbursed hereunder in
payment of Indemnification Claims shall be deemed disbursed in satisfaction of
claims in the order in which they are finally resolved.
If the Escrow Agent receives within the fifteen (15) day
period described above a written objection from Seller to the payment of an
Indemnification Claim, which claim would otherwise be properly payable by the
Escrow Agent, the Escrow Agent shall not distribute the amount of the
Indemnification Claim, but rather shall earmark a portion of the Escrow Deposit
as a claims reserve, the amount of which shall be the amount that would have
been distributable to the Indemnified Party but for the objection by Seller (the
"Claims Reserve"). Thereafter, the Escrow Agent shall continue to hold the
Claims Reserve pending resolution of matters objected to
2
32
by Seller and shall distribute the Claims Reserve only pursuant to (i) joint
written instructions executed by both Purchaser and Seller, or (ii) a Final
Order.
A. "Final Order" shall mean a (i) settlement agreement signed
by Seller and Purchaser; (ii) a certified copy of a binding decision of an
arbitrator which is not subject to review by or appeal to any other forum; or
(iii) a certified copy of a final order or judgment of a court of competent
jurisdiction determining the rights of Seller and Purchaser with respect to the
Escrow Deposit, which has been finally affirmed on appeal by the highest court
before which such appeal may be sought, or has become final, by lapse of time or
is not otherwise subject to appeal.
B. Escrow Termination Date. On the first business day
following the Escrow Termination Date the Escrow Agent shall disburse to Seller
via wire transfer in accordance with the wiring instructions provided by Seller
the balance of the Escrow Deposit minus the Claims Reserve with respect thereto,
and minus the amount of any Indemnification Claim submitted prior to the Escrow
Termination Date. The remaining amounts held by the Escrow Agent, if any, shall
continue to be held and distributed pursuant to this Agreement.
Section 5. Concerning the Escrow Agent.
A. Scope of its Authority. The Escrow Agent shall act as
Escrow Agent for the other parties hereto under this Agreement until the
termination of this Agreement in accordance with its terms, shall take such
actions as are specifically provided for herein and may exercise such additional
powers as are reasonably incidental thereto. The Escrow Agent shall not exercise
any discretion or make any judgments and shall act or refrain from acting only
in accordance with instructions and directions of the parties to this Agreement
who shall have agreed to make such instructions or directions.
B. Limitation of Liability. The Escrow Agent shall not be
liable for any act which it may do or omit to do hereunder so long as it shall
have acted in a manner not inconsistent with the terms of this Agreement. The
Escrow Agent shall not be liable in any respect on account of the identity,
authority or rights of the parties executing or delivering or purporting to
execute or deliver this Agreement, or any documents or papers, the delivery of
which is contemplated hereunder. The Escrow Agent may act in reliance upon any
instrument or signature which it reasonably believes to be genuine and may
assume that any person purporting to give notice or advice or instruction in
connection with the provisions hereof has been duly authorized to do so. The
Escrow Agent is authorized to disregard any and all warnings from any person,
and may disregard any directions, instructions, notices, communications or
information from any source whatsoever, excepting only directions conforming to
the terms and provisions of this Agreement. Under no circumstances shall the
Escrow Agent be liable or responsible for the application of funds after
delivery to any account or person in accordance with this Agreement.
C. Additional Rights of Escrow Agent. The Escrow Agent shall
have the following rights in addition to those granted above.
(i) The Escrow Agent may rely, and shall be protected
in acting or refraining from acting in reliance, upon any requisition,
certificate, statement, instrument,
3
33
opinion, report, notice, request, direction, consent, or other document or
instrument contemplated by this Agreement or any order, judgment or decree of a
court of competent jurisdiction, believed by it to be genuine and to have been
signed or otherwise authenticated by any person reasonably believed by the
Escrow Agent to be the proper person to sign or otherwise authenticate any such
document or instrument.
(ii) If any action of the Escrow Agent is questioned
by the parties hereto, the Escrow Agent may, but is not required to, consult
with independent legal counsel and the written advice of such counsel shall be
sufficient authorization and protection in respect of any action taken, suffered
or omitted by the Escrow Agent in reliance thereon.
(iii) The Escrow Agent shall not be bound to make any
investigation into the facts or other matters stated in any requisition,
certificate, statement, instrument, evidentiary material, opinion, report,
notice, request, directive or consent, or any judgment, order or decree of any
court of competent jurisdiction.
(iv) The Escrow Agent shall not be required to
institute legal proceedings of any kind or to defend any legal proceeding which
may be instituted in respect of the subject matter of this Agreement.
(v) The Escrow Agent shall be reimbursed by Purchaser
for all fees, expenses, disbursements and advances incurred or made by it in the
performance of its duties hereunder.
D. Indemnification of Escrow Agent. Each of the parties hereto
other than the Escrow Agent shall be jointly and severally liable for and shall
indemnify the Escrow Agent for, and hold it harmless against, any loss,
liability, expense, claim, demand or judgment incurred, suffered, paid or
otherwise borne by the Escrow Agent without willful misconduct or gross
negligence on the part of the Escrow Agent, and arising out of or in connection
with the acceptance or administration of this Agreement, including, but not
limited to, all reasonable costs and expenses of defending itself against any
claim of liability, other than a claim of liability arising out of willful
misconduct or gross negligence of the Escrow Agent, asserted in any litigation
relating to this Agreement ("Indemnifiable Damages"). If any such claim is
asserted against the Escrow Agent, the Escrow Agent may engage counsel of its
choice and each of the parties hereto other than Escrow Agent shall be jointly
and severally liable for the fees of such counsel and the expenses incurred to
defend the Escrow Agent against such claim, and in the event any claimant is
successful in establishing his, her or its claim, each of the parties hereto
other than Escrow Agent will, jointly and severally, hold the Escrow Agent
harmless and will be liable for all payments required to be made by the Escrow
Agent pursuant to any order, decree or judgment that may be entered in a court
of competent jurisdiction. The indemnifications provided in this Section shall
survive the termination of this Agreement.
In the event the Escrow Agent is entitled to Indemnifiable Damages from
the other parties to this Agreement, then as between such parties and without
limiting the obligations set forth in the preceding paragraph, Purchaser, on the
one hand, and Seller, on the other hand, shall each be liable for 50% of such
Indemnifiable Damages.
4
34
E. Resignation of Escrow Agent; Termination of Escrow
Agreement. The Escrow Agent shall be entitled to resign as Escrow Agent upon
sixty (60) days' prior, written notice to each of the other parties hereto, in
which case the Escrow Agent shall pay the Escrow Deposit as directed in writing
jointly by Purchaser and Seller, or, failing receipt of written directions as to
whom the Escrow Deposit shall be paid, to a court of competent jurisdiction.
Except as otherwise provided herein, this Agreement shall cease and
terminate upon the disbursement of the entire Escrow Deposit and the net
investment income and the performance of all obligations contemplated herein;
provided, however, that the indemnifications provided pursuant to Section 5(D)
above shall survive the termination of this Agreement.
Section 6. Delivery of Information to Escrow Agent. Each of the other
parties hereto shall execute and deliver such documents and obtain such
information as the Escrow Agent may reasonably request to effectuate the
operation of the escrow account and the efficient administration thereof.
Section 7. Binding Effect. This Agreement will be binding upon, inure
to the benefit of, and be enforceable by the respective beneficiaries,
representatives, successors and assigns of the parties hereto.
Section 8. Entire Agreement; Amendments. This Agreement contains the
entire understanding of the parties with respect to this subject matter, and may
be amended only by a written instrument duly executed by all parties hereto and
shall be binding for all purposes upon all of the parties hereto.
Section 9. Notices. All notices, claims, requests, demands and other
communications hereunder shall be sufficiently given if delivered in person or
sent by facsimile transmission or by registered or certified mail, postage
prepaid, addressed as follows:
(a) If to Purchaser: Digital Television Services of Georgia, LLC
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
FAX #770/▇▇▇-▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
With a copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇, L.L.P.
NationsBank Corporate Center, Suite 2600
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
FAX # (▇▇▇) ▇▇▇-▇▇▇▇
Attn: C. ▇▇▇▇ ▇▇▇▇▇, Esq.
5
35
(b) If to Seller: Ocmulgee Communications, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
With a copy to: ▇▇▇▇▇, Cork & ▇▇▇▇▇▇, LLP
500 SunTrust Bank Building
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ III, Esq.
(c) If to the Escrow Agent: Union Bank of California, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
FAX # (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇
or to such other address as the persons to whom notice is to be given may have
previously furnished in writing to the others, provided that notices of changes
of address shall only be effective upon receipt. A notice given in accordance
with the preceding sentence shall be deemed to have been given as of the date so
delivered, or sent by facsimile transmission, or two (2) business days after
mailing if mailed.
Section 10. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with the laws of the State of Georgia,
without regard to its conflict of law rules.
Section 11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument
Section 12. Headings. Section headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
6
36
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement, all as of the day and year first above written.
DIGITAL TELEVISION SERVICES OF
GEORGIA, LLC
By: DTS Management, LLC
Its: Manager
By:______________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.,
President and Manager
OCMULGEE COMMUNICATIONS, INC.
By: _________________________________
Its: ____________________________
ESCROW AGENT:
UNION BANK OF CALIFORNIA, N.A.
By: _________________________________
Its: ____________________________
7
37
EXHIBIT A
ESCROW AGENT'S
WIRING INSTRUCTIONS
Wiring instructions with respect to the deposit by Purchaser to the Escrow Agent
pursuant to Section 2 of the Escrow Agreement:
Name: Union Bank of California, N.A.
ABA #▇▇▇▇▇▇▇▇▇
Trust Department/TRUSDG
Ref: ______________________
Acct #_______________
38
EXHIBIT B
FORM OF RECEIPT FOR ESCROW DEPOSIT
TO: Digital Television Services of Georgia, LLC
Fax (▇▇▇) ▇▇▇-▇▇▇▇
(Attention: C. ▇▇▇▇ ▇▇▇▇▇, Esq.)
Ocmulgee Communications, Inc.
Fax ______________
(Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇)
RE: Receipt of Escrow Deposit pursuant to Escrow Agreement dated
__________, 199__, by and among Union Bank of California, N.A. ("Escrow
Agent"), Digital Television Services of Georgia, LLC ("Purchaser") and
Ocmulgee Communications, Inc. ("Seller")
Ladies and Gentlemen:
Be advised that we have received pursuant to Section 2 of the Escrow
Agreement a wire transfer of funds on this ____ day of _________, 199__ from
Purchaser in the amount of $950,000, to be held by us as Escrow Agent pursuant
to the Escrow Agreement.
Sincerely yours,
------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇
By: Union Bank of California, N.A.
Title: Assistant Vice-President
39
EXHIBIT C
FORM OF INDEMNIFICATION CLAIM
TO: Ocmulgee Communications, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
cc: Union Bank of California, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇
cc: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Scarborough, L.L.P.
NationsBank Corporate Center, Suite 2600
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: C. ▇▇▇▇ ▇▇▇▇▇, Esq.
RE: Indemnification Claim pursuant to Section 10.2 of the Purchase
Agreement dated ______________, 199___ (the "Purchase Agreement") by
and between Digital Television Services of Georgia, LLC ("Purchaser")
and Ocmulgee Communications, Inc. ("Seller")
Ladies and Gentlemen:
Please be advised that the undersigned is hereby providing written
notice to Seller of an assertion by the undersigned of a right to
indemnification under Section 10.2 of the Purchase Agreement.
A brief description of the facts giving rise to this claim is as
follows:
[Insert description]
A reasonable estimate of the Indemnifiable Damages (as defined in the
Purchase Agreement) suffered, or which may be suffered, by the undersigned is as
follows:
[Insert amount of claim or reasonable estimate and basis for estimate
of claim]
DIGITAL TELEVISION SERVICES OF GEORGIA, LLC
By: DTS Management, LLC
Its: Member
By:_______________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.,
President and Manager
40
SCHEDULE 1.3
LOCATIONS
COUNTY ZIP CODE CABLED NON-CABLED TOTAL
------ -------- ------ ---------- -----
▇▇▇▇▇▇▇▇ County, GA 750 750
▇▇▇ ▇▇▇▇ County, GA 2,308 2,308
▇▇▇▇▇▇▇▇ County, GA 1,650 1,650
▇▇▇▇▇▇ County, GA 804 804
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 8 8
Clinch County, GA 836 836
Coffee County, GA 2,248 2,248
▇▇▇▇ County, GA 2,411 2,389 4,800
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ 3,828 2,572 6,400
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ 1,192 1,192
▇▇▇▇ ▇▇▇▇▇ County, GA 1,337 1,337
▇▇▇▇▇▇ County, GA 1,500 500 2,000
Liberty County, GA 614 614
Lowndes County, GA 1,060 1,060
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 1 1
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,▇▇▇▇▇ 121 121
Pulaski County, GA 898 ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,▇▇▇▇▇ 208 208
▇▇▇▇ County, GA 1,500 1,500
▇▇▇▇▇▇▇ County, GA 1,100 1,100
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 17 17
Jefferson County, FL 1,500 2,590 4,090
TOTAL 36,912
41
SCHEDULE 1.6
OTHER ASSUMED AGREEMENTS
JMA NRTC/Member Agreement for Marketing and Distribution of DBS Services
Five Year Maintenance Agreement ($4/mo.)
In-House Finance with Maintenance Agreement ($17.88/mo.)
In-House Finance (Single Port $12.49/mo., Dual Port $14.27/mo.)
In-House Lease ($25/mo.)
Bellsouth- Yellow Page Advertising
▇▇▇▇▇ Company- Directory Advertising
42
SCHEDULE 2.1(a)
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT is made this _____ day of
____________, 1997, by and between Digital Television Services of Georgia, LLC,
a Georgia limited liability company ("Purchaser") and Ocmulgee Communications,
Inc., a Georgia corporation ("Seller").
RECITALS
1. Purchaser and Seller have entered into an Asset Purchase Agreement
dated as of _____________, 1997 (the "Purchase Agreement") pursuant to which
Seller has agreed to sell, assign, transfer and convey to Purchaser all of
Seller's right, title and interest in the National Rural Telecommunications
Cooperative's System No. 1017 for the exclusive distribution in the Locations of
DBS Services offered by DirecTv. Capitalized terms used herein which are not
otherwise defined herein shall have the meanings set forth in the Purchase
Agreement.
2. Pursuant to Section 2.1 and Section 3.1 of the Purchase Agreement,
Seller has agreed to assign and Purchaser has agreed to assume the rights and
obligations under the NRTC Agreements that accrue on and after the date hereof.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and legal sufficiency of which is hereby acknowledged, Seller and
Purchaser hereby agree as follows:
1. ASSIGNMENT. Seller hereby assigns, transfers and conveys to
Purchaser all right, title and interest in and to the NRTC Agreements and the
Other Assumed Agreements, including, but not limited to, the agreements listed
on Schedule A hereto and any rights in the Franchise.
2. ASSUMPTION. Purchaser hereby assumes the Current Liabilities, and
all liabilities that accrue under the NRTC Agreements on and after the date
hereof.
3. OTHER MATTERS. This assignment and assumption is made subject to and
together with the representations, warranties, covenants and agreements of
Purchaser and Seller specifically provided in the Purchase Agreement. Seller
hereby covenants to and agrees with Purchaser to do, execute, acknowledge and
deliver, or cause to be done, executed, acknowledged and delivered to Purchaser,
its successors and assigns, all such further acts, assignments, transfers,
conveyances, and assurances that may be reasonably requested by Purchaser for
the assignment, transfer and conveyance of the NRTC Agreements, the Other
Assumed Agreements and the Franchise.
43
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
PURCHASER:
Digital Television Services of
Georgia, LLC
By: DTS Management, LLC
Its: Member
By:____________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.,
President and Manager
SELLER:
Ocmulgee Communications, Inc.
By:________________________________
Its:______________________
44
SCHEDULE A
NRTC AGREEMENTS AND OTHER ASSUMED AGREEMENTS
1. NRTC/Member Agreement for Marketing and Distribution of DBS Services
dated as of __________, 199__ by and between the NRTC and Seller, as
amended by that certain Amendment as of _______________, 199__, and as
may be further amended from time to time, together with all schedules
and exhibits thereto.
2. NRTC/Member DBS Product Retail Agreement dated ____________, 199__ by
and between the NRTC and Seller, as amended from time to time, together
with all schedules and exhibits thereto.
45
SCHEDULE 2.1(b)
▇▇▇▇ OF SALE
FOR VALUE RECEIVED, Ocmulgee Communications, Inc., a Georgia
corporation ("Seller"), does hereby grant, bargain, sell, convey and assign to
Digital Television Services of Georgia, LLC, a Georgia limited liability company
("Purchaser"), the following:
All Purchased Assets, including without limitation (i) the NRTC
Agreements, (ii) the Other Assumed Agreements, (iii) Franchise, (iv) Current
Assets, (v) Inventory, (vi) Leased Subscriber Equipment, (vii) relationships,
contracts and accounts with Customers, (viii) Fixed Assets, (ix) Records, (x)
telephone numbers used in the Business, and (xi) all other assets of Seller,
whether tangible or intangible, used in connection with the Business, as set
forth in the Purchase Agreement dated as of ____________, 1997 between Purchaser
and Seller (the "Purchase Agreement"). Capitalized terms used herein which are
not otherwise defined shall have the meanings set forth in the Purchase
Agreement.
This ▇▇▇▇ of Sale is made subject to and together with the
representations, warranties, covenants and agreements of Seller specifically
provided in the Purchase Agreement. Seller hereby covenants and agrees with
Purchaser to do, execute, acknowledge and deliver, or cause to be done,
executed, acknowledged and delivered to Purchaser, its successors and assigns,
all such further acts, assignments, transfers, conveyances, and assurances that
may be reasonably requested by Purchaser for the assignment, transfer and
conveyance of the Purchased Assets.
IN WITNESS WHEREOF, Seller has caused this ▇▇▇▇ of Sale to be executed
and delivered to Purchaser on this ____ day of ______, 1997.
OCMULGEE COMMUNICATIONS, INC.
By:_________________________________
Its:_____________________________
46
SCHEDULE 4.4
ALLOCATION OF PURCHASE PRICE
1. Cash ______________
2. Accounts Receivable ______________
2. Fixed Assets ______________
3. Inventory ______________
4. Leased Subscriber Equipment ______________
5. General Intangibles including NRTC Agreements
==============
Total $______________
47
SCHEDULE 5.2(b)
CONSENTS OF SELLER
Board of Directors and Shareholders of Seller
48
SCHEDULE 5.3(a)
LIENS
Liens of Whirlpool Financial Corporation filed in Dodge County, Georgia.
Lien of ▇.▇. ▇▇▇▇▇▇, ▇▇., Farms, Inc.
49
SCHEDULE 5.4
FIXED ASSETS NEEDING REPAIRS
None
50
SCHEDULE 5.10
CHANGES OR EVENTS
None
51
SCHEDULE 5.11
LICENSES AND PERMITS
Dodge County Business License
52
SCHEDULE 5.14
LITIGATION
None
53
SCHEDULE 6.2(b)
CONSENTS OF PURCHASER
None
54
SCHEDULE 8.8
NONCOMPETITION AGREEMENT
THIS NONCOMPETITION AGREEMENT (this "Agreement") is made and entered
into as of this ___ day of _________, 1997, by and between Digital Television
Services of Georgia, LLC, a Georgia limited liability company ("Company"), and
_______________ [("OCI"/"COVENANTOR")].
R E C I T A L S
A. Pursuant to that certain Asset Purchase Agreement dated __________,
1997 (the "Purchase Agreement") by and between Company and [OCI/OCMULGEE
COMMUNICATIONS, INC. ("OCI")], Company has purchased certain assets and assumed
certain liabilities of OCI used or usable for the exclusive distribution in
certain areas in the State of Georgia of DBS Services offered by DirecTv, Inc.,
the successor rights holder to ▇▇▇▇▇▇ Communications Galaxy, Inc. ("HCG")
through the National Rural Telecommunications Cooperative (the "NRTC") (the
"Business").
B. A primary reason for the purchase by Company of the assets of OCI
pursuant to the Purchase Agreement is to enable Company to establish and operate
a business substantially similar to the Business operated by OCI.
C. AS A [STOCKHOLDER] [MANAGER] [DIRECTOR] OF OCI, COVENANTOR WILL
RECEIVE SUBSTANTIAL BENEFITS FROM THE CONSUMMATION OF THE TRANSACTIONS
CONTEMPLATED BY THE PURCHASE AGREEMENT.
D. As a condition to closing the transactions contemplated by the
Purchase Agreement, [OCI/COVENANTOR] is required to enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and covenants
of the parties, together with other valuable consideration, the receipt and
legal sufficiency of which is hereby acknowledged, Company and [OCI/COVENANTOR]
hereby stipulate and agree as follows:
1. RESTRICTIVE COVENANTS.
Section 1.1 Access to Confidential Information.
[OCI/COVENANTOR] has had access AS A [STOCKHOLDER] [MANAGER] [DIRECTOR] OF OCI
(DIRECTLY OR INDIRECTLY) PRIOR TO THE SALE OF OCI'S ASSETS TO COMPANY to
valuable, highly confidential, privileged and proprietary information relating
to the Business, including without limitation, the operation of the Business,
customer lists, pricing and other information regarded by Company as proprietary
and confidential (collectively, the "Confidential Information"). Anything herein
to the contrary notwithstanding, information shall not be deemed to be
Confidential Information hereunder if such information is or becomes available
or known to the general public (or to
55
[OCI/COVENANTOR] by a third party which is not, directly or indirectly, in
breach of a confidentiality obligation) through no act, omission or fault of
[OCI/COVENANTOR] or such information is required to be disclosed by
[OCI/COVENANTOR] by law or pursuant to a court order (provided that
[OCI/COVENANTOR] shall have given Company notice of the circumstances
surrounding such compelled disclosure and an opportunity to seek an appropriate
protective order with respect thereto). It is further stipulated and
acknowledged that unauthorized use or disclosure by [OCI/COVENANTOR] of
Confidential Information would seriously damage Company in its Business.
Section 1.2 Covenant Not To Disclose Confidential Information.
During the "Restrictive Period" (hereinafter defined), and after its termination
or expiration for any reason, [OCI/COVENANTOR] will not, without Company's prior
written consent, (i) communicate, divulge, disclose, furnish or make accessible
to any third person, company or other person or entity, whether or not in
competition with Company, and whether or not for pecuniary gain, any aspect of
the Confidential Information, or (ii) reproduce, recreate or use any
Confidential Information.
Section 1.3 Nonsolicitation of Employees. During the
Restrictive Period, [OCI/COVENANTOR] will not, directly or indirectly, employ,
solicit or encourage any employee or independent contractor of Company, who at
any time during the Restrictive Period was employed by Company, to terminate his
or her employment with or retention by Company for the purpose of becoming
employed or retained by [OCI/COVENANTOR] or any other person or entity to
perform the same or similar services that such employee or independent
contractor performed for Company or Company's successors or permitted assigns.
Section 1.4 Nonsolicitation of Customers. During the
Restrictive Period, [OCI/COVENANTOR] will not, directly or indirectly, solicit
any person or entity that was a customer or subscriber of OCI at any time during
the two (2) year period immediately prior to the consummation of the
transactions contemplated by the Purchase Agreement or is a customer of Company
or Company's successors or permitted assigns during the Restrictive Period for
the purpose of providing to such customer services similar to or in competition
with the services provided by Company or Company's successors or permitted
assigns in the "Territory" (as hereinafter defined).
Section 1.5 Covenant Not To Compete. During the Restrictive
Period, [OCI/COVENANTOR] will not engage in, directly or indirectly, become
interested in, become engaged by, or become involved in any manner in any
business which is competitive with any aspect of the Business and which is
located in or conducts any business in the Territory.
2
56
Without limiting any of the foregoing, the parties agree that these
covenants are intended to prohibit [OCI/COVENANTOR] from engaging in such
prohibited activities, either, as the case may be, as an [INDIVIDUAL], owner,
partner, employee, consultant, stockholder (except as a holder of stock in
corporations whose stock is publicly traded and which is subject to the
reporting requirements of the Securities Exchange Act of 1934, as amended, and
then only to the extent of not owning more than one percent (1%) of the issued
and outstanding stock of such corporation), agent or salesman for any person,
firm, corporation, limited liability company, partnership, or otherwise.
As used herein, the term "Restrictive Period" shall mean the two (2)
year period immediately following the date hereof. As used herein, the term
"Territory" shall mean the specific geographic areas of the State of Georgia as
set forth on Schedule A attached hereto.
2. ENFORCEMENT.
Section 2.1 Equitable Relief. [OCI/COVENANTOR] hereby
acknowledges that a breach by Covenantor of any of the provisions of this
Agreement would cause irreparable damage to Company incapable of measurement and
that the remedy at law for such breach would be inadequate to compensate Company
for its losses. Therefore, in the event of such breach, Company, in addition to
any other remedies available to it at law, in equity or otherwise, shall be
entitled, at its option, to seek and obtain a temporary restraining order and
preliminary and permanent injunctions restraining [OCI/COVENANTOR] from
breaching or continuing any breach of any of the provisions of this Agreement.
Section 2.2 Attorneys' Fees. [OCI/COVENANTOR] shall be liable
for any and all reasonable attorneys' fees, expenses and court costs incurred in
connection with the enforcement of Company's rights hereunder.
3. ACKNOWLEDGMENT OF REASONABLENESS; SEVERABILITY. [OCI/COVENANTOR] has
carefully considered the provisions of this Agreement and agrees that, under all
circumstances, the restrictions set forth herein are fair and reasonable and
required for Company's protection of its legitimate interest, and are a material
and necessary part of the purchase of certain of the assets of OCI by Company
pursuant to the Purchase Agreement. [OCI/COVENANTOR] further agrees that the
restrictions are reasonable in scope, area and time, and will not prevent [HIM
OR IT] from pursuing other business ventures [OR EMPLOYMENT OPPORTUNITIES], or
otherwise cause a financial hardship upon [OCI/COVENANTOR]. The provisions of
this Agreement are severable. If any provision of this Agreement shall be held
to be invalid or unenforceable in any respect, such provision shall be carried
out and enforced only to the extent to which it shall be valid and enforceable,
and any such invalidity and unenforceability shall not affect any other
provision of this Agreement, all of which shall be fully carried out and
enforced as if such invalid or unenforceable provision had not been set forth
herein. If any unenforceable provision of this Agreement may be modified so as
to be enforceable under applicable law, such provision shall be deemed to have
been modified so as to be enforceable to the fullest extent permitted at law.
3
57
4. REPRESENTATIVES, [HEIRS, SUCCESSORS] AND ASSIGNS; THIRD PARTY
BENEFICIARY. The rights and obligations of [OCI/COVENANTOR] under this Agreement
shall inure to the benefit of Company, its representatives, successors and
assigns, and shall be binding upon [OCI/COVENANTOR] and [HIS OR ITS] legal
representatives, [HEIRS OR SUCCESSORS] and permitted assigns. Company shall have
the right to assign, transfer or convey this Agreement to its affiliated
companies, successor entities or assignees or transferees of substantially all
of Company's business activities. This Agreement, being personal in nature to
[OCI/COVENANTOR], may not be assigned by [OCI/COVENANTOR] without Company's
prior written consent.
5. NOTICES. All notices hereunder shall be in writing and mailed to the
parties by registered or certified mail, return receipt requested, to the
following addresses or to such other locations as the parties may hereafter
designate in writing in accordance with the terms of the delivery of notices
provided for herein:
[OCI/COVENANTOR]:
with a copy to: ▇▇▇▇▇, Cork & ▇▇▇▇▇▇, LLP
500 SunTrust Bank Building
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ III, Esq.
Company: Digital Television Services of Georgia, LLC
Building C-200
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
with a copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Scarborough, L.L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
NationsBank ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: C. ▇▇▇▇ ▇▇▇▇▇, Esq.
6. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Georgia, without regard to
the choice of law provisions thereof.
7. EXPENSES; PAYMENTS. Each of the parties hereto shall pay the fees
and expenses incurred by them in connection with the negotiation, preparation,
execution and consummation
4
58
of this Agreement. All payments made pursuant to this Agreement shall be made
without deduction for present or future income, stamp or other taxes, fees,
duties or other charges of any nature whatsoever.
8. AMENDMENT; WAIVER. This Agreement may be amended or modified or any
provision hereunder waived only by the written agreement of all of the parties
hereto. Failure of any party to enforce at any time any of the provisions of
this Agreement shall in no way be construed to be a waiver of any such
provision, nor in any way to affect the validity of this Agreement or any part
thereof or the right of any party thereafter to enforce each and every
provision. No waiver of any breach or noncompliance of this Agreement shall be
held to be a waiver of any other or subsequent breach or noncompliance.
9. ENTIRE AGREEMENT. This Agreement (and any documents referred to
herein) contains the entire agreement between the parties hereto with respect to
the subject matter hereof and all prior understandings and agreements shall be
deemed merged herein.
10. CHOICE OF FORUM/CONSENT TO JURISDICTION. [OCI/COVENANTOR] hereby
agrees that any dispute arising out of this Agreement shall be subject to the
jurisdiction of both the state and federal courts of Georgia. For that purpose,
[OCI/COVENANTOR] hereby irrevocably submits to the jurisdiction of the state and
federal courts of Georgia and waives any rights [HE OR IT] may have to claim
that jurisdiction over [HIM OR IT] in Georgia may not be had or that Georgia is
an improper venue for the enforcement of the obligations represented by this
Agreement. [OCI/COVENANTOR] further agrees to accept service of process out of
any of the state and federal courts in Georgia in any such dispute by registered
or certified mail addressed to [OCI/COVENANTOR] as provided for herein.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
5
59
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
[OCI/COVENANTOR]:
COMPANY:
Digital Television Services of
Georgia, LLC
By: DTS Management, LLC
Its: Member
By:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.,
President and Manager
6
60
SCHEDULE A
▇▇▇▇▇▇▇ County
▇▇▇▇▇▇▇▇ County
Bacon County
▇▇▇ ▇▇▇▇ County
▇▇▇▇▇▇▇▇ County
▇▇▇▇▇▇ County
▇▇▇▇▇▇▇ County
Clinch County
Coffee County
▇▇▇▇ County
Crisp County
Dodge County
Dooly County
▇▇▇▇▇▇ County
▇▇▇▇▇ County
▇▇▇▇▇ County
▇▇▇▇ ▇▇▇▇▇ County
▇▇▇▇▇▇ County
Liberty County
Lowndes County
▇▇▇▇▇▇▇▇ County
▇▇▇▇▇▇ County
Pulaski ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇