EXHIBIT 10.26
PURCHASE AGREEMENT
DATED AS OF MARCH 22, 1999
AMONG
CHARTER COMMUNICATIONS, INC.,
CHARTER COMMUNICATIONS, LLC,
CHARTER HELICON, LLC,
HELICON PARTNERS I, L.P.,
XXXX INVESTMENTS, INC.,
AND
THE LIMITED PARTNERS
OF HELICON PARTNERS I, L.P.
LIST OF EXHIBITS
(the following exhibits have been omitted and will be supplementally provided to
the SEC upon their request.)
Name Exhibit
---- -------
Amended LLC Agreement A
Excluded Assets B
Indemnity Agreement C
Release of Debt Obligations D
Put Agreement E
Sellers' Addresses F
PURCHASE AGREEMENT
This PURCHASE AGREEMENT (this "AGREEMENT") is dated as of March 22,
1999, by and among CHARTER COMMUNICATIONS, INC., a Delaware corporation
("CHARTER"), CHARTER COMMUNICATIONS LLC, a Delaware limited liability company
("BUYER"), CHARTER HELICON, LLC, a Delaware limited liability company ("GP
BUYER"), HELICON PARTNERS I, L.P., a Delaware limited partnership ("HELICON"),
XXXX INVESTMENTS, INC., a Delaware corporation ("BII"),, and the Limited
Partners.
RECITALS:
A. BII holds certain assets, including the BII Assets, and, as of the
date of this Agreement, the Limited Partners comprise all of Helicon's limited
partners and hold all of Helicon's limited partnership interests and preferred
interests.
B. Buyer and GP Buyer are indirect wholly owned subsidiaries of
Charter.
C. Buyer desires to acquire from the Limited Partners all of their
limited partnership interests and preferred interests in Helicon.
D. GP Buyer desires to acquire the BII Assets by the contribution of
such BII Assets to GP Buyer, with BII receiving, in exchange for the
contribution of the BII Assets, the Preferred LLC Interest.
E. The parties hereto desire to set forth the terms in accordance with
which BII shall contribute the BII Assets to GP Buyer, and the Partners shall
transfer their Helicon limited partnership interests and preferred interests to
Buyer, 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:
SECTION 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:
"ACCOUNTS RECEIVABLE" means all rights of the Helicon Companies to
payment for goods or services provided prior to the Adjustment Time (including,
but not limited to, rights to payment for cable services provided to customers
of the Systems, the sale of advertising, the leasing of channels, and other
goods, services and rentals).
"ADJUSTMENT TIME" means 11:59 p.m., East Coast time on 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.
"AMENDED LLC AGREEMENT" means the Amended and Restated Operating
Agreement of GP Buyer, substantially in the form attached hereto as EXHIBIT A.
"ASSETS" means all of the tangible and intangible assets that are
owned, leased or held by the Helicon Companies and that are used or held for use
in connection with the conduct of their business or the operation of the Systems
other than the Excluded Assets and less any such Assets that are sold,
transferred or otherwise conveyed by the Helicon 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 Helicon
Companies, or otherwise not owned by the Helicon Companies, "Assets" includes
only the interest, title and rights in such assets held by the Helicon
Companies.
"BASIC SUBSCRIBER" means, with respect to any System, any Subscriber to
a System at the regular basic monthly subscription rate (including discounted
rates offered in the ordinary course of business consistent with past practice)
for at least broadcast basic cable service (either alone or in combination with
any other service) for such System, who has rendered payment for at least one
month's service and who has not more than Five Dollars ($5.00) more than two (2)
months past due from the last day of the period to which any outstanding xxxx
relates.
"XXXX" means Xxxxxxxx X. Xxxx, who is the sole stockholder of BII.
"BII ASSETS" means the assets of BII set forth on SCHEDULE 3.3.
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"BULK SUBSCRIBER" means, with respect to any System, any Subscriber,
other than a Basic Subscriber, to at least broadcast basic cable service (either
alone or in combination with any other service) which is billed on a bulk basis
to bulk commercial accounts, such as hotels, motels, hospitals, apartment houses
and similar multiple dwelling units or other commercial accounts and who has
rendered payment for at least one month's service at such Subscriber's regular
basic monthly subscription rate without discount (except regularly offered
discounts) and who does not have more than $10.00 that is more than two (2)
months past due from the last day of the period to which any outstanding xxxx
relates.
"CABLE ACT" means Title VI of the Communications Act of 1934, as
amended, 47 U.S.C. Section 151 ET SEQ., all other provisions of the Cable
Communications Policy Act of 1984 and the provisions of 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.
"CALL AGREEMENT" means the Agreement, dated December 16, 1998, as
amended January 25, 1999, among BII (as assignee) and the Subordinated Holders,
entitling BII to acquire, in accordance with the terms thereof, the Warrants for
an acquisition price of $43,250,000.
"CHARTER'S DISCLOSURE SCHEDULES" means the Disclosure Schedules
referred to in Section 5 of this Agreement and attached to this Agreement.
"CHARTER PARTIES" means Charter, Buyer and GP Buyer.
"CLOSING" means the purchase and sale of the Purchased Interests and
the consummation of the BII Contribution pursuant to this Agreement.
"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, all as amended and in effect from
time to time.
"COMPENSATION ARRANGEMENT" means any plan or compensation arrangement
other than an Employee Plan, whether written or unwritten, which provides to
employees, former employees, officers, directors and shareholders of Helicon or
any ERISA Affiliate any compensation or other benefits, whether deferred or not,
in excess of base salary or wages, including, but not limited to, any bonus or
incentive plan, stock rights plan, deferred compensation arrangement, life
insurance, stock purchase plan, severance pay plan and any other employee fringe
benefit plan.
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"CONSENTS" means the consents, permits, approvals and authorizations of
Governmental Authorities and other Persons necessary to transfer the Purchased
Interests to Buyer, to effect the BII Contribution 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 Helicon Company is a party or which
are binding upon any Helicon Company.
"COPYRIGHT ACT" means the Copyright Act of 1976, as amended and in
effect from time to time.
"EMPLOYEE PLAN" means any pension, retirement, profit-sharing, deferred
compensation, vacation, severance, bonus, incentive, medical, vision, dental,
disability, life insurance, other employee benefit plan as defined in Section
3(3) of ERISA or any other employee plan, program, arrangement or agreement to
which any Helicon Company or any ERISA Affiliate of any Helicon Company
contributes or is required to contribute, or which any Helicon Company or any
such ERISA Affiliate sponsors or maintains.
"ENCUMBRANCES" means any pledge, claim, mortgage, lien, charge,
encumbrance, right to purchase, right of first refusal, adverse interest,
attachment, exception to or defect in title or other ownership interest or
security interest of any kind or nature whatsoever.
"ENFORCEABILITY EXCEPTIONS" means the exceptions or limitations to the
enforceability of contracts under bankruptcy, insolvency, or similar laws
affecting creditors' rights generally, by judicial discretion in the enforcement
of equitable remedies and by public policies generally.
"ENVIRONMENTAL CLAIM" means any claim, complaint, action, suit,
proceeding, investigation or notice, including without limitation any proceeding
before any federal, state or local administrative body by any Person, agent or
agency of a federal, state or local government alleging potential liability
arising out of, based on or resulting from (i) the release or disposal into, or
the presence in the environment, including, without limitation, the indoor
environment, soil, subsurface, surface or groundwater, of any pollutant,
contaminant, waste, toxic substance, hazardous substance, petroleum or petroleum
derivative at any location, whether or not owned by the Seller, or (ii)
circumstances forming the basis of any violation, or alleged violation, of any
Environmental Law.
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"ENVIRONMENTAL LAW" means any and all federal, state or local laws,
statues, rules, regulations, ordinances, orders, decrees or other binding
obligations (i) related to releases or threatened releases of any Hazardous
Material to soil, surface water, groundwater, air or any other environmental
media; (ii) governing the use, treatment, storage, disposal, transport, or
handling of Hazardous Material; or (iii) related to the protection of the
environment and human health. Such Environmental Laws shall include, but are not
limited to, RCRA, CERCLA, EPCRA, the Clean Air Act, the Clean Water Act, the
Safe Drinking Water Act, the Toxic Substances Control Act, the Endangered
Species Act, and any other federal, state or local laws, statutes, ordinances,
rules, orders, permit conditions, licenses or any terms or provisions thereof
related to clauses (i), (ii), or (iii) above.
"EQUITY INTERESTS" 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.
"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; and (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 xxxxxxxx attributable to such System's Bulk Subscribers for each such
class of service provided by such 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). For purposes of the foregoing, monthly xxxxxxxx shall exclude xxxxxxxx
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, all 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.
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"ESCROW AGENT" means State Street Bank and Trust Company, or any other
bank reasonably acceptable to Buyer and the Partners.
"EXCLUDED ASSETS" means the assets listed on EXHIBIT B.
"FCC" means the Federal Communications Commission, or any successor
agency thereof.
"FCC LICENSE" means any domestic satellite, business radio or other
License issued by the FCC.
"FCC REGULATIONS" means the rules, regulations and published policies
and decisions of the FCC promulgated by the FCC with respect to the Cable Act,
all as in effect from time to time.
"FRANCHISE" means any cable television franchise, related agreements,
ordinances, permits, instruments, resolutions or other authorizations issued or
granted to a Helicon Company by any Franchising Authority, including all
amendments thereto and renewals or modifications thereof authorizing the
construction or operation of a cable television system.
"FRANCHISE AREA" means the specific geographic area, comprising a
municipality or portion of a county or other political instrumentality, in which
a Helicon Company provides cable television service (A) pursuant to a Franchise,
or (B) where a Franchise is being renewed or is not required, pursuant to
applicable Legal Requirements.
"FRANCHISE/FCC CONSENT" means any Consent that is necessary or required
for the transfer of control to Charter to occur upon the consummation of the
transactions contemplated by this Agreement, from a Franchising Authority or the
FCC with respect to, respectively, the Franchises or the FCC Licenses.
"FRANCHISING AUTHORITIES" means all Governmental Authorities that have
issued or granted any Franchises relating to the operation of a System.
"GAAP" means generally accepted accounting principles as in effect in
the United States from time to time.
"GP INTEREST" means the general partnership interest in Helicon held by
BII.
"GOVERNMENTAL AUTHORITY" means any federal, state or local governmental
authority or instrumentality, including any court, tribunal or administrative or
regulatory agency, department, bureau, commission or board.
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"HAZARDOUS SUBSTANCE" means any substance, hazardous material, or other
substance or compound regulated under Environmental Laws, including, without
limitation, petroleum or any refined product or fraction or derivative thereof.
"HCC" means Helicon Capital Corp., a Delaware corporation.
"HELICON COMPANIES" means Helicon, THGLP, HPIAC, HCC and their
respective Subsidiaries as listed on SCHEDULE 3.3 hereto, each of which may be
referred to herein individually as a "Helicon Company."
"HELICON CORP." means Helicon Corp., a Delaware corporation, which is
one of the Limited Partners and provides certain management services pursuant to
the Management Agreements with respect to the operation of the Helicon
Companies.
"HELICON'S DISCLOSURE SCHEDULES" means the Disclosure Schedules
referred to in Sections 3, 4 and 6.1 of this Agreement and attached to this
Agreement.
"HELICON PARTIES" means Helicon, BII and the Limited Partners.
"HPIAC" means HPI Acquisition Co., LLC, a Delaware limited liability
company.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, and the regulations promulgated by the Federal Trade Commission with
respect thereto, all as amended and in effect from time to time.
"INDEBTEDNESS" of any Person means, without duplication, (a) all
indebtedness for borrowed money (including but not limited to the THGLP Note);
(b) all obligations issued, undertaken or assumed as the deferred purchase price
of property or services (other than trade payables entered into in the ordinary
course of business on ordinary terms); (c) all non-contingent reimbursement or
payment obligations with respect to surety instruments; (d) all obligations
evidenced by notes, bonds, debentures or similar instruments, including
obligations so evidenced incurred in connection with the acquisition of
property, assets or businesses; (e) all indebtedness created or arising under
any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to property acquired by the Person (even
though the rights and remedies of the seller or bank under such agreement in the
event of default are limited to repossessions or sale of such property); (f) all
capitalized lease obligations; (g) all net obligations with respect to swap
Contracts; (h) all indebtedness referred to in clauses (a) through (g) above
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any lien upon or in property
(including accounts and contract rights) owned by such Person, even though such
Person
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has not assumed or become liable for the payment of such Indebtedness; and (i)
all guaranty obligations in respect of indebtedness or obligations of another
Person that is not a Helicon Company of the kinds referred to in clauses (a)
through (g) above.
"INDEMNITY AGREEMENT" means the Indemnity Agreement among Buyer (as
agent for and on behalf of the Charter Parties), Helicon Corp. (as agent for and
on behalf of Sellers), and the Escrow Agent, substantially in the form of
EXHIBIT C.
"INDEMNITY FUND" means the amount of $10,000,000 being deposited by
Buyer with, or at Sellers' option, being provided by Sellers in the form of the
Letters of Credit delivered to and in favor of, the Escrow Agent pursuant to the
Indemnity Agreement in accordance with Sections 2.5 and 10.4 hereof and the
terms of the Indemnity Agreement, to provide a fund for the payment of any
indemnification to which any Charter Party shall be entitled under Section 10
hereof.
"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
Helicon Companies.
"LEGAL REQUIREMENTS" means applicable common law and any applicable
statute, permit, 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,
order, judicial decision, decree or judgment which may have been handed down,
adopted or imposed by any Governmental Authority, all as in effect from time to
time.
"LEGAL RESTRICTIONS" means restrictions on transfer arising under
federal and state securities laws, the Cable Act, FCC Regulations, the
Franchises and the Licenses.
"LETTERS OF CREDIT" means the original irrevocable letters of credit in
the aggregate amount of $10,000,000 that may, at the Sellers' option, be
delivered to the Escrow Agent at Closing to fund the Indemnity Fund, which
letters shall permit partial drawings and be issued in customary commercial form
by financial institutions reasonably acceptable to Buyer.
"LICENSES" means all FCC Licenses, permits or other authorizations, and
all other licenses, authorizations and permits issued by any Governmental
Authority, that are held by a Helicon Company for the business or operation of
the Systems, excluding the Franchises.
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"LIMITED PARTNERS" shall mean all holders of the LP Interests,
PROVIDED, HOWEVER, that BII shall only be a Limited Partner upon the exercise of
the Warrants pursuant to Section 6.9.
"LOSS" or "LOSSES" means any claims, damages, losses, liabilities,
taxes, injuries to persons, property or natural resources, fines, penalties,
costs and expenses (excluding any and all consequential and incidental damages),
including without limitation, settlement costs and any reasonable legal,
accounting or other expenses incurred in connection with investigating or
defending any action or threatened actions.
"LP INTERESTS" means the limited partnership interests in Helicon held
by the Limited Partners, and by BII as contemplated by Section 6.9.
"MANAGEMENT AGREEMENTS" means the Agreement, dated April 8, 1996,
between Helicon and Helicon Corp., and the Agreement, dated November 2, 1993,
between THGLP and Helicon Corp.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the
business, financial condition, results of operations, Assets or liabilities of
the Helicon Companies, taken as a whole, other than those resulting from changes
in economic conditions that are applicable to the cable industry generally on a
national, state, or regional basis, any changes in conditions (including Rate
Regulatory Matters, and other proposed or enacted federal or state governmental
legislation, regulations or decisions or policies formally adopted pursuant
thereto) that are applicable to the cable industry generally on a national,
state or regional basis, or any changes in competitive activities affecting the
Systems.
"MATERIAL CONTRACT" means any Contract (i) that is material to the
business, financial condition or results of operations of the Helicon Companies,
taken as a whole or (ii) that requires payments in the aggregate of more than
$50,000 per year.
"ORGANIZATIONAL 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.
"PARTNERS" means BII and the Limited Partners.
"PARTNERSHIP AGREEMENT" means the Agreement of Limited Partnership of
Helicon Partners I, L.P., dated as of April 8, 1996, among BII and the Limited
Partners.
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"PERMITTED ENCUMBRANCES" means each of the following: (A) liens for
current taxes and other governmental charges that are not yet due and payable;
(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 Helicon 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 Helicon 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 Helicon 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 which are either of record
or set forth in Schedule 3.9 or in the deeds or leases to such Real Property or
which, either individually or in the aggregate, do not materially and adversely
affect or interfere with the ownership or use of any such Real Property in the
business and operations of the Systems as presently conducted; and (G) any
Encumbrances relating to the Debt Obligations or as described in Schedule 3.9.
"PERSON" means an individual, corporation, association, partnership,
joint venture, trust, estate, limited liability company, limited liability
partnership, Governmental Authority or other entity or organization.
"PREFERRED INTERESTS" means all preferred partnership interests in
Helicon, including the Preferred Partnership Interests, the Additional Preferred
Interests, any Pari Passu Preferred Interests and any Senior Equity Interests,
as such terms are defined in the Partnership Agreement.
"PREFERRED LLC INTEREST" means the preferred interest in GP Buyer to be
issued to BII pursuant to the BII Contribution and whose terms are set forth in
the Amended LLC Agreement.
"PURCHASED INTERESTS" means the LP Interests and the Preferred
Interests.
"RATE REGULATORY MATTER" means, 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
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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 Helicon 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 Helicon 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.
"REQUIRED CONSENTS" means the Consents that are designated by the
symbol "(R)(C)" on Schedules 3.4 and 4.2 .
"SEC" means the U.S. Securities and Exchange Commission, or any
successor agency thereto.
"SECURITIES ACT" means the Securities Act of 1933, and the rules and
regulations of the SEC promulgated thereunder, as amended, all as in effect from
time to time.
"SELLERS" means the Partners with respect to the sale of their LP
Interests, the Limited Partners with respect to the sale of their Preferred
Interests, and solely with respect to the representations and warranties set
forth in Section 4 and the indemnification provisions set forth in Section 10,
BII with respect to the BII Assets.
"SUBORDINATED HOLDERS" means Sandler Mezzanine Partners, X.X. Xxxxxxx
Mezzanine T-E Partners, L.P., Sandler Mezzanine Foreign Partners, L.P.,
SunAmerica, Inc., Permal Private Equity Holdings, L.P., Private Equity Holdings,
L.P. and Union Venture Corporation.
"SUBSCRIBER" means any Person to whom any Helicon Company provides
cable television programming or other service through the Systems into a single
household, a multiple dwelling unit, a hotel or motel unit, a commercial
business or any other real property improvement.
"SUBSIDIARY" means, with respect to any Person, any other Person of
which the outstanding voting Equity Interests 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 Equity Interests) is owned
(beneficially or otherwise) directly or indirectly by such first Person or any
Subsidiary thereof.
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"SYSTEMS" means the cable television systems owned and operated by any
Helicon 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 Helicon 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 and all taxes, fees, levies, duties, tariffs, imposts
and other charges of any kind imposed by any government or taxing authority,
including without limitations: 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, including any
schedule or attachment thereto, and including any amendment thereof, required to
be submitted to any Governmental Authority with respect to any Tax.
"THGLP" means The Helicon Group, L.P., a Delaware limited partnership.
"THGLP NOTE" means the promissory note dated November 2, 1993, executed
by THGLP and held by Xxxx, in the original principal amount of $5,000,000.
"TRANSACTION DOCUMENTS" means this Agreement, the Indemnity Agreement,
the Amended LLC Agreement, the Put Agreement, the Option Agreements 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.
"TRANSFERABLE FRANCHISE AREA" means any Franchise Area with respect to
which (A) any Consent necessary under a Franchise in connection with the
consummation of the transactions contemplated by this Agreement shall have been
obtained or shall have been deemed obtained by operation of law in accordance
with the provisions of the Cable Act, or (B) no Consent is necessary under a
Franchise in connection with the consummation of the transactions contemplated
by this Agreement.
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"UPSET DATE" means July 31, 1999; PROVIDED, HOWEVER, that (A) in the
event that the Closing shall not have occurred on or prior to July 31, 1999 due
to a "governmental delay," the Upset Date shall be extended to August 30, 1999,
and (B) thereafter, in the event that the Closing shall not have occurred on or
prior to August 30, 1999 due to a "governmental delay," the Upset Date shall be
extended to September 29, 1999; with "governmental delay" meaning the failure,
without any breach by any of the parties hereto of their obligations hereunder,
to receive from a Governmental Authority any consents or authorizations which
are required as a condition of Closing. In the event that the Closing shall not
have occurred on or prior to September 29, 1999 due to a "governmental delay,"
Sellers shall have the option, exercisable by written notice to the Charter
Parties no later than the close of business on such date, to extend the Upset
Date to November 30, 1999; provided, that, as a condition to the exercise of
such option, Helicon shall have exercised commercially reasonable efforts to
obtain such consents and authorizations prior to September 29, 1999; and
PROVIDED, FURTHER, that, Sellers shall continue to exercise commercially
reasonable efforts to obtain such consents and authorizations as soon after
September 29, 1999 as is practicable.
"WARRANTS" means the Warrants issued as of April 8, 1996, to the
Subordinated Holders by Helicon entitling them to purchase an aggregate of
2,419.1 units of Class B Common LP Interests in Helicon.
1.2 TERMS DEFINED ELSEWHERE IN THIS AGREEMENT. For purposes of this
Agreement, and in addition to the definitions set forth in the first paragraph
hereof and in Section 1.1, the following terms have the meanings set forth in
the sections indicated:
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Term Section
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Adjustment Assets Section 2.4(b)(1)
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Adjustment Liabilities Section 2.4(b)(2)
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Allocation Agreement Section 6.10(d)(ii)
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Antitrust Division Section 6.5
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BII Contribution Section 2.1
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Cash Consideration Section 2.3
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Charter Agent Section 11.7(b)
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Charter Financial Statements Section 5.6
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Claimant Section 10.6(a)
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Term Section
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Closing Equivalent Subscribers Section 2.4(a)
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Closing Subscriber Data Section 2.5
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Closing Net Liabilities Section 2.4(b)
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Confidential Information Section 6.2(a)
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Debt Obligations Section 2.4(b)(3)
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Estimated Cash Consideration Section 2.5
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Fee Properties Section 3.9
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Final Closing Statement Section 2.6(a)
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Financial Statements Section 3.5
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FTC Section 6.5
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Indemnity Fund Section 10.4
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Indemnifying Party Section 10.6(a)
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Inventory Section 3.19
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Investment Person Section 3.3(a)
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IRS Section 3.13(f)(viii)
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Leased Properties Section 3.9
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Leases Section 3.9
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Option Agreements Section 6.16
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Partnership Assets Section 6.10(d)(1)
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Preliminary Closing Statement Section 2.5
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Purchase Consideration Section 6.10(d)(2)
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Put Agreement Section 6.16
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Sellers' Agent Section 11.7(a)
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Tax Partnership Section 3.12(f)
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Term Section
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THGLP Note Purchase Price Section 2.2(c)
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Welfare Plan Section 3.13(d)
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Year 0000 Xxxx Xxxxxxx 6.21
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Year 0000 Xxxxxxx Xxxxxxx 3.21
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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, a reference to a Schedule is a reference to a Schedule 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.
SECTION 2: CONTRIBUTION OF BII ASSETS; SALE AND PURCHASE OF PURCHASED INTERESTS;
CASH CONSIDERATION
2.1 CONTRIBUTION. Subject to the terms and conditions of this
Agreement, BII hereby agrees to contribute, transfer, assign and deliver to GP
Buyer at the Closing, and GP Buyer hereby agrees to acquire and assume at the
Closing, all of BII's right, title and interests in, to and under the BII
Assets, free and clear of all Encumbrances, subject to Legal Restrictions, in
consideration of GP Buyer's issuance and transfer to BII of the Preferred LLC
Interest (the "BII CONTRIBUTION").
2.2 AGREEMENT TO SELL AND BUY PURCHASED INTERESTS. Subject to the terms
and conditions set forth in this Agreement, each Seller hereby agrees to sell,
transfer, assign and deliver to Buyer at the Closing, and Buyer hereby agrees to
purchase and assume at the Closing, the Purchased Interests held by such Seller,
free and clear of all Encumbrances, subject to Legal Restrictions as follows:
(a) Each of the Partners shall sell, transfer and convey to
Buyer such Partner's LP Interest, and Buyer shall buy such LP Interest for such
portion of the Cash
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Consideration as shall be determined in accordance with the provisions of
Sections 2.3 and 2.5 hereof.
(b) Each of the Limited Partners shall sell, transfer and
convey to Buyer such Limited Partner's Preferred Interest, and Buyer shall buy
such Preferred Interest for such portion of the Cash Consideration as shall be
determined in accordance with the provisions of Sections 2.3 and 2.5 hereof.
(c) In addition thereto, Xxxx shall sell, transfer and convey
to Buyer the THGLP Note, and Buyer shall buy the THGLP Note for a purchase price
equaling the sum, as of the Closing Date, of the principal outstanding under the
THGLP Note, plus all accrued and unpaid interest thereon (the "THGLP NOTE
PURCHASE PRICE").
2.3 CASH CONSIDERATION FOR LP INTERESTS AND PREFERRED INTERESTS. Buyer
shall pay and deliver to the Partners, as consideration for the sale of the LP
Interests and the Preferred Interests, an aggregate cash payment equal to the
difference of (A) Five Hundred Twenty-Eight Million Six Hundred Twenty-Eight
Thousand Two Hundred Fifty Dollars ($528,628,250) less (B) the amount of the
THGLP Note Purchase Price, as adjusted in accordance with Sections 2.4, 2.5 and
2.6 below (the "CASH CONSIDERATION"). The Cash Consideration (including any
adjustments thereto) payable with respect to the LP Interests and Preferred
Interests shall be allocated among the Partners, as determined by the Partners
and specified and noticed to Buyer on the Preliminary Closing Statement (as may
be modified by the Limited Partners prior to and after Closing to reflect
adjustments thereto agreed to among the Partners). Each Partner shall agree,
with Buyer's acknowledgment, to such allocation in writing at or prior to the
Closing, and such notice and written acknowledgment shall control the allocation
of the Estimated Cash Consideration among the Limited Partners at Closing.
2.4 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 170,300 multiplied by $3,230. For purposes
of this Agreement, "CLOSING EQUIVALENT SUBSCRIBERS" means the total number of
Equivalent Subscribers for all of the Systems as of the Closing Date.
(b) CLOSING NET LIABILITIES. The Cash Consideration shall be
decreased by the amount of the Closing Net Liabilities. 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.
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(1) Subject to the other provisions of this Section
2.4(b), "ADJUSTMENT ASSETS" means, as of any date, in each case computed for the
Helicon Companies on a consolidated basis and without duplication in accordance
with GAAP, the sum of: (A) cash and cash equivalents; (B) prepaid expenses and
deposits; (C) Accounts Receivable and other receivables; (D) Tax refunds due to
any of the Helicon Companies for any Tax period ending prior to the Adjustment
Time; and (E) any other current assets which are reflected in the Financial
Statements or, pursuant to GAAP, should have been but were not reflected in the
Financial Statements. For purposes of the foregoing, Accounts Receivable (net of
any allowance for doubtful accounts) shall be valued at 100% of all Subscriber
receivables that are less than one month past due, 99% of all Subscriber
receivables that are between one and two months past due, 60% of all Subscriber
receivables between two and three months past due, and 95% of all advertising
and other receivables that are less than three months past due, in each case
determined from the later of the last day of the period to which any outstanding
xxxx relates, or the date of billing.
(2) Subject to the other provisions of this Section
2.4(b), "ADJUSTMENT LIABILITIES" means, as of any date, in each case computed
for the Helicon Companies on a consolidated basis and without duplication in
accordance with GAAP, the sum of: (A) accounts payable; (B) expenses of the
Helicon 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 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 prepayments and deposits; (E) Tax payments due and payable by any
of the Helicon Companies to any Governmental Authority for all Tax periods
ending on or prior to the Adjustment Time; (F) all obligations for any
management fees (deferred or otherwise) owed by the Helicon Companies to Helicon
Corp. under the Management Agreements; (G) the amount of the Debt Obligations as
of the Adjustment Time; (H) accrued and unpaid vacation pay and sick leave
related to any and all persons employed by any of the Helicon Companies; (I)
one-half of the Taxes and fees described in Section 6.10(e); and (J) any other
current liabilities which are reflected in the Financial Statements or, pursuant
to GAAP, should have been but were not reflected in the Financial Statements.
(3) "DEBT OBLIGATIONS" means, with respect to the
Helicon Companies on a consolidated basis without duplication, Indebtedness of
the Helicon Companies, including, but not limited to, all liabilities of the
Helicon Companies (as defined and determined in accordance with GAAP) under the
debt instruments listed in SCHEDULE 3.6; PROVIDED, HOWEVER, that, neither Debt
Obligations nor Adjustment Liabilities shall include: (i) any amounts payable to
the Subordinated Holders with respect to the Warrants; (ii) any amounts in
respect of performance bonds issued on
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behalf of any of the Helicon Companies to secure its performance in the ordinary
course of business; (iii) any amounts in the nature of prepayment penalties or
other fees or expenses that are required to be paid under the terms of such debt
instruments with respect to the assumption of the Debt Obligations, or the
refinancing or satisfaction thereof, or the change of control of the Helicon
Companies; (iv) any amounts payable with respect to leases of equipment or
vehicles; and (v) any amounts payable under mortgages securing local financings
as listed in Item 9 on SCHEDULE 3.6, and (vi) the THGLP Note Purchase Price.
(4) 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 the Partners, 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 Helicon Company
shall not be treated as Adjustment Assets or Adjustment Liabilities.
(c) CLOSING DATE REIMBURSEMENTS. The Cash Consideration shall
be increased by the amounts, if any, provided for in Sections 6.1(c)(3), and
decreased by the amount, if any, provided for in Section 6.1(c)(4).
2.5 PAYMENTS AT CLOSING. Helicon shall arrange for CableData, Inc., to
complete a print-out of Subscriber data (the "CLOSING SUBSCRIBER DATA") as of a
date on or about fifteen (15) days prior to the date scheduled for the Closing,
a copy of which print-out will be promptly provided by Helicon to Charter. No
later than ten (10) days prior to the date scheduled for the Closing, Helicon
shall prepare and deliver to Buyer a written report (the "PRELIMINARY CLOSING
STATEMENT") setting forth Helicon's estimates of Closing Net Liabilities,
Closing Equivalent Subscribers, and the Cash Consideration (including the
portion thereof payable to each Partner) determined in accordance with Sections
2.3, 2.4 and this Section 2.5. The Preliminary Closing Statement shall be
prepared by Helicon in good faith in accordance with GAAP and shall be certified
by Helicon to be its good faith estimate of the Closing Net Liabilities, Closing
Equivalent Subscribers and Cash Consideration as of the date thereof. Helicon
shall make available to Buyer such information as Buyer shall reasonably request
relating to the matters set forth in the Preliminary Closing Statement. Buyer
shall notify Helicon in writing in the event Buyer disputes any amount set forth
on the Preliminary Closing Statement. Buyer and Helicon shall, in good faith,
use all reasonable efforts to resolve any dispute with respect to any amount set
forth on the Preliminary Closing Statement prior to the date scheduled for the
Closing. At Closing, in addition to the payment of the THGLP Note Purchase Price
to Xxxx, Buyer shall pay (a) unless the Sellers shall have elected to deliver
the Letters of Credit, to the Escrow Agent the amount of the Indemnity Fund, to
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be held by the Escrow Agent in escrow on behalf of Sellers in accordance with
the terms of the Indemnity Agreement, and (b) to the Partners (allocated to them
as they shall have agreed pursuant to Section 2.3), the portion of the Cash
Consideration, as adjusted on the basis of the Preliminary Closing Statement (as
adjusted by Helicon and Buyer prior to Closing) less the aggregate amount, if
any, paid to the Escrow Agent under clause (a), with the sum of the amounts paid
by Buyer under clauses (a) and (b) being referred to as the "ESTIMATED CASH
CONSIDERATION".
2.6 POST-CLOSING PAYMENT OF CASH CONSIDERATION ADJUSTMENTS.
(a) FINAL CLOSING STATEMENT. Within ninety (90) days after the
Closing Date, Buyer shall prepare and deliver to Helicon Corp. 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 2.4. The Final Closing Statement shall be prepared by Buyer in good
faith in accordance with GAAP and shall be certified by Buyer to be, as of the
date prepared, its good faith estimate of the Closing Net Liabilities, Closing
Equivalent Subscribers and Cash Consideration. Buyer shall allow Helicon Corp.
and its agents reasonable access after the Closing Date to make copies of the
books, records and accounts of the Helicon Companies and make available to
Helicon Corp. such information as Helicon Corp. reasonably requests to allow
Helicon Corp. to examine the accuracy of the Final Closing Statement. If Buyer
fails to deliver the Final Closing Statement to Helicon Corp. within ninety (90)
days of the Closing, Buyer shall be deemed to have waived its right to payment
of any Cash Consideration adjustment pursuant to Section 2.6(b)(1)(B). Within
thirty (30) days after the date that the Final Closing Statement is delivered by
Buyer to Helicon Corp., Helicon Corp. 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 Final Closing Statement. If Helicon Corp. notifies
Buyer of its acceptance of the amounts set forth in the Final Closing Statement,
or if Helicon Corp. fails to deliver its report of any proposed adjustments
within the thirty (30) 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 (30) day period. Buyer
and Helicon Corp. shall, in good faith, use all reasonable efforts to resolve
any dispute involving the amounts set forth in the Final Closing Statement. If
Helicon Corp. and Buyer fail to agree on any amount set forth in the Final
Closing Statement within fifteen (15) days after Buyer receives Helicon Corp.'s
report pursuant to this Section 2.6, then Helicon Corp. will retain Deloitte &
Touche LLP to make the final determination, under the terms of this Agreement,
of any amounts under dispute. Deloitte & Touche LLP 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. The costs and expenses of Deloitte &
Touche LLP and
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its services rendered pursuant to this Section 2.6 shall be borne one-half by
Buyer and one-half by Sellers.
(b) PAYMENT OF CASH CONSIDERATION ADJUSTMENTS.
(1) After the amount of the Cash Consideration is
finally determined pursuant to Section 2.6(a), payments shall be made as
follows:
(A) If the amount of the Cash Consideration
as finally determined pursuant to Section 2.6(a) exceeds the amount of the
Estimated Cash Consideration, then within three (3) business days after the date
the amount of the Cash Consideration is finally determined, Buyer shall pay the
amount of such excess to the Limited Partners, by wire or accounts transfer of
immediately available funds to an account or accounts designated by the Limited
Partners by written notice to Buyer. Such payment shall be made to the Limited
Partners pro rata in the proportions set forth on the notice and acknowledgment
referred to in Section 2.3.
(B) If the amount of the Cash Consideration
as finally determined pursuant to Section 2.6(a) is less than the amount of the
Estimated Cash Consideration, then within three (3) business days after the date
the amount of the Cash Consideration is finally determined, the Limited Partners
shall pay to Buyer the amount of such deficiency, by wire or accounts transfer
of immediately available funds to an account or accounts designated by Buyer by
written notice to the Limited Partners. In the event the Limited Partners do not
fulfill their obligations under this Section 2.6(b)(i)(B), Buyer shall be
entitled to receive the amount of such deficiency from the Indemnity Fund.
(2) Any amount which becomes payable pursuant to this
Section 2.6 will constitute an adjustment to the Cash Consideration for all
purposes.
SECTION 3: REPRESENTATIONS AND WARRANTIES OF THE HELICON COMPANIES
Subject to any provisions of this Agreement limiting, qualifying or
excluding any of the representations or warranties made herein, and to the
disclosures set forth in the Helicon Disclosure Schedules, as such schedules are
referenced herein, Helicon represents and warrants to the Charter Parties as set
forth in this Section 3.
3.1 ORGANIZATION AND AUTHORITY OF HELICON. Helicon is a limited
partnership duly formed, validly existing, and in good standing under the laws
of the State of Delaware. Helicon 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
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owned, leased or operated and in the manner in which such business is now
conducted, and to execute, deliver and perform this Agreement and the other
Transaction Documents to which it is a party according to their respective
terms.
3.2 AUTHORIZATION AND BINDING OBLIGATION. The execution, delivery and
performance by Helicon of this Agreement and the other Transaction Documents to
which Helicon is a party have been duly authorized by all necessary partnership
action on the part of Helicon. This Agreement and the other Transaction
Documents to which Helicon is or will become a party have been duly executed and
delivered by Helicon (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 Helicon enforceable against Helicon
in accordance with their terms, except as the enforceability of this Agreement
and such other Transaction Documents may be limited by Enforceability
Exceptions.
3.3 ORGANIZATION AND OWNERSHIP OF HELICON COMPANIES.
(a) SCHEDULE 3.3 sets forth the name of each Helicon Company,
including the jurisdiction of incorporation or formation (as the case may be) of
each. Each Helicon 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 Helicon 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 Helicon
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 Helicon 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 SCHEDULE
3.3, which are all jurisdictions in which such qualification is required, except
as described in SCHEDULE 3.3. Except as disclosed in SCHEDULE 3.3, no Helicon
Company, directly or indirectly, owns, of record or beneficially, any Equity
Interest in any Person (each such Person described in SCHEDULE 3.3, an
"INVESTMENT PERSON") or has the right or obligation to acquire, any Equity
Interests in any Person. Except as disclosed in SCHEDULE 3.3, the Helicon
Company that owns the Equity Interests of each such Investment Person owns such
Equity Interests free and clear of all Encumbrances subject to Legal
Restrictions.
(b) SCHEDULE 3.3 sets forth all of the authorized, issued and
outstanding Equity Interests of Helicon and each other Helicon Company and the
record and beneficial owner of each issued and outstanding Equity Interest of
each of them. All of such issued and outstanding Equity Interests of the Helicon
Companies have been duly authorized, validly issued, fully paid and, as
pertaining to capital stock interests, non-
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assessable, and have not been issued in violation of any federal or state
securities laws. Except as set forth in SCHEDULE 3.3, the owner of the Equity
Interests of each Helicon Company owns such Equity Interests free and clear of
all Encumbrances subject to Legal Restrictions (except that no representation is
made in this Section 3 as to the LP Interests and Preferred Interests held by
the Partners or the BII Assets). Except as disclosed in SCHEDULE 3.3, there are
no outstanding securities, options, warrants, calls, rights, commitments,
agreements, arrangements or undertakings of any kind to which any Helicon
Company is a party or by which any of them is bound obligating such Helicon
Company to issue, deliver or sell, or cause to be issued, delivered or sold, any
additional Equity Interests of such Helicon Company or obligating such Helicon
Company to issue, grant, extend or enter into any such security, option,
warrant, call, right, commitment, agreement, arrangement or undertaking. Helicon
has delivered to Buyer complete and correct copies of the Organizational
Documents of each Helicon Company as in effect on the date hereof.
3.4 ABSENCE OF CONFLICTING AGREEMENTS; CONSENTS. Except for the
expiration or termination of any applicable waiting period under the HSR Act, or
as set forth in SCHEDULE 3.4 or SCHEDULE 3.8, the execution, delivery and
performance by Helicon of this Agreement and the other Transaction Documents to
which Helicon is a party: (a) do not require the consent of, notice or
declaration to, or filing with any Governmental Authority or any other Person
under any Franchise, License (including any FCC License), or Material Contract;
(b) will not conflict with any provision of the Organizational Documents of
Helicon or any other Helicon Company, each as currently in effect; (c) assuming
receipt of all Consents set forth on SCHEDULE 3.4, will not conflict with,
result in a breach of, or constitute a default under any Legal Requirement to
which Helicon or any other Helicon Company is bound; (d) assuming receipt of all
Consents set forth on SCHEDULE 3.4, will not conflict with, constitute grounds
for termination of, result in a material breach of, constitute a material
default under, or accelerate or permit the acceleration of any performance
required by the terms of any Franchise, License (including any FCC License), or
Material Contract; and (e) assuming receipt of the Consents set forth on
SCHEDULE 3.4, will not result in the creation of any Encumbrance upon the Assets
or the Purchased Interests. Notwithstanding the foregoing, Helicon makes no
representation or warranty regarding any of the foregoing that may result from
the specific legal or regulatory status of any of the Charter Parties or as a
result of any other facts that specifically relate to the business or activities
in which any of the Charter Parties is or proposes to be engaged other than the
cable television business.
3.5 FINANCIAL STATEMENTS. Helicon has furnished Buyer with true and
complete copies of the audited financial statements (including the notes and
schedules thereto) and unaudited financial statements listed in SCHEDULE 3.5
(collectively, the "FINANCIAL STATEMENTS"), and such Financial Statements are by
this reference incorporated into and deemed a part of Helicon's Disclosure
Schedules. Except as disclosed in SCHEDULE 3.5
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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, (which will be in accordance with past practice and are not
expected to be material) the Financial Statements: (1) have been prepared from
the books and records of the Helicon 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 Helicon 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 Helicon Companies to which they relate as at their respective
dates and the results of operations and with respect to the audited Financial
Statements, the cash flows, for the periods then ended.
3.6 DEBT OBLIGATIONS; ABSENCE OF UNDISCLOSED LIABILITIES.
(a) Except as provided in or arising pursuant to the loan or
credit agreements, notes, bonds, indentures and other agreements and instruments
listed in SCHEDULE 3.6, or under certain of the leases for Tangible Personal
Property listed in SCHEDULE 3.9, the Helicon Companies have no Indebtedness.
(b) None of the Helicon Companies has any Indebtedness,
liability, or obligation of a type required by GAAP to be reflected on a balance
sheet that is not reflected or reserved against in the latest balance sheet of
such Helicon Company included in the Financial Statements, other than
Indebtedness, liabilities and obligations that were incurred in the ordinary
course of business after the date of the latest balance sheet of such Helicon
Company, which would not, in the aggregate, reasonably be expected to be
material.
3.7 ABSENCE OF CERTAIN CHANGES. Between September 30, 1998 and the date
of this Agreement, except as disclosed in SCHEDULE 3.7 and except for matters
occurring after the date hereof that are permitted by the provisions of this
Agreement or consented to by the Charter Parties, no Helicon Company has:
(a) 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 unnecessary or obsolete);
(b) issued any note, bond or other debt security, or created,
incurred, assumed, or guaranteed any Indebtedness;
(c) made or promised any material increase in the salary or
other compensation payable or to become payable to any executive officer or
other employee of
-24-
any Helicon Company other than in the ordinary course of business or as
contemplated under any employment arrangement currently in effect;
(d) experienced any occurrences, or been involved in any
transactions which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect;
(e) entered into any transaction, other than transactions
entered into in the ordinary course of business, which would be required to be
presented in the audited financial statements of the Helicon Companies and the
notes thereto prepared in conformity with GAAP, applied in a manner consistent
with the past practices of the Helicon Companies relating to the preparation of
audited financial statements of the Helicon Companies;
(f) amended or terminated any Material Contract, or any
material License, agreement or understanding to which any Helicon Company is a
party, except in the ordinary course of business;
(g) waived or released any material right or claim relating to
any Helicon Company or the Systems except in the ordinary course of business;
PROVIDED, HOWEVER, that all material rights or claims related to any Helicon
Company or the Systems waived or released between December 31, 1998 and the date
of this Agreement are set forth on SCHEDULE 3.7; PROVIDED FURTHER, HOWEVER, that
for purposes of the indemnification provisions set forth in Section 10,
"material" shall not be "read out" of the previous proviso; or
(h) entered into an agreement to do any of the things
described in the preceding clauses (a) through (g).
3.8 FRANCHISES, LICENSES, MATERIAL CONTRACTS. SCHEDULE 3.8 contains a
list of the Franchises (including the Franchising Authority which granted each
Franchise, the stated expiration date of each Franchise, and the System to which
the Franchise applies), material FCC Licenses and other material Licenses and
Material Contracts in effect on the date hereof, each pending application for a
Franchise, material License or Material Contract, and a list of any System or
portion thereof owned or operated by the Helicon Companies which does not
require a Franchise authorizing the installation, construction, development,
ownership or operation of the same; which list is true, correct and complete in
all material respects. Except as disclosed in SCHEDULE 3.8, each Helicon Company
has obtained and possesses and is the legal holder of all material Franchises
and material Licenses (including FCC Licenses) which are necessary or required
to entitle it to install, construct, develop, own or lease, operate and use its
assets and properties and to carry on and conduct its business and operations as
presently conducted. Helicon has delivered to
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Buyer true and complete copies of all Franchises, FCC Licenses, other material
Licenses and Material Contracts. Except as disclosed in SCHEDULE 3.8, the
Franchises, FCC Licenses, other material Licenses and Material Contracts are in
full force and effect (subject to expiration at the end of their current term as
disclosed on SCHEDULE 3.8), and are valid, binding and enforceable in accordance
with their terms, except to the extent such enforceability may be affected by
Enforceability Exceptions. Except as disclosed in SCHEDULE 3.8, the Helicon
Companies are in material compliance with the terms of the Franchises (including
the payment of any fees due thereunder), FCC Licenses, other material Licenses
and Material Contracts, and as of the date of this Agreement none of the Helicon
Companies has received any written notice from a Franchising Authority, the FCC,
or a consultant representing a Franchising Authority, any state cable regulatory
authority or the FCC to the effect that any of the Helicon Companies are not
currently in material compliance with the terms of the Franchise granted by any
Franchising Authority or with an FCC License. Except as set forth in SCHEDULE
3.8, a valid request for renewal has been timely filed in accordance with
Section 626(a) of the Cable Act with the proper Franchising Authority with
respect to each Franchise that has expired prior to, or will expire within,
thirty (30) months after the date of this Agreement.
3.9 TITLE TO AND CONDITION OF REAL PROPERTY AND TANGIBLE PERSONAL
PROPERTY. SCHEDULE 3.9 lists all (i) material Real Property owned in fee by any
of the Helicon Companies as of the date of this Agreement ("FEE PROPERTIES") and
describes the current use thereof; (ii) material Real Property leasehold
interests held by any of the Helicon Companies, as lessee, as of the date of
this Agreement (the "LEASED PROPERTIES") and describes the current use thereof
and describes the applicable leases and any amendments or modifications thereof
(collectively, the "LEASES") pursuant to which the Helicon Companies lease such
Leased Properties; and (iii) material Leases under which any Helicon Company is
a lessor affecting such Fee Properties, of any such Helicon Company. Helicon has
delivered to Buyer a true and correct copy of (i) each deed pursuant to which
any of the Helicon Companies acquired any material Fee Property, together with
any survey and title insurance policies issued to such Helicon Company and in
its possession, (ii) each lease under which any Helicon Company is a lessor
affecting such Fee Property and in its possession, (iii) any other material
easements, rights-of-way, covenants, conditions and restrictions, document or
agreement affecting title to such Fee Property and in the case of this clause
(iii) in the possession of the Helicon Companies; and (iv) each material lease
for a Leased Property under which any Helicon Company is a lessee. Except as
disclosed in SCHEDULE 3.9, (a) each Helicon Company owning a material Fee
Property has good and marketable title thereto; (b) each Helicon Company that
owns any material item of Tangible Personal Property has good and valid title
thereto; (c) each Helicon Company that leases a material Leased Property has a
valid leasehold interest therein (subject to expiration of such lease in
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accordance with its terms); (d) each Helicon 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; (e) each of the material Leases are in full force and
effect and have not been modified or amended in any respect; (f) no material
default exists under any of the Leases; (g) none of the Helicon Companies are a
party to any lease of Tangible Personal Property with annual lease payments in
excess of $50,000; and (h) all material easements, rights-of-way and similar
agreements benefitting any of the Fee Properties or Leased Properties and which
are material to the business of any of the Helicon Companies as presently
conducted are in full force and effect, and the Helicon Companies are in
material compliance with such agreements and no material default exists
thereunder. All structures on the Fee Properties and Leased Properties are
structurally sound and in good operating condition and repair, and all Tangible
Personal Property are in good operating condition, normal wear and tear
excepted, except that the foregoing representation is not made with respect to
any Real Property, improvements thereon and Tangible Personal Property acquired
in acquisitions of Systems since December 31, 1998, which property is "as is,
where is." 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-units easements, rights of entry or rights-of-way held or used by the
Helicon Companies.
3.10 INTANGIBLES. SCHEDULE 3.10 contains a true and complete
description of the material Intangibles (exclusive of those required to be
listed in SCHEDULE 3.8), that are owned or leased by any of the Helicon
Companies and that are reasonably necessary for the conduct of the business or
operations of the Systems as currently conducted. To Helicon's knowledge, except
as to potential copyright liability arising from the performance, exhibition or
carriage of any music on the Systems or except as disclosed in SCHEDULE 3.10,
none of the Helicon Companies is infringing upon any trademarks, trade names,
copyrights or similar intellectual property rights of others.
3.11 INFORMATION REGARDING THE SYSTEMS.
(a) Helicon has delivered to Buyer a copy of the "System
Profiles" that are prepared by the Helicon Companies in the ordinary course of
business. The "System Profiles" are substantially accurate; PROVIDED, HOWEVER,
that if any information in the System Profiles shall conflict with any
information disclosed in Helicon's Disclosure Schedules, such scheduled
information shall be considered to be the more accurate information.
(b) SUBSCRIBERS. SCHEDULE 3.11 sets forth the approximate
number of Equivalent Subscribers as of the date indicated therein (including the
approximate number of Equivalent Subscribers served in each Franchise Area and
served by each headend, in case as of the date indicated therein). The "System
Profiles" delivered
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pursuant to Section 3.11(a) provide a description, as of the respective dates
set forth therein, of all Subscriber rates, tariffs and other charges for cable
television and other services provided by any Helicon Company. Helicon has
delivered to Buyer a Cable Data, Inc. print-out listing all free, discount or
other promotional service obligations of any Helicon Company with respect to the
Systems as of the date of such print-out. None of the Helicon Companies has any
obligation or liability for the refund of the monies to Subscribers other than
as evidenced by their respective refund (including deposit) account credit
balances or as may be required under the rules and regulations relating to rates
promulgated by the FCC under the Cable Act. The Subscriber records of the
Helicon Companies are prepared by Cable Data, Inc. in accordance with its
customary practices. At January 31, 1999, (i) the total number of Subscribers
was approximately 170,000, and (ii) the Systems were capable of providing
service to approximately 235,000 homes without the need for any line extension
other than a standard drop from an adjoining public road. As used in the
preceding sentence, a "home" shall mean a unit of residential housing, including
single family and each unit of a multi-family dwelling units, and any commercial
or institutional real property improvement.
(c) CERTAIN SYSTEMS INFORMATION. SCHEDULE 3.11 sets forth the
approximate number of plant miles for each System and the approximate bandwidth
capability of each System. The "System Profiles" delivered pursuant to Section
3.11(a) provide a list of the stations and signals carried by each System, and
the channel position of each such signal and station. Except as set forth on
SCHEDULE 3.11, each such station is carried pursuant to a retransmission
consent, "must carry" request or other programming agreement.
(d) FRANCHISE AND FCC MATTERS. All reports or other documents,
payments or submissions required to be filed by any of the Helicon Companies
with any of the Franchising Authorities or the FCC have been duly filed or
submitted and were materially correct when filed. The Helicon Companies are
permitted under all applicable Franchises and FCC Regulations to distribute the
television broadcast signals distributed by the Systems (except during periods
covered by bona fide requests for nonduplication or syndex blackouts in
accordance with FCC Regulations) and to utilize all carrier frequencies
generated by the operations of the Systems, and are authorized or licensed in
all material respects to operate all the facilities of the Systems required by
Legal Requirements to be authorized or licensed.
(e) REQUEST FOR SIGNAL CARRIAGE. Except for nonduplication and
blackout notices received in the ordinary course of business, none of the
Helicon 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, except as disclosed in SCHEDULE
3.11, the Helicon Companies have complied in all material respects with all
written and bona fide requests or demands
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received from television broadcast stations to carry or to terminate carriage of
a television broadcast signal on a System.
(f) RATE REGULATORY MATTERS. SCHEDULE 3.11 sets forth a list
of all Governmental Authorities that are certified to regulate basic service
rates of the Systems pursuant to the Cable Act and FCC Regulations as of the
date of this Agreement. No pending rate complaints have been filed with the FCC
against the Systems according to the FCC's log, dated January 1, 1999, which
reflects rate complaints filed through December 31, 1998. Except as set forth on
SCHEDULE 3.11, as of the date of this Agreement, none of the Helicon Companies
has received any written notice, and to Helicon's knowledge, any notice (other
than 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 any of such Helicon Company from Subscribers of the Systems
(excluding revenue with respect to deposits for converters, encoders, decoders,
and related equipment and other prepaid items) that has not been resolved.
(g) 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 Helicon Companies' past practices. SCHEDULE
3.11 lists all policies of insurance maintained, owned or held by all Helicon
Companies on the date hereof with respect to the Systems and Assets, which list
is true and complete in all material respects. All such policies are outstanding
and in full force and effect on the date hereof and, to Helicon's knowledge, are
with financially sound insurers. From December 31, 1997 to the date of this
Agreement, no insurance carrier has denied any material claim for insurance made
by any Helicon Company in respect of any of the Systems and Assets or refused to
renew any policy covering any of the Systems and Assets.
(h) RIGHT OF FIRST REFUSAL. Except as set forth on SCHEDULE
3.11, no Person (including any Governmental Authority) has any right to acquire
any interest in connection with the transactions contemplated hereby in any of
the Systems (including, without limitation, any right of first refusal or
similar right), other than rights of condemnation or eminent domain afforded by
law or upon the termination of or default under any Franchise.
3.12 TAXES.
(a) The Helicon Companies have timely filed or have caused to
be filed all required Tax Returns with the appropriate Governmental Authorities
in all jurisdictions in which such Tax Returns are required to be filed by the
Helicon Companies (except Tax Returns listed on SCHEDULE 3.12 for which the
filing date has been extended and such extension period has not expired), and
all Taxes of the Helicon Companies have been properly accrued or paid to the
extent such Taxes have become due
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and payable. Helicon has delivered to Buyer true, correct and complete copies of
the Tax Returns (in the form filed) listed in SCHEDULE 3.12. The Financial
Statements reflect an adequate reserve in accordance with GAAP (without regard
to any amounts reserved for deferred taxes) for all material unpaid Taxes
payable by the Helicon Companies for all Tax periods and portions thereof
through the date of such Financial Statements. Except as disclosed in SCHEDULE
3.12, none of the Helicon 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 SCHEDULE
3.12, none of the federal, state or local income Tax Returns filed by the
Helicon Companies during the prior three years has been audited by any taxing
authority. Except as disclosed in SCHEDULE 3.12, (i) neither the IRS nor any
other Governmental Authority has asserted, or to the best knowledge of each of
the Helicon Companies, threatened to assert any deficiency or claim for
additional Taxes against, or any adjustment of Taxes relating to, any of the
Helicon Companies and, to the best knowledge of each of the Helicon Companies,
no basis exists for any such deficiency, claim or adjustment, and (ii) to the
best knowledge of each of the Helicon Companies, there are no proposed
reassessments of any property owned by any of the Helicon Companies that would
affect the Taxes of any of the Helicon Companies. There are no material Tax
liens on any assets of the Helicon Companies, other than liens for current Taxes
not yet due and payable and liens for Taxes that are being contested in good
faith by appropriate proceedings and are disclosed on SCHEDULE 3.12.
(b) Except as disclosed in SCHEDULE 3.12, none of the Helicon
Companies was included or is includible in any consolidated, combined or unitary
Tax Return with any entity.
(c) None of the Helicon Companies has entered into any
compensatory agreements with respect to the performance of services which
payment thereunder would result in a non-deductible expense to such Helicon
Company pursuant to Section 280G of the Code or an excise Tax to the recipient
of such payment pursuant to Section 4999 of the Code. No acceleration of the
vesting schedule for any property that is substantially unvested within the
meaning of the regulations under Section 83 of the Code will occur in connection
with the transactions contemplated by this Agreement.
(d) No consent under Section 341(f) of the Code has been filed
with respect to any of the Helicon Companies.
(e) Each of the Helicon Companies has had since its inception
and will continue to have through the Closing Date the federal tax status (i.e.,
partnership, C corporation or S corporation) such entity reported on its 1997
federal Tax Returns, except as results from any actions taken pursuant to this
Agreement.
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(f) Except as disclosed in SCHEDULE 3.12, none of the Helicon
Companies have been at any time a member of any partnership, joint venture or
other arrangement or contract which is treated as a partnership for federal,
state, local or foreign tax purposes (a "TAX PARTNERSHIP") or the holder of a
beneficial interest in any trust for any period for which the statute of
limitations for any Tax has not expired, except for a Tax Partnership which is a
Helicon Company.
(g) The Helicon Companies have withheld or collected and paid
over to the appropriate Governmental Authorities or are properly holding for
such payment all material Taxes required by law to be withheld or collected.
(h) Except as disclosed in SCHEDULE 3.12, there are no tax
sharing agreements or similar arrangements with respect to or involving any of
the Helicon Companies.
(i) Except as disclosed in SCHEDULE 3.12, none of the Helicon
Companies has any (i) income reportable for a period ending after the Closing
Date but attributable to a transaction (E.G., an installment sale) occurring in
or a change in accounting method made for a period ending on or prior to the
Closing Date which resulted in a deferred reporting of income from such
transaction or from such change in accounting method (other than a deferred
intercompany transaction), or (ii) deferred gain or loss arising out of any
deferred intercompany transaction.
3.13 EMPLOYEE MATTERS.
(a) EMPLOYEE PLANS. SCHEDULE 3.13 contains a list of all
Employee Plans and material Compensation Arrangements. The Helicon Companies
have delivered or made available to Buyer true, complete and correct copies of
each Employee Plan and each Compensation Arrangement, if any, and all material
related documents, including without limitation: (i) the most recent summary
plan description (together with any summary of material modifications) and
material employee communications, (ii) any governmental filing or communication,
including material documents received from any Governmental Authority for the
past three years, (iii) any funding agreements or contracts, and (iv) any other
material contracts or agreements related to such Employee Plan or Compensation
Arrangement. None of the Helicon Companies or any of their ERISA Affiliates has
experienced a complete or partial withdrawal, within the meaning of ERISA
Section 4203 or 4205, from any "multiemployer plan" (as defined in ERISA Section
3(37)). Except as required under Code Section 4980B or ERISA Section 601-609, no
Employee Plan provides life insurance, health or medical coverage to former
employees of the Helicon Companies.
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(b) QUALIFIED PLANS. Except as disclosed in SCHEDULE 3.13,
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 (a copy of which has been provided or made
available to Buyer) except as described in SCHEDULE 3.13, and no such
determination letter has been revoked, and to the best of any Helicon Company's
knowledge, no revocation has been threatened, no event has occurred and no
circumstances exist that would adversely affect the tax-qualification of such
Employee Plan; (2) no such Employee Plan has been amended since the effective
date of its most recent determination letter in any respect that might adversely
affect its qualification; (3) no Employee Plan is subject to Section 302 or
Title IV of ERISA or Section 412 of the Code; (4) 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 Helicon Companies to any
material liability; (5) there is no termination or partial termination, or
requirement to provide security with respect to any Employee Plan; (6) 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; (7) the transactions contemplated by this Agreement will
not result in liability under ERISA to Helicon or the other Helicon Companies or
Buyer, or any of their respective ERISA Affiliates, or any entitlement to any
additional benefits or any acceleration of the time of payment or vesting of any
benefits under any Employee Plan for any employee of any Helicon Company; and
(8) at all times on or prior to the Closing, each Employee Plan that is intended
to be tax-qualified, satisfied all minimum coverage and minimum participation
requirements, if any, imposed on such Employee Plan by the applicable terms of
the Code and ERISA.
(c) PLAN ADMINISTRATION. Each Employee Plan and each
Compensation Arrangement has been operated and administered in all material
respects in accordance with its terms and all applicable laws, including but not
limited to ERISA and the Code. To the knowledge of the Helicon Companies, there
are no pending or threatened investigations by any governmental agency or other
claims (except claims for benefits payable in the normal operation of the Plan),
suits or proceedings against or involving any Plan or asserting any rights to or
claims for benefits under any Plan that could give rise to any material
liability and there are not any facts that could give rise to any material
liability in the event of any such investigation, claim, suit or proceeding.
(d) WELFARE PLAN FUNDING. The list of Employee Plans in
SCHEDULE 3.13 discloses whether each Plan that is an "employee welfare benefit
plan" as defined in section 3(1) of ERISA ("WELFARE PLAN") is (i) unfunded, (ii)
funded through a "welfare benefit fund," as such term is defined in section
419(e) of the Code, or other funding mechanism or (iii) insured. Other than
Welfare Plans provided under a collective bargaining agreement, each such
Welfare Plan may be amended or terminated without
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material liability to any Helicon Company (other than the payment of benefits
accruing prior to such termination) at any time after the Closing Date.
(e) LABOR UNIONS. As of the date of this Agreement, other than
as disclosed in SCHEDULE 3.13, none of the Helicon Companies is party to or
bound by any collective bargaining agreement. As of the date of this Agreement,
other than as disclosed in SCHEDULE 3.13, to the knowledge of Helicon, (1) none
of the employees of the Helicon 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 Helicon Companies. The Helicon Companies have fulfilled their
obligations under the collective bargaining agreements set forth in SCHEDULE
3.13.
(f) All Helicon Companies and their ERISA Affiliates have
properly classified individuals providing services to any Helicon Company or any
ERISA Affiliates as employees or non-employees, except to the extent that a
misclassification would be immaterial.
(g) With respect to each Welfare Plan that is funded wholly or
partially through an insurance policy, there will be no material liability of
any Helicon Company or an ERISA Affiliate, as of Closing Date, under any such
insurance policy or ancillary agreement with respect to such insurance policy in
the nature of a retroactive rate adjustment loss sharing arrangement or other
actual or contingent liability arising wholly or partially out of events
occurring prior to the Closing Date.
3.14 ENVIRONMENTAL LAWS. Except as disclosed in SCHEDULE 3.14 and
except for any such noncompliance of an insubstantial nature that has been
remedied as required by applicable Environmental Laws: (a) the Helicon
Companies' operations with respect to the Systems have complied and comply in
all material respects with all applicable Environmental Laws; (b) none of the
Helicon 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 Helicon's knowledge, the Real Property
complies and has complied in all material respects with all applicable
Environmental Laws. Except as disclosed in SCHEDULE 3.14, as of the date of this
Agreement, no Environmental Claim has been filed or issued against the Helicon
Companies.
3.15 CLAIMS AND LITIGATION. Except as disclosed in SCHEDULE 3.15, there
is no claim, legal action, arbitration or other legal, governmental,
administrative or tax
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proceeding, nor any order, complaint, decree, or judgment, or to Helicon's
knowledge, investigation, dispute or controversy, in progress or pending, or to
Helicon's knowledge, threatened in writing against or relating to the Helicon
Companies, any of their respective directors, officers, employees or, to
Helicon's knowledge, agents with respect to their performance of duties in such
capacity, the Assets or the business or operations of any of the Systems other
than (i) proceedings generally affecting the cable television industry and not
specific to the Helicon Companies; (ii) claims and legal actions arising in the
ordinary course of business with respect to the payment by Subscribers for
services rendered by any of the Helicon Companies; (iii) non-material disputes
with respect to programming agreements; and (iv) claims or legal actions arising
in the ordinary course of business that are reasonably expected to be covered by
insurance policies held by the Helicon Companies (subject to applicable
deductibles).
3.16 COMPLIANCE WITH LAWS. Except as disclosed in SCHEDULE 3.16 and
except for any such noncompliance as has been remedied, each of the Helicon
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. Helicon has delivered to Buyer complete and correct copies of all
material FCC forms that have been prepared since January 1, 1993, by or on
behalf of any of the Helicon Companies, to the extent in the possession of any
of the Helicon Companies, relating to rate regulation filed with any
Governmental Authority with respect to the Systems and copies of all material
correspondence with any Governmental Authority relating to rate regulations
generally and any other Rate Regulatory Matter or specific rates charged to
subscribers of the Systems.
3.17 TRANSACTIONS WITH AFFILIATES. Except to the extent disclosed in
the notes to the Financial Statements or as described in SCHEDULE 3.17, none of
the Helicon Companies has been involved in any business arrangement or business
relationship or is a party to any agreement, contract, commitment or transaction
with any Affiliate of any of the Helicon Companies (other than another Helicon
Company) and no Affiliate of any of the Helicon Companies (other than another
Helicon Company) owns any property or right, tangible or intangible, that is
used in the business of the Helicon Companies (other than in its capacity as a
direct or indirect equity or debt holder of the Helicon Companies).
3.18 BROKER. Neither Helicon nor any of the other Helicon Companies or
any Person acting on their behalf has incurred any liability for any finders' or
brokers' fees or commissions in connection with the transactions contemplated by
this Agreement and the Transaction Documents except that Sellers will pay any
amounts due Xxxxxx Capital Corporation.
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3.19 INVENTORY. Each Helicon Company has inventory, spare parts and
materials relating to the Systems of the type and nature and maintained at a
level consistent with past practice (the "INVENTORY"), and such Inventory will
be sufficient to operate their respective businesses in the ordinary course for
at least thirty (30) days after the Closing.
3.20 OVERBUILDS. Except as set forth in SCHEDULE 3.20 or except for
direct broadcast satellite service or Satellite Master Antenna Television, (i)
no construction programs have been undertaken by any Person to distribute cable
television services or other video programming services by wire or wireless in
any of the Franchise Areas and, to Helicon's knowledge, without investigation
but upon inquiry of its regional managers and as should reasonably be known to a
reasonable cable television operator, no such construction programs are proposed
or threatened to be undertaken; (ii) to Helicon's knowledge (subject to the same
limitation referred to in clause (i) above), no franchise or other applications
or requests of any Person have been filed or are pending or threatened, or
proposed which are reasonably likely to materially adversely impact any of the
Systems; (iii) there is no other Person within any of the Franchise Areas which
is providing or, to Helicon's knowledge (subject to the same limitation referred
to in clause (i) above), has applied for a franchise to provide cable television
services or other video programming by wire or wireless services to any of the
Franchise Areas in competition with any of the Helicon Companies; and (iv) none
of the Helicon Companies have received any written notice that any other Person
intends to provide cable television services or other video programming services
by wire or wireless in any of the Franchise Areas. Except as set forth on
SCHEDULE 3.8, no Helicon Company is, nor is any Affiliate of any Helicon
Company, a party to any agreement restricting the ability of any third party to
operate cable television systems or any other video programming distribution
business within any of the Franchise Areas.
3.21 YEAR 2000. Each Helicon Company has (i) initiated a review and
assessment of all areas within its business that could reasonably be expected to
be adversely affected by "YEAR 2000 MATTERS" (that is, the risk that computer
applications used by such Helicon Company may be unable to recognize and perform
properly date-sensitive functions involving certain dates prior to and any date
after December 31, 1999), (ii) developed a plan (the "YEAR 2000 PLAN") (a copy
of which has been delivered to Buyer) for addressing Year 2000 Matters on a
timely basis, and (iii) as of the date of this Agreement, commenced
implementation of the Year 2000 Plan.
3.22 DISCONNECTIONS. SCHEDULE 3.22 sets forth (i) the approximate
number of Subscribers which each of the Helicon Companies have disconnected from
service during each of the six (6) months prior to the date hereof and (ii) a
general description of the Helicon Companies' policies relating to the
connection and disconnection of Subscribers from service.
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3.23 BUDGETS. SCHEDULE 3.23 sets forth true, correct and complete
copies of the Helicon Companies' capital budgets for 1999. Helicon has
previously delivered to Charter a true, correct and complete copy of the Helicon
Companies' operating budget for 1999.
3.24 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 Helicon (including Helicon's Disclosure
Schedules) 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.
SECTION 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 the Charter Parties (with respect to such
Seller and not with respect to any other Seller) as set forth in this Section 4.
4.1 AUTHORITY OF SELLERS; AUTHORIZATION AND BINDING OBLIGATION. Such
Seller has the requisite corporate, partnership 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 or
will become a party have been duly authorized by all necessary corporate,
partnership or other applicable action on the part of such Seller. This
Agreement and the other Transaction Documents to which such Seller is or will
become 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 Enforceability Exceptions.
4.2 ABSENCE OF CONFLICTING AGREEMENTS; CONSENTS. Except for the
expiration or termination of any applicable waiting period under the HSR Act, or
as set forth in SCHEDULE 4.2, the execution, delivery and performance by such
Seller of this Agreement and the other Transaction Documents to which such
Seller is a party: (a) do not require any consent of, declaration to, notice to,
or filing with any Governmental Authority or
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any other Person that has not been obtained; (b) will not conflict with any
provision of the Organizational Documents of such Seller as currently in effect;
(c) assuming receipt of the Consents set forth on SCHEDULE 3.4 or SCHEDULE 4.2,
will not conflict with, result in a breach of, or constitute a default under any
Legal Requirement to which such Seller is bound; (d) assuming receipt of the
Consents set forth on SCHEDULE 3.4 or SCHEDULE 4.2, will not conflict with,
constitute grounds for termination of, result in a material breach of,
constitute a material 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 is bound; and (e) assuming receipt of the Consents set forth
on SCHEDULE 3.4 or SCHEDULE 4.2, will not result in the creation of any
Encumbrance upon the Purchased Interests held 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
any Charter Party or as a result of any other facts that specifically relate to
the business or activities in which any Charter Party is or proposes to be
engaged other than the cable television business.
4.3 TITLE TO BII ASSETS. BII represents that it holds of record and
owns beneficially the GP Interest and has good and marketable title to the other
BII Assets, in each case, free and clear of all Encumbrances, subject to Legal
Restrictions.
4.4 TITLE TO THE LP INTERESTS AND THE PREFERRED INTERESTS. Each Limited
Partner represents that it holds of record and owns beneficially the LP
Interests and the Preferred Interests set forth by its name on SCHEDULE 3.3,
free and clear of all Encumbrances, subject to Legal Restrictions except as set
forth in SCHEDULE 4.2. BII represents, solely as of Closing, that it holds of
record and owns beneficially the LP Interest acquired pursuant to Section 6.9
hereof, free and clear of all Encumbrances, subject to Legal Restrictions.
4.5 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 and the
Transaction Documents except that Sellers will pay any amounts due Xxxxxx
Capital Corporation.
4.6 INVESTMENT PURPOSE. BII is acquiring the Preferred LLC Interest 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.
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 Helicon's Disclosure
Schedules), 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.
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SECTION 5: REPRESENTATIONS AND WARRANTIES OF THE CHARTER PARTIES
The Charter Parties represent and warrant to each Seller as set forth
in this Section 5.
5.1 ORGANIZATION; AUTHORIZATION AND BINDING OBLIGATION.
(a Charter is a corporation duly incorporated, validly
existing, and in good standing under the laws of the State of Delaware. Charter
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 in the manner in which such business is now
conducted, and to execute, deliver and perform this Agreement and the other
Transaction Documents to which Charter is a party according to their respective
terms. Charter is duly qualified and in good standing as a foreign corporation
in each jurisdiction in which such qualification is required.
(b Each of Buyer and GP Buyer is a limited liability company
duly organized, validly existing, and in good standing under the laws of the
State of Delaware. Each of Buyer and GP Buyer has the requisite 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 in the
manner in which such business is now conducted, and to execute, deliver and
perform this Agreement and the other Transaction Documents to which each of
Buyer and GP Buyer is a party according to their respective terms. Each of Buyer
and GP Buyer is duly qualified and in good standing as a foreign limited
liability company in each jurisdiction in which such qualification is required.
5.2 AUTHORIZATION AND BINDING OBLIGATION. The execution, delivery, and
performance by each Charter Party of this Agreement and the other Transaction
Documents to which Buyer is or will become a party have been duly authorized by
all necessary corporate, shareholder or other action on the part of such Charter
Party. This Agreement and the other Transaction Documents to which such Charter
Party is or will become a party have been duly executed and delivered by such
Charter Party (or, in the case of Transaction Documents to be executed and
delivered at Closing, when executed and delivered will be duly 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 each Charter Party, enforceable
against such Charter Party in accordance with their terms, except as the
enforceability of this Agreement and such other Transaction Documents may be
limited by Enforceability Exceptions.
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5.3 ABSENCE OF CONFLICTING AGREEMENTS; CONSENTS. Except for the
expiration or termination of any applicable waiting period under the HSR Act or
as set forth in SCHEDULE 5.3, and the filing by Charter 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 the
Charter Parties of this Agreement and the other Transaction Documents to which
each such Charter Party is a party: (a) does not require any consent of, notice
or declaration 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
Organizational Documents of such Charter Party, as currently in effect; (c)
assuming receipt of the Consents set forth on SCHEDULE 5.3, will not conflict
with, result in a material breach of or constitute a material default under any
Legal Requirement to which such Charter Party is bound; and (d) assuming receipt
of the Consents set forth on SCHEDULE 5.3, 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 Charter Party is a
party or bound. Notwithstanding the foregoing, none of the Charter Parties makes
any representation or warranty regarding any of the foregoing that may result
from the specific legal or regulatory status of any Seller or any Helicon
Company or as a result of any other facts that specifically relate to the
business or activities in which any Seller or any Helicon Company is or proposes
to be engaged other than the cable television business.
5.4 CAPITAL STRUCTURE AND OPERATIONS OF GP BUYER. Prior to the Closing,
GP Buyer had no Subsidiaries and conducted no business other than the retention
of accountants, attorneys, financial advisors and other professionals and other
than actions taken in connection with the transactions contemplated hereby.
Charter represents that it owns beneficially all of GP Buyer's and Buyer's
issued and outstanding Equity Interests.
5.5 CLAIMS AND LITIGATION. Except as disclosed in SCHEDULE 5.5, there
is no claim, legal action, arbitration, or other legal, governmental,
administrative or tax proceeding, nor any order, complaint, decree or judgment
or, to the Charter Parties' knowledge, any investigation, dispute or
controversy, in progress or pending, or to the Charter Parties' knowledge
threatened in writing, against or relating to any Charter Party, any of their
respective directors, officers, employees or, to the Charter Parties' knowledge,
agents with respect to their performance of duties in such capacity, the assets
or business of such Charter Party or its Subsidiaries other than (i) proceedings
generally affecting the cable television industry and not specific to such
Charter Party or its Subsidiaries; (ii) claims and legal actions arising in the
ordinary course of business with respect to the payment by Subscribers for
services rendered by the Charter Parties or its Subsidiaries; and (iii) claims
or legal actions arising in the ordinary course of business
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that are reasonably expected to be covered by insurance policies held by the
Charter Parties and their Subsidiaries (subject to applicable deductibles).
5.6 FINANCIAL STATEMENTS. Charter has furnished Helicon with true and
complete copies of the audited financial statements and the unaudited financial
statements listed in SCHEDULE 5.6 (the "CHARTER FINANCIAL STATEMENTS") and such
Charter Financial Statements are by this reference incorporated into and deemed
a part of Charter's Disclosure Schedules. Except as disclosed in SCHEDULE 5.6
and except, in the case of the unaudited Charter Financial Statements, for the
omission of footnotes and changes resulting from customary and recurring
year-end adjustments (which will be in accordance with past practice and are not
expected to be material), the Charter Financial Statements: (1) have been
prepared from the books and records of the Charter Parties to which they relate,
with no material difference between such Charter Financial Statements and the
financial records maintained, and the accounting methods applied, by the Charter
Parties 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 Charter Parties to which they relate as at their
respective dates and the results of operations and with respect to the audited
Charter Financial Statements, the cash flows, for the periods then ended.
5.7 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.
5.8 AVAILABILITY OF PREFERRED LLC INTEREST AND FUNDS. As of the
Closing, Charter shall have taken all actions necessary with respect to the
approval and issuance of the Preferred LLC Interest, and Buyer shall have
available sufficient funds to enable it to consummate the transactions
contemplated hereby.
5.9 BROKER. No Charter Party nor any Person acting on behalf of any
Charter Party 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.
5.10 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 the Charter Parties 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.
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5.11 TAX MATTERS CONCERNING GP BUYER. No election has ever been filed
or otherwise made with respect to GP Buyer that would cause GP Buyer to be
classified as other than a disregarded entity for federal and state income Tax
purposes with respect to taxable period(s) or portions thereof ending prior to
the Closing Date. Immediately following the consummation of the transactions
contemplated by this Agreement, if GP Buyer were incorporated, GP Buyer would
not be classified as an "investment company," within the meaning of Sections
721(b) and 351(e) of the Code.
SECTION 6: SPECIAL COVENANTS AND AGREEMENTS
6.1 OPERATION OF BUSINESS PRIOR TO THE CLOSING. Except as required by
applicable Legal Requirements or as provided in Schedule 6.1 or Section 6.1(c),
and except as consented to in writing by the Charter Parties between the date
hereof and the Closing Date, Helicon will operate and cause the Helicon
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 the other covenants set forth in this Section 6) and
abide by the following negative and affirmative covenants:
(a NEGATIVE COVENANTS. The Helicon Companies shall not do any
of the following:
(1 FRANCHISES. Fail to timely file a valid request
for renewal in accordance with Section 626(a) of the Cable Act, or fail to use
commercially reasonable efforts to renew on substantially the same or on other
commercially reasonable terms any Franchise that will expire after the date
hereof and prior to the date which is thirty months after the Closing Date in
accordance with its terms (it being understood that the Helicon Companies 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
the Charter Parties' obligations hereunder).
(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
Helicon Companies following the Closing except: (A) agreements for the provision
of services to 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 Fifty Thousand Dollars
($50,000) in any one case or in excess of Five Hundred Thousand Dollars
($500,000) in
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the aggregate; or (D) with respect to utility pole attachments agreements,
Contracts with terms as customarily required by the utility whose poles are
utilized.
(3 DISPOSITION OF ASSETS. Sell, assign, lease, swap,
or otherwise transfer or dispose of any of the Assets, except as set forth in
SCHEDULE 6.1 and except for assets consumed or disposed of in the ordinary
course of business.
(4 ENCUMBRANCES. Create, assume or permit to exist
any Encumbrance upon the Assets, except for Permitted Encumbrances or
Encumbrances disclosed in Schedules 3.3, 3.6 or 3.9.
(5 INDEBTEDNESS. Other than Indebtedness in respect
of vehicle leases, permit the Helicon Companies to incur any additional
Indebtedness except to the extent repaid at or prior to Closing; PROVIDED that
any such incurrence shall be in the ordinary course of business and the Helicon
Companies shall give Buyer prior notice thereof.
(6 MARKETING PROGRAMS. Implement any new marketing
plans that are materially different from marketing plans previously implemented
by the Helicon Companies.
(b AFFIRMATIVE COVENANTS. Helicon shall do, and shall cause
the Helicon Companies to do, the following:
(1 ACCESS TO INFORMATION. Subject to the Charter
Parties' obligations hereunder to maintain the confidentiality of the
Confidentiality 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 Helicon 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.
(2 INSURANCE. Maintain the existing insurance
policies on the Systems and the Assets (or comparable replacement policies).
(3 BOOKS AND RECORDS. Maintain the Helicon Companies'
books and records in accordance with past practices.
(4 FINANCIAL INFORMATION. Furnish to Buyer, as
prepared by the Helicon Companies in the ordinary course of business from their
books and records maintained in accordance with past practices: (i) an unaudited
consolidated balance sheet
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and statement of operations for the Helicon Companies for each calendar quarter
within forty-five days after the end of such calendar quarter between the date
hereof and the Closing Date, (ii) an unaudited, unconsolidated monthly cash flow
statement for each region included in the Helicon Company's operations, within
forty-five days after the end of each month between the date hereof and the
Closing Date, and (iii) any other financial or operational information furnished
to the Helicon Companies' lenders.
(5 COMPLIANCE WITH LAWS. Comply in all material
respects with all Franchises and Legal Requirements applicable to the Helicon
Companies and the operation of the Systems.
(6 KEEP ORGANIZATION INTACT. Except with respect to
any voluntary departure of any of the Helicon 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 Helicon Companies' suppliers, customers and others
having business relations with it.
(c CERTAIN PERMITTED ACTIONS. Notwithstanding anything in this
Agreement (including Sections 6.1(a) and (b) above) to the contrary, the Charter
Parties consent and agree as follows:
(1 CONTRACTUAL COMMITMENTS. The Helicon Companies
shall comply in all material respects 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 the Charter
Parties' 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 the Charter Parties' consent).
The Helicon 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 CAPITAL EXPENDITURES. The Helicon Companies shall
make routine capital expenditures in a manner substantially consistent with the
capital budget set forth in SCHEDULE 3.23.
(3 PENDING ACQUISITIONS. The Helicon Companies may
consummate the transactions set forth in SCHEDULE 6.1, subject to the provisions
set forth in SCHEDULE 6.1. At Closing, the Cash Consideration shall be increased
by the amounts paid by the Helicon Companies between February 28, 1999 and
Closing as purchase price to the sellers to consummate the transactions
described in SCHEDULE 6.1.
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(4 SALE OF INTERNET BUSINESS. The Helicon Companies
may proceed with the sale of their Internet business, PROVIDED, HOWEVER, if the
sale is consummated prior to Closing, the Cash Consideration shall be decreased
at Closing by the net amount (after payment of related expenses and liabilities)
of any consideration payable to the Helicon Companies in connection with such
sale; and PROVIDED, FURTHER, if the sale is not consummated prior to Closing,
Adjustments Liabilities shall not include (i) the Debt Obligations identified on
SCHEDULE 3.6 as having been incurred with respect to the Internet business, and
(ii) related expenses and liabilities.
(5 RESALE OF LONG DISTANCE SERVICE. The Helicon
Companies may continue with the resale of long distance service as provided in
the agreement therefore listed in SCHEDULE 3.8 hereto.
(6 EXCLUDED ASSETS. The Helicon Companies may, prior
to Closing, (i) assign each of the Excluded Assets to any of the Sellers, its
designees or any other Person, or (ii) otherwise provide for the discharge or
termination of any Excluded Asset comprising a contractual arrangement described
on EXHIBIT B; PROVIDED, HOWEVER, that such assignments, either individually or
in the aggregate, do not result in any adverse Tax consequence to any of the
Helicon Companies which is not included in Adjustment Liabilities in the
computation of Closing Net Liabilities.
6.2 CONFIDENTIALITY; PRESS RELEASE.
(a The Helicon Companies and the Sellers may from time to time
in the course of this transaction disclose to the Charter Parties information
and material concerning the Sellers, the Helicon Companies, the Assets and
Systems, including proprietary information, contracts, marketing information,
technical information, product or service concepts, subscriber information,
rates, financial information ideas, concepts and research and development, and
any analysis, compilations, studies or other documents prepared by or on behalf
of the Charter Parties in respect thereof (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 the Charter Parties independently.
The Charter Parties agree that, except as required by applicable law,
Confidential Information received from the Helicon Companies or the Sellers
shall be used solely in connection with the transaction contemplated by this
Agreement. Each Charter Party, except as required by applicable law, 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, each of whom shall maintain the confidentiality of
such
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Confidential Information for the purpose of consummating the transactions
contemplated by this Agreement), all or any portion of the Confidential
Information disclosed to it by the Helicon Companies or the Sellers. In the
event of a breach of the covenants contained in this Section 6.2, the Helicon
Companies 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 the Charter
Parties shall 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. With respect to press releases or any other public
announcements required by law, the party intending to make such release or
disclosure shall provide the other parties with an advance copy and 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. Charter shall provide to Helicon and Sellers such
information relating to Charter and its Subsidiaries and their businesses and
operations as Helicon and Sellers shall reasonably request. Helicon shall use
commercially reasonable efforts to cause its accountants to cooperate, at the
Charter Parties' expense, with any reasonable request of the Charter Parties
with respect to the inclusion of the Helicon Companies' financial statements and
such accountants' report thereon in any filing with the SEC or any other
Governmental Authority.
6.4 CONSENTS.
(a Following the execution hereof and (if necessary) following
the Closing, Helicon shall use commercially reasonable efforts, and shall cause
the Helicon Companies to use commercially reasonable efforts, to obtain as
expeditiously as possible all Consents required to be obtained by the Helicon
Companies or Sellers, including (i) Consents under the Franchises, Licenses and
Contracts of the Helicon Companies and (ii) Consents of the Subordinated
Holders. In the event Helicon cannot obtain the Consent of a Subordinated
Holder, Helicon shall use commercially reasonable efforts to obtain an extension
with respect to any action of such Subordinated Holder that may prevent, hinder
or delay the Closing. Helicon shall, and shall cause the Helicon Companies to,
prepare and file, or cause to be prepared and filed, within fifteen (15) days
after the date hereof, all applications required to be filed with the FCC and
any
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Franchising Authority (except for all FCC Forms 394, which shall be filed within
five (5) days of the date hereof), that are necessary for the transfer of
control to Charter in connection with the consummation of the transactions
contemplated by this Agreement of the Franchises and the Licenses identified in
SCHEDULE 3.4, subject to receipt from Charter of its respective portions of such
applications, which portions the Charter Parties have prepared and are
delivering to Helicon on the date hereof. Subject to the other provisions of
this Section 6.4, if, notwithstanding their commercially reasonable efforts,
Helicon and the other Helicon Companies are unable to obtain any of the
Consents, none of the Helicon Companies nor Sellers shall be liable to any of
the Charter Parties for any breach of covenant, and after the Closing, Sellers
shall not have any obligation with respect to obtaining any Consents or any
liability for the failure of such Consents to be obtained. 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 Sellers or any Helicon Company.
(b Each of the Charter Parties agrees to cooperate with the
Helicon Companies and Sellers in all commercially reasonable respects in
obtaining any necessary Consents. The parties shall use commercially reasonable
efforts to overcome any opposition to obtaining any Consents. Without limiting
the foregoing, if in connection with the process of obtaining any Consent, a
Governmental Authority or other Person imposes any condition or any change to a
Franchise, License or Contract to which such Consent relates that would be
applicable to any Charter Party or any Helicon Company as a requirement for
granting its Consent, Buyer may negotiate jointly with Helicon with such
Governmental Authority or other Person, as appropriate, with respect to such
condition or change, and each agrees that neither the Helicon Companies nor the
Charter Parties shall have any obligation to bear any monetary obligations to a
Governmental Authority or other Person as a condition to obtaining any required
Consent therefrom; PROVIDED, HOWEVER, that either may elect, in its sole
discretion, to satisfy such monetary obligations, in which case, the Charter
Parties will accept (and agree that Helicon may cause any Helicon Company to
accept) any condition or change in the Franchise, License or Contract to which
such Consent relates to the extent provided herein. The Charter Parties will
comply with any reasonable request (as determined in their sole discretion) to
fulfill any non-monetary obligations in connection with the granting of a
Consent to a transfer of a Franchise. The Charter Parties shall promptly furnish
to any Governmental Authority or other Person from whom a Consent is requested
such accurate and complete information regarding the Charter Parties and their
Subsidiaries including financial information concerning the Charter Parties and
other information relating to the cable and other media operations of the
Charter Parties, as such Governmental Authority or other Person may reasonably
require in connection with obtaining any Consent, and Buyer shall promptly
furnish to Helicon a copy of any such information provided to any Governmental
Authority or other Person, and any other information concerning the Charter
Parties as Helicon may reasonably request in
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connection with obtaining any Consent. To the extent Helicon is required to
supply such information as to the Charter Parties and their Subsidiaries to
Persons from whom Consents are sought, Helicon may supply such information and
shall have no obligation to the Charter Parties with respect to the disclosure
or use of such information by such Persons. It is understood and agreed that
nothing contained in this Section 6.4(b) shall prevent the Charter Parties (or
their employees, agents, representatives and any other Person acting on behalf
of the Charter Parties) from making statements or inquiries to, attending
meetings of, making presentations to, or from responding to requests initiated
by Governmental Authorities or other Persons from whom a Consent is sought, and
the Charter Parties shall use commercially reasonable efforts to apprise Helicon
of all such requests.
6.5 HSR ACT FILING. As soon as practicable after the execution of this
Agreement, but in any event no later than thirty days after such execution, the
parties will each complete and file, or cause to be completed and filed, any
notification and report required to be filed under the HSR Act; and each such
filing shall request early termination of the waiting period imposed by the HSR
Act. The parties shall use commercially reasonable efforts to respond as
promptly as reasonably practicable to any inquiry received from the Federal
Trade Commission (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 Governmental Authority in connection with antitrust
matters. The parties 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
Charter, on the one hand, and Helicon, on the other hand.
6.6 ABILITY TO CONSUMMATE TRANSACTIONS.
(a No Charter Party will take any action that does, or could
reasonably be expected to, disqualify Charter to be the transferee of control of
the Helicon Companies as the holder of the Franchises and the owner and operator
of the Assets and Systems.
(b None of the parties hereto will take any action that is
inconsistent with its respective obligations under this Agreement or which does,
or would reasonably be expected to, materially hinder or delay the consummation
of the transactions contemplated by this Agreement. Without limiting the
generality of the foregoing, at all times between the date hereof and the
Closing Date, each Charter Party will take all necessary or advisable actions to
ensure, and each Charter Party will ensure, that Charter is able to deliver the
Preferred LLC Interest at Closing, and that Buyer is able to deliver
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the Cash Consideration at Closing, and each Seller will take all necessary or
advisable actions to ensure, and each Seller will ensure, that such Seller will
be able to sell, transfer, deliver its respective Purchased Interest, at
Closing.
6.7 CONTINUATION OR REFINANCING OF THE DEBT OBLIGATIONS.
(a The Charter Parties acknowledge and agree that all
obligations of the Helicon Companies with respect to the debt instruments that
are listed in SCHEDULE 3.6 (including all principal, accrued and unpaid interest
and all other amounts) shall remain obligations of the Helicon Companies through
and after Closing, and each of the Charter Parties will cooperate with the
Helicon Companies with respect to any information on or assurances by the
Charter Parties that shall be reasonably requested by any of the holders of such
debt instruments with respect to the continuation of such obligations subsequent
to Closing; PROVIDED, HOWEVER, that if, and only to the extent that, any of the
holders of such debt instruments shall, in accordance with the terms thereof,
demand payment as a condition of the grant of their Consent to the consummation
hereof, the Charter Companies shall take such actions as shall be necessary to
effect the refinancing of the Debt Obligations held by such holders on the
Closing Date. Notwithstanding any other provision hereof, the Charter Parties
shall bear and pay any amounts in the nature of prepayment penalties or other
fees or expenses that are required to be paid under the terms of the debt
instruments that are listed in SCHEDULE 3.6 with respect to the assumption of
the Debt Obligations, or the refinancing or satisfaction thereof, or the change
of control of the Helicon Companies.
(b The Charter Parties shall release and hold harmless the
Sellers and Xxxx at the Closing from any further obligations with respect to the
debt instruments that are listed in SCHEDULE 3.6, such release being
substantially in the form attached hereto as EXHIBIT D.
6.8 RETENTION AND ACCESS TO THE HELICON COMPANIES' RECORDS. Except as
provided in Section 6.10(c)(1), Sellers shall, for a period of five years from
the Closing Date or such shorter period as is required by statute, 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
Helicon 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 or such shorter period as is allowed by statute.
Subsequent to such five year period or such or such shorter period as is allowed
by statute, Buyer shall only destroy such books and records and subsequent to
thirty days' notice to Sellers of their right to remove and retain such books
and records or to copy such books and records prior to their destruction;
PROVIDED, HOWEVER, that Buyer shall retain or deliver to the Sellers all books
and records related to any ongoing litigation or audit or investigation by a
Governmental Authority.
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6.9 PURCHASE AND EXERCISE OF WARRANTS. BII shall purchase all of the
outstanding Warrants from the Subordinated Holders pursuant to its rights as
Xxxx'x assignee under the Call Agreement in exchange for cash or the issuance of
a note with full recourse to BII and guaranteed by Xxxx and shall exercise the
Warrants and pay to Helicon an aggregate exercise price in cash of $3,628,250.
6.10 TAX MATTERS. The following provisions shall govern the allocation
of responsibility between the Charter Parties and Sellers for certain tax
matters following the Closing Date:
(a TAX PERIODS ENDING ON OR BEFORE THE CLOSING DATE. Helicon
Corp. shall prepare or cause to be prepared and file or cause to be filed all
Tax Returns for the Helicon Companies (i) that are due on or before the Closing
Date, or (ii) that relate to taxable periods ending on or prior to the Closing
Date but are required to be filed after the Closing Date. Such Tax Returns shall
be prepared in accordance with each Helicon Company's past custom and practice,
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 Helicon Company that
is a partnership or limited liability company, such Tax Returns shall be
prepared in accordance with the Organizational Documents of such Helicon Company
as in effect on the Closing Date. In preparing each Helicon Company's Tax
Returns, Helicon Corp. 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 ten days prior to filing.
(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 Helicon 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 Helicon Company's past custom and practice. In preparing
such Tax Returns, Buyer shall consult with Helicon Corp. in good faith and shall
provide Helicon Corp. with drafts of such Tax Returns (together with the
relevant back-up information) for review at least ten days prior to filing.
(c COOPERATION ON TAX MATTERS.
(1 The Charter Parties and Helicon Corp. 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
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material provided hereunder. The Charter Parties and Helicon Corp. agree (A) to
retain all books and records with respect to Tax matters pertinent to the
Helicon 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 any Charter Party or Helicon Corp., 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 Helicon
Corp., 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 The Charter Parties and Helicon Corp. 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).
(3 The Charter Parties and the Partners agree that if
any of them receives any notice of an audit or examination from any Governmental
Authority with respect to Taxes of any Helicon Company for any taxable period or
portion thereof ending on or prior to the Closing Date, then the recipient of
such notice shall, within three (3) days of the receipt thereof, notify and
provide copies of such notice to the other party, as the case may be, in
accordance with the notice provisions of Section 11.2.
(4 The Charter Parties further agree that immediately
after the Closing, BII shall be relieved of its responsibilities with respect to
post-Closing matters as the "tax matters partner," within the meaning of Section
6231(a)(7) of the Code, of Helicon and THGLP, and that the Charter Parties shall
take any and all actions required to be taken to effectuate the same.
(d SECTION 754 ELECTIONS; ALLOCATION OF PURCHASE PRICE. (1) To
the extent not already in effect, each Helicon Company that is treated as a
partnership for federal income tax purposes shall timely file an election under
Section 754 of the Code so that such entities shall be able to adjust the tax
basis of their assets (collectively, the "PARTNERSHIP ASSETS") under Section
743(b) of the Code as a result of the transactions contemplated herein.
(2) The aggregate amount of the Cash Consideration
and any liabilities of the Helicon Companies (the "PURCHASE CONSIDERATION")
shall be allocated among the Partnership Assets in an allocation agreement (the
"ALLOCATION AGREEMENT") to be prepared in accordance with the rules under
Sections 743(b), 751, 755 and 1060 of the Code. Buyer shall deliver a draft of
the Allocation Agreement to Helicon Corp. at
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least thirty (30) days prior to the Closing Date for approval and consent, and
Buyer and Helicon Corp. shall mutually agree upon the Allocation Agreement prior
to the Closing Date. In this regard, Buyer and Helicon Corp. agree that for
purposes of such Allocation Agreement seventy-eight percent (78%) of the
Purchase Consideration shall be allocated to the Franchises and twenty-two
percent (22%) of the Purchase Consideration shall be allocated to the
Partnership Assets that are tangible assets. Neither Buyer nor Helicon Corp.
shall unreasonably withhold its approval and consent with respect to the
Allocation Agreement. Buyer and Sellers agree that the Allocation Agreement
shall be amended to reflect any post-Closing adjustments determined under
Section 2.6 of this Agreement. Unless otherwise required by applicable law,
Buyer, Sellers and the Helicon Companies agree to act, and cause their
respective affiliates to act, in accordance with the computations and
allocations contained in the Allocation Agreement in any relevant Tax Returns or
similar filings (including any forms or reports required to be filed pursuant to
Section 1060 of the Code ("1060 Forms")), to cooperate in the preparation of any
1060 Forms, to file such 1060 Forms in the manner required by applicable law and
to not take any position inconsistent with such Allocation Agreement upon
examination of any tax refund or refund claim, in any litigation or otherwise.
(e CERTAIN TAXES. All transfer, documentary, sales, use,
stamp, registration and other such Taxes and fees (including any penalties and
interest but excluding any income tax) incurred in connection with the
transactions consummated pursuant to this Agreement shall be borne equally by
the Charter Parties and the Sellers. If and to the extent that such Taxes and
fees are included in Adjustment Liabilities pursuant to Section 2.4(b)(2),
Seller's share of such Taxes and fees shall be paid by the Helicon Companies.
The Charter Parties and Helicon Corp. will cooperate 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.
(f The Charter Parties agree that they will not, and will not
cause or permit any of their Affiliates or any Helicon Company to, amend any Tax
Return of any Helicon Company with respect to any taxable period or portion
thereof ending on or prior to the Closing Date without the prior written consent
of Helicon Corp. Nothing in this Section 6.10(f) shall be construed to affect
the Buyer's rights pursuant to Section 6.10(h) herein.
(g From and after the date of this Agreement, Helicon Corp.
and each Helicon Company shall not without the prior written consent of the
Buyer (which consent shall not be unreasonably withheld) make, or cause or
permit to be made, any Tax election that would adversely affect Buyer in any
material respect.
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(h CONTESTS. (1) In the case of an audit or administrative
proceeding that relates to taxable periods ending on or before the Closing Date
with respect to any income Tax Return of the Helicon Companies, Helicon Corp.
(as agent for and on behalf of the Sellers) shall have the right at its expense
to participate in and control the conduct of such audit or proceeding; the
Charter Parties also may participate in any such audit or proceeding and, if
Helicon Corp. (as agent for and on behalf of the Sellers) does not assume the
defense of any such audit or proceeding, the Charter Parties may defend the same
in such manner as they may deem appropriate, including, but not limited to,
settling such audit after giving ten (10) days prior written notice to the
Partners setting forth the terms and conditions of settlement. In the event that
issues relating to a potential adjustment are required to be dealt with in the
same proceeding as separate issues relating to a potential adjustment for which
the Charter Parties would be liable, the Charter Parties shall have the right,
at their expense, to control the audit or proceeding with respect to the latter
issues.
(2) Neither the Charter Parties nor Helicon Corp. (as
agent for and on behalf of the Sellers) shall enter into any compromise or agree
to settle any claim pursuant to any Tax audit or proceeding which would
adversely affect the other party for such year or a subsequent year without the
written consent of the other party, which consent may not be unreasonably
withheld. The Charter Parties and Helicon Corp. (as agent for and on behalf of
the Sellers) agree to cooperate, and the Charter Parties agree to cause the
Helicon Companies to cooperate, in the defense against or compromise of any
claim in any audit or proceeding.
(i The Charter Parties agree that they will not, and will not
cause or permit any of their Affiliates to, file or otherwise make any election
with respect to GP Buyer that would cause GP Buyer to be classified as an entity
other than a partnership for federal and state income Tax purposes with respect
to post-Closing Tax periods.
6.11 HELICON NAME. Helicon Corp. and Helicon Group Ltd. retain the
right to use the name "Helicon" after the Closing, and the Charter Parties agree
to change, within one year after the Closing, the name of each Helicon Company
include any variant of "Helicon" to a name that does not include any variant of
"Helicon."
6.12 RELEASES. Except as expressly provided in Section 10 or 6.13
hereof, with respect to the transactions contemplated by this Agreement, after
the Closing, (a) no Charter Party nor any of its respective Affiliates will have
any claim (other than claims for fraud) against or be entitled to enforce any
provision of the Partnership Agreement against, any Seller nor any of such
Seller's Affiliates, or any of their respective present and former officers,
directors, stockholders, partners, representatives or agents, and all such
claims (except claims made pursuant to Section 10 and claims for fraud) are
hereby waived and released, and (b) no Seller nor any of such Seller's
Affiliates will have any
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rights or any claim (other than claims for fraud), under or be entitled to
enforce any provision of the Partnership Agreement against, any Charter Party,
any of its Affiliates, or any of their respective present and former officers,
directors, stockholders, partners, representatives or agents, and all such
claims (except claims made pursuant to Section 10 or 6.13, and claims for fraud)
are hereby waived and released.
6.13 EXCULPATION AND INDEMNIFICATION. After the Closing, Buyer, GP
Buyer and the Helicon Companies will be bound by and will assume the same
obligations to satisfy (and Buyer and GP Buyer will cause the Helicon Companies
to continue to satisfy) the rights of exculpation, indemnification and
advancement of expenses to which the present and former directors, officers,
employees and agents of the Helicon Companies and the Sellers are entitled with
respect to any matter existing or occurring prior to the Closing and/or with
respect to this Agreement and the Transaction Documents, under each such Helicon
Company's existing Organizational Documents or resolution of Helicon's Advisory
Committee, in accordance with the terms and conditions of any such exculpation
and indemnification provisions as in effect on the date of this Agreement.
6.14 EMPLOYEE MATTERS.
(a Except as otherwise provided in or required by any
employment agreement between any Helicon Company and any employee, all employees
of the Helicon Companies who continue in employment following the Closing shall
be employed at the same salary or hourly rate as in effect immediately prior to
Closing without material reduction for a period of six months following the
Closing and shall be employed on such terms and conditions as are substantially
similar in the aggregate to the terms and conditions of employment of Buyer's
employees. Each such employee shall receive credit for all purposes (other than
benefit accrual purposes under any defined benefit retirement plan) under any
Employee Plan or Compensation Arrangement of the Buyer for past service with any
Helicon Company and, to the extent credited under any Employee Plan or
Compensation Arrangement of any Helicon Company, for past service with any
predecessor employer.
(b Buyer shall offer group health plan coverage to all of the
employees of the Helicon Companies and to the spouse and dependents of such
employees who become employed by Buyer or any ERISA Affiliate of the Buyer as of
the Closing on terms and conditions generally applicable to all of Buyer's
similarly situated employees. For purposes of providing such coverage, Buyer
shall waive all pre-existing condition limitations for all such employees
covered by the health care plan of any Helicon Company as of the Closing and
shall provide such health care coverage effective as of the Closing without the
application of any eligibility period for coverage. In addition, Buyer shall
credit all employee payments toward deductible out-of-pocket and co-payment
obligation limits under the Helicon Companies' health care plans for the
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plan year which includes the Closing Date as if such payments had been made for
similar purposes under Buyer's health care plans during the plan year which
includes the Closing Date, with respect to employees of the Helicon Companies
and the spouse and any dependents of such employees who become employed by Buyer
as of the Closing Date.
(c Buyer shall assume full responsibility and liability for
offering and providing "continuation coverage" to any "covered employee" and any
"qualified beneficiary" who is covered by a "group health plan" sponsored or
contributed to by any of the Helicon Companies who has experienced a "qualifying
event" or is receiving "continuation coverage" on or prior to the closing.
"Continuation coverage," "covered employee," "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. For
purposes of this Section, each employee at any Helicon Company and each employee
of Helicon Corp. who experiences a loss of health care coverage as a result of
the transactions contemplated by this Agreement together with their spouse and
dependents, if any, shall be deemed eligible for continuation coverage as
provided herein.
6.15 ASSIGNMENT OF CERTAIN ARRANGEMENTS WITH AFFILIATES.
(a) Prior to Closing Helicon Corp. will assign the Management
Agreements to BII except that Helicon Corp. shall retain the right to receive
the deferred management fees thereunder, which deferred management fees shall
comprise Adjustment Liabilities. The Management Agreements shall be included at
Closing in the BII Assets. At Closing, GP Buyer shall pay to Helicon Corp. the
amount of such deferred management fees, in satisfaction in full of Helicon
Corp.'s right to receive such deferred management fees.
(b) Prior to Closing, subject to the receipt of any Consents,
Helicon Corp. will assign to Helicon, and Helicon will assume the programming
agreements that have been entered into by Helicon Corp. as manager, as described
in Schedules 3.8 and 3.17 hereof.
6.16 PUT. Charter shall cause to be delivered at Closing to BII with
respect to the Preferred LLC Interest, the put agreement (the "PUT AGREEMENT"),
substantially in the form attached hereto as EXHIBIT E, duly executed by Xxxx
Xxxxx, Charter's controlling stockholder, which agreement shall entitle each
holder of all or part of the units of the Preferred LLC Interest, at his option
at any time until and through the fifth anniversary of the Closing Date, to put
to Xx. Xxxxx or his designee such number of units of such Preferred LLC Interest
as such holder shall elect, for an amount equal to the number of such "put"
units multiplied by the original issue price of such units, plus any accrued and
unpaid dividends on such "put" units. On the date hereof, Charter is executing
and delivering option agreements, (the "OPTION AGREEMENTS"), granting certain
rights to BII
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and three other Partners in the event of an initial public offering of the
common stock of Charter or one of its affiliates.
6.17 GUARANTY BY CHARTER. Subject to the provisions of this Section
6.17, Charter hereby fully, unconditionally and irrevocably guarantees to
Sellers the due and punctual payment of the Cash Consideration and any other
monetary obligations of Buyer and the due and punctual performance of all other
obligations of Buyer or GP Buyer, all in accordance with the terms of this
Agreement. Charter hereby acknowledges that, with respect to all of Buyer's and
GP Buyer's obligations to pay money, including the Cash Consideration, this
guaranty shall be a guaranty of payment and performance and not of collection
and shall not be conditioned or contingent upon the pursuit of any remedies
against Buyer or GP Buyer. Charter hereby waives diligence, demand of payment,
filing of claims with a court in the event of merger or bankruptcy of Buyer or
GP Buyer, any right to require a proceeding first against Buyer or GP Buyer, the
benefit of discussion, protest or notice and all demands whatsoever, and
covenants that this guaranty will not be discharged as to any obligation except
by satisfaction of such obligation in full. Until the Sellers have been paid in
full any amounts due and owing to Sellers under this Agreement, Charter hereby
irrevocably waives any claim or other rights which it may now or hereafter
acquire against Buyer and GP Buyer that arise from the existence, payment,
performance or enforcement of its obligations under this Agreement, including
any right of reimbursement, exoneration, contribution, indemnification, any
right to participate in any claim or remedy of Sellers against Buyer or GP
Buyer, or any collateral which Sellers hereafter acquire, whether or not such
claim, remedy or right arises in equity, or under contract, statute or common
law, including the right to take or receive from Buyer or GP Buyer, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim or other rights. To the fullest
extent permitted by applicable law, the obligations of Charter hereunder shall
not be affected by (a) the failure of the applicable obligee to assert any claim
or demand or to enforce any right or remedy against Charter pursuant to the
provisions of this Agreement or otherwise, (b) any rescission, waiver, amendment
or modification of, or any release from any of the terms or provisions of this
Agreement or the invalidity or unenforceability (in whole or in part) of this
Agreement, unless consented to in writing by Charter and Sellers and (c) any
change in the existence (corporate or otherwise) of Buyer, Charter or any of the
Sellers or any insolvency, bankruptcy, reorganization or similar proceeding
affecting any of them or their assets. If any amount shall be paid to Charter in
violation of the preceding sentence and the obligations of Buyer or GP Buyer
under this Agreement shall not have been discharged in full, such amount shall
be deemed to have been paid to Charter for the benefit of, and held in trust for
the benefit of, Sellers, and shall forthwith be paid to Sellers. Charter
acknowledges that it will receive direct and indirect benefits from the
consummation of the transactions contemplated by this Agreement and that the
waivers set forth in this Section 6.17 are knowingly made in contemplation of
such benefits. Nothing contained in this Section 6.17 is intended to or
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shall impair, as among Charter and Sellers, the obligations of Charter, which
are absolute and unconditional, upon failure by Buyer or GP Buyer to perform
their respective obligations under this Agreement, including the obligation to
pay to Sellers the Cash Consideration and any other monetary obligations of
Buyer when payable in accordance with the terms of this Agreement, or is
intended to or shall affect the relative rights of Sellers and creditors of
Charter, nor shall anything herein prevent Sellers from exercising all remedies
otherwise permitted by applicable law.
6.18 DISCLOSURE SCHEDULES. The parties acknowledge and agree that (i)
Helicon's Disclosure Schedules and Charter's Disclosure Schedules may include
certain items and information solely for informational purposes for the
convenience of the parties hereto, and (ii) the disclosure of any matter in
Helicon's Disclosure Schedules or Charter's Disclosure Schedules shall not be
deemed to constitute an acknowledgment by the Helicon Parties, in this case of
Helicon's Disclosure Schedules, or the Charter Parties, in the case of Charter's
Disclosure Schedules, that the matter is material.
6.19 FURTHER ASSURANCES. After the date hereof the parties shall take
any commercially reasonable actions and execute any other documents that may be
reasonably 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.
6.20 ENVIRONMENTAL REPORTS. At any time after the date hereof, Buyer
shall have the right to engage an environmental consultant to conduct a Phase I
environmental audit and to prepare a Phase I environmental report, and if
recommended in such Phase I environmental report, a Phase II environmental audit
and Phase II environmental report for each Real Property listed on SCHEDULE 3.9.
The cost of Phase I and Phase II environmental audits and reports shall be borne
by Buyer. The Helicon Companies shall cooperate with Buyer, in connection with
such Phase I and Phase II environmental audits and reports, including providing
all reasonable access to their respective properties and facilities.
6.21 YEAR 2000 MATTERS. The Helicon Companies shall have taken
commercially reasonable actions to implement the Year 2000 Plan and to complete
implementation of the Year 2000 Plan as soon as is reasonably practicable. The
Helicon Companies shall cooperate with the Charter Parties prior to the Closing
with respect to the Year 2000 Matters. Such cooperation shall include providing
the Charter Parties with status reports as the Charter Parties may reasonably
request regarding Year 2000 Matters.
6.22 REPRESENTATIONS, WARRANTIES AND COVENANTS OF XXXX. By his
execution here below in joinder to this Agreement with respect to this Section
6.22, Xxxx agrees as follows:
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(a) Xxxx represents and warrants to the Charter Parties: (i)
that his joinder hereto and any Transaction Document to which he will become a
party have been duly executed and delivered by him (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) his legal, valid, and binding obligation,
enforceable against him in accordance with their terms, except as the
enforceability of this Agreement and such other Transaction Document may be
limited by Enforceability Exceptions; and (ii) that his performance of his
obligations under this Section 6.22 does not require any consent of, declaration
to, notice to, or filing with any Governmental Authority or any other Person
that has not been obtained, will not conflict with, result in a breach of, or
constitute a default under any Legal Requirement to which he is bound, and will
not conflict with, result in a material breach of, or constitute a material
default under any material agreement or instrument to which he is bound.
(b) Xxxx represents and warrants to the Charter Parties that
Xxxx holds all legal and beneficial rights to the THGLP Note free and clear, and
will transfer such note to Buyer at Closing free and clear of all Encumbrances,
subject to Legal Restrictions.
(c) Xxxx covenants to perform his obligations under Sections
2.2(c), 8.2(c), and 8.3(b)(1) hereof.
(d) Xxxx, Sellers and the Charter Parties agree that for
purposes of Sections 7.1(b) and 10.5 hereof, Xxxx'x representations and
warranties in (i) subsections (a) and (b) above shall comprise representations
and warranties of Sellers under Section 4 hereof, and (ii) subsection (b) above
shall comprise representations and warranties of Sellers under Section 4.4
hereof.
(e) After the Closing, Xxxx agrees to indemnify and hold the
Charter Parties harmless against and with respect to, and shall reimburse Buyer
for any and all Losses resulting from any untrue representation or breach of
warranty by Xxxx set forth in subsections (a) or (b) above, or the
nonfulfillment of any covenant by Xxxx in subsection (c) above or in any
Transaction Document to which Xxxx is a party; PROVIDED, HOWEVER, that the
foregoing indemnity will be subject to the limitations in Section 10.5 hereof as
if Xxxx comprised a Seller hereunder, and PROVIDED, FURTHER, that to implement
such foregoing indemnity, Xxxx shall comprise an "Indemnifying Party" under
Section 10.6 hereof.
SECTION 7: CONDITIONS TO OBLIGATIONS OF THE CHARTER PARTIES AND SELLERS
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7.1 CONDITIONS TO OBLIGATIONS OF THE CHARTER PARTIES. All obligations
of the Charter Parties 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 HELICON. As to the
representations and warranties of Helicon set forth in Section 3, (1) each of
those representations and warranties set forth in Section 3 which is 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, without regard
to the materiality or Material Adverse Effect qualifiers set forth therein, and
(2) each of the other representations and warranties of Helicon set forth in
Section 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, without regard to the materiality
or Material Adverse Effect qualifiers set forth therein (except for
representations and warranties with respect to the delivery of documents to
Buyer or the listing of documents on a Schedule hereto), provided that for
purposes of each of clauses (1) and (2) above, the representations and
warranties shall be deemed true and correct in all respects 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 Effect, 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.
(b) REPRESENTATIONS AND WARRANTIES OF SELLERS. As to the
representations and warranties of Sellers set forth in Section 4, (1) each of
those representations and warranties set forth in Section 4 which is 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, without regard
to the materiality or Material Adverse Effect qualifiers set forth therein, and
(2) each of the other representations and warranties of Sellers set forth in
Section 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, without regard to the
materiality, or Material Adverse Effect qualifiers set forth therein (except for
representations and warranties with respect to the delivery of documents to
Buyer or the listing of documents on a Schedule hereto), 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 Effect, 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.
(c) COVENANTS. The Helicon Parties, the Sellers and Xxxx shall
have performed and complied in all material respects with all covenants and
agreements required by this Agreement to be performed or complied with by them
prior to or at the Closing.
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(d) CONSENTS. (i) The aggregate number of Equivalent
Subscribers as of the Closing, in those Franchise Areas that are Transferable
Franchise Areas shall be at least ninety percent (90%) of the aggregate number
of Equivalent Subscribers in all Franchise Areas as of the Closing, (ii) one
hundred twenty (120) days shall have elapsed and no extensions of such 120-day
period shall have been granted since the date of filing of the FCC Form 394 with
respect to any Franchise Consent which has not been obtained; and (iii) all
other Required Consents shall have been obtained.
(e) XXXX-XXXXX-XXXXXX. The requisite waiting period, if any,
under the HSR Act shall have expired or been terminated.
(f) JUDGMENT. There shall not be in effect on the date on
which the Closing is to occur any judgment, decree, order or other prohibition
having the force of law that would prevent or make unlawful the Closing,
provided that the Charter Parties 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.
(g) DELIVERIES. The Helicon Parties shall have made or stand
willing to make all the deliveries to Buyer described in Section 8.2.
(h) 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.
(i) PURCHASE AND EXERCISE OF WARRANTS. BII (a) shall have
purchased all of the outstanding Warrants from the Subordinated Holders pursuant
to its rights as Xxxx'x assignee under the Call Agreement and (b) shall have
exercised the Warrants.
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. All representations and
warranties of the Charter Parties set forth in Section 5 shall be true and
complete in all material respects at and as of the Closing Date as though made
at and as of that time.
(b) COVENANTS. The Charter Parties 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 them prior to or at the
Closing.
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(c) CONSENTS. (i) The aggregate number of Equivalent
Subscribers as of the Closing, in those Franchise Areas that are Transferable
Franchise Areas shall be at least ninety percent (90%) of the aggregate number
of Equivalent Subscribers in all Franchise Areas as of the Closing, (ii) one
hundred twenty (120) days shall have elapsed and no extensions of such 120-day
period shall have been granted since the date of filing of the FCC Form 394 with
respect to any Franchise Consent which has not been obtained; and (iii) all
Required Consents shall have been obtained.
(d) XXXX-XXXXX-XXXXXX. The requisite waiting period, if any,
under the HSR Act shall have expired or been terminated.
(e) JUDGMENT. There shall not be in effect on the date on
which the Closing is to occur any judgment, decree, order or other prohibition
having the force of law that would prevent or make unlawful the Closing,
provided that Helicon Parties 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.
(f) RELEASE FROM DEBT INSTRUMENTS. Sellers and Xxxx shall have
been released as provided in Section 6.7(b) by the Charter Parties from any
further obligations with respect to the debt instruments that are listed in
SCHEDULE 3.6.
(g) DELIVERIES. The Charter Parties shall have made or stand
willing to make all the deliveries described in Section 8.3.
SECTION 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 Section 7, and
subject to Section 8.1(a)(2), the Closing shall take place on a date specified
by the mutual agreement of Helicon and Buyer, or in the absence of such
agreement, on the last business day of such calendar month in which the
conditions set forth in Sections 7.1(d) and (e) and Sections 7.2(c) and (d)
shall have been satisfied or waived; PROVIDED, HOWEVER, that if the last
business day of such calendar month in which such conditions shall have been
satisfied or waived shall be beyond the Upset Date, then the Closing shall occur
on the Upset Date.
(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
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judgment, decree, or order that would prevent or make unlawful the Closing, or
(B) any other circumstance beyond the reasonable control of the Helicon Parties
or the Charter Parties shall exist that would prevent the Closing or the
satisfaction of any of the conditions precedent to any party set forth in
Section 7, then either Helicon or Buyer may, at its option, postpone the date on
which the Closing is required to take place until such date, to be set by the
party that elects to postpone the date for Closing pursuant to this subsection
(2) on at least five business days' written notice to the other party, as soon
as practicable after such judgment, decree, or order ceases to be in effect, or
such other circumstance ceases to exist; PROVIDED, HOWEVER, that any
postponement of the date on which the Closing is required to take place to a
date beyond the Upset Date shall require the consent of both Helicon and Buyer.
(b) CLOSING PLACE. The Closing shall be held at the offices of
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, or any other place or time as Helicon and Buyer shall mutually
agree.
8.2 DELIVERY BY SELLERS. The Sellers shall deliver or cause to be
delivered to the Charter Parties the following:
(a) BII ASSETS. An assignment agreement providing for the
assignment and contribution of the BII Assets by BII to GP Buyer, in a form
reasonably satisfactory to GP Buyer, together with any certificates representing
the GP Interest.
(b) PURCHASED INTERESTS. An assignment agreement providing for
the assignment of the LP Interests and the Preferred Interests by the Limited
Partners to Buyer, in a form reasonably satisfactory to Buyer, together with any
certificates representing the LP Interests or the Preferred Interests, duly
endorsed for transfer.
(c) THGLP NOTE. An assignment agreement providing for the
assignment of the THGLP Note by Buyer, in a form reasonably satisfactory to
Buyer, together with the original THGLP Note.
(d) OFFICER'S CERTIFICATE OF HELICON AND BII. A certificate
executed by BII, on its own behalf and in its capacity as the general partner of
Helicon, dated as of the Closing Date, certifying that the closing conditions
specified in Sections 7.1(a) and (c) have been satisfied as to Helicon or BII,
except as disclosed in such certificate.
(e) SELLERS' CERTIFICATE. A certificate executed by Sellers,
dated as of the Closing Date, certifying that the closing conditions specified
in Sections 7.1(b) and (c) have been satisfied as to Sellers and Xxxx, except as
disclosed in such certificate.
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(f) SECRETARIES' CERTIFICATES. A certificate executed by
Helicon and BII, dated as of the Closing Date, (1) certifying that the
resolutions, as attached to said certificate, were duly adopted by BII, on its
own behalf and in its capacity as the general partner of Helicon, as the case
may be, authorizing and approving the execution by such party of this Agreement
and the other Transaction Documents to which such party 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, Certificates of Good Standing for Helicon and each of the other Helicon
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.
(g) COMPLIANCE WITH FIRPTA. A certificate executed by each
Seller, in a form reasonably satisfactory to the Buyer, pursuant to Section
1.1445-2(b)(2) of the Treasury Regulations, certifying that such Seller is not a
foreign person.
(h) CONSENTS. Copies of Consents which have been obtained by
Helicon or Sellers prior to the Closing.
(i) INDEMNITY AGREEMENT. The Indemnity Agreement, duly
executed by Helicon Corp. (as agent for and on behalf of Sellers) and the Escrow
Agent.
(j) AMENDED LLC AGREEMENT. The Amended LLC Agreement duly
executed by BII.
(k) RESIGNATIONS. Written resignations, effective on the
Closing Date, of all officers, managers and directors of the Helicon Companies.
(l) TERMINATIONS. Written terminations, effective on the
Closing Date, of all management and other similar agreements, as listed in
SCHEDULE 3.17, between any of the Sellers and any of the Helicon Companies,
except as provided in Section 6.15 hereof.
(m) BANK ACCOUNTS. True and complete information regarding
each Helicon Company's bank accounts containing cash deposits as of the Closing
Date and the names of all authorized signatories on all such accounts.
(n) ORGANIZATIONAL, FINANCIAL, AND TAX RECORDS. All corporate,
partnership or limited liability company records (including minute books and
stock books and registers) and financial and tax records of each of the Helicon
Companies that are not located at one of the offices or sites included in the
Real Property.
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(o) OPINIONS OF COUNSEL. (i) An opinion of Dow, Xxxxxx &
Xxxxxxxxx, PLLC, counsel to Helicon, dated as of the Closing Date, in form and
substance reasonably satisfactory to Buyer; and (ii) an opinion of counsel to
certain Partners, dated as of the Closing Date, in form and substance reasonably
satisfactory to Buyer.
(p) PUT AGREEMENT. The Put Agreement duly executed by BII.
8.3 DELIVERY BY THE CHARTER PARTIES. Prior to or at the Closing, the
Charter Parties shall deliver to Sellers the following:
(a) ASSUMPTION AGREEMENTS
(1) An assumption agreement providing for the
assumption by GP Buyer of the BII Assets, in a form reasonably satisfactory to
BII.
(2) An assumption agreement providing for the
assumption by Buyer of the LP Interests and the Preferred Interests, in a form
reasonably satisfactory to Sellers.
(3) An assumption agreement providing for the
assumption by GP Buyer of the Management Agreements, in a form reasonably
satisfactory to Helicon Corp.
(b) PURCHASE CONSIDERATION.
(1) The purchase price for the THGLP Note, as set
forth in Section 2.2(c) hereof, by wire transfer of immediately available funds
to an account designated by Xxxx by written notice to Buyer not less than two
days prior to Closing.
(2) As provided in Section 2.5, the payments to the
Escrow Agent, if the Partners do not elect to deliver the Letters of Credit, by
wire or accounts transfer of immediately available funds to one or more accounts
designated by the Escrow Agent, and the Estimated Cash Consideration, less the
payments to the Escrow Agent, to the Partners in accordance with the allocation
agreed to among them pursuant to Section 2.3 hereof, by wire or accounts
transfer of immediately available funds to one or more accounts designated by
the Partners, in each case by written notice to Buyer not less than two days
prior to the Closing.
(c) OFFICERS' CERTIFICATE. A certificate executed by each of
the Charter Parties, 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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(d) SECRETARIES' CERTIFICATE. A certificate executed by each
of the Charter Parties, 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 such Charter Party, authorizing and approving the execution by such
Charter Party of this Agreement and the other Transaction Documents to which
such Charter Party 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 such Charter Party 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.
(e) AMENDED LLC AGREEMENT. The Amended LLC Agreement duly
executed by Charter and GP Buyer.
(f) INDEMNITY AGREEMENT. The Indemnity Agreement, duly
executed by Buyer (as agent for and on behalf of the Charter Parties), and the
Escrow Agent.
(g) OPINION OF COUNSEL. An opinion of Paul, Hastings, Xxxxxxxx
& Xxxxxx LLP, counsel to Buyer, dated as of the Closing Date, in form and
substance reasonably satisfactory to the Partners.
(h) PUT AGREEMENT. The Put Agreement executed by Xxxx X.
Xxxxx.
SECTION 9: TERMINATION
9.1 AGREEMENT BETWEEN HELICON AND BUYER. This Agreement may be
terminated at any time prior to the Closing by agreement between Helicon and
Buyer.
9.2 TERMINATION BY HELICON. This Agreement may be terminated at any
time prior to the Closing by Helicon, and the BII Contribution 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 a Charter Party has
nonetheless refused to consummate the Closing. Notwithstanding the foregoing,
Helicon 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 any Helicon Party's
failure to act in good faith or a breach of or failure to perform any of its
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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 Helicon Party'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.
(c) CLOSING EQUIVALENT SUBSCRIBERS. If the Closing Equivalent
Subscribers shall be less than 150,000, PROVIDED, that termination pursuant to
this Section 9.2(c) shall not be effective, and shall be void ab initio, in the
event that Buyer delivers notice to Helicon that Buyer is willing to close
notwithstanding the failure of the Closing Equivalent Subscribers to be at least
150,000; PROVIDED, FURTHER, that, if Buyer elects to close as provided in the
immediately foregoing proviso, than notwithstanding the actual number of Closing
Equivalent Subscribers or any other provision of this Agreement, the Estimated
Cash Consideration payable by Buyer at such Closing shall be an amount equal to
Four Hundred Eighty-Four Million Five Hundred Thousand Dollars ($484,500,000)
decreased by the amount of the Closing Net Liabilities pursuant to Section
2.4(b) and adjusted pursuant to Section 2.4(c).
9.3 TERMINATION BY BUYER. This Agreement may be terminated at any time
prior to the Closing by Buyer, and the BII Contribution and purchase and sale of
the Purchased Interests abandoned, upon written notice to Helicon, 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 any Helicon Party has
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 any Charter Party'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 any Charter Party's failure to act in good faith or a
breach of or failure to perform any of its
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representations, warranties, covenants or other obligations in accordance with
the terms of this Agreement.
(c) CLOSING EQUIVALENT SUBSCRIBERS. If the Closing Equivalent
Subscribers shall be less than 150,000.
9.4 EFFECT OF TERMINATION. If this Agreement is terminated as provided
in this Section 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.
(b) WITHDRAWAL OF APPLICATIONS. All filings, applications and
other submissions relating to the consummation of the transaction contemplated
hereby shall, to the extent practicable, be withdrawn from the Governmental
Authority or other Person to whom made.
(c) WILLFUL BREACH BY THE CHARTER PARTIES. No such termination
will relieve Buyer from liability for a willful breach by the Charter Parties of
this Agreement, and in such event the Helicon Parties shall have all rights and
remedies available at law and equity, including the remedy of specific
performance.
(d) WILLFUL BREACH BY THE HELICON PARTIES. No such termination
will relieve the Helicon Parties from liability for a willful breach of this
Agreement, and in such event the Charter Parties shall have all rights and
remedies available at law or equity, including the remedy of specific
performance.
(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 Section 9:
(1) No Charter Party will have any claim or recourse
against Xxxx, any of the Sellers, or any of their or the Helicon Parties'
respective officers, directors, shareholders, partners, employees, agents or
Affiliates (other than the Helicon Companies) as a result of the breach of any
representation, warranty, covenant or agreement of any Helicon Party contained
herein or otherwise arising out of or in connection with the transactions
contemplated by this Agreement or the business or operations of the Helicon
Companies prior to the Closing. The Charter Parties' sole recourse shall be
against the Helicon Companies.
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(2) No Helicon Party will have any claim or recourse
against any of the Charter Parties' respective officers, directors,
shareholders, partners, employees, agents or Affiliates (other than the Charter
Parties) as a result of the breach of any representation, warranty, covenant or
agreement of any Charter Party contained herein or otherwise arising out of or
in connection with the transactions contemplated by this Agreement or the
compliance by the Charter Parties with their covenants prior to the Closing. The
Helicon Parties' sole recourse shall be against the Charter Parties.
9.5 ATTORNEY'S 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).
SECTION 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 Section 10.
10.2 INDEMNIFICATION BY SELLERS. After the Closing, but subject to
Section 10.5, the Sellers agree to indemnify and hold the Charter Parties
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 Helicon or the nonfulfillment of any
covenant to be performed at or prior to Closing by Helicon contained in this
Agreement or any other Transaction Document to which Helicon is a party; and
(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.
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For purposes of this Section 10, each representation and
warranty (whether made as of the date of this Agreement or made on and as of the
Closing Date) contained in this Agreement for which indemnification is sought
hereunder shall be read (including for purposes of determining whether a breach
of such representation or warranty has occurred) without regard to, and as if
such representation or warranty did not contain materiality or Material Adverse
Effect qualifications that may be contained therein (except for representations
and warranties with respect to the delivery of documents to Buyer or the listing
of documents on a Schedule hereto).
10.3 INDEMNIFICATION BY THE CHARTER PARTIES. After the Closing, but
subject to Section 10.5, the Charter Parties jointly and severally agree to
indemnify and hold Sellers harmless against and with respect to, and shall
reimburse Sellers for any and all Losses resulting from any untrue
representation or breach of warranty by any Charter Party or the nonfulfillment
of any covenant by any Charter Party contained in this Agreement or any other
Transaction Document to which such Charter Party is a party.
10.4 INDEMNITY AGREEMENT. At the Closing, Buyer (as agent for and on
behalf of the Charter Parties), Helicon Corp. (as agent for and on behalf of
Sellers), and the Escrow Agent shall execute the Indemnity Agreement, in
accordance with which Buyer will deposit the Indemnity Fund with or, at the
Sellers' option, the Sellers will deliver the Letters of Credit to the Escrow
Agent on the Closing Date in order to provide a fund for, and the exclusive
source for, the payment of any indemnification to which any Charter Party is
entitled under this Section 10 (such escrow, the "INDEMNITY FUND"); PROVIDED,
HOWEVER, that the Indemnity Fund shall not be the exclusive source for the
payment of any indemnification to which any Charter Party is entitled as a
result of a breach of the representations and warranties set forth in Section
4.3 or 4.4.
(a) The Indemnity Fund will be administered in accordance
with the provisions of this Section 10 and the Indemnity Agreement.
(b) On the first business day following the twelve-month
anniversary of the Closing Date, the Indemnity Fund, less any amount subject to
an outstanding claim by the Charter Parties, shall be released from escrow and
paid over to the Partners. Thereafter, any remaining Indemnity Fund shall be
released from escrow and paid over to Sellers, in accordance with the Indemnity
Agreement.
10.5 CERTAIN LIMITATIONS ON INDEMNIFICATION OBLIGATIONS.
Notwithstanding anything in this Agreement to the contrary:
(a) The following limitations shall apply to any of the
Charter Parties or any of the Sellers, as the Claimant, with respect to its
claims against the Sellers or the Charter Parties, as the Indemnifying Party,
for indemnity for matters described in Section
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10.2 or 10.3, as the case may be, other than any claim by Sellers regarding the
nonfulfillment of the Charter Parties' obligation to pay the Cash Consideration
or issue the Preferred LLC Interest (in which event the following limitations
shall not apply):
(1) The Indemnifying Party will not be required to
indemnify or otherwise be liable to the Claimant for matters described in
Section 10.2 or 10.3 (as the case may be) unless and until the aggregate amount
of all Losses of the Claimant arising therefrom for which the Indemnifying Party
would have indemnification liability to the Claimant but for this Section
10.5(a)(1), exceeds, and then only to the extent of the excess above, $400,000;
PROVIDED, HOWEVER, that this Section 10.5(a)(1) shall not apply to any amount
payable to Buyer or Sellers pursuant to Section 2.6, or as a result of a breach
of any of the representations and warranties set forth in Sections 4.3 or 4.4.
(2) No Indemnifying Party will be required to
indemnify or otherwise be liable to the Claimant with respect to any Losses
arising under Section 10.2 or 10.3 (as the case may be) unless the Claimant
gives the Indemnifying Party written notice of a claim pursuant to Section 10.2
or 10.3 (as the case may be) on or prior to the date that is twelve months after
the Closing Date, PROVIDED, that such twelve-month limitation shall not apply in
the case of any breach of any of the representations and warranties set forth in
Sections 4.3 or 4.4; and
(3) Except for a claim of a breach of any of the
representations and warranties set forth in Sections 4.3 and 4.4, the sole and
exclusive remedy available to the Claimant shall be a claim for indemnity
pursuant to the terms of this Section 10.
(4) The amount payable to the Claimant by the
Indemnifying Party in respect of a Loss shall be computed net of any insurance
payments received with respect thereto that reduces the amount of such Loss that
would otherwise be sustained. The parties hereto agree to use commercially
reasonable efforts to collect any and all insurance proceeds to which it may be
entitled in respect of any Loss prior to seeking indemnity as Claimant from the
Indemnifying Party.
(5) No party shall have any liability or obligation
(for indemnification or otherwise) arising as a result of any other party's
waiver of any closing condition, nor shall any adjustment be made to the Cash
Consideration in respect of the foregoing.
(6) No Indemnifying Party will have any liability or
obligation for any inaccuracy in any representation or warranty made by such
party in this Agreement (1) which did not exist as of the date of this Agreement
and which arose other than by reason of any breach by a Indemnifying Party of
any covenant or agreement of
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such party set forth in this Agreement, or (2) if such inaccuracy does not exist
at the time of the Closing.
(b) Notwithstanding anything in this Agreement to the
contrary, the following additional limitations shall apply with respect to
claims against the Sellers, as the Indemnifying Party, by the Charter Parties,
as Claimants, for indemnity for any matter described in Section 10.2:
(1) Anything in this Agreement or applicable law to
the contrary notwithstanding, other than claims (i) with respect to the
Indemnity Fund as provided for in this Agreement and (ii) for breaches of
representations and warranties contained in Sections 4.3 and 4.4, no Seller, its
Affiliates or any of their respective officers, directors, shareholders,
members, partners, employees or agents shall have any obligation or liability to
any Charter Party under this Section 10 or otherwise, and no Charter Party will
have any claim or recourse against Seller, its Affiliates or any of their
respective officers, directors, shareholders, members, partners, employees or
agents as a result of the breach of any representation, warranty, covenant or
agreement of any Helicon Party or any Seller contained herein or otherwise
arising out of or in connection with the transactions contemplated by this
Agreement or the Transaction Documents or the business or operations of the
Helicon Companies prior to the Closing.
(2) All payments required to be made by Sellers or
any Seller in respect of their indemnification obligations under this Section 10
shall be made solely from the Indemnity Fund except for any misrepresentation or
breach by any Seller of any representations and warranties by such Seller in
Section 4.3 or 4.4 hereof, in which event such Seller shall be solely liable
with respect to any indemnity due the Charter Parties under Section 10.2(b)
above.
(3) Sellers shall 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
Section 2.
(4) No Seller will have any liability or obligation
for any inaccuracy in any representation or warranty made by any Helicon Party
in this Agreement which relates to any Excluded Asset.
(5) Sellers shall have no obligation to indemnify or
otherwise be liable to the Charter Parties with respect to any claim for breach
of any representation or warranty by any of the Helicon Parties or otherwise,
arising from any presence of Hazardous Substances on any of the Real Property
described on Schedule 3.9 to the extent that such presence of Hazardous
Substances shall have been disclosed or revealed to the Charter Parties in any
environmental assessments undertaken between the date
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hereof and the Closing Date; PROVIDED, HOWEVER, that notwithstanding the
foregoing, the representations and warranties on environmental matters by
Helicon in Section 3.14, unqualified by the results of such environmental
assessments, shall continue to comprise a closing condition under Section 7.1(a)
hereof.
(6) No Seller will have any liability or obligation
for any untrue representation or breach of warranty with respect to inaccuracy
in any representation or warranty set forth in Section 3.20 that exists as of
the Closing Date that did not exist as of the date of this Agreement.
(c) The foregoing limitations shall not apply with respect
to claims arising following the Closing relating to any breach of the terms of
the Amended LLC Agreement, the Put Agreement, Option Agreement or the release
from Debt Obligations.
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); PROVIDED, HOWEVER,
that the failure to give such notice shall not impair the Claimant's rights
under this Section 10 unless such failure to give such notice shall have
materially impaired the Indemnifying Party's ability to defend against such
third-party claim.
(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
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reimbursement for actual out-of-pocket expenses incurred by the Claimant as the
result of a request by the Indemnifying Party; provided that notwithstanding the
foregoing, if such claim is from a Franchising Authority or other Governmental
Authority and any of the Charter Parties are seeking indemnification against the
Sellers in respect of such claim, the Charter Party may retain control of the
defense of such claim, but the Sellers shall have the right, at their own
expense, to participate in the defense of such claim, and the Charter Party
shall cooperate with the Sellers in defending such claim and keep the Sellers
informed of all material strategies and developments therein. The Charter
Parties may not settle any such claim by a Franchising Authority or other
Governmental Authority for which the Sellers would be liable without the consent
of the Sellers, which shall not be unreasonably withheld. Claimant will not
enter into any settlement of such claim which could result in indemnification
liability without the Indemnifying Party's prior written consent (which shall
not be unreasonably withheld) without the Indemnifying Party's prior written
consent (not to be unreasonably withheld or delayed). Any such settlement will
be binding upon the Charter Parties and Sellers for purposes of determining
whether any indemnification payment is required pursuant to this Section 10.
10.7 TREATMENT OF INDEMNIFICATION PAYMENTS. The Charter Parties and
Sellers will treat all payments made pursuant to this Section 10 (including all
payments made to the Charter Parties out of the Indemnity Fund but excluding the
release of any Indemnity Fund to Sellers) as an adjustment to the Cash
Consideration for all purposes hereof, except to the extent the laws of a
particular jurisdiction provide otherwise, in which case such payments shall be
made in an amount sufficient to indemnify the relevant party on an after-Tax
basis.
SECTION 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. Sellers shall bear and pay any amounts payable to Xxxxxx
Capital Corporation in connection with this Agreement and the transaction
contemplated hereby.
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
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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:
IF TO THE CHARTER PARTIES: Charter Communications, Inc.
00000 Xxxxxxxxxxx Xxxxx, Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx, President & C.E.O.
(with a copy to Xxxxxx X. Xxxx, General Counsel)
Telephone: 000-000-0000
Telecopier: 000-000-0000
with copy (which shall not constitute Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
notice) to: 000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
Telephone: 000-000-0000
Telecopier: 000-000-0000
IF TO HELICON (prior to the Closing) OR HELICON To Helicon Corp.'s address as set forth on Exhibit F
CORP. (after the Closing): hereto.
with copies (which shall not constitute Dow, Xxxxxx & Xxxxxxxxx, PLLC
notice) to: 0000 Xxx Xxxxxxxxx Xxxxxx, X.X.,
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxx X. Xxxx, Esq.
Telephone: 000-000-0000
Telecopier: 202-776-2222
and
Xxxxxx & Company LLC
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxxx
Telephone: 000-000-0000
Telecopier: 000-000-0000
IF TO A SELLER: At the address specified for such Seller on the
attached EXHIBIT F
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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 any Helicon Party
without the prior written consent of the Charter Parties (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 the Charter
Parties without the prior written consent of the Helicon Parties (prior to the
Closing) or the Sellers (after the Closing) (which consent shall not be
unreasonably withheld or delayed); PROVIDED, HOWEVER, that Buyer may assign its
rights, interests or obligations hereunder to an Affiliate without the prior
written consent of the Helicon Parties or the Seller, as the case may be;
PROVIDED, HOWEVER, (i) such assignment does not hinder or delay the consummation
of the transactions contemplated hereby and by the other Transaction Documents
and (ii) Charter may not assign its obligations under Section 6.17, which shall
remain in full force and effect notwithstanding any such assignment. 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. This Agreement is not intended to confer upon any Person other than the
parties hereto any rights or remedies hereunder.
11.4 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).
11.5 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 the Helicon Parties and the Charter Parties
with respect to the subject matter of this Agreement and supersedes all prior
agreements, understandings and negotiations between the parties. The Charter
Parties acknowledge that none of the Helicon Parties has made any, or makes any,
promises, representations, warranties, covenants or undertakings, express or
implied, other than those expressly set forth in this Agreement.
11.6 AMENDMENTS; WAIVER OF COMPLIANCE. 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 any Helicon Party prior to the
Closing only if such amendment or waiver is set forth in a writing executed by
such Helicon Party, (b) will be binding upon Xxxx or each Seller after the
Closing only if such amendment or waiver is set forth in a writing executed by
Xxxx or each Seller, as the case may be, and (c) will be
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binding upon any Charter Party only if such amendment or waiver is set forth in
a writing executed by such Charter Party.
11.7 AGENCY APPOINTMENTS BY THE SELLERS AND THE CHARTER PARTIES.
(a) Each Seller hereby irrevocably constitutes and appoints
Helicon (for all periods prior to the Closing) and Helicon Corp. (for all
periods after the Closing) as the true and lawful attorney-in-fact and agent of
such Seller (in such capacity, Helicon and Helicon Corp. are referred to as
"SELLERS' AGENT"), to act for such Seller in Seller's name, place and stead with
respect to all matters relating to this Agreement and the other Transaction
Documents and all of the transactions contemplated hereby and thereby, including
without limiting the generality of the foregoing, to execute and deliver all
waivers, consents, approvals and notices to and receive all notices provided or
permitted hereby or thereby; to waive, modify or amend any of the terms of this
Agreement and the other Transaction Documents and to make all endorsements
thereon provided or permitted under this Agreement or the other Transaction
Documents; to receive all payments or other funds provided or permitted and to
give all receipts, acquittances, discharges and acknowledgments in respect
thereof; to pay all expenses relating to the transactions contemplated by this
Agreement and the other Transaction Documents; to represent such Seller in any
proceedings hereunder prior to the Closing; to represent such Seller in
indemnification proceedings hereunder; to execute, acknowledge, certify,
deliver, file and/or record any and all instruments and other documents; and to
take any and all other actions in connection with the execution, delivery and
performance of this Agreement and the other Transaction Documents and the
transactions contemplated hereby or thereby as Sellers' Agent, in its sole
discretion, may deem necessary, appropriate or convenient in connection
therewith. Each Seller agrees that any action that may be taken by Helicon under
this Agreement prior to the Closing may be taken by BII, on Helicon's behalf as
its general partner, in Helicon's sole discretion.
(b) Each Charter Party hereby irrevocably constitutes and
appoints Buyer as the true and lawful attorney-in-fact and agent of such Charter
Party (in such capacity, Buyer is referred to as the "CHARTER AGENT"), to act
for such Charter Party in such Charter Party's name, place and stead with
respect to all matters relating to this Agreement and the other Transaction
Documents and all of the transactions contemplated hereby and thereby, including
without limiting the generality of the foregoing, to execute and deliver all
waivers, consents, approvals and notices to and receive all notices provided or
permitted hereby or thereby; to waive, modify or amend any of the terms of this
Agreement and the other Transaction Documents and to make all endorsements
thereon provided or permitted under this Agreement or the other Transaction
Documents; to receive all payments or other funds provided or permitted and to
give all receipts, acquittances, discharges and acknowledgments in respect
thereof; to pay all expenses relating to the transactions contemplated by this
Agreement and the other Transaction Documents; to represent such Charter Party
in any proceedings hereunder prior to the
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Closing; to represent such Charter Party in indemnification proceedings
hereunder; to execute, acknowledge, certify, deliver, file and/or record any and
all instruments and other documents; and to take any and all other actions in
connection with the execution, delivery and performance of this Agreement and
the other Transaction Documents and the transactions contemplated hereby or
thereby as Charter Agent, in its sole discretion, may deem necessary,
appropriate or convenient in connection therewith.
11.8 CONSENT AND AGREEMENT OF SELLERS. Each Seller consents to the
execution, delivery and performance of this Agreement by Helicon, BII, Xxxx and
each other Seller, and to the taking by each other Helicon Party and each
Helicon Company 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 this Agreement may be amended pursuant to Section
11.6.
11.9 SPECIFIC PERFORMANCE. The parties recognize in the event that any
Helicon Party or any Charter Party, as the case may be, should refuse to perform
under the provisions of this Agreement, monetary damages alone will not be
adequate. The Charter Parties and the Helicon Parties shall therefore each be
entitled, in addition to any other remedies which may be available, including
monetary damages, to obtain specific performance of the terms of this Agreement.
In the event of any action to enforce this Agreement specifically, the parties
hereto each waive the defense that there is an adequate remedy at law.
11.10 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 LEFT BLANK;
SIGNATURES ON FOLLOWING PAGES]
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IN WITNESS WHEREOF, this Agreement has been executed by each of the
Helicon Parties and each of the Charter Parties as of the date first written
above.
CHARTER: BUYER:
CHARTER COMMUNICATIONS, INC. CHARTER COMMUNICATIONS, LLC
By: /s/ Xxxxxx X. Xxxx By: /s/ Xxxxxx X. Xxxx
Name: Xxxxxx X. Xxxx Name: Xxxxxx X. Xxxx
Title: Senior Vice President Title: Senior Vice President
GP BUYER: HELICON:
CHARTER HELICON, LLC HELICON PARTNERS I, L.P.
By: XXXX INVESTMENTS, INC., its general
partner
By: /s/Xxxxxx X. Xxxx
Name: Xxxxxx X. Xxxx
Title:: Senior Vice President By: /s/ Xxxxxxxx X. Xxxx
Name: Xxxxxxxx X. Xxxx
Title: President
BII:
XXXX INVESTMENTS, INC.
By: /s/ Xxxxxxxx X. Xxxx
Name: Xxxxxxxx X. Xxxx
Title: President
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LIMITED PARTNERS:
HELICON CORP. HELICON GROUP LTD.
By: /s/ Xxxxxxxx X. Xxxx By: /s/ Xxxxxxxx X. Xxxx
Name: Xxxxxxxx X. Xxxx Name: Xxxxxxxx X. Xxxx
Title: President Title: President
TREDD INVESTORS, a general TREDD INVESTORS TWO, a general
partnership partnership
By: /s/ Xxxxxxxx X. Xxxx By: /s/ Xxxxxxxx X. Xxxx
Name:____________________________ Name:____________________________
Title:___________________________ Title:___________________________
XXXXXXX CABLE CORPORATION GAK CABLE INC.
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxxx Name: Xxxxxxx X. Xxxxxx
Title: President Title: President
XXXXXX CABLE CORP. XXXX INVESTMENTS, INC.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxxxx X. Xxxx
Name: Xxxxxx X. Xxxxxx Name: Xxxxxxxx X. Xxxx
Title: President Title: President
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JOINDER BY XXXXXXXX X. XXXX
The undersigned, Xxxxxxxx X. Xxxx, hereby affirms and evidences his
agreement to the provisions of Section 6.22 of the foregoing Purchase Agreement.
/s/ Xxxxxxxx X. Xxxx Date: March 22, 1999
XXXXXXXX X. XXXX
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TABLE OF CONTENTS
Page No.
--------
SECTION 1: CERTAIN DEFINITIONS 3
1.1 Terms Defined in this Section 3
"Accounts Receivable" 3
"Adjustment Time" 3
"Affiliate" 3
"Amended LLC Agreement" 3
"Assets" 3
"Basic Subscriber" 3
"Xxxx 3
"BII Assets" 3
"Bulk Subscriber" 3
"Cable Act" 4
"Call Agreement" 4
"Charter's Disclosure Schedules" 4
"Charter Parties" 4
"Closing" 4
"Closing Date" 4
"Code" 4
"Compensation Arrangement" 4
"Consents" 5
"Contracts" 5
"Copyright Act" 5
"Employee Plan" 5
"Encumbrances" 5
"Enforceability Exceptions" 5
"Environmental Claim" 5
"Environmental Law" 6
"Equity Interests" 6
"Equivalent Subscribers" 6
"ERISA" 6
"ERISA Affiliate" 6
"Escrow Agent" 7
"Excluded Assets" 7
"FCC" 7
"FCC License" 7
"FCC Regulations" 7
"Franchise" 7
"Franchise Area" 7
-i-
"Franchise/FCC Consent" 7
"Franchising Authorities" 7
"GAAP" 7
"GP Interest" 7
"Governmental Authority" 7
"Hazardous Substance" 8
"HCC" 8
"Helicon Companies" 8
"Helicon Corp." 8
"Helicon's Disclosure Schedules" 8
"Helicon Parties" 8
"HPIAC" 8
"HSR Act" 8
"Indebtedness" 8
"Indemnity Agreement" 9
"Indemnity Fund" 9
"Intangibles" 9
"Legal Requirements" 9
"Legal Restrictions" 9
"Letters of Credit" 9
"Licenses" 9
"Limited Partners" 10
"Loss"or "Losses" 10
"LP Interests" 10
"Management Agreements" 10
"Material Adverse Effect" 10
"Material Contract" 10
"Organizational Documents" 10
"Partners" 10
"Partnership Agreement" 10
"Permitted Encumbrances" 10
"Person" 11
"Preferred Interests" 11
"Preferred LLC Interest" 11
"Purchased Interests" 11
"Rate Regulatory Matter" 11
"Real Property" 12
"Required Consents" 12
"SEC" 12
"Securities Act" 12
"Sellers" 12
"Subordinated Holders" 12
-ii-
"Subscriber" 12
"Subsidiary" 12
"Systems" 13
"Tangible Personal Property" 13
"Tax" 13
"Tax Return" 13
"THGLP" 13
"THGLP Note" 13
"Transaction Documents" 13
"Transferable Xxxxxxxxx Xxxx" 00
"Upset Date" 14
"Warrants" 14
1.2 Terms Defined Elsewhere in this Agreement 14
1.3 Rules of Construction 16
SECTION 2: CONTRIBUTION OF BII ASSETS; SALE AND PURCHASE OF PURCHASED
INTERESTS; CASH CONSIDERATION 16
2.1 Contribution 16
2.2 Agreement to Sell and Buy Purchased Interests 16
2.3 Cash Consideration for LP Interests and Preferred Interests 17
2.4 Cash Consideration Adjustments 17
2.5 Payments at Closing 19
2.6 Post-Closing Payment of Cash Consideration Adjustments 20
SECTION 3: REPRESENTATIONS AND WARRANTIES OF THE HELICON COMPANIES 21
3.1 Organization and Authority of Helicon 21
3.2 Authorization and Binding Obligation 22
3.3 Organization and Ownership of Helicon Companies 22
3.4 Absence of Conflicting Agreements; Consents 23
3.5 Financial Statements 23
3.6 Debt Obligations; Absence of Undisclosed Liabilities 24
3.7 Absence of Certain Changes 24
3.8 Franchises, Licenses, Material Contracts 25
3.9 Title to and Condition of Real Property and Tangible
Personal Property 26
3.10 Intangibles 27
3.11 Information Regarding the Systems 27
3.12 Taxes 29
3.13 Employee Matters 31
3.14 Environmental Laws 33
3.15 Claims and Litigation 33
3.16 Compliance With Laws 34
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3.17 Transactions with Affiliates 34
3.18 Broker 34
3.19 Inventory 34
3.20 Overbuilds 35
3.21 Year 2000 35
3.22 Disconnections 35
3.23 Budgets 36
3.24 Cure 36
SECTION 4: REPRESENTATIONS AND WARRANTIES OF SELLERS 36
4.1 Authority of Sellers; Authorization and Binding Obligation 36
4.2 Absence of Conflicting Agreements; Consents 36
4.3 Title to BII Assets 37
4.4 Title to the LP Interests and the Preferred Interests 37
4.5 Broker 37
4.6 Investment Purpose 37
4.7 Cure 37
SECTION 5: REPRESENTATIONS AND WARRANTIES OF THE CHARTER PARTIES 38
5.1 Organization; Authorization and Binding Obligation 38
5.2 Authorization and Binding Obligation 38
5.3 Absence of Conflicting Agreements; Consents 39
5.4 Capital Structure and Operations of GP Buyer 39
5.5 Claims and Litigation 39
5.6 Financial Statements 40
5.7 Investment Purpose; Investment Company 40
5.8 Availability of Preferred LLC Interest and Funds 40
5.9 Broker 40
5.10 Cure 40
SECTION 6: SPECIAL COVENANTS AND AGREEMENTS 41
6.1 Operation of Business Prior to the Closing 41
6.2 Confidentiality; Press Release 44
6.3 Cooperation: Commercially Reasonable Efforts 45
6.4 Consents 45
6.5 HSR Act Filing 47
6.6 Ability to Consummate Transactions 47
6.7 Continuation or Refinancing of the Debt Obligations 48
6.8 Retention and Access to the Helicon Companies'Records 48
6.9 Purchase and Exercise of Warrants 48
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6.10 Tax Matters 49
6.11 Helicon Name 52
6.12 Releases 52
6.13 Exculpation and Indemnification 53
6.14 Employee Matters 53
6.15 Assignment of Certain Arrangements with Affiliates 54
6.16 Put 54
6.17 Guaranty by Charter 55
6.18 Disclosure Schedules 56
6.19 Further Assurances 56
6.20 Environmental Reports 56
6.21 Year 2000 Matters 56
6.22 Representations, Warranties and Covenants of Xxxx 56
SECTION 7: CONDITIONS TO OBLIGATIONS OF THE CHARTER PARTIES AND SELLERS 58
7.1 Conditions to Obligations of the Charter Parties 58
7.2 Conditions to Obligations of Sellers 59
SECTION 8: CLOSING AND CLOSING DELIVERIES 60
8.1 Closing 60
8.2 Delivery by Sellers 61
8.3 Delivery by the Charter Parties 63
SECTION 9: TERMINATION 64
9.1 Agreement between Helicon and Buyer 64
9.2 Termination by Helicon 64
9.3 Termination by Buyer 65
9.4 Effect of Termination 66
9.5 Attorney's Fees 67
SECTION 10: SURVIVAL OF REPRESENTATIONS AND WARRANTIES;INDEMNIFICATION;
CERTAIN REMEDIES 67
10.1 Survival 67
10.2 Indemnification by Sellers 67
10.3 Indemnification by the Charter Parties 68
10.4 Indemnity Agreement 68
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10.5 Certain Limitations on Indemnification Obligations 68
10.6 Procedure for Indemnification 71
10.7 Treatment of Indemnification Payments 72
SECTION 11: MISCELLANEOUS 72
11.1 Fees and Expenses 72
11.2 Notices 72
11.3 Benefit and Binding Effect 73
11.4 GOVERNING LAW 74
11.5 Entire Agreement 74
11.6 Amendments; Waiver of Compliance 74
11.7 Agency Appointments by the Sellers and the Charter Parties 75
11.8 Consent and Agreement of Sellers 76
11.9 Specific Performance 76
11.10 Counterparts 00
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XXXXXXXX AGREEMENT
DATED MARCH 22, 1999
AMONG
CHARTER COMMUNICATIONS, INC.,
CHARTER COMMUNICATIONS, LLC,
CHARTER HELICON, LLC,
HELICON PARTNERS I, L.P.,
XXXX INVESTMENTS, INC., AND
HELICON'S LIMITED PARTNERS
===============================================
LIST OF EXHIBITS AND SCHEDULES
(THE FOLLOWING EXHIBITS AND SCHEDULES HAVE BEEN OMITTED AND WILL BE
SUPPLEMENTALLY PROVIDED TO THE SECURITIES AND EXCHANGE
COMMISSION UPON THEIR REQUEST.)
-----------------------------------------------
EXHIBITS:
Exhibit A -- Form of Amended LLC Agreement
Exhibit B -- Excluded Assets
Exhibit C -- Form of Indemnity Agreement
Exhibit D -- Form of Release of Debt Obligations
Exhibit E -- Form of Put Agreement
Exhibit F -- Sellers' Addresses
SCHEDULES:
Schedule 3.3 -- Ownership of the Helicon Companies
Schedule 3.4 -- Helicon Conflicts; Consents
Schedule 3.5 -- Financial Statements
Schedule 3.6 -- Debt Obligations
Schedule 3.7 -- Occurrence of Certain Changes
Schedule 3.8 -- Franchises, Licenses, Contracts
Schedule 3.9 -- Real Property and Tangible Personal Property;
Encumbrances
Schedule 3.10 -- Intangibles
Schedule 3.11 -- Systems Information
Schedule 3.12 -- Tax Matters
Schedule 3.13 -- Employee Matters
Schedule 3.14 -- Environmental Matters
Schedule 3.15 -- Claims and Litigation
Schedule 3.16 -- Compliance with Laws
Schedule 3.17 -- Transactions with Affiliates
Schedule 3.20 -- Overbuilds
Schedule 3.22 -- Disconnections
Schedule 3.23 -- Budgets
Schedule 4.2 -- Sellers' Conflicts; Consents
Schedule 5.3 -- Charter Consents
Schedule 5.5 -- Claims and Litigation
Schedule 5.6 -- Charter Financial Statements
Schedule 6.1 -- Ordinary Course Operations and Permitted
Exceptions
