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EXHIBIT 10.79
AMENDED AND RESTATED
ASSET CONTRIBUTION AGREEMENT
DATED SEPTEMBER 25, 1997
BY AND AMONG
▇▇▇▇▇▇ COMMUNICATIONS ASSOCIATES, L.L.C.
AND
TEMPO CABLE, INC., COMMUNICATIONS SERVICES, INC., TCI
CABLEVISION OF OKLAHOMA, INC., TCI OF KANSAS, INC.,
WENTRONICS, INC., TCI CABLEVISION OF UTAH, INC., TCI CABLEVISION OF
ARIZONA, INC., TULSA CABLE TELEVISION, INC. AND TCI
AMERICAN CABLE HOLDINGS III, L.P.
AND
PEAK CABLEVISION, LLC
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LIST OF SCHEDULES AND EXHIBITS
Schedules
Schedule 1.20 ▇▇▇▇▇▇ Leased Property
Schedule 1.22 ▇▇▇▇▇▇ Other Real Property Interests
Schedule 1.23 ▇▇▇▇▇▇ Owned Real Property
Schedule 1.25 ▇▇▇▇▇▇ System Contracts
Schedule 1.26 ▇▇▇▇▇▇ System Franchises
Schedule 1.27 ▇▇▇▇▇▇ System Licenses
Schedule 1.60 TCI Leased Property
Schedule 1.63 TCI Other Real Property Interests
Schedule 1.64 TCI Owned Real Property
Schedule 1.67 TCI System Contracts
Schedule 1.68 TCI System Franchises
Schedule 1.69 TCI System Licenses
Schedule 4.2 TCI Excluded Assets
Schedule 4.3 ▇▇▇▇▇▇ Excluded Assets
Schedule 5.3 ▇▇▇▇▇▇ Required Consents
Schedule 5.4 ▇▇▇▇▇▇ Liens and Permitted Liens
Schedule 5.8 ▇▇▇▇▇▇ Cost of Service Elections
Schedule 5.10 ▇▇▇▇▇▇ Financial Statements; ▇▇▇▇▇▇
Changes or Events
Schedule 5.11 ▇▇▇▇▇▇ Litigation
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Schedule 5.13 ▇▇▇▇▇▇ Employment Matters
Schedule 5.14 ▇▇▇▇▇▇ Systems Information
Schedule 5.15 ▇▇▇▇▇▇ Bonds
Schedule 6.3 TCI Required Consents
Schedule 6.4 TCI Liens and Permitted Liens
Schedule 6.8 TCI Cost of Service Elections
Schedule 6.10 TCI Financial Statements; TCI
Changes or Events
Schedule 6.11 TCI Litigation
Schedule 6.13 TCI Employment Matters
Schedule 6.14 TCI Systems Information
Schedule 6.15 TCI Bonds
Exhibits
Exhibit 9.2(b) Form of Keep Well Agreement
Exhibit 10.2(b) TCI ▇▇▇▇ of Sale and Assignment and
Assumption Agreement
Exhibit 10.3(b) ▇▇▇▇▇▇ ▇▇▇▇ of Sale and Assignment
and Assumption ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ CONTRIBUTION AGREEMENT
THIS ASSET CONTRIBUTION AGREEMENT ("Agreement") is dated as of September
25, 1997, by and among ▇▇▇▇▇▇ Communications Associates, L.L.C. ("▇▇▇▇▇▇"),
Tempo Cable, Inc., Communications Services, Inc., TCI Cablevision of Oklahoma,
Inc., TCI of Kansas, Inc., Wentronics, Inc., TCI Cablevision of Utah, Inc., TCI
Cablevision of Arizona, Inc., Tulsa Cable Television, Inc. (collectively, the
"TCI Entities"), TCI American Cable Holdings III, L.P. ("TCI Member") and
Premier Media, LLC, a Colorado limited liability company (the "Company").
RECITALS
▇. ▇▇▇▇▇▇ and the TCI Member (together, the "Members") have formed
the Company for the purposes of, among other things, the ownership, operation,
acquisition and management of cable television systems.
▇. ▇▇▇▇▇▇ will own and operate on or before the Closing Date certain
cable television systems serving certain systems in Arkansas, Missouri, Nevada,
Oklahoma and Utah (the "▇▇▇▇▇▇ Systems"), with such cable television systems
being described in further detail on Exhibit A attached hereto.
C. TCI Member will own and operate on or before the Closing Date
certain cable television systems serving Arizona, Oklahoma and Utah (the "TCI
Systems"), with such cable television systems being described in further detail
on Exhibit A attached hereto.
▇. ▇▇▇▇▇▇ desires to contribute substantially all of the assets of
the ▇▇▇▇▇▇ Systems to the Company, and TCI desires to contribute substantially
all of the assets of the TCI Systems to the Company, on the terms and
conditions hereinafter set forth.
AGREEMENTS
In consideration of the mutual covenants and promises set forth
herein, the parties agree as follows:
SECTION 1. DEFINITIONS
In addition to terms defined elsewhere in this Agreement, the following
capitalized terms or terms otherwise defined in this SECTION 1 shall have the
meanings set forth below:
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1.1 1992 Cable Act. The Cable Television Consumer Protection and
Competition Act of 1992 and the FCC rules and regulations promulgated
thereunder.
1.2 Affiliate. With respect to any Person, any Person controlling,
controlled by or under common control with such Person; "control" means the
ownership, directly or indirectly, of voting securities representing the right
generally to elect a majority of the directors (or similar officials) of a
Person or the possession, by contract or otherwise, of the authority to direct
the management and policies of a Person.
1.3 Assets. The ▇▇▇▇▇▇ Assets or the TCI Assets, as the context
requires.
1.4 Basic Services. The lowest tier of service offered to
subscribers of a System.
1.5 Business Day. Any day other than a Saturday, Sunday or a day on
which the banking institutions in Denver, Colorado are required or authorized
to be closed.
1.6 Cable Act. The Cable Communications Policy Act of 1984, as
amended, and the rules and regulations promulgated thereunder.
1.7 Cable Business. ▇▇▇▇▇▇'▇ Cable Business or TCI's Cable Business,
as the context requires.
1.8 Closing Time. 11:59 P.M., Mountain Time, on the Closing Date.
1.9 Communications Act. The Communications Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
1.10 Contract. Any contract, mortgage, deed of trust, bond,
indenture, lease, license, note, franchise, certificate, option, warrant, right
or other instrument, document, obligation or agreement, whether written or
oral.
1.11 Equivalent Basic Subscribers (or "EBSs"). As of any date of
determination and for each franchise area served by a System, the sum of (a)
the total number of private residential customer accounts that are billed by
individual unit (regardless of whether such accounts are in single-family homes
or in individually billed units in apartment buildings and other multi- unit
buildings) (exclusive of (i) "second connects" and "additional outlets" as such
terms are commonly understood in the cable television industry, and (ii)
accounts that are not charged or are charged less than the standard monthly
service fees and charges then in effect for such System for Basic Services) for
Basic Services and (b) the quotient of (i) the total monthly ▇▇▇▇▇▇▇▇ for sales
of Basic Services and Expanded Basic Services by such System during the most
recent month ended prior to the date of calculation to commercial, bulk-billed
and other
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accounts not billed by individual unit (whether on a discounted or undiscounted
basis) and individually billed subscribers that pay less than the standard
monthly service fees charged for Basic Services, but excluding ▇▇▇▇▇▇▇▇ in
excess of a single month's charges for any account, divided by (ii) the
standard monthly combined rate (without discount of any kind) charged to
individually billed subscribers for Basic Services and Expanded Basic Services
in effect during such month. For purposes of calculating the number of EBSs,
there will be excluded (i) all accounts billed by individual unit that are, and
all ▇▇▇▇▇▇▇▇ to any commercial, bulk-billed and other accounts not billed by
individual unit that are, more than 60 days past due in the payment of any
amount in excess of $5.00 or the standard rate charged for Basic Services at
the time of determination, (ii) any accounts billed by individual unit and all
commercial, bulk-billed and other accounts not billed by individual units that,
as of the date of calculation, have not paid in full the charges for at least
one full month of service, (iii) that portion of the ▇▇▇▇▇▇▇▇ to all accounts
billed by individual unit included in clause (b) above and any commercial,
bulk-billed and other accounts not billed by individual unit representing an
installation or other non-recurring charge, a charge for equipment or for any
outlet or connection other than the first outlet or first connection in any
individually billed unit or, with respect to a bulk account, in any residential
unit (e.g., an individual apartment or rental unit), a charge for any tiered
service other than Expanded Basic Services (whether or not included within Pay
TV), any charge for Pay TV or a pass-through charge for sales taxes, line-
itemized franchise fees, fees charged by the FCC and the like, (iv) any
individually billed unit and all ▇▇▇▇▇▇▇▇ to any commercial, bulk-billed and
other accounts not billed by individual unit whose service is pending
disconnection for any reason and (v) any individually billed unit and all
▇▇▇▇▇▇▇▇ to any commercial, bulk-billed or other accounts not billed by
individual unit who was solicited 60 days prior to the Closing Date to purchase
such services by promotions or offers of discounts other than those then
generally being offered by the party for which the determination of EBSs is
being made. For purposes of this definition, payments on account of monthly
▇▇▇▇▇▇▇▇ will be deemed due on the first day of the period for which the
service to which such ▇▇▇▇▇▇▇▇ relate is provided.
1.12 Environmental Law. Any Legal Requirement concerning the
protection of public health, safety, welfare or the environment, including
Legal Requirements relating to emissions, discharges, releases or threatened
releases of Hazardous Substances into the environment, air (including both
ambient and within buildings and other structures), surface water, ground water
or land or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous
Substances.
1.13 ERISA. The Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations promulgated thereunder and published
interpretations with respect thereto.
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1.14 ERISA Affiliate. As to any Person, any trade or business,
whether or not incorporated, which together with such Person would be deemed a
single employer within the meaning of Section 4001 of ERISA.
1.15 Expanded Basic Services. Any video programming provided over a
cable television system, regardless of service tier, other than Basic Services,
any new product tier and Pay TV.
1.16 FCC. The Federal Communications Commission.
1.17 Financial Statements. ▇▇▇▇▇▇'▇ Financial Statements or TCI's
Financial Statements, as the context requires.
1.18 ▇▇▇▇▇▇ Assets. All properties, privileges, rights, interests and
claims, real and personal, tangible and intangible, of every type and
description that are owned, leased, held, used or useful in ▇▇▇▇▇▇'▇ Cable
Business in which ▇▇▇▇▇▇ or any Affiliate of ▇▇▇▇▇▇ has any right, title or
interest or in which ▇▇▇▇▇▇ or any Affiliate of ▇▇▇▇▇▇ acquires any right,
title or interest on or before the Closing Time that are not ▇▇▇▇▇▇ Excluded
Assets, including the ▇▇▇▇▇▇ Tangible Personal Property, ▇▇▇▇▇▇ Owned Real
Property, ▇▇▇▇▇▇ Leased Property, ▇▇▇▇▇▇ Other Real Property Interests, ▇▇▇▇▇▇
System Franchises, ▇▇▇▇▇▇ System Licenses, ▇▇▇▇▇▇ System Contracts, ▇▇▇▇▇▇
Books and Records and the ▇▇▇▇▇▇ Other Intangibles, but excluding any ▇▇▇▇▇▇
Excluded Assets.
1.19 ▇▇▇▇▇▇ Books and Records. All engineering records, files, data,
drawings, blueprints, schematics, reports, lists, plans and processes and all
other files of correspondence, lists, records and reports concerning ▇▇▇▇▇▇'▇
Cable Business, including subscribers and prospective subscribers of the ▇▇▇▇▇▇
Systems, signal and program carriage and dealings with Governmental
Authorities, including all reports filed by or on behalf of ▇▇▇▇▇▇ with the FCC
and statements of account filed by or on behalf of ▇▇▇▇▇▇ with the U.S.
Copyright Office and all documents, reports and records relating to the
employees of the ▇▇▇▇▇▇ Systems.
1.20 ▇▇▇▇▇▇ Leased Property. The leaseholds of real property
described as ▇▇▇▇▇▇ Leased Property on SCHEDULE 1.20.
1.21 ▇▇▇▇▇▇ Other Intangibles. All intangible assets other than
▇▇▇▇▇▇ System Franchises, ▇▇▇▇▇▇ System Licenses and ▇▇▇▇▇▇ System Contracts,
including subscriber lists, accounts receivable, claims (excluding any claims
relating to ▇▇▇▇▇▇ Excluded Assets), patents and copyrights, owned, used or
held for use in ▇▇▇▇▇▇'▇ Cable Business.
1.22 ▇▇▇▇▇▇ Other Real Property Interests. The easements and rights
of access (other than those relating to multiple dwelling units) and other
interests in real property held by ▇▇▇▇▇▇ in connection with ▇▇▇▇▇▇'▇ Cable
Business, including those interests
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described as ▇▇▇▇▇▇ Other Real Property Interests on SCHEDULE 1.22, but
excluding the ▇▇▇▇▇▇ Owned Real Property.
1.23 ▇▇▇▇▇▇ Owned Real Property. The fee interests in the real
property described as ▇▇▇▇▇▇ Owned Real Property on SCHEDULE 1.23 and all
improvements thereon.
1.24 ▇▇▇▇▇▇ Required Consents. Any and all consents, authorizations
and approvals required under the ▇▇▇▇▇▇ System Franchises, ▇▇▇▇▇▇ System
Licenses, the leases and other documents evidencing ▇▇▇▇▇▇ Leased Property and
▇▇▇▇▇▇ Other Real Property Interests and the ▇▇▇▇▇▇ System Contracts for (i)
▇▇▇▇▇▇ to transfer the ▇▇▇▇▇▇ Assets to the Company; (ii) the Company to
operate the ▇▇▇▇▇▇ Systems and to own, lease, use and operate the ▇▇▇▇▇▇ Assets
and the ▇▇▇▇▇▇ Systems at the places and in substantially the manner in which
the ▇▇▇▇▇▇ Assets are used and the ▇▇▇▇▇▇ Systems are operated as of the date
of this Agreement and as of the Closing; and (iii) the Company to assume and
perform the ▇▇▇▇▇▇ System Franchises, the ▇▇▇▇▇▇ System Licenses, the leases
and other documents evidencing ▇▇▇▇▇▇ Leased Property or ▇▇▇▇▇▇ Other Real
Property Interests and the ▇▇▇▇▇▇ System Contracts.
1.25 ▇▇▇▇▇▇ System Contracts. The pole line agreements, underground
conduit agreements, crossing agreements, multiple dwelling, bulk billing or
commercial service agreements and other Contracts (other than ▇▇▇▇▇▇ System
Franchises and ▇▇▇▇▇▇ System Licenses) described on SCHEDULE 1.25.
1.26 ▇▇▇▇▇▇ System Franchises. The franchises and other
authorizations or permits described on SCHEDULE 1.26.
1.27 ▇▇▇▇▇▇ System Licenses. The intangible cable television channel
distribution rights, cable television relay service (CARS), business radio and
other licenses, copyright notices and other licenses, authorizations, consents
or permits issued by the FCC or any other Governmental Authority (other than
▇▇▇▇▇▇ System Franchises, ▇▇▇▇▇▇ System Contracts and ▇▇▇▇▇▇ Other Real
Property Interests) described on SCHEDULE 1.27.
1.28 ▇▇▇▇▇▇ Tangible Personal Property. All tangible personal
property, including towers, tower equipment, aboveground and underground cable,
distribution systems, headend amplifiers, line amplifiers, microwave equipment,
converters, testing equipment, motor vehicles, office equipment, computers and
billing equipment, furniture, supplies, inventory and other physical assets.
1.29 ▇▇▇▇▇▇'▇ Cable Business. The cable television business and other
income-generating business related to the ▇▇▇▇▇▇ Systems conducted by ▇▇▇▇▇▇
through the ▇▇▇▇▇▇ Systems by Halcyon GP and Halcyon LP as of the date of this
Agreement and ▇▇▇▇▇▇ as of the Closing.
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1.30 Governmental Authority. The United States of America, any state,
commonwealth, territory or possession of the United States of America and any
political subdivision or quasi-governmental authority of any of the same,
including any court, tribunal, department, commission, board, bureau, agency,
county, municipality, province, parish or other instrumentality of any of the
foregoing.
1.31 Halcyon GP. Halcyon Communications Partners, an Oklahoma
general partnership.
1.32 Halcyon LP. Halcyon Communications Limited Partnership, an
Oklahoma limited partnership.
1.33 Hazardous Substances. (a) Any "hazardous waste" as defined by
the Resource Conservation and Recovery Act of 1976 (RCRA) (42 U.S.C. Sections
6901 et seq.), as amended, and the rules and regulations promulgated
thereunder; (b) any "hazardous substance" as defined by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (42 U.S.C.
Sections 9601 et seq.) (CERCLA), as amended, and the rules and regulations
promulgated thereunder; (c) any substance regulated by the Toxic Substances
Control Act (TSCA) (42 U.S.C. Sections 2601 et seq.), or the Insecticide,
Fungicide and Rodenticide Act (IFRA) (7 U.S.C. Sections 136 et seq.), each as
amended, and the rules and regulations promulgated thereunder; (d) asbestos or
asbestos-containing material of any kind or character; (e) polychlorinated
biphenyls; (f) any substances regulated under the provisions of Subtitle I of
RCRA relating to underground storage tanks; (g) any substance the presence,
use, handling, treatment, storage or disposal of which on Owned Real Property
or Leased Property is prohibited by any Environmental Law; and (h) any other
substance which by any Environmental Law requires special handling, reporting
or notification of any Governmental Authority in its collection, storage, use,
treatment or disposal.
1.34 HCI Partnership Interests. The partnership interests in Halcyon
GP and Halcyon LP held by Halcyon Communications, Inc.
1.35 HSR Act. The ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended, and the rules and regulations promulgated thereunder.
1.36 Judgment. Any judgment, writ, order, injunction, award or decree
of any court, judge, justice or magistrate, including any bankruptcy court or
judge or the arbitrator in any binding arbitration, and any order of or by any
Governmental Authority.
1.37 Knowledge. The actual knowledge of a particular matter of one or
more of the executive officers of such party or the general manager or one or
more of the managers of such party's Systems.
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1.38 Leased Property. The ▇▇▇▇▇▇ Leased Property or TCI Leased
Property, as the context requires.
1.39 Legal Requirement. Applicable common law and any statute,
ordinance, code or other law, rule, regulation, order, technical or other
written standard, requirement or procedure enacted, adopted, promulgated,
applied or followed by any Governmental Authority, including any Judgment.
1.40 Lien. Any security interest, security agreement, financing
statement filed with any Governmental Authority, conditional sale or other
title retention agreement, any lease, consignment or bailment given for
purposes of security, any mortgage, lien, indenture, pledge, option,
encumbrance, adverse interest, constructive trust or other trust, claim,
attachment, exception to, defect in or other condition affecting title or other
ownership interest (including but not limited to reservations, rights of entry,
possibilities of reverter, encroachments, protrusions, easements,
rights-of-way, rights of first refusal, restrictive covenants, leases and
licenses) of any kind, which constitutes an interest in or claim against
property, whether arising pursuant to any Legal Requirement, System License,
System Franchise, System Contract or otherwise.
1.41 Litigation. Any claim, action, suit, proceeding, arbitration,
investigation, hearing or other activity or procedure that could result in a
Judgment and any notice of any of the foregoing.
1.42 Losses. Any claims, losses, liabilities, damages, penalties,
costs and expenses, including interest that may be imposed in connection
therewith, expenses of investigation, reasonable fees and disbursements of
counsel and other experts, and the cost to any Person making a claim or seeking
indemnification under this Agreement with respect to funds expended by such
Person by reason of the occurrence of any event or the existence or assertion
of any Liens (other than Permitted Liens) with respect to which indemnification
is sought.
1.43 Operating Agreement. The Operating Agreement of the Company
dated as of the date hereof whose initial members are ▇▇▇▇▇▇ and TCI Member.
1.44 Owned Real Property. ▇▇▇▇▇▇ Owned Real Property or TCI Owned
Real Property, as the context requires.
1.45 Other Real Property Interests. The ▇▇▇▇▇▇ Other Real Property
Interests or the TCI Other Real Property Interests, as the context requires.
1.46 Party. Either ▇▇▇▇▇▇, on the one hand, or the TCI Entities for
periods prior to the Initial Contribution Date and the TCI Member for periods
on and after the Initial Contribution Date, on the other hand, as the context
requires.
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1.47 Pay TV. A la carte tiers or premium programming services
selected by and sold to subscribers on a per channel or per program basis.
1.48 Permitted Lien. Any (a) Lien securing Taxes, assessments and
governmental charges not yet due and payable, (b) zoning law or ordinance or
any similar Legal Requirement, (c) right reserved to any Governmental Authority
to regulate the affected property, (d) as to Owned Real Property and Other Real
Property Interests, any Lien that does not individually or in the aggregate
interfere with the right or ability to own, use or operate the Owned Real
Property or Other Real Property Interests as they are being used or operated or
to convey title to the same and (e) in the case of Leased Property, (i) the
rights of any lessor and (ii) any Lien granted by any lessor of Leased
Property; provided that "Permitted Lien" will not include any Lien securing a
debt or claim (other than inchoate materialmen's, mechanics', workmen's,
repairmen's or other like Liens arising in the ordinary course of business or
any Lien described in clause (e) above) or any Lien which could prevent or
impair in any way the conduct of the business of the affected System as it is
currently being conducted, and provided further that the classification of any
Lien as a "Permitted Lien" will not affect any liability which TCI may have
under this Agreement for any such Lien with respect to the exchange of the TCI
Systems or which ▇▇▇▇▇▇ may have under this Agreement for any such Lien with
respect to the exchange of the ▇▇▇▇▇▇ Systems, including pursuant to any
indemnity obligation under this Agreement.
1.49 Person. Any natural person, Governmental Authority, corporation,
general or limited partnership, limited liability company, joint venture,
trust, association or unincorporated entity of any kind.
1.50 Required Consents. The ▇▇▇▇▇▇ Required Consents or the TCI
Required Consents, as the context requires.
1.51 System. Any of the ▇▇▇▇▇▇ Systems or the TCI Systems, as the
context requires.
1.52 System Contracts. The ▇▇▇▇▇▇ System Contracts or the TCI System
Contracts, as the context requires.
1.53 System Franchises. The ▇▇▇▇▇▇ System Franchises or the TCI
System Franchises, as the context requires.
1.54 System Licenses. The ▇▇▇▇▇▇ System Licenses or the TCI System
Licenses, as the context requires.
1.55 Tangible Personal Property. The ▇▇▇▇▇▇ Tangible Personal
Property or the TCI Tangible Personal Property, as the context requires.
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1.56 Taxes. All levies and assessments of any kind or nature imposed
by any Governmental Authority, including all income, sales, use, ad valorem,
value added, franchise, severance, net or gross proceeds, withholding, payroll,
employment, excise or property taxes and levies or assessments related to
unclaimed property, together with any interest thereon and any penalties,
additions to tax or additional amounts applicable thereto.
1.57 TCI. The TCI Entities for all periods prior to the Initial
Contribution Date and the TCI Member for all periods on and after the Initial
Contribution Date.
1.58 TCI Assets. All of the assets, properties, privileges, rights,
interests and claims, real and personal, tangible and intangible, of every type
and description that are owned, leased, held, used or useful in TCI's Cable
Business in which TCI or any Affiliate of TCI has any right, title or interest
or in which TCI or any Affiliate of TCI acquires any right, title or interest
on or before the Closing Time that are not TCI Excluded Assets, including the
TCI Tangible Personal Property, the TCI Owned Real Property, the TCI Leased
Property, the TCI Other Real Property Interests, the TCI System Franchises,
the TCI System Licenses, the TCI System Contracts, the TCI Books and Records
and TCI Other Intangibles, but excluding any TCI Excluded Assets.
1.59 TCI Books and Records. All engineering records, files, data,
drawings, blueprints, schematics, reports, lists, plans and processes and all
other files of correspondence, lists, records and reports concerning TCI's
Cable Business, including subscribers and prospective subscribers of the TCI
Systems, signal and program carriage and dealings with Governmental
Authorities, including all reports filed by or on behalf of TCI with the FCC
and statements of account filed by or on behalf of TCI with the U.S. Copyright
Office and all documents, reports and records relating to the employees of the
TCI Systems.
1.60 TCI Leased Property. The leaseholds of real property described
as TCI Leased Property on SCHEDULE 1.60.
1.61 TCI Other Intangibles. All intangible assets other than TCI
System Franchises, TCI System Licenses and TCI System Contracts, including
subscriber lists, accounts receivable, claims (excluding any claims relating to
TCI Excluded Assets), patents, copyrights and goodwill, if any, owned, used or
held for use in TCI's Cable Business.
1.62 TCI Options. Various options held by ▇▇▇▇▇▇ giving ▇▇▇▇▇▇ the
option to purchase the TCI Partnership Interests for a total option price equal
to $3,000,000.
1.63 TCI Other Real Property Interests. The easements and rights of
access (other than those relating to multiple dwelling units) and other
interests in real property held by TCI in connection with TCI's Cable Business,
including those interests described
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as TCI Other Real Property Interests on SCHEDULE 1.63, but excluding the TCI
Owned Real Property.
1.64 TCI Owned Real Property. The fee interests in the real property
described as TCI Owned Real Property on SCHEDULE 1.64 and all improvements
thereon.
1.65 TCI Partnership Interests. The various partnership interests in
Halcyon GP and Halcyon LP held by American Televenture of Minersville, Inc.,
TCI Cablevision of Nevada, Inc., TCI Cablevision of Utah, Inc., Tempo Cable,
Inc. and ECP Holdings, Inc.
1.66 TCI Required Consents. Any and all consents, authorizations and
approvals required under the TCI System Franchises, the TCI System Licenses,
the leases and other documents evidencing the TCI Leased Property or the TCI
Other Real Property Interests and the TCI System Contracts for (i) TCI to
transfer the TCI Assets to the Company; (ii) the Company to operate the TCI
Systems and to own, lease, use and operate the TCI Assets and the TCI Systems
at the places and in substantially the manner in which the TCI Assets are used
and the TCI Systems are operated as of the date of this Agreement and as of the
Closing; and (iii) the Company to assume and perform the TCI System Franchises,
the TCI System Licenses, the leases and other documents evidencing TCI Leased
Property or TCI Other Real Property Interests and the TCI System Contracts.
1.67 TCI System Contracts. The pole line agreements, underground
conduit agreements, crossing agreements, multiple dwelling, bulk billing or
commercial service agreements and other Contracts (other than TCI System
Franchises and TCI System Licenses) described on SCHEDULE 1.67.
1.68 TCI System Franchises. The franchises and similar authorizations
or permits described on SCHEDULE 1.68.
1.69 TCI System Licenses. The intangible cable television channel
distribution rights, cable television relay service (CARS), business radio and
other licenses, copyright notices and other licenses, authorizations, consents
or permits issued by the FCC or any other Governmental Authority (other than
TCI System Franchises, TCI System Contracts and TCI Other Real Property
Interests) described on SCHEDULE 1.69.
1.70 TCI Tangible Personal Property. All tangible personal property,
including towers, tower equipment, aboveground and underground cable,
distribution systems, headend amplifiers, line amplifiers, microwave equipment,
converters, testing equipment, motor vehicles, office equipment, computers and
billing equipment, furniture, supplies, inventory and other physical assets.
1.71 TCI's Cable Business. The cable television business and other
income-generating business related to the TCI Systems conducted by TCI through
the TCI Systems.
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1.72 third party. Any Person other than TCI and its Affiliates or
▇▇▇▇▇▇ and its Affiliates.
1.73 Transaction Documents. The instruments and documents described
in SECTIONS 10.2 and 10.3 which are being executed and delivered by or on
behalf of ▇▇▇▇▇▇ or TCI in connection with this Agreement or the transactions
contemplated hereby.
1.74 Other Definitions. The following terms are defined in the
Sections or Recitals indicated:
Term Section or Recital
---- ------------------
Action 12.5
Adjustments 3.3
Agreement First Paragraph
Assumed Debt 3.2
Assumed Obligations and Liabilities 4.3
Closing 10.1
Closing Date 10.1
Company First Paragraph
Cost of Service Election 5.8(d)
Final Adjustment Certificate 3.3
▇▇▇▇▇▇ Balance Sheet 5.10
▇▇▇▇▇▇ Excluded Assets 4.4
▇▇▇▇▇▇ Plans 5.13(b)
▇▇▇▇▇▇ Systems Recital B
▇▇▇▇▇▇'▇ Financial Statements 5.10
Hired Employee 8.3(g)
Indemnified Party 12.5
Indemnifying Party 12.5
Initial Adjustment Certificate 3.3
Initial Contribution Date 2.1
Members Recital A
Outside Closing Date 11.1
Prime Rate 13.10
Roll-Up 2.2
Survival Period 12.1
Taking 13.16
TCI Member First Paragraph
TCI Balance Sheet 6.10
TCI Entities First Paragraph
TCI Excluded Assets 4.2
TCI Plans 6.13(b)
TCI Systems Recital C
TCI's Financial Statements 6.10
Transitional Billing Services 8.10
WARN 5.13(b)
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1.75 Accounting Terms. All accounting terms not otherwise defined in
this Agreement will have the meanings ascribed to them under generally
acceptable accounting principles as in effect from time to time in the United
States.
SECTION 2. INITIAL CONTRIBUTION BY TCI ENTITIES; ROLL-UP; CONTRIBUTION TO
COMPANY
2.1 Initial Contribution by TCI Entities. Prior to the Closing, the
TCI Entities shall contribute, convey, assign and transfer, or cause to be
contributed, conveyed, assigned and transferred, to the TCI Member, and the TCI
Member shall accept, assume and acquire from the TCI Entities, all of the TCI
Assets and liabilities, contingent or otherwise, relating thereto (the "Initial
Contribution"). The date of the Initial Contribution shall be deemed the
"Initial Contribution Date."
2.2 Roll-Up. Prior to or substantially contemporaneously with the
Closing, but in any event in the following sequence, ▇▇▇▇▇▇ shall first
exercise the TCI Options, which shall result in ▇▇▇▇▇▇ owning approximately 99%
of the partnership interests of Halcyon GP and Halcyon LP, and second, purchase
the HCI Partnership Interests, which shall result in ▇▇▇▇▇▇ owning all of the
partnership interests of Halcyon LP and Halcyon GP. The foregoing shall be
collectively referred to as the "Roll-Up."
2.3 Agreement to Contribute. Subject to the terms and conditions set
forth in this Agreement, after the Initial Contribution and Roll-Up described
in Sections 2.1 and 2.2 have occurred, TCI and ▇▇▇▇▇▇ hereby agree to transfer
and deliver to the Company on the Closing Date all of the TCI Assets or ▇▇▇▇▇▇
Assets, as applicable, free and clear of any Liens (except for Permitted
Liens).
2.4 Issuance of Ownership Interests. In consideration for the
contribution to the Company by the Members of their respective Assets described
in Section 2.3, the Members shall receive at Closing the Ownership Interests in
the Company as set forth in, and in accordance with the terms of, the Operating
Agreement. In connection therewith, each Member or its designee shall receive
a credit to its capital account in the Company in an amount equal to the value
of its respective Assets as set forth in Exhibit C to the Operating Agreement
less such Member's debt being assumed by the Company as set forth in Exhibit C
to the Operating Agreement, and subject to the adjustments applicable to such
Member pursuant to Section 3.1 and any adjustment to the debt being assumed
pursuant to Section 3.2. Such credit to each Member's capital account in the
Company will be made on the Closing Date based on information available on such
date, with any post-Closing adjustment to be made in cash between the
applicable Parties.
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SECTION 3. ADJUSTMENTS
3.1 Closing Adjustments. On the Closing Date, each Member's capital
account in the Company shall be increased or decreased, as appropriate, by the
net amount of the following adjustments:
(a) Each Member shall make adjustments on a pro rata basis as
of the Closing Time for all prepaid expenses, other than inventory (but only to
the extent the full benefit thereof will be realizable by the Company within 12
months after the Closing Date), accrued expenses (including real and personal
property taxes), copyright fees and franchise or license fees or charges,
prepaid income, subscriber prepayments and accounts receivable related to such
Member's Cable Business, all as determined in accordance with generally
accepted accounting principles consistently applied, to reflect the principle
that all expenses and income attributable to such Member's Cable Business for
the period through and including the Closing Time are for the account of such
Member, and all expenses and income attributable to such Member's Cable
Business for the period after the Closing Time are for the account of the
Company. Such Member will receive no credit for any (i) accounts receivable
resulting from cable service sales any portion of which is 60 days or more past
due from the billing date as of the Closing Date, (ii) all accounts receivable
resulting from advertising sales any portion of which is 120 days or more past
due as of the Closing Date, or (iii) accounts receivable from customers whose
accounts are inactive or whose service is pending disconnection for any reason
as of the Closing Date. Notwithstanding the foregoing, no adjustment will be
made for any items of income or expense that relate to any Excluded Assets.
For purposes of making "past due" calculations under this paragraph, the
billing statements of a System will be deemed to be due and payable on the
first day of the period during which the service to which such billing
statements relate is provided.
(b) All advance payments to, or funds of third parties on
deposit with, a Member as of the Closing Date, relating to such Member's Cable
Business, including advance payments and deposits (including any accrued
interest on such deposits) by subscribers served by such Member's Cable
Business for converters, encoders, decoders, cable television service and
related sales, shall be assumed by, and credited to the account of, the
Company.
(c) Each Member's capital account shall be reduced by the
economic value of all accrued vacation time permitted to be taken by the
employees of such Member after the Closing Time pursuant to Section 8.3(g).
(d) If the aggregate number of EBS's as of the month ending
immediately preceding the Closing Date of the Systems contributed by ▇▇▇▇▇▇ is
less than 27,116, then ▇▇▇▇▇▇'▇ capital account shall be reduced by the product
of the number of EBS's less than 27,116, multiplied by $1,250. If the
aggregate number of EBS's as of the
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month ending immediately preceding the Closing Date of the Systems contributed
by TCI is less than 86,786, then TCI's capital account shall be reduced by the
product of the number of EBS's less than 86,786, multiplied by $1,400.
3.2 Assumption by the Company of Assumed Debt.
(a) Concurrent with the Closing, the Company will assume, and
then immediately prepay, debt of the Members in the initial amount set forth in
Exhibit C to the Operating Agreement (the "Assumed Debt"), subject to
adjustment in accordance with Section 3.2(b). Such assumption will be
accomplished in a manner that fully releases the applicable Member from further
liability for the Assumed Debt pursuant to applicable loan documents related to
such Assumed Debt.
(b) The Assumed Debt of either Member will be adjusted upward
or downward, as necessary, so that the aggregate Ownership Interest (as defined
in the Operating Agreement) of all of the Members in the Company upon and
immediately after Closing will be equal to the percentages set forth in Section
4.2 of the Operating Agreement. Any dispute concerning the amount of such
Assumed Debt adjustment will be determined prior to Closing by an auditor
selected in accordance with Section 3.3.
3.3 Calculation of Adjustments.
(a) Each Member will estimate in good faith with respect to
their respective Systems, and set forth, together with a detailed statement of
the calculation thereof, the adjustments and prorations with respect to its
Cable Business prescribed by Section 3.1 (the "Adjustments"), in a certificate
(the "Initial Adjustment Certificate") executed by an authorized representative
of ▇▇▇▇▇▇ or TCI, as appropriate, and delivered to the other Member at least 10
Business Days prior to the Closing. Each Initial Adjustment Certificate will
be accompanied by appropriate documentation, including an accounts receivable
detail with relevant aging information as of the date of such certification, in
summary form, supporting the determination of and the Adjustments proposed in
such certificate. Following receipt of such Initial Adjustment Certificate,
the recipient shall have five Business Days to review such schedule and
supporting information and to notify the preparer of such Initial Adjustment
Certificate of any disagreements with the preparer's estimates of the
Adjustments. If the recipient provides a notice of disagreement with the
preparer's estimates of such amounts within such five Business Day period, TCI
and ▇▇▇▇▇▇ shall negotiate in good faith to resolve any such dispute and to
reach an agreement prior to the Closing Date on such estimated amounts as of
the Closing Date. The estimate so agreed upon by TCI and ▇▇▇▇▇▇ or (if the
parties do not reach such an agreement on such estimated amounts set forth in
the Initial Adjustment Certificates prior to the Closing Date or if the
recipient fails to provide a notice of disagreement with the preparer's
estimates of such amounts within the time provided) the estimates of
Adjustments set forth in the Initial Adjustment Certificates shall be the basis
for determining the net Adjustment set forth in Section 3.1. For purposes of
this section,
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the net Adjustment shall be the difference between the estimated Adjustments of
each Member. The net Adjustment shall be made to the Member's capital account
with the highest estimated Adjustment. A corresponding adjustment shall then
be made to TCI's capital account in accordance with Section 3.2(b).
(b) Within 90 days after the Closing, ▇▇▇▇▇▇ and TCI will each
deliver to the other a certificate (the "Final Adjustment Certificate") showing
in full detail the final determination of their respective Adjustments which
certificate will be accompanied by appropriate documentation supporting the
amounts proposed in such certificate, including an accounts receivable detail
with relevant aging information as of the Closing Time, and which will be
executed by an officer of ▇▇▇▇▇▇ or TCI, as appropriate. Each party will
provide to the other reasonable access to all records in its possession which
were used in the preparation of its Initial and Final Adjustment Certificates.
▇▇▇▇▇▇ and TCI will each review the other's Final Adjustment Certificate and
will give written notice to the other party of any objections it has to the
calculations shown in such certificate within 30 days after its receipt
thereof. TCI and ▇▇▇▇▇▇ will endeavor in good faith to resolve any such
objections within 30 days after the receipt by the Members of each other's
objections. If any objections or disputes have not been resolved at the end of
such 30-day period, the disputed portion of the Adjustments will be determined
within the following 30 days by a partner in a major accounting firm with
substantial cable television audit experience which is not the auditor of
either ▇▇▇▇▇▇ or TCI (or any Affiliate of either of them) and the determination
of such auditor will be final and will be binding upon the Members. If ▇▇▇▇▇▇
and TCI cannot agree with respect to the selection of an auditor, ▇▇▇▇▇▇ and
TCI will each select an auditor and those two auditors will select a third
auditor whose determination will be final and will be binding upon the Members.
▇▇▇▇▇▇ and TCI will bear equally the expenses arising in connection with such
determination of all disputed amounts, whether by agreement of the Members or
by an auditor's determination. The net final Adjustment amount shall be
further adjusted in order to take into account any estimated Adjustments
actually made at the Closing pursuant to Section 3.3(a) (the "Post-Closing
Adjustment"). The positive Post-Closing Adjustment shall be added to the
appropriate Member's capital account with a corresponding adjustment being made
to TCI's capital account in accordance with Section 3.2(b). In connection
therewith, if the positive Post-Closing Adjustment is added to TCI's capital
account then the amount of TCI Assumed Debt will be increased accordingly.
Likewise, if the positive Post-Closing Adjustment is added to ▇▇▇▇▇▇'▇ capital
account then the amount of TCI Assumed Debt will be decreased accordingly and
TCI will reimburse to Peak such decreased amount.
SECTION 4. ASSUMED LIABILITIES AND EXCLUDED ASSETS
4.1 Assumed Obligations and Liabilities. At the Closing Date, the
Company will assume and after the Closing, the Company will pay, discharge and
perform the following (the "Assumed Obligations and Liabilities"): (a) those
obligations and liabilities accruing and relating to periods after the Closing
Time under or with respect to
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the Assets assigned and transferred to the Company at the Closing; (b) those
obligations and liabilities of either Member to customers of the Cable Business
for (i) subscriber deposits related to the Systems in the amount for which the
Company received credit under Section 3.3 and (ii) customer, advertising and
other advance payments held by either Member as of the Closing Date in the
amount for which the Company received credit under Section 3.3; and (c) all
other obligations and liabilities accruing and relating to periods after the
Closing Time and arising out of the ownership of the Assets or operation of the
Systems after the Closing Time, except to the extent that such obligations or
liabilities relate to any Excluded Asset.
4.2 TCI Excluded Assets. "TCI Excluded Assets" means all: (a)
programming (including cable guide Contracts) and retransmission consent
Contracts (other than those listed on SCHEDULE 1.63 (TCI System Contracts); (b)
vehicle leases; (c) TCI Plans; (d) insurance policies and rights and claims
thereunder (except as otherwise provided in Section 13.16); (e) bonds, letters
of credit, surety instruments and other similar items; (f) cash and cash
equivalents and notes receivable; (g) subscriber billing Contracts and related
leased equipment to the extent not used at the Company; (h) all commercial
accounts relating to the provision of cable music services through DMX, Inc.;
(i) all Contracts relating to national advertising sales representation,
including Contracts with National Cable Communications or Cable Networks, Inc.;
and (j) rights, assets and properties described on SCHEDULE 4.2.
4.3 ▇▇▇▇▇▇ Excluded Assets. "▇▇▇▇▇▇ Excluded Assets" means all: (a)
programming (including cable guide Contracts) and retransmission consent
Contracts (other than those listed on SCHEDULE 1.25 (▇▇▇▇▇▇ System Contracts);
(b) vehicle leases; (c) ▇▇▇▇▇▇ Plans unless expressly included as a ▇▇▇▇▇▇
System Contract; (d) insurance policies and rights and claims thereunder
(except as otherwise provided in Section 13.16); (e) bonds, letters of credit,
surety instruments and other similar items; (f) cash and cash equivalents and
notes receivable; (g) subscriber billing Contracts and related leased equipment
to the extent not used at the Company; and (h) rights, assets and properties
described on SCHEDULE 4.3.
SECTION 5. ▇▇▇▇▇▇'▇ REPRESENTATIONS AND WARRANTIES
▇▇▇▇▇▇ represents and warrants to the Company and TCI as of the
date of this Agreement and as of the Closing, as follows:
5.1 Organization and Qualification of ▇▇▇▇▇▇. ▇▇▇▇▇▇ is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Colorado and has all requisite power and authority to
own, lease and use the ▇▇▇▇▇▇ Assets owned, leased or used by it and to conduct
▇▇▇▇▇▇'▇ Cable Business as it is currently conducted. ▇▇▇▇▇▇ is duly qualified
to do business and is in good standing under the laws of each jurisdiction in
which the ownership, leasing or use of the ▇▇▇▇▇▇ Assets owned, leased or used
by it or the nature of its activities in connection with the ▇▇▇▇▇▇
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Systems makes such qualification necessary, except in any such jurisdiction
where the failure to be so qualified and in good standing would not have a
material adverse effect on the ownership or operation of ▇▇▇▇▇▇'▇ Cable
Business, the ▇▇▇▇▇▇ Assets or ▇▇▇▇▇▇ Systems or on the ability of ▇▇▇▇▇▇ to
perform its obligations under this Agreement.
5.2 Authority and Validity. ▇▇▇▇▇▇ has all requisite power and
authority to execute and deliver, to perform its obligations under, and to
consummate the transactions contemplated by, this Agreement and the Transaction
Documents to which ▇▇▇▇▇▇ is a party. The execution and delivery by ▇▇▇▇▇▇,
the performance by ▇▇▇▇▇▇ under, and the consummation by ▇▇▇▇▇▇ of the
transactions contemplated by, this Agreement and the Transaction Documents to
which ▇▇▇▇▇▇ is a party have been duly and validly authorized by all necessary
action by or on behalf of ▇▇▇▇▇▇. This Agreement has been, and when executed
and delivered by ▇▇▇▇▇▇ the Transaction Documents will be, duly and validly
executed and delivered by ▇▇▇▇▇▇ and the valid and binding obligations of
▇▇▇▇▇▇, enforceable against ▇▇▇▇▇▇ in accordance with their terms, except as
the same may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws now or hereafter in effect relating to the
enforcement of creditors' rights generally or by principles governing the
availability of equitable remedies.
5.3 No Conflict; Required Consents. Except for the ▇▇▇▇▇▇ Required
Consents, all of which are listed on SCHEDULE 5.3, the TCI Required Consents
and the notification and expiration or earlier termination of the waiting
period under the HSR Act, the execution and delivery by ▇▇▇▇▇▇, the performance
of ▇▇▇▇▇▇ under, and the consummation of the transactions contemplated by, this
Agreement and the Transaction Documents to which ▇▇▇▇▇▇ is a party do not and
will not: (a) conflict with or violate any provision of its articles of
organization or operating agreement; (b) violate any provision of any Legal
Requirement; (c) require any consent, approval or authorization of, or filing
of any certificate, notice, application, report or other document with, any
Governmental Authority or other Person; or (d) (i) conflict with, violate,
result in a breach of or constitute a default under (without regard to
requirements of notice, lapse of time or elections of other Persons or any
combination thereof), (ii) permit or result in the termination, suspension or
modification of, (iii) result in the acceleration of (or give any Person the
right to accelerate) the performance of ▇▇▇▇▇▇ under, or (iv) result in the
creation or imposition of any Lien under any ▇▇▇▇▇▇ System Franchise, ▇▇▇▇▇▇
System License or any ▇▇▇▇▇▇ System Contract or other instrument evidencing
any of the ▇▇▇▇▇▇ Assets or by which ▇▇▇▇▇▇ or any of its assets is bound or
affected, except for purposes of clauses (c) and (d) such consents, approvals,
authorizations and filings that, if not obtained or made, would not, and such
violations, conflicts, breaches, defaults, terminations, suspensions,
modifications and accelerations as would not, individually or in the aggregate,
have a material adverse effect on any ▇▇▇▇▇▇ System, ▇▇▇▇▇▇'▇ Cable Business or
▇▇▇▇▇▇ or on the ability of ▇▇▇▇▇▇ to perform its obligations under this
Agreement or the Transaction Documents to which ▇▇▇▇▇▇ is a party.
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5.4 Assets.
5.4.1 As of the date of this Agreement, Halcyon GP and Halcyon
LP have, and as of Closing, ▇▇▇▇▇▇ will have, exclusive and good title to (or,
in the case of Assets that are leased, valid leasehold interests in) the ▇▇▇▇▇▇
Assets (other than ▇▇▇▇▇▇ Owned Real Property, ▇▇▇▇▇▇ Leased Property and
▇▇▇▇▇▇ Other Real Property Interests, as to which representations and
warranties in SECTION 5.6 apply). The ▇▇▇▇▇▇ Assets are free and clear of all
Liens, except for (a) Permitted Liens or (b) Liens described on SCHEDULE 5.4,
all of which will be terminated, released or, in the case of the rights of
first refusal listed on SCHEDULE 5.4, waived, as appropriate, at or prior to
the Closing. Except as described on SCHEDULE 1.28 (▇▇▇▇▇▇ Tangible Personal
Property), the ▇▇▇▇▇▇ Tangible Personal Property is in good operating condition
and repair (ordinary wear and tear excepted).
5.4.2 Except for items included in the ▇▇▇▇▇▇ Excluded Assets,
the ▇▇▇▇▇▇ Assets constitute all the assets necessary to permit the Company to
conduct ▇▇▇▇▇▇'▇ Cable Business and to operate the ▇▇▇▇▇▇ Systems substantially
as they are being conducted and operated on the date of this Agreement and in
compliance in all material respects with all applicable Legal Requirements,
▇▇▇▇▇▇ System Contracts, ▇▇▇▇▇▇ System Licenses and ▇▇▇▇▇▇ System Franchises
and to perform all of the Assumed Obligations and Liabilities.
5.4.3 To the Knowledge of ▇▇▇▇▇▇, no third party has been
granted or applied for a cable television franchise or is providing or
intending to provide cable television services in any of the communities or
unincorporated areas currently served by ▇▇▇▇▇▇'▇ Cable Business.
5.5 ▇▇▇▇▇▇ System Franchises, ▇▇▇▇▇▇ System Licenses, ▇▇▇▇▇▇ System
Contracts and ▇▇▇▇▇▇ Other Real Property Interests.
(a) Except as described on SCHEDULES 1.20 (▇▇▇▇▇▇ Leased Property),
1.22 (▇▇▇▇▇▇ Other Real Property Interests), 1.25 (▇▇▇▇▇▇ System Contracts),
1.26 (▇▇▇▇▇▇ System Franchises), 1.27 (▇▇▇▇▇▇ System Licenses), or 4.3 (▇▇▇▇▇▇
Excluded Assets), (a) Halcyon GP or Halcyon LP is not as of the date of this
Agreement, and ▇▇▇▇▇▇ will not be as of the Closing Date, bound or affected by
any of the following that relate primarily or in whole to ▇▇▇▇▇▇'▇ Cable
Business: (i) leases of real or personal property; (ii) franchises for the
construction or operation of cable television systems or System Contracts of
substantially equivalent effect; (iii) other licenses, authorizations, consents
or permits of the FCC or any other Governmental Authority; (iv) material
easements or rights of access; (v) pole line agreements, underground conduit
agreements, crossing agreements or bulk or commercial service agreements; or
(vi) System Contracts relating to the operation of ▇▇▇▇▇▇'▇ Cable Business
other than those described in any other clause of this Section which
contemplate payments by or to ▇▇▇▇▇▇ in any 12-month period exceeding $10,000
individually or $50,000 in the aggregate or that are not terminable by ▇▇▇▇▇▇
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without cost or penalty on not more than 90 days prior written notice, and (b)
no Affiliate of ▇▇▇▇▇▇ is a party to any documents listed on such Schedules.
(b) Complete and correct copies of the ▇▇▇▇▇▇ System Franchises and
▇▇▇▇▇▇ System Licenses have been delivered by ▇▇▇▇▇▇ to TCI. The ▇▇▇▇▇▇ System
Franchises and ▇▇▇▇▇▇ System Licenses are currently in full force and effect
and are valid under all applicable Legal Requirements according to their terms.
There is no legal action, governmental proceeding or investigation, pending or
to ▇▇▇▇▇▇'▇ Knowledge threatened, to terminate, suspend or modify any ▇▇▇▇▇▇
System Franchise and ▇▇▇▇▇▇ System License and Halcyon GP and Halcyon LP are as
of the date of this Agreement, and ▇▇▇▇▇▇ will be as of the Closing Date, in
material compliance with the terms and conditions of all the ▇▇▇▇▇▇ System
Franchises and ▇▇▇▇▇▇ System Licenses and with other applicable requirements of
all Governmental Authorities (including the FCC and the Register of Copyrights)
relating to the ▇▇▇▇▇▇ System Franchises and ▇▇▇▇▇▇ System Licenses, including
all requirements for notification, filing, reporting, posting and maintenance
of logs and records.
(c) Complete and correct copies of all material ▇▇▇▇▇▇ System
Contracts (including Contracts relating to Leased Property and Other Real
Property Interests described on SCHEDULE 1.22) have been provided to TCI. Such
documents constitute the entire agreement with the other party. Each such
▇▇▇▇▇▇ System Contract is in full force and effect and constitutes the valid,
legal, binding and enforceable obligation of Halcyon GP, Halcyon LP or ▇▇▇▇▇▇,
as the case may be, and Halcyon GP, Halcyon LP or ▇▇▇▇▇▇, as the case may be,
are not and to ▇▇▇▇▇▇'▇ Knowledge, each other party thereto is not in breach or
default of any material terms or conditions thereunder.
5.6 Real Property. All the Assets consisting of ▇▇▇▇▇▇ Owned Real
Property, ▇▇▇▇▇▇ Leased Property and material ▇▇▇▇▇▇ Other Real Property
Interests are described on SCHEDULES 1.20 (▇▇▇▇▇▇ Leased Property), 1.22
(▇▇▇▇▇▇ Other Real Property Interests) and 1.23 (▇▇▇▇▇▇ Owned Real Property).
Except as otherwise disclosed on SCHEDULES 1.20 (▇▇▇▇▇▇ Leased Property), 1.22
(▇▇▇▇▇▇ Other Real Property Interests) and 1.23 (▇▇▇▇▇▇ Owned Real Property),
Halcyon GP and Halcyon LP, as of the date of this Agreement, and ▇▇▇▇▇▇ will,
as of the Closing Date, hold title to the ▇▇▇▇▇▇ Owned Real Property free and
clear of all Liens, other than Permitted Liens and have the valid and
enforceable right to use and possess such ▇▇▇▇▇▇ Owned Real Property, subject
only to the Permitted Liens; and Halcyon GP and Halcyon LP, as of the date of
this Agreement, and ▇▇▇▇▇▇ will, as of the Closing Date, have valid and
enforceable leasehold interests in all ▇▇▇▇▇▇ Leased Property and, with respect
to ▇▇▇▇▇▇ Other Real Property Interests, have valid and enforceable rights to
use all ▇▇▇▇▇▇ Other Real Property Interests subject only to Permitted Liens.
Except for routine repairs, all of the material improvements, leasehold
improvements and the premises of the ▇▇▇▇▇▇ Owned Real Property and the
premises demised under the leases and other documents evidencing the ▇▇▇▇▇▇
Leased Property are in good condition and repair and are suitable for the
purposes used. Each parcel of ▇▇▇▇▇▇ Owned Real Property and each parcel of
▇▇▇▇▇▇ Leased Property and any improvements
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23
thereon and their current use (a) has access to and over public streets or
private streets for which ▇▇▇▇▇▇ has a valid right of ingress and egress, (b)
conforms in its current use and occupancy to all material zoning requirements
without reliance upon a variance issued by a Governmental Authority or a
classification of the parcel in question as a nonconforming use and (c)
conforms in its current use to all restrictive covenants, if any, or other
Liens affecting all or part of such parcel. Except where the failure of the
representations made in this sentence to be true and correct would not have a
material adverse effect on any ▇▇▇▇▇▇ Assets comprising any ▇▇▇▇▇▇ System, all
buildings, towers, guy wires and anchors, earth-receiving dishes and related
facilities used in the operations of the ▇▇▇▇▇▇ Systems are located entirely on
the ▇▇▇▇▇▇ Owned Real Property or ▇▇▇▇▇▇ Leased Property, and together with all
pole attachments, cable plant and cable installations, equipment and facilities
used in connection with the ▇▇▇▇▇▇ Systems, are located entirely on the ▇▇▇▇▇▇
Owned Real Property or ▇▇▇▇▇▇ Leased Property, and together with all pole
attachments, cable plant and cable installations, equipment and facilities used
in connection with the ▇▇▇▇▇▇ Systems are maintained, placed and located in
accordance with the provisions of all applicable Legal Requirements, deeds,
leases, licenses, permits or other legally enforceable arrangements.
5.7 Environmental.
(a) To ▇▇▇▇▇▇'▇ Knowledge, the ▇▇▇▇▇▇ Owned Real Property and
▇▇▇▇▇▇ Leased Property comply in all material respects with and has previously
been operated in compliance in all material respects with all Environmental
Laws. Neither Halcyon GP, Halcyon LP nor ▇▇▇▇▇▇ have, either directly or
indirectly, (i) generated, stored, used, treated, handled, discharged, released
or disposed of any Hazardous Substances at, on, under, in or about, to or from
or in any other manner affecting, any ▇▇▇▇▇▇ Owned Real Property or ▇▇▇▇▇▇
Leased Property, (ii) transported any Hazardous Substances to or from any
▇▇▇▇▇▇ Owned Property or ▇▇▇▇▇▇ Leased Property or (iii) undertaken or caused
to be undertaken any other activities relating to the ▇▇▇▇▇▇ Owned Real
Property or ▇▇▇▇▇▇ Leased Property, which could reasonably give rise to any
liability under any Environmental Law and, to ▇▇▇▇▇▇'▇ Knowledge, no other
present or previous owner, tenant, occupant or user of any ▇▇▇▇▇▇ Owned Real
Property or ▇▇▇▇▇▇ Leased Property or any other Person has committed or
suffered any of the foregoing. To ▇▇▇▇▇▇'▇ Knowledge, no release of Hazardous
Substances outside the ▇▇▇▇▇▇ Owned Real Property or ▇▇▇▇▇▇ Leased Property has
entered or threatens to enter any ▇▇▇▇▇▇ Owned Real Property or ▇▇▇▇▇▇ Leased
Property, nor is there any pending or threatened Litigation based on
Environmental Laws which arises from any condition of the land adjacent to or
immediately surrounding any ▇▇▇▇▇▇ Owned Real Property or ▇▇▇▇▇▇ Leased
Property. No Litigation based on Environmental Laws which relates to any
▇▇▇▇▇▇ Owned Real Property or ▇▇▇▇▇▇ Leased Property or any operations or
conditions on it (A) has been asserted or conducted in the past or is currently
pending against or with respect to ▇▇▇▇▇▇ or, to ▇▇▇▇▇▇'▇ Knowledge, any other
Person or (B) to ▇▇▇▇▇▇'▇ Knowledge, is threatened or contemplated.
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(b) To ▇▇▇▇▇▇'▇ Knowledge, (i) no aboveground or underground
storage tanks are currently or have been located on any ▇▇▇▇▇▇ Owned Real
Property or ▇▇▇▇▇▇ Leased Property, (ii) no ▇▇▇▇▇▇ Owned Real Property or
▇▇▇▇▇▇ Leased Property has been used at any time as a gasoline service station
or any other facility for storing, pumping, dispensing or producing gasoline or
any other petroleum products or wastes and (iii) no building or other structure
on any ▇▇▇▇▇▇ Owned Real Property or ▇▇▇▇▇▇ Leased Property contains asbestos,
asbestos-containing material or material presumed to be asbestos-containing
material under any Environmental Law.
(c) ▇▇▇▇▇▇ has provided TCI with complete and correct copies
of (i) all studies, reports, surveys or other written materials in ▇▇▇▇▇▇'▇
possession or to which ▇▇▇▇▇▇ has access relating to the presence or alleged
presence of Hazardous Substances at, on, under or affecting the ▇▇▇▇▇▇ Owned
Real Property or ▇▇▇▇▇▇ Leased Property, (ii) all notices (other than general
notices made by general publication) or other materials in ▇▇▇▇▇▇'▇ possession
or to which ▇▇▇▇▇▇ has access that were received from any Governmental
Authority having the power to administer or enforce any Environmental Laws
relating to current or past ownership, use or operation of the ▇▇▇▇▇▇ Owned
Real Property or ▇▇▇▇▇▇ Leased Property or activities at the ▇▇▇▇▇▇ Owned Real
Property or ▇▇▇▇▇▇ Leased Property and (iii) all materials in ▇▇▇▇▇▇'▇
possession or to which ▇▇▇▇▇▇ has access relating to any Litigation or
allegation by any private third party concerning any Environmental Law.
5.8 Compliance with Legal Requirements.
(a) The ownership, leasing and use of the ▇▇▇▇▇▇ Assets as
they are currently owned, leased and used and the conduct of ▇▇▇▇▇▇'▇ Cable
Business and the operation of the ▇▇▇▇▇▇ Systems as they are currently
conducted and operated do not violate or infringe in any material respect any
Legal Requirements currently in effect (other than Legal Requirements described
in Section 5.8(d), as to which the representations and warranties set forth in
that subsection shall apply). Neither Halcyon GP, Halcyon LP nor ▇▇▇▇▇▇ has
received any notice of any violation by ▇▇▇▇▇▇ or ▇▇▇▇▇▇'▇ Cable Business of
any Legal Requirement applicable to the operation of ▇▇▇▇▇▇'▇ Cable Business as
currently conducted, or the ▇▇▇▇▇▇ Systems as currently operated and to
▇▇▇▇▇▇'▇ Knowledge, there is no existing fact, circumstance or condition that
could reasonably form the basis for an allegation of any such violation.
(b) A valid request for renewal has been duly and timely filed
under Section 626 of the Communications Act with the proper Governmental
Authority with respect to all ▇▇▇▇▇▇ System Franchises that have expired prior
to or will expire within 36 months after the date of this Agreement.
(c) As of the date of this Agreement, Halcyon GP and Halcyon
LP have complied, and as of Closing, ▇▇▇▇▇▇ will comply, and ▇▇▇▇▇▇'▇ Cable
Business is in compliance, in all material respects, with the specifications
set forth in Part 76, Subpart K
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of the rules and regulations of the FCC, Section 111 of the U.S. Copyright Act
of 1976 and the applicable rules and regulations thereunder and the applicable
rules and regulations of the U.S. Copyright Office, the Register of Copyrights,
the Copyright Royalty Tribunal and the Communications Act, including provisions
of any thereof pertaining to signal leakage, to utility pole make ready and to
grounding and bonding of cable television systems (in each case as the same is
currently in effect), and all other applicable Legal Requirements relating to
the construction, maintenance, ownership and operation of the ▇▇▇▇▇▇ Assets,
the ▇▇▇▇▇▇ Systems and ▇▇▇▇▇▇'▇ Cable Business.
(d) Notwithstanding the foregoing, to ▇▇▇▇▇▇'▇ Knowledge, each
▇▇▇▇▇▇ System is in compliance in all material respects with the provisions of
the 1992 Cable Act as such Legal Requirements relate to the operation of
▇▇▇▇▇▇'▇ Cable Business. As of the date of this Agreement, Halcyon GP and
Halcyon LP have complied, and as of Closing, ▇▇▇▇▇▇ will comply, in all
material respects with the must carry and retransmission consent provisions of
the 1992 Cable Act as they relate to the ▇▇▇▇▇▇ Systems. As of the date of the
Agreement, Halcyon GP and Halcyon LP have used, and as of Closing, ▇▇▇▇▇▇ will
use, reasonable good faith efforts to establish rates charged to subscribers,
effective since September 1, 1993, that are or were allowable under the 1992
Cable Act and any authoritative interpretation thereof now or then in effect,
whether or not such rates are or were subject to regulation at that date by any
Governmental Authority, including any local franchising authority and/or the
FCC, unless such rates were not subject to regulation pursuant to a specific
exemption from rate regulation contained in the 1992 Cable Act other than the
failure of any franchising authority to have been certified to regulate rates.
Notwithstanding the foregoing, ▇▇▇▇▇▇ makes no representation or warranty that
the rates charged to subscribers would be allowable under any rules and
regulations of the FCC or any authoritative interpretation thereof, promulgated
after the date of the Closing. ▇▇▇▇▇▇ has delivered to TCI complete and
correct copies of all FCC Forms 393, 1200, 1205, 1210, 1215, 1220, 1225, 1235
and 1240 filed with respect to the ▇▇▇▇▇▇ Systems, copies of all other FCC
Forms filed by ▇▇▇▇▇▇ and of all correspondence with any Governmental Authority
relating to rate regulation generally or specific rates charged to subscribers
with respect to ▇▇▇▇▇▇ Systems, including copies of any complaints filed with
the FCC with respect to any rates charged to subscribers of the ▇▇▇▇▇▇ Systems,
and any other documentation supporting an exemption from the rate regulation
provisions of the 1992 Cable Act claimed by ▇▇▇▇▇▇ with respect to any of the
▇▇▇▇▇▇ Systems. Neither Halcyon GP, Halcyon LP nor ▇▇▇▇▇▇ has received any
notice from any Governmental Authority with respect to an intention to enforce
customer service standards pursuant to the 1992 Cable Act and neither Halcyon
GP, Halcyon LP nor ▇▇▇▇▇▇ have agreed with any Governmental Authority to
establish customer service standards that exceed the customer service standards
promulgated pursuant to the 1992 Cable Act. Except as set forth on SCHEDULE
5.8, neither Halcyon GP, Halcyon LP nor ▇▇▇▇▇▇ has made any election with
respect to any cost of service proceeding conducted in accordance with Part
76.922 of Title 47 of the Code of Federal Regulations or any similar proceeding
with respect to any of the ▇▇▇▇▇▇ Systems (a "Cost of Service Election").
Neither Halcyon GP, Halcyon LP nor ▇▇▇▇▇▇ has entered into or is subject to any
so-called social contract
-22-
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or proposed resolution with the FCC with respect to rates charged for cable
television services in the ▇▇▇▇▇▇ Systems and is currently negotiating or
anticipating entering into or being subject to the same.
5.9 Patents, Trademarks and Copyrights. Halcyon GP, Halcyon LP or
▇▇▇▇▇▇, as the case may be, have timely and accurately made all requisite
filings and payments with the Register of Copyrights with respect to ▇▇▇▇▇▇'▇
Cable Business. ▇▇▇▇▇▇ has delivered to TCI complete and correct copies of all
current reports and filings for the past two years, made or filed pursuant to
copyright rules and regulations with respect to ▇▇▇▇▇▇'▇ Cable Business.
Neither Halcyon LP, Halcyon GP nor ▇▇▇▇▇▇ possesses any patent, patent right,
trademark or copyright related to or material to the operation of the ▇▇▇▇▇▇
Systems and neither Halcyon GP, Halcyon LP nor ▇▇▇▇▇▇ is a party to any license
or royalty agreement with respect to any such patent, trademark or copyright,
except for licenses respecting program material and obligations under the
Copyright Act of 1976 applicable to cable television systems generally. The
▇▇▇▇▇▇ Systems and ▇▇▇▇▇▇'▇ Cable Business have been operated in such a manner
so as not to violate or infringe upon the rights, or give rise to any rightful
claim of any Person for copyright, trademark, service ▇▇▇▇, patent or license
infringement or the like.
5.10 Financial Statements; Undisclosed Liabilities; Absence of Certain
Changes or Events. ▇▇▇▇▇▇ has delivered to TCI complete and correct copies of
(a) unaudited balance sheets of each of the ▇▇▇▇▇▇ Systems and related
statements of income, for and as of the year ended December 31, 1996 and (b)
unaudited balance sheets and the related unaudited statements of income for
each quarter ending on and after March 31, 1997 (all of such financial
statements and notes being hereinafter referred to as "▇▇▇▇▇▇'▇ Financial
Statements"). ▇▇▇▇▇▇'▇ Financial Statements are in accordance with the books
and records of each of the respective ▇▇▇▇▇▇ Systems, were prepared in
accordance with generally accepted accounting principles, applied on a
consistent basis throughout the periods covered thereby, and, except as may be
described therein, present fairly the financial condition of such Systems at
the dates and for the periods indicated, subject, in the case of unaudited
▇▇▇▇▇▇ Financial Statements, only to standard year-end adjustments and the
omission of footnotes. The balance sheets as of March 31, 1997 of each of the
▇▇▇▇▇▇ Systems is herein called "▇▇▇▇▇▇ Balance Sheet." At the date of the
▇▇▇▇▇▇ Balance Sheet, ▇▇▇▇▇▇ had no material liabilities required by generally
accepted accounting principles to be reflected or reserved against therein that
were not fully reflected or reserved against on the ▇▇▇▇▇▇ Balance Sheet, other
than liabilities included in ▇▇▇▇▇▇ liabilities as set forth on SCHEDULE 5.10.
Except as set forth on SCHEDULE 5.10, since the date of ▇▇▇▇▇▇ Balance Sheet:
(a) none of the ▇▇▇▇▇▇ Systems has incurred any obligation or liability
(contingent or otherwise), except normal trade or business obligations incurred
in the ordinary course of business, the performance of which will not, to
▇▇▇▇▇▇'▇ Knowledge, individually or in the aggregate, have a material adverse
effect on the financial condition of ▇▇▇▇▇▇ or the results of operations of
▇▇▇▇▇▇'▇ Cable Business; (b) there has been no material adverse change in the
▇▇▇▇▇▇ Assets comprising any ▇▇▇▇▇▇ System or in the business, condition,
financial or otherwise, or liabilities of ▇▇▇▇▇▇'▇ Cable
-23-
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Business or any ▇▇▇▇▇▇ System and, to ▇▇▇▇▇▇'▇ Knowledge, no fact or condition
exists or is contemplated or threatened which would result in such a change in
the future; and (c) ▇▇▇▇▇▇'▇ Cable Business has been conducted only in the
ordinary course of business consistent with past practice. For the purpose of
this Agreement, the impact on ▇▇▇▇▇▇ of events which affect the cable industry
as a whole in the States of Arkansas, Missouri, Nevada, Oklahoma and Utah or
the United States, shall not be considered in determining whether there has
been a material adverse change in the business, condition, financial or
otherwise or liabilities of ▇▇▇▇▇▇'▇ Cable Business or any ▇▇▇▇▇▇ System.
5.11 Litigation. Except as set forth in SCHEDULE 5.11: (a) there is
no Litigation pending or, to ▇▇▇▇▇▇'▇ Knowledge, threatened, by or before any
Governmental Authority or private arbitration tribunal against Halcyon GP,
Halcyon LP or ▇▇▇▇▇▇ which, if adversely determined, would materially adversely
affect the financial condition or operations of ▇▇▇▇▇▇'▇ Cable Business, the
▇▇▇▇▇▇ Systems, the ▇▇▇▇▇▇ Assets or the ability of ▇▇▇▇▇▇ to perform its
obligations under this Agreement, or which, if adversely determined, would
result in the modification, revocation, termination, suspension or other
limitation of any of the ▇▇▇▇▇▇ System Franchises, ▇▇▇▇▇▇ System Licenses,
▇▇▇▇▇▇ System Contracts or leases or other documents evidencing the ▇▇▇▇▇▇
Leased Property or the ▇▇▇▇▇▇ Other Real Property Interests; and (b) there is
not in existence any Judgment requiring ▇▇▇▇▇▇ to take any action of any kind
with respect to the ▇▇▇▇▇▇ Assets or the operation of the ▇▇▇▇▇▇ Systems, or to
which ▇▇▇▇▇▇ (with respect to the ▇▇▇▇▇▇ Systems), the ▇▇▇▇▇▇ Systems or the
▇▇▇▇▇▇ Assets are subject or by which they are bound or affected.
5.12 Tax Returns; Other Reports. Halcyon Communications, Inc. ("HCI"),
as the tax matters partner for each of Halcyon LP and Halcyon GP, has duly and
timely filed all federal, state, local and foreign Tax returns and other Tax
reports required to be filed by Halcyon LP and Halcyon GP. ▇▇▇▇▇▇ has received
no notice of any deficiency, assessment or audit, or proposed deficiency,
assessment or audit from any taxing Governmental Authority which could affect
or result in the imposition of a Lien upon the ▇▇▇▇▇▇ Assets.
5.13 Employment Matters.
(a) SCHEDULE 5.13(A) contains a complete and correct list of
the names and positions of all employees engaged in ▇▇▇▇▇▇'▇ Cable Business as
of the date set forth on SCHEDULE 5.13(A). ▇▇▇▇▇▇ has complied in all material
respects with all applicable Legal Requirements relating to the employment of
labor, including, the Worker Adjustment and Retraining Notification Act, 29
U.S.C. Section 2101, et seq. ("WARN"), ERISA, continuation coverage
requirements with respect to group health plans and those relating to wages,
hours, collective bargaining, unemployment insurance, worker's compensation,
equal employment opportunity, age and disability discrimination, immigration
control and the payment and withholding of Taxes.
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(b) Each employee benefit plan (as defined in Section 3(3) of
ERISA) or any multiemployer plan (as defined in Section 3(37) of ERISA) with
respect to which ▇▇▇▇▇▇ or any of its ERISA Affiliates has any liability or in
which any employees or agents, or any former employees or agents, of ▇▇▇▇▇▇ or
any of its ERISA Affiliates participate is set forth in SCHEDULE 5.13(B) (the
"▇▇▇▇▇▇ Plans"). Neither ▇▇▇▇▇▇, any of its ERISA Affiliates nor any ▇▇▇▇▇▇
Plan is in material violation of any provision of the Internal Revenue Code, as
amended (the "Code") or ERISA. No "reportable event" (as defined in Section
4043 of ERISA) has occurred and is continuing with respect to any ▇▇▇▇▇▇ Plan
and no "prohibited transaction" (as defined in Section 406 of ERISA) has
occurred with respect to any ▇▇▇▇▇▇ Plan which reasonably could result in
material liability to ▇▇▇▇▇▇ or any of its ERISA Affiliates. No material
"accumulated funding deficiency" or "withdrawal liability" (as defined in
Section 302 of ERISA) exists with respect to any of the ▇▇▇▇▇▇ Plans. After
the Closing, the Company will not be required, under ERISA, the Code or any
collective bargaining agreement, to establish, maintain or continue any Plan
currently maintained by ▇▇▇▇▇▇ or any of its ERISA Affiliates.
(c) Except as set forth on SCHEDULE 5.13(C), there are no
collective bargaining agreements applicable to any Person employed by ▇▇▇▇▇▇
that renders services in connection with the ▇▇▇▇▇▇ Systems and ▇▇▇▇▇▇ has no
duty to bargain with any labor organization with respect to any such Person.
There are not pending any unfair labor practice charges against ▇▇▇▇▇▇, any
demand for recognition or any other effort of or request or demand from, a
labor organization for representative status with respect to any Person
employed by ▇▇▇▇▇▇ that renders services in connection with the ▇▇▇▇▇▇ Systems.
Except as described on SCHEDULE 5.13(C), ▇▇▇▇▇▇ has no employment agreements,
either written or oral, with any employee of the ▇▇▇▇▇▇ Systems and none of the
employment agreements listed on SCHEDULE 5.13(C) requires ▇▇▇▇▇▇ or will
require the Company to employ any Person after the Closing.
5.14 ▇▇▇▇▇▇ Systems Information. SCHEDULE 5.14 sets forth a
materially true and accurate description of the following information relating
to ▇▇▇▇▇▇'▇ Cable Business as of the most recent monthly report generated by
▇▇▇▇▇▇ in the ordinary course of business containing the information required
to prepare such SCHEDULE 5.14, provided that such date is no earlier than two
months prior to the date of this Agreement:
(a) the approximate number of miles of plant included in the
▇▇▇▇▇▇ Assets;
(b) the number of subscribers and subscriber equivalents
served by the ▇▇▇▇▇▇ Systems for each ▇▇▇▇▇▇ System Franchise;
(c) the approximate number of single family homes and
residential dwelling units passed by the ▇▇▇▇▇▇ Systems;
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(d) a description of basic and optional or tier services
available from the ▇▇▇▇▇▇ Systems, the rates charged by ▇▇▇▇▇▇ for each and the
number of subscribers and subscriber equivalents receiving each optional or
tier service;
(e) the stations and signals carried by the ▇▇▇▇▇▇ Systems and
the channel position of each such signal and station; and
(f) the cities, towns, villages, townships, boroughs and
counties served by the ▇▇▇▇▇▇ Systems.
5.15 Bonds; Letters of Credit. Except as set forth on SCHEDULE 5.15,
there are no franchise, construction, fidelity, performance, or other bonds,
guaranties in lieu of bonds or letters of credit posted by Halcyon GP, Halcyon
LP or ▇▇▇▇▇▇ in connection with its operation or ownership of any of the ▇▇▇▇▇▇
Systems or ▇▇▇▇▇▇ Assets.
5.16 Finders and Brokers. ▇▇▇▇▇▇ has not employed any financial
advisor, broker or finder or incurred any liability for any financial advisory,
brokerage, finder's or similar fee or commission in connection with the
transactions contemplated by this Agreement for which the Company or TCI could
be liable.
SECTION 6. TCI'S REPRESENTATIONS AND WARRANTIES
TCI represents and warrants to ▇▇▇▇▇▇ as of the date of this Agreement
and as of the Closing, as follows.
6.1 Organization and Qualification of TCI.
(a) Tempo Cable, Inc. is a corporation duly organized, validly
existing and in good standing under the laws of the State of Oklahoma;
Communications Services, Inc. is a corporation duly organized, validly existing
and in good standing under the laws of the State of Kansas; TCI Cablevision of
Oklahoma, Inc. is a corporation duly organized, validly existing and in good
standing under the laws of the State of Colorado; TCI of Kansas, Inc. is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Kansas; Wentronics, Inc. is a corporation duly organized,
validly existing and in good standing under the laws of the State of New
Mexico; TCI Cablevision of Utah, Inc. is a corporation duly organized, validly
existing and in good standing under the laws of the State of Utah; TCI
Cablevision of Arizona, Inc. is a corporation duly organized, validly existing
and in good standing under the laws of the State of Arizona; and Tulsa Cable
Television, Inc. is a corporation duly organized, validly existing and in good
standing under the laws of the State of Oklahoma. Each of the TCI Entities has
all requisite corporate power and authority to own, lease and use the TCI
Assets owned, leased or used by it and to conduct TCI's Cable Business as it is
currently conducted. Each of the TCI Entities is duly qualified to do business
and is in good standing under the laws of each jurisdiction in which the
ownership, leasing or use of the
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TCI Assets owned, leased or used by it or the nature of its activities in
connection with the TCI Systems makes such qualification necessary, except in
any such jurisdiction where the failure to be so qualified and in good standing
would not have a material adverse effect on the ownership or operation of TCI's
Cable Business, the TCI Assets or TCI Systems or on the ability of TCI to
perform its obligations under this Agreement.
(b) TCI Member is a limited partnership duly organized and
validly existing under the laws of the State of Colorado and has all requisite
partnership power and authority to own, lease and use the TCI Assets owned,
leased or used by it and to conduct TCI's Cable Business as it is currently
conducted. Prior to Closing, TCI Member will be duly qualified to do business
and in good standing under the laws of each jurisdiction in which the
ownership, leasing or use of the TCI Assets owned, leased or used by it or the
nature of its activities in connection with the TCI Systems makes such
qualification necessary, except in any such jurisdiction where the failure to
be so qualified and in good standing would not have a material adverse effect
on the ownership or operation of TCI's Cable Business, the TCI Assets or TCI
Systems or on the ability of TCI to perform its obligations under this
Agreement.
6.2 Authority and Validity. Each of the TCI Entities and the TCI
Member have all requisite power and authority to execute and deliver, to
perform its obligations under, and to consummate the transactions contemplated
by, this Agreement and the Transaction Documents to which it is a party. The
execution and delivery by the TCI Entities and the TCI Member, the performance
by the TCI Entities and the TCI Member, and the consummation by the TCI
Entities and the TCI Member of the transactions contemplated by, this Agreement
and the Transaction Documents to which any of the TCI Entities or the TCI
Member is a party have been duly and validly authorized by all necessary
action. This Agreement has been, and when executed and delivered by the TCI
Entities and the TCI Member, the Transaction Documents will be, duly and
validly executed and delivered by the TCI Entities and the TCI Member and the
valid and binding obligations of the TCI Entities and the TCI Member,
enforceable against the TCI Entities and the TCI Member in accordance with
their terms, except as the same may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws now or hereafter in
effect relating to the enforcement of creditors' rights generally or by
principles governing the availability of equitable remedies.
6.3 No Conflict; Required Consents. Except for the TCI Required
Consents, all of which are listed on SCHEDULE 6.3, the ▇▇▇▇▇▇ Required Consents
and the notification and expiration or earlier termination of the waiting
period under the HSR Act, the execution and delivery by any of the TCI Entities
or the TCI Member, the performance of any of the TCI Entities or the TCI Member
under, and the consummation of the transactions contemplated by, this Agreement
and the Transaction Documents to which any of the TCI Entities or the TCI
Member is a party do not and will not: (a) conflict with or violate any
provision of its charter, bylaws or other constituent documents; (b) violate
any provision of any Legal Requirement; (c) require any consent, approval or
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authorization of, or filing of any certificate, notice, application, report or
other document with, any Governmental Authority or other Person; or (d) (i)
conflict with, violate, result in a breach of or constitute a default under
(without regard to requirements of notice, lapse of time or elections of other
Persons or any combination thereof), (ii) permit or result in the termination,
suspension or modification of, (iii) result in the acceleration of (or give any
Person the right to accelerate) the performance of any of the TCI Entities or
the TCI Member under, or (iv) result in the creation or imposition of any Lien
under any TCI System Franchise, TCI System License or any TCI System Contract
or other instrument evidencing any of the TCI Assets or by which any of the TCI
Entities or the TCI Member or any of its assets is bound or affected, except
for purposes of clauses (c) and (d) such consents, approvals, authorizations
and filing, that, if not obtained or made, would not, and such violations,
conflicts, breaches, defaults, terminations, suspensions, modifications and
accelerations as would not, individually or in the aggregate, have a material
adverse effect on any TCI System, TCI's Cable Business, any TCI Entity or the
TCI Member or on the ability of any TCI Entity or the TCI Member to perform its
obligations under this Agreement or the Transaction Documents to which any TCI
Entity or the TCI Member is a party.
6.4 Assets.
(a) TCI has exclusive and good title to (or, in the case of
Assets that are leased, valid leasehold interests in) the TCI Assets (other
than TCI Owned Real Property, TCI Leased Property and TCI Other Real Property
Interests, as to which representations and warranties in Section 6.6 apply).
The TCI Assets are free and clear of all Liens, except for (a) Permitted Liens
or (b) Liens described on SCHEDULE 6.4, all of which will be terminated,
released or, in the case of the rights of first refusal listed on SCHEDULE 6.4,
waived, as appropriate, at or prior to the Closing. Except as described on
SCHEDULE 1.70 (TCI Tangible Personal Property), the TCI Tangible Personal
Property is in good operating condition and repair (ordinary wear and tear
excepted).
(b) Except for items included in the TCI Excluded Assets, the
TCI Assets constitute all the assets necessary to permit the Company to conduct
TCI's Cable Business and to operate the TCI Systems substantially as they are
being conducted and operated on the date of this Agreement and in compliance in
all material respects with all applicable Legal Requirements, TCI System
Contracts, TCI System Licenses and TCI System Franchises and to perform all of
the Assumed Obligations and Liabilities.
(c) To the Knowledge of TCI, no third party has been granted
or applied for a cable television franchise or is providing or intending to
provide cable television services in any of the communities or unincorporated
areas currently served by TCI's Cable Business.
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6.5 TCI System Franchises, TCI System Licenses, TCI System Contracts
and TCI Other Real Property Interests.
(a) Except as described on SCHEDULES 1.60 (TCI Leased
Property), 1.63 (TCI Other Real Property Interests), 1.67 (TCI System
Contracts), 1.68 (TCI System Franchises), 1.69 (TCI System Licenses or 4.2 (TCI
Excluded Assets), (a) TCI is not bound or affected by any of the following that
relate primarily or in whole to TCI's Cable Business: (i) leases of real or
personal property; (ii) franchises for the construction or operation of cable
television systems or System Contracts of substantially equivalent effect;
(iii) other licenses, authorizations, consents or permits of the FCC or any
other Governmental Authority; (iv) material easements or rights of access; (v)
pole line agreements, underground conduit agreements, crossing agreements or
bulk or commercial service agreements; or (vi) System Contracts relating to the
operations of TCI's Cable Business other than those described in any other
clause of this Section which contemplate payments by or to TCI in any 12-month
period exceeding $10,000 individually or $50,000 in the aggregate or that are
not terminable by TCI without cost or penalty on not more than 90 days prior
written notice and (b) no Affiliate of TCI is a party to any documents listed
on such Schedules.
(b) Complete and correct copies of the TCI System Franchises
and TCI System Licenses have been delivered by the appropriate TCI Entity to
▇▇▇▇▇▇. The TCI System Franchises and TCI System Licenses are currently in
full force and effect and are valid under all applicable Legal Requirements
according to their terms. There is no legal action, governmental proceeding or
investigation, pending or to TCI's Knowledge threatened, to terminate, suspend
or modify any TCI System Franchise and TCI System License and TCI is in
material compliance with the terms and conditions of all the TCI System
Franchises and TCI System Licenses and with other applicable requirements of
all Governmental Authorities (including the FCC and the Register of Copyrights)
relating to the TCI System Franchises and TCI System Licenses, including all
requirements for notification, filing, reporting, posting and maintenance of
logs and records.
(c) Complete and correct copies of all material TCI System
Contracts (including Contracts relating to Leased Property and Other Real
Property Interests described on SCHEDULE 1.63) have been provided to ▇▇▇▇▇▇.
Such documents constitute the entire agreement with the other party. Except as
set forth on SCHEDULE 1.67, each such TCI System Contract is in full force and
effect and constitutes the valid, legal, binding and enforceable obligation of
TCI and TCI is not and to TCI's Knowledge, each other party thereto is not in
breach or default of any material terms or conditions thereunder.
6.6 Real Property. All the Assets consisting of TCI Owned Real
Property, TCI Leased Property and material TCI Other Real Property Interests
are described on SCHEDULES 1.60 (TCI Leased Property), 1.63 (TCI Other Real
Property Interests) and 1.64 (TCI Owned Real Property). Except as otherwise
disclosed on SCHEDULES 1.60 (TCI Leased Property), 1.63 (TCI Other Real
Property Interests) and 1.64 (TCI Owned Real Property), TCI holds title to the
TCI Owned Real Property free and clear of all Liens,
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other than Permitted Liens and has the valid and enforceable right to use and
possess such TCI Owned Real Property, subject only to the Permitted Liens; and
TCI has valid and enforceable leasehold interests in all TCI Leased Property
and, with respect to TCI Other Real Property Interests, has valid and
enforceable rights to use all TCI Other Real Property Interests subject only to
Permitted Liens. Except for routine repairs, all of the material improvements,
leasehold improvements and the premises of the TCI Owned Real Property and the
premises demised under the leases and other documents evidencing the TCI Leased
Property are in good condition and repair and are suitable for the purposes
used. Each parcel of TCI Owned Real Property and each parcel of TCI Leased
Property and any improvements thereon and their current use (a) has access to
and over public streets or private streets for which TCI has a valid right of
ingress and egress, (b) conforms in its current use and occupancy to all
material zoning requirements without reliance upon a variance issued by a
Governmental Authority or a classification of the parcel in question as a
nonconforming use and (c) conforms in its current use to all restrictive
covenants, if any, or other Liens affecting all or part of such parcel. Except
where the failure of the representations made in this sentence to be true and
correct would not have a material adverse effect on any TCI Assets comprising a
TCI System, all buildings, towers, guy wires and anchors, earth-receiving
dishes and related facilities used in the operations of the TCI Systems are
located entirely on the TCI Owned Real Property or TCI Leased Property, and
together with all pole attachments, cable plant and cable installations,
equipment and facilities used in connection with the TCI Systems are
maintained, placed and located in accordance with the provisions of all
applicable Legal Requirements, deeds, leases, licenses, permits or other
legally enforceable arrangements.
6.7 Environmental.
(a) To TCI's Knowledge, the TCI Owned Real Property and TCI
Leased Property comply in all material respects with and has previously been
operated in compliance in all material respects with all Environmental Laws.
TCI has not either directly or indirectly, (i) generated, stored, used,
treated, handled, discharged, released or disposed of any Hazardous Substances
at, on, under, in or about, to or from or in any other manner affecting, any
TCI Owned Real Property or TCI Leased Property, (ii) transported any Hazardous
Substances to or from any TCI Owned Property or TCI Leased Property or (iii)
undertaken or caused to be undertaken any other activities relating to the TCI
Owned Real Property or TCI Leased Property, which could reasonably give rise to
any liability under any Environmental Law and, to TCI's Knowledge, no other
present or previous owner, tenant, occupant or user of any TCI Owned Real
Property or TCI Leased Property or any other Person has committed or suffered
any of the foregoing. To TCI's Knowledge, no release of Hazardous Substances
outside the TCI Owned Real Property or TCI Leased Property has entered or
threatens to enter any TCI Owned Real Property or TCI Leased Property, nor is
there any pending or threatened Litigation based on Environmental Laws which
arises from any condition of the land adjacent to or immediately surrounding
any TCI Owned Real Property
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or TCI Leased Property. No Litigation based on Environmental Laws which
relates to any TCI Owned Real Property or TCI Leased Property or any operations
or conditions on it (A) has been asserted or conducted in the past or is
currently pending against or with respect to TCI or, to TCI's Knowledge, any
other Person, or (B) to TCI's Knowledge, is threatened or contemplated.
(b) To TCI's Knowledge, (i) except as disclosed on SCHEDULE
6.7(B), no aboveground or underground storage tanks are currently or have been
located on any TCI Owned Real Property or TCI Leased Property, (ii) no TCI
Owned Real Property or TCI Leased Property has been used at any time as a
gasoline service station or any other facility for storing, pumping, dispensing
or producing gasoline or any other petroleum products or wastes and (iii) no
building or other structure on any TCI Owned Real Property or TCI Leased
Property contains asbestos, asbestos-containing material or material presumed
to be asbestos-containing material under any Environmental Law.
(c) The appropriate TCI Entity has provided ▇▇▇▇▇▇ with
complete and correct copies of (i) all studies, reports, surveys or other
written materials in such party's possession or to which such party has access
relating to the presence or alleged presence of Hazardous Substances at, on,
under or affecting the TCI Owned Real Property or TCI Leased Property, (ii) all
notices (other than general notices made by general publication) or other
materials in such party's possession or to which such party has access that
were received from any Governmental Authority having the power to administer or
enforce any Environmental Laws relating to current or past ownership, use or
operation of the TCI Owned Real Property or TCI Leased Property or activities
at the TCI Owned Real Property or TCI Leased Property and (iii) all materials
in such party's possession or to which such party has access relating to any
Litigation, allegation by any private third party concerning any Environmental
Law.
6.8 Compliance with Legal Requirements.
(a) The ownership, leasing and use of the TCI Assets as they
are currently owned, leased and used and the conduct of TCI's Cable Business
and the operation of the TCI Systems as they are currently conducted and
operated do not violate or infringe in any material respect any Legal
Requirements currently in effect (other than Legal Requirements described in
Section 6.8(d), as to which the representations and warranties set forth in
that subsection shall apply). TCI has received no notice of any violation by
TCI or TCI's Cable Business of any Legal Requirement applicable to the
operation of TCI's Cable Business as currently conducted, or the TCI Systems as
currently operated and to its Knowledge, there is no existing fact,
circumstance or condition that could reasonably form the basis for an
allegation of any such violation.
(b) A valid request for renewal has been duly and timely filed
under Section 626 of the Communications Act with the proper Governmental
Authority with respect to all TCI System Franchises that have expired prior to
or will expire within 36 months after the date of this Agreement.
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(c) TCI has complied and TCI's Cable Business is in
compliance, in all material respects, with the specifications set forth in Part
76, Subpart K of the rules and regulations of the FCC, Section 111 of the U.S.
Copyright Act of 1976 and the applicable rules and regulations thereunder and
the applicable rules and regulations of the U.S. Copyright Office, the Register
of Copyrights, the Copyright Royalty Tribunal and the Communications Act,
including provisions of any thereof pertaining to signal leakage, to utility
pole make ready and to grounding and bonding of cable television systems (in
each case as the same is currently in effect), and all other applicable Legal
Requirements relating to the construction, maintenance, ownership and operation
of the TCI Assets, the TCI Systems and TCI's Cable Business.
(d) Notwithstanding the foregoing, to TCI's Knowledge, each
TCI System is in compliance in all material respects with the provisions of the
1992 Cable Act as such Legal Requirements relate to the operation of TCI's
Cable Business. TCI has complied in all material respects with the must carry
and retransmission consent provisions of the 1992 Cable Act as they relate to
the TCI Systems. TCI has used reasonable good faith efforts to establish rates
charged to subscribers, effective since September 1, 1993, that are or were
allowable under the 1992 Cable Act and any authoritative interpretation thereof
now or then in effect, whether or not such rates are or were subject to
regulation at that date by any Governmental Authority, including any local
franchising authority and/or the FCC, unless such rates were not subject to
regulation pursuant to a specific exemption from rate regulation contained in
the 1992 Cable Act other than the failure of any franchising authority to have
been certified to regulate rates. Notwithstanding the foregoing, TCI makes no
representation or warranty that the rates charged to subscribers would be
allowable under any rules and regulations of the FCC or any authoritative
interpretation thereof, promulgated after the date of the Closing. TCI has
delivered to ▇▇▇▇▇▇ complete and correct copies of all FCC Forms 393, 1200,
1205, 1210, 1215, 1220, 1225, 1235 and 1240 filed with respect to the TCI
Systems, copies of all other FCC Forms filed by TCI and of all correspondence
with any Governmental Authority relating to rate regulation generally or
specific rates charged to subscribers with respect to TCI Systems, including
copies of any complaints filed with the FCC with respect to any rates charged
to subscribers of the TCI Systems, and any other documentation supporting an
exemption from the rate regulation provisions of the 1992 Cable Act claimed by
TCI with respect to any of the TCI Systems. TCI has received no notice from
any Governmental Authority with respect to an intention to enforce customer
service standards pursuant to the 1992 Cable Act and TCI has not agreed with
any Governmental Authority to establish customer service standards that exceed
the customer service standards promulgated pursuant to the 1992 Cable Act.
Except as set forth on SCHEDULE 6.8, TCI has not made any Cost of Service
Election with respect to any of the TCI Systems.
6.9 Patents, Trademarks and Copyrights. TCI has timely and
accurately made all requisite filings and payments with the Register of
Copyrights with respect to TCI's Cable Business. The appropriate TCI Entity
has delivered to ▇▇▇▇▇▇ complete and
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correct copies of all current reports and filings for the past three years,
made or filed pursuant to copyright rules and regulations with respect to TCI's
Cable Business. TCI does not possess any patent, patent right, trademark or
copyright related to or material to the operation of the TCI Systems and TCI is
not a party to any license or royalty agreement with respect to any such
patent, trademark or copyright, except for licenses respecting program material
and obligations under the Copyright Act of 1976 applicable to cable television
systems generally. The TCI Systems and TCI's Cable Business have been operated
in such a manner so as not to violate or infringe upon the rights, or give rise
to any rightful claim of any Person for copyright, trademark, service ▇▇▇▇,
patent or license infringement or the like.
6.10 Financial Statements; Undisclosed Liabilities; Absence of Certain
Changes or Events. Each of the TCI Entities have delivered to ▇▇▇▇▇▇ complete
and correct copies of its respective (a) internally generated balance sheets
and related statements of income for and as of the year ended December 31,
1996, and (b) unaudited balance sheets and the related unaudited statements of
income for each quarter ending on and after March 31, 1997 (all of such
financial statements and notes being hereinafter referred to as "TCI's
Financial Statements"). TCI's Financial Statements are in accordance with the
books and records of the respective TCI System, were prepared in accordance
with generally accepted accounting principles, applied on a consistent basis
throughout the periods covered thereby, present fairly the financial condition
of such TCI System at the dates and for the periods indicated, subject, in the
case of unaudited TCI Financial Statements, only to standard year-end
adjustments and the omission of footnotes. The balance sheet as of March 31,
1997 of each TCI Entity is herein called a "TCI Balance Sheet." At the date
of each TCI Balance Sheet, each TCI Entity had no material liabilities required
by generally accepted accounting principles to be reflected or reserved against
therein that were not fully reflected or reserved against on such TCI Balance
Sheet, other than liabilities as set forth on SCHEDULE 6.10. Except as set
forth on SCHEDULE 6.10, since the date of each TCI Balance Sheet: (a) neither
such TCI Entity nor the TCI Member has incurred any obligation or liability
(contingent or otherwise), except normal trade or business obligations incurred
in the ordinary course of business, the performance of which will not, to TCI's
Knowledge, individually or in the aggregate, have a material adverse effect on
the financial condition of such TCI Entity or the TCI Member or the results of
operations of TCI's Cable Business; (b) there has been no material adverse
change in the TCI Assets comprising any TCI System or in the business,
condition, financial or otherwise, or liabilities of TCI's Cable Business or
any TCI System and, to TCI's Knowledge, no fact or condition exists or is
contemplated or threatened which would result in such a change in the future;
and (c) TCI's Cable Business has been conducted only in the ordinary course of
business consistent with past practice. For the purpose of this Agreement, the
impact on TCI of events which affect the cable industry as a whole in Arizona,
Oklahoma and Utah or the United States, shall not be considered in determining
whether there has been a material adverse change in the business, condition,
financial or otherwise or liabilities of TCI's Cable Business or any TCI
System.
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6.11 Litigation. Except as set forth in SCHEDULE 6.11: (a) there is
no Litigation pending or, to TCI's Knowledge, threatened, by or before any
Governmental Authority or private arbitration tribunal against TCI which, if
adversely determined, would materially adversely affect the financial condition
or operations of TCI's Cable Business, TCI Systems, the TCI Assets or the
ability of TCI to perform its obligations under this Agreement, or which, if
adversely determined, would result in the modification, revocation,
termination, suspension or other limitation of any of the TCI System
Franchises, TCI System Licenses, TCI System Contracts or leases or other
documents evidencing the TCI Leased Property or the TCI Other Real Property
Interests; and (b) there is not in existence any Judgment requiring TCI to take
any action of any kind with respect to the TCI Assets or the operation of the
TCI Systems, or to which TCI (with respect to the TCI Systems), the TCI Systems
or the TCI Assets are subject or by which they are bound or affected.
6.12 Tax Returns; Other Reports. TCI has duly and timely filed all
federal, state, local and foreign Tax returns and other Tax reports required to
be filed by TCI, and has timely paid all Taxes which have become due and
payable, whether or not so shown on any such return or report, the failure of
which to be filed or paid could adversely affect or result in the imposition of
a Lien upon the TCI Assets, except such amounts as are being contested
diligently and in good faith and are not in the aggregate material. TCI has
received no notice of, nor does TCI have any Knowledge of, any deficiency,
assessment or audit, or proposed deficiency, assessment or audit from any
taxing Governmental Authority which could affect or result in the imposition of
a Lien upon the TCI Assets.
6.13 Employment Matters.
(a) SCHEDULE 6.13(A) contains a complete and correct list of
the names and positions of all employees engaged in TCI's Cable Business as of
the date set forth on SCHEDULE 6.13(A). TCI has complied in all material
respects with all applicable Legal Requirements relating to the employment of
labor, including, WARN, ERISA, continuation coverage requirements with respect
to group health plans and those relating to wages, hours, collective
bargaining, unemployment insurance, worker's compensation, equal employment
opportunity, age and disability discrimination, immigration control and the
payment and withholding of Taxes.
(b) Each employee benefit plan (as defined in Section 3(3) of
ERISA) or any multiemployer plan (as defined in Section 3(37) of ERISA) with
respect to which TCI or any of its ERISA Affiliates has any liability or in
which any employees or agents, or any former employees or agents, of TCI or any
of its ERISA Affiliates participate is set forth in SCHEDULE 6.13(B) (the "TCI
Plans"). Neither TCI, any of its ERISA Affiliates nor any TCI Plan is in
material violation of any provision of the Code or ERISA. No "reportable
event" (as defined in Section 4043 of ERISA) has occurred and is continuing
with respect to any TCI Plan and no "prohibited transaction" (as defined in
Section 406 of
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ERISA) has occurred with respect to any TCI Plan which reasonably could result
in material liability to TCI or any of its ERISA Affiliates. No material
"accumulated funding deficiency" or "withdrawal liability" (as defined in
Section 302 of ERISA) exists with respect to any of the TCI Plans. After the
Closing, the Company will not be required, under ERISA, the Code or any
collective bargaining agreement, to establish, maintain or continue any Plan
currently maintained by TCI or any of its ERISA Affiliates.
(c) Except as set forth on SCHEDULE 6.13(C), there are no
collective bargaining agreements applicable to any Person employed by TCI that
renders services in connection with the TCI Systems and TCI has no duty to
bargain with any labor organization with respect to any such Person. There are
not pending any unfair labor practice charges against TCI, any demand for
recognition or any other effort of or request or demand from, a labor
organization for representative status with respect to any Person employed by
TCI that renders services in connection with the TCI Systems. Except as
described on SCHEDULE 6.13(C), TCI has no employment Contracts, either written
or oral, with any employee of the TCI Systems and none of the employment
Contracts listed on SCHEDULE 6.13(C) requires TCI or will require the Company
to employ any Person after the Closing.
6.14 TCI Systems Information. SCHEDULE 6.14 sets forth a materially
true and accurate description of the following information relating to TCI's
Cable Business as of the most recent monthly report generated by TCI in the
ordinary course of business containing the information required to prepare such
SCHEDULE 6.14, provided that such date is no earlier than two months prior to
the date of this Agreement:
(a) the approximate number of miles of plant included in the
TCI Assets;
(b) the number of subscribers and subscriber equivalents
served by the TCI Systems;
(c) the approximate number of single family homes and
residential dwelling units passed by the TCI Systems;
(d) a description of basic and optional or tier services
available from the TCI Systems, the rates charged by TCI for each and the
number of subscribers and subscriber equivalents receiving each optional or
tier service;
(e) the stations and signals carried by the TCI Systems and
the channel position of each such signal and station; and
(f) the cities, towns, villages, townships, boroughs and
counties served by the TCI Systems.
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6.15 Bonds; Letters of Credit. Except as set forth on SCHEDULE 6.15,
there are no franchise, construction, fidelity, performance, or other bonds,
guaranties in lieu of bonds or letters of credit posted by TCI in connection
with its operation or ownership of any of the TCI Systems or TCI Assets.
6.16 Finders and Brokers. Neither the TCI Entities nor TCI has
employed any financial advisor, broker or finder or incurred any liability for
any financial advisory, brokerage, finder's or similar fee or commission in
connection with the transactions contemplated by this Agreement for which
▇▇▇▇▇▇ or the Company could be liable.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to each Member as follows:
7.1 Organization, Standing and Authority. The Company is a limited
liability company duly organized and validly existing under the laws of the
State of Colorado. As of the Closing the Company shall be duly qualified to
conduct business in all such foreign jurisdictions in which such qualification
shall be necessary for the conduct of its Cable Business and the ownership of
the Assets being contributed by the Members. The Company has all requisite
power (a) to acquire, own, lease, and use the Assets and operate the Business,
and (b) to execute, deliver, and perform this Agreement and the documents
contemplated hereby according to their respective terms.
7.2 Authorization and Binding Obligation. The execution, delivery
and performance of this Agreement and the other agreements contemplated hereby
by the Company have been duly authorized by all necessary action on the part of
the Company. This Agreement has been duly executed and delivered by the
Company and constitutes its legal, valid, and binding obligation, enforceable
against it in accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization moratorium or similar laws
now or hereafter in effect relating to the enforcement of creditors' rights
generally or by principles governing the availability of equitable remedies.
7.3 Absence of Conflicting Agreements. Subject to obtaining the
Required Consents and the expiration or earlier termination of the waiting
period under the HSR Act, the execution, delivery, and performance of this
Agreement and the documents contemplated hereby (with or without the giving of
notice, the lapse of time, or both): (a) does not require the consent of any
third party; (b) will not conflict with the Company's operating agreement; and
(c) will not conflict with, result in a breach of, or constitute a default
under, any applicable Legal Requirements applicable to the Company, or any
contract or agreement to which the Company is a party or by which the Company
may be bound, such that the Company could not acquire or operate the Assets.
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7.4 Claims and Legal Actions. There is no claim, legal action,
arbitration, governmental investigation or other legal, administrative or tax
proceeding, nor any order, decree or judgment, in progress or pending, or to
the Knowledge of the Company, threatened, against or adversely affecting the
Company, such that the Company could not acquire or operate the Assets.
7.5 Sprint Spectrum. On the Closing Date, the Company will not own,
manage or otherwise control any business which engages in the wireless or
wireline business or provides wireless or wireline services.
SECTION 8. COVENANTS
8.1 Access to Premises and Records. Between the date of this
Agreement and the Closing Date each Party will give to the other and its
counsel, accountants and other representatives full access during normal
business hours to all the premises and books and records of its Cable Business
and to all its Assets and Systems' personnel; and will furnish to the other and
such representatives all such documents, financial information and other
information regarding its Cable Business and its Assets as the other from time
to time reasonably may request; provided that no investigation will affect or
limit the scope of any of the representations, warranties, covenants and
indemnities of the other in this Agreement or in any Transaction Document or
limit liability for any breach of any of the foregoing.
8.2 Continuity and Maintenance of Operations; Certain Deliveries and
Notices. Except as the other Party may otherwise consent in writing, between
the date of this Agreement and the Closing, each of the TCI Member and the TCI
Entities, as applicable, with respect to TCI's Cable Business, the TCI Systems
and the TCI Assets, and ▇▇▇▇▇▇ with respect to ▇▇▇▇▇▇'▇ Cable Business, the
▇▇▇▇▇▇ Systems and the ▇▇▇▇▇▇ Assets:
(a) will conduct its Cable Business and operate its Systems
only in the usual, regular and ordinary course and consistent with past
practices and, to the extent consistent with such conduct and operation, use
its commercially reasonable efforts to (i) preserve its current business intact
in all material respects, including preserving existing relationships with
franchising authorities, suppliers, customers and others having business
dealings with those Systems, unless the Parties mutually agree otherwise, (ii)
keep available the services of its employees and agents providing services in
connection with its Cable Business and (iii) continue making marketing,
advertising and promotional expenditures with respect to its Cable Business;
(b) will maintain those Assets in good repair, order and
condition, ordinary wear and tear excepted, will maintain equipment and
inventory for those Systems at normal historical levels consistent with past
practices, but, as of the Closing Date, there shall not be less than that
amount of equipment and inventory necessary to
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operate those Systems for a period of 30 days after Closing assuming normal use
and operations; will maintain in full force and effect, policies of insurance
with respect to its Cable Business, in such amounts and with respect to such
risks as customarily maintained by operators of cable television systems of the
size and geographic location of those Systems and will maintain its books,
records and accounts with respect to those Assets and the operation of those
Systems in the usual, regular and ordinary manner on a basis consistent with
past practices;
(c) except with respect to Excluded Assets, will not (i)
modify, terminate, renew, suspend or abrogate any System Contract, not
including any retransmission consent, programming or multiple dwelling, bulk
billing or commercial service System Contracts, other than in the ordinary
course of business; (ii) modify, terminate, renew, suspend or abrogate any
retransmission consent, programming or multiple dwelling, bulk billing or
commercial service System Contract, System Franchise, lease or document
evidencing Leased Property or Other Real Property Interests or System Licenses;
(iii) engage in any marketing, subscriber installation, disconnection or
collection practices that are inconsistent with its past practices; (iv)
decrease the rate charged for any level of Basic Services, Expanded Basic
Services, or any Pay TV or add, delete, retier or repackage any programming
services except to the extent required under the 1992 Cable Act or any other
Legal Requirement; provided however, if rates are decreased in order to so
comply, the party decreasing the rates will provide the other with copies of
any FCC forms (even if not filed with any Governmental Authority) that such
party used to determine that the new rates were required; (v) make any Cost of
Service Election; (vi) enter into any agreement with or commitment to any
competitive access providers with respect to its Systems; (vii) sell, transfer
or assign any portion of its Assets other than sales in the ordinary course of
business or permit the creation of a Lien, other than a Permitted Lien, on any
Asset; or (viii) engage in any hiring or employee compensation practices that
are inconsistent with past practices, except for changes in such practices
implemented by such party and its Affiliates on a company-wide basis;
(d) will promptly deliver to the other true and complete
copies of all monthly and quarterly financial statements and operating reports
and any reports with respect to the operation of its Cable Business prepared by
or for such Party at any time from the date of this Agreement until the
Closing;
(e) will give or cause to be given to the other and its
counsel, accountants and other representatives, as soon as reasonably possible
but in any event prior to the date of submission to the appropriate
Governmental Authority, copies of all FCC Forms 1200, 1205, 1210, 1215, 1220,
1225, 1235 and 1240 or any other FCC forms required to be filed with any
Governmental Authority under the 1992 Cable Act with respect to rates and
prepared with respect to any of its Systems, such forms to be reasonably
satisfactory in form and substance to the other;
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(f) will duly and timely file a valid notice of renewal under
Section 626 of the Cable Act with the appropriate Governmental Authority with
respect to any System Franchise that will expire within 36 months after any
date between the date of this Agreement and the Closing Date; and
(g) will promptly notify the other of any fact, circumstance,
event or action by it or otherwise which, if known at the date of this
Agreement, would have been required to be disclosed by it in or pursuant to
this Agreement.
8.3 Employees.
(a) The Company may, but shall have no obligation to employ or
offer employment to any employee of either Party's Cable Business. Not more
than 60 days after the date of this Agreement, each Party shall provide to the
Company and the other Party a list of all active employees of their respective
Systems excluding all employees subject to a collective bargaining agreement or
represented by a labor organization, if any, as of a recent date, showing then-
current positions and rates of compensation. Within 30 days after receipt of
this list, the Company will provide to each Party in writing a list of
employees that the Company or its Affiliates may desire to employ following the
Closing (subject to the satisfaction of the Company's conditions for
employment). As of the Closing Date, each Party shall terminate the
employment of all employees who were employed incidental to the conduct of such
Party's Cable Business.
(b) Each Party will pay to all employees employed in its
respective Cable Business all compensation, including salaries, commissions,
bonuses, deferred compensation, severance, insurance, vacation (except for
accrued vacation included in the adjustments calculated pursuant to Section
3.1(c) to be carried over pursuant to Section 8.3(g)), sick pay and other
compensation or benefits to which they are entitled for periods through and
including the Closing Time, including, without limitation, all amounts, if any,
payable on account of the termination of their employment. Each Party agrees
to cooperate in all reasonable respects with the Company to allow the Company
to evaluate and interview employees of its Cable Business in order to make
hiring decisions. Such cooperation shall include, but not be limited to,
allowing the Company to contact employees during normal business hours and
making personnel records available.
(c) Each Party will be responsible for the maintenance and
distribution of benefits accrued under any employee benefit plan (as defined in
ERISA) maintained by such Party pursuant to the provisions of any Legal
Requirement and of such plans. The Company will not assume any obligation or
liability for any such accrued benefits or any fiduciary or administrative
responsibility to account for or dispose of any such accrued benefits under any
employee benefit plans maintained by any Party.
(d) All claims and obligations under, pursuant to or in
connection with any welfare, medical, insurance, disability or other employee
benefit plans of either Party
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or arising under any Legal Requirement affecting employees of such Party
incurred through and including the Closing Date or resulting from or arising
from events or occurrences occurring or commencing through and including the
Closing Date will remain the responsibility of such Party, whether or not such
employees are hired by the Company after the Closing. The Company will not
have and will not assume any obligation or liability under or in connection
with any such plan maintained by the either Party.
(e) Each Party will remain solely responsible for, and will
indemnify and hold harmless the Company from and against all Losses arising
from or with respect to, all salaries and all severance, vacation (except for
accrued vacation included in the adjustments calculated pursuant to Section
3.1(c)), medical, sick, holiday, continuation coverage and other compensation
or benefits to which its employees may be entitled, whether or not such
employees may be hired by the Company, as a result of their employment by it
through and including the Closing Time, the termination of their employment at
the Closing Time, the obligation, if any, to notify and/or bargain with any
labor organization, the consummation of the transactions contemplated hereby or
pursuant to any applicable Legal Requirement (including, without limitation,
WARN) or otherwise relating to their employment through and including the
Closing Time.
(f) Each Party will retain full responsibility and liability
for offering and providing "continuation coverage" of any "qualified
beneficiary" who is covered by a "group health plan" sponsored or contributed
to by such party and who has experienced a "qualifying event" or is receiving
"continuation coverage" through and including the Closing Date. "Continuation
coverage," "qualified beneficiary," "group health plan," and "qualifying event"
all shall have the meanings given such terms under Code Section 4980B.
(g) Notwithstanding anything to the contrary herein, the
Company shall (i) credit each employee of either Party who is offered
employment by the Company prior to the Closing Date and becomes an employee of
the Company after the Closing Time (a "Hired Employee") the lesser of the
amount of vacation accrued by him or her as an employee of such Party through
and including the Closing Time or the amount of accrued vacation permitted to
be accrued by employees of the Company in accordance with the Company's
standard practices; (ii) permit each Hired Employee to participate in the
Company's employee benefit plans to the same extent as similarly situated
employees of the Company and their dependents; (iii) give each Hired Employee
credit for his or her past service with such Party (including past service with
any prior owner or operator of such Party) for purposes of eligibility and
vesting under the Company's employee benefit and other plans to the same extent
as other similarly situated employees of the Company; and (iv) not subject any
Hired Employee to any waiting periods or limitations on benefits for pre-
existing conditions under the Company's employee benefit plans, including any
group health and disability plans, except to the extent such employees were
subject to such limitations under such Party's employee benefit plans.
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(h) If the Company discharges without cause within 90 days
after the Closing any Hired Employee and such Hired Employee would have been
entitled to severance payments pursuant to either Party's severance benefits
plan, as applicable, if such Hired Employee had been discharged without cause
by such Party at the Closing Time, then the Company shall pay severance
benefits to such Hired Employee in accordance with the applicable Party's
severance benefit plan to the extent such plan would have paid severance to
such Hired Employee.
(i) Nothing in this Section 8.3 or elsewhere in this Agreement
shall be deemed to make any employee of the Parties a third party beneficiary
of this Agreement.
8.4 Leased Vehicles; Other Capital Leases. Each Party will pay the
remaining balances on any leases for vehicles included in its Tangible Personal
Property and will deliver title to such vehicles free and clear of all Liens
(other than Permitted Liens) to the Company at the Closing.
8.5 Required Consents, Estoppel Certificates, Franchise Renewal.
(a) Each Party will use its commercially reasonable efforts to
obtain in writing as promptly as possible and at its expense, all the Required
Consents and any other consent, authorization or approval required to be
obtained by such Party in connection with the transactions contemplated by this
Agreement, reasonably satisfactory in form and substance to the other, and
deliver to the other copies of such Required Consents and such other consents,
authorizations or approvals promptly after they are obtained by such Party;
provided however, that each Party will afford the other Party the opportunity
to review, approve and revise the form of Required Consent prior to delivery to
the Party whose consent is sought. Each Party will cooperate with the other
Party to obtain all Required Consents, but neither Party will be required to
accept or agree or accede to any modifications or amendments to, or the
imposition of any condition to the transfer of, any of the System Franchises,
System Licenses, System Contracts or leases or documents evidencing Leased
Property or Other Real Property Interests of its Cable Business that are not
acceptable to the other in its sole discretion. Notwithstanding the foregoing,
as soon as practicable after the date of this Agreement, but in any event no
later than 20 days after the date of this Agreement, the parties will cooperate
with each other to complete, execute and deliver, or cause to be completed,
executed and delivered to the appropriate Governmental Authority, an FCC Form
394 with respect to each System Franchise as to which such Form 394 is
required.
(b) Each Party will use commercially reasonable efforts to
obtain and cooperate with the other Party to obtain renewals or extensions of
any System Franchise for which a valid notice of renewal pursuant to the formal
renewal procedures established by Section 626 of the Cable Act has not been
timely delivered to the appropriate
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Governmental Authority for a period expiring no earlier than three years after
the Closing Date.
(c) Notwithstanding the foregoing, no Party will have any
further obligation to obtain Required Consents: (i) with respect to license
agreements relating to pole attachments where the licensing Party will not
consent to an assignment of such license agreement but requires that the
proposed assignee enter into a new agreement with such licensing authority, in
which case such Party shall use its commercially reasonable efforts to enter
into such agreement prior to the Closing or as soon as practicable thereafter
and the Party to the license agreement will cooperate with and assist the other
Party in obtaining such agreements; provided however that the proposed
assignee's commercially reasonable efforts shall not require it to take any
action of the type that such Party is not required to take pursuant to Section
8.5; and (ii) for any business radio license which such Party reasonably
expects can be obtained within 120 days after the Closing and so long as a
temporary authorization is available to the other Party under FCC rules with
respect thereto.
8.6 Transfer Taxes. All transfer and similar Taxes and sales, use or
excise Taxes arising from or payable by reason of the transfer of any of the
TCI Assets and the ▇▇▇▇▇▇ Assets will be shared by TCI and ▇▇▇▇▇▇ pro rata,
based on the Ownership Interests (as defined in the Operating Agreement) of
each Member in the Company.
8.7 Ancillary Agreements. At Closing, the Company shall enter into
the following ancillary agreements, in form and substance satisfactory to the
Company and the other parties thereto:
(a) Programming Supply Agreement. The Company shall enter
into, and TCI shall cause its Affiliate, Satellite Services, Inc. ("SSI"), to
enter into, a programming supply agreement (the "Programming Supply
Agreement"), pursuant to which the Company shall receive the benefits of any
programming or purchasing agreements available to TCI to the extent the Company
may receive such benefits pursuant to SSI's programming or purchasing
agreements.
(b) Ad Sales Agreement. The Company and TCI Media Services,
Inc. ("Media Services") shall enter into an advertising representation
agreement pursuant to which Media Services will provide ad sales services to
the Company ("Media Services Agreement").
8.8 @Home Services. The Company agrees to utilize @Home as the
exclusive internet provider for the Systems if the Company determines that it
is economic to provide internet access via the Systems.
8.9 Updated Schedules. Not less than 10 Business Days prior to
Closing, each Party will deliver to the other revised copies of each of the
Schedules prepared by it,
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except for the employee schedules (regardless of whether the original schedule
is as of a certain date) which shall have been updated and marked to show any
changes occurring between the date of this Agreement and the date of delivery;
provided however that for purposes of such Party's representations and
warranties and covenants in this Agreement, all references to the Schedules
will mean the version of the Schedules attached to this Agreement on the date
of signing, and provided further that if the effect of any such updates to
Schedules is to disclose any one or more additional properties, privileges,
rights, interests or claims as Assets, the Company, at or before Closing, will
have the right (to be exercised by written notice to the Parties) to cause any
one or more of such items to be designated as and deemed to constitute Excluded
Assets for all purposes under this Agreement. Without changing the result set
forth in the preceding sentence that a Party's updated Schedules do not serve
to update such Party's representations and warranties, the updated Schedules
delivered pursuant to this Section shall be accompanied by an officer's
certificate of the Party delivering such Schedules, certifying that the
information set forth in such Schedules is true and accurate in all material
respects as of the date of delivery thereof and that all information required
to be given in the Schedules "as of the date of this Agreement" has been
updated to the date of delivery of the updated Schedules or other date
permitted to be specified in such Schedules.
8.10 Use of Names and Logos. For a period of 180 days after the
Closing, the Company will be entitled to use the trademarks, trade names,
service marks, service names, logos and similar proprietary rights of any party
hereto to the extent incorporated in or on the Assets transferred to it at the
Closing, provided that the Company will exercise reasonable efforts to remove
all such names, marks, logos and similar proprietary rights from the Assets by
such date as is reasonably practicable following the Closing.
8.11 Transitional Billing Services. ▇▇▇▇▇▇ and TCI will each provide
to the Company, upon request, access to and the right to use its billing system
computers, software and related fixed assets in connection with the Systems for
a period of up to 90 days following the Closing to allow for conversion of
existing billing arrangements ("Transitional Billing Services"). The Company
will notify either Party at least 10 days prior to the Closing as to whether it
desires Transitional Billing Services. All Transitional Billing Services, if
any, that are requested by the Company will be provided on reasonable terms and
conditions; provided however, that the amount to be paid by the Company will
not exceed the cost to the applicable Party of providing such Transitional
Billing Services. Each Party will notify the Company, at least 45 days prior
to the Closing, of the cost to such Party of providing such Transitional
Billing Services.
8.12 Initial Contribution. The Initial Contribution shall have taken
place prior to the Closing Date.
8.13 Roll-Up. All conditions, approvals or consents required to be
obtained prior to the consummation of the Roll-Up, including any HSR approvals,
shall have been
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obtained, and the Roll-Up accomplished, prior to or simultaneously with the
Closing Date.
8.14 Company Financing. The Company shall secure such financing as
shall be necessary for it to pre-pay (a) $93,000,000, representing TCI Assumed
Debt, and (b) $18,750,000, representing ▇▇▇▇▇▇ Assumed Debt, subject to
adjustments pursuant to the terms hereof. Such financing shall be obtained by
the Company on such terms as ▇▇▇▇▇▇ deems commercially reasonable.
8.15 Confidentiality and Publicity.
(a) Each Party will use commercially reasonable efforts to
assure that any non-public information that such Party may obtain from the
other in connection with this Agreement with respect to the other's Cable
Business and Systems will be kept confidential and, unless and until the
Closing occurs, such Party will not disclose, and will cause its employees,
consultants, advisors and agents not to disclose, any such information to any
other Person (other than its directors, officers and employees and
representatives of its advisers and lenders whose knowledge thereof is
necessary in order to facilitate the consummation of the transactions
contemplated hereby) or use, and will cause its employees, consultants,
advisors and agents not to use, such information to the detriment of the other;
provided that (i) such Party may use and disclose any such information once it
has been publicly disclosed (other than by such Party in breach of its
obligations under this Section) or which rightfully has come into the
possession of such Party (other than from the other Party) and (ii) to the
extent that such Party may, in the reasonable opinion of its counsel, be
compelled by Legal Requirements to disclose any of such information, such Party
may disclose such information if it will have used all reasonable efforts, and
will have afforded the other Party the opportunity, to obtain an appropriate
protective order or other satisfactory assurance of confidential treatment, for
the information compelled to be disclosed. The obligation by either Party to
hold information in confidence pursuant to this Section will be satisfied if
such Party exercises the same care with respect to such information as it would
exercise to preserve the confidentiality of its own similar information. In
the event of termination of this Agreement, each Party will use all reasonable
efforts to cause to be delivered to the other, and retain no copies of, any
documents, work papers and other materials obtained by such Party or on its
behalf from the other, whether so obtained before or after the execution
hereof.
(b) Neither Party will issue any press releases or make any
other public announcement, any oral or written statements to ▇▇▇▇▇▇'▇ and TCI's
employees concerning this Agreement and the transactions contemplated hereby,
except as required by applicable Legal Requirements, without the prior written
consent and approval of the other, which consent and approval may not be
unreasonably withheld.
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8.16 Bulk Transfers. ▇▇▇▇▇▇ and TCI each waives compliance by the
other with Legal Requirements relating to bulk transfers applicable to the
transactions contemplated hereby.
8.17 Lien Searches. Each Party will obtain at its expense, the
results of a lien search conducted by a professional search company of records
in the offices of the secretaries of state in each state and county clerks in
each county where there exist any of its Owned Real Property or Tangible
Personal Property, and in the state and county where such Party's principal
offices are located, including copies of all financing statements or similar
notices or filings (and any continuation statements) discovered by such search
company.
8.18 Further Assurances. At or after the Closing, each of ▇▇▇▇▇▇ and
TCI at the request of the other, will promptly execute and deliver, or cause to
be executed and delivered, to the other all such documents and instruments, in
addition to those otherwise required by this Agreement, in form and substance
reasonably satisfactory to the other as the other may reasonably request in
order to carry out or evidence the terms of this Agreement or to collect any
accounts receivable or other claims included in the ▇▇▇▇▇▇ Assets or the TCI
Assets. Without limiting the generality of the foregoing, ▇▇▇▇▇▇ and TCI will
take, or cause to be taken, all actions consistent with the terms of this
Agreement.
8.19 Consents. If and to the extent ▇▇▇▇▇▇ or TCI shall have waived
satisfaction of the condition to Closing set forth in Section 9.1(e) or Section
9.2(e), respectively, subsequent to the Closing, each of TCI with respect to
the TCI Systems and the TCI Assets and ▇▇▇▇▇▇ with respect to the ▇▇▇▇▇▇
Systems and the ▇▇▇▇▇▇ Assets will continue to use commercially reasonable
efforts to obtain in writing as promptly as possible any Required Consent which
was not obtained on or before the Closing and will deliver copies of the same,
reasonably satisfactory in form and substance, to the other. The obligations
set forth in this Section will survive the Closing and will not be merged in
the consummation of the transactions contemplated hereby.
8.20 Company Name. ▇▇▇▇▇▇ shall either (a) change the name of the
Company, or (b) create a "doing business as" name pursuant to which the Company
will market its services and/or products. In either case, such name shall be
acceptable to both Members.
SECTION 9. CONDITIONS PRECEDENT
9.1 Conditions to ▇▇▇▇▇▇'▇ Obligations. The obligations of ▇▇▇▇▇▇ to
consummate the transactions contemplated by this Agreement will be subject to
the satisfaction, at or before the Closing, of the following conditions, which
may be waived by ▇▇▇▇▇▇ in writing.
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(a) Accuracy of Representations and Warranties. The
representations and warranties of TCI in this Agreement and in any Transaction
Document, if specifically qualified by materiality, are true in all respects
and, if not so qualified, are true in all material respects at and as of the
Closing with the same effect as if made at and as of the Closing.
(b) Performance of Agreements. TCI Member and the TCI
Entities have performed in all material respects all obligations and agreements
and complied in all material respects with all covenants in this Agreement and
in any Transaction Document to be performed and complied with by them at or
before the Closing.
(c) Deliveries. TCI has delivered the items and documents
required to be delivered by it pursuant to this Agreement and any Transaction
Document, including those required under Section 10.2.
(d) Legal Proceedings. No action, suit or proceeding is
pending or threatened by or before any Governmental Authority and no Legal
Requirement has been enacted, promulgated or issued or become or deemed
applicable to any of the transactions contemplated by this Agreement by any
Governmental Authority, which would (i) prohibit the Company's ownership or
operation of all or a material portion of any TCI System, TCI's Cable Business
or the TCI Assets, (ii) compel the Company to dispose of or hold separate all
or a material portion of any TCI System, TCI's Cable Business or the TCI Assets
as a result of any of the transactions contemplated by this Agreement or any
Transaction Document, (iii) if determined adversely to the Company's interest,
materially impair the ability of the Company to realize the benefits of the
transactions contemplated by this Agreement or any Transaction Document or have
a material adverse effect on the right of the Company to exercise full rights
of ownership of the TCI Systems or (iv) prevent or make illegal the
consummation of any transactions contemplated by this Agreement or any
Transaction Document.
(e) Consents. ▇▇▇▇▇▇ has received evidence, in form and
substance reasonably satisfactory to it, that the TCI Required Consents have
been obtained.
(f) No Material Adverse Change. There has not been any
material adverse change in the TCI Assets or the financial condition or
operations of TCI's Cable Business or the TCI Systems since the date of this
Agreement.
(g) Subscribers. The TCI Systems are serving at least 86,786
Equivalent Basic Subscribers.
(h) Documents and Records. TCI has delivered to ▇▇▇▇▇▇ all
TCI Books and Records, including a list of all pending subscriber hook-ups,
disconnect and repair orders, supply orders and any other lists reasonably
necessary to the operation of the TCI Systems. Delivery of the foregoing will
be deemed made to the extent such TCI
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Books and Records are then located at any of the offices included in the TCI
Owned Real Property or TCI Leased Property and made available to ▇▇▇▇▇▇.
(i) HSR Act. All filings required under the HSR Act with
respect to the Roll-Up have been made and the applicable waiting period has
expired or been earlier terminated.
(j) Franchise Renewals. Any TCI System Franchise for which a
valid notice of renewal pursuant to the formal renewal procedures established
by Section 626 of the Cable Act has not been timely delivered to the
appropriate Governmental Authority has been renewed or extended for a period
expiring no earlier than three years after the Closing Date.
(k) Company Document. The Operating Agreement shall have been
duly executed and delivered by TCI Member.
(l) Ancillary Agreements. TCI shall have caused to be
executed and delivered to the Company the Programming Supply Agreement and the
Media Services Agreement.
(m) Company Financing. The Company shall have secured the
financing referred in accordance with Section 8.13.
9.2 Conditions to TCI's Obligations. The obligations of TCI to
consummate the transactions contemplated by this Agreement will be subject to
the satisfaction, at or before the Closing, of the following conditions, which
may be waived by TCI in writing.
(a) Accuracy of Representations and Warranties. The
representations and warranties of ▇▇▇▇▇▇ in this Agreement and in any
Transaction Document, if specifically qualified by materiality, are true in all
respects and, if not so qualified, are true in all material respects at and as
of the Closing with the same effect as if made at and as of the Closing.
(b) Performance of Agreements. ▇▇▇▇▇▇ has performed in all
material respects all obligations and agreements and complied in all material
respects with all covenants in this Agreement and in any Transaction Document
to be performed and complied with by it at or before the Closing.
(c) Deliveries. ▇▇▇▇▇▇ has delivered the items and documents
required to be delivered by it, pursuant to this Agreement and any Transaction
Documents, including those required under Section 10.3.
(d) Legal Proceedings. No action, suit or proceeding is
pending or threatened by or before any Governmental Authority and no Legal
Requirement has been
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enacted, promulgated or issued or become or deemed applicable to any of the
transactions contemplated by this Agreement by any Governmental Authority,
which would (i) prohibit the Company's ownership or operation of all or a
material portion of any ▇▇▇▇▇▇ System, ▇▇▇▇▇▇'▇ Cable Business or the ▇▇▇▇▇▇
Assets, (ii) compel the Company to dispose of or hold separate all or a
material portion of any ▇▇▇▇▇▇ System, ▇▇▇▇▇▇'▇ Cable Business or ▇▇▇▇▇▇ Assets
as a result of any of the transactions contemplated by this Agreement or any
Transaction Document, (iii) if determined adversely to the Company's interest,
materially impair the ability of the Company to realize the benefits of the
transactions contemplated by this Agreement or any Transaction Document or have
a material adverse effect on the right of the Company to exercise full rights
of ownership of the ▇▇▇▇▇▇ Systems or (iv) prevent or make illegal the
consummation of any transactions contemplated by this Agreement or any
Transaction Document.
(e) Consents. TCI has received evidence, in form and
substance reasonably satisfactory to it, that the ▇▇▇▇▇▇ Required Consents have
been obtained.
(f) No Material Adverse Change. There has not been any
material adverse change in the ▇▇▇▇▇▇ Assets or the financial condition or
operations of the ▇▇▇▇▇▇ Systems since the date of this Agreement.
(g) Subscribers. The ▇▇▇▇▇▇ Systems are serving at least
27,116 Equivalent Basic Subscribers.
(h) Documents and Records. ▇▇▇▇▇▇ has delivered to TCI all
▇▇▇▇▇▇ Books and Records, including a list of all pending subscriber hook-ups,
disconnect and repair orders, supply orders and any other lists reasonably
necessary to the operation of the ▇▇▇▇▇▇ Systems. Delivery of the foregoing
will be deemed made to the extent such ▇▇▇▇▇▇ Books and Records are then
located at any of the offices included in the ▇▇▇▇▇▇ Owned Real Property or
▇▇▇▇▇▇ Leased Property and made available to TCI.
(i) HSR Act. All filings required under the HSR Act with
respect to the Roll-Up have been made and the applicable waiting period has
expired or been earlier terminated.
(j) Franchise Renewals. Any ▇▇▇▇▇▇ System Franchise for which
a valid notice of renewal pursuant to the formal renewal procedures established
by Section 626 of the Cable Act has not been timely delivered to the
appropriate Governmental Authority have been renewed or extended for a period
expiring no earlier than three years after the Closing Date.
(k) Company Document. The Operating Agreement shall have been
duly executed and delivered by ▇▇▇▇▇▇.
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(l) Ancillary Agreements. The Company shall have executed and
delivered the Programming Supply Agreement and the Media Services Agreement.
(m) Financing. The Company shall have secured financing in
accordance with Section 8.13 and a Keep Well Agreement in the form of Exhibit
9.2(b) shall have been executed by the banks providing such financing.
SECTION 10. THE CLOSING
10.1 The Closing; Time and Place. The closing of the transactions
contemplated by this Agreement (the "Closing") will take place at a date (the
"Closing Date") and time mutually determined by TCI and ▇▇▇▇▇▇, which Closing
Date shall be within ten days after the date on which all conditions set forth
in Sections 9.1 and 9.2 have either been satisfied or waived in writing by the
Party entitled to the benefit of such condition.
10.2 TCI's Delivery Obligations. At the Closing, TCI will deliver or
cause to be delivered to ▇▇▇▇▇▇ and/or the Company, as appropriate, the
following.
(a) ▇▇▇▇ of Sale and Assignment and Assumption Agreement. The
executed ▇▇▇▇ of Sale and Assignment and Assumption Agreement in the form of
EXHIBIT 10.2(A) and such other instruments of transfer, assignment or
assumption, in form and substance mutually satisfactory to TCI and ▇▇▇▇▇▇, as
▇▇▇▇▇▇ may reasonably require to further document the transfer and assignment
of the TCI Assets to the Company and the Company's assumption of the Assumed
Obligations and Liabilities.
(b) Deeds. A special warranty deed in a form reasonably
acceptable to ▇▇▇▇▇▇ (and complying with applicable state laws) with respect to
each parcel of TCI Owned Real Property, duly executed and acknowledged and in
recordable form, warranting to defend title to such TCI Owned Real Property in
the peaceable possession of the Company against all Persons claiming by,
through or under TCI, subject however, to any Permitted Liens.
(c) Lien Releases. Evidence satisfactory to ▇▇▇▇▇▇ that all
Liens (other than Permitted Liens) affecting or encumbering the TCI Assets have
been terminated, released or waived, as appropriate, or original, executed
instruments in form satisfactory to ▇▇▇▇▇▇ effecting such terminations,
releases or waivers.
(d) Vehicle Titles. Title certificates to all vehicles
included among the TCI Assets, endorsed for transfer of title to the Company,
and separate bills of sale therefor or other transfer documentation, if
required by the laws of the States in which such vehicles are titled.
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(e) Evidence of Authorization Actions. Certified resolutions
or other evidence reasonably satisfactory to ▇▇▇▇▇▇ that TCI Member and the TCI
Entities have taken all action necessary to authorize the execution of this
Agreement and the Transaction Documents and the consummation of the
transactions contemplated hereby and thereby.
(f) FIRPTA Certificate. FIRPTA Non-Foreign Seller Certificate
certifying that TCI is not a foreign person within the meaning of Section 1445
of the Code reasonably satisfactory in form and substance to ▇▇▇▇▇▇.
(g) Officer's Certificates. A certificate or certificates
executed by an executive officer of TCI Member and the TCI Entities dated the
date of the Closing, reasonably satisfactory in form and substance to ▇▇▇▇▇▇
certifying that the conditions specified in Sections 9.1(a) and 9.1(b) have
been satisfied.
(h) Ancillary Documents. The Programming Supply Agreement and
the Media Services Agreement, duly executed by TCI or its Affiliate.
(i) Other. Such other documents and instruments as may be
necessary to effect the intent of this Agreement and the Transaction Documents
and consummate the transactions contemplated hereby and thereby.
10.3 ▇▇▇▇▇▇'▇ Delivery Obligations. At the Closing, except as
otherwise provided below, ▇▇▇▇▇▇ will deliver or cause to be delivered to TCI
and/or the Company, as appropriate, the following.
(a) ▇▇▇▇ of Sale and Assignment and Assumption Agreement. The
executed ▇▇▇▇ of Sale and Assignment and Assumption Agreement in the form of
EXHIBIT 10.3(A) and such other instruments of transfer, assignment or
assumption, in form and substance mutually satisfactory to ▇▇▇▇▇▇ and TCI, as
TCI may reasonably require to further document the transfer and assignment of
the ▇▇▇▇▇▇ Assets to the Company and the Company's assumption of the Assumed
Obligations and Liabilities.
(b) Deeds. A special warranty deed in a form reasonably
acceptable to TCI (and complying with applicable state laws) with respect to
each parcel of ▇▇▇▇▇▇ Owned Real Property, duly executed and acknowledged and
in recordable form, warranting to defend title to such ▇▇▇▇▇▇ Owned Real
Property in the peaceable possession of the Company against all Persons
claiming by, through or under ▇▇▇▇▇▇, subject however, to any Permitted Liens.
(c) Lien Releases. Evidence satisfactory to TCI that all
Liens (other than Permitted Liens) affecting or encumbering the ▇▇▇▇▇▇ Assets
have been terminated, released or waived, as appropriate, or original, executed
instruments in form satisfactory to TCI effecting such terminations, releases
or waivers.
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(d) Vehicle Titles. Title certificates to all vehicles
included among the ▇▇▇▇▇▇ Assets, endorsed for transfer of title to the Company
and separate bills of sale therefor or other transfer documentation, if
required by the laws of the states in which such vehicles are titled.
(e) Evidence of Authorization Actions. Certified resolutions
of ▇▇▇▇▇▇ or other evidence reasonably satisfactory to TCI that ▇▇▇▇▇▇ has
taken all action necessary to authorize the execution of this Agreement and the
Transaction Documents and the consummation of the transactions contemplated
hereby and thereby.
(f) FIRPTA Certificate. FIRPTA Non-Foreign Seller Certificate
certifying that ▇▇▇▇▇▇ is not a foreign person within the meaning of Section
1445 of the Code reasonably satisfactory in form and substance to TCI.
(g) Officer's Certificate. A certificate executed by an
executive officer of ▇▇▇▇▇▇ dated the date of the Closing, reasonably
satisfactory in form and substance to TCI certifying that the conditions
specified in Sections 9.2(a) and 9.2(b) have been satisfied.
(h) Other. Such other documents and instruments as may be
necessary to effect the intent of this Agreement and consummate the
transactions contemplated hereby.
10.4 Deliveries by the Company. As a condition to each Party's
performance of their obligations hereunder, prior to or on the Closing Date,
the Company has delivered or is delivering to the Parties, in form and
substance reasonably satisfactory to the Parties:
(a) Assumption Agreement. Appropriate assumptions agreements,
in form and substance reasonably satisfactory to each Party, pursuant to which
the Company shall assume and undertake to perform each Party's obligations
arising after the Closing Time and assume and perform the Assumed Obligations
and Liabilities;
(b) Ancillary Agreements. The Programming Supply Agreement
and the Media Services Agreement.
(c) Payment of TCI Debt and ▇▇▇▇▇▇ Debt. The payment of the
debt associated with the TCI Assets and ▇▇▇▇▇▇ Assets, respectively, as
provided for in Section 8.13, by wire transfer of immediately available funds
in accordance with wire transfer instructions provided by TCI and ▇▇▇▇▇▇,
respectively.
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SECTION 11. TERMINATION AND DEFAULT
11.1 Termination Events. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned:
(a) at any time, by the mutual agreement of ▇▇▇▇▇▇ and TCI;
(b) by either ▇▇▇▇▇▇ or TCI at any time, if the other is in
material breach or default of any of its covenants, agreements or other
obligations herein or in any Transaction Document, or if any of its
representations herein or in any Transaction Document if specifically qualified
by materiality, is not true in all respects or, if not qualified by
materiality, is not true in all material respects when made or when otherwise
required by this Agreement or any Transaction Document to be true, if the non-
breaching Party provides the breaching Party with prompt written notice that
provides a reasonably detailed explanation of the facts and circumstances
surrounding such breach or default; provided that such Party shall have no
right to terminate if (i) the breaching Party cures such breach or default
within 30 days after its receipt of such written notice, unless such breach or
default cannot be cured within such 30-day period; or (ii) the breach or
default is capable of being cured prior to March 31, 1998 (the "Outside Closing
Date") and the breaching Party commences to cure such breach or default within
such 30-day period and diligently continues to take all action reasonably
necessary to cure such breach or default prior to the Outside Closing Date and
such breach or default is cured prior to the Outside Closing Date;
(c) by either ▇▇▇▇▇▇ or TCI upon written notice to the other,
if any of the conditions to its obligations set forth in Sections 9.1 and 9.2,
respectively, are not satisfied on or before the Outside Closing Date for any
reason other than a material breach or default by such Party of its respective
covenants, agreements or other obligations under this Agreement, or if any of
its representations herein or in any Transaction Document, if specifically
qualified by materiality, is not true in all respects or, if not qualified by
materiality, is not true in all material respects when made or when otherwise
required by this Agreement or in any Transaction Document to be true; or
(d) as otherwise provided in this Agreement.
11.2 Effect of Termination. If this Agreement is terminated pursuant
to Section 11.1, all obligations of the parties under this Agreement will
terminate, except for the obligations set forth in Sections 8.14 and 13.15.
Termination of this Agreement pursuant to Sections 11.1(a) or 11.1(b) will not
limit or impair any remedies that any of TCI or ▇▇▇▇▇▇ may have with respect to
a breach or default by the other of its covenants, agreements or obligations
under this Agreement.
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SECTION 12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
12.1 Survival of Representations and Warranties. The representations
and warranties of TCI and ▇▇▇▇▇▇ in this Agreement and in the Transaction
Documents will survive until the first anniversary of the Closing Date, except
that (a) all such representations and warranties with respect to any Taxes,
rates, Environmental Law, ERISA, employment matters or copyright matters will
survive until 60 days after the expiration of the applicable statute of
limitations (including any extensions) for such Taxes, rates, Environmental
Law, ERISA, employment matters or copyright matters, respectively, and (b) the
representations and warranties as to title of the Assets in Sections 5.4(a) and
6.4(a), respectively, and as to title of Owned Real Property set forth in
Sections 5.6 and 6.6, respectively, and in the special warranty deed or deeds
delivered with respect to Owned Property will survive the Closing and the
delivery of such deeds and will continue in full force and effect without
limitation with the understanding that, notwithstanding any language contained
in any such deed, the representations and warranties as to title to Owned Real
Property set forth in Sections 5.6 and 6.6, respectively, will not be merged
into any such deed or other Transaction Document. The periods of survival of
the representations and warranties prescribed by this Section 12.1 are referred
to as the "Survival Period." The liabilities of each Party under its
respective representations and warranties will expire as of the expiration of
the applicable Survival Period; provided however that such expiration will not
include, extend or apply to any representation or warranty, the breach of which
has been asserted by a Party in a written notice to the other party before such
expiration or about which a Party has given the other Party written notice
before such expiration indicating that facts or conditions exist that, with the
passage of time or otherwise, can reasonably be expected to result in a breach
(and describing such potential breach in reasonable detail). The covenants and
agreements of each Party in this Agreement and in the Transaction Documents
will survive the Closing and will continue in full force and effect without
limitation.
12.2 Indemnification by TCI. From and after the Closing, TCI will
indemnify and hold harmless ▇▇▇▇▇▇ and the Company and their shareholders and
respective Affiliates, and the shareholders, officers, directors, employees,
agents, successors and assigns and any Person claiming by or through any of
them, as the case may be, from and against any and all Losses arising out of or
resulting from (a) any breach of any representation or warranty made by any TCI
Entity or TCI Member in this Agreement; (b) any breach of any covenant,
agreement or obligation of any TCI Entity or TCI Member contained in this
Agreement; (c) any act or omission of any TCI Entity or TCI Member with respect
to, or any event or circumstance related to, the ownership or operation of the
TCI Assets or the conduct of TCI's Cable Business, which act, omission, event
or circumstance occurred or existed prior to or at the Closing Time, without
regard to whether a claim with respect to such matter is asserted before or
after the Closing Time, including any matter described on SCHEDULE 6.11; (d)
any liability or obligation not included in the Assumed Obligations and
Liabilities and related to the TCI Assets; (e) any
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claim that the transactions contemplated by this Agreement violate WARN or any
Legal Requirement or any fraudulent conveyance laws of any jurisdiction; (f)
any claim relating to "continuation coverage" under Code Section 4980B with
respect to former employees of any TCI Entity or TCI Member at and after the
Closing Time or that ▇▇▇▇▇▇ or the Company is deemed to be a successor employer
of any TCI Entity or TCI Member under Code Section 4980B; (g) the presence,
generation, removal or transportation of a Hazardous Substance on or from any
of the TCI Owned Real Property or TCI Leased Property through and including the
Closing Time, including the costs of removal or clean-up of such Hazardous
Substance and other compliance with the provisions of any Environmental Laws
(whether before or after Closing), including anything listed on SCHEDULE
6.7(B); or (h) any rate refund or credit, penalty and/or interest payment with
respect thereto ordered by any Governmental Authority with respect to the TCI
Systems for periods through and including the Closing Time.
In the event that an indemnified item arises under both clause (a) and under
one or more of clauses (b) through (h) of this Section, ▇▇▇▇▇▇'▇ and the
Company's rights to pursue its claim under clauses (b) through (h), as
applicable, will exist notwithstanding the expiration of the Survival Period
applicable to such claim under clause (a).
12.3 Indemnification by ▇▇▇▇▇▇. From and after the Closing, ▇▇▇▇▇▇
will indemnify and hold harmless each TCI Entity, TCI Member and the Company
and their shareholders and respective Affiliates and the shareholders,
officers, directors, employees, agents, successors and assigns and any Person
claiming by or through any of them, as the case may be, from and against any
and all Losses arising out of or resulting from (a) any breach of any
representation or warranty made by ▇▇▇▇▇▇ in this Agreement; (b) any breach of
any covenant, agreement or obligation of ▇▇▇▇▇▇ contained in this Agreement;
(c) any act or omission of ▇▇▇▇▇▇ with respect to, or any event or circumstance
related to, the ownership or operation of the ▇▇▇▇▇▇ Assets or the conduct of
▇▇▇▇▇▇'▇ Cable Business, which act, omission, event or circumstance occurred or
existed prior to or at the Closing Time, without regard to whether a claim with
respect to such matter is asserted before or after the Closing Time, including
any matter described on SCHEDULE 5.11; (d) any liability or obligation not
included in the Assumed Obligations and Liabilities and related to the ▇▇▇▇▇▇
Assets; (e) any claim that the transactions contemplated by this Agreement
violate WARN or any similar Legal Requirement or any bulk transfer or
fraudulent conveyance laws of any jurisdiction; (f) any claim relating to
"continuation coverage" under Code Section 4980B with respect to former
employees of ▇▇▇▇▇▇ at and after the Closing Time or that TCI or the Company is
deemed to be a successor employer of ▇▇▇▇▇▇ under Code Section 4980B; (g) the
presence, generation, removal or transportation of a Hazardous Substance on or
from any of the ▇▇▇▇▇▇ Owned Real Property or ▇▇▇▇▇▇ Leased Property through
and including the Closing Time, including the costs of removal or clean-up of
such Hazardous Substance and other compliance with the provisions of any
Environmental Laws (whether before or after Closing); or (h) any rate refund or
credit, penalty and/or interest payment with respect
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thereto ordered by any Governmental Authority with respect to the ▇▇▇▇▇▇
Systems for periods through and including the Closing Time.
In the event that an indemnified item arises under both clause (a) and under
one or more of clauses (b) through (h) of this Section, TCI's and the Company's
rights to pursue its claim under clauses (b) through (h), as applicable, will
exist notwithstanding the expiration of the Survival Period applicable to such
claim under clause (a).
12.4 Indemnification by the Company. From and after the Closing, the
Company will indemnify and hold harmless ▇▇▇▇▇▇, each TCI Entity, the TCI
Member and their shareholders and respective Affiliates and the shareholders,
officers, directors, employees, agents, successors and assigns and any Person
claiming by or through any of them, as the case may be, from and against any
and all Losses arising out of or resulting from (a) any breach of any
representation or warranty made by the Company in this Agreement; (b) any
breach of any covenant, agreement or obligation of the Company in this
Agreement; (c) any act or omission of the Company with respect to, or any event
or circumstance related to, the ownership or operation of the Assets or the
conduct of the Cable Business, which act, omission, event or circumstance
occurred or existed after the Closing Time; (d) the failure of the Company to
perform the Assumed Obligations and Liabilities.
12.5 Third Party Claims. Promptly after the receipt by any Party of
notice of any claim, action, suit or proceeding by any third party
(collectively, an "Action"), which Action is subject to indemnification under
this Agreement, such Party (the "Indemnified Party") will give reasonable
written notice to the Party from whom indemnification is claimed (the
"Indemnifying Party"). The Indemnified Party will be entitled, at the sole
expense and liability of the Indemnifying Party, to exercise full control of
the defense, compromise or settlement of any such Action unless the
Indemnifying Party, within a reasonable time after the giving of such notice by
the Indemnified Party, (a) admits in writing to the Indemnified Party the
Indemnifying Party's liability to the Indemnified Party for such Action under
the terms of this Section 12, (b) notifies the Indemnified Party in writing of
the Indemnifying Party's intention to assume such defense, (c) provides
evidence reasonably satisfactory to the Indemnified Party of the Indemnifying
Party's ability to pay the amount, if any, for which the Indemnified Party may
be liable as a result of such Action and (d) retains legal counsel reasonably
satisfactory to the Indemnified Party to conduct the defense of such Action.
The other Party will cooperate with the Party assuming the defense, compromise
or settlement of any such Action in accordance with this Agreement in any
manner that such Party reasonably may request. If the Indemnifying Party so
assumes the defense of any such Action, the Indemnified Party will have the
right to employ separate counsel and to participate in (but not control) the
defense, compromise or settlement of the Action, but the fees and expenses of
such counsel will be at the expense of the Indemnified Party unless (a) the
Indemnifying Party has agreed to pay such fees and expenses, (b) any relief
other than the payment of money damages is sought against the Indemnified Party
or (c) the Indemnified Party will have
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been advised by its counsel that there may be one or more defenses available to
it which are different from or additional to those available to the
Indemnifying Party, and in any such case that portion of the fees and expenses
of such separate counsel that are reasonably related to matters covered by the
indemnity provided in this Section 12 will be paid by the Indemnifying Party.
No Indemnified Party will settle or compromise any such Action for which it is
entitled to indemnification under this Agreement without the prior written
consent of the Indemnifying Party, unless the Indemnifying Party has failed,
after reasonable notice, to undertake control of such Action in the manner
provided in this Section 12.5. No Indemnifying Party will settle or compromise
any such Action (a) in which any relief other than the payment of money damages
is sought against any Indemnified Party or (b) in the case of any Action
relating to the Indemnified Party's liability for any Tax, if the effect of
such settlement would be an increase in the liability of the Indemnified Party
for the payment of any Tax for any period beginning after the Closing Date,
unless the Indemnified Party consents in writing to such compromise or
settlement.
SECTION 13. MISCELLANEOUS PROVISIONS
13.1 Parties Obligated and Benefited. Subject to the limitations set
forth below, this Agreement will be binding upon the parties and their
respective assigns and successors in interest and will inure solely to the
benefit of the parties and their respective assigns and successors in interest,
and no other Person will be entitled to any of the benefits conferred by this
Agreement. Without the prior written consent of the other Party, no Party will
assign any of its rights under this Agreement or delegate any of its duties
under this Agreement, provided that a Party may, without the consent of any
other Party, assign or delegate its rights or obligations under this Agreement
to any of its Affiliates, and such assignee will be substituted for such Party
under this Agreement as though it were the original Party to this Agreement.
13.2 Notices. Any notice, request, demand, waiver or other
communication required or permitted to be given under this Agreement will be in
writing and will be deemed to have been duly given only if delivered in person
or by first class, prepaid, registered or certified mail, or sent by courier
or, if receipt is confirmed, by telecopier:
To TCI at:
TCI American Cable Holdings III, L.P.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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With a copy similarly addressed to the attention of ▇▇▇▇▇ ▇.
▇▇▇▇▇:
To ▇▇▇▇▇▇ at:
▇▇▇▇▇▇ Communications Associates, L.L.C.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Jenkens & ▇▇▇▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Any Party may change the address to which notices are required to be sent by
giving notice of such change in the manner provided in this Section. All
notices will be deemed to have been received on the date of delivery, which in
the case of deliveries by telecopier will be the date of the sender's
confirmation.
13.3 Right to Specific Performance. The Parties acknowledge that the
unique nature of the Assets renders money damages an inadequate remedy for the
breach by the Parties of its obligations under this Agreement, and the Parties
agree that in the event of such breach, the Parties will upon proper action
instituted by either of them, be entitled to a decree of specific performance
of this Agreement.
13.4 Waiver. This Agreement or any of its provisions may not be
waived except in writing. The failure of any Party to enforce any right
arising under this Agreement on one or more occasions will not operate as a
waiver of that or any other right on that or any other occasion.
13.5 Captions. The section and other captions of this Agreement are
for convenience only and do not constitute a part of this Agreement.
13.6 CHOICE OF LAW. THIS AGREEMENT AND THE RIGHTS OF THE PARTIES
UNDER IT WILL BE GOVERNED BY AND CONSTRUED IN ALL RESPECTS IN ACCORDANCE WITH
THE LAWS OF THE STATE OF COLORADO, WITHOUT REGARD TO THE CONFLICTS OF LAWS
RULES OF COLORADO.
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13.7 Terms. Terms used with initial capital letters or otherwise
defined in this Agreement will have the meanings specified, applicable to both
singular and plural forms, for all purposes of this Agreement. The word
"include" and derivatives of that word are used in this Agreement in an
illustrative sense rather than limiting sense.
13.8 Rights Cumulative. All rights and remedies of each of the
Parties under this Agreement will be cumulative, and the exercise of one or
more rights or remedies will not preclude the exercise of any other right or
remedy available under this Agreement or applicable law.
13.9 Time. Time is of the essence under this Agreement. If the last
day permitted for the giving of any notice or the performance of any act
required or permitted under this Agreement falls on a day which is not a
Business Day, the time for the giving of such notice or the performance of such
act will be extended to the next succeeding Business Day.
13.10 Late Payments. If either Party fails to pay the other any
amounts when due under this Agreement, the amounts due will bear interest from
the due date to the date of payment at the annual rate publicly announced from
time to time by The Bank of New York as its prime rate (the "Prime Rate") plus
2%, adjusted as and when changes in the Prime Rate are made.
13.11 Counterparts. This Agreement may be executed in counterparts,
each of which will be deemed an original.
13.12 Entire Agreement. This Agreement (including the Transaction
Documents and the Schedules and Exhibits referred to in this Agreement, which
are incorporated in and constitute a part of this Agreement) contains the
entire agreement of the Parties and supersedes all prior oral or written
agreements and understandings with respect to the subject matter. This
Agreement may not be amended or modified except by a writing signed by the
Parties.
13.13 Severability. Any term or provision of this Agreement which is
invalid or unenforceable will be ineffective to the extent of such invalidity
or unenforceability without rendering invalid or unenforceable the remaining
rights of the Person intended to be benefited by such provision or any other
provisions of this Agreement.
13.14 Construction. This Agreement has been negotiated by the Parties
and their respective legal counsel, and legal or equitable principles that
might require the construction of this Agreement or any provision of this
Agreement against the Party drafting this Agreement will not apply in any
construction or interpretation of this Agreement.
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13.15 Expenses. Except as otherwise expressly provided in this
Agreement, each Party will pay all of its expenses, including attorneys' and
accountants' fees, in connection with the negotiation of this Agreement, the
performance of its obligations and the consummation of the transactions
contemplated by this Agreement.
13.16 Risk of Loss. The risk of any loss or damage to the ▇▇▇▇▇▇
Assets or TCI Assets resulting from fire, theft or other casualty (except
reasonable wear and tear) will be borne by ▇▇▇▇▇▇ or TCI, respectively, at all
times through and including the Closing Time. If any such loss or damage is
sufficiently substantial so as to preclude and prevent resumption of normal
operations of any material portion of a System or the replacement or
restoration of the lost or damaged property within 20 days from the occurrence
of the event resulting in such loss or damage, ▇▇▇▇▇▇ or TCI as appropriate,
will immediately notify the other in writing of that fact and the other, at any
time within 10 days after receipt of such notice, may elect by written notice
to the notifying Party to either (a) waive such defect and proceed toward
consummation of the transaction in accordance with terms of this Agreement or
(b) terminate this Agreement. If the other elects to so terminate this
Agreement, both parties will stand fully released and discharged of any and all
obligations under this Agreement. If the other elects to consummate the
transactions contemplated by this Agreement notwithstanding such loss or damage
and does so, all insurance proceeds payable as a result of the occurrence of
the event resulting in such loss or damage (to the extent not used to replace
or restore such lost or damaged property), except for any proceeds from
business interruption insurance relating to the loss of revenue for the period
through and including the Closing Date, will be delivered by the notifying
Party to the other or the rights to such proceeds will be assigned by the
notifying Party to the other if not yet paid over to the notifying Party, and
the notifying Party will pay to the other an amount equal to the difference
between the amount of such insurance costs and the full replacement cost of the
damaged or lost Assets.
If, prior to the Closing, any part of or interest in the ▇▇▇▇▇▇
Assets or the TCI Assets is taken or condemned as a result of the exercise of
the power of eminent domain, or if a Governmental Authority having such power
informs ▇▇▇▇▇▇ or TCI that it intends to condemn all or any part of a Party's
Assets (such event being called, in either case, a "Taking"), then the other
Party may terminate this Agreement. If the other Party does not elect to
terminate this Agreement, then (a) the other Party will have the sole right, in
the name of the Party, if the other Party so elects, to negotiate for, claim,
contest and receive all damages with respect to the Taking, (b) the Party will
be relieved of its obligation to convey to the other Party the Assets or
interests that are the subject of the Taking, (c) at the Closing the Party will
assign to the other Party all of the Party's rights to all damages payable with
respect to the Taking and (d) following the Closing, the Party will give the
other Party such further assurances of such rights and assignment with respect
to the Taking as the other Party may from time to time reasonably request.
13.17 Tax Consequences. No party to this Agreement makes any
representation or warranty, express or implied, with respect to the Tax
implications of any aspect of this
-59-
63
Agreement on any other party to this Agreement, and all parties expressly
disclaim any such representation or warranty with respect to any Tax
consequences arising under this Agreement. Each party has relied solely on its
own Tax advisors with respect to the Tax implications of this Agreement.
13.18 Commercially Reasonable Efforts. For purposes of this Agreement,
"commercially reasonable efforts" will not be deemed to require a Party to
undertake extraordinary measures, including the initiation or prosecution of
legal proceedings or the payment of amounts in excess of normal and usual
filing fees and processing fees, if any.
The parties have executed this Agreement as of the day and year first
above written.
TEMPO CABLE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
COMMUNICATIONS SERVICES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
TCI CABLEVISION OF OKLAHOMA, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
TCI OF KANSAS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
WENTRONICS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
-60-
64
TCI CABLEVISION OF UTAH, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
TCI CABLEVISION OF ARIZONA, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
TULSA CABLE TELEVISION, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
TCI AMERICAN CABLE HOLDINGS III, L.P.
By: Cablevision of Arizona Partner,
Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇ COMMUNICATIONS
ASSOCIATES, L.L.C.
By: ▇▇▇▇▇▇ Capital Partners,
Ltd., its Member
By: ▇▇▇▇▇▇ Capital
Corporation, its
General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
PREMIER MEDIA, LLC
By: ▇▇▇▇▇▇ Communications Associates,
L.L.C., Manager
By: ▇▇▇▇▇▇ Capital Partners,
Ltd., its Member
By: ▇▇▇▇▇▇ Capital
Corporation, its
General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
-61-
65
EXHIBIT A
ASSET CONTRIBUTION AGREEMENT
▇▇▇▇▇▇ SYSTEMS
* Cedarville, AR
* ▇▇▇▇▇▇▇ ▇▇, ▇▇
* ▇▇▇▇ ▇▇▇▇, ▇▇
* Rudy, AR
* Winslow, AR
* Excelsior, AR
* Mountainburg, AR
* Prairie Grove, AR
* West Fork, AR
* Lavaca, AR
* Ely, NV
* McGill, NV
* ▇▇▇▇, NV
* Eureka, NV
* Wendover/W. Wendover, UT
* Fillmore, UT
* Milford, UT
* Minersville, UT
* DeQueen/Horatio, AR
* Mansfield/Huntington, AR
* Murfreesboro, AR
* ▇▇▇▇▇▇ City, OK
* Valliant, OK
* Pea Ridge, AR
* Gravette, AR
* Centerton, AR
* Rogers, AR
* LittleFlock, AR
* Avoca, AR
* ▇▇▇▇▇▇ County, AR
* Lincoln, AR
* Beaver Lake, AR
* Prairie Creek, AR
* ▇▇▇▇▇, OK
* Calvin, OK
* Clayton, OK
* Howe, OK
* ▇▇▇▇▇▇▇▇▇, OK
* Midland, Sugar Loaf, Witchervle, AR
* Panama, Shady Point, OK
* Pocola, OK
* Porum Landing, OK
* Stuart, Arpelar, Haywd, OK
* Talihina, OK
* Wetumka, OK
A-1
66
* Wister, OK
* ▇▇▇▇▇▇▇/McCaskill, AR
* Center Point/Dierks, AR
* Pold Co., Cove, Hatfield, Grannis, AR
* Daisy, Kirby, New Hope, Salem, AR
* ▇▇▇▇▇▇/▇▇▇▇▇/Saratoga2/Tollette, AR
* Mineral Springs, AR
* Antlers, OK
* Bennington, OK
* Boswell, OK
* Caney, OK
* Rattan, OK
* Braggs, OK
* Cherokee Heights, Sportsmen, OK
* Mullberry/Dyer, AR
* Seligman, Washburn, MO
A-2
67
EXHIBIT A
ASSET CONTRIBUTION AGREEMENT
TCI SYSTEMS
----------------------------------------------------------------------------------------------------
Franchise
Common System Headend Name(s) Communities Served Name of TCI Owner
Name by Headend Entity
----------------------------------------------------------------------------------------------------
Holdenville/ Okemah Holdenville, OK Holdenville, OK Tempo Cable, Inc.
Okemah, OK Okemah, OK
McAlester, OK Communications
McAlester, OK Alderson, OK Services, Inc.
▇▇▇▇▇▇, OK
McAlester, OK
Pittsburg, OK
Seminole Communications
Konawa, OK Konawa, OK Services, Inc.
Maud, OK Maud, OK
Seminole, OK Seminole, OK
Wellston, OK Wellston, OK
Wewoka, OK Wewoka, OK
----------------------------------------------------------------------------------------------------
Henryetta, OK Chandler, OK Chandler, OK TCI Cablevision of
Oklahoma, Inc.
Henryetta, OK Dewar, OK
Henryetta, OK
Stroud, OK Stroud, OK
----------------------------------------------------------------------------------------------------
Muskogee, OK Haskell, OK Haskell, OK TCI Cablevision of
Oklahoma, Inc.
Muskogee, OK Muskogee, OK
Muskogee County, OK
Wagoner, OK (City)
Wagoner, OK Wagoner, OK
(outside township)
----------------------------------------------------------------------------------------------------
Okmulgee, OK Okmulgee, OK Okmulgee, OK Communications
Okmulgee County, OK Services, Inc.
----------------------------------------------------------------------------------------------------
Stigler, OK Stigler, OK ▇▇▇▇▇▇▇ County, OK Tempo Cable, Inc.
Stigler, OK
Whitefield, OK
----------------------------------------------------------------------------------------------------
A-3
68
----------------------------------------------------------------------------------------------------
Franchise
Common System Headend Name(s) Communities Served Name of TCI Owner
Name by Headend Entity
----------------------------------------------------------------------------------------------------
Alva, OK Alva, OK Alva, OK TCI Cablevision of
▇▇▇▇▇ County, OK Oklahoma, Inc.
TCI Cablevision of
----------------------------------------------------------------------------------------------------
Enid, OK Enid, OK Enid, OK Oklahoma, Inc.
Garfield County (North
Enid, OK
Garfield (Town), OK
▇▇▇▇▇ AFB, OK
----------------------------------------------------------------------------------------------------
Stillwater, OK Cushing, OK Cushing, OK TCI of Kansas, Inc.
TCI of Kansas, Inc.
Perry, OK Noble County, OK
Perry, OK TCI of Kansas, Inc.
Stillwater, OK ▇▇▇▇▇ County, OK
Perkins, OK
Stillwater, OK
----------------------------------------------------------------------------------------------------
Grove, OK Grove, OK Delaware County, OK Communications
Grove, OK Services, Inc.
Osage, OK
Pawhuska, OK Pawhuska, OK Pawhuska, OK Communications
Services, Inc.
----------------------------------------------------------------------------------------------------
Moab, UT Moab, UT Grand, UT Wentronics, Inc.
Moab, UT
----------------------------------------------------------------------------------------------------
Price/Monticello, UT Blanding, UT Blanding, UT TCI Cablevision of
Utah, Inc.
Castle ▇▇▇▇, UT Castle ▇▇▇▇, UT TCI Cablevision of
▇▇▇▇▇ County, UT Utah, Inc.
Huntington, UT
Orangeville, UT
Centerfield, UT Centerfield, UT TCI Cablevision of
Gunnison, UT Utah, Inc.
Duchesne, UT Duchesne, UT TCI Cablevision of
Utah, Inc.
Mt. Pleasant, UT Fairview, UT TCI Cablevision of
Mt. Pleasant, UT Utah, Inc.
Sanpete, UT
Spring City, UT
----------------------------------------------------------------------------------------------------
A-4
69
----------------------------------------------------------------------------------------------------
Franchise
Common System Headend Name(s) Communities Served Name of TCI Owner
Name by Headend Entity
----------------------------------------------------------------------------------------------------
Price/Monticello, UT Price, UT Carbon County, UT TCI Cablevision of
(continued) Helper, UT Utah, Inc.
Price, UT
Wellington, UT
Richfield, UT Richfield, UT TCI Cablevision of
Utah, Inc.
Roosevelt, UT Roosevelt, UT TCI Cablevision of
Utah, Inc.
Salina, UT Aurora, UT TCI Cablevision of
Redmond, UT Utah, Inc.
Salina, UT
▇▇▇▇▇▇, UT
East Carbon, UT East Carbon, UT TCI Cablevision of
Sunnyside, UT Utah, Inc.
Ephraim, UT Ephraim, UT TCI Cablevision of
Manti, UT Utah, Inc.
----------------------------------------------------------------------------------------------------
Price/Monticello, UT Ferron, UT Ferron, UT TCI Cablevision of
(continued) Utah, Inc.
Kanab, UT Kanab, UT TCI Cablevision of
Utah, Inc.
Monticello, UT Monticello, UT TCI Cablevision of
Utah, Inc.
Moroni, UT Fountain Green, UT TCI Cablevision of
Moroni, UT Utah, Inc.
Fredonia, AZ Fredonia, AZ TCI Cablevision of
Arizona, Inc.
----------------------------------------------------------------------------------------------------
Bristow, OK Bristow, OK Bristow, OK Tulsa Cable Television,
Inc.
----------------------------------------------------------------------------------------------------
Drumright, OK Drumright, OK Drumright, OK Tulsa Cable Television,
Inc.
----------------------------------------------------------------------------------------------------
A-5
70
EXHIBIT 10.2(b)
EXHIBIT 10.3(b)
to that certain Asset Contribution Agreement dated as of September 25, 1997,
among
▇▇▇▇▇▇ Communications Associates, L.L.C., a Colorado limited liability company
and
Tempo Cable, Inc., an Oklahoma corporation, Communications Services, Inc., a
Kansas corporation, TCI Cablevision of Oklahoma, Inc., a Colorado corporation,
TCI of Kansas, Inc., a Kansas corporation, Wentronics, Inc., a New Mexico
corporation, TCI Cablevision of Utah, Inc., a Utah corporation, TCI Cablevision
of Arizona, an Arizona corporation, Tulsa Cable Television, Inc., an Oklahoma
corporation, TCI American Cable Holdings, L.P., a Colorado limited partnership,
▇▇▇▇ OF SALE AND ASSIGNMENT AND ASSUMPTION AGREEMENT
This ▇▇▇▇ of Sale and Assignment and Assumption Agreement (this
"Assignment") is made as of ____________, 199_ by ____________, a ____________
[partnership] [limited liability company] ("[TCI] [▇▇▇▇▇▇]"), in favor of
Premier Media, LLC, a Colorado limited liability company (the "Company ").
This Assignment is entered into pursuant to the terms of the Asset
Exchange Agreement dated as of ____________, 1997 by and among ▇▇▇▇▇▇
Communications Associates, L.L.C., a Colorado limited liability company, Tempo
Cable, Inc., an Oklahoma corporation, Communications Services, Inc., a Kansas
corporation, TCI Cablevision of Oklahoma, Inc., a Colorado corporation, TCI of
Kansas, Inc., a Kansas corporation, Wentronics, Inc., a New Mexico corporation,
TCI Cablevision of Utah, Inc., a Utah corporation, TCI Cablevision of Arizona,
an Arizona corporation, Tulsa Cable Television, Inc., an Oklahoma corporation,
TCI American Cable Holdings, L.P., a Colorado limited partnership (the
"Agreement"). Capitalized terms not otherwise defined in this Assignment shall
have the meanings given to such terms in the Agreement.
In consideration of the foregoing premises, the transactions
contemplated by the Agreement, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, [TCI] [▇▇▇▇▇▇] does
hereby grant, bargain, sell, transfer, assign and convey unto the Company, its
successors and assigns, all of the right, title and interest of [TCI] [▇▇▇▇▇▇]
in and to the [TCI] [▇▇▇▇▇▇] Assets.
TO HAVE AND TO HOLD the [TCI] [▇▇▇▇▇▇] Assets unto the Company, and its
successors and assigns, forever, and [TCI] [▇▇▇▇▇▇] hereby warrants and agrees
to defend title to the same against all claims of any Person.
The grant, bargain, sale, transfer, assignment and conveyance of the
[TCI] [▇▇▇▇▇▇] Assets will not include any of the [TCI] [▇▇▇▇▇▇] Excluded
Assets.
[TCI] [▇▇▇▇▇▇] reasserts the representations and warranties pertaining
to the
10.2(b)/10.3(b)-1
71
Assets that are contained in the Agreement, all of which representations and
warranties are incorporated herein by this reference as if set forth in full
herein, subject to the limitations set forth in the Agreement regarding the
survival of, and the liability for breach of, such representations and
warranties. No provision set forth in this Assignment shall be deemed to
enlarge, alter or amend the terms or provisions of the Agreement. In the event
of any conflict between the provisions of this Assignment and the provisions of
the Agreement, the Agreement shall control.
In consideration of the foregoing premises, the transactions
contemplated by the Agreement and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company does
hereby assume and agree to observe, comply with, and perform in accordance with
the terms of each, the Company Assumed Obligations and Liabilities. The
Company does not assume or have any responsibility for any liabilities or
obligations associated with the [TCI] [▇▇▇▇▇▇] Excluded Assets.
This assumption by the Company is made solely for the benefit of [TCI]
[▇▇▇▇▇▇] and no third party shall have any right to enforce its terms or to
rely on it.
Specifically excluded from this Assignment is any right, title or
interest which is by law or contract non-assignable without the consent of the
other party or parties thereto, unless and until such consent has been given,
whereupon the assignment of such right, title or interest shall be
automatically effective.
The validity, performance, and enforcement of this Assignment and all
Transaction Documents, unless expressly provided to the contrary, shall be
governed by the laws of the State of Colorado, without giving effect to the
principles of conflicts of law of such state.
IN WITNESS WHEREOF, the undersigned has executed this Assignment
effective as of the date first written above.
[TCI] [▇▇▇▇▇▇]:
--------------------------------
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
PREMIER MEDIA, LLC
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
10.2(b)/10.3(b)-2
72
EXHIBIT 9.2(b)
to that certain Asset Contribution Agreement dated as of September 25, 1997,
among
▇▇▇▇▇▇ Communications Associates, L.L.C., a Colorado limited liability company
and
Tempo Cable, Inc., an Oklahoma corporation, Communications Services, Inc., a
Kansas corporation, TCI Cablevision of Oklahoma, Inc., a Colorado corporation,
TCI of Kansas, Inc., a Kansas corporation, Wentronics, Inc., a New Mexico
corporation, TCI Cablevision of Utah, Inc., a Utah corporation, TCI Cablevision
of Arizona, an Arizona corporation, Tulsa Cable Television, Inc., an Oklahoma
corporation, TCI American Cable Holdings, L.P., a Colorado limited partnership,
FORM OF KEEP WELL AGREEMENT
[Agent]
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of _________ as from
time to time in effect (the "Credit Agreement") among Premier Media, LLC (the
"Borrower"), the banks referred to therein (the "Banks") and
_____________________, as agent for the Banks (the "Agent"). Tempo Cable, Inc.,
Communications Services, Inc., TCI Cablevision of Oklahoma, Inc., TCI of
Kansas, Inc., Wentronics, Inc., TCI Cablevision of Utah, Inc., TCI Cablevision
of Arizona, Inc., Tulsa Cable Television, Inc. (collectively "TCI"), agree
with the Agent for the benefit of the Banks as follows:
1. Definitions. Capitalized terms used in this letter will
have the same meanings as set forth in the Credit Agreement for purposes of
this letter. In addition, the following terms will have the following
meanings:
(a) "Keep Well Advances" will have the meaning specified in
Section 2.
(b) "'Keep Well Commitment" means $56,000,000.
(c) "'Keep Well Termination Date" means ______.
9.2(b)-1
73
(d) "Keep Well Triggering Event" means (i) a failure by
Borrower to make any principal payment when due under the Credit Agreement or
(ii) if the amounts due under the Credit Agreement are accelerated as a result
of nonpayment or bankruptcy of Borrower.
(e) "Unfunded Keep Well" means at any time the amount of the
Keep Well Commitment less the aggregate amount of all Keep Well Advances
previously made by TCI hereunder.
2. Commitment to Make Keep Well Advances. If a Keep Well Triggering
Event occurs, TCI will, within five Business Days after written request by the
Agent, make an advance of funds (a "Keep Well Advance") to Borrower in an
amount equal to the principal amount then due under the Credit Agreement to the
extent Borrower does not have other funds available for such purpose; provided,
however, that TCI will not at any time be obligated to make any Keep Well
Advance in an amount which exceeds the then Unfunded Keep Well. Each Keep Well
Advance will be made as a loan from TCI to the Borrower and each such loan will
be evidenced by a promissory note of the Borrower payable to TCI, with the
repayment of such loan to be subordinated to amounts owed to the Banks under
the Credit Agreement [pursuant to the terms of the Subordination Agreement].
Promptly after each Keep Well Advance, TCI will deliver to the Agent the
promissory note evidencing such Keep Well Advance, together with such
supporting documentation as may be necessary to establish that such Keep Well
Advance was made and the amount thereof.
3. Termination of Obligation to Make Keep Well Advances. This
Agreement and the obligation of TCI to make Keep Well Advances hereunder will
terminate on the earliest of (a) the advance by TCI of the full amount of the
Keep Well Commitment and the delivery of all documentation relating to the Keep
Well Advances required by Section 2, (b) both (i) the payment in full of all
loans and all other obligations owing to the Banks arising under the Credit
Agreement, and (ii) the termination or expiration of the commitments of the
Banks to make any loans to Borrower under the Credit Agreement, (c) the Keep
Well Termination Date or (d) the date any amendment, renewal, extension or
other modification of the Credit Agreement that could have an adverse effect on
TCI under this letter becomes effective (except with the prior written consent
of TCI).
4. Further Assurances. TCI will execute and deliver to the Banks
such further instruments and take such further action as the Banks may at any
time or times reasonably request in order to carry out the provisions and
intent of this Agreement.
9.2(b)-2
74
5. Notices. All communications and notices hereunder will be in
writing and given as provided in the Credit Agreement, with notices to to the
Agent or Banks to be sent to the places therein specified and with notices to
TCI to be sent as follows:
c/o Tele-Communications, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Copies: Similarly addressed, Attention: Legal Department
6. Substitution Rights. At the request of TCI, the Banks will
release one or more of the entities defined as "TCI" under this letter from any
further obligations hereunder so long as the net worth of the entities
remaining as obligors (including for this purpose any additional TCI affiliates
which agree in writing to be bound as an obligor hereunder) is not less than
$______ (less the aggregate amount of all Keep Well Advances previously made by
TCI). In addition, TCI may transfer its assets so long as after giving effect
to such transfer TCI will continue to have a net worth not less than $______.
The foregoing substitution rights may be evidenced by a new keep well agreement
among the parties hereto and any additional TCI Affiliates, which new agreement
will be on the same or similar terms as this Agreement.
7. General. This Agreement may be executed in any number of
counterparts which together will constitute one and the same instrument and
will be governed by and construed in accordance with the internal laws of the
State of Colorado. Neither this Agreement nor any term hereof may be amended,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the amendment, waiver,
discharge or termination is sought. The headings in this Agreement are for
reference only and will not limit or otherwise affect the meaning hereof. The
provisions of this Agreement will inure to the benefit of Agent, the Banks and
their respective successors and assigns and will be binding upon TCI and its
successors and assigns, except that TCI will not be able to delegate or assign
any of its duties or obligations hereunder (other than as permitted by Section
6) without the prior written consent of the Banks, which will not be withheld
unreasonably.
If the foregoing corresponds with your understanding of our
agreement, kindly sign this letter in the appropriate space below, whereupon
this letter will become a binding agreement between you and each of the
undersigned.
9.2(b)-3
75
TEMPO CABLE, INC.
By:
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
COMMUNICATIONS SERVICES, INC.
By:
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
TCI CABLEVISION OF OKLAHOMA, INC.
By:
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
TCI OF KANSAS, INC.
By:
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
WENTRONICS, INC.
By:
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
TCI CABLEVISION OF UTAH, INC.
By:
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
9.2(b)-4
76
TCI CABLEVISION OF ARIZONA, INC.
By:
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
TULSA CABLE TELEVISION, INC.
By:
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President
The foregoing is accepted:
[AGENT]
By:
--------------------------------
Name:
-----------------------
Title:
-----------------------
9.2(b)-5