EXHIBIT 2.02
PURCHASE AGREEMENT
DATED AS OF FEBRUARY 22, 1999
AMONG
FRONTIERVISION PARTNERS, L.P.,
AND
FVP GP, L.P., the GENERAL PARTNER, and
CERTAIN DIRECT AND INDIRECT LIMITED PARTNERS
OF FRONTIERVISION PARTNERS, L.P.,
as Sellers,
AND
ADELPHIA COMMUNICATIONS CORPORATION,
as Buyer
PURCHASE AGREEMENT
DATED AS OF FEBRUARY 22, 1999
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TABLE OF CONTENTS
Page
ARTICLE 1
CERTAIN DEFINITIONS
1.1 Terms Defined in this Section.............................................................1
1.2 Terms Defined Elsewhere in this Agreement................................................11
1.3 Rules of Construction....................................................................13
ARTICLE 2
SALE AND PURCHASE OF PURCHASED INTERESTS; ASSUMPTION OF
LIABILITIES; ADDITIONAL PURCHASE CONSIDERATION
2.1 Agreement to Sell and Buy................................................................13
2.2 Assumption of Obligations................................................................14
2.3 Additional Purchase Consideration for Purchased Interests................................14
2.4 Escrow Deposit; Registration Rights......................................................15
2.5 Cash Consideration Adjustments...........................................................16
2.6 Payment at Closing.......................................................................20
2.7 Post-Closing Payment of Cash Consideration Adjustments...................................20
2.8 Seller Specific Liabilities..............................................................23
2.9 Additional Cash Consideration Adjustments................................................25
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF FVP
3.1 Organization and Authority of FVP........................................................28
3.2 Authorization and Binding Obligation.....................................................28
3.3 Organization and Ownership of FrontierVision Companies...................................29
3.4 Absence of Conflicting Agreements; Consents..............................................30
3.5 Financial Statements.....................................................................30
3.6 Absence of Undisclosed Liabilities.......................................................31
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Page
3.7 Absence of Certain Changes...............................................................31
3.8 Franchises, Licenses, Material Contracts.................................................32
3.9 Title to and Condition of Real Property and Tangible Personal Property...................32
3.10 Intangibles..............................................................................33
3.11 Information Regarding the Systems........................................................33
3.12 Taxes....................................................................................36
3.13 Employee Plans...........................................................................36
3.14 Environmental Laws.......................................................................37
3.15 Claims and Litigation....................................................................38
3.16 Compliance With Laws.....................................................................38
3.17 Transactions with Affiliates.............................................................38
3.18 Broker...................................................................................39
3.19 Securities Law Matters...................................................................39
3.20 Cure.....................................................................................40
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLERS
4.1 Authority of Sellers; Authorization and Binding Obligation...............................40
4.2 Absence of Conflicting Agreements; Consents..............................................41
4.3 Title to Purchased Interests.............................................................41
4.4 Broker...................................................................................42
4.5 Taxes....................................................................................43
4.6 Securities Law Matters...................................................................43
4.7 Cure.....................................................................................44
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER
5.1 Organization; Authorization and Binding Obligation.......................................44
5.2 Authorization and Binding Obligation.....................................................45
5.3 Absence of Conflicting Agreements; Consents..............................................45
5.4 Capital Structure; ACC Class A Common Stock..............................................46
5.5 Claims and Litigation....................................................................46
5.6 SEC Reports..............................................................................46
5.7 Broker...................................................................................47
5.8 Investment Purpose; Investment Company...................................................47
5.9 Cure.....................................................................................48
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Page
ARTICLE 6
SPECIAL COVENANTS AND AGREEMENTS
6.1 Operation of Business Prior to Closing...................................................48
6.2 Confidentiality; Press Release...........................................................52
6.3 Cooperation; Commercially Reasonable Efforts.............................................53
6.4 Consents.................................................................................53
6.5 HSR Act Filing...........................................................................58
6.6 Buyer's Qualifications and Financing.....................................................59
6.7 Discharge of Debt Documents..............................................................59
6.8 Retention and Access to the FrontierVision Companies' Records............................60
6.9 Employee Matters.........................................................................61
6.10 Tax Matters..............................................................................63
6.11 FrontierVision Name......................................................................64
6.12 Releases.................................................................................65
6.13 Directors and Officers Insurance.........................................................65
6.14 Rate Regulatory Matters..................................................................65
6.15 Distribution by SPCs of Interest in General Partner; Cancellation of SPC Notes...........66
6.16 Cooperation on Buyer SEC Matters.........................................................66
6.17 Stock Consideration Registration Rights Agreement........................................67
6.18 State Cable Systems......................................................................67
6.19 Lien Searches............................................................................68
6.20 Distant Signals; Copyright Matters.......................................................68
ARTICLE 7
CONDITIONS TO OBLIGATIONS OF BUYER AND SELLERS
7.1 Conditions to Obligations of Buyer.......................................................69
7.2 Conditions to Obligations of Sellers.....................................................72
ARTICLE 8
CLOSING AND CLOSING DELIVERIES
8.1 Closing..................................................................................74
8.2 Deliveries by Sellers....................................................................76
8.3 Deliveries by Buyer......................................................................77
ARTICLE 9
TERMINATION
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Page
9.1 Termination by Agreement.................................................................78
9.2 Termination by FVP.......................................................................78
9.3 Termination by Buyer.....................................................................79
9.4 Effect of Termination....................................................................80
9.5 Attorneys' Fees..........................................................................81
ARTICLE 10
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION;
CERTAIN REMEDIES
10.1 Survival.................................................................................81
10.2 Indemnification by Sellers...............................................................81
10.3 Post-Closing Escrow Agreement............................................................82
10.4 Indemnification by Buyer.................................................................83
10.5 Certain Limitations on Indemnification Obligations.......................................84
10.6 Procedure for Indemnification............................................................87
10.7 Treatment of Indemnification Payments....................................................88
ARTICLE 11
MISCELLANEOUS
11.1 Fees and Expenses........................................................................88
11.2 Notices..................................................................................89
11.3 Benefit and Binding Effect...............................................................90
11.4 Further Assurances ......................................................................90
11.5 GOVERNING LAW............................................................................90
11.6 Entire Agreement.........................................................................91
11.7 Amendments; Waiver of Compliance; Consents...............................................91
11.8 Consent and Agreements of Sellers........................................................91
11.9 Counterparts.............................................................................92
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FRONTIERVISION'S DISCLOSURE SCHEDULE
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Section Description
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Section 1.1 Excluded Assets; Seasonal Subscribers; Prepayment Penalties
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Section 2.5 Capital Expenditures Budget; Carriage Adjustments
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Section 3.3 Ownership of FrontierVision Companies
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Section 3.4 FrontierVision Conflicts; Consents
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Section 3.5 Financial Statements
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Section 3.6 FrontierVision Liabilities
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Section 3.7 Certain Developments
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Section 3.8 Franchises, Licenses, Contracts
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Section 3.9 Real Property and Tangible Personal Property; Encumbrances
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Section 3.10 Intangibles
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Section 3.11 Systems Information
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Section 3.12 Tax Matters
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Section 3.13 Employee Plans
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Section 3.14 Environmental Matters
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Section 3.15 Claims and Litigation
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Section 3.16 Compliance with Laws
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Section 3.17 Transactions with Affiliates
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Section 3.18 Broker
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Section 4.2 Sellers Conflicts; Consents
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Section 4.3 Title to Purchased Interests
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Section 6.1 Post-Signing Covenants
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Section 6.4 Franchise Rebuild/Upgrade Requirements
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TABLE OF EXHIBITS
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Exhibit Description
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Exhibit A Form of Noncompetition Agreement
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Exhibit B Form of Post-Closing Escrow Agreement
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Exhibit C Form of Opinion of FVP's Counsel
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Exhibit D Form of Opinion of Buyer's Counsel
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Exhibit E Addresses of Sellers
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Exhibit F Closing Net Liabilities Example Calculation
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Exhibit G Form of Seller Release
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Exhibit H Form of Management Release
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Exhibit I Post-Closing Escrow Agreement Release Provisions
Example
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PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "Agreement") is entered into as of
February 22, 1999, by and among FrontierVision Partners, L.P., a Delaware
limited partnership ("FVP"), FVP GP, L.P., a Delaware limited partnership (the
"General Partner"), each party named as a "Limited Partner Seller" on the
signatures pages hereto, each party named as an "SPC Seller" on the signature
pages hereto, and Adelphia Communications Corporation, a Delaware corporation
("Buyer").
RECITALS
The General Partner owns all of the general partnership interests in
FVP and certain Subordinated Notes issued by FVP. The Limited Partner Sellers
are each limited partners of FVP and own limited partnership interests in FVP
and certain Subordinated Notes issued by FVP. Each SPC Seller owns all of the
capital stock of an SPC, which in turn is a limited partner of FVP and owns a
limited partnership interest in FVP and certain Subordinated Notes issued by
FVP. The SPC Sellers also hold certain Subordinated Notes issued by FVP.
Collectively, the Limited Partner Sellers and the SPCs own all of the limited
partnership interests in FVP, and collectively the General Partner, the Limited
Partner Sellers, the SPC Sellers and the SPCs own all of the Subordinated Notes
issued by FVP. Buyer desires to acquire from the General Partner and the Limited
Partner Sellers all of their partnership interests in FVP and Subordinated Notes
issued by FVP and desires to acquire from the SPC Sellers all of their stock in
the SPCs and Subordinated Notes issued by FVP. The General Partner, Limited
Partner Sellers and SPC Sellers (collectively, the "Sellers" and individually a
"Seller") desire to sell to Buyer all of their partnership interests in FVP or
stock in the SPCs, as described above and all of their Subordinated Notes issued
by FVP as described above, in each case for the consideration and on the terms
and conditions set forth in this Agreement.
AGREEMENTS
In consideration of the above recitals and of the mutual agreements and
covenants contained in this Agreement, the parties to this Agreement, intending
to be bound legally, agree as follows:
ARTICLE 1
CERTAIN DEFINITIONS
1.1 Terms Defined in this Section.
The following terms, as used in this Agreement, have the meanings set
forth in this Section:
"ACC Class A Common Stock" means the Class A Common Stock, par value
$.01 per share, of Buyer that is authorized and designated as such in Buyer's
Certificate of Incorporation as in effect on the date of this Agreement.
"Accounts Receivable" means all rights of the FrontierVision Companies
to payment for goods or services provided prior to the Adjustment Time,
including rights to payment for cable services to customers of the Systems, the
sale of advertising, the leasing of channels, and other goods and services and
rentals.
"Adjustment Time" means (A) with respect to Adjustment Assets and
Adjustment Liabilities and other items that primarily relate to the
FrontierVision Companies as a whole, 11:59 p.m., local Denver time, on the day
immediately preceding the Closing Date, and (B) with respect to Adjustment
Assets and Adjustment Liabilities and other items that primarily relate to a
particular System, 11:59 p.m. local time for that System, on the day immediately
preceding the Closing Date.
"Affiliate" means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries controls, is
controlled by, or is under common control with the specified Person.
"Assets" means all of the tangible and intangible assets that are
owned, leased or held by the FrontierVision Companies and that are used in
connection with the conduct of the business or operations of the Systems other
than the Excluded Assets and less any such Assets that are sold, transferred, or
otherwise conveyed by the FrontierVision Companies to third Persons prior to the
Closing in accordance with the provisions of this Agreement, provided that with
respect to any assets that are leased by the FrontierVision Companies or
otherwise not owned by the FrontierVision Companies, "Assets" includes only the
interest, title and rights in such assets held by the FrontierVision Companies.
"Basic Subscriber" means, with respect to any System as of any date,
each residential customer or resident of a multiple dwelling unit served by such
System who subscribes to at least broadcast basic service (either alone or in
combination with any other service and including subscribers who receive
regularly offered discounts), and who has rendered payment for one month's
service at such System's regular basic monthly subscription rate without
discount (excluding regularly offered discounts) and who does not have more than
$10.00 (excluding late charges and fees and amounts subject to a bona fide
dispute) that is two months or more past due from and including the last day of
the period to which any outstanding ▇▇▇▇ relates.
"Bulk Subscriber" means, with respect to any System, any commercial
establishment (e.g., any hotel or motel) or multiple dwelling unit establishment
(e.g., any apartment, condominium or cooperative building) served by such System
that subscribes to at least broadcast basic service (either alone or in
combination with any other service), and who has rendered payment for one
month's service at such customer's regular basic monthly subscription rate and
who does not have more than $10.00 (excluding late charges and fees and amounts
subject to a bona fide dispute) that is two months or more past due from and
including the last day of the period to which any outstanding ▇▇▇▇ relates.
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"Cable Act" means Title VI of the Communications Act of 1934, as
amended, 47 U.S.C. Section 151 et seq., and all other provisions of the Cable
Communications Policy Act of 1984, the Cable Television Consumer Protection and
Competition Act of 1992, and the provisions of the Telecommunications Act of
1996 amending Title VI of the Communications Act of 1934, in each case as
amended and in effect from time to time.
"Capital Stock" means any and all shares, interests, or other
equivalent interests (however designated) in the equity of any Person, including
capital stock, partnership interests, and membership interests, and including
any rights, options or warrants with respect thereto.
"Charter Documents" means the articles or certificate of incorporation,
bylaws, certificate of limited partnership, partnership agreement, certificate
of formation, limited liability company operating agreement, and all other
organizational documents of any Person other than an individual.
"Closing" means the consummation of the purchase and sale of the
Purchased Interests pursuant to this Agreement in accordance with the provisions
of Article 8.
"Closing Date" means the date on which the Closing occurs.
"Code" means the Internal Revenue Code of 1986, as amended, and the
Treasury Regulations promulgated thereunder, as amended and in effect from time
to time.
"Consents" means the consents, permits, approvals and authorizations of
Governmental Authorities and other Persons necessary to transfer the Purchased
Interests to Buyer or otherwise to consummate the transactions contemplated by
this Agreement.
"Contracts" means all leases, easements, rights-of-way, rights of
entry, programming agreements, pole attachment and conduit agreements, customer
agreements, and other agreements, written or oral (including any amendments and
other modifications thereto) to which any FrontierVision Company is a party or
which are binding upon any FrontierVision Company and that relate to any of the
Assets or the business or operations of any of the Systems or any of the
FrontierVision Companies and (A) which are in effect on the date hereof, or (B)
which are entered into by any FrontierVision Company between the date hereof and
the Closing Date.
"Copyright Act" means the Copyright Act of 1976, as amended and in
effect from time to time.
"Credit Agreement" means the Second Amended and Restated Credit
Agreement dated as of December 19, 1997 among FrontierVision Operating Partners,
L.P., as Borrower, The Chase Manhattan Bank, as Administrative Agent, ▇.▇.
▇▇▇▇▇▇ Securities Inc., as Syndication Agent, CIBC Inc., as Documentation Agent,
and each of the other Lenders party thereto, as amended and in effect from time
to time.
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"Debt Documents" means each of the loan or credit agreements, notes,
bonds, indentures and other agreements and instruments pursuant to which any
indebtedness for borrowed money or any capital lease obligation of any
FrontierVision Company (and any guarantee by a FrontierVision Company of
indebtedness for borrowed money or any capitalized lease obligation of another
Person that is not a FrontierVision Company) in an aggregate principal amount in
excess of $250,000 is outstanding or committed to.
"Deposit Escrow Agreement" means the Escrow Agreement executed
concurrently herewith by FVP, Buyer and the Escrow Agent.
"Deposit Registration Rights Agreement" means the Registration Rights
Agreement between Buyer and FVP, relating to the registration of the Escrow
Registrable Securities constituting the Deposit Escrow Property, which agreement
shall be executed on the date of this Agreement.
"Employee Plan" means any pension, retirement, profit-sharing, deferred
compensation, vacation, severance, bonus, incentive, medical, vision, dental,
disability, life insurance or any other employee benefit plan as defined in
Section 3(3) of ERISA to which any FrontierVision Company or any ERISA Affiliate
of any FrontierVision Company contributes or which any FrontierVision Company or
any such ERISA Affiliate sponsors or maintains, or by which any FrontierVision
Company or any such ERISA Affiliate is otherwise bound.
"Encumbrances" means any pledge, claim, mortgage, lien, charge,
encumbrance, or security interest of any kind or nature whatsoever.
Notwithstanding the foregoing, "Encumbrances" does not include any restriction
on transfer or assignment.
"Environmental Claim" means any written claim or notice or any
proceeding before a Governmental Authority arising under or pertaining to any
Environmental Law or Hazardous Substance.
"Environmental Law" means any Legal Requirement pertaining to land use,
air, soil, surface water, groundwater (including the protection, cleanup,
removal, remediation or damage thereof), or to the protection of public health
and safety, or any other environmental matter, including the following laws as
amended and in effect from time to time: (A) Clean Air Act (42 U.S.C. ss. 7401,
et seq.); (B) Clean Water Act (33 U.S.C. ss. 1251, et seq.); (C) Resource
Conservation and Recovery Act (42 U.S.C. ss. 6901, et seq.); (D) Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. ss. 9601, et
seq.); (E) Safe Drinking Water Act (42 U.S.C. 300f, et seq.); and (F) Toxic
Substances Control Act (15 U.S.C. ss. 2601, et seq.).
"Equivalent Subscribers" means, with respect to any System as of any
date, the sum of: (A) the number of Basic Subscribers served by such System as
of such date; (B) the number of Basic Subscribers represented by the Bulk
Subscribers served by such System as of such date, which number shall be
calculated for each class of service provided by such System by dividing (1) the
monthly ▇▇▇▇▇▇▇▇ attributable to such System's Bulk Subscribers for each such
class of service provided by such
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System for the calendar month immediately preceding the date on which such
calculation is made, by (2) the full, non-discounted monthly rate charged by
such System for such class of service, respectively (excluding pass-through
charges for sales taxes, line-itemized franchise fees, fees charged by the FCC
and other similar line-itemized charges); and (C) the number of equivalent Basic
Subscribers represented by the "Seasonal Subscribers" of the FrontierVision
Companies as of the date of determination, which number will be determined as
set forth in Section 1.1 of FrontierVision's Disclosure Schedule. For purposes
of the foregoing, monthly ▇▇▇▇▇▇▇▇ shall exclude ▇▇▇▇▇▇▇▇ for a la carte or
digital service tiers and for premium services, pass-through charges for sales
taxes, line- itemized franchise fees, fees charged by the FCC and other similar
line-itemized charges, and nonrecurring charges or credits which include those
relating to installation, connection, relocation and disconnection fees and
miscellaneous rental charges for equipment such as remote control devices and
converters.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rules and regulations thereunder, as amended and in effect from
time to time.
"ERISA Affiliate" means a trade or business affiliated within the
meaning of Sections 414(b), (c) or (m) of the Code.
"Escrow Agent" means Bank of Montreal Trust Company.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder, as in effect
from time to time.
"Excluded Assets" means the assets listed as "Excluded Assets" in
Section 1.1 of FrontierVision's Disclosure Schedule.
"FCC" means the Federal Communications Commission.
"FCC Regulations" means the rules, regulations and published policies
of the FCC promulgated by the FCC with respect to the Cable Act, as in effect
from time to time.
"Franchise Area" means any geographic area in which a FrontierVision
Company is authorized to provide cable television service pursuant to a
Franchise or provides cable television service in which a Franchise is not
required pursuant to applicable Legal Requirements.
"Franchise" means any cable television franchise and related
agreements, ordinances, permits or other authorizations issued or granted to a
FrontierVision Company by any Franchising Authority.
"Franchising Authorities" means all Governmental Authorities that have
issued or granted any Franchises relating to the operation of a System.
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"FrontierVision Companies" means FVP and each of the other entities
listed as "FrontierVision Companies" in Section 3.3 of FrontierVision's
Disclosure Schedule, each of which may be referred to herein individually as a
"FrontierVision Company." None of Main Security Surveillance, Inc., The Maine
InternetWorks, Inc., or Landmark NetAccess, Inc. is a "FrontierVision Company"
as used in this Agreement, except that for the limited purposes of determining
"Adjustment Assets" and "Adjustment Liabilities" of the FrontierVision Companies
in accordance with Section 2.5, Main Security Surveillance, Inc. shall be
treated as a FrontierVision Company.
"FrontierVision's Disclosure Schedule" means FrontierVision's
Disclosure Schedule referred to in this Agreement and delivered to Buyer by FVP
and Sellers concurrently with the execution of this Agreement.
"FrontierVision Inc." means FrontierVision Inc., a Delaware
corporation.
"FrontierVision Liabilities" means, with respect to the FrontierVision
Companies on a consolidated basis, without duplication, all liabilities of the
FrontierVision Companies (as defined and determined in accordance with GAAP),
including, without limitation the following: (A) all obligations of the
FrontierVision Companies for borrowed money; (B) all obligations of the
FrontierVision Companies evidenced by bonds, debentures, notes, indentures,
mortgages, or similar instruments; and (C) all capital lease obligations of the
FrontierVision Companies. Notwithstanding the foregoing, "FrontierVision
Liabilities" shall not include: (A) any amounts in respect of performance bonds
issued by any of the FrontierVision Companies in the ordinary course of
business; (B) any amounts in the nature of prepayment penalties or premiums
resulting from the consummation of the transactions contemplated by this
Agreement or satisfaction of the Indentures, which prepayment penalties and
premiums with respect to the Debt Documents are set forth in Section 1.1 of
FrontierVision's Disclosure Schedule; and (C) the Subordinated Notes. No
liability that would otherwise be included within the meaning of "FrontierVision
Liability" as defined above shall be excluded from the definition solely
because: (A) the liability relates to an item or matter that constitutes a
Permitted Encumbrance; or (B) the liability relates to an item or matter that is
disclosed to Buyer in this Agreement or FrontierVision's Disclosure Schedule.
"GAAP" means generally accepted accounting principles as in effect in
the United States from time to time.
"General Partnership Interest" means the general partnership interest
in FVP held by the General Partner.
"Governmental Authority" means any federal, state, or local
governmental authority, including any court or administrative or regulatory
agency.
"Hazardous Substance" means any pollutant, contaminant, hazardous or
toxic substance, material, constituent or waste or any pollutant or any release
thereof that is labeled or regulated as such
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by any Governmental Authority pursuant to an Environmental Law, including,
without limitation, petroleum or petroleum compounds, radioactive materials,
asbestos or any asbestos-containing material, or polychlorinated biphenyls.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, and the regulations promulgated by the Federal Trade Commission with
respect thereto, as amended and in effect from time to time.
"Indentures" means: (A) the Indenture dated as of October 7, 1996,
between FrontierVision Operating Partners, L.P. and FrontierVision Capital
Corporation, as Issuers, and U.S. Bank National Association, as Trustee,
relating to the 11% Senior Subordinated Notes due 2006 (the "1996 Indenture");
(B) the Indenture dated as of September 19, 1997 between FrontierVision
Holdings, L.P. and FrontierVision Holdings Capital Corporation, as Issuers, and
U.S. Bank National Association, as Trustee, relating to the 11 7/8% Senior
Discount Notes due 2007 (the "1997 Indenture"); and (C) the Indenture dated as
of December 9, 1998 between FrontierVision Holdings, L.P. and FrontierVision
Holdings Capital II Corporation, as Issuers, and U.S. Bank National Association,
as Trustee, relating to the 11 7/8% Senior Discount Notes due 2007, Series B
(the "1998 Indenture"), in each case as amended and in effect from time to time,
each of which may be referred to herein individually as an "Indenture."
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, patents, permits, proprietary information, technical
information and data, machinery and equipment warranties, and other similar
intangible property rights and interests issued to or owned by any of the
FrontierVision Companies.
"Legal Requirements" means applicable common law and any applicable
statute, ordinance, code or other law, rule, regulation, order, technical or
other standard, requirement or procedure enacted, adopted, promulgated or
applied by any Governmental Authority, including any applicable decree or
judgment of a court of competent jurisdiction, all as in effect from time to
time.
"Licenses" means all domestic satellite, business radio and other FCC
licenses, and all other licenses, authorizations and permits issued by any
Governmental Authority that is held by a FrontierVision Company in the business
and operations of the Systems, excluding the Franchises.
"Limited Partnership Interests" means the limited partnership interests
in FVP held by the Limited Partner Sellers.
"Loss" means any claim, loss, liability, damages, penalties, costs and
expenses (excluding any and all consequential, incidental and special damages).
"Management Release" means the "Agreement of Release" substantially in
the form of Exhibit H to be delivered to Buyer by the Persons designated on
Exhibit H at the Closing.
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"Material Contract" means the Debt Documents, the Material Leases, and
any other Contract that requires payments by one of the FrontierVision Companies
(or entitles one of the FrontierVision Companies to payments) in the aggregate
of more than $100,000 during the current term of such Contract, but "Material
Contract" specifically excludes all subscription agreements with customers and
specifically excludes all pole attachment and conduit agreements.
"Material Lease" means all headend, tower and microwave site leases,
fiber leases, and any other lease designated as a "Material Lease" in Section
3.9 of FrontierVision's Disclosure Schedule.
"Noncompetition Agreement" means either of the Noncompetition
Agreements between Buyer and each of the two Persons designated on Exhibit A,
substantially in the form of Exhibit A with respect to such Person, which
agreements shall be executed and delivered on the Closing Date.
"Permitted Encumbrances" means each of the following: (A) liens for
current taxes and other governmental charges that are not yet delinquent; (B)
liens for taxes, assessments, governmental charges or levies, or claims the
non-payment of which is being diligently contested in good faith or liens
arising out of judgments or awards against the FrontierVision Companies with
respect to which at the time there shall be a prosecution for appeal or there
shall be a proceeding to review or the time limit has not yet run for such an
appeal or review with respect to such judgment or award; provided that with
respect to the foregoing liens in this clause (B), adequate reserves shall have
been set aside on the FrontierVision Companies' books, and no foreclosure,
distraint, sale or similar proceedings shall have been commenced with respect
thereto that remain unstayed for a period of 60 days after their commencement;
(C) liens of carriers, warehousemen, mechanics, laborers, and materialmen and
other similar statutory liens incurred in the ordinary course of business for
sums not yet due or being diligently contested in good faith, and for which
adequate reserves have been set aside on the FrontierVision Companies' books;
(D) liens incurred in the ordinary course of business in connection with
worker's compensation and unemployment insurance or similar laws; (E) statutory
landlords' liens; (F) with respect to the Real Property, leases, easements,
rights to access, rights-of-way, mineral rights or other similar reservations
and restrictions and defects of title which are either of record or set forth in
FrontierVision's Disclosure Schedule or in the deeds or leases to such Real
Property or which (except in the case of owned Real Property, and which), either
individually or in the aggregate, do not materially and adversely affect or
interfere with the ownership or use or marketability of any such Real Property
in the business and operations of the Systems as presently conducted; and (G)
any other claims or encumbrances that are described in Section 3.9 of
FrontierVision's Disclosure Schedule and that relate to Assumed Liabilities that
are not discharged in full at the Closing or that will be removed prior to or at
Closing.
"Person" means an individual, corporation, association, partnership,
joint venture, trust, estate, limited liability company, limited liability
partnership, Governmental Authority, or other entity or organization.
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"Post-Closing Escrow Agreement" means the Post-Closing Escrow Agreement
among Buyer, Sellers, and the Escrow Agent, substantially in the form of Exhibit
B but subject to Section 10.3, which agreement shall be executed and delivered
on the Closing Date.
"Purchased Interests" means the General Partnership Interest, the
Limited Partnership Interests, the SPC Stock, the Subordinated Notes held by the
General Partner, the Subordinated Notes held by the Limited Partner Sellers, and
the Subordinated Notes held by the SPC Sellers.
"Rate Regulatory Matter" shall mean, with respect to any cable
television system, any matter or any effect on such system or the business or
operations thereof, arising out of or related to the Cable Act, any FCC
Regulations heretofore adopted thereunder, or any other present or future Legal
Requirement dealing with, limiting or affecting the rates which can be charged
by cable television systems to their customers (whether for programming,
equipment, installation, service or otherwise).
"Real Property" means all of the fee and leasehold estates and, to the
extent of the interest, title, and rights of the FrontierVision Companies in the
following, buildings and other improvements thereon, easements, licenses, rights
to access, rights-of-way, and other real property interests that are owned or
held by any of the FrontierVision Companies and used or held for use in the
business or operations of the Systems, plus such additions thereto and less such
deletions therefrom arising between the date hereof and the Closing Date in
accordance with this Agreement.
"SEC" means the U.S. Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder, as in effect from time
to time.
"Seller Release" means the "Agreement of Release" substantially in the
form of Exhibit G to be delivered to Buyer by each Seller at the Closing.
"SPC" means any corporation that is a limited partner of FVP, the
Capital Stock of which corporation is being sold to Buyer pursuant to this
Agreement.
"SPC Notes" means certain promissory notes issued by certain of the
SPCs to the SPC Seller which owns all of the Capital Stock of such SPC.
"SPC Stock" means the Capital Stock of the SPCs held by the SPC
Sellers.
"Stock Consideration Registration Rights Agreement" means the
Registration Rights Agreement among Buyer and Sellers, relating to the
registration of the Stock Consideration Registrable Securities constituting the
Stock Consideration, which agreement shall be executed on the date of this
Agreement.
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"Subordinated Notes" means certain Subordinated Notes issued by FVP to
the General Partner, the Limited Partner Sellers, the SPC Sellers, and the SPCs
in connection with their investments in FVP.
"Subsidiary" means, with respect to any Person, any other Person of
which the outstanding voting Capital Stock sufficient to elect at least a
majority of its board of directors or other governing body (or, if there are no
such voting interests, of which 50% or more of the Capital Stock) is owned
(beneficially or otherwise) directly or indirectly by such first Person or any
Subsidiary thereof.
"Systems" means the cable television systems owned and operated by any
FrontierVision Company or any combination of any of them, each of which may be
referred to herein individually as a "System."
"Tangible Personal Property" means all of the equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant,
converters, spare parts, and other tangible personal property which are owned or
leased by any of the FrontierVision Companies and used or held for use in the
conduct of the business or operations of the Systems, plus such additions
thereto and less such deletions therefrom arising between the date hereof and
the Closing Date in accordance with this Agreement.
"Tax" means any federal, state, local, or foreign income, gross
receipts, windfall profits, severance, property, production, sales, use,
license, excise, franchise, capital, transfer, employment, withholding, or other
tax or governmental assessment, together with any interest, additions, or
penalties with respect thereto and any interest in respect of such additions or
penalties.
"Tax Return" means any tax return, declaration of estimated tax, tax
report or other tax statement, or any other similar filing required to be
submitted to any Governmental Authority with respect to any Tax.
"Transaction Documents" means this Agreement, the Deposit Escrow
Agreement, the Post- Closing Escrow Agreement, the Noncompetition Agreements,
the Deposit Registration Rights Agreement, the Stock Consideration Registration
Rights Agreement, the Seller Releases, the Management Releases, and the other
documents, agreements, certificates and other instruments to be executed,
delivered and performed by the parties in connection with the transactions
contemplated by this Agreement.
"Upset Date" means the one year anniversary of the date of this
Agreement, as such date may be extended pursuant to the provisions of this
Agreement, including, without limitation, Sections 8.1, 9.2 and 9.3.
"Weighted Average Trading Price" means the price determined by a
fraction, the numerator of which is the sum of the results obtained by
multiplying, for each of the trading days in the period of measurement, (A) the
total number of shares of ACC Class A Common Stock or other security traded on
each of said trading days on the principal U.S. trading market (whether stock
exchange, the
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NASDAQ National Market System, or otherwise) on which such stock or other
security is traded, by (B) the closing sale price of such stock or other
security (as published in the Northeast Edition of The Wall Street Journal) for
each of said trading days, and the denominator of which is the total number of
shares of such stock or other security traded on the trading days in the period
of measurement.
1.2 Terms Defined Elsewhere in this Agreement.
For purposes of this Agreement, the following terms have the meanings
set forth in the sections indicated:
Term Section
120-Day Period Section 7.1(d)(1)(A)
Adjustment Assets Section 2.5(b)(1)
Adjustment Liabilities Section 2.5(b)(2)
Agent Section 11.8
Assumed Employees Section 6.9(a)
Assumed Liabilities Section 2.2
Audited Financial Statements Section 3.5(a)
Buyer First Paragraph
Buyer's 10-K Section 5.6(a)
Buyer's 10-Q Section 5.6(a)
Cash Consideration Section 2.3(a)(1)
Claimant Section
Closing Cash Payment Section 2.6
Closing Equivalent Subscribers Section 2.5(a)
Closing Net Liabilities Section 2.5(b)
Deposit Escrow Property Section 2.4(a)
Designated Material Consent Franchise Section 6.4(b)
Designated Non-Material Consent Section 6.4(b)
Franchise
Escrow Registrable Securities Section 2.4(b)
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Financial Statements Section
Final Closing Statement Section 2.7(b)
FVP First Paragraph
GECC Section 6.7(c)
GECC Facility Consent Section 6.7(c)
General Partner First Paragraph
Indemnifying Party Section
Limited Partner Seller First Paragraph
Material Consent Franchise Section 7.1(d)(1)
Material Renewal Franchise Section 6.4(c)
Net Closing Cash Payment Section 2.7(a)
Post-Closing Adjustments Escrow Section 2.7(a)
Post-Closing Adjustment Funds Section 2.7(a)
Post-Closing Indemnity Escrow Section 10.3
Post-Closing Indemnity Property Section 10.3
Preliminary Closing Statement Section 2.6
Purchase Consideration Section 2.3(a)
Renewal Franchises Section 6.1(a)(1)
Renewal Window Section 6.4(d)
Seller Recitals
SPC Seller First Paragraph
Stock Consideration Section 2.3(a)(2)
Stock Consideration Registrable Section 6.17
Securities
Unaudited Financial Statements Section 3.5(a)
Warn Act Section 9(a)
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1.3 Rules of Construction.
Words used in this Agreement, regardless of the gender and number
specifically used, shall be deemed and construed to include any other gender and
any other number as the context requires. As used in this Agreement, the word
"including" is not limiting, and the word "or" is not exclusive. Except as
specifically otherwise provided in this Agreement in a particular instance, a
reference to a Section is a reference to a Section of this Agreement, a
reference to an Exhibit is a reference to an Exhibit to this Agreement, and the
terms "hereof," "herein," and other like terms refer to this Agreement as a
whole, including the Disclosure Schedules and the Exhibits to this Agreement,
and not solely to any particular part of this Agreement. The descriptive
headings in this Agreement are inserted for convenience of reference only and
are not intended to be part of or to affect the meaning or interpretation of
this Agreement.
ARTICLE 2
SALE AND PURCHASE OF PURCHASED INTERESTS;
ASSUMPTION OF LIABILITIES; ADDITIONAL PURCHASE
CONSIDERATION
2.1 Agreement to Sell and Buy.
Subject to the terms and conditions set forth in this Agreement, each
Seller hereby agrees to sell, transfer, and deliver to Buyer at the Closing, and
Buyer hereby agrees to purchase at the Closing, the Purchased Interests held by
such Seller, free and clear of all Encumbrances.
2.2 Assumption of Obligations.
In consideration of the sale of the Purchased Interests, concurrently
with the Closing, Buyer shall assume all obligations and liabilities associated
with the Purchased Interests purchased by Buyer, whether such obligations and
liabilities arose prior to the Closing or arise after the Closing, including
(and notwithstanding any provision of applicable partnership law to the
contrary) all obligations and liabilities arising out of the ownership of the
General Partnership Interest (collectively, the "Assumed Liabilities"). After
the Closing Buyer shall cause the FrontierVision Companies to discharge all of
their obligations and liabilities, whether such obligations and liabilities
arose prior to the Closing or arise after the Closing, including all obligations
and liabilities relating to the business and operations of the Systems; provided
that Buyer shall not be deemed to have assumed directly any obligations and
liabilities of the FrontierVision Companies vis-a-vis any Person that is not a
party to this Agreement or entitled to indemnification under this Agreement. In
addition, nothing in this Section 2.2 shall impair Buyer's rights under Sections
2.5, 2.8 and 2.9 or Buyer's indemnification rights under Article 10 after the
Closing (subject in each case to the limitations provided therein).
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2.3 Additional Purchase Consideration for Purchased Interests.
(a) In addition to assuming the Assumed Liabilities,
Buyer shall pay and deliver to Sellers as consideration for the sale of the
Purchased Interests (the "Purchase Consideration"):
(1) A cash payment equal to Six Hundred Million
Dollars ($600,000,000),
subject to adjustment in accordance with this Article 2 (the "Cash
Consideration");
(2) 7,000,000 shares of ACC Class A Common
Stock, together with the kind
and amounts of securities, cash and other property that Sellers would have held
or been entitled to receive as of the Closing (whether resulting from a stock
split, subdivision, combination or reclassification of the outstanding capital
stock of Buyer, or in redemption thereof, or as a result of any merger,
consolidation, acquisition or other exchange of assets to which Buyer may be a
party or otherwise) had Sellers held such shares of ACC Class A Common Stock as
of the date of this Agreement and retained such shares, and all securities, cash
and other property distributed or issued with respect to or in substitution or
exchange therefor, during the period from the date of this Agreement through
(and including) the Closing Date (collectively, the "Stock Consideration"). To
the extent Adelphia pays cash to the Sellers pursuant to Section 8.1(a)(4) in
lieu of delivering the ACC Class A Common Stock (or other securities, cash and
property described in the preceding sentence), the term "Stock Consideration"
shall include all such cash as the context requires.
(b) The Cash Consideration (and any adjustments thereto)
and the Stock Consideration shall be allocated among the Purchased Interests and
the Sellers as determined by the Sellers and delivered to Buyer in writing at
least two days prior to the Closing. Not more than 44% of the aggregate Purchase
Consideration shall be allocated to the purchase and sale of the Purchased
Interests held by the SPC Sellers.
2.4 Escrow Deposit; Registration Rights.
(a) Deposit of ACC Class A Shares. Simultaneously with
the execution of this Agreement, and as a material inducement to FVP and Sellers
to enter into this Agreement, Buyer shall cause 1,000,000 shares of ACC Class A
Common Stock to be issued in the name of FVP and delivered to the Escrow Agent
to be held in escrow pursuant to the terms of the Deposit Escrow Agreement,
which is to be executed concurrently herewith by Buyer, FVP, and the Escrow
Agent. The "Deposit Escrow Property" means, collectively, the 1,000,000 shares
of ACC Class A Common Stock deposited pursuant to this Section 2.4(a), together
with the kind and amounts of securities, cash and other property that Sellers
would have held or been entitled to receive as of the date the Deposit Escrow
Property is released in accordance with this Agreement (whether resulting from a
stock split, subdivision, combination or reclassification of the outstanding
capital stock of Buyer, or in redemption thereof, or as a result of any merger,
consolidation, acquisition or other exchange of assets to which Buyer may be a
party or otherwise) had Sellers held such shares of ACC Class A Common Stock as
of the date of this Agreement and retained such shares, and all securities, cash
and other property distributed or issued
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with respect to or in substitution or exchange therefor, during the period from
the date of this Agreement through (and including) the date the Deposit Escrow
Property is released in accordance with this Agreement, and also includes, to
the extent relevant, all cash deposited with the Escrow Agent pursuant to
Section 2.4(b) and all earnings thereon.
(b) Deposit Registration Rights Agreement. Simultaneously
with the execution of this Agreement, and as a material inducement to FVP and
Sellers to enter into this Agreement, Buyer shall execute and deliver the
Deposit Registration Rights Agreement, pursuant to which Buyer will grant FVP
certain rights as provided therein in respect of the shares of ACC Class A
Common Stock or other securities constituting the Deposit Escrow Property (the
"Escrow Registrable Securities"). As soon as practicable after the execution of
this Agreement, Buyer shall file an appropriate registration statement under the
Securities Act covering the registration of all of such Escrow Registrable
Securities. Buyer shall then use commercially reasonable efforts to cause such
registration statement to be declared effective under the Securities Act as soon
as practicable thereafter and kept effective in accordance with the provisions
of the Deposit Registration Rights Agreement, and Buyer shall otherwise comply
with the provisions of the Deposit Registration Rights Agreement. If a
registration statement covering the registration of all of such Escrow
Registrable Securities has not been declared effective under the Securities Act
(and such registration statement shall not be subject to any stop order or
proceeding seeking a stop order) on the earlier of (1) the date FVP terminates
this Agreement in accordance with Section 9.2 as a result of a willful breach of
this Agreement by Buyer (including a willful breach as described in the first
sentence of Section 9.4(c)), and (2) May 31, 1999, Buyer shall deposit with the
Escrow Agent, on the next business day, cash in an amount equal to the aggregate
fair market value of the shares of ACC Class A Common Stock or other securities
constituting the Deposit Escrow Property (computed on the basis of the Weighted
Average Trading Price of such shares of ACC Class A Common Stock or other
securities for the ten day trading period beginning on the thirteenth trading
day prior to the date on which Buyer deposits such cash amount pursuant to this
sentence). Upon such payment by Buyer to the Escrow Agent, all of such shares of
ACC Class A Common Stock or other securities constituting the Deposit Escrow
Property shall be released and paid over to Buyer but all cash funds, if any,
included in the Deposit Escrow Property and previously held by the Escrow Agent
shall be retained by the Escrow Agent as part of the Deposit Escrow Property.
(c) Release of Deposit Escrow Property. At the Closing,
all of the Deposit Escrow Property shall be released from escrow and returned to
Buyer. Upon termination of this Agreement prior to the Closing in accordance
with Article 9, all of the Deposit Escrow Property shall be released from escrow
and returned to Buyer except as provided in the following sentence. If FVP
terminates this Agreement in accordance with Section 9.2 as a result of a
willful breach of this Agreement by Buyer (including a willful breach as
described in the first sentence of Section 9.4(c)), all of the Deposit Escrow
Property shall be released from escrow and paid over to FVP on the next business
day, provided that FVP shall be entitled to receive all cash if the condition
specified in the last sentence of Section 2.4(b) is applicable, and FVP shall be
entitled to enforce this Section 2.4 against Buyer notwithstanding any provision
to the contrary in Section 9.4(c). On the day of the occurrence of any of the
foregoing events, FVP and Buyer will execute and deliver to the Escrow Agent
joint written instructions containing
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appropriate disbursement instructions consistent with this Section 2.4(c) and
the Deposit Escrow Agreement.
2.5 Cash Consideration Adjustments.
(a) Closing Equivalent Subscribers. The Cash
Consideration shall be decreased by the number, if any, by which the number of
Closing Equivalent Subscribers is less than 700,000, multiplied by $2,928. For
purposes of this Agreement, "Closing Equivalent Subscribers" means the total
number of Equivalent Subscribers for all of the Systems as of the Adjustment
Time; provided, however, that if the systems exchange transactions between the
FrontierVision Companies and InterMedia Partners of Kentucky, L.P. referred to
in Section 6.1 of FrontierVision's Disclosure Schedule are consummated prior to
the Closing hereunder, none of the subscribers served by the InterMedia systems
acquired in such transactions shall be included in Closing Equivalent
Subscribers but the number of Closing Equivalent Subscribers represented by the
subscribers served by the Systems sold to InterMedia (determined as if the
effective time of the consummation of the respective InterMedia transactions
were the Adjustment Time hereunder) shall be included in Closing Equivalent
Subscribers; and provided further, however, that the provisions of Section
6.4(e) shall apply to the extent relevant.
(b) Closing Net Liabilities. The Cash Consideration
shall be decreased by the amount, if any, by which the Closing Net Liabilities
exceed $1,150,000,000 and shall be increased by the amount, if any, by which the
Closing Net Liabilities are less than $1,150,000,000. For purposes of this
Agreement, "Closing Net Liabilities" means Adjustment Liabilities as of the
Adjustment Time, decreased by Adjustment Assets as of the Adjustment Time.
(1) Subject to the other provisions of this
Section 2.5(b), "Adjustment Assets" means, as of any date, the sum of: (A) cash
and cash equivalents, (B) prepaid expenses, deposits, and other current assets
(other than inventory); (C) Accounts Receivable and other receivables; (D) tax
refunds due to any of the FrontierVision Companies for any tax period ending
prior to the Adjustment Time; (E) the amount of Reimbursable Capital
Expenditures; (F) the amount of the cash consideration paid by the
FrontierVision Companies in connection with the systems exchange transactions,
if consummated prior to the Closing hereunder, with InterMedia Partners of
Kentucky L.P. referred to in Section 6.1 of FrontierVision's Disclosure
Schedule; (G) the aggregate amount of any cash investments made by the
FrontierVision Companies in The Maine Internet Works, Inc. and Landmark Net
Access, Inc. after the date of this Agreement and prior to the Adjustment Time
(provided that any such investments shall not be included unless Buyer consented
to such investments); (H) the amount of the net asset, if applicable, referred
to in Section 6.7(e); and (I) the amount of the insurance premiums paid by the
FrontierVision Companies prior to the Adjustment Time as contemplated by Section
6.13, in each case of clauses (A) through (D) computed for the FrontierVision
Companies on a consolidated basis and without duplication in accordance with
GAAP and in each case of clauses (E) through (I) as agreed above. Exhibit F
referred to below in Section 2.5(c) identifies and describes the "other
receivables" referenced in clause (C) above that would be included in Adjustment
Assets if the Closing
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Date were the date of this Agreement. The disclosure made pursuant to the
immediately preceding sentence is for informational purposes only.
(2) Subject to the other provisions of this
Section 2.5(b), "Adjustment Liabilities" means, as of any date, the sum of: (A)
accounts payable; (B) expenses of the FrontierVision Companies relating to the
consummation of the transactions contemplated by this Agreement, including fees
and expenses of attorneys, accountants, financial advisors and broker fees, if
such fees and expenses are paid by the FrontierVision Companies after the
Closing Date, but excluding any expenses that Buyer agrees to pay or is
obligated to pay pursuant to this Agreement; (C) accrued and unpaid expenses;
(D) subscriber's prepayments and deposits; (E) Tax payments due and payable by
any of the FrontierVision Companies to any Governmental Authority for all Tax
periods ending on or prior to the Adjustment Time; (F) all other FrontierVision
Liabilities as of the Adjustment Time; (G) subject to Section 6.18, $5,500,000
(which represents the amount by which the amount of rebuild/upgrade capital
expenditures of the FrontierVision Companies budgeted for the period beginning
October 23, 1998 and ending December 31, 1998 with respect to the Systems
acquired pursuant to the State Cable Acquisition Agreement exceeded the amount
of capital expenditures actually made by the FrontierVision Companies for such
period with respect to such Systems); (H) $2,000,000 (which represents the
amount by which the amount of rebuild/upgrade capital expenditures of the
FrontierVision Companies budgeted for the period beginning July 1, 1998 and
ending December 31, 1998 with respect to the Systems other than the Systems
acquired pursuant to the State Cable Acquisition Agreement exceeded the amount
of capital expenditures actually made by the FrontierVision Companies for such
period with respect to such other Systems); (I) the cash amount required to pay
off vehicle leases held by the FrontierVision Companies, if any; (J) the amount
as illustrated in Section 2.5 of FrontierVision's Disclosure Schedule as the
"Net Carriage Adjustment" and as updated for activity through the Closing Date;
(K) the amount of cash and other monetary purchase price consideration (net of
reasonable out-of-pocket transaction costs and expenses) received by the
FrontierVision Companies in connection with the sale of systems to Helicon
Partners I, L.P. consummated on January 7, 1999, plus the amount of cash and
other monetary purchase price consideration (net of reasonable out-of-pocket
transaction costs and expenses) received by the FrontierVision Companies in
connection with the sale of other systems and assets, including without
limitation, the sale of the Rockland, Maine office site real estate parcel
referenced in Section 3.8 of FrontierVision's Disclosure Schedule, if any,
consummated after the date of this Agreement and prior to the Closing Date; (L)
the amount of cash and other monetary purchase price consideration payable by
the FrontierVision Companies under the purchase contract for the Chillicothe,
Ohio real estate parcel referenced in Section 3.8 of FrontierVision's Disclosure
Schedule, but only to the extent to which such amount has not been paid by the
FrontierVision Companies prior to the Closing Date; (M) the FrontierVision
Companies' share of any out-of-pocket costs and expenses incurred in connection
with relocating the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ site referred to in Section 3.6 (Item A.2) of
FrontierVision's Disclosure Schedule, but only to the extent to which such costs
and expenses have not been paid by the FrontierVision Companies prior to the
Closing; (N) $3,937,500.00; (O) $200,000.00 (representing the amount payable in
connection with the matter disclosed in Section 3.6 (Item A.1) of
FrontierVision's Disclosure Schedule that is not covered by clause (F) above);
(P) the aggregate amount of any cash distributions received by the
FrontierVision Companies from The Maine Internet Works,
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Inc. and Landmark Net Access, Inc. after December 31, 1998 and prior to the
Adjustment Time; (Q) the amount paid by Buyer at the Closing with respect to
FVP's Executive Deferred Compensation Plan as contemplated by Section 6.9(f);
(R) the amount, if any, required to be included as an Adjustment Liability
pursuant to Section 6.4(e); (S) the amount of the net liability, if applicable,
referred to in Section 6.7(e); (T) $10,000,000, reduced by the aggregate amount
of capital expenditures actually made by the FrontierVision Companies during the
period beginning January 1, 1999 and ending on the Closing Date with respect to
the Waterville, Ohio and Bedford, Michigan Systems upgrade and rebuild projects
listed in Section 2.5 of FrontierVision's Disclosure Schedule; and (U) the
aggregate amount of the programming costs savings to the FrontierVision
Companies as a result of the Programming Supply Agreement with Buyer, in each
case of clauses (A) through (F) computed for the FrontierVision Companies on a
consolidated basis and without duplication in accordance with GAAP and in each
case of clauses (G) through (U) as agreed above. The parties agree that to the
extent any liability qualifies as an Adjustment Liability pursuant to more than
one clause of this paragraph, it shall be included only once and without
duplication.
(3) The amount of "Reimbursable Capital
Expenditures" equals the amount by which (A) the aggregate amount of capital
expenditures actually made by the FrontierVision Companies during the period
beginning January 1, 1999 and ending on the Closing Date with respect to any of
the Systems upgrade and rebuild projects listed in Section 2.5 of
FrontierVision's Disclosure Schedule (it being understood that in no event will
any capital expenditures made to complete the New Philadelphia retrofit, Bangor,
Amesbury, and Ironton/Ashland upgrade and rebuild projects to the point of
completion described in Section 2.5(D) of FrontierVision's Disclosure Schedule
or any capital expenditures made by the FrontierVision Companies with respect to
the Waterville, Ohio and Bedford, Michigan Systems upgrade and rebuild projects
listed in Section 2.5 of FrontierVision's Disclosure Schedule be included in the
amount for this clause (A)) exceeds (B) the amount, if any, by which (1) the
amount of Budgeted Other Capital Expenditures exceeds (2) the amount of Actual
Other Capital Expenditures; provided that if the amount in clause (B)(2) exceeds
the amount in clause (B)(1), the amount for clause (B) shall be zero. As used in
this subsection (3), the following terms have the following meanings:
(A) "Budgeted Other Capital
Expenditures" means the aggregate cumulative amount of capital expenditures
budgeted for all of the capital expenditures categories included in all
categories other than "Upgrade/Rebuild" on the Capital Expenditures Budget for
the period beginning January 1, 1999 and ending on the Closing Date (the amount
budgeted for the month in which the Closing occurs to be prorated in the event
the Closing Date occurs on a day other than the first or last day of a month).
(B) "Actual Other Capital Expenditures"
means the aggregate amount of capital expenditures actually made by the
FrontierVision Companies during the period beginning January 1, 1999 and ending
on the Closing Date with respect to all of the capital expenditure categories
included in all categories other than "Upgrade/Rebuild" on the Capital
Expenditures Budget, computed on a basis consistent with the accounting
methodologies used to compute the Budgeted Other Capital
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Expenditures, which in turn was prepared on a basis consistent with the
accounting procedures used to prepare the Financial Statements.
(C) "Capital Expenditures Budget" means
the monthly capital expenditures budget for the FrontierVision Companies for
calendar year 1999 that is included in Section 2.5 of FrontierVision's
Disclosure Schedule.
(4) To the extent consistent with GAAP, revenues
and expenses shall be treated as prepaid or accrued so as to reflect the
principle that revenues and expenses attributable to the period prior to the
Adjustment Time shall be for the account of Sellers and revenues and expenses
attributable to the period after the Adjustment Time shall be for the account of
Buyer.
(5) Deferred income Taxes of any FrontierVision
Company shall not be treated as Adjustment Assets or Adjustment Liabilities.
(6) To the extent any liability that would be an
Adjustment Liability but for the fact that all or any portion of such liability
is transferred by a FrontierVision Company (including Main Security
Surveillance, Inc. for this purpose) to and assumed by The Maine Internet Works,
Inc. or Landmark Net Access, Inc. prior to the Adjustment Time, such liability
shall be treated as an Adjustment Liability (but without duplication) in any
event.
(c) Example Calculation. Attached hereto as Exhibit F is
an example calculation of Closing Net Liabilities for illustrative purposes
only, prepared on the basis of good faith estimates of Adjustment Assets and
Adjustment Liabilities made by FVP as if the Closing Date were January 31, 1999.
FVP makes no representation and warranty to any other party with respect to the
accuracy of Exhibit F.
2.6 Payment at Closing.
No later than seven business days prior to the date scheduled for the
Closing, FVP shall prepare and deliver to Buyer a written report (the
"Preliminary Closing Statement") setting forth FVP's estimates of Closing Net
Liabilities and Closing Equivalent Subscribers, determined in accordance with
Section 2.5 and this Section 2.6. The Preliminary Closing Statement shall be
prepared by FVP in good faith and shall be certified by FVP to be its good faith
estimate of the Closing Net Liabilities and Closing Equivalent Subscribers as of
the date thereof. FVP shall make available to Buyer such information as Buyer
shall reasonably request relating to the matters set forth in the Preliminary
Closing Statement. If Buyer does not agree with any estimated amount set forth
in the Preliminary Closing Statement, then on or prior to the third business day
prior to the date scheduled for the Closing, Buyer may deliver to FVP a written
report setting forth in reasonable detail its good faith estimates (supported by
substantial evidence) of any amount set forth in the Preliminary Closing
Statement with which Buyer disagrees. In the case of any such estimated amount
as to which Buyer delivers its own estimate on or before such third business
day, FVP and Buyer will endeavor in good faith to agree prior to the Closing on
the
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appropriate amount of such estimate to be used for calculating the Closing Cash
Payment (as defined below). At the Closing Buyer shall pay to Sellers the amount
of the Cash Consideration, as adjusted at Closing on the basis of the
Preliminary Closing Statement, with any changes thereto mutually agreed to
between Buyer and FVP (the "Closing Cash Payment") in accordance with the
provisions of Section 8.3(a)(2). In the case of any such estimated amount as to
which Buyer delivers its own estimate on or before such third business day and
as to which FVP and Buyer do not so agree prior to the Closing, at the Closing
the difference (if any) between the amount of the Closing Cash Payment that
would be determined using the estimates set forth in FVP's Preliminary Closing
Statement (with any changes thereto mutually agreed to between Buyer and FVP)
and the amount of the Closing Cash Payment that would be determined using the
estimates of Buyer that remain in dispute will be transferred by Buyer to the
Escrow Agent, to be held in the Post-Closing Adjustments Escrow and disbursed in
accordance with the provisions of Section 2.7.
2.7 Post-Closing Payment of Cash Consideration Adjustments.
(a) Post-Closing Adjustments Escrow. At the Closing,
Buyer, Sellers and the Escrow Agent shall execute the Post-Closing Escrow
Agreement, in accordance with which, on the Closing Date, in addition to any
deposit to be made pursuant to Section 2.6, Buyer will deposit $5,000,000 with
the Escrow Agent to hold in escrow on behalf of Sellers solely in order to
provide a fund for any payment to which Buyer may be entitled in accordance with
Section 2.7(c) (such escrow, the "Post-Closing Adjustments Escrow," and such
$5,000,000, together with any amounts deposited in the Post-Closing Adjustments
Escrow pursuant to Section 2.6, and any earnings thereon, the "Post- Closing
Adjustment Funds"). None of the Post-Closing Adjustment Funds will be available
for any purpose other than as described above and as described in Section 2.9
and shall not be available to satisfy any obligation of Sellers under Article
10. The Post-Closing Adjustments Escrow will be administered, and the
Post-Closing Adjustment Funds will be held and disbursed, in accordance with the
provisions of this Section 2.7 and the Post-Closing Escrow Agreement. The
Closing Cash Payment less the amounts deposited in the Post-Closing Adjustments
Escrow pursuant to Sections 2.6 and this 2.7(a) shall be referred to as the "Net
Closing Cash Payment."
(b) Final Closing Statement. Within one hundred twenty
days after the Closing Date, Buyer shall prepare and deliver to the General
Partner a written report (the "Final Closing Statement") setting forth Buyer's
final estimates of Closing Net Liabilities and Closing Equivalent Subscribers,
determined in accordance with Section 2.5. The Final Closing Statement shall be
prepared by Buyer in good faith and shall be certified by Buyer to be, as of the
date prepared, its good faith estimate of the Closing Net Liabilities and
Closing Equivalent Subscribers. Buyer shall allow the General Partner and its
agents access at all reasonable times after the Closing Date to copies of the
books, records and accounts of the FrontierVision Companies and make available
to the General Partner such information as the General Partner reasonably
requests to allow the General Partner to examine the accuracy of the Final
Closing Statement. Within thirty days after the date that the Final Closing
Statement is delivered by Buyer to the General Partner, the General Partner
shall complete its examination thereof and may deliver to Buyer a written report
setting forth any proposed adjustments to any amounts set forth in the
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Final Closing Statement. If the General Partner notifies Buyer of its acceptance
of the amounts set forth in the Final Closing Statement, or if the General
Partner fails to deliver its report of any proposed adjustments within the
thirty day period specified in the preceding sentence, the amounts set forth in
the Final Closing Statement shall be conclusive, final, and binding on the
parties as of the last day of such thirty day period. Buyer and the General
Partner shall use good faith efforts to resolve any dispute involving the
amounts set forth in the Final Closing Statement. If the General Partner and
Buyer fail to agree on any amount set forth in the Final Closing Statement
within fifteen days after Buyer receives the General Partner's report pursuant
to this Section 2.7, then the General Partner shall retain a national
independent accounting firm which is approved by Buyer to make the final
determination, under the terms of this Agreement, of any amounts under dispute.
Buyer hereby approves the appointment of any of the "Big Five" accounting firms
selected by the General Partner so long as such firm does not then serve as the
independent auditor of any of the FrontierVision Companies or the General
Partner or Buyer. The selected accounting firm shall endeavor to resolve the
dispute as promptly as practicable and such firm's resolution of the dispute
shall be final and binding on the parties, and a judgment may be entered thereon
in any court of competent jurisdiction. All of the costs and expenses of the
selected accounting firm and its services rendered pursuant to this Section 2.7
shall be borne by Buyer, on the one hand, and Sellers, on the other hand, as
nearly as possible in the proportion to the amount by which the determination of
all matters related to such costs and expenses varies from the positions of
Buyer and the General Partner on all such matters. Any fees to be borne by
Sellers pursuant to the preceding sentence shall be paid out of the Post-Closing
Adjustment Funds in accordance with the provisions of Section 2.7(c).
(c) Payment of Cash Consideration Adjustments.
(1) Within three business days after the General
Partner delivers to Buyer its proposed adjustments to the Final Closing
Statement, the amounts not in dispute shall be determined and the Escrow Agent
shall release and pay over to Buyer and/or Sellers, as the case may be, the
appropriate amount of the Post-Closing Adjustment Funds not in dispute;
provided, however, that out of any amounts payable to Sellers an amount equal to
the greater of $25,000 or one percent (1%) of the amount in dispute shall
continue to be held in the Post-Closing Adjustments Escrow to cover (A) the
fees, if any, payable by Sellers pursuant to the last sentence of Section 2.7(b)
with respect to the final determination of the Cash Consideration and (B) the
fees payable by Sellers to the Escrow Agent pursuant to the Post-Closing Escrow
Agreement. For example, if (i) the Closing Cash Payment was determined to be
$600,000,000; (ii) the Net Closing Cash Payment was determined to be
$594,000,000; (iii) the Cash Consideration determined on the basis of Buyer's
Final Closing Statement was $595,000,000; and (iv) the Cash Consideration
determined on the basis of Buyer's Final Closing Statement (with any adjustments
proposed by the General Partner pursuant to Section 2.7(b)) was $597,000,000;
then $3,000,000 (i.e., $600,000,000 less $597,000,000) would be paid by the
Escrow Agent to Buyer, and $1,000,000 (i.e, $595,000,000 less $594,000,000) less
the amount of the reserve for Sellers' fees would be paid to Sellers. The
balance in the Post-Closing Adjustments Escrow would be held by the Escrow Agent
until the amount of the Cash Consideration is finally determined pursuant to
Section 2.7(b)) (whether by agreement of the parties or by final resolution of
any accounting firm).
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Upon and within three business days after such final determination, the Escrow
Agent shall release and pay over to Buyer and/or Sellers, as the case may be,
the appropriate amount of the Post-Closing Adjustment Funds based upon such
final determination; provided, however, that any payments to be made to Sellers
shall be reduced by the fees and expenses to be paid by Sellers if not already
reserved. To the extent there are not sufficient monies in the Post-Closing
Adjustments Escrow to distribute the amount determined to be payable to Sellers
pursuant to this Section 2.7, Buyer will pay to Sellers in cash the amount of
such deficiency within three business days of the date of such determination. To
the extent there are not sufficient monies in the Post-Closing Adjustments
Escrow to distribute the amounts determined to be payable to Buyer pursuant to
this Section 2.7, the amount of such deficiency will be paid to Buyer from the
Post-Closing Indemnity Escrow to the extent of any Post-Closing Indemnity
Property therein within three business days of the date of such determination.
(2) If Buyer has not delivered the Final Closing
Statement to the General Partner within twenty days after the end of the 120-day
period referred to in Section 2.7(b), the Escrow Agent shall release and pay
over to Sellers all of the Post-Closing Adjustment Funds.
(3) If the General Partner has not delivered its
report of any proposed adjustments to the Final Closing Statement within the
thirty day period following its receipt of the Final Closing Statement, the
Escrow Agent shall release and pay out the Post-Closing Adjustment Funds based
upon the Final Closing Statement delivered by Buyer.
(4) Notwithstanding the above provisions, if
Buyer has provided notice of a claim to the General Partner pursuant to Section
2.9(b), a portion of the Post-Closing Adjustment Funds sufficient to reimburse
Buyer for any such claim and to pay Sellers' share of any fees and expenses
under Section 2.9(b) shall be retained in the Post-Closing Adjustments Escrow
and shall not be distributed until such claims are finally resolved in
accordance with Section 2.9(b).
(5) All earnings attributable to each portion of
the Post-Closing Adjustment Funds shall be paid to the party entitled to such
portion of the Post-Closing Adjustment Funds in accordance with this Section 2.7
or Section 2.9 to the extent applicable (except all earnings attributable to the
portion of the Post-Closing Adjustment Funds, if any, used to pay the Sellers'
share of any fees and expenses payable out of the Post-Closing Adjustment Funds
pursuant to said Sections shall be paid to Sellers).
(6) Any amount which becomes payable pursuant to
this Section 2.7 will constitute an adjustment to the Cash Consideration for all
purposes.
(7) All payments to be made to Sellers under
this Section 2.7 shall be paid by wire or accounts transfer of immediately
available funds to one or more accounts designated by Sellers by written notice
to the Escrow Agent or Buyer, as applicable.
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(8) All payments to be made to Buyer under this
Section 2.7 shall be paid by wire or accounts transfer of immediately available
funds to one or more accounts designated by Buyer by written notice to the
Escrow Agent or Sellers, as applicable.
(9) No later than the close of business on the
first business day after it is determined in accordance with this Section 2.7
and Section 2.9 that Buyer and/or Sellers are entitled to all or any portion of
the Post-Closing Adjustment Funds, the General Partner and Buyer will execute
and deliver to the Escrow Agent joint written instructions containing
appropriate disbursement instructions consistent with this Section 2.7 and
Section 2.9 and the Post-Closing Escrow Agreement.
2.8 Seller Specific Liabilities.
(a) If it is determined at the Closing (based upon a good
faith showing by Buyer supported by substantial evidence and that is agreed to
by the SPC Seller that owns the Capital Stock of the SPC in question) that any
of the SPCs has any indebtedness or liability (other than any indebtedness or
liability disclosed in Section 4.3 or in Section 4.3 of FrontierVision's
Disclosure Schedule) that will not otherwise be discharged at the Closing, then
the amount of Cash Consideration payable to such SPC Seller shall be decreased
by the dollar amount of such indebtedness or liability as agreed to by such SPC
Seller and Buyer. If it is determined at the Closing (based upon a good faith
showing by Buyer supported by substantial evidence and that is agreed to by the
Seller in question) that any of the Purchased Interests held by a Seller is
subject to an Encumbrance and that will not otherwise be discharged and released
at the Closing, then the amount of Cash Consideration payable to such Seller
shall be decreased by the dollar amount necessary to discharge and release such
Encumbrance as agreed to by such Seller and Buyer. Buyer agrees to notify the
appropriate Seller promptly upon becoming aware of any matter that could give
rise to a claim under this Section 2.8 that was not disclosed in this Agreement
or in FrontierVision's Disclosure Schedule. If such Seller and Buyer cannot
agree on the appropriate amount of the decrease in Cash Consideration payable to
such Seller by the time scheduled for the Closing, then Buyer shall deposit a
portion of the Closing Cash Payment equal to the amount of Buyer's claim
(together with an amount equal to the greater of $25,000 or one percent (1%) of
the amount of Buyer's claim to cover the fees, if any, payable by such Seller
pursuant to Section 2.8(b) with respect to an accounting firm's final
determination) with the Escrow Agent to hold in a separate escrow on behalf of
such Seller solely in order to provide a fund for any payment to which Buyer may
be entitled in accordance with this Section 2.8 (each such escrow, a
"Post-Closing Section 2.8 Escrow," and such deposit, together with any earnings
thereon, the "Post-Closing Section 2.8 Funds"), and the amount of the Closing
Cash Payment payable to such Seller shall be decreased by the amount so
deposited. None of the Post-Closing Section 2.8 Funds will be available for any
purpose other than as described above and shall not be available to satisfy any
obligation of Sellers under Article 10. The Post-Closing Section 2.8 Escrow will
be administered, and the Post-Closing Section 2.8 Funds will be held and
disbursed, in accordance with the provisions of this Section 2.8 and the
Post-Closing Escrow Agreement.
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(b) After the Closing, Buyer and such Seller shall use
good faith efforts to resolve any dispute involving the validity and amount of
any claim made by Buyer pursuant to this Section 2.8. If such Seller and Buyer
fail to agree on the validity and amount of any such claim within fifteen days
after the Closing, then such Seller shall retain a national independent
accounting firm which is approved by Buyer to make the final determination,
under the terms of this Agreement, regarding the validity and amount of any such
claim. Buyer hereby approves the appointment of any of the "Big Five" accounting
firms selected by such Seller so long as such firm does not then serve as the
independent auditor of any of the FrontierVision Companies or the General
Partner or Buyer. The selected accounting firm shall endeavor to resolve the
dispute as promptly as practicable and such firm's resolution of the dispute
shall be final and binding on the parties, and a judgment may be entered thereon
in any court of competent jurisdiction. All of the costs and expenses of the
selected accounting firm and its services rendered pursuant to this Section 2.8
shall be borne by Buyer, on the one hand, and such Seller, on the other hand, as
nearly as possible in the proportion to the amount by which the determination of
all matters related to such costs and expenses varies from the positions of
Buyer and such Seller on all such matters.
(c) Within three business days after any matter governed
by this Section 2.8 is finally resolved (whether by agreement of the parties or
by final resolution of an accounting firm), the amount of Post-Closing Section
2.8 Funds payable to Buyer and/or such Seller shall be released and paid over to
Buyer and/or such Seller in accordance with such final resolution. To the extent
there are not sufficient monies in the Post-Closing Section 2.8 Escrow to
distribute the amounts determined to be payable to Buyer pursuant to this
Section 2.8, the amount of such deficiency will be paid to Buyer from the
Post-Closing Indemnity Escrow to the extent of any Post-Closing Indemnity
Property therein within three business days of the date of such determination.
All payments to be made to such Seller or Buyer, as the case may be, under this
Section 2.8 shall be paid by wire or accounts transfer of immediately available
funds to one or more accounts designated by such Seller or Buyer, as the case
may be, by written notice to the Escrow Agent. No later than the close of
business on the first business day after it is determined in accordance with
this Section 2.8 that Buyer and/or a Seller is entitled to all or any portion of
the Post-Closing Section 2.8 Funds being held in a Post-Closing Section 2.8
Escrow for the benefit of Buyer and such Seller, such Seller and Buyer will
execute and deliver to the Escrow Agent joint written instructions containing
appropriate disbursement instructions consistent with this Section 2.8 and the
Post-Closing Escrow Agreement.
(d) All earnings attributable to each portion of the
Post-Closing Section 2.8 Funds shall be paid to the party entitled to such
portion of the Post-Closing 2.8 Funds in accordance with this Section 2.8
(except all earnings attributable to the portion of the Post-Closing Section 2.8
Funds, if any, used to pay a Seller's share of any fees and expenses payable out
of the Post-Closing Section 2.8 Funds pursuant to this Section 2.8 shall be paid
to such Seller).
(e) Any amount which becomes payable pursuant to this
Section 2.8 will constitute an adjustment to the Cash Consideration for all
purposes.
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2.9 Additional Cash Consideration Adjustments.
(a) If, at any time prior to the Closing, Buyer becomes
aware of any fact, event,
circumstance, or action, the existence or occurrence of which, if not corrected
or remedied prior to the Closing, would, in Buyer's good faith and reasonable
belief, and supported by substantial evidence, require the Sellers to indemnify
Buyer pursuant to Section 10.2(a) as a result of an untrue representation or a
breach of warranty by FVP contained in Sections 3.9 (with respect to any
rearrangements or rehabilitations of cable trunk only as specified in the
penultimate sentence of Section 3.9), 3.11(g) (with respect to payment of
copyright fees only), 3.11(k), 3.11(l) (with respect to payment of pole
attachment fees only), or 3.14 or as a result of the existence of an Encumbrance
on the Assets of the FrontierVision Companies that is not a Permitted
Encumbrance, Buyer shall immediately give notice to FVP of such fact, event,
circumstance or action. If Buyer desires to seek an adjustment to the Cash
Consideration in respect of such matter, Buyer shall so state in its notice and
specify in reasonable detail the factual basis for the claim and the amount
thereof. Buyer shall certify in such notice that the basis and amount of the
claim were determined in good faith by Buyer and such claim must be supported by
substantial evidence. Buyer agrees to make available to FVP and its authorized
representatives the information relied upon by Buyer to substantiate the claim.
If the matter is cured prior to the Closing, Buyer shall not be entitled to any
adjustment to the Cash Consideration pursuant to this Section 2.9 in respect of
such matter. If Buyer and FVP agree at or prior to the Closing to the validity
and amount of such claim, the Cash Consideration shall be reduced by such
amount. If Buyer and FVP do not agree to the validity or the amount of the claim
at or prior to the Closing, then Buyer shall deposit a portion of the Closing
Cash Payment equal to the amount of Buyer's claim with the Escrow Agent to hold
in escrow on behalf of Sellers solely in order to provide a fund for any payment
to which Buyer may be entitled in respect of a claim made under this Section
2.9(a) (such escrow, the "Post-Closing Section 2.9 Escrow," and such deposit,
together with any earnings thereon, the "Post-Closing Section 2.9 Funds"). None
of the Post-Closing Section 2.9 Funds will be available for any purpose other
than as described above and shall not be available to satisfy any obligation of
Sellers under Article 10. The Post-Closing Section 2.9 Escrow will be
administered, and the Post-Closing Section 2.9 Funds will be held and disbursed,
in accordance with the provisions of this Section 2.9 and the Post-Closing
Escrow Agreement.
(b) If, at any time after the Closing and prior to end of
the 120-day period following the Closing, Buyer becomes aware of any fact,
event, circumstance, or action that existed or occurred prior to the Closing
and, because it was not corrected or remedied prior to the Closing, requires, in
Buyer's good faith and reasonable belief, and supported by substantial evidence,
the Sellers to indemnify Buyer pursuant to Section 10.2(a) as a result of an
untrue representation or a breach of warranty by FVP contained in Sections 3.9
(with respect to any rearrangements or rehabilitations of cable trunk only as
specified in the penultimate sentence of Section 3.9), 3.11(g) (with respect to
payment of copyright fees only), 3.11(k), 3.11(l) (with respect to payment of
pole attachment fees only), or 3.14 or as a result of the existence of an
Encumbrance on the Assets of the FrontierVision Companies that is not a
Permitted Encumbrance, and Buyer desires to seek an adjustment to the Cash
Consideration in respect of such matter, Buyer shall promptly give notice to the
General Partner of such fact, event, circumstance or action and specify in
reasonable detail the factual basis for the claim and the amount thereof. Buyer
- 25 -
shall certify in such notice that the basis and amount of the claim were
determined in good faith by Buyer and such claim must be supported by
substantial evidence. An amount of Post-Closing Adjustment Funds sufficient to
reimburse Buyer for any claim made in accordance with this Section 2.9(b) and to
pay Sellers' share of any fees and expenses under Section 2.9 shall be retained
in the Post- Closing Adjustments Escrow and shall not be distributed until such
claim is finally resolved in accordance with this Section 2.9. Buyer agrees to
make available to FVP and its authorized representatives the information relied
upon by Buyer to substantiate the claim. If Buyer and FVP agree to the validity
and amount of such claim, the Cash Consideration shall be reduced by such amount
and a portion of the Post-Closing Adjustment Funds equal to such amount shall be
released and paid over to Buyer.
(c) Buyer and the General Partner shall use good faith
efforts to resolve any dispute
involving the validity and amount of any claim made by Buyer pursuant to this
Section 2.9. If the General Partner and Buyer fail to agree on the validity and
amount of any such claim within fifteen days after the Closing (with respect to
a claim made pursuant to Section 2.9(a)) or the date the claim is made by Buyer
(with respect to a claim made pursuant to Section 2.9(b)), then the General
Partner shall retain a national independent accounting firm which is approved by
Buyer to make the final determination, under the terms of this Agreement,
regarding the validity and amount of any such claim. The selection of an
accounting firm, the resolution of a dispute submitted to an accounting firm,
and responsibility for the resulting costs and expenses with respect to any
claims subject to this Section 2.9 shall be governed by the provisions of
Section 2.7(b) that govern such matters.
(d) If the General Partner or Buyer believes any such
claim is not an appropriate
matter to be determined by an accounting firm, the General Partner or Buyer may
submit the matter to binding arbitration under the Commercial Arbitration Rules
of the American Arbitration Association. Such arbitration shall take place in
Washington, D.C. unless the parties select a different site by mutual agreement.
All of the costs and expenses of arbitration pursuant to this Section 2.9 shall
be borne by Buyer, on the one hand, and Sellers, on the other hand, as nearly as
possible in the proportion to the amount by which the determination of all
matters related to such costs and expenses varies from the positions of Buyer
and the General Partner on all such matters, unless the arbitrator finds that
the position asserted by either party is without merit, in which case such party
shall bear the entire expenses of arbitration, including reasonable attorney's
fees of the other party. The arbitration determination shall be final and
binding on the parties, and a judgment may be entered thereon in any court of
competent jurisdiction.
(e) Within three business days after any matter governed
by this Section 2.9 is finally
resolved (whether by agreement of the parties, by final resolution of an
accounting firm, or by final resolution by an arbitrator), the amount of
Post-Closing Section 2.9 Funds or Post-Closing Adjustment Funds, as applicable,
payable to Buyer, on the one hand, and/or Sellers, on the other hand, shall be
released and paid over to Buyer and/or Sellers in accordance with such final
resolution. To the extent there are not sufficient monies in the Post-Closing
Section 2.9 Escrow or the Post-Closing Adjustments Escrow, as applicable, to
distribute the amounts determined to be payable to Buyer pursuant to this
- 26 -
Section 2.9, the amount of such deficiency will be paid to Buyer from the
Post-Closing Indemnity Escrow to the extent of any Post-Closing Indemnity
Property therein within three business days of the date of such determination.
All payments to be made to Sellers or Buyer, as the case may be, under this
Section 2.9 shall be paid by wire or accounts transfer of immediately available
funds to one or more accounts designated by Sellers or Buyer, as the case may
be, by written notice to the Escrow Agent. No later than the close of business
on the first business day after it is determined in accordance with this Section
2.9 that Buyer and/or Sellers are entitled to all or any portion of the
Post-Closing Section 2.9 Funds and/or Post-Closing Adjustment Funds, the General
Partner and Buyer will execute and deliver to the Escrow Agent joint written
instructions containing appropriate disbursement instructions consistent with
this Section 2.9 and the Post-Closing Escrow Agreement.
(f) All earnings attributable to each portion of the
Post-Closing Section 2.9 Funds
shall be paid to the party entitled to such portion of the Post-Closing Section
2.9 Funds in accordance with this Section 2.9 (except all earnings attributable
to the portion of the Post-Closing Section 2.9 Funds, if any, used to pay the
Sellers' share of any fees and expenses payable out of the Post-Closing Section
2.9 Funds pursuant to this Section 2.9 shall be paid to the Sellers).
(g) Any amount which becomes payable pursuant to this
Section 2.9 will constitute
an adjustment to the Cash Consideration for all purposes.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF FVP
Subject to any provisions of this Agreement limiting, qualifying or
excluding any of the representations or warranties made herein, FVP represents
and warrants to Buyer as set forth in this Article 3.
3.1 Organization and Authority of FVP.
FVP is a limited partnership duly formed, validly existing, and in good
standing under the laws of the State of Delaware. FVP has the requisite
partnership power and authority to own, lease, and operate its properties, to
carry on its business in the places where such properties are now owned, leased,
or operated and such business is now conducted, and to execute, deliver and
perform this Agreement and the other Transaction Documents to which FVP is a
party according to their respective terms.
3.2 Authorization and Binding Obligation.
The execution, delivery, and performance by FVP of this Agreement and
the other Transaction Documents to which FVP is a party have been duly
authorized by all necessary partnership action on the part of FVP. This
Agreement and the other Transaction Documents to which FVP is a party have
- 27 -
been duly executed and delivered by FVP (or, in the case of Transaction
Documents to be executed and delivered at Closing, when executed and delivered
will be duly executed and delivered) and constitute (or, in the case of
Transaction Documents to be executed and delivered at Closing, when executed and
delivered will constitute) the legal, valid, and binding obligation of FVP,
enforceable against FVP in accordance with their terms, except as the
enforceability of this Agreement and such other Transaction Documents may be
limited by bankruptcy, insolvency, or similar laws affecting creditors' rights
generally or by judicial discretion in the enforcement of equitable remedies,
and as rights to indemnification may be limited by federal or state securities
laws or the public policies embodied therein.
3.3 Organization and Ownership of FrontierVision Companies.
(a) Section 3.3 of FrontierVision's Disclosure Schedule
sets forth the name of each
FrontierVision Company, including the jurisdiction of incorporation or formation
of each, as the case may be. Each FrontierVision Company that is a corporation
is a corporation duly incorporated, validly existing, and in good standing under
the laws of the jurisdiction of its incorporation. Each FrontierVision Company
that is a limited partnership is a limited partnership duly formed, validly
existing, and in good standing under the laws of the jurisdiction of its
formation. Each FrontierVision Company that is a limited liability company is a
limited liability company duly formed, validly existing, and in good standing
under the laws of the jurisdiction of its formation. Each FrontierVision Company
is duly qualified and in good standing as a foreign corporation, limited
partnership, or limited liability company, as the case may be, in each
jurisdiction listed in Section 3.3 of FrontierVision's Disclosure Schedule,
which are all jurisdictions in which such qualification is required, except
where such failure to be so qualified would not have a material adverse effect
on the conduct of such FrontierVision Company's business. Except as disclosed in
Section 3.3 of FrontierVision's Disclosure Schedule, no FrontierVision Company,
directly or indirectly, owns, of record or beneficially, any outstanding
securities or other interest in any Person (each such Person, an "Investment
Person") or has the right or obligation to acquire, any outstanding securities
or other interest in any Person. The FrontierVision Company that owns the
Capital Stock of each such Investment Person owns such Capital Stock free and
clear of all Encumbrances.
(b) Section 3.3 of FrontierVision's Disclosure Schedule
sets forth the authorized,
issued and outstanding Capital Stock of FVP and each other FrontierVision
Company and the record and beneficial owner of the issued and outstanding
Capital Stock of each of them. All of such issued and outstanding Capital Stock
of the FrontierVision Companies has been duly authorized, validly issued, and
has not been issued in violation of any federal or state securities laws. Except
as set forth in Section 3.3 of FrontierVision's Disclosure Schedule, the owner
of the Capital Stock of each FrontierVision Company owns such Capital Stock free
and clear of all Encumbrances (except that no representation is made in this
Article 3 as to any partnership interests in FVP held by any Seller or any SPC
or as to any Capital Stock of any SPC held by any SPC Seller). Except as
disclosed in Section 3.3 of FrontierVision's Disclosure Schedule, there are no
outstanding securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which any
- 28 -
FrontierVision Company is a party or by which any of them is bound obligating
such FrontierVision Company to issue, deliver or sell, or cause to be issued,
delivered or sold, any additional Capital Stock of such FrontierVision Company
or obligating such FrontierVision Company to issue, grant, extend or enter into
any such security, option, warrant, call, right, commitment, agreement,
arrangement or undertaking. FVP has delivered to Buyer complete and correct
copies of the Charter Documents of each FrontierVision Company as in effect on
the date hereof. Section 3.3 of FrontierVision's Disclosure Schedule describes
the Capital Stock or other investment interests held and beneficially owned by
the FrontierVision Companies with respect to the Investment Persons.
3.4 Absence of Conflicting Agreements; Consents.
Except for the expiration or termination of any applicable waiting
period under the HSR Act, the filing by FVP, any other FrontierVision Company,
and/or the Sellers with the SEC of any reports required to be filed in
connection with the consummation of the transactions contemplated hereby, or as
set forth in Section 3.4 of FrontierVision's Disclosure Schedule, the execution,
delivery and performance by FVP of this Agreement and the other Transaction
Documents to which FVP is a party (with or without the giving of notice, the
lapse of time, or both): (A) do not require the Consent of, notice to, or filing
with any Governmental Authority or any other Person under any Franchise, FCC
License or Material Contract; (B) will not conflict with any provision of the
Charter Documents of FVP or any other FrontierVision Company, each as currently
in effect; (C) assuming receipt of all Consents, will not conflict with, result
in a breach of, or constitute a default under any Legal Requirement to which FVP
or any of the other FrontierVision Companies is bound; (D) assuming receipt of
all Consents, will not conflict with, constitute grounds for termination of,
result in a breach of, constitute a default under, or accelerate or permit the
acceleration of any performance required by the terms of any Franchise, FCC
License, or Material Contract; and (E) will not result in the creation of any
Encumbrance upon the Assets. Notwithstanding the foregoing, FVP does not make
any representation or warranty regarding any of the foregoing that may result
from the specific legal or regulatory status of Buyer or as a result of any
other facts that specifically relate to the business or activities in which
Buyer is or proposes to be engaged other than the cable television business.
3.5 Financial Statements.
(a) FVP has furnished Buyer with true and complete copies
of the audited financial
statements listed in Section 3.5 of FrontierVision's Disclosure Schedule
(collectively, the "Audited Financial Statements") and of the unaudited
financial statements listed in Section 3.5 of FrontierVision's Disclosure
Schedule (collectively, the "Unaudited Financial Statements," and collectively
with the Audited Financial Statements, the "Financial Statements"), and such
Financial Statements are by this reference incorporated into and deemed a part
of FrontierVision's Disclosure Schedule.
(b) Except as disclosed in Section 3.5 of
FrontierVision's Disclosure Schedule and except, in the case of the Unaudited
Financial Statements, for the omission of footnotes and changes resulting from
customary and recurring year-end adjustments, the Financial Statements: (1) have
been
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prepared from the books and records of the FrontierVision Companies to which
they relate, with no material difference between such Financial Statements and
the financial records maintained, and the accounting methods applied, by the
FrontierVision Companies for tax purposes; (2) have been prepared in accordance
with GAAP consistently applied and maintained throughout the periods indicated
(except as indicated in the notes thereto); and (3) present fairly in all
material respects the financial condition of the FrontierVision Companies to
which they relate as at their respective dates and the results of operations for
the periods then ended.
3.6 Absence of Undisclosed Liabilities.
None of the FrontierVision Companies has any indebtedness, liability,
or obligation except for: (a) indebtedness, liabilities and obligations that are
reflected or reserved against in the latest balance sheet of such FrontierVision
Company included in the Financial Statements; (b) indebtedness, liabilities and
obligations under the Debt Documents, Contracts, Franchises, Licenses, or
Employee Plans; (c) indebtedness, liabilities and obligations that were incurred
after the date of the latest balance sheet of such FrontierVision Company
included in the Financial Statements either in the ordinary course of business
or in compliance with the covenants of FVP set forth in Section 6.1 or that (to
the extent not discharged prior to the Closing) will be included as Adjustment
Liabilities in the computation of Closing Net Liabilities (none of which
indebtedness, liabilities or obligations results from a claim or lawsuit
relating to a breach of contract, breach of warranty, tort or infringement that,
if adversely determined, would have a material adverse effect on the business,
financial condition, assets or liabilities of the FrontierVision Companies,
taken as a whole; and (d) contingent asserted and unasserted liabilities and
obligations set forth in Section 3.6 of FrontierVision's Disclosure Schedule.
3.7 Absence of Certain Changes.
(a) Since December 31, 1997, except as disclosed in the
Quarterly Reports on Form
10-Q of FrontierVision Operating Partners, L.P. for any of the quarters ended
March 31, 1998, June 30, 1998 and September 30, 1998, or as disclosed in the
Quarterly Reports on Form 10-Q of FrontierVision Holdings, L.P. for any of the
quarters ended March 31, 1998, June 30, 1998 and September 30, 1998, or as
disclosed in any public document filed by FrontierVision Operating Partners,
L.P. or FrontierVision Holdings, L.P. with the SEC after September 30, 1998, or
as disclosed in Section 3.7 of FrontierVision's Disclosure Schedule and except
for matters occurring after the date hereof that are permitted by the provisions
of this Agreement or consented to by Buyer, no FrontierVision Company has: (1)
made any sale, assignment, lease, or other transfer of assets other than in the
ordinary course of business with suitable replacements being obtained therefor
(unless such assets were obsolete); or (2) issued any note, bond, or other debt
security or created, incurred, assumed, or guaranteed any indebtedness for
borrowed money other than pursuant to the Debt Documents listed in Section 1.1
of FrontierVision's Disclosure Schedule.
(b) Since December 31, 1998, except as disclosed in
Section 3.7 of FrontierVision's Disclosure Schedule and except for matters
occurring after the date of this Agreement that are permitted
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by the provisions of this Agreement or consented to by Buyer, no FrontierVision
Company has made or promised any material increase in compensation payable or to
become payable to any of the employees (including executive officers) of any
FrontierVision Company other than in the ordinary course of business or as
contemplated under any employment arrangement currently in effect.
3.8 Franchises, Licenses, Material Contracts.
Section 3.8 of FrontierVision's Disclosure Schedule contains a list of
the Franchises (including the Franchising Authority which granted each Franchise
and the stated expiration date of each Franchise), FCC Licenses and Material
Contracts in effect on the date hereof, which list is true, correct and complete
in all material respects. Without material exception and subject to the last
sentence of this Section 3.8, the Franchises and the Licenses constitute all of
the authorizations of Governmental Authorities necessary or required for the
construction, maintenance and operations of the Systems as currently conducted.
FVP has delivered to Buyer true and complete copies of all Franchises, FCC
Licenses and Material Contracts as in effect on the date hereof. Subject to the
last sentence of this Section 3.8, the Franchises, FCC Licenses and Material
Contracts are in full force and effect (subject to expiration at the end of
their current term) and are valid, binding and enforceable upon the
FrontierVision Company that is a party thereto and, to FVP's knowledge, the
other parties thereto in accordance with their terms, except to the extent such
enforceability may be affected by bankruptcy, insolvency, or similar laws
affecting creditors' rights generally and by judicial discretion in the
enforcement of equitable remedies. Except as disclosed in Section 3.8 of
FrontierVision's Disclosure Schedule, the FrontierVision Companies are in
material compliance with the terms of the Franchises, Licenses and Material
Contracts, and as of the date of this Agreement none of the FrontierVision
Companies has received any written notice (or to FVP's knowledge after due
inquiry of the regional managers of the Systems, oral notice) from a Franchising
Authority to the effect that any of the FrontierVision Companies are not
currently in material compliance with the terms of the Franchise granted by such
Franchising Authority. Except as set forth in Section 3.4 or 3.8 of
FrontierVision's Disclosure Schedule, none of the Franchises grants to any
Franchising Authority or any other Person any right of first refusal or right to
purchase the assets of any System that would be triggered by the consummation of
the purchase and sale of the Purchased Interests. Except as set forth in Section
3.8 of FrontierVision's Disclosure Schedule, a valid request for renewal has
been timely filed under Section 626(a) of the Cable Act with the proper
Franchising Authority with respect to each Franchise in respect of which the
statutory time period for making such filing has expired. Subject to the
provisions of Sections 6.1 and 6.4, FVP shall not have any obligation to renew
or extend any Franchises, Licenses or Material Contracts as a condition to
Buyer's obligations under this Agreement.
3.9 Title to and Condition of Real Property and Tangible Personal
Property.
Section 3.9 of FrontierVision's Disclosure Schedule lists all Real
Property parcels owned in fee by any of the FrontierVision Companies as of the
date of this Agreement (excluding easements, rights-of-way, and similar
authorizations) and describes the current use thereof. Except as disclosed in
Section 3.9 of FrontierVision's Disclosure Schedule, a copy of each deed
pursuant to which any of the
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FrontierVision Companies acquired a fee estate in a Real Property parcel that is
currently owned by it (including any title insurance policies issued to such
FrontierVision Company that are related to such parcels) have been delivered to
Buyer by FVP. Section 3.9 of FrontierVision's Disclosure Schedule lists the Real
Property leased by any of the FrontierVision Companies as of the date of this
Agreement and describes the current use thereof and indicates the stated
expiration date of the current term of such leases. Except as disclosed in
Section 3.9 of FrontierVision's Disclosure Schedule: (a) the FrontierVision
Company that owns a fee estate in a Real Property parcel has good and marketable
title thereto; (b) the FrontierVision Company that owns any material item of
Tangible Personal Property has good and valid title thereto; (c) the
FrontierVision Company that leases Real Property pursuant to any of the Material
Leases has a valid leasehold interest therein (subject to expiration of such
Material Lease in accordance with its terms); and (d) the FrontierVision Company
that leases any material item of Tangible Personal Property has a valid
leasehold interest therein (subject to expiration of such lease in accordance
with its terms), in each case of (a), (b), (c) and (d) above, free and clear of
all Encumbrances other than Permitted Encumbrances. The FrontierVision Companies
own, lease or otherwise have rights to use all real property (excluding
easements, rights-of-way and similar authorizations) and tangible personal
property necessary to operate the Systems as presently conducted by the
FrontierVision Companies in all material respects. Notwithstanding the express
language of this Section 3.9 or as may otherwise be provided in this Agreement,
no representation or warranty is being made as to title to the internal wiring,
house drops, and unrecorded dwelling-unit easements, rights of entry or
rights-of-way held or used by the FrontierVision Companies. Except for such
rearrangements or rehabilitations of a System's cable trunk as may be necessary
in the ordinary course of business for that System taken as a whole, the
FrontierVision Companies have no obligation to rearrange or rehabilitate any of
such cable trunk. Buyer acknowledges that, except as expressly warranted in this
Section 3.9 and Sections 3.14, 3.15 and 3.16, all Real Property, all
improvements thereon, and all other Tangible Personal Property are being sold or
assigned "as is-where is" and Buyer shall not be entitled to make any claim
against FVP or Sellers arising out of or relating to the condition thereof.
3.10 Intangibles.
Section 3.10 of FrontierVision's Disclosure Schedule contains a
description of the material Intangibles (exclusive of those required to be
listed in Section 3.8 of FrontierVision's Disclosure Schedule), that are owned
or leased by any of the FrontierVision Companies and that are necessary for the
conduct of the business or operations of the Systems. To FVP's knowledge, except
as to potential copyright liability arising from the performance, exhibition or
carriage of any music on the Systems or as disclosed in Section 3.10 of
FrontierVision's Disclosure Schedule, it is not infringing upon any trademarks,
trade names, copyrights or similar intellectual property rights of others.
3.11 Information Regarding the Systems.
(a) Subscribers. Section 3.11 of FrontierVision's
Disclosure Schedule sets forth the approximate number of Equivalent Subscribers
as of the date indicated therein (including the
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approximate number of Equivalent Subscribers served in each Franchise Area and
served by each headend, in each case as of the date indicated therein).
(b) Operating Revenue. Section 3.11 of FrontierVision's
Disclosure Schedule sets
forth the approximate "Operating Revenue" of the Systems on a consolidated basis
as of the date indicated therein, as "Operating Revenue" is defined therein.
(c) Certain Systems Information. Section 3.11 of
FrontierVision's Disclosure
Schedule sets forth the approximate number of plant miles for each System, the
approximate bandwidth capability of each System, the channel lineup for each
System, and the monthly rates charged for each class of service offered by each
System, which information is true and correct in all material respects, in each
case as of the applicable dates specified therein and subject to any
qualifications set forth therein.
(d) Franchise and FCC Matters. All material reports
required to be filed by any of
the FrontierVision Companies with any of the Franchising Authorities or the FCC
have been duly filed and were materially correct when filed. The FrontierVision
Companies are permitted under all applicable Franchises and FCC Regulations to
distribute the television broadcast signals distributed by the Systems (except
for any inadvertent failure by the Systems to comply with the FCC's
nonduplication and syndex rules) and to utilize all carrier frequencies
generated by the operations of the Systems, and are licensed in all material
respects to operate all the facilities required by Legal Requirements to be
licensed (except where the failure to be so authorized or licensed would not
materially impair the operation of the Systems as presently conducted).
(e) Request for Signal Carriage. Except for
nonduplication and blackout notices
received in the ordinary course of business, none of the FrontierVision
Companies has received any FCC order requiring any System to carry a television
broadcast signal or to terminate carriage of a television broadcast signal with
which it has not complied, and to FVP's knowledge, except as disclosed in
Section 3.11 of FrontierVision's Disclosure Schedule, the FrontierVision
Companies have complied with all written and bona fide requests or demands
received from television broadcast stations to carry or to terminate carriage of
a television broadcast signal on a System.
(f) Rate Regulatory Matters. Section 3.11 of
FrontierVision's Disclosure Schedule
sets forth a list of all Governmental Authorities that are certified to regulate
rates of the Systems pursuant to the Cable Act and FCC Regulations as of the
date of this Agreement and all Franchise Areas in which a complaint regarding
rates has been filed with the FCC as of November 12, 1998 (other than those that
have been rejected by the FCC or have been withdrawn). As of the date of this
Agreement, none of the FrontierVision Companies has received any written notice
from any Governmental Authority that it has any obligation or liability to
refund to subscribers of the Systems any portion of the revenue received by such
FrontierVision Company from subscribers of the Systems (excluding with respect
to deposits for converters, encoders, decoders and related equipment and other
prepaid items). Buyer acknowledges that, except as expressly warranted in this
Section 3.11(f), FVP is not making any
- 33 -
representation or warranty regarding any Rate Regulatory Matter and, except as
expressly provided in Section 10.2(c), Buyer shall not be entitled to make any
claim against FVP or Sellers arising out of or relating to any Rate Regulatory
Matter.
(g) Copyright. To the extent necessary to operate the
Systems, the FrontierVision
Companies are entitled to hold and do hold the compulsory copyright license
described in Section 111 of the Copyright Act, which compulsory copyright
license is in full force and effect and has not been revoked, canceled,
encumbered or adversely affected in any material respect except relating to any
immaterial disputes which may arise after the date hereof with respect to
copyright fees payable with respect to the operation by the FrontierVision
Companies of the Systems. The FrontierVision Companies have paid all material
copyright fees that are due and payable with respect to the operation by the
FrontierVision Companies of the Systems (or have accrued a liability with
respect thereto which will be included as an Adjustment Liability in the
computation of Closing Net Liabilities) and have set aside an adequate reserve
on their books for the payment of all copyright fees that are required to be
accrued but are not yet due and payable.
(h) Insurance. The Systems and Assets are insured
against claims, loss or damage
in amounts generally customary in the cable television industry and consistent
with the FrontierVision Companies' past practices.
(i) Purchase and Sale Agreements. Section 3.11 of
FrontierVision's Disclosure
Schedule lists all definitive purchase and sale agreements pursuant to which the
Systems were acquired. A copy of each such agreement has been delivered to
Buyer. The FrontierVision Companies have not collected any payment as of the
date of this Agreement from any "seller" under any of such purchase and sale
agreements in respect of any indemnification claim made against any such
"seller" by the FrontierVision Companies for a breach of any representation or
warranty by any such "seller" regarding the condition of any of the Systems
acquired from any such "seller." Except as disclosed in Section 3.11 of
FrontierVision's Disclosure Schedule, no FrontierVision Company is bound by any
contractual noncompete or similar restrictive covenant. The FrontierVision
Companies have paid all amounts that are due and payable under the purchase and
sale agreements referred to above (or have accrued a liability with respect
thereto which will be included as an Adjustment Liability in the computation of
Closing Net Liabilities).
(j) Overbuilds. To FVP's knowledge, as of the date of
this Agreement, except as
disclosed in Section 3.11 of FrontierVision's Disclosure Schedule, the Systems
are the only cable television systems presently servicing the Franchise Areas
(other than any cable television system owned, operated or managed by Buyer or
any Subsidiary or Affiliate of Buyer).
(k) Franchise Fees. The FrontierVision Companies have
paid all franchise fees that
are due and payable with respect to the operation by the FrontierVision
Companies of the Systems (or have accrued a liability with respect thereto which
will be included as an Adjustment Liability in the computation of Closing Net
Liabilities).
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(1) Pole Attachments. The FrontierVision Companies have
paid all pole attachment
fees that are due and payable with respect to the operation by the
FrontierVision Companies of the Systems (or have accrued a liability with
respect thereto which will be included as an Adjustment Liability in the
computation of Closing Net Liabilities). As of the date of this Agreement,
except as disclosed in Section 3.11 of FrontierVision's Disclosure Schedule, no
pole attachment audits are pending and the FrontierVision Companies have not
received written notice of any pending pole attachment audit.
3.12 Taxes.
The FrontierVision Companies have filed or caused to be filed all
required federal Tax Returns and all other material required Tax Returns with
the appropriate Governmental Authorities in all jurisdictions in which such Tax
Returns are required to be filed by the FrontierVision Companies (except Tax
Returns for which the filing date has been extended and such extension period
has not expired), and all Taxes shown on such Tax Returns have been properly
accrued or paid to the extent such Taxes have become due and payable. FVP has
delivered to Buyer true, correct and complete copies of the Tax Returns (in the
form filed) listed in Section 3.12 of FrontierVision's Disclosure Schedule. The
Financial Statements reflect an adequate reserve for all material unpaid Taxes
payable by the FrontierVision Companies for all Tax periods and portions thereof
through the date of such Financial Statements. Any unpaid Taxes of the
FrontierVision Companies for all periods ending prior to the Closing Date and
not reflected on such Financial Statements will be included as an Adjustment
Liability in the computation of Closing Net Liabilities. Except as disclosed in
Section 3.12 of FrontierVision's Disclosure Schedule, none of the FrontierVision
Companies has executed any waiver or extensions of any statute of limitations on
the assessment or collection of any Tax or with respect to any liability arising
therefrom. Except as disclosed in Section 3.12 of FrontierVision's Disclosure
Schedule, none of the federal, state or local income Tax Returns filed by the
FrontierVision Companies has been audited by any taxing authority. Except as set
forth in Section 3.12 of FrontierVision's Disclosure Schedule, there are no Tax
audits pending and no outstanding agreements or waiver extending the statutory
period of limitations applicable to any federal, state or local Tax Return of
any of the FrontierVision Companies for any period.
3.13 Employee Plans.
(a) Employee Plans. Section 3.13 of FrontierVision's
Disclosure Schedule contains
a list of all Employee Plans (true and correct copies of which have been
delivered to Buyer). None of the FrontierVision Companies or any of their ERISA
Affiliates is or has been required to contribute to any "multiemployer plan," as
defined in ERISA Section 3(37), nor has any FrontierVision Company or any such
ERISA Affiliate (or any former ERISA Affiliate with respect to the period in
which such entity was an ERISA Affiliate) experienced a complete or partial
withdrawal, within the meaning of ERISA Section 4203 or 4205, from such a
"multiemployer plan." Except as required under Code Section 4980B or ERISA
Sections 601-609, no Employee Plan provides health or medical coverage to
- 35 -
former employees of the FrontierVision Companies. As of the Adjustment Time the
FrontierVision Companies will have accrued in accordance with GAAP a liability
for all health benefit claims filed as of such time and all claims incurred but
not reported as of such time.
(b) Qualified Plans. Except as disclosed in Section 3.13
of FrontierVision's
Disclosure Schedule, with respect to each Employee Plan, and after taking into
consideration the effect of the payments to be made with respect to the Employee
Plans: (1) each such Employee Plan that is intended to be tax-qualified is the
subject of a favorable determination letter except as described in Section 3.13
of FrontierVision's Disclosure Schedule; (2) no material liability to the
Pension Benefit Guaranty Corporation is expected by FVP to be incurred by the
FrontierVision Companies or any of their ERISA Affiliates (or any former ERISA
Affiliate with respect to the period in which such entity was an ERISA
Affiliate) with respect to any Employee Plan; (3) no non-exempt prohibited
transaction, within the definition of Section 4975 of the Code or Title 1, Part
4 of ERISA, has occurred which would subject the FrontierVision Companies or any
of their ERISA Affiliates (or any former ERISA Affiliate with respect to the
period in which such entity was an ERISA Affiliate) to any material liability;
(4) there is no accumulated funding deficiency, termination or partial
termination, or requirement to provide security with respect to any Employee
Plan; (5) the fair market value of the assets of any Employee Plan would exceed
the value of all liabilities and obligations of such Employee Plan if such plan
were to terminate on the Closing Date; and (6) the transactions contemplated by
this Agreement will not result in liability under ERISA to FVP or the
FrontierVision Companies or Buyer, or any of their respective ERISA Affiliates.
(c) Labor Unions. As of the date of this Agreement,
other than as disclosed in
Section 3.13 of FrontierVision's Disclosure Schedule, none of the FrontierVision
Companies is party to or bound by any collective bargaining agreement. As of the
date of this Agreement, other than as disclosed in Section 3.13 of
FrontierVision's Disclosure Schedule, to the knowledge of FVP, (1) none of the
employees of the FrontierVision Companies is presently a member of any
collective bargaining unit related to his or her employment and (2) no
collective bargaining unit has filed a petition for representation of any of the
employees of the FrontierVision Companies.
3.14 Environmental Laws.
Except as disclosed in Section 3.14 of FrontierVision's Disclosure
Schedule: (a) the FrontierVision Companies' operations with respect to the
Systems comply in all material respects with all applicable Environmental Laws
as in effect on the date of this Agreement; (b) none of the FrontierVision
Companies has used the Real Property for the manufacture, transportation,
treatment, storage or disposal of Hazardous Substances except for gasoline and
diesel fuel and such use of Hazardous Substances (in cleaning fluids, solvents
and other similar substances) customary in the construction, maintenance and
operation of a cable television system and in amounts or under circumstances
that would not reasonably be expected to give rise to material liability for
remediation; and (c) to FVP's knowledge, the Real Property complies and has
complied in all material respects with all applicable Environmental Laws. Except
as disclosed in Section 3.14 of FrontierVision's Disclosure
- 36 -
Schedule, as of the date of this Agreement, no Environmental Claim has been
filed or issued against the FrontierVision Companies.
3.15 Claims and Litigation.
Except as disclosed in Section 3.15 of FrontierVision's Disclosure
Schedule, as of the date of this Agreement, there is no claim, legal action,
arbitration or other legal, administrative or tax proceeding, nor any order,
decree or judgment, in progress or pending, or to FVP's knowledge threatened in
writing, against or relating to the FrontierVision Companies, the Assets or the
business or operations of any of the Systems (other than FCC and other
proceedings generally affecting the cable television industry and not specific
to the FrontierVision Companies and other than rate complaints or certifications
filed by customers or Franchising Authorities) that would have a material
adverse effect on FVP's ability to perform its obligations under this Agreement
or that would have a material adverse effect on the business, financial
condition, assets or liabilities of any of the FrontierVision Companies.
3.16 Compliance With Laws.
Except as disclosed in Section 3.16 of FrontierVision's Disclosure
Schedule and except for any such noncompliance as has been remedied, each of the
FrontierVision Companies has complied in all material respects with, and the
Systems and the Assets are in compliance in all material respects with, all
applicable Legal Requirements (including, without limitation, the Code, ERISA,
the National Labor Relations Act, the Cable Act, FCC Regulations, and the
Copyright Act). Notwithstanding the foregoing or any other provision of this
Agreement to the contrary, and without limiting the provisions of Section 6.14,
FVP does not make any representation or warranty with respect to compliance with
any Legal Requirements dealing with, limiting or affecting the rates which can
be charged by cable television systems to their customers (whether for
programming, equipment, installation, service or otherwise) or any other Rate
Regulatory Matter.
3.17 Transactions with Affiliates.
Except as disclosed in the Financial Statements or Section 3.17 of
FrontierVision's Disclosure Schedule, none of the FrontierVision Companies has
been involved in any business arrangement or business relationship with any
Affiliate of any of the FrontierVision Companies (other than another
FrontierVision Company), and no Affiliate of any of the FrontierVision Companies
(other than another FrontierVision Company) owns any property or right, tangible
or intangible, that is used in the business of the FrontierVision Companies
(other than in its capacity as a direct or indirect equity or debt holder of the
FrontierVision Companies).
3.18 Broker.
Neither FVP nor any of the other FrontierVision Companies or any Person
acting on their behalf has incurred any liability for any finders' or brokers'
fees or commissions in connection with the
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transactions contemplated by this Agreement except as described in Section 11.1
or disclosed in Section 3.18 of FrontierVision's Disclosure Schedule.
3.19 Securities Law Matters.
(a) FVP represents that it is an "accredited investor"
as that term is defined in
Regulation D under the Securities Act and that it has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of acquisition of the Escrow Registrable Securities and of
making an informed investment decision with respect thereto, and understands all
risks of holding the Escrow Registrable Securities for an indefinite period of
time.
(b) FVP acknowledges receipt of copies of Buyer's 10-K
and Buyer's 10-Q.
(c) FVP is aware that the Escrow Registrable Securities
are not currently registered
under the Securities Act or under any state securities laws.
(d) FVP agrees that it will not transfer the Escrow
Registrable Securities without
compliance with the registration and other provisions of all applicable
securities laws and acknowledges that each certificate representing the Escrow
Registrable Securities which it receives will be marked with an appropriate
legend to such effect (which legend will be removed in accordance with the
provisions of the Deposit Registration Rights Agreement).
(e) FVP is purchasing the Escrow Registrable Securities
solely for investment
purposes, with no present intention to sell the Escrow Registrable Securities
(other than pursuant to an effective registration statement).
(f) FVP understands that it must bear the economic risk
of the investment represented by the purchase of the Escrow Registrable
Securities for an indefinite period.
(g) FVP agrees not to offer, sell, or otherwise dispose
of the shares of the Escrow Registrable Securities at any time prior to the
second anniversary of the date FVP acquires the Escrow Registrable Securities,
unless such offer, sale, or other disposition is (1) registered under the
Securities Act, or (2) in compliance with an opinion of counsel of FVP,
delivered to Buyer and reasonably acceptable to it, to the effect that such
offer, sale, or other disposition thereof does not violate the Securities Act.
(h) FVP acknowledges that the certificate(s) representing
the Escrow Registrable Securities delivered hereunder shall bear the following
legend (which legend will be removed in accordance with the provisions of the
Deposit Registration Rights Agreement):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE FEDERAL OR STATE SECURITIES LAWS AND MAY NOT BE
- 38 -
OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED OR ASSIGNED
FOR VALUE, DIRECTLY OR INDIRECTLY, NOR MAY THE SECURITIES BE
TRANSFERRED ON THE BOOKS OF THE CORPORATION, WITHOUT
REGISTRATION OF SUCH SECURITIES UNDER ALL APPLICABLE FEDERAL
OR STATE SECURITIES LAWS OR COMPLIANCE WITH AN APPLICABLE
EXEMPTION THEREFROM.
THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AS SET FORTH IN A REGISTRATION RIGHTS
AGREEMENT, A COPY OF WHICH MAY BE OBTAINED FROM THE
CORPORATION.
3.20 Cure.
For all purposes under this Agreement, the existence or occurrence of
any events or circumstances which constitute or cause a breach of a
representation or warranty of FVP (including without limitation FrontierVision's
Disclosure Schedule) on the date such representation or warranty is made shall
be deemed not to constitute a breach of such representation or warranty if such
event or circumstance is cured on or prior to the Closing Date or the earlier
termination of this Agreement.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLERS
Subject to any provisions of this Agreement limiting, qualifying or
excluding any of the representations or warranties made herein, each Seller
severally represents and warrants to Buyer (with respect to such Seller and not
with respect to any other Seller) as set forth in this Article 4.
4.1 Authority of Sellers; Authorization and Binding Obligation.
Such Seller has the requisite corporate, partnership, limited liability
company or other applicable power, authority and legal capacity to execute,
deliver and perform this Agreement and the other Transaction Documents to which
such Seller is a party according to their respective terms. The execution,
delivery, and performance by such Seller of this Agreement and the other
Transaction Documents to which such Seller is a party have been duly authorized
by all necessary action on the part of such Seller. This Agreement and the other
Transaction Documents to which such Seller is a party have been duly executed
and delivered by such Seller (or, in the case of Transaction Documents to be
executed and delivered at Closing, when executed and delivered will be duly
executed and delivered) and constitute (or, in the case of Transaction Documents
to be executed and delivered at Closing, when executed and delivered will
constitute) the legal, valid, and binding obligation of such Seller, enforceable
against such Seller in accordance with their terms, except as the enforceability
of this Agreement and such other Transaction Documents may be limited by
bankruptcy, insolvency, or similar
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laws affecting creditors' rights generally or by judicial discretion in the
enforcement of equitable remedies, and as rights to indemnification may be
limited by federal or state securities laws or the public policies embodied
therein.
4.2 Absence of Conflicting Agreements; Consents.
Except for the expiration or termination of any applicable waiting
period under the HSR Act, the filing by FVP, any other FrontierVision Company
and/or the Sellers with the SEC of any reports required to be filed in
connection with the consummation of the transactions contemplated hereby, or as
set forth in Section 4.2 of FrontierVision's Disclosure Schedule, the execution,
delivery and performance by such Seller of this Agreement and the other
Transaction Documents to which such Seller is a party (with or without the
giving of notice, the lapse of time, or both): (A) do not require the Consent
of, notice to, or filing with any Governmental Authority or any other Person
that has not been obtained; (B) will not conflict with any provision of the
Charter Documents of such Seller (and, in the case of the SPC Sellers, the
Charter Documents of the SPC owned by such Seller) as currently in effect; (C)
assuming receipt of all Consents, will not conflict with, result in a breach of,
or constitute a default under any Legal Requirement to which such Seller (and,
in the case of the SPC Sellers, to which the SPC owned by such Seller) is bound;
(D) assuming receipt of all Consents, will not conflict with, constitute grounds
for termination of, result in a breach of, constitute a default under, or
accelerate or permit the acceleration of any performance required by the terms
of any material agreement or instrument to which such Seller (and, in the case
of the SPC Sellers, to which the SPC owned by such Seller) is bound; and (E)
will not result in the creation of any Encumbrance upon the Purchased Interests
held by such Seller (and, in the case of the SPC Sellers, upon the limited
partnership interest in FVP held by the SPC owned by such Seller).
Notwithstanding the foregoing, no Seller makes any representation or warranty
regarding any of the foregoing that may result from the specific legal or
regulatory status of Buyer or as a result of any other facts that specifically
relate to the business or activities in which Buyer is or proposes to be engaged
other than the cable television business.
4.3 Title to Purchased Interests.
(a) The General Partner represents that it holds of
record and owns beneficially the
General Partnership Interest and the Subordinated Notes set forth by its name in
Section 4.3 of FrontierVision's Disclosure Schedule, free and clear of all
Encumbrances.
(b) Each Limited Partner Seller represents that it holds
of record and owns
beneficially the Limited Partnership Interest and the Subordinated Notes set
forth by its name in Section 4.3 of FrontierVision's Disclosure Schedule, free
and clear of all Encumbrances.
(c) Each SPC Seller represents that it holds of record
and owns beneficially the
Subordinated Notes listed next to its name in Section 4.3 of FrontierVision's
Disclosure Schedule and that the SPC listed next to its name in Section 4.3 of
FrontierVision's Disclosure Schedule holds of record and owns beneficially the
limited partnership interest in FVP and the Subordinated Notes set
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forth by such SPC's name in Section 4.3 of FrontierVision's Disclosure Schedule,
free and clear of all Encumbrances. Each SPC Seller represents that it holds of
record and owns beneficially 100% of the issued and outstanding Capital Stock of
the SPC listed next to such SPC Seller's name in Section 4.3 of FrontierVision's
Disclosure Schedule, free and clear of all Encumbrances. All of the issued and
outstanding Capital Stock of the SPC owned by such SPC Seller has been duly
authorized, validly issued, fully paid and nonassessable, and has not been
issued in violation of any federal or state securities laws. Each SPC Seller
represents that the SPC owned by such SPC Seller has not and does not own any
assets or other properties (other than the respective limited partnership
interests in FVP and the Subordinated Notes held by such SPC, and, in the case
of 1818 II Cable Corp. and Olympus Cable Corp., the respective limited
partnership interests in the General Partner held by such SPC, which interests
in the General Partner shall be distributed, directly or indirectly, to the SPC
Seller which owns such SPC immediately prior to the Closing) or conduct any
business or have any indebtedness, liabilities or obligations other than rights,
obligations, and liabilities arising under this Agreement and the partnership
agreement of FVP, the SPC Notes (which SPC Notes shall be canceled by the SPC
Seller that holds such SPC Note concurrently with the Closing) or as disclosed
in Section 4.3 of FrontierVision's Disclosure Schedule.
(d) Except as disclosed in Section 4.3 of
FrontierVision's Disclosure Schedule and
except for this Agreement and rights granted under the partnership agreement of
FVP, such Seller (and, in the case of the SPC Sellers, the SPC owned by such
Seller) (1) is not party to, and has not granted to any other Person, any
options, warrants, subscription rights, rights of first refusal or any other
rights providing for the acquisition or disposition of partnership interests or
other equity interests in the FVP (and, in the case of the SPC Sellers, in the
SPC owned by such Seller), and (2) is not a party to any voting agreement,
voting trust, proxy or other agreement or understanding with respect to the
voting of any of the Purchased Interests or the Capital Stock of any of the
FrontierVision Companies.
4.4 Broker.
Neither such Seller nor any Person acting on its behalf has incurred
any liability for any finders' or brokers' fees or commissions in connection
with the transactions contemplated by this Agreement except as described in
Section 11.1.
4.5 Taxes.
There are no Tax audits pending and no outstanding agreements or waiver
extending the statutory period of limitations applicable to any federal, state,
or local Tax Return of the SPC the capital stock of which is owned by such SPC
Seller for any period.
4.6 Securities Law Matters.
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(a) Each such Seller who is an "Accredited Investor"
represents that the information
provided in such Seller's "Accredited Investor Questionnaire" delivered herewith
is true, correct and complete.
(b) Such Seller, either individually or together with his
representatives and advisors,
has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of acquisition of the Stock
Consideration Registrable Securities and of making an informed investment
decision with respect thereto, and understands all risks of holding the Stock
Consideration Registrable Securities for an indefinite period of time.
(c) Such Seller acknowledges receipt of copies of Buyer's
10-K and Buyer's 10-Q.
(d) Such Seller has carefully considered and has, to the
extent such Seller believes
such discussion necessary discussed with such Seller's professional legal, tax,
accounting and financial advisors the suitability of an investment in the Stock
Consideration Registrable Securities for such Seller's particular tax and
financial situation and has determined that the Stock Consideration Registrable
Securities is a suitable investment for such Seller.
(e) Such Seller agrees that it will not transfer the
Stock Consideration Registrable
Securities without compliance with the registration and other provisions of all
applicable securities laws.
(f) Such Seller is purchasing the Stock Consideration
Registrable Securities solely
for investment purposes, with no present intention to sell the Stock
Consideration Registrable Securities (other than pursuant to an effective
registration statement).
(g) Such Seller understands that it must bear the
economic risk of the investment represented by the purchase of the Stock
Consideration Registrable Securities for an indefinite period.
(h) Such Seller agrees not to offer, sell, or otherwise
dispose of the shares of the Stock Consideration Registrable Securities at any
time prior to the second anniversary of the date such Seller acquires the Stock
Consideration Registrable Securities, unless such offer, sale, or other
disposition is (1) registered under the Securities Act, or (2) in compliance
with an opinion of counsel of the Seller, delivered to Buyer and reasonably
acceptable to it, to the effect that such offer, sale, or other disposition
thereof does not violate the Securities Act.
(i) Such Seller acknowledges that the certificate(s)
representing the Stock Consideration Registrable Securities delivered hereunder
shall be issued to such Seller with the following legend (which legend will be
removed in accordance with the provisions of the Stock Consideration
Registration Rights Agreement):
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THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE FEDERAL OR STATE SECURITIES LAWS AND MAY NOT BE
OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED OR ASSIGNED
FOR VALUE, DIRECTLY OR INDIRECTLY, NOR MAY THE SECURITIES BE
TRANSFERRED ON THE BOOKS OF THE CORPORATION, WITHOUT
REGISTRATION OF SUCH SECURITIES UNDER ALL APPLICABLE FEDERAL
OR STATE SECURITIES LAWS OR COMPLIANCE WITH AN APPLICABLE
EXEMPTION THEREFROM.
THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AS SET FORTH IN A REGISTRATION RIGHTS
AGREEMENT, A COPY OF WHICH MAY BE OBTAINED FROM THE
CORPORATION.
4.7 Cure.
For all purposes under this Agreement, the existence or occurrence of
any events or circumstances which constitute or cause a breach of a
representation or warranty of such Seller (including without limitation
FrontierVision's Disclosure Schedule) on the date such representation or
warranty is made shall be deemed not to constitute a breach of such
representation or warranty if such event or circumstance is cured on or prior to
the Closing Date or the earlier termination of this Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to FVP and each Seller as set forth in
this Article 5.
5.1 Organization; Authorization and Binding Obligation.
Buyer is a corporation duly incorporated, validly existing, and in good
standing under the laws of the State of Delaware. Buyer has the requisite
corporate power and authority to own, lease, and operate its properties, to
carry on its business in the places where such properties are now owned, leased,
or operated and such business is now conducted, and to execute, deliver and
perform this Agreement and the other Transaction Documents to which Buyer is a
party according to their respective terms. Buyer is duly qualified and in good
standing as a foreign corporation in each jurisdiction in which such
qualification is required.
- 43 -
5.2 Authorization and Binding Obligation.
The execution, delivery, and performance by Buyer of this Agreement and
the other Transaction Documents to which Buyer is a party have been duly
authorized by all necessary corporate, shareholder or other action on the part
of Buyer. This Agreement and the other Transaction Documents to which Buyer is a
party have been duly executed and delivered by Buyer (or, in the case of
Transaction Documents to be executed and delivered at Closing, when executed and
delivered will be duly executed and delivered) and constitute (or, in the case
of Transaction Documents to be executed and delivered at Closing, when executed
and delivered will constitute) the legal, valid, and binding obligation of
Buyer, enforceable against Buyer in accordance with their terms, except as the
enforceability of this Agreement and such other Transaction Documents may be
limited by bankruptcy, insolvency, or similar laws affecting creditors' rights
generally or by judicial discretion in the enforcement of equitable remedies,
and as rights to indemnification may be limited by federal or state securities
laws or the public policies embodied therein.
5.3 Absence of Conflicting Agreements; Consents.
Except for the expiration or termination of any applicable waiting
period under the HSR Act and the filing by Buyer with the SEC of any reports
required to be filed in connection with the consummation of the transactions
contemplated hereby, the execution, delivery and performance by Buyer of this
Agreement and the other Transaction Documents to which Buyer is a party (with or
without the giving of notice, the lapse of time, or both): (a) do not require
any Consent, declaration to, or filing with any Governmental Authority or any
other Person; (b) will not conflict with any provision of the Charter Documents
of Buyer, as currently in effect; (c) will not conflict with, result in a breach
of, or constitute a default under any Legal Requirement to which Buyer is bound;
and (d) will not conflict with, constitute grounds for termination of, result in
a breach of, constitute a default under, or accelerate or permit the
acceleration of any performance required by the terms of any material agreement
or instrument to which Buyer is a party or bound. Notwithstanding the foregoing,
Buyer does not make any representation or warranty regarding any of the
foregoing that may result from the specific legal or regulatory status of any
Seller or any FrontierVision Company or as a result of any other facts that
specifically relate to the business or activities in which any Seller or any
FrontierVision Company is or proposes to be engaged other than the cable
television business.
5.4 Capital Structure; ACC Class A Common Stock.
(a) All of the shares of ACC Class A Stock deposited into
escrow in accordance with
the Deposit Escrow Agreement as contemplated by Section 2.4(a): (1) have been
duly authorized and validly issued, fully paid and nonassessable, not subject
to, or issued in violation of, any preemptive rights and have not been issued in
violation of any federal or state securities laws; and (2) have the same rights
and powers as all other shares of ACC Class A Common Stock issued and
outstanding as of the date of this Agreement. If released to FVP in accordance
with this Agreement, on the date of such release, all of the securities
constituting the Deposit Escrow Property: (1) shall have been duly
- 44 -
authorized and validly issued, fully paid and nonassessable, not subject to, or
issued in violation of, any preemptive rights and not issued in violation of any
federal or state securities laws; and (2) shall have the same rights and powers
as all other shares of ACC Class A Common Stock (or, if any of the securities
constituting the Deposit Escrow Property are not shares of ACC Class A Stock, as
all other securities of the same class and series) issued and outstanding as of
the date of this Agreement.
(b) On the Closing Date, all of the shares of ACC Class A
Common Stock constituting the Stock Consideration (or, if applicable, all of the
securities of any other class or series constituting the Stock Consideration):
(1) shall have been duly authorized and validly issued, fully paid and
nonassessable, not subject to, or issued in violation of, any preemptive rights
and not issued in violation of any federal or state securities laws; and (2)
shall have the same rights and powers as all other shares of ACC Class A Common
Stock (or, if any of the securities constituting the Stock Consideration are not
shares of ACC Class A Stock, as all other securities of the same class and
series) issued and outstanding as of the date of this Agreement.
5.5 Claims and Litigation.
As of the date of this Agreement, 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
Buyer's knowledge threatened in writing, against or relating to Buyer or the
assets or business of Buyer or its Subsidiaries (other than FCC and other
proceedings generally affecting the cable television industry and not specific
to Buyer or its Subsidiaries and other than rate complaints or certifications
filed by customers or franchising authorities), that would have a material
adverse effect on Buyer's ability to perform its obligations under this
Agreement or that could reasonably be expected to have a material adverse effect
on the business, financial condition, assets or liabilities of Buyer and its
Subsidiaries, taken as a whole.
5.6 SEC Reports.
(a) Buyer's financial statements contained in its Annual
Report on Form 10-K for
the fiscal year ended March 31, 1998 ("Buyer's 10-K") present fairly the
consolidated financial operations of Buyer for the fiscal year then ended, in
conformity with GAAP. Buyer's interim financial statements contained in its
Quarterly Report on Form 10-Q for the quarter ended September 30, 1998 ("Buyer's
10-Q") reflect all adjustments which are, in Buyer's management's opinion,
necessary to a fair statement of the results for the interim period presented
and necessary to present fairly Buyer's consolidated financial position as of
September 30, 1998 and its consolidated results of operations for the quarter
ended September 30, 1998 and cash flows from consolidated operations for the
quarter ended September 30, 1998.
(b) Except as set forth in Buyer's 10-Q or in any public
document filed by Buyer with
the SEC after September 30, 1998, Buyer's capitalization (including for this
purpose, all outstanding options, warrants and other rights to acquire Capital
Stock or other securities of Buyer) is as set forth
- 45 -
in Buyer's 10-K to the extent required to be set forth in Buyer's 10-K. The ACC
Class A Common Stock is not subject to any preemptive right, claim or other
interest of any Person.
(c) Except as set forth in any public document filed by
Buyer or Hyperion
Telecommunications, Inc. or Olympus Communications, L.P. with the SEC after
September 30, 1998: (1) there has not been, since September 30, 1998, any
material adverse change in the financial condition, results of operations of
Buyer, or any damage, destruction or loss which materially and adversely affects
the financial condition, results of operations or future prospects of Buyer; and
(2) as of the date of this Agreement, Buyer has not entered into any commitment
or transaction material to Buyer's business.
(d) No statement made in Buyer's 10-K or Buyer's 10-Q or
any public document filed by Buyer or Hyperion Telecommunications, Inc. or
Olympus Communications, L.P. with the SEC after September 30, 1998, nor any
statement, representation or warranty made by Buyer in this Agreement or the
other Transaction Documents (including schedules and exhibits), contains any
untrue statement of any material fact or omits a material fact necessary to make
the statements contained herein or therein, in light of the circumstances in
which they were made, not misleading.
5.7 Broker.
Neither Buyer nor any Person acting on behalf of Buyer has incurred any
liability for any finders' or brokers' fees or commissions in connection with
the transactions contemplated by this Agreement except as described in Section
11.1.
5.8 Investment Purpose; Investment Company.
Buyer is acquiring the Purchased Interests for investment for its own
account and not with a view to the sale or distribution of any part thereof
within the meaning of the Securities Act. Buyer is not an "investment company"
as defined in the Investment Company Act of 1940, as amended.
5.9 Cure.
For all purposes under this Agreement, the existence or occurrence of
any events or circumstances which constitute or cause a breach of a
representation or warranty of Buyer on the date such representation or warranty
is made shall be deemed not to constitute a breach of such representation or
warranty if such event or circumstance is cured on or prior to the Closing Date
or the earlier termination of this Agreement.
ARTICLE 6
SPECIAL COVENANTS AND AGREEMENTS
- 46 -
The parties covenant and agree as follows, provided that, except with
respect to express agreements and covenants of a Seller contained in this
Article 6 (including Sections 6.5, 6.12 and 6.15), no Seller shall have any
obligation or liability prior to the Closing with respect to any agreement or
covenant of FVP set forth in this Article 6 (it being understood and agreed by
each Seller that nothing in this sentence shall impair or diminish the
indemnification obligations of Sellers under Article 10 after the Closing,
including with respect to any covenant of FVP set forth in this Article 6).
6.1 Operation of Business Prior to Closing.
Except as required by applicable Legal Requirements or as contemplated
in FrontierVision's Disclosure Schedule or Section 6.1(c), without the consent
of Buyer (which consent shall not be unreasonably withheld), between the date
hereof and the Closing Date, FVP will operate and cause the FrontierVision
Companies to operate the Systems in the ordinary course of business (subject to,
and except as modified by, compliance with the following negative and
affirmative covenants) and abide by the following negative and affirmative
covenants:
(a) Negative Covenants. The FrontierVision Companies
shall not do any of the following:
(1) Franchises. Fail to use commercially
reasonable efforts to renew on
substantially the same or on other commercially reasonable terms any Franchise
that has expired or will expire after the date hereof and prior to the Closing
Date in accordance with its terms; provided, however, the FrontierVision
Companies shall not agree to any material changes to the terms of any Franchise
without Buyer's prior written consent and provided further that FVP shall not be
required to take any steps necessary to obtain renewals of any Franchise earlier
than such steps are required to be taken by applicable FCC Regulations, and
obtaining renewals of any Franchise shall not be a condition precedent to
Buyer's obligations hereunder except as provided in the immediately following
sentence). The parties agree that the obligations of the FrontierVision
Companies with respect to the renewal of the Franchises referred to in Section
3.8(F) of FrontierVision's Disclosure Schedule (Renewal Letters Not Timely
Filed), exclusive of the Penobscot Indian Nation (ME) and Town of Friendsville
(MD) Franchises (the "Renewal Franchises") are governed solely by Section 6.4
and 7.1(d) and not this Section 6.1(a)(1).
(2) Contracts. Modify or amend in any material
respect, except in the
ordinary course of business, any Contract that shall survive the Closing; or
enter into any new Contracts that will be binding on the FrontierVision
Companies following the Closing except: (A) agreements for the provision of
cable television services to residential customers; (B) the renewal or extension
of any existing Contract on its existing terms, in all material respects, in the
ordinary course of business; (C) contracts or commitments entered into in the
ordinary course of business that are terminable on not more than sixty days
prior notice or that do not involve post-Closing obligations in excess of
TwentyFive Thousand Dollars ($25,000) in any one case or in excess of Five
Hundred Thousand Dollars ($500,000) in the aggregate; or (D) with respect to
utility pole attachment agreements, Contracts with
- 47 -
terms as customarily required by the utility whose poles are utilized, and
except in any event, subject to their legal obligations and constraints, the
FrontierVision Companies will not enter into a new collective bargaining
agreement without providing Buyer a reasonable opportunity to review and approve
the proposed terms of such agreement, which approval shall not be unreasonably
withheld by Buyer.
(3) Disposition of Assets. Sell, assign, lease,
swap, or otherwise transfer or
dispose of any of the Assets, except as set forth in Section 6.1 of
FrontierVision's Disclosure Schedule and except for assets consumed or disposed
of in the ordinary course of business or assets (other than any System as a
whole) that are replaced by replacement property of substantially equivalent
kind and use.
(4) Encumbrances. Create, assume or permit to
exist any Encumbrance upon
the Assets, except for Permitted Encumbrances or other Encumbrances disclosed in
FrontierVision's Disclosure Schedule.
(5) Indebtedness. Permit the FrontierVision
Companies to incur any
additional indebtedness for borrowed money except pursuant to the Debt Documents
listed in Section 3.8 of FrontierVision's Disclosure Schedule and that (if not
repaid at or prior to the Closing) is included in Adjustment Liabilities in the
computation of Closing Net Liabilities.
(6) Marketing Programs. Implement any new
marketing plans that are materially different from marketing plans previously
implemented by the FrontierVision Companies.
(7) Channel Lineups; Rate Changes. Make channel
additions or channel
substitutions or change the channel lineup for any System or change the customer
rates charged by any System or enter into any new carriage agreements, except as
set forth in Section 6.1 of FrontierVision's Disclosure Schedule.
(b) Affirmative Covenants. FVP shall, and shall cause
the FrontierVision
Companies to, do the following:
(1) Access to Information. Subject to Buyer's
obligations hereunder to
maintain the confidentiality of Confidential Information, allow Buyer and its
authorized representatives reasonable access during normal business hours to the
Assets, physical plant, offices, properties and records for the purpose of
inspection, and furnish or cause to be furnished to Buyer or its authorized
representatives all information with respect to the Assets or the FrontierVision
Companies that Buyer may reasonably request. Any investigation or request for
information shall be conducted in such a manner as not to interfere with the
business or operations of the Systems. Buyer hereby agrees that it shall
promptly provide written notice to FVP or such Seller if based upon information
provided to Buyer or through its investigation, Buyer determines that FVP or a
Seller is in breach in any material respect of any of its representations or
warranties set forth in this Agreement.
- 48 -
(2) Insurance. Maintain the existing insurance
policies on the Systems andthe Assets (or comparable replacement policies).
(3) Books and Records. Maintain the
FrontierVision Companies' books and records in accordance with past practices.
(4) Financial Information. Furnish to Buyer
within forty-five days after the
end of each month between the date hereof and the Closing Date, an unaudited
consolidated balance sheet and statement of operations and statement of cash
flows for the FrontierVision Companies for such month, which financial
information shall be prepared from the FrontierVision Companies' books and
records maintained in the ordinary course of business in accordance with past
practices.
(5) Compliance with Laws. Comply in all
material respects with all Legal Requirements applicable to the FrontierVision
Companies and the operation of the Systems.
(6) Keep Organization Intact. Except with
respect to any voluntary departure
of any of the FrontierVision Companies' employees between the date hereof and
Closing, use its commercially reasonable efforts to preserve intact its business
and organization relating to the Systems and preserve for Buyer the goodwill of
the FrontierVision Companies' suppliers, customers and others having business
relations with it.
(7) Specified Rebuild and Upgrade Projects.
Proceed with the rebuild and upgrade projects identified in Section 2.5 of
FrontierVision's Disclosure Schedule in the ordinary course of business.
(8) Franchise Renewal Letters. File a request
for renewal under Section
626(a) of the Cable Act with the proper Franchising Authority with respect to
each Franchise in respect of which the time period for making such filing will
expire on or before the Closing Date.
(9) Year 2000 Remediation Plan. Proceed with
the Year 2000 Remediation
Plan of the FrontierVision Companies in accordance in all material respects with
the provisions of such plan, a copy of which has been provided to Buyer.
(10) Rate Changes. Implement the rate changes
set forth in Section 6.1 of
FrontierVision's Disclosure Schedule in accordance with the implementation
schedule set forth therein with respect to each such rate change.
(11) Purchase and Sale Agreement Indemnification
Claims. Pursue in the
ordinary course of business consistent with the past practice of the
FrontierVision Companies any indemnification claims regarding the condition of
any of the Systems acquired from the "sellers" under the purchase and sale
agreements referred to in Section 3.11(i) that the FrontierVision Companies may
- 49 -
have against such "sellers" pursuant to the indemnification provisions thereof.
The FrontierVision Companies will apply any payments actually collected after
the date of this Agreement in respect of any such claims to remedying the matter
in respect of which the payments were collected or will include the amount of
any such payment that is not so applied as an Adjustment Liability in the
Computation of Closing Net Liabilities (but shall have no obligation pursuant to
this provision to expend more than the amount collected on remedying such
matter).
(c) Certain Permitted Actions. Notwithstanding anything
in this Agreement(including Sections 6.1(a) and (b) above) to the contrary,
Buyer consents and agrees as follows:
(1) Contractual Commitments. FVP, the General
Partner and the other
FrontierVision Companies may comply with all of their contractual commitments
under their existing Contracts and under any Contracts entered into after the
date of this Agreement in compliance with Section 6.1(a)(2) or with Buyer's
consent (in each case, as such Contracts may be in effect from time to time in
accordance with Section 6.1(a)(2) or with Buyer's consent). FVP, the General
Partner and the other FrontierVision Companies may take such actions as are
contemplated by the other Sections of this Agreement (excluding Sections 6.1(a)
and (b)) and otherwise comply with their obligations under the other Sections of
this Agreement (excluding Sections 6.1(a) and (b)).
(2) Pending Acquisitions/Swaps/Sales. The
FrontierVision Companies may consummate the transactions set forth in Section
6.1 of FrontierVision's Disclosure Schedule.
(3) Holdings Exchange Offer. FrontierVision
Holdings, L.P. and
FrontierVision Holdings Capital II Corporation may consummate the Exchange Offer
and comply with its other obligations contemplated in the Registration Rights
Agreement dated as of December 9, 1998 among FrontierVision Holdings, L.P.,
FrontierVision Holdings Capital II Corporation, ▇.▇. ▇▇▇▇▇▇ Securities Inc. and
Chase Securities Inc.
(4) Excluded Assets. The FrontierVision
Companies may assign each of the
Excluded Assets to the General Partner, its designees or any other Person prior
to the Closing; provided that such assignments, either individually or in the
aggregate, do not result in any adverse Tax consequence to any of the
FrontierVision Companies which is not included in Adjustment Liabilities in the
computation of Closing Net Liabilities.
(5) Other Matters. The FrontierVision Companies
may take the other actions
set forth in Section 6.1 of FrontierVision's Disclosure Schedule.
6.2 Confidentiality; Press Release.
FVP and the Sellers may from time to time in the
course of this transaction
disclose to Buyer information and material concerning FVP and the Sellers, the
FrontierVision Companies, the Assets and the Systems, including proprietary
information, contracts, marketing
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information, technical information, product or service concepts, subscriber
information, rates, financial information ideas, concepts and research and
development (any of the foregoing and any analysis, compilations, studies or
other documents prepared by or on behalf of Buyer in respect thereof are
hereafter collectively referred to as "Confidential Information"). The term
"Confidential Information" does not include any item of information that (1) is
publicly known at the time of its disclosure, (2) is lawfully received from a
third party not bound in a confidential relationship with a party hereto, (3) is
published or otherwise made known to the public by any source other than a party
bound by the provisions hereof, or (4) was generated by Buyer independently.
Buyer agrees that Confidential Information received from FVP and the Sellers
shall be used solely in connection with the transaction contemplated by this
Agreement. Buyer agrees that it shall treat confidentially and not directly or
indirectly, divulge, reveal, report, publish, transfer or disclose, for any
purpose whatsoever (other than to its investors, financing sources and agents
for the purpose of consummating the transactions contemplated by this Agreement,
each of whom shall maintain the confidentiality of such Confidential
Information), all or any portion of the Confidential Information disclosed to it
by FVP or the Sellers. In the event of a breach of the covenants contained in
this Section 6.2, FVP and the Sellers shall be entitled to seek injunctive
relief as well as any and all other remedies at law or equity. If the Closing
does not occur, the Confidential Information, except for that portion which
consists of analysis, compilations, studies or other documents prepared by or on
behalf of Buyer, will be returned to FVP or the Sellers, as appropriate,
immediately upon FVP's or a Seller's request therefor; and that portion of the
Confidential Information which consists of analysis, compilations, studies or
other documents prepared by or on behalf of Buyer will be held by Buyer and kept
confidential and subject to the terms of this Section 6.2, or will be destroyed.
(b) No party will issue any press release or make any other
public announcements concerning this Agreement or the transaction contemplated
hereby except in consultation with the other parties, except for disclosures
required by law (including any legal obligations imposed on Buyer in connection
with its status as a publicly-held corporation and any legal obligations imposed
on any of the FrontierVision Companies in connection with their status as
reporting companies under the Exchange Act or in connection with the Holdings
Exchange Offer contemplated in Section 6.1(c)(3)). With respect to press
releases or any other public announcements required by law (including the legal
obligations referred to in the parenthetical clause of the immediately preceding
sentence), the party intending to make such release or disclosure shall provide
the other parties with an advance copy and a reasonable opportunity to review.
6.3 Cooperation; Commercially Reasonable Efforts.
The parties shall cooperate with each other and their respective
counsel and accountants in all commercially reasonable respects in connection
with any actions required to be taken as part of their respective obligations
under this Agreement, and otherwise use their commercially reasonable efforts to
consummate the transactions contemplated hereby and to fulfill their obligations
hereunder as expeditiously as practicable. Buyer shall provide to FVP and
Sellers such information relating to Buyer and its Subsidiaries and their
businesses and operations as FVP and Sellers shall reasonably request.
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FVP shall provide to Buyer such information relating to the FrontierVision
Companies and their businesses and operations as Buyer shall reasonably request.
Following the execution of this Agreement FVP and Buyer will negotiate in good
faith to agree to a mutually satisfactory Programming Supply Agreement
consistent in all material respects with the discussions to date between the
parties with respect to the subject matter thereof. .
6.4 Consents.
Subject to the other provisions of this Section 6.4 and this Agreement,
the parties agree as follows:
(a) Following the execution hereof, FVP shall use
commercially reasonable efforts,
and shall cause the FrontierVision Companies to use commercially reasonable
efforts, to obtain as expeditiously as possible all Consents (other than the
Credit Agreement Consent and the GECC Facility Consent, which shall be governed
solely by Section 6.7(a) or Section 6.7(c) as appropriate), required to be
obtained by the FrontierVision Companies, including Consents under the
Franchises, Licenses and Contracts of the FrontierVision Companies, and the
renewal of the Renewal Franchises. Buyer agrees to cooperate with FVP and the
FrontierVision Companies in all commercially reasonable respects in obtaining
the foregoing Consents and renewals. In furtherance of the foregoing, FVP and
Buyer agree to cooperate in preparing and completing an application on FCC Form
394 (or other appropriate form) and appropriate letters of transmittal for each
Franchise Consent listed in Section 3.4 of FrontierVision's Disclosure Schedule
and use their best efforts to file completed applications with the appropriate
Franchising Authorities within thirty days after the execution of this Agreement
(and in any event within forty-five days after the execution of this Agreement).
Effective upon filing of each Franchise Consent application, FVP and Buyer shall
be deemed to have agreed that such application is "facially complete." FVP and
Buyer also agree to cooperate in preparing and completing an appropriate
application and letters of transmittal for each Consent listed in Section 3.4 of
FrontierVision's Disclosure Schedule relating to Licenses and Contracts of the
FrontierVision Companies and using their best efforts to file completed
applications with the FCC or other appropriate Person within thirty days after
the execution of this Agreement (and in any event within forty-five days after
the execution of this Agreement). FVP shall also use commercially reasonable
efforts to cause all such Consents relating to Franchises and Contracts to
include a provision that permits Buyer to transfer the Purchased Interests to
any Affiliate of Buyer that agrees in writing as a condition to such transfer to
be bound by any and all obligations of Buyer in connection therewith; provided
that FVP shall have no additional obligation with respect to obtaining such a
provision if the inclusion of such a provision would cause such Consent to be
unreasonably withheld, delayed or otherwise conditioned; and provided further
that if the Franchising Authority or other Person from whom such Consent is
requested objects to the inclusion of such a provision such request will be
immediately withdrawn.
(b) In the event that after the execution of this
Agreement, FVP and Buyer mutually
agree that an application on FCC Form 394 is required to be filed in order to
request a Franchise Consent that is not listed in Section 3.4 of
FrontierVision's Disclosure Schedule, FVP and Buyer agree
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to cooperate in preparing and completing an application on FCC Form 394 (or
other appropriate form) and appropriate letters of transmittal and using their
best efforts to file a completed application with the appropriate Franchising
Authority within ten days after FVP and Buyer agree that Consent is required.
Effective upon filing of each Franchise Consent application, FVP and Buyer shall
be deemed to have agreed that such application is "facially complete."
In the event that after the execution of this Agreement, a Franchising
Authority that did not receive a Franchise Consent request on FCC Form 394 (or
other appropriate form) pursuant to Section 6.4(a) asserts that its Consent is
required in order to consummate the transactions contemplated by this Agreement,
FVP and Buyer will notify the other party and cooperate with each other in good
faith to determine whether they agree that Consent is required. If FVP and Buyer
cannot agree within five business days after both parties are notified of such
Franchising Authority's assertion, FVP and Buyer shall mutually retain a law
firm to make the final determination (which law firm shall be experienced in
cable franchising matters and shall not then serve as legal counsel to any of
the FrontierVision Companies or Buyer). The selected law firm shall endeavor to
resolve the dispute as promptly as practicable and such firm's resolution of the
dispute shall be final and binding on the parties. All of the costs and expenses
of the selected law firm and its services rendered pursuant to this paragraph
shall be borne by whichever of FVP or Buyer is the nonprevailing party.
If it is finally determined pursuant to this Section 6.4(b) (by
agreement of FVP and Buyer or by resolution of a law firm) that a Franchise
Consent is required from such Franchising Authority, and the Franchise in
question relates to a Franchise Area that serves a number of subscribers equal
to or greater than the number of subscribers served by the Franchise Area that
serves the fewest number of subscribers of all of the Franchise Areas related to
the Material Consent Franchises (based on the number of subscribers specified
for each such Franchise Area in Section 3.11(A) of FrontierVision's Disclosure
Schedule) (such a Franchise, a "Designated Material Consent Franchise"), then
FVP and Buyer agree to cooperate in preparing and completing an application on
FCC Form 394 (or other appropriate form) and appropriate letters of transmittal
and using their best efforts to file a completed application with the
appropriate Franchising Authority within ten days after the date it is
determined a Franchise Consent is required. Effective upon filing of each
Franchise Consent application, FVP and Buyer shall be deemed to have agreed that
such application is "facially complete."
If it is finally determined pursuant to this Section 6.4(b) (by
agreement of FVP and Buyer or by resolution of a law firm) that a Franchise
Consent is required from such Franchising Authority but the Franchise in
question is not a Designated Material Consent Franchise (all such Franchises
that are not a Designated Material Consent Franchise, a "Designated Non-Material
Consent Franchise"), and the Franchise Areas relating to all such Designated
Non-Material Consent Franchises serve in the aggregate at least 35,000
subscribers (based on the number of subscribers specified for each such
Franchise Area in Section 3.11(A) of FrontierVision's Disclosure Schedule), then
(except to the extent that Buyer agrees that no Franchise Application will be
filed for a particular Designated Non-Material Consent Franchise), FVP and Buyer
agree to cooperate in preparing and completing an application on FCC Form 394
(or other appropriate form) and appropriate letters of transmittal for each
Designated Non-Material Consent
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Franchise identified to such date and using their best efforts to file a
completed application with the appropriate Franchising Authority within ten days
after the date it is determined such filings are required pursuant to this
paragraph. Effective upon filing of each Franchise Consent application, FVP and
Buyer shall be deemed to have agreed that such application is "facially
complete."
(c) FVP and Buyer shall promptly furnish to any
Governmental Authority or other
Person from whom a Consent or Franchise renewal is requested such accurate and
complete information regarding the FrontierVision Companies and Buyer, including
financial information and other information relating to the cable and other
media operations of the FrontierVision Companies and Buyer, as a Governmental
Authority or other Person may reasonably require in connection with obtaining
any such Consent or renewal. Notwithstanding anything in this Agreement to the
contrary, but subject to the provisos below in this Section 6.4(c), Buyer
acknowledges and agrees that FVP will control and manage the process of
obtaining such Consents and Franchise renewals and that neither Buyer nor any of
its employees, agents, representatives or any other Person acting on behalf of
Buyer will contact any Governmental Authority or other Person who is party to a
Franchise, License or Contract of the FrontierVision Companies, including those
from whom a Consent or Franchise renewal is sought, for the purpose of seeking
any amendment, modification or changes to any Franchise, License or Contract,
for the purpose of waiving or extending the time period in which such
Governmental Authority or other Person is required to act on the request for
Consent or renewal, or for any other purpose that would have the result of
unduly hindering or delaying the receipt of any such Consent, waiver or renewal;
provided that it is understood and agreed that nothing herein shall prevent
Buyer (or its employees, agents, representatives and any other Person acting on
behalf of Buyer) from communicating (by letter, press release, or otherwise)
following consultation with FVP with any such Governmental Authority (whether or
not a Consent is being sought from it) in order to provide information relating
to Buyer and transition issues regarding Buyer and the Systems following the
Closing Date or from responding to requests initiated by Governmental
Authorities or other Persons from whom a Consent is sought so long as such
response does not relate to any of the foregoing prohibited matters and Buyer
shall use commercially reasonable efforts to apprise FVP of all such requests.
(d) If in connection with the process of obtaining any
Consent, a Governmental
Authority or other Person seeks to impose any condition or any change to a
Franchise, License or Contract to which such Consent relates that would be
applicable to Buyer or any FrontierVision Company as a requirement for granting
its Consent, FVP shall promptly notify Buyer of such fact and FVP shall not
agree to such condition or change except as agreed to by Buyer in writing;
provided that if such condition or change relates to a Consent with respect to a
Material Consent Franchise or a Designated Material Consent Franchise that is
then in the Renewal Window, Buyer hereby accepts (and agrees that FVP may accept
on behalf of Buyer and the FrontierVision Companies without the need for any
further agreement by Buyer in writing) any such conditions or changes that are
commercially reasonable taken as a whole (it being agreed by Buyer for purposes
of this Agreement, without limiting whether any other terms are commercially
reasonable, that so long as the proposed renewal term of such Franchise is at
least ten years, that a requirement to complete an upgrade/rebuild of the System
serving
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such Franchise Area up to 750 MHz by a date that is no earlier than three years
from the Closing Date and/or a requirement to pay franchise fees up to the
amount permitted by the Cable Act is commercially reasonable). For purposes of
this Agreement, the term "Renewal Window" means that the Franchise in question
is due to expire within three years from the date of determination.
If in connection with the process of obtaining a renewal of any Renewal
Franchise, a Franchising Authority seeks to renew such Franchise on terms that
differ in any materially adverse respect from the terms of the existing
Franchise, FVP shall promptly notify Buyer of such fact and FVP shall not agree
to such condition or change except as agreed to by Buyer in writing; provided
that Buyer hereby accepts (and agrees that FVP may accept on behalf of Buyer and
the FrontierVision Companies without the need for any further agreement by Buyer
in writing) the following: (1) a renewal of the City of Auborn (ME), City of
Lewiston (ME), and Town of Lisbon (ME) Franchises on substantially the same
terms as the respective terms of renewal specified in such existing Franchises;
(2) a renewal of the Town of Tremont (ME), Town of Bar Harbor (ME), City of Old
Town (ME), and Town of Orrington (ME) Franchises on substantially the same terms
as the terms of the existing City of Bangor (ME) Franchise; (3) a renewal of the
Town of Southwest Harbor (ME) Franchise on substantially the same terms as the
terms contained in the draft franchise proposal previously delivered to Buyer;
(4) a renewal of the Village of Holgate (OH) Franchise on substantially the same
terms as the terms contained in the draft franchise proposal previously
delivered to Buyer; (5) a renewal of the City of Defiance (OH) Franchise on
substantially the same terms as the terms contained in the draft franchise
proposal previously delivered to Buyer; (6) a renewal of the Village of Albany
(OH) and Town of Spring Hope (NC) Franchises on terms that are commercially
reasonable taken as a whole (it being agreed by Buyer for purposes of this
Agreement, without limiting whether any other terms are commercially reasonable,
that so long as the proposed renewal term of the Renewal Franchise is at least
ten years, that a requirement to complete an upgrade/rebuild of the System
serving such Franchise Area up to 750 MHz by a date that is no earlier than
three years from the Closing Date and/or a requirement to pay franchise fees up
to the amount permitted by the Cable Act is commercially reasonable).
Buyer agrees that all fees, costs and expenses of such conditions or
changes shall be borne by Buyer directly or indirectly as the owner of the
FrontierVision Companies. Buyer also agrees that after the Closing it will cause
the FrontierVision Companies to comply with the provisions of all of the
Franchises and will not withhold its consent to any requirement that the
FrontierVision Companies comply with the rebuild/upgrade requirements contained
in the Franchises as set forth in Section 6.4 of FrontierVision's Disclosure
Schedule (as such requirements may be modified with Buyer's consent) that is
imposed by a Franchising Authority as a condition to its approval of a request
for Consent or request for a Franchise renewal.
(e) If prior to the Closing hereunder any Franchising
Authority purchases the assets
of any System (or portion thereof) that serves the Franchise Area covered by the
Franchise granted by such Franchising Authority pursuant to any right of first
refusal in such Franchise that is triggered by the consummation of the purchase
and sale of the Purchased Interests, an amount equal to the product of (1) the
number of Closing Equivalent Subscribers represented by the subscribers served
in such
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Franchise Area (determined as if the effective time of the consummation of the
respective sale of such to the Franchising Authority were the Adjustment Time
hereunder) multiplied by (2) $2,928 shall be included as an Adjustment Liability
in the computation of Closing Net Liabilities, and the target number of 700,000
Closing Equivalent Subscribers referred to in Section 2.5(a) shall be reduced by
such number of Closing Equivalent Subscribers. FVP will not agree and will not
permit the FrontierVision Companies to agree to sell the assets of any System
(or portion thereof) pursuant to a right of first refusal in a Franchise as
described above if the closing thereof would occur after the Closing hereunder
and the purchase consideration would be less than the amount equal to the
product of (1) the number of Closing Equivalent Subscribers represented by the
subscribers served in such Franchise Area (determined as if the effective time
of the consummation of the respective sale of such to the Franchising Authority
were the Adjustment Time hereunder) multiplied by (2) $2,928.
(f) If, notwithstanding their commercially reasonable
efforts, FVP and the other
FrontierVision Companies are unable to obtain any required Consents or Franchise
renewal, none of FVP or any of the Sellers shall be liable to Buyer for any
breach of covenant and after the Closing none of FVP or any of the Sellers shall
have any further obligation with respect to obtaining any such Consents or
renewals or any liability for the failure of such Consents or renewals to be
obtained. Except as provided in this Agreement or with respect to the Credit
Agreement Consent, nothing herein shall require the expenditure or payment of
any funds (other than in respect of normal and usual attorneys fees, filing fees
or other normal costs of doing business) or the giving of any other
consideration by FVP, any Seller or any of the FrontierVision Companies in order
to obtain any Consent or renewal.
6.5 HSR Act Filing.
As soon as practicable after the execution of this
Agreement, but in any event
no later than forty-five days after such execution, FVP, as the "acquired
person," and Buyer, as the "acquiring person," will each complete and file, or
cause to be completed and filed, a premerger notification and report under the
HSR Act that is consistent with the rules and regulations of the Federal Trade
Commission (the "FTC") and that requests early termination of the waiting period
imposed by the HSR Act. FVP and Buyer shall use commercially reasonable efforts
to respond as promptly as reasonably practicable to any inquiries received from
the FTC and the Antitrust Division of the Department of Justice (the "Antitrust
Division") for additional information or documentation and to respond as
promptly as reasonably practicable to all inquiries and requests received from
any other Governmental Authority in connection with antitrust matters. FVP and
Buyer shall use commercially reasonable efforts to overcome any objections which
may be raised by the FTC, the Antitrust Division or any other Governmental
Authority having jurisdiction over antitrust matters. The fees relating to the
filings required by the HSR Act shall be shared equally by Buyer, on the one
hand, and Sellers, on the other hand.
(b) Each of the other parties to this Agreement and their
Affiliates will cooperate
with FVP and Buyer in causing such filings to be made as expeditiously as
practicable, will promptly file, after any request by the FTC or Antitrust
Division and after appropriate negotiation with the FTC
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or the Antitrust Division of the scope of such request, any information or
documents so requested, and will furnish FVP and Buyer with copies of any
correspondence from or to, and notify FVP and Buyer of any other communications
with, the FTC and Antitrust Division that relates to the transactions
contemplated by this Agreement.
(c) If the parties subsequently determine that any filing
by any of the Sellers or their
Affiliates is required in connection with the consummation of the transactions
contemplated by this Agreement, including the acquisition by any of the Sellers
of ACC Class A Common Stock, such Seller and, as necessary, Buyer, will each
complete and file, or cause to be completed and filed, a premerger notification
and report under the HSR Act that is consistent with FTC rules and regulations
and that requests early termination of the waiting period imposed by the HSR
Act. Each of the parties making such filings shall use commercially reasonable
efforts to: (1) respond as promptly as reasonably practicable to any inquiries
received from the FTC and the Antitrust Division for additional information or
documentation; (2) respond as promptly as reasonably practicable to all
inquiries and requests received from any other Governmental Authority in
connection with antitrust matters; and (3) overcome any objections which may be
raised by the FTC, the Antitrust Division or any other Governmental Authority
having jurisdiction over antitrust matters. The filing fees related to any
filing required to be made under this subsection (c) shall be shared equally
between the "acquiring person" and the "acquired person" for each such filing,
except that if any filing is required solely as a result of the purchase and
sale of the SPC Stock contemplated hereby (as opposed to direct partnership
interests in FVP), any filing fees related to such filings shall be paid solely
by the SPC Seller(s) who own(s) the SPC Stock in question.
6.6 Buyer's Qualifications and Financing.
(a) Buyer will not take any action that does, or could
reasonably be expected to,
disqualify Buyer to be the transferee of control of the FrontierVision Companies
as the holder of the Franchises and the owner and operator of the Assets and
Systems. Should Buyer become aware of any fact or circumstance that would
disqualify Buyer as the transferee of control of the FrontierVision Companies,
Buyer will promptly notify FVP and Sellers in writing thereof and will remove
any such disqualifying fact or circumstance.
(b) Buyer will not take any action that is inconsistent
with its obligations under this
Agreement or which does, or would reasonably be expected to, materially hinder
or delay the consummation of the transaction contemplated by this Agreement.
Without limiting the generality of the foregoing, at all times between the date
hereof and the Closing Date, Buyer will take all necessary or advisable actions
to ensure, and Buyer will ensure, that Buyer is able to deliver the Cash
Consideration and the Stock Consideration at Closing. From the date hereof until
Closing, Buyer will promptly notify FVP and Sellers of any event that occurs or
circumstance that arises that could prevent Buyer from being able to deliver the
Cash Consideration or Stock Consideration at Closing.
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6.7 Discharge of Debt Documents.
(a) Promptly following the execution of this Agreement,
FVP will approach the
agent banks under the Credit Agreement to seek requisite lender consent (the
"Credit Agreement Consent") to permit the outstanding loans and commitments
under the Credit Agreement to remain outstanding after the Closing, and FVP will
use its best efforts to obtain such Consent. FVP will keep Buyer reasonably
informed as to FVP's inquiries and the agent banks' responses with respect
thereto. Buyer acknowledges and agrees that FVP has no obligation (other than to
use best efforts as provided above) to obtain the Credit Agreement Consent and
that obtaining the Credit Agreement Consent is not a condition precedent to
Buyer's obligations hereunder and that this Section 6.7(a) in no way limits
Buyer's obligation under Section 6.7(b) if the indebtedness under the Credit
Agreement becomes due and payable at the Closing. FVP shall afford Buyer the
opportunity to discuss and negotiate the Credit Agreement Consent with the agent
banks and other lenders under the Credit Agreement. It is understood and agreed
that both FVP and Buyer shall have a reasonable opportunity to review and the
right to approve the Credit Agreement Consent documentation and terms thereof
prior to execution thereof.
(b) If the Credit Agreement Consent is not obtained,
Buyer shall cause all obligations
of the FrontierVision Companies under the Credit Agreement (including all
principal, accrued and unpaid interest and all other amounts) that becomes due
and payable concurrently with the consummation of the Closing to be discharged
in full at the Closing.
(c) Promptly following the execution of this Agreement,
FVP will approach General
Electric Capital Corporation ("GECC") to seek consent (the "GECC Facility
Consent") to permit the Equipment Leasing Facility to remain outstanding after
the Closing, and FVP will use its commercially reasonable efforts (which shall
in no event require the expenditure or payment of funds or the giving of any
other consideration by FVP, any Seller or any of the FrontierVision Companies in
order to obtain the GECC Facility Consent) to obtain such Consent. FVP will keep
Buyer reasonably informed as to FVP's inquiries and GECC's responses with
respect thereto. Buyer acknowledges and agrees that FVP has no obligation (other
than to use commercially reasonable efforts as provided above) to obtain the
GECC Facility Consent and that obtaining the GECC Facility Consent is not a
condition precedent to Buyer's obligations hereunder. If GECC withholds its
consent, FVP will cause all indebtedness outstanding under such Equipment
Leasing Facility to be repaid at or before the Closing.
(d) Buyer acknowledges and agrees that the Issuers under
the Indentures will be
required to make an Offer of Redemption under each of the Indentures within
thirty days of the Closing Date, in the case of the 1996 Indenture, and within
thirty-five days of the Closing Date, in the case of the 1997 Indenture and the
1998 Indenture. Buyer will cause the Issuers to discharge all of their
obligations under the Indentures in accordance with their terms.
(e) FVP will cause the FrontierVision Companies to
terminate all of its interest rate protection and similar agreements and
discharge all of their obligations thereunder at or prior to the
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Closing unless Buyer has delivered reasonable prior notice to FVP specifying
that Buyer desires the FrontierVision Companies to maintain the effectiveness of
one or more of such agreements as specified in Buyer's notice. If the
FrontierVision Companies maintain the effectiveness of one or more of such
agreements at Buyer's request, the amount of the net asset shall be included as
an Adjustment Asset in the computation of Closing Net Liabilities, if
applicable, or the amount of the net liability shall be included as an
Adjustment Liability in the computation of Closing Net Liabilities, if
applicable.
6.8 Retention and Access to the FrontierVision Companies' Records.
Except as provided in Section 6.10(c)(1), the General Partner and
Sellers shall, for a period of five years from the Closing Date, have access to,
and the right to copy, at their expense, during usual business hours upon
reasonable prior notice to Buyer, all of the books and records relating to the
FrontierVision Companies, Assets and Systems that were transferred to Buyer
pursuant to this Agreement. Buyer shall retain and preserve all such books and
records for such five year period. Subsequent to such five year period, Buyer
shall only destroy such books and records if there is no ongoing litigation,
governmental audit or other proceeding, and subsequent to thirty days' notice to
the General Partner and Sellers of their right to remove and retain such books
and records, or to copy such books and records prior to their destruction.
6.9 Employee Matters.
(a) Except as otherwise provided in this Section 6.9,
nothing herein shall require
Buyer or the FrontierVision Companies to continue the employment of any
employees of the FrontierVision Companies for any period of time following the
Closing. Within thirty days after representatives of Buyer meet with the
FrontierVision Companies' corporate-level employees to discuss employment
opportunities with Buyer following the Closing, FVP shall provide to Buyer a
list of all employees of the FrontierVision Companies and shall designate those
corporate-level employees that are not available for continued employment with
the FrontierVision Companies following the Closing. Within a reasonable period
of time following the receipt of such list and no less than sixty days prior to
the Closing Date, Buyer shall provide FVP with written notice of which of the
available employees of the FrontierVision Companies Buyer intends to retain
following the Closing (the "Assumed Employees"). FVP shall cause the
FrontierVision Companies to terminate the employment of all employees that are
not Assumed Employees on or prior to the Closing. Notwithstanding the foregoing,
Buyer agrees to provide FVP with written notice of which of the available
employees of the FrontierVision Companies Buyer intends to retain following the
Closing at least 100 days prior to the Closing in the event that Buyer intends
to terminate or to cause any FrontierVision Company to terminate 50 or more
employees (when considered together with those employees to be terminated as
designated by any FrontierVision Company) during the 90-day period prior to and
including the Closing to permit FVP to make any required notices under the
Worker Adjustment and Retraining Notification Act, as amended ("WARN Act"). In
the event that Buyer fails to provide such notice to FVP, Buyer agrees that it
will retain a sufficient number of employees employed by the FrontierVision
Companies as of the Closing to ensure that 50 or more employees do not
experience "employment loss" as that term
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is defined in the WARN Act during the 90-day period prior to and including the
Closing. Buyer shall continue to employ such employees for a period of at least
90 days after the Closing, except for such employees who voluntarily terminate
employment, retire or are discharged for cause. Buyer shall be solely
responsible for and shall indemnify and hold Sellers harmless from any liability
arising under the WARN Act after the Closing arising out of Buyer's failure to
provide adequate advanced written notice to FVP or arising out of Buyer's
failure to continue the employment of any FrontierVision Company employee as
required in this Section 6.9(a). Buyer shall have no obligation to provide
severance benefits to any employee of the FrontierVision Companies who terminate
employment on or prior to Closing.
(b) As of and immediately after the Closing each Assumed
Employee shall be
employed in the same position and on the same terms and conditions prevailing as
of the Closing, and each Assumed Employee who continues his employment after the
Closing shall receive credit for past service with any of the FrontierVision
Companies for all purposes of eligibility and vesting under Buyer's Employee
Plans and for all other purposes under Buyer's vacation, sick leave or other
benefit programs or arrangements. Buyer shall not otherwise be required to
maintain any particular level of benefits for any of the Assumed Employees
except that Buyer will not discuss any potential changes in employment terms or
benefits with the Assumed Employees prior to the Closing. Notwithstanding the
foregoing, upon Buyer's request, FVP will coordinate with Buyer to permit Buyer
to meet with any of the corporate-level Assumed Employees to discuss employment
opportunities following the Closing, including position, salary and other
employment benefits (and the requirement that such employee must continue
employment in the same position and on the same terms and conditions shall not
apply to any corporate-level Assumed Employees).
(c) Buyer shall assume full responsibility and liability
for offering and providing
"continuation coverage" to any "qualified beneficiary" who is covered by a
"group health plan" sponsored or contributed to by any FrontierVision Company or
any of their ERISA Affiliates and who has experienced a "qualifying event" or is
receiving "continuation coverage" on or prior to the Closing. "Continuation
coverage," "Qualified beneficiary," "Qualifying event" and "group health plan"
all shall have the meanings given such terms under Section 4980B of the Code and
Section 601 et seq. of ERISA. Buyer shall hold the FrontierVision Companies and
any entity required to be combined with the FrontierVision Companies (within the
meaning of Sections 414(b), (c), (m) or (o) of the Code) harmless from and fully
indemnify them against any costs, expenses, losses, damages and liabilities
incurred or suffered by them directly or indirectly, including, but not limited
to, reasonable attorneys' fees and expenses, which relate to continuation
coverage and arise as a result of any action or omission by any FrontierVision
Company or any of their ERISA Affiliates or because Buyer is deemed to be a
successor employer to any FrontierVision Company or any of their ERISA
Affiliates.
(d) If the employment of any Assumed Employee who
continues his employment
with the FrontierVision Companies after the Closing is terminated within the
one-year period immediately following the Closing, such employee shall be
entitled to receive severance benefits in accordance with the provisions of the
FrontierVision Severance Pay Plan disclosed in Section 3.13 of
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FrontierVision's Disclosure Schedule. Notwithstanding the foregoing or anything
in the FrontierVision Severance Pay Plan to the contrary, Buyer shall have no
obligation to provide any severance benefits to any such employee discharged for
cause.
(e) At or prior to the Closing, FVP and the other
FrontierVision Companies shall
enter into appropriate release agreements with ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇,
pursuant to which each party irrevocably waives, releases and forever discharges
the other party (including the agents, servants, employees, directors, officers,
affiliates, divisions, partners and representatives of FVP and the other
FrontierVision Companies) of and from any and all actions, causes of actions,
charges, complaints, claims, liabilities, and expenses (including, without
limitation, attorneys' fees and costs) of any nature whatsoever, known or
unknown, in law and equity, arising from the employment agreements by and
between FVP and each of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇.
(f) At the Closing, Buyer shall cause all amounts due
under the FrontierVision
Partners, L.P. Executive Deferred Compensation Plan to be paid as directed by
FVP. An amount equal to the aggregate amount of such payments shall be included
as an Adjustment Liability in the computation of Closing Net Liabilities. The
participants under the Plan shall deliver appropriate releases to Buyer with
respect to its rights under the Plan contingent upon receipt of the Closing
payment due to such participant.
6.10 Tax Matters.
The following provisions shall govern the allocation of responsibility
between Buyer and Sellers for certain tax matters following the Closing Date:
(a) Tax Periods Ending on or Before the Closing Date.
The General Partner shall
prepare or cause to be prepared and file or cause to be filed all Tax Returns
for the FrontierVision Companies for all periods ending on or prior to the
Closing Date which are required to be filed after the Closing Date. Such Tax
Returns shall be prepared in accordance with each FrontierVision Company's past
custom and practice (subject to applicable Legal Requirements and determined on
the basis of the appropriate permanent records of such FrontierVision Company),
and allocations of items of income and gain and loss and deduction shall be made
using the closing of the books method. In the case of any FrontierVision Company
that is a partnership or limited liability company, such Tax Returns shall be
prepared in accordance with the Charter Documents of such FrontierVision Company
as in effect on the Closing Date. In preparing each FrontierVision Company's Tax
Returns, the General Partner shall consult with Buyer in good faith and shall
provide Buyer with drafts of such Tax Returns (together with the relevant
back-up information) for review at least twenty days prior to filing. After the
Closing, Buyer shall not prepare or cause to be prepared or file or cause to be
filed any Tax Return for the FrontierVision Companies for any period ending on
or prior to the Closing Date, except as any Seller adversely affected thereby
may agree in writing.
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(b) Tax Periods Beginning Before and Ending After the
Closing Date. Buyer shall
prepare or cause to be prepared and file or cause to be filed any Tax Returns of
the FrontierVision Companies for Tax periods which begin before the Closing Date
and end after the Closing Date. Such Tax Returns shall be prepared in accordance
with each FrontierVision Company's past custom and practice (subject to
applicable Legal Requirements and determined on the basis of the appropriate
permanent records of such FrontierVision Company). In preparing such Tax
Returns, Buyer shall consult with the General Partner in good faith and shall
provide the General Partner with drafts of such Tax Returns (together with the
relevant back-up information) for review at least twenty days prior to filing.
(c) Cooperation on Tax Matters.
(1) Buyer and the General Partner shall
cooperate fully, as and to the extent
reasonably requested by the other party, in connection with the filing of Tax
Returns pursuant to this Section 6.10 and any audit, litigation, or other
proceeding with respect to Taxes. Such cooperation shall include the retention
and (upon the other party's request) the provision of records and information
which are reasonably relevant to any such audit, litigation, or other proceeding
and making employees available on a mutually convenient basis to provide
additional information and explanation of any material provided hereunder. Buyer
and the General Partner agree (A) to retain all books and records with respect
to Tax matters pertinent to the FrontierVision Companies relating to any taxable
period beginning before the Closing Date until the expiration of the statute of
limitations (and, to the extent notified by Buyer or the General Partner, any
extensions thereof) of the respective taxable periods, and to abide by all
record retention agreements entered into with any taxing authority, and (B) to
give the other party reasonable written notice prior to transferring, destroying
or discarding any such books and records and, if the other party so requests,
Buyer or the General Partner, as the case may be, shall allow the other party to
take possession of such books and records to the extent they would otherwise be
destroyed or discarded.
(2) Buyer and the General Partner further agree,
upon request, to use
commercially reasonable efforts to obtain any certificate or other document from
any Governmental Authority or any other Person as may be necessary to mitigate,
reduce or eliminate any Tax that could be imposed (including Taxes with respect
to the transactions contemplated hereby).
(d) Tax Sharing Agreements. All tax sharing agreements
or similar agreements with
respect to or involving the FrontierVision Companies shall be terminated as of
the Closing Date and, after the Closing Date, the FrontierVision Companies shall
not be bound thereby or have any liability thereunder.
(e) Certain Taxes. All transfer, documentary, sales,
use, stamp, registration and other
such Taxes and fees (including any penalties and interest) incurred in
connection with this Agreement shall be borne one-half by Buyer and one-half by
Sellers. Buyer and the General Partner will cooperate
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in all reasonable respects to prepare and file all necessary Tax Returns and
other documentation with respect to all such transfer, documentary, sales, use,
stamp, registration and other Taxes and fees.
6.11 FrontierVision Name.
Buyer agrees that the General Partner shall retain the right to the
name "FrontierVision" after the Closing and agrees to change the name of each of
the FrontierVision Companies within one year after the Closing to a name that
does not include any variant of "FrontierVision" and agrees not to otherwise use
the "FrontierVision" name or any variant thereof thereafter, subject to Buyer's
indemnification obligations under Section 10.4(c).
6.12 Releases.
After the Closing neither Buyer nor its Affiliates will have any claim
against (except as expressly provided in Article 10), or be entitled to enforce
any provision of the existing partnership agreement of FVP (or either of the
Limited Partnership Interests and Note Purchase Agreements pursuant to which the
Sellers made their investments in FVP) against, any Seller or any Affiliate of
any Seller or any officer or director of any Seller or any Affiliate of any
Seller, and any and all such claims (except claims made pursuant to Article 10)
are hereby waived and released. At the Closing, subject to Section 6.13, each
Seller shall execute and deliver to Buyer a Seller Release. At the Closing,
subject to Section 6.13, each Person designated on Exhibit H shall execute and
deliver to Buyer a Management Release.
6.13 Directors and Officers Insurance.
Prior to the Closing FVP will purchase on behalf of the FrontierVision
Companies a General Partners Liability/Limited Partnership Reimbursement
insurance policy in scope and coverage substantially similar to the policy
quotation received by Buyer from American Dynasty Surplus Line Insurance Company
on February 16, 1999, covering the officers and directors of the FrontierVision
Companies and the members of FVP's Advisory Committee. The amount of any
premiums paid by the FrontierVision Companies prior to the Adjustment Time in
respect of such policy shall be included as an Adjustment Asset in the
computation of Closing Net Liabilities. Buyer agrees to cause the FrontierVision
Companies to keep such policy in effect for at least the three year period
following the Closing Date.
6.14 Rate Regulatory Matters.
The parties acknowledge and agree that notwithstanding anything in this
Agreement or any other Transaction Document to the contrary (including any
representation or warranty made by FVP in Sections 3.11(e), 3.15 or 3.16), any
matter relating to, in connection with or resulting or arising from any Rate
Regulatory Matter, or any actions taken prior to or after the date hereof by any
FrontierVision Company to comply with or in a good faith attempt to comply with
any Rate Regulatory Matter
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(including any rate reduction, refund, penalty or similar action having the
effect of reducing the rates previously or subsequently paid by subscribers,
whether instituted or implemented by or imposed on any FrontierVision Company
and changes to rate practices instituted or implemented by or imposed on any
FrontierVision Company), shall not: (a) cause or constitute, directly or
indirectly, a breach by any FrontierVision Company or any Seller of any of its
representations, warranties, covenants or agreements contained in this Agreement
or any other Transaction Document (and such representations, warranties,
covenants, and agreements shall hereby be deemed to be modified appropriately to
reflect and permit the impact and existence of such Rate Regulatory Matters and
to permit any action by any FrontierVision Company to comply with or attempt in
good faith to comply with such Rate Regulatory Matters; (b) otherwise cause or
constitute, directly or indirectly, a default or breach by any FrontierVision
Company or any Seller under this Agreement or any other Transaction Document;
(c) result in the failure of any condition precedent to the obligations of Buyer
under this Agreement or any other Transaction Document; (d) otherwise excuse
Buyer's performance of its obligations under this Agreement or any other
Transaction Document; or (e) except as expressly provided in Section 10.2(c),
give rise to any claim for indemnification or other compensation by Buyer or any
adjustment to the Stock Consideration or Cash Consideration.
6.15 Distribution by SPCs of Interest in General Partner;
Cancellation of SPC Notes.
(a) Immediately prior to the Closing, each of ▇▇▇▇▇
Brothers ▇▇▇▇▇▇▇▇ & Co. and
Olympus Growth Fund II, L.P., both of which are SPC Sellers, will cause the
respective SPC owned by it to distribute, directly or indirectly, to such SPC
Seller the limited partnership interest in the General Partner held by such SPC
(together with all of its rights and obligations under the partnership agreement
of the General Partner). Such partnership interests in the General Partner are
not included in the Purchased Interests and shall not be sold and transferred to
Buyer hereunder.
(b) Each SPC Seller that holds any SPC Note shall cause
all such SPC Notes to be
canceled concurrently with the Closing. Buyer shall not assume any liability
with respect to any SPC Notes, and no SPC shall have any continuing liability
after the Closing with respect to any SPC Notes.
6.16 Cooperation on Buyer SEC Matters.
(a) FVP shall cooperate with Buyer and its counsel and
accountants in connection
with any filing required to be made by Buyer with the SEC. FVP shall provide to
Buyer such information relating to the FrontierVision Companies and their
respective business and operations as Buyer may reasonably request. All costs,
expenses and fees incurred in connection with the inclusion by Buyer of such
information in any such filing shall be borne by Buyer, and Buyer shall
indemnify and hold harmless FVP and the Sellers from any Losses resulting from
the inclusion by Buyer of any such information in any such filing, except Buyer
shall not have any indemnification liability to the FrontierVision Companies to
the extent any Losses arise out of any information included by Buyer in reliance
upon and in conformity with written information furnished by the FrontierVision
Companies expressly for use in connection with such filings.
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(b) FVP hereby consents to the inclusion by Buyer of
financial statements of the
FrontierVision Companies, if requested to be so included by Buyer, in any report
required to be filed by Buyer with the SEC, the National Association of
Securities Dealers' Automated Quotations ("NASDAQ") System or any stock exchange
pursuant to applicable Legal Requirements, including the Securities Act and the
Exchange Act. All costs, expenses and fees incurred in connection with the
inclusion by Buyer of financial statements of the FrontierVision Companies in
any such report shall be borne by Buyer, and Buyer shall indemnify and hold
harmless FVP and the Sellers from any Losses resulting from the inclusion by
Buyer of financial statements of the FrontierVision Companies in any such
report. FVP agrees to obtain the consent of the independent public accountants
of the FrontierVision Companies to the inclusion of such financial statements in
any report so required to be filed by Buyer with the SEC, NASDAQ System or any
stock exchange.
6.17 Stock Consideration Registration Rights Agreement.
(a) Simultaneously with the execution of this Agreement,
and as a material
inducement to Sellers to enter into this Agreement, Buyer shall execute and
deliver the Stock Consideration Registration Rights Agreement, pursuant to which
Buyer will ▇▇▇▇▇ ▇▇▇▇▇▇▇ certain rights as provided therein in respect of the
shares of ACC Class A Common Stock and other securities constituting the Stock
Consideration (such shares and other securities, the "Stock Consideration
Registrable Securities"). Buyer shall perform all of its obligations under the
Stock Consideration Registration Rights Agreement in accordance with their
terms.
(b) Prior to the Closing FVP will make a written request
to the "Minor Holders"
under the Stock Consideration Registration Rights Agreement with respect to
compliance with certain "Sales Notice" procedures, and establish a "preferred
broker" to facilitate such Sales Notices, all as more fully described in
Paragraph 2(b) of the Stock Consideration Registration Rights Agreement. No
"Minor Holder" will be liable to Buyer or any other party for any damages
sustained by Buyer or any other party as a result of the failure of such Minor
Holder to make a Sales Notice as requested by FVP.
6.18 State Cable Systems.
The FrontierVision Companies acquired certain of the Systems from State
Cable TV Corporation and Better Cable TV Company on October 23, 1998 pursuant to
a purchase and sale agreement referred to in Section 3.11 of FrontierVision's
Disclosure Schedule (the "State Cable Acquisition Agreement"). The
FrontierVision Companies have filed, or intend to file after the execution of
this Agreement, an indemnification claim against the sellers thereunder based on
their breach of certain representations and warranties relating to the bandwidth
capacity of such Systems. In consideration of the inclusion as an Adjustment
Liability of item (G) in Section 2.5(b)(2), FVP and Buyer hereby agree as
follows: (1) Sellers shall be entitled to the first $5,500,000 which is
collected by or on behalf of the FrontierVision Companies, either before or
after the Closing hereunder, in respect of such claim (to the extent it relates
to the plant miles in respect of which item (G) in Section 2.5(b)(2)
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relates) and Buyer shall be entitled to any amounts collected in excess of
$5,500,000; and (2) if such claim is not finally resolved prior to the Closing
hereunder, Buyer shall offer to engage the General Partner to proceed with the
claim on behalf of and as the agent of the FrontierVision Companies, will
cooperate and cause the FrontierVision Companies to cooperate with the General
Partner in all reasonable respects in connection therewith, and if any such
amounts are collected by or on behalf of the FrontierVision Companies after the
Closing hereunder, Buyer shall cause the first $5,500,000 in the aggregate of
such monies (less any such amounts collected by the FrontierVision Companies
prior to the Closing) to be remitted promptly to the General Partner for the
benefit of Sellers; provided, however, that (A) the General Partner shall not be
required to accept such engagement or proceed with such claim and Buyer may
terminate the engagement of the General Partner at any time provided that Buyer
shall still cause the first $5,500,000 in the aggregate of such monies (less any
such amounts collected by the FrontierVision Companies prior to the Closing) to
be remitted promptly to the General Partner for the benefit of Sellers except
that out of any monies to be remitted to the General Partner pursuant to this
clause (B) there shall be deducted Buyer's reasonable out-of-pocket costs and
expenses actually incurred, if any, in connection with prosecuting such claim
after the Closing and provided further that if the amount of the monies
collected after the Closing exceeds $5,500,000, Sellers shall only bear a pro
rata portion of Buyer's out-of-pocket costs and expenses based on a fraction,
the numerator of which is equal to $5,500,000 and the denominator of which is
equal to the total amount of the monies collected; and (B) the General Partner
shall not waive or settle such claim without the prior written consent of Buyer
(which consent shall not be unreasonably withheld) if the settlement relates to
any indemnification claim other than the claim described above in subsection (1)
or otherwise impairs the rights of the FrontierVision Companies with respect to
any other indemnification claims under the State Cable Acquisition Agreement.
6.19 Lien Searches.
FVP shall deliver to Buyer, at least two weeks prior to the Closing
Date, an accurate list of the current address of each Seller's respective
principal place of business, or if such Seller has no principal place of
business, such Seller's respective residence, and upon delivery of such list FVP
shall be deemed to have represented and warranted to Buyer that each such
address is the true and correct address that it purports to be with respect to
each Seller as of such date.
6.20 Distant Signals; Copyright Matters.
Unless otherwise restricted or prohibited by any Governmental
Authority, Legal Requirement or Contract, if requested by Buyer, FVP will cause
the FrontierVision Companies to delete prior to the Closing any distant
broadcast signal the continued carriage of which will in Buyer's reasonable
judgment result in a substantial increase to Buyer's copyright liability;
provided, however, that Buyer shall give FVP reasonable advance notice to permit
the FrontierVision Companies to comply with its notice obligations in connection
with a signal deletion and FVP shall have no obligation to cause the deletion of
such signal unless Buyer agrees to reimburse the Sellers for any out-of-pocket
costs and
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expenses that may be incurred by the FrontierVision Companies in connection with
deleting any such signals (other than nominal costs and expenses).
ARTICLE 7
CONDITIONS TO OBLIGATIONS OF BUYER AND SELLERS
7.1 Conditions to Obligations of Buyer.
All obligations of Buyer at the Closing hereunder are subject to the
fulfillment prior to or at the Closing of each of the following conditions:
(a) Representations and Warranties of FVP. As to the
representations and warranties
of FVP set forth in Article 3, (1) those representations and warranties set
forth in Article 3 which are expressly stated to be made solely as of the date
of this Agreement or another specified date shall be true and correct in all
respects as of such date, and (2) all other representations and warranties of
FVP set forth in Article 3 shall be true and correct in all respects at and as
of the time of the Closing as though made at and as of that time, except in each
case of clauses (1) and (2) to the extent that the aggregate effect of the
inaccuracies in such representations and warranties as of the applicable times
does not constitute a material adverse change in the business, financial
condition, assets or liabilities of the FrontierVision Companies, taken as a
whole, when compared with the state of facts that would exist if all such
representations and warranties were true in all respects as of the applicable
times, not giving effect to any inaccuracies resulting from any actions taken in
accordance with the provisions of this Agreement, any event that arose in the
ordinary course of business, any changes in economic conditions that are
applicable to the cable industry generally on a national, state, regional or
local basis, any changes in conditions (including Rate Regulatory Matters, and
other federal, state or local governmental actions, legislation or regulations)
that are applicable to the cable industry generally on a national, state,
regional or local basis, or any changes in competitive activities.
(b) Representations and Warranties of Sellers. As to the
representations and
warranties of Sellers set forth in Article 4, (1) those representations and
warranties set forth in Article 4 which are expressly stated to be made solely
as of the date of this Agreement or another specified date shall be true and
correct in all respects as of such date, and (2) all other representations and
warranties of Sellers set forth in Article 4 shall be true and correct in all
respects at and as of the time of the Closing as though made at and as of that
time, except in each case of clauses (1) and (2) to the extent that the
aggregate effect of the inaccuracies in such representations and warranties as
of the applicable times does not materially impair Sellers' ability to perform
their obligations under this Agreement and the other Transaction Documents to
which they are party.
(c) Covenants. FVP and the Sellers shall have performed
and complied with all
covenants and agreements required by this Agreement (other than by Sections 6.4
and 6.7, which are governed by the immediately following sentence) to be
performed or complied with by them prior to
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or at the Closing, except to the extent that the aggregate effect of the failure
to so perform or comply has not had a material adverse effect on the business,
financial condition, assets or liabilities of the FrontierVision Companies,
taken as a whole. FVP shall have performed and complied with in all material
respects all covenants and agreements required by Sections 6.4, 6.7 and 6.16 to
be performed or complied with by it prior to or at the Closing.
(d) Franchise Consents and Franchise Renewals.
(1) A Consent of the Franchising Authority shall
have been obtained for each
Franchise designated in Section 3.4 of FrontierVision's Disclosure Schedule as a
"Material Consent Franchise" and for each Designated Material Consent Franchise,
if any. Notwithstanding the preceding sentence, and for purposes of satisfaction
of the condition in this subsection (1):
(A) Consent with respect to any Material
Consent Franchise or any
Designated Material Consent Franchise shall be deemed obtained on the date the
120-Day Period expires if such Franchising Authority fails to approve or deny
the request for Consent by such date and the failure to approve the request for
Consent was not principally caused by any of the following: a nonfrivolous
dispute by the Franchising Authority as to the FrontierVision Companies' (or any
predecessor's) noncompliance with the Franchise (provided that FVP has provided
Buyer with evidence reasonably satisfactory to Buyer supporting FVP's contention
that such dispute is frivolous); a nonfrivolous dispute by the Franchising
Authority as to Buyer's qualifications to be the transferee of control of the
FrontierVision Companies as the holder of the Franchise in question (provided
that FVP has provided Buyer with evidence reasonably satisfactory to Buyer
supporting FVP's contention that such dispute is frivolous); or the withholding
of consent by FVP or Buyer to any requirements that would be imposed by the
Franchising Authority as a condition to granting such Consent (although nothing
herein shall be deemed to limit the provisions of Section 6.4(d) relating to
changes and conditions that Buyer is required to accept and that FVP may accept
on behalf of Buyer and the FrontierVision Companies). The term "120-Day Period"
means, with respect to any Franchise, the 120 day period commencing on the date
on which the Consent application on FCC Form 394 (or other appropriate form)
required to be filed with respect to such Franchise was filed with the
appropriate Franchising Authority, plus the number of days, if any, that FVP has
agreed with a Franchising Authority to extend the 120-day period provided by
Section 617 of the Cable Act.
(B) Consent with respect to any Material
Consent Franchise or
Designated Material Consent Franchise that is not in the Renewal Window shall be
deemed obtained on the sixtieth day (subject to the proviso below) after the
date the 120-Day Period expires, or if the Franchising Authority has
affirmatively denied the request for Franchise Consent, the sixtieth day after
the date of such denial, if such Franchising Authority fails to approve or fails
to reverse its denial of the request for Consent by such date and the failure to
approve or reverse its denial of the request for Consent was not principally
caused by a non-frivolous dispute by the Franchising Authority as to the
FrontierVision Companies' (or a predecessor's) noncompliance with the Franchise
(provided that FVP has provided Buyer with evidence reasonably satisfactory to
Buyer supporting FVP's contention that
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such dispute is frivolous); provided, however, that the sixty day extension
period referred to above shall be reduced by each day that the Franchise Consent
application was filed after the forty-fifth day after the execution of this
Agreement (with respect to applications filed pursuant to Section 6.4(a)) or
filed after the tenth day after the date it was determined that such application
was required to be filed (with respect to applications filed pursuant to Section
6.4(b)) if such delay in filing was principally caused by Buyer.
(2) The Renewal Franchises shall have been
renewed in accordance with the
provisions of Section 6.4. The condition in this subsection (2) shall be deemed
satisfied as to any Renewal Franchise (other than the City of Lewiston (ME),
City of Auborn (ME), and City of Defiance (OH) Franchises) if such Franchise is
extended on its existing terms to a date that permits either the FrontierVision
Companies (prior to the Closing) or Buyer (after the Closing) to file a request
for renewal under Section 626(a) of the Cable Act prior to the expiration of the
statutory time period for making such filing (determined on the basis of the new
expiration date).
(3) A Consent of the Franchising Authority under
the Town of Manchester
(ME), the Town of Winthrop (ME), the Town of Peru (ME), the Town of Fairfield
(ME), the Town of Milo (ME), and the City of ▇▇▇▇▇▇ (ME) Franchises shall have
been obtained (with an acknowledgment by such Franchising Authority that the
FrontierVision Companies are not in default under the Franchise) or the date by
which the FrontierVision Companies are required to complete any upgrade/rebuild
requirements set forth in such Franchises shall have been extended at least
three years such that the FrontierVision Companies are not in default under the
Franchise.
(e) FCC Consents. Consent of the FCC shall have been
obtained with respect to
each CARS License listed in Section 3.8 of FrontierVision's Disclosure Schedule.
(f) Lease Consents. Consent of the lessor under the
office leases designated as
"Material Consent Leases" in Section 3.4 of FrontierVision's Disclosure Schedule
shall have been obtained.
(g) ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. The requisite waiting period, if
any, under the HSR Act shall have expired or been terminated.
(h) Judgment. There shall not be in effect on the date on
which the Closing is to
occur any judgment, decree, or order of a court of competent jurisdiction or
other prohibition having the force of law that would prevent or make unlawful
the Closing, provided that Buyer shall have used commercially reasonable efforts
to prevent the entry of any such judgment, decree, order or other legal
prohibition and to appeal as expeditiously as possible any such judgment,
decree, order or other legal prohibition that may be entered and shall have
otherwise taken commercially reasonable actions to cause any such judgment,
decree, order or other legal prohibition to cease to be in effect as
expeditiously as possible.
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(i) No Material Adverse Change. No event shall have
occurred between December
31, 1998 and the date on which the Closing is to occur that has had a material
adverse effect on the business, financial condition, assets or liabilities of
the FrontierVision Companies, taken as a whole, other than events or changes
disclosed in this Agreement or FrontierVision's Disclosure Schedule, or an event
that arose in the ordinary course of business, any changes in economic
conditions that are applicable to the cable industry generally on a national,
state, regional or local basis, any changes in conditions (including Rate
Regulatory Matters, and other federal, state or local governmental actions,
legislation or regulations) that are applicable to the cable industry generally
on a national, state, regional or local basis, or any changes in competitive
activities.
(j) Lien Searches. FVP shall have delivered to Buyer, at
least two weeks prior to
the Closing Date, UCC financing statement, tax lien and judgment searches dated
not more than thirty days prior to the Closing Date (including copies of
documents listed on each search, if any) with respect to each of the Sellers
performed by a search firm reasonably satisfactory to Buyer in the jurisdiction
of each Seller's respective principal place of business, or if such Seller has
no place of business, in the jurisdiction of his or her respective residence as
set forth in the list delivered by FVP pursuant to Section 6.19 (except that
this condition shall not be deemed unsatisfied by the failure to deliver a
search at least two weeks prior to the Closing Date if such search does not
evidence any Encumbrance on the Purchased Interests or the Assets that is not a
Permitted Encumbrance or if any such Encumbrance that is not a Permitted
Encumbrance is removed at or prior to the Closing).
(k) Deliveries. Sellers shall have made or stand willing
to make all the deliveries to Buyer described in Section .
7.2 Conditions to Obligations of Sellers.
All obligations of each Seller at the Closing hereunder are subject to
the fulfillment prior to or at the Closing of each of the following conditions:
(a) Representations and Warranties. As to the
representations and warranties of
Buyer set forth in Article 5, (1) those representations and warranties set forth
in Article 5 which are expressly stated to be made solely as of the date of this
Agreement or another specified date shall be true and correct in all respects as
of such date, and (2) all other representations and warranties of Buyer set
forth in Article 5 shall be true and correct in all respects at and as of the
time of the Closing as though made at and as of that time, except in each case
of clauses (1) and (2) to the extent that the aggregate effect of the
inaccuracies in such representations and warranties as of the applicable times
does not constitute a material adverse change in the business, financial
condition, assets or liabilities of Buyer and its Subsidiaries, taken as a
whole, when compared with the state of facts that would exist if all such
representations and warranties were true in all respects as of the applicable
times, not giving effect to any inaccuracies resulting from any actions taken in
accordance with the provisions of this Agreement, any event that arose in the
ordinary course of business, any changes in economic conditions that are
applicable to the cable industry generally on a national, state, regional or
local basis, any
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changes in conditions (including Rate Regulatory Matters, and other federal,
state or local governmental actions, legislation or regulations) that are
applicable to the cable industry generally on a national, state, regional or
local basis, or any changes in competitive activities.
(b) Covenants. Buyer shall have performed and complied
with in all material
respects all covenants and agreements required by this Agreement to be performed
or complied with by it prior to or at the Closing.
(c) ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. The requisite waiting period, if
any, under the HSR Act shall
have expired or been terminated.
(d) Judgment. There shall not be in effect on the date on
which the Closing is to
occur any judgment, decree, or order of a court of competent jurisdiction or
other prohibition having the force of law that would prevent or make unlawful
the Closing, provided that FVP shall have used commercially reasonable efforts
to prevent the entry of any such judgment, decree, order or other legal
prohibition and to appeal as expeditiously as possible any such judgment,
decree, order or other legal prohibition that may be entered and shall have
otherwise taken commercially reasonable actions to cause any such judgment,
decree, order or other legal prohibition to cease to be in effect as
expeditiously as possible.
(e) No Material Adverse Change. No event shall have
occurred between the date
of this Agreement and the date on which the Closing is to occur that has had a
material adverse effect on the business, financial condition, assets or
liabilities of Buyer and its Subsidiaries, taken as a whole, other than an event
that arose in the ordinary course of business, any changes in economic
conditions that are applicable to the cable industry generally on a national,
state, regional or local basis, any changes in conditions (including Rate
Regulatory Matters, and other federal, state or local governmental actions,
legislation or regulations) that are applicable to the cable industry generally
on a national, state, regional or local basis, or any changes in competitive
activities.
(f) Stock Consideration. The shares of ACC Class A
Common Stock to be paid and
issued to Sellers as the Stock Consideration (or, if applicable, all of the
securities of any other class or series constituting the Stock Consideration):
(1) shall have been duly authorized and validly issued, fully paid and
nonassessable, not subject to, or issued in violation of, any preemptive rights
and not issued in violation of any federal or state securities laws; (2) shall
comply with the provisions of the Stock Consideration Registration Rights
Agreement; and (3) shall have the same rights and powers as all other shares of
ACC Class A Common Stock (or, if any of the securities constituting the Stock
Consideration are not shares of ACC Class A Stock, as all other securities of
the same class or series) issued and outstanding as of the date of this
Agreement.
(g) Stock Consideration Registration Rights Agreement.
The Stock Consideration
Registration Rights Agreement shall be in full force and effect in accordance
with its terms and Buyer shall have performed all of its obligations therein in
accordance with their terms. An appropriate
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registration statement covering the registration of all of the Stock
Consideration Registrable Securities shall have been declared effective under
the Securities Act in accordance with the provisions of the Stock Consideration
Registration Rights Agreement (and such registration statement shall not be
subject to any stop order or proceeding seeking a stop order). All of the Stock
Consideration Registrable Securities shall be listed on the NASDAQ National
Market System, New York Stock Exchange or American Stock Exchange or other major
market system or exchange reasonably acceptable to Sellers.
(h) Deliveries. Buyer shall have made or stand willing
to make all the deliveries
described in Section .
ARTICLE 8
CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date.
(1) Subject to satisfaction or, to the extent
permitted by law, waiver, of the
closing conditions described in Article 7, and subject to Sections 8.1(a)(2),
8.1(a)(3) and 8.1(a)(4), the Closing shall take place on the tenth business day
after FVP or Buyer provides written notice to the other party after satisfaction
or waiver of the conditions set forth in Sections 7.1(d), (e), (f) and (g) and
Section 7.2(c) (provided that without Buyer's consent, the Closing Date shall
not be earlier than the earlier of the date on which all Franchise Consents are
obtained and the date that is sixty days after the date on which the 120-Day
Period has expired for each Franchise in respect of which a Franchise Consent
application was filed; provided, however, that the sixty day extension period
referred to above shall be reduced by each day that the Franchise Consent
application was filed after the forty-fifth day after the execution of this
Agreement (with respect to applications filed pursuant to Section 6.4(a)) or
filed after the tenth day after the date it was determined that such application
was required to be filed (with respect to applications filed pursuant to Section
6.4(b)) if such delay in filing was principally caused by Buyer)); and provided
further that without the consent of both FVP and Buyer the Closing Date shall
not be earlier than the tenth business day after FVP or Buyer provides written
notice to the other party that the Closing is permitted to take place in
accordance with the preceding provisions of this Section 8.1(a)(1)), or on such
earlier or later date as FVP and Buyer shall mutually agree. If such tenth
business day (or any other date for the Closing agreed to by FVP and Buyer)
would extend the date for the Closing beyond the Upset Date, the Upset Date
shall be extended to the day after such tenth business day or other date agreed
to for the Closing, as applicable.
(2) If on the date on which the Closing would
otherwise be required to take
place pursuant to Section 8.1(a)(1), (A) there shall be in effect any judgment,
decree, or order of a court of competent jurisdiction that would prevent or make
unlawful the Closing, or (B) any other circumstance beyond the reasonable
control of FVP or Sellers or Buyer (but which shall not in any
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event include any matters relating to financing of the transactions contemplated
hereby) shall exist that would prevent the Closing or the satisfaction of any of
the conditions precedent to any party set forth in Article 7, then either FVP or
Buyer may, at its option, postpone the date on which the Closing is required to
take place until the tenth business day after either party provides written
notice to the other party, as soon as practicable after such conditions are
satisfied, such judgment, decree, or order ceases to be in effect, or such other
circumstance ceases to exist; provided, however, that a party's postponement of
the date on which the Closing is required to take place shall not restrict the
exercise by FVP or Buyer of its rights under Section 9.2 or 9.3, as applicable.
(3) If on the date on which the Closing would
otherwise be required to take
place pursuant to Section 8.1(a)(1), the Credit Agreement Consent has not been
obtained, then Buyer may, at its option, postpone the date on which the Closing
is required to take place until such date, but in no event later than June 30,
1999, to be set by Buyer on at least ten business days' written notice to FVP.
(4) If on the date on which the Closing would
otherwise be required to take
place pursuant to the foregoing subsections of this Section 8.1(a), the
conditions set forth in Sections 7.2(f) or (g) have not been satisfied, then
either FVP or Buyer may, at its option (but it shall not be compelled to do so),
postpone the date on which the Closing is required to take place until such
date, but in no event later than the Upset Date, to be set by either party on at
least ten business days' written notice to the other party, as soon as
practicable after such conditions are satisfied; provided, however, that a
party's postponement of the date on which the Closing is required to take place
shall not restrict the exercise by FVP or Buyer of its rights under Section 9.2
or 9.3, as applicable; and provided, further, that if such conditions set forth
in Sections 7.2(f) and (g) have not been satisfied in any event by the Upset
Date, Buyer shall be deemed to have willfully breached this Agreement with the
attendant consequences set forth in Sections 2.4 and 9.4; provided, further,
however, that Buyer may on the Upset Date, but only on the Upset Date, satisfy
the conditions set forth in Sections 7.2(g) and (h) by being ready, able, and
willing to deliver on the Upset Date, in lieu of the Stock Consideration
Registrable Securities, additional cash consideration in an amount equal to the
aggregate fair market value of the Stock Consideration Registrable Securities
(computed on the basis of the Weighted Average Trading Price of the ACC Class A
Common Stock or other security constituting the Stock Consideration for the ten
trading day period beginning on the thirteenth trading day prior to the Upset
Date.
(b) Closing Place. The Closing shall be held at the
offices of Dow, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇, PLLC, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇, or any other place or time as FVP and Buyer shall mutually agree.
8.2 Deliveries by Sellers.
Prior to or at the Closing, Sellers shall deliver or cause to be
delivered to Buyer the following:
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(a) Purchased Interests. An assignment agreement
providing for the assignment of
the Purchased Interests to Buyer, in a form reasonably satisfactory to Buyer,
together with any notes or certificates representing the Purchased Interests,
duly endorsed for transfer.
(b) Officer's Certificate of FVP. A certificate executed
by FVP, dated as of the
Closing Date, certifying that the closing conditions specified in Sections
7.1(a) and (c) have been satisfied as to FVP, except as disclosed in said
certificate.
(c) Secretary's Certificate. A certificate executed by
FVP, dated as of the Closing
Date, (1) certifying that the resolutions, as attached to said certificate, were
duly adopted by the Advisory Committee of FVP, authorizing and approving the
execution by FVP of this Agreement and the other Transaction Documents to which
FVP is a party and the consummation of the transactions contemplated hereby and
thereby and that such resolutions remain in full force and effect; (2)
certifying that the resolutions, as attached to said certificate, were duly
adopted by the Board of Directors of FrontierVision Inc., authorizing and
approving the execution by FVP and the General Partner of this Agreement and the
other Transaction Documents to which they are a party and the consummation of
the transactions contemplated hereby and thereby and that such resolutions
remain in full force and effect; and (3) providing, as attachments thereto,
Certificates of Good Standing for FVP and each of the other FrontierVision
Companies certified by an appropriate state official of the State of their
organization, all certified by such state officials as of a date not more than
fifteen days before the Closing Date.
(d) Consents. Copies of Consents which have been
obtained by FVP or Sellers prior to the Closing.
(e) Corporate, Financial, and Tax Records. All corporate
records (including minute
books and stock books and registers) and financial and tax records of each of
the FrontierVision Companies that are not located at one of the offices or sites
included in the Real Property.
(f) Post-Closing Escrow Agreement. The Post-Closing
Escrow Agreement, duly executed by each Seller and the Escrow Agent.
(g) Noncompetition Agreement. The Noncompetition
Agreements, duly executed by each Person designated on Exhibit A.
(h) Opinion of Counsel. An opinion of Dow, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇, PLLC, counsel to
FVP, dated as of the Closing Date, substantially in the form of Exhibit C
hereto.
(i) Seller Releases. A Seller Release, duly executed by
each Seller.
(j) Management Releases. A Management Release, duly
executed by each Person designated on Exhibit H.
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8.3 Deliveries by Buyer.
Prior to or at the Closing, Buyer shall deliver to Sellers the
following:
(a) Purchase Consideration.
(1) An assumption agreement providing for the
assumption by Buyer of the
Assumed Liabilities, in a form reasonably satisfactory to Sellers.
(2) The Closing Cash Payment as follows: (A)
$5,000,000 will be paid to the
Escrow Agent for deposit in the Post-Closing Adjustments Escrow pursuant to
Section 2.7; (B) any amount required to be deposited in the Post-Closing
Adjustments Escrow pursuant to Section 2.6 will be paid to the Escrow Agent; (C)
any amount required to be deposited in a Post-Closing Section 2.8 Escrow
pursuant to Section 2.8 will be paid to the Escrow Agent; (D) any amount
required to be deposited in the Post-Closing Section 2.9 Escrow pursuant to
Section 2.9 will be paid to the Escrow Agent; and (E) the balance of the Closing
Cash Payment will be paid by wire or accounts transfer of immediately available
funds to one or more accounts designated by Sellers by written notice to Buyer
not less than two days prior to the Closing.
(3) The Stock Consideration as follows: (A)
stock certificates representing
1,000,000 shares of ACC Class A Common Stock in the aggregate will be issued and
registered in the name of Seller or Sellers' designees as directed by the
Sellers by written notice to Buyer not less than two days prior to the Closing
and transferred to the Escrow Agent for deposit in the Post-Closing Indemnity
Escrow pursuant to Section 10.3, and (B) stock certificates representing the
portion of the Stock Consideration which is not transferred to the Escrow Agent
will be issued and registered in the name of Seller or Sellers' designees as
directed by the Sellers by written notice to Buyer not less than two days prior
to the Closing and delivered to Sellers or Sellers' designees; or, if Buyer
delivers cash pursuant to Section 8.1(a)(4) in lieu of the Stock Consideration
Registrable Securities, (A) an amount equal to the aggregate fair market value
of 1,000,000 shares of ACC Class A Common Stock (computed on the basis of the
Weighted Average Trading Price of the ACC Class A Common Stock for the ten
trading day period beginning on the thirteenth trading day prior to the Closing
Date) will be transferred to the Escrow Agent for deposit in the Post-Closing
Indemnity Escrow pursuant to Section 10.3, and (B) the portion of the Stock
Consideration which is not transferred to the Escrow Agent will be paid by wire
or accounts transfer of immediately available funds to one or more accounts
designated by Sellers by written notice to Buyer not less than two days prior to
the Closing.
(b) Officer's Certificate. A certificate executed by
Buyer, dated as of the Closing
Date, certifying that the closing conditions specified in Sections 7.2(a) and
(b) have been satisfied, except as disclosed in said certificate.
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(c) Secretary's Certificate. A certificate executed by
Buyer, dated as of the Closing
Date, (1) certifying that the resolutions, as attached to said certificate, were
duly adopted by the Board of Directors of Buyer, authorizing and approving the
execution by Buyer of this Agreement and the other Transaction Documents to
which Buyer is a party and the consummation of the transactions contemplated
hereby and thereby and that such resolutions remain in full force and effect;
and (2) providing, as attachments thereto, a Certificate of Good Standing for
Buyer certified by an appropriate state official of the State of Delaware,
certified by such state official as of a date not more than fifteen days before
the Closing Date.
(d) Post-Closing Escrow Agreement. The Post-Closing
Escrow Agreement, duly
executed by Buyer and the Escrow Agent.
(e) Opinion of Counsel. Opinions of ▇▇▇▇▇▇▇▇ Ingersoll
Professional Corporation,
counsel to Buyer, dated as of the Closing Date, substantially in the form of
Exhibit D hereto.
ARTICLE 9
TERMINATION
9.1 Termination by Agreement.
This Agreement may be terminated at any time prior to the Closing by
agreement between FVP and Buyer.
9.2 Termination by FVP.
This Agreement may be terminated at any time prior to the Closing by
FVP and the purchase and sale of the Purchased Interests abandoned, upon written
notice to Buyer, upon the occurrence of any of the following:
(a) Conditions. If on any date determined for the
Closing in accordance with Section
8.1 if each condition set forth in Section 7.1 has been satisfied (or will be
satisfied by the delivery of documents at the Closing) or waived in writing on
such date and either a condition set forth in Section 7.2 has not been satisfied
(or will not be satisfied by the delivery of documents at the Closing) or waived
in writing on such date or Buyer has nonetheless refused to consummate the
Closing. Notwithstanding the foregoing, FVP may not rely on the failure of any
condition set forth in Section 7.2 to be satisfied if such failure was
principally caused by FVP's or any Seller's failure to act in good faith or a
breach of or failure to perform any of its representations, warranties,
covenants or other obligations in accordance with the terms of this Agreement.
(b) Upset Date. If the Closing shall not have occurred
on or prior to the Upset Date,
unless the failure of the Closing to occur was principally caused by FVP's or
any Seller's failure to act
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in good faith or a breach of or failure to perform any of its representations,
warranties, covenants or other obligations in accordance with the terms of this
Agreement; provided that (1) if on the Upset Date the Closing has not occurred
solely because any notice period required by Section 8.1(a) has not lapsed, the
Upset Date shall be extended to a date that is one business day after the lapse
of such period; and (2) if FVP is required to file a Franchise Consent
application pursuant to Section 6.4(b), then FVP may extend the Upset Date from
time to time at its sole option by notice to Buyer to a date that is one
business day after the later of (A) the date that is 210 days after the last
Franchise Consent application was filed pursuant to Section 6.4(b) and (B) 90
days after the last affirmative denial by a Franchising Authority of a request
for such Franchise Consent.
9.3 Termination by Buyer.
This Agreement may be terminated at any time prior to the Closing by
Buyer and the purchase and sale of the Purchased Interests abandoned, upon
written notice to FVP, upon the occurrence of any of the following:
(a) Conditions. If on any date determined for the
Closing in accordance with Section
8.1 if each condition set forth in Section 7.2 has been satisfied (or will be
satisfied by the delivery of documents at the Closing) or waived in writing on
such date and either a condition set forth in Section 7.1 has not been satisfied
(or will not be satisfied by the delivery of documents at the Closing) or waived
in writing on such date or Sellers have nonetheless refused to consummate the
Closing. Notwithstanding the foregoing, Buyer may not rely on the failure of any
condition set forth in Section 7.1 to be satisfied if such failure was
principally caused by Buyer's failure to act in good faith or a breach of or
failure to perform any of its representations, warranties, covenants or other
obligations in accordance with the terms of this Agreement.
(b) Upset Date. If the Closing shall not have occurred
on or prior to the Upset Date,
unless the failure of the Closing to occur was principally caused by Buyer's
failure to act in good faith or a breach of or failure to perform any of its
representations, warranties, covenants or other obligations in accordance with
the terms of this Agreement or failure to satisfy the conditions set forth in
Sections 7.2(f) or (g); provided that (1) if on the Upset Date the Closing has
not occurred solely because any notice period required by Section 8.1(a) has not
lapsed, the Upset Date shall be extended to a date that is one business day
after the lapse of such period; and (2) if FVP is required to file a Franchise
Consent application pursuant to Section 6.4(b), then FVP may extend the Upset
Date from time to time at its sole option by notice to Buyer to a date that is
one business day after the later of (A) the date that is 210 days after the last
Franchise Consent application was filed pursuant to Section 6.4(b) and (B) 90
days after the last affirmative denial by a Franchising Authority of a request
for such Franchise Consent.
9.4 Effect of Termination.
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If this Agreement is terminated as provided in this Article 9, then
this Agreement will forthwith become null and void and there will be no
liability on the part of any party to any other party or any other Person in
respect thereof, provided that:
(a) Surviving Obligations. The obligations of the
parties described in Sections 6.2,
9.4 and 11.1 (and all other provisions of this Agreement relating to expenses)
will survive any such termination. In addition, if FVP is entitled to receive
the Deposit Escrow Property in accordance with Section 2.4, all of Buyer's
obligations with respect to the Deposit Escrow Property, including its
obligations under the Deposit Escrow Agreement and under the Deposit
Registration Rights Agreement will survive any such termination.
(b) Withdrawal of Applications. All filings,
applications and other submissions
relating to the transfer of the Purchased Interests shall, to the extent
practicable, be withdrawn from the Governmental Authority or other Person to
whom made.
(c) Willful Breach by Buyer. No such termination will
relieve Buyer from liability
for a willful breach of this Agreement (which shall be deemed to include without
limitation any failure by Buyer to satisfy the conditions set forth in Sections
7.2(f) or (g) by the date on which the Closing would otherwise be required to
take place pursuant to Section 8.1, subject to the provisions of Section
8.1(a)(4), or in any event by the Upset Date), and in such event the Deposit
Escrow Property shall be released from escrow and delivered to FVP. Subject to
Buyer's continuing obligations described in Section 9.4(a), the delivery of the
Deposit Escrow Property to Sellers in compliance with the provisions of Section
2.4 shall be liquidated damages and constitute full payment and the exclusive
remedy for any damages suffered by FVP and Sellers by reason of Buyer's breach
of this Agreement prior to the Closing. If the Deposit Escrow Property is not
delivered to Sellers in compliance with the provisions of Section 2.4, FVP and
Sellers shall have all rights and remedies available at law or equity to enforce
the provisions of Section 2.4.
(d) Willful Breach by FVP or Sellers. No such
termination will relieve FVP from
liability for its willful breach of this Agreement, and in such event Buyer
shall have all rights and remedies available at law or equity, including the
remedy of specific performance against FVP. No such termination will relieve any
Seller from liability for its willful breach of this Agreement, and in such
event Buyer shall have all rights and remedies available at law or equity,
including the remedy of specific performance against such breaching Seller.
(e) No Recourse. Anything in this Agreement or
applicable law to the contrary
notwithstanding, in the event this Agreement is terminated as provided in this
Article 9, Buyer will have no claim or recourse against any of FVP's, the
General Partner's, or any Seller's respective officers, directors, shareholders,
partners, employees, agents or Affiliates (excluding from "Affiliates" for this
purpose FVP, the General Partner and the other Sellers themselves) as a result
of the breach of any representation, warranty, covenant or agreement of FVP or
any Seller contained herein or otherwise arising out of or in connection with
the transactions contemplated by this Agreement or the business
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or operations of the FrontierVision Companies prior to the Closing, it being
understood that FVP shall have no liability for any breach by a Seller and no
Seller will have any liability for any breach by FVP or another Seller.
9.5 Attorneys' Fees.
Notwithstanding any provision in this Agreement that may limit or
qualify a party's remedies, in the event of a default by any party that results
in a lawsuit or other proceeding for any remedy available under this Agreement,
the prevailing party shall be entitled to reimbursement from the defaulting
party of its reasonable legal fees and expenses (whether incurred in
arbitration, at trial, or on appeal).
ARTICLE 10
SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES
10.1 Survival.
All representations, warranties and covenants set forth herein will
survive the Closing, provided that all claims made in respect of such
representations, warranties and covenants will be subject to any applicable
limitations set forth in this Article 10.
10.2 Indemnification by Sellers.
After the Closing, but subject to Section 10.5, each Seller hereby
agrees to indemnify and hold Buyer harmless against and with respect to, and
shall reimburse Buyer for:
(a) any and all Losses resulting from any untrue
representation or breach of warranty
by FVP or the nonfulfillment of any covenant to be performed by FVP prior to the
Closing contained in this Agreement or any other Transaction Document to which
FVP is a party;
(b) any and all Losses resulting from any untrue
representation or breach of warranty
by such Seller or the nonfulfillment of any covenant by such Seller contained in
this Agreement or any other Transaction Document to which such Seller is a
party; and
(c) any rate refund liability imposed on any of the
FrontierVision Companies for any
period ending prior to the Adjustment Time by a final order or decision issued
by a Governmental Authority (but only to the extent of the out-of-pocket costs
payable in respect thereof and it being understood and agreed that any claim for
indemnification in respect of any rate refund liability may be made only
pursuant to this Section 10.2(c) and not under any other provision of this
Section 10.2); provided, however, that Buyer may make a claim pursuant to this
Section 10.2(c) upon the issuance of
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an initial adverse order or decision by a Governmental Authority with respect to
one of the FrontierVision Companies for any period ending prior to the
Adjustment Time that could result in an obligation of the Sellers to indemnify
Buyer under this Section 10.2(c) in order to preserve its rights under this
Article 10 pending appeal or other final resolution of such order or decision.
(d) any and all Losses resulting from the matters
disclosed in Sections 3.14 and 3.15
of FrontierVision's Disclosure Schedule (other than matters relating to Rate
Regulatory Matters, including, without limitation, the matters disclosed in
items 1 and 2 of said Section 3.15) and the tax audits disclosed in Section 3.12
of FrontierVision's Disclosure Schedule.
(e) any and all Losses resulting from any pole attachment
fees payable with respect to the operation by the FrontierVision Companies of
the Systems for any period ending prior to the Adjustment Time.
(f) any and all Losses resulting from the matter
disclosed in Item A.4 of Section 3.6 of FrontierVision's Disclosure Schedule
relating to a dispute between the FrontierVision Companies and CSG.
(g) any and all Losses resulting from amounts that are
payable by the FrontierVision
Companies to the other parties under the purchase and sale agreements referred
to in Section 3.11(i).
10.3 Post-Closing Escrow Agreement.
FVP and Buyer have agreed on and delivered to the Escrow Agent a form
of Post-Closing Escrow Agreement in the form of Exhibit B hereto. Following the
execution of this Agreement FVP and Buyer will cooperate in good faith with the
Escrow Agent (or another Person who FVP and Buyer mutually select to serve as
the escrow agent thereunder) to agree with the Escrow Agent (or such other
Person) on the final form of the Post-Closing Escrow Agreement including such
changes to the form attached as Exhibit B as are requested or recommended by the
Escrow Agent and are mutually acceptable to FVP and Buyer (such acceptance not
to be unreasonably withheld by FVP and Buyer). FVP and Buyer agree to take such
additional actions and enter into appropriate amendments to the Transaction
Documents as may reasonably be necessary to reflect the final form of
Post-Closing Escrow Agreement. Subject to the foregoing, at the Closing, Buyer,
Sellers and the Escrow Agent shall execute the Post-Closing Escrow Agreement, in
accordance with which, on the Closing Date, in addition to the deposit
contemplated by Section 2.7 and in addition to any deposit required by Sections
2.6, 2.8 or 2.9, Buyer will deposit 1,000,000 shares of ACC Class A Common Stock
with the Escrow Agent on behalf of Sellers in order to provide a fund for, and
the exclusive source for, the payment of any indemnification to which Buyer is
entitled under this Article 10 (such escrow, the "Post-Closing Indemnity
Escrow"). The Post-Closing Indemnity Escrow will be administered, and the
Post-Closing Indemnity Property (as defined below) will be held and disbursed,
in accordance with the provisions of this Article 10 and the Post-Closing Escrow
Agreement. The "Post-Closing Indemnity Property" means, collectively, the
1,000,000 shares of ACC Class A Common Stock deposited with the Escrow
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Agent pursuant to this Section 10.3, together with the kind and amounts of
securities, cash and other property that Sellers would have held or been
entitled to receive as of the date the Post-Closing Indemnity Property is
released in accordance with this Agreement (whether resulting from a stock
split, subdivision, combination or reclassification of the outstanding capital
stock of Buyer, or in redemption thereof, or as a result of any merger,
consolidation, acquisition or other exchange of assets to which Buyer may be a
party or otherwise) had Sellers held such shares of ACC Class A Common Stock as
of the Closing Date and retained such shares, and all securities, cash and other
property distributed or issued with respect to or in substitution or exchange
therefor, during the period from the Closing Date through (and including) the
date the Post-Closing Indemnity Property is released. Subject to the terms and
conditions contained in the Post-Closing Escrow Agreement and the Stock
Consideration Registration Rights Agreement, the Sellers will have the right to
cause the shares of ACC Class A Common Stock or other securities constituting
the Post-Closing Indemnity Property to be sold and converted to cash from time
to time. If Buyer delivers cash pursuant to Section 8.1(a)(4) in lieu of the
Stock Consideration Registrable Securities, Buyer will deposit cash in the
amount determined pursuant to the second part of Section 8.3(a)(3) in the
Post-Closing Indemnity Escrow and the term "Post-Closing Indemnity Property"
shall mean such deposit plus any earnings thereon.
10.4 Indemnification by Buyer.
After the Closing, but subject to Section 10.5, Buyer hereby agrees to
indemnify and hold Sellers harmless against and with respect to, and shall
reimburse Sellers for:
(a) any and all Losses resulting from any untrue
representation, breach of warranty, or nonfulfillment of any covenant by Buyer
contained in this Agreement or any other Transaction Document to which Buyer is
a party;
(b) any and all Losses resulting from any liability or
obligation of the FrontierVision Companies arising from or related to any event
occurring after the Closing Date, and any Assumed Liabilities and any liability
or obligation that was reflected as an Adjustment Liability in computing Closing
Net Liabilities under Article 2;
(c) any and all Losses arising as a result of the
occurrence of the Closing without the receipt of any Consent (including any
Consent under a Franchise, but excluding any Consent that was not either
disclosed in FrontierVision's Disclosure Schedule or determined to require
Consent pursuant to Section 6.4(b) or requested prior to the Closing), waiver of
a Franchising Authority's right of first refusal under a Franchise, or renewal
of any Franchise; and
(d) any and all Losses resulting from the use of the
"FrontierVision" name or any variant thereof by Buyer and/or its Affiliates
and/or the FrontierVision Companies from and after the Closing.
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10.5 Certain Limitations on Indemnification Obligations.
Notwithstanding anything in this Agreement to the contrary:
(a) No Seller will be required to indemnify or otherwise
be liable to Buyer for any matter described in Section 10.2 unless and until the
aggregate amount of all Losses of Buyer arising therefrom for which Sellers
would have indemnification liability to Buyer but for this Section 10.5(a),
exceeds $1,000,000, in which event Sellers will be liable for all such Losses;
provided, however, that this Section 10.5(a) shall not apply to any amount
payable to Buyer pursuant to Section 2.7 or Section 2.9 or Section 10.2(c) (but
only in respect of a claim that Buyer could have made under Section 10.2(c)
immediately after the Closing) or Section 10.2(d) or Section 10.2(e) (but only
in respect of a claim that Buyer could have made under Section 10.2(e)
immediately after the Closing) or Section 10.2(f) or Section 10.2(g), but no
amounts paid to Buyer pursuant to the sections referred to in this proviso (as
limited in this proviso) shall be treated as Losses for purposes of determining
when Buyer's Losses exceed $1,000,000.
(b) No Seller will be required to indemnify or otherwise
be liable to Buyer with respect to any Losses arising under Section 10.2 unless
Buyer gives Sellers written notice of a claim pursuant to Section 10.2 on or
prior to the date that is eighteen months after the Closing Date; provided that,
the Post-Closing Indemnity Property shall be released to Sellers as follows:
(1) On the first business day following the date
that is six months after the Closing Date (the "Initial Release Date"):
(A) if on the Initial Release Date the
Post-Closing Indemnity Property consists solely of shares of ACC Class A Common
Stock or other Stock Consideration Registrable Securities, then the number of
shares of ACC Class A Common Stock or other Stock Consideration Registrable
Securities equal to one-half of the total number of such shares deposited into
the Post- Closing Indemnity Escrow on the Closing Date, less the total number of
shares that were previously paid out to Buyer in respect of claim(s) made by
Buyer pursuant to this Article 10 or Article 2, and less the number of shares
the fair market value of which equals the aggregate dollar value of all bona
fide claims made by Buyer pursuant to this Article 10 or Article 2 that remain
outstanding on the Initial Release Date, shall be released from escrow and paid
over to Sellers (the number of shares to be appropriately adjusted to give
effect to any stock split, combination or similar event);
(B) if on the Initial Release Date the
Post-Closing Indemnity Property consists solely of cash funds, then an amount in
cash equal to one-half of the total amount of cash funds that would have been in
the Post-Closing Indemnity Escrow on the Initial Release Date if no payments had
been made to Buyer out of the Post-Closing Indemnity Escrow during such period,
less the dollar value of all payments (whether in the form of shares or cash)
that were previously paid out to Buyer in respect of claim(s) made by Buyer
pursuant to this Article 10 or Article 2, and less the aggregate dollar
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value of all bona fide claims made by Buyer pursuant to this Article 10 or
Article 2 that remain outstanding on the Initial Release Date, shall be released
from escrow and paid over to Sellers;
(C) if on the Initial Release Date the
Post-Closing Indemnity Property consists partly of shares of ACC Class A Common
Stock or other Stock Consideration Registrable Securities and partly of cash
funds, then the number of shares of ACC Class A Common Stock or other Stock
Consideration Registrable Securities equal to one-half the total number of such
shares that would have been in the Post-Closing Indemnity Escrow on the Initial
Release Date if no payments in the form of such shares had been made to Buyer
out of the Post-Closing Indemnity Escrow during such period, less the total
number of shares that were paid out to Buyer in respect of claim(s) made by
Buyer pursuant to this Article 10 or Article 2, and less the number of shares
the fair market value of which equals the aggregate dollar value of all bona
fide claims made by Buyer pursuant to this Article 10 or Article 2 that remain
outstanding on the Initial Release Date (except to the extent an amount in cash
has been reserved for any portion of such outstanding claims), shall be released
from escrow and paid over to Sellers (the number of shares to be appropriately
adjusted to give effect to any stock split, combination or similar event), and
an amount in cash equal to one-half of the total amount of cash funds that would
have been in the Post-Closing Indemnity Escrow on the Initial Release Date if no
payments in the form of cash had been made to Buyer out of the Post-Closing
Indemnity Escrow during such period, less the dollar value of all payments that
were previously paid out in the form of cash to Buyer in respect of claim(s)
made by Buyer pursuant to this Article 10 or Article 2, and less the aggregate
dollar value of all bona fide claims made by Buyer pursuant to this Article 10
or Article 2 that remain outstanding on the Initial Release Date (except to the
extent a number of shares has been reserved for any portion of such outstanding
claims), shall be released from escrow and paid over to Sellers; and
(2) on the first business day following the date
that is eighteen months after the Closing Date (the "Second Release Date") all
remaining Post-Closing Indemnity Property, less a number of shares of ACC Class
A Common Stock or other Stock Consideration Registrable Securities or an amount
in cash or a combination thereof as directed by the General Partner the
aggregate dollar value of which is equal to the aggregate dollar amount of any
bona fide claims made by Buyer that remain outstanding on the Second Release
Date, shall be released from escrow and paid over to Sellers.
Attached hereto as Exhibit I for illustrative purposes only is an example of how
the preceding provisions are intended to work. Thereafter, any remaining
Post-Closing Indemnity Property shall be released from escrow and paid over to
Sellers or Buyer in accordance with this Agreement and the Post- Closing Escrow
Agreement. To the extent any payment is made to Buyer out of the Post-Closing
Indemnity Property pursuant to Sections 2.7, 2.8 or 2.9 or this Article 10, and
the Post-Closing Indemnity Property consists of both Stock Consideration
Registrable Securities and cash, the General Partner shall designate which
portion of the payment shall be made in the form of shares (based on its fair
market value on the date of payment as computed as provided in Section 10.5(c))
or cash or combination of both. On the business day that it is determined in
accordance with this Section 10.5(b) and this Article 10 that Buyer and/or
Sellers are entitled to all or any portion of the Post-Closing Indemnity
Property, the General Partner and Buyer will execute and deliver to the Escrow
Agent joint
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written instructions containing appropriate disbursement instructions consistent
with this Section 10.5(b) and this Article 10 and the Post-Closing Escrow
Agreement.
(c) All payments required to be made by Sellers or any
Seller in respect of their indemnification obligations under this Article 10
shall be made solely from the Post-Closing Indemnity Property. For purposes of
this Article 10 and the Post-Closing Escrow Agreement, the fair market value of
a share of ACC Class A Common Stock or other Stock Consideration Registrable
Security on any day shall be computed by reference to the Weighted Average
Trading Price of such stock or other security for the ten trading day period
beginning on the thirteenth trading day prior to the date of determination.
(d) Anything in this Agreement or applicable law to the
contrary notwithstanding, other than with respect to the Post-Closing Indemnity
Property as provided for and limited in this Article 10 (and other than with
respect to the Post-Closing Adjustment Funds as provided for and limited in
Section 2.7, the Post-Closing Section 2.8 Funds as provided for and limited in
Section 2.8, and the Post-Closing Section 2.9 Funds as provided for and limited
in Section 2.9) after the Closing no Seller (or any officer, director,
shareholder, partner, employee, agent or Affiliate of such Seller) shall have
any obligation or liability to Buyer under Article 10, and Buyer will have no
claim or recourse against any Seller (or any officer, director, shareholder,
partner, employee, agent or Affiliate of such Seller) as a result of the breach
of any representation, warranty, covenant or agreement of FVP or any Seller
contained herein or otherwise arising out of or in connection with the
transactions contemplated by this Agreement or the business or operations of the
FrontierVision Companies, other than claims relating to the Noncompetition
Agreements or the Deposit Registration Rights Agreement or the Stock
Consideration Registration Rights Agreement (which shall each be governed by its
respective terms); and the Post-Closing Indemnity Property, the Post-Closing
Adjustment Funds, the Post-Closing Section 2.8 Funds and the Post-Closing
Section 2.9 Funds (in each case as provided for and limited by the provisions of
this Agreement) shall be the sole and exclusive remedy for any such claim by
Buyer for any such matters, whether such claims are framed in contract, tort or
otherwise.
(e) The amount payable to the Claimant by the
Indemnifying Party in respect of a Loss shall be computed net of any insurance
coverage with respect thereto that reduces the amount of such Loss that would
otherwise be sustained, and Buyer and each Seller agree to use commercially
reasonable efforts to collect any and all insurance proceeds to which it may be
entitled in respect of any Loss.
(f) Sellers will not be liable with respect to any Loss
to the extent that the amount of such Loss was included as an Adjustment
Liability in the computation of Closing Net Liabilities in accordance with
Article 2.
(g) Notwithstanding anything in this Agreement to the
contrary, no Seller shall have any liability or obligation (for indemnification
or otherwise) arising as a result of the occurrence of the
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Closing without certain Consents or Buyer's waiver of any closing condition, nor
shall any adjustment be made to the Cash Consideration in respect of the
foregoing.
(h) Buyer will not be required to indemnify or otherwise
be liable to any Seller with respect to any Losses arising under Section 10.4(a)
with respect to an untrue representation or breach of warranty set forth in
Section 5.6 unless Sellers give Buyer written notice of such a claim on or prior
to the date that is thirty days after the expiration of the statute of
limitations with respect to such claim.
(i) Buyer will not be required to indemnify or otherwise
by liable to any Seller with respect to Losses arising under Section 10.4(d) to
the extent such Losses result from the matter disclosed in Section 3.10(B) of
FrontierVision's Disclosure Schedule.
10.6 Procedure for Indemnification.
The procedure for indemnification shall be as follows:
(a) The party claiming indemnification (the "Claimant")
shall promptly give notice to the party from which indemnification is claimed
(the "Indemnifying Party") of any claim, whether between the parties or brought
by a third party, specifying in reasonable detail the factual basis for the
claim and the amount thereof (if known and quantifiable).
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying Party
shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and its authorized representatives the information relied upon by the Claimant
to substantiate the claim. If the Claimant and the Indemnifying Party agree at
or prior to the expiration of the thirty-day period (or any mutually agreed upon
extension thereof) to the validity and amount of such claim, the Indemnifying
Party shall immediately pay to the Claimant the full amount of the claim. If the
Claimant and the Indemnifying Party do not agree within the thirty-day period
(or any mutually agreed upon extension thereof), the Claimant may seek
appropriate remedy at law or equity.
(c) With respect to any claim by a third party as to
which the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in or
assume control of the defense of such claim, and the Claimant shall cooperate
fully with the Indemnifying Party, subject to reimbursement for actual
out-of-pocket expenses incurred by the Claimant as the result of a request by
the Indemnifying Party. If the Indemnifying Party elects to assume control of
the defense of any third-party claim, the Claimant shall have the right to
participate in the defense of such claim at its own expense. If the Indemnifying
Party does not elect to participate in or assume control of the defense of any
third-party claim, the Claimant will not enter into any settlement of such claim
which could result in indemnification liability unless the Claimant gives the
Indemnifying Party prior written notice of such settlement. If the Indemnifying
Party does not
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thereupon elect to assume the defense of such claim within five business days
after such notice is given, then the Claimant may enter into such settlement and
such settlement will be binding upon Buyer and Sellers for purposes of
determining whether any indemnification payment is required pursuant to this
Article 10.
10.7 Treatment of Indemnification Payments.
Buyer and Sellers will treat all payments made pursuant to this Article
10 (including all payments made to Buyer out of the Post-Closing Indemnity
Property but excluding the release of any Post-Closing Indemnity Property to
Sellers) as an adjustment to the Purchase Consideration for all purposes.
ARTICLE 11
MISCELLANEOUS
11.1 Fees and Expenses.
Except as otherwise provided in this Agreement, each party shall pay
its own expenses incurred in connection with the authorization, preparation,
execution, and performance of this Agreement, including all fees and expenses of
counsel, accountants, agents, and representatives. Buyer and Sellers agree that
the brokerage fee payable to ▇▇▇▇▇▇▇ & Associates shall be paid by Buyer in the
event the Closing occurs hereunder. Buyer and Sellers agree that the fees and
expenses incurred in connection with the lien searches described in Section
7.1(j) shall be borne one-half by Buyer and one-half by Sellers.
11.2 Notices.
All notices, demands, and requests required or permitted to be given
under the provisions of this Agreement shall be in writing, may be sent by
telecopy (with automatic machine confirmation), delivered by personal delivery,
or sent by commercial delivery service or certified mail, return receipt
requested, shall be deemed to have been given on the date of actual receipt,
which may be conclusively evidenced by the date set forth in the records of any
commercial delivery service or on the return receipt, and shall be addressed to
the recipient at the address specified below, or with respect to any party, to
any other address that such party may from time to time designate in a writing
delivered in accordance with this Section 11.2:
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If to Buyer:
Adelphia Communications Corporation
Main at ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇,
Vice President Corporate Development
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with copies (which shall not
constitute notice) to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Professional Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
If to FVP (prior to the Closing) or the General Partner (after the
Closing):
FrontierVision Partners, L.P.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇-▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not
constitute notice) to:
If to a Seller:
Dow, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, PLLC ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq. and
J. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
At the address specified for such Seller
on the attached Exhibit E
11.3 Benefit and Binding Effect.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns; provided
that (a) neither this Agreement nor any of the rights, interests or obligations
hereunder may be assigned by FVP or a Seller without the prior written consent
of Buyer (which consent shall not be unreasonably withheld or delayed), and (b)
neither this Agreement nor any of the rights, interests or obligations hereunder
may be assigned by Buyer without the prior written consent of FVP (prior to the
Closing) or the General Partner (after the Closing) (which consent shall not be
unreasonably withheld or delayed). Notwithstanding the provisions of the
immediately preceding sentence, Buyer may assign all or any portion of its
rights (but not its obligations) under this Agreement to one or more
Subsidiaries or Affiliates of Buyer, without the prior
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written consent of FVP or the General Partner; provided that (1) such assignee
executes documentation reasonably satisfactory to Sellers evidencing such
assignment, and (2) Buyer remains liable to perform the obligations in full to
be performed by Buyer hereunder, and (3) no such assignment would be reasonably
likely to hinder or delay the Closing as reasonably determined by Sellers.
Consent shall be deemed to be reasonably withheld if the consenting party
reasonably determines that the assignment would be reasonably likely to hinder
or delay the Closing. In the event of a permitted assignment by Buyer, Buyer, as
well as such assignee, shall remain liable hereunder for all purposes and the
representations, warranties and covenants made by Buyer shall apply equally to
the assignee (modified as appropriate for the organization of the assignee). In
no event may Buyer assign its obligations with respect to the Stock
Consideration or Deposit Escrow Property without FVP's consent (prior to
Closing) or the General Partner's consent (after the Closing), which may be
withheld in its sole and absolute discretion. This Agreement is not intended to
confer upon any Person other than the parties hereto any rights or remedies
hereunder, except the provisions of Section 6.9 are intended for the benefit of,
and may be relied upon by, the Assumed Employees, and the provisions of Section
6.13 are intended for the benefit of, and may be relied upon by, the officers
and directors of the FrontierVision Companies and the members of FVP's Advisory
Committee.
11.4 Further Assurances .
After the Closing the parties shall take any actions and execute any
other documents that may be necessary or desirable to the implementation and
consummation of this Agreement upon the reasonable request of the other party,
at the expense of the requesting party.
11.5 GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED, AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO
THE CHOICE OF LAW PROVISIONS THEREOF).
11.6 Entire Agreement.
This Agreement, the Disclosure Schedules and the Exhibits hereto, and
the other Transaction Documents to be delivered by the parties pursuant to this
Agreement, collectively represent the entire understanding and agreement between
Buyer, FVP, and Sellers with respect to the subject matter of this Agreement and
supersedes all prior agreements, understandings and negotiations between the
parties. Buyer acknowledges that none of FVP or any other FrontierVision Company
or any Seller has made any, or makes any, promises, representations, warranties,
covenants or undertakings, express or implied, other than those expressly set
forth in this Agreement. Notwithstanding the first sentence of this Section
11.6, this Agreement does not impair or otherwise affect the validity of (1) any
consent whenever granted by any Seller with respect to the execution, delivery,
and performance of this Agreement or any other document or instrument relating
to the subject matter of this Agreement or (2) any power of attorney whenever
granted by any Seller authorizing any Person to execute and deliver
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on behalf of such Seller this Agreement or any other document or instrument
relating to the subject matter of this Agreement.
11.7 Amendments; Waiver of Compliance; Consents.
This Agreement may be amended and any provision of this Agreement may
be waived; provided that any such amendment or waiver (a) will be binding upon
FVP prior to the Closing only if such amendment or waiver is set forth in a
writing executed by FVP, (b) will be binding upon a Seller prior to the Closing
only if such amendment or waiver is set forth in a writing executed by FVP and
has been approved by 75% of the voting members of FVP's Advisory Committee (with
a certificate delivered by FVP stating that such required approval has been
obtained being conclusive evidence thereof), and (c) will be binding upon a
Seller after the Closing only if such amendment or waiver is set forth in a
writing executed by the General Partner and has been approved by 75% of the
voting members of FVP's Advisory Committee (as constituted immediately prior to
the Closing) (with a certificate delivered by the General Partner stating that
such required approval has been obtained being conclusive evidence thereof), and
(d) will be binding upon Buyer only if such amendment or waiver is set forth in
a writing executed by Buyer. No waiver shall operate as a waiver of, or estoppel
with respect to, any subsequent or other matter not expressly waived.
11.8 Consent and Agreements of Sellers.
(a) Pursuant to a separate agreement each Seller has
appointed FVP and the General
Partner, each with power to act separately (for all periods prior to the
Closing) and the General Partner (for all periods from and after the Closing) as
the true and lawful attorney-in-fact and agent of each Seller (in such capacity,
FVP and the General Partner are referred to as the "Agent"), to act for each
Seller in Seller's name, place and stead with respect to this Agreement and the
other Transaction Documents and all of the transactions contemplated hereby and
thereby. Buyer shall be entitled to rely exclusively upon any communication
given by Agent and shall not be liable in any manner whatsoever for any action
taken or not taken in reliance upon Agent. Any payments made, at Agent's request
and instruction, by Buyer to Agent pursuant to the terms of this Agreement and
the other Transaction Documents shall fully discharge Buyer for any liability to
any Seller in connection with such payment, as fully and completely as if such
payment had been made directly to such Seller. Buyer hereby agrees to accept and
rely on the actions of Agent as if it were the action of a Seller or Sellers.
(b) Each Seller consents to the execution, delivery and
performance of this
Agreement by FVP, the General Partner and each other Seller and to the taking by
FVP, each FrontierVision Company, the General Partner and each other Seller of
all actions contemplated by this Agreement to be taken by such Person. Subject
to the terms and conditions of this Agreement, each Seller agrees to consummate
the transactions contemplated by this Agreement in accordance with its terms, as
it may be amended pursuant to Section 11.7.
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11.9 Counterparts.
This Agreement may be signed in counterparts with the same effect as if
the signature on each counterpart were upon the same instrument.
[REMAINDER OF PAGE INTENTIONALLY BLANK;
SIGNATURES ON FOLLOWING PAGES]
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IN WITNESS WHEREOF, this Agreement has been executed by Buyer, FVP, the
General Partner and the other Sellers as of the date first written above.
BUYER:
ADELPHIA COMMUNICATIONS CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President
FVP:
FRONTIERVISION PARTNERS, L.P., by FVP GP, L.P., its general partner, by
FrontierVision Inc., its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
GENERAL PARTNER:
FVP GP, L.P., by FrontierVision Inc., its general
partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
[THIS IS A SIGNATURE PAGE
TO THE PURCHASE AGREEMENT]
S-1
LIMITED PARTNER SELLERS:
▇▇ ▇▇▇▇▇▇ Investment Corporation
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ SBIC Fund, L.P.
First Union Capital Partners, Inc.
Tahosa Investors
Kensington Investment Associates
Pegasus Partners
Prosperity Associates
SBF Investments Ltd.
▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ III
▇▇▇▇ Trading Company
Washington Partners
Duff ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ - FrontierVision, L.P.
EOS Partners SBIC, L.P.
▇▇▇▇▇▇▇ ▇▇▇▇ Mellon Foundation
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ (▇▇▇▇▇▇ Family Investment Co.,
IV)
J. Cashew Corporation
▇▇▇▇▇▇▇▇▇ Family Trust
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ Brothers
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Trust
▇▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ III
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▇▇▇▇▇▇▇ Investments Limited Partnership
Olympus Executive Fund, L.P.
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[THIS IS A SIGNATURE PAGE
TO THE PURCHASE AGREEMENT]
S-2
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▇▇▇▇▇ ▇. Waskou
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▇▇▇▇▇▇ ▇. Bosekrus
By FrontierVision Partners, L.P., Agent and Attorney- in-Fact for each Limited
Partner Seller, by FVP GP, L.P., its general partner, by FrontierVision Inc.,
its general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
[THIS IS A SIGNATURE PAGE
TO THE PURCHASE AGREEMENT]
S-3
SPC SELLERS:
1818 Fund II, L.P.
Olympus Growth Fund II, ▇.▇.
▇▇▇▇▇▇ Group Inc.
Sendal Investment Limited
Monte Coral, ▇.▇.
▇▇▇▇▇ ▇.▇.
Salzburg Corporation
Clover Enterprises
▇▇▇▇▇▇▇ Limited
Leeward Holdings
Staniard Limited
Solar Group S.A.
Englewood Enterprises
Grove Enterprises
Walvis Bay Limited
Datronics Limited
▇▇▇▇▇▇▇▇ Holdings Limited
Salt Lake Enterprises, Inc.
▇▇▇▇▇▇▇▇ International Corp.
By FrontierVision Partners, L.P., Agent and Attorney- in-Fact for each SPC
Seller, by FVP GP, L.P., its general partner, by FrontierVision Inc., its
general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President
[THIS IS A SIGNATURE PAGE
TO THE PURCHASE AGREEMENT]
{The Registrant agrees to furnish supplementally to the Commission upon request
a copy of the schedules to this agreement. The schedules contain customary
information for schedules to agreements of this type.}
S-4