Exhibit 10.8
PURCHASE AND SALE AGREEMENT
by and among
NCAA HOLDINGS, INC.
and
HILTON HEAD COMMUNICATIONS, L.P.
and
OLYMPUS COMMUNICATIONS, L.P.
and
OLYMPUS COMMUNICATIONS HOLDINGS, L.L.C.
TABLE OF CONTENTS
Page
ARTICLE I PURCHASE AND SALE OF PARTNERSHIP INTERESTS.............................................................2
1.1 Transfer and Sale of National General Partnership Interest.......................................2
1.2 Transfer and Sale of National Limited Partnership Interest.......................................2
1.3 Transfer of TMIP Limited Partnership Interest....................................................2
ARTICLE II PURCHASE PRICE; CLOSING DATE..........................................................................3
2.1 Purchase Price...................................................................................3
2.2 Allocation of Purchase Price; Section 754 Election; Other Tax Matters............................3
2.3 Adjustment to Purchase Price.....................................................................3
2.4 Expenses.........................................................................................4
2.5 Closing; Date and Location.......................................................................4
ARTICLE III REPRESENTATIONS AND WARRANTIES.......................................................................5
3.1 Organization.....................................................................................5
3.2 Authorization of Agreement.......................................................................5
3.3 Title to National General Partnership Interest...................................................5
3.4 Litigation.......................................................................................6
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF HHC.................................................................6
4.1 Organization.....................................................................................6
4.2 Authorization of Agreement.......................................................................6
4.3 Title to National Limited Partnership Interest...................................................7
4.4 Litigation.......................................................................................7
ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLERS..............................................................7
5.1 Financial Statements.............................................................................7
5.2 Franchises.......................................................................................8
5.3 Compliance with Laws.............................................................................9
5.4 Subscribers......................................................................................9
5.5 Taxes............................................................................................9
5.6 No Adverse Change...............................................................................10
5.7 Compliance with FCC and Other Requirements......................................................10
5.8 Non-Infringement................................................................................12
5.9 Accounts Receivable.............................................................................12
5.10 Litigation.....................................................................................12
5.11 Insurance......................................................................................12
5.12 Partnership Assets.............................................................................13
5.13 Employee Benefits..............................................................................13
5.14 Accuracy of Information........................................................................15
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF OLYMPUS............................................................15
6.1 Organization....................................................................................15
6.2 Authorization of Agreement......................................................................16
6.3 Litigation......................................................................................16
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF OLYMPUS HOLDINGS..................................................16
7.1 Organization....................................................................................16
7.2 Authorization of Agreement......................................................................17
7.3 Litigation......................................................................................17
ARTICLE VIII CONDUCT OF BUSINESS PENDING CLOSING; HSR ACT FILING................................................17
8.1 Maintenance of Business.........................................................................17
8.2 Consummation of Agreement.......................................................................17
8.3 HSR Act Filing..................................................................................18
ARTICLE IX CONDITIONS TO CLOSING - BUYERS.......................................................................18
9.1 Conditions to Obligations of Buyers.............................................................18
ARTICLE X CONDITIONS TO CLOSING - SELLERS.......................................................................19
10.1 Conditions to Obligations of Sellers...........................................................19
ARTICLE XI CLOSING 20
11.1 Actions to be taken by Sellers at Closing......................................................20
11.2 Actions to be taken by Buyers at Closing.......................................................20
ARTICLE XII INDEMNIFICATION.....................................................................................20
12.1 Survival of Representations and Warranties.....................................................20
12.2 Indemnification................................................................................20
12.3 Indemnification with Respect to Third-Party Claims.............................................21
ARTICLE XIII TERMINATION........................................................................................24
13.1 Termination by Mutual Agreement................................................................24
13.2 Buyers' Default................................................................................25
13.3 Sellers' Default...............................................................................25
13.4 Termination by Buyer or Seller.................................................................25
ARTICLE XIV NOTICE 25
14.1 Addresses for Notice...........................................................................25
14.2 Effectiveness of Notice........................................................................27
ARTICLE XV LAWS GOVERNING;VENUE.................................................................................27
ARTICLE XVI MISCELLANEOUS........................................................................................27
16.1 Counterparts...................................................................................27
16.2 Assignment.....................................................................................28
16.3 Entire Agreement...............................................................................28
16.4 Captions.......................................................................................28
16.5 Expenses.......................................................................................28
16.6 Confidentiality................................................................................28
16.7 Further Assurances.............................................................................28
16.8 No Waiver......................................................................................29
16.9 Severability...................................................................................29
16.10 Binding Effect................................................................................29
16.11 WAIVER OF JURY TRIAL..........................................................................29
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made this 23rd day of December, 1997, by and
among NCAA Holdings, Inc., a Delaware corporation ("NCAA"), Hilton Head
Communications, L.P., a Delaware limited partnership ("HHC") (NCAA and HHC are
sometimes hereinafter referred to as the "Sellers"), Olympus Communications,
L.P., a Delaware limited partnership ("Olympus"), and Olympus Communications
Holdings, L.L.C., a Delaware limited liability company ("Olympus Holdings")
(Olympus and Olympus Holdings are sometimes hereinafter referred to as the
"Buyers").
WITNESSETH:
WHEREAS, NCAA owns a one percent (1%) general partnership
interest (the "National General Partnership Interest") in National Cable
Acquisition Associates, L.P., a Delaware limited partnership (the "Partnership);
and
WHEREAS, HHC owns a ninety-nine percent (99%) limited
partnership interest (the "National Limited Partnership Interest") in the
Partnership (the National General Partnership Interest and the National Limited
Partnership Interest sometimes are referred to herein collectively as the
"Partnership Interests"); and
WHEREAS, subject to the terms and conditions of this
Agreement, NCAA desires to sell, and Olympus desires to purchase, the National
General Partnership Interest; and
WHEREAS, subject to the terms and conditions of this
Agreement, HHC desires to sell the National Limited Partnership Interest, and
Olympus and Olympus Holdings each desire to purchase that portion of the
National Limited Partnership Interest such that immediately following the
Closing (as defined below) Olympus will have a ninety-eight and nine tenths
percent (98.9%) limited partnership interest in the Partnership (a "98.9%
National Limited Partnership Interest") and Olympus Holdings will have a one
tenth percent (.1%) limited partnership interest in the Partnership (a ".1%
National Limited Partnership Interest"); and
WHEREAS, HHC owns a limited partnership interest (the "TMIP
Limited Partnership Interest") in Tele-Media Investment Partnership, L.P., a
Delaware limited partnership ("TMIP"); and
WHEREAS, on or prior to the Closing Date (as defined in
Section 2.5), HHC will assign and transfer to the Partnership the TMIP Limited
Partnership Interest.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements contained herein, and intending to be legally
bound hereby, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF PARTNERSHIP INTERESTS
1.1 Transfer and Sale of National General Partnership Interest.
On the Closing Date, NCAA shall sell, assign and transfer to
Olympus, and Olympus shall purchase and acquire from NCAA, all of the National
General Partnership Interest, (including, without limitation, all of its rights,
title and interests as a general partner in the Partnership and all of its
rights, title and interests in and to the net profits and net losses of the
Partnership, its capital account in the Partnership, all rights to fees and
reimbursement of expenses and all distributions of cash or other property that
may be made by the Partnership, all with respect thereto) free and clear of any
and all liens, encumbrances, pledges, options, charges or restrictions of any
nature except for Permitted Liens (as defined in Section 3.3).
1.2 Transfer and Sale of National Limited Partnership Interest.
On the Closing Date, HHC shall sell, assign and transfer to:
(a) Olympus, and Olympus shall purchase and acquire, free and
clear of any and all liens, encumbrances, pledges, options, charges or
restrictions of any nature except for Permitted Liens, that portion of the
National Limited Partnership Interest (including, without limitation, all of its
rights, title and interests as a limited partner in the Partnership and all of
its rights, title and interests in and to the net profits and net losses of the
Partnership, its capital account in the Partnership, all rights to fees and
reimbursement of expenses and all distributions of cash or other property that
may be made by the Partnership, all with respect thereto) necessary so that
immediately following the Closing Olympus will have a 98.9% National Limited
Partnership Interest; and
(b) Olympus Holdings, and Olympus Holdings shall purchase and
acquire, free and clear of any and all liens, encumbrances, pledges, options,
charges or restrictions of any nature except for Permitted Liens, that portion
of the National Limited Partnership Interest (including, without limitation, all
of its rights, title and interests as a limited partner in the Partnership and
all of its rights, title and interests in and to the net profits and net losses
of the Partnership, its capital account in the Partnership, all rights to fees
and reimbursement of expenses and all distributions of cash or other property
that may be made by the Partnership, all with respect thereto) necessary so that
immediately following the Closing Olympus Holdings will have a .1% National
Limited Partnership Interest.
1.3 Transfer of TMIP Limited Partnership Interest.
On or before the Closing Date, HHC shall assign and transfer
to the Partnership the TMIP Limited Partnership Interest (including, without
limitation, all of its rights, title and interests as a limited partner in TMIP
and all of its rights, title and interests in and to the net profits and net
losses of TMIP, its capital account in TMIP, all rights to fees and
reimbursement of expenses and all distributions of cash or other property that
may be made by TMIP, all with respect thereto), free and clear of any and all
liens, encumbrances, pledges, options, charges or restrictions of any nature
except for Permitted Liens.
ARTICLE II
PURCHASE PRICE; CLOSING DATE
2.1 Purchase Price.
At the Closing, in consideration of the sale of the
Partnership Interests,Buyers shall pay to Sellers One Hundred Eighteen Million
Dollars ($118,000,000.00) (the "Purchase Price"), subject to adjustment as
provided in Section 2.3 below. The amount of the Purchase Price to be paid at
the Closing by each of Olympus and Olympus Holdings shall be determined by the
mutual agreement of Olympus and Olympus Holdings.
2.2 Allocation of Purchase Price; Section 754 Election; Other Tax
Matters.
(a) The Purchase Price shall be allocated among the
Partnership's assets in the manner mutually agreed to by all of the parties on
the Closing Date and shall be set forth on Schedule 2.2. The allocation of the
Purchase Price among the Partnership's assets agreed to by the parties shall be
used for all purposes by the parties. The Sellers shall cause the Partnership to
file on a timely basis elections under Section 754 of the Internal Revenue Code
of 1986, as amended (the "Code"), on the federal income tax returns of the
Partnership for the taxable year of the Partnership ending on the Closing Date
and, to the extent necessary, comparable elections on the state income tax
returns of the Partnership, copies of all such returns and any extensions of
time to file such returns shall be provided to the Buyers upon the filing of
such returns and extensions. The provisions of this Section shall survive the
consummation of the transactions contemplated by this Agreement.
(b) For all taxable periods of the Partnership that end on or
before the Closing Date, the Sellers shall cause to be prepared and filed with
all applicable authorities all Tax returns, reports and forms required to be
filed.
2.3 Adjustment to Purchase Price.
The Purchase Price shall be: (i) decreased by an amount equal
to the Net Liability Adjustment (as hereinafter defined) to the extent such Net
Liability Adjustment is a negative amount as of October 1, 1997 or (ii)
increased by an amount equal to the Net Liability Adjustment to the extent such
Net Liability Adjustment is a positive amount as of October 1, 1997. For
purposes hereof, the Net Liability Adjustment shall be the number obtained by
subtracting (x) the sum of all liabilities of the Partnership (as defined and
determined in accordance with generally accepted accounting principles ("GAAP"))
on October 1, 1997, from (y) the sum of the current assets of the Partnership
(as defined and determined in accordance with GAAP) on October 1, 1997. The Net
Liability Adjustment shall be determined on the Closing Date by the mutual
agreement of the parties and shall be in accordance with GAAP. In the event the
parties do not mutually agree upon the Net Liability Adjustment on the Closing
Date, on or before 60 days after the Closing Date, Sellers shall deliver to
Buyers a final calculation of the Net Liability Adjustment (the "Final
Calculation"), together with such supporting documentation as Buyers may
reasonably request. Should Buyers dispute Sellers' Final Calculation, Buyers
shall promptly, but in no event later than 45 days after receipt of the Final
Calculation (the "Grace Period"), deliver to Sellers written notice describing
in reasonable detail the dispute, together with Buyers' determination as to the
Final Calculation in reasonable detail. If the dispute is not resolved by the
parties within 20 days from the date of receipt by Sellers of written notice
from Buyers, the parties agree to engage promptly the Pittsburgh, Pennsylvania
office of Price Waterhouse or, if unavailable, another "big five" accounting
firm mutually acceptable to Sellers and Buyers (the "Independent Accountant") to
resolve the dispute within 30 days after such engagement. The Independent
Accountant's determination shall be final and binding on the parties. All fees
and costs of the Independent Accountant shall be borne equally by Buyers and
Sellers. Buyers shall not dispute Sellers' Final Calculation unless Sellers'
computation of the Final Calculation differs from Buyers' computation by more
than $1,000.00. If Buyers fail to notify Seller prior to the expiration of the
Grace Period that it disputes Sellers' Final Calculation, Sellers' Final
Calculation shall be deemed to be accepted by Buyers and shall be final and
binding on the parties.
2.4 Expenses.
Any transfer, documentary, sales, use, registration, and other
such Taxes (as defined below) and related penalties, interest or additions
thereto, and recording or filing fees imposed upon the sale, assignment and
delivery of the Partnership Interests and the other transactions contemplated
hereby shall be paid by the Sellers.
2.5 Closing; Date and Location.
The consummation of the transfer of the Partnership Interests
to Buyers and the receipt of the consideration therefor by Sellers shall
constitute the "Closing." Unless otherwise mutually agreed to by the parties,
the Closing shall take place at 10:00 a.m., local time, at the offices of
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Professional Corporation, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. The parties agree to close the transactions contemplated
by this Agreement within five (5) days after all of the conditions to Closing
have been satisfied or waived, whichever shall later occur, which specified date
and time shall constitute the "Closing Date." The effective date of the sale of
the Partnership Interests shall be October 1, 1997. Notwithstanding the
foregoing, this Agreement may be terminated pursuant to Section 13.4 hereof if
the Closing has not occurred by September 30, 1998.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF NCAA
NCAA REPRESENTS AND WARRANTS TO BUYERS THAT THE FOLLOWING STATEMENTS
AND REPRESENTATIONS ARE TRUE AND CORRECT AS OF THE DATE HEREOF
AND WILL ALSO BE TRUE AND CORRECT ON THE CLOSING DATE, AS
FOLLOWS:
3.1 Organization.
NCAA is a corporation, duly organized and validly existing
under the laws of the State of Delaware with full power and authority to engage
in its business and operations, to enter into this Agreement and perform the
terms of this Agreement. NCAA is duly qualified to conduct business and is in
good standing in those jurisdictions where the conduct of its business or the
nature of its assets makes such qualification necessary.
3.2 Authorization of Agreement.
The Board of Directors of NCAA has taken all necessary
corporate action to authorize and approve as to NCAA individually and as a
general partner of HHC this Agreement, the consummation of the transactions
contemplated hereby and the performance by NCAA of all of the terms and
conditions hereof on its part to be performed. The execution and delivery of
this Agreement, the consummation of the transactions contemplated hereby and the
fulfillment and compliance with the terms and conditions hereof do not and will
not: (a) violate any provisions of any judicial or administrative order, award,
judgment or decree applicable to NCAA; (b) conflict with, result in a breach of
or constitute a default under the Certificate of Incorporation or By-laws of
NCAA or any other agreement or instrument to which NCAA is a party or by which
NCAA is bound; (c) create or impose any lien, charge, encumbrance, or
restriction upon the National General Partnership Interest in contravention of
any agreement or instrument to which NCAA is a party or by which NCAA is bound;
or (d) create a right in any person to accelerate payment of the principal of
any indebtedness due from NCAA nor increase the amount of any interest over that
theretofore payable in respect thereof. This Agreement has been duly authorized,
executed and delivered by NCAA and constitutes a legal, valid and binding
obligation of NCAA. All of the approvals and consents required for NCAA to
consummate the transactions contemplated hereby have been obtained.
3.3 Title to National General Partnership Interest.
NCAA has good and valid title to the National General
Partnership Interest, and NCAA has full power, authority and right to transfer
the National General Partnership Interest free and clear of any and all liens,
charges, pledges, options, encumbrances or restrictions of any nature except for
liens, charges, pledges, encumbrances and restrictions under (a) that certain
Credit Agreement dated December 27, 1994, among HHC as borrower, the Lenders
from time to time parties thereto, Canadian Imperial Bank of Commerce, acting
through its New York agency ("CIBC-NYA") and The Toronto-Dominion Bank ("TD") as
Managing Agents, CIBC-NYA, as Documentation Agent, TD, as Syndication Agent,
First Union National Bank of North Carolina and Societe Generale, as Agents,
Credit Lyonnais, as Co-Agent and CIBC-NYA, as Administrative Agent (as the same
may be hereafter supplemented, replaced, modified or amended from time to time)
and (b) the Limited Partnership Agreement of the Partnership (collectively,
"Permitted Liens").
3.4 Litigation.
There is no litigation, at law or in equity, nor any
proceedings before any commission or other governmental authority, pending, or
to the best of NCAA's knowledge, threatened against NCAA which would prevent or
restrict NCAA's right or ability to consummate the transfer of the National
General Partnership Interest as contemplated herein.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF HHC
HHC REPRESENTS AND WARRANTS TO BUYERS THAT THE FOLLOWING STATEMENTS
AND REPRESENTATIONS ARE TRUE AND CORRECT AS OF THE DATE HEREOF
AND WILL ALSO BE TRUE AND CORRECT ON THE CLOSING DATE, AS
FOLLOWS:
4.1 Organization.
HHC is a limited partnership duly formed and validly existing
under the laws of the State of Delaware with full power and authority to engage
in its business and operations, to enter into this Agreement and perform the
terms of this Agreement. NCAA is the sole general partner of HHC. HHC is duly
qualified to conduct business and is in good standing in those jurisdictions
where the conduct of its business or the nature of its assets makes such
qualification necessary.
4.2 Authorization of Agreement.
HHC has taken all necessary partnership action to authorize
and approve this Agreement, the consummation of the transactions contemplated
hereby and the performance by HHC of all of the terms and conditions hereof on
its part to be performed. The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and the fulfillment and
compliance with the terms and conditions hereof do not and will not: (a) violate
any provisions of any judicial or administrative order, award, judgment or
decree applicable to HHC; (b) conflict with, result in a breach of or constitute
a default under the Limited Partnership Agreement of HHC or any other agreement
or instrument to which HHC is a party or by which HHC is bound; (c) create or
impose any lien, charge, encumbrance, or restriction upon the National Limited
Partnership Interest in contravention of any agreement or instrument to which
HHC is a party or by which HHC is bound; or (d) create a right in any person to
accelerate payment of the principal of any indebtedness due from HHC nor
increase the amount of any interest over that theretofore payable in respect
thereto. This Agreement has been duly authorized, executed and delivered by HHC
and constitutes a legal, valid and binding obligation of HHC. All of the
approvals and consents required for HHC to consummate the transactions
contemplated hereby have been obtained.
4.3 Title to National Limited Partnership Interest.
HHC has good and valid title to the National Limited
Partnership Interest, and HHC has full power, authority and right to transfer
the National Limited Partnership Interest free and clear of any and all liens,
charges, pledges, options, encumbrances or restrictions of any nature except for
Permitted Liens.
4.4 Litigation.
There is no litigation, at law or in equity, nor any
proceedings before any commission or other governmental authority, pending, or
to the best of HHC's knowledge, threatened against HHC which would prevent or
restrict HHC's right or ability to consummate the transfer of the National
Limited Partnership Interest as contemplated herein.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLERS
SELLERS JOINTLY AND SEVERALLY REPRESENT AND WARRANT TO BUYERS THAT THE
FOLLOWING STATEMENTS AND REPRESENTATIONS ARE TRUE AND CORRECT AS OF THE DATE
HEREOF AND WILL ALSO BE TRUE AND CORRECT ON THE CLOSING DATE, AS FOLLOWS:
5.1 Financial Statements.
True, complete and correct copies of the unaudited balance
sheet of the Partnership as of December 31, 1996, and the related statement of
income for the fiscal year ended December 31, 1996, and the unaudited balance
sheet of the Partnership as at September 30, 1997, and the related statement of
income for the nine month period ended September 30, 1997, certified by the
Partnership's Chief Financial Officer are attached as Schedule 5.1. Such
financial statements accurately reflect the income, expenses, liabilities,
equity and assets of the Partnership at the date thereof. The above-referenced
financial statements, including the notes thereto, if any: (a) are in accordance
with the respective books and records of the Partnership; (b) are true and
correct and, subject to normal year-end adjustments, present fairly the
financial condition of the Partnership as of the date of such financial
statements and its results of operations for the periods then ended; and (c)
except as indicated in the notes to such financial statements, have been
prepared in accordance with GAAP, consistently applied with prior periods, and
can be reconciled with the financial records maintained, and the accounting
methods applied, by the Partnership for Tax (as defined below) purposes. Except
as provided in such financial statements, or as fully disclosed in Schedule 5.1,
the Partnership has no liabilities or obligations (whether accrued, absolute,
contingent, whether due or to become due or otherwise) which might be or become
a charge against the assets of the Partnership, including any "loss
contingencies" considered "probable" or "reasonably possible" within the meaning
of the Financial Accounting Standard Board's Statement of Financial Accounting
Standards No. 5, except trade payables and similar liabilities and obligations
incurred in the ordinary and regular course of business since the date of such
financial statements.
5.2 Franchises.
(a) Listed and identified on Schedule 5.2 attached hereto are
all of the existing governmental authorizations for construction, maintenance
and operation of the CATV systems of the Partnership (individually, a
"Franchise" and collectively, the "Franchises") presently held by the
Partnership and the political entity or authority which has granted each
Franchise. All governmental authorizations necessary or required for the
construction, maintenance and operation of the CATV systems of the Partnership
have been obtained by the Partnership, and are listed and identified in Schedule
5.2. All such agreements, statutes, ordinances, resolutions, licenses or permits
granting the Franchises are validly existing, legally enforceable obligations of
the Partnership and, to the best knowledge of Sellers, are validly existing,
legally enforceable obligations of the other parties thereto, in accordance with
their terms, granted and renewed in accordance with all applicable federal,
state and local laws, and the Partnership is validly and lawfully operating
under the provisions of the franchises and applicable law. Further, the
Partnership has obtained in accordance with all federal, state and local laws
all Franchises required for the lawful operation of the CATV systems of the
Partnership. Except as set forth on Schedule 5.2, none of the political entities
or authorities which have granted a Franchise have been, or have applied to be,
certified to regulate the CATV rates charged by the Partnership pursuant to the
Cable Television Consumer Protection and Competition Act of 1992 and the Rules
and Regulations of the Federal Communications Commission ("FCC").
Each of the Franchises expires on the dates set forth on
Schedule 5.2 attached hereto. The Partnership has duly complied with all of the
terms and conditions of the Franchises and has not done or performed any act
which would invalidate or impair its rights under, or give to the granting
authority the right to terminate, the Franchises. There is no pending assertion
or claim that operations pursuant to any Franchise have been improperly
conducted or maintained. All construction of distribution plant required by any
of the Franchises has been completed in accordance with the terms of such
Franchise.
(b) True, complete and correct copies of the Franchises, all
amendments, assignments and consents thereto and the latest rate change
approval, if any, to the date hereof have been delivered by Sellers to Buyers.
(c) All of the approvals and consents required by the
Franchises to consummate the transactions contemplated by this Agreement have
been obtained by the Partnership.
5.3 Compliance with Laws.
The Partnership is in compliance in all material respects with
all applicable foreign, federal, state and local laws, rules, regulations,
orders, writs, injunctions, ordinances or decrees of any governing authority,
federal, state or local court, or of any municipal or governmental departments,
commission, board, bureau, agency or municipality having jurisdiction over it or
its CATV systems.
5.4 Subscribers.
As of October 1, 1997, the Partnership had 57,606 Equivalent
Basic Subscribers and, as of the Closing Date, there shall not be less than
57,447 Equivalent Basic Subscribers. The term "Equivalent Basic Subscribers"
shall mean the number obtained by adding (i) the number of first outlet
residential subscribers for basic CATV service of the Partnership who have made
at least one monthly payment for service at the normal monthly rate for basic
service, to (ii) the result obtained by dividing the aggregate of the gross
monthly billing from bulk subscribers who have made at least one monthly payment
for service at the normal monthly rate by $11.95.
5.5 Taxes.
The Partnership has (i) duly filed all federal, state, local
and foreign tax returns and other reports required to be filed, and has timely
paid and will pay all Taxes (as defined below) with respect to its businesses
that have become or may become due and payable by it except such amounts as are
being contested diligently and in good faith and are not in the aggregate
material and (ii) received no written notice of, nor do the Sellers have any
knowledge of, any notice of deficiency or assessment, or proposed deficiency or
assessment, from any taxing authority with respect to the Partnership's
businesses. There are no property, sales, use or franchise fee or tax audits
pending with respect to the Partnership's businesses.
There are no unpaid Taxes which are or could become a lien on
the Partnership's assets, nor are there any Tax liens filed against the
Partnership's assets. There are no outstanding agreements or waivers extending
the statutory period of limitations applicable to any items of Taxes of the
Partnership, and neither the Partnership nor its partners have requested any
extension of time within which to file any Tax return, which return has not yet
been filed. Neither the Partnership nor the Sellers have been notified that any
taxing authority intends to audit the Partnership. The earliest year for which
the Internal Revenue Service may assess deficiencies against the Partnership is
1994. The charges, accruals and reserves with respect to Taxes on the books of
the Partnership are adequate (as determined in accordance with GAAP). All Taxes
that the Partnership is or was legally required to withhold or collect have been
duly withheld or collected and, to the extent required, have been paid to the
proper governmental authority. All individuals that the Partnership treats as
independent contractors are not "employees" (within the meaning of Section
3121(d)(2)(1) of the Code or Section 3(6) of ERISA) for purposes of any federal,
state or local Taxes. There is no dispute or claim as to Tax liability of any
other person or entity as to which the Partnership may be liable or have an
indemnification obligation.
"Tax" or "Taxes" means all levies and assessments of any kind
or nature imposed by any governmental authority including, but not limited to,
all income, sales, use, ad valorem, value added, franchise, severance, net or
gross proceeds, withholding, payroll, employment, regulatory assessments, gross
receipts, occupation, excise or property taxes, together with any interest
thereon and any penalties, additions to Tax or additional amounts applicable
thereto.
5.6 No Adverse Change.
There has been no material adverse change in the assets or
financial condition or operations of the Partnership or its businesses since
September 30, 1997 other than changes arising from matters of a general economic
nature or matters caused by or arising from legislation, rulemaking or
regulation affecting the cable television industry generally, and since
September 30, 1997, the assets and financial condition and operations of the
Partnership and its businesses have not been materially and adversely affected
as a result of any fire, explosion, accident, casualty, labor trouble, flood,
drought, riot, storm, condemnation or act of God or public force, or otherwise.
5.7 Compliance with FCC and Other Requirements.
5.7.1 The Partnership is permitted under all applicable
Franchises and FCC rules, regulations and orders to distribute the transmissions
(whether television, satellite, radio or otherwise) of video programming or
other information that the Partnership makes available to subscribers of its
CATV systems and to utilize all carrier frequencies generated by the operation
of its CATV systems, and is licensed to operate all the facilities required by
law to be licensed including, without limitation, any business radio and any
cable television relay service system being operated as part of the
Partnership's CATV systems. No written requests have been received by the
Partnership during the three years preceding the date of this Agreement from the
FCC, the United States Copyright Office or any other person or entity
challenging or questioning the right of the Partnership to operate its CATV
systems or any FCC-licensed or registered facility used in conjunction with the
Partnership's operation of its CATV systems. Except for such noncompliance that
would not, individually or in the aggregate, have a material adverse effect on
the Partnership or operation of its CATV systems, the Partnership's operation of
its CATV systems is in compliance with the FCC's rules and regulations and the
provisions of the Communications Act of 1934, as amended. The Partnership has
not violated any laws or any duty or obligation with regard to protecting the
privacy rights of any past or present subscribers of the Partnership's CATV
systems.
5.7.2 The Partnership has conducted all system and microwave
performance tests and all Cumulative Leakage Index ("CLI") related tests
required with respect to its CATV systems. The Partnership has (i) maintained
appropriate log books and other recordkeeping which accurately reflect in all
material respects all results required to be shown thereon; (ii) to the extent
required by the rules and regulations of the FCC, corrected any radiation
leakage of its CATV systems required to be corrected in connection with the
Partnership's monitoring obligations under the rules and regulations of the FCC
and (iii) otherwise complied with all applicable CLI rules and regulations in
connection with the operation of its CATV systems, except for such noncompliance
that would not, individually or in the aggregate, have a material adverse effect
on the Partnership or operation of its CATV systems.
5.7.3 The Partnership has deposited with the United States
Copyright Office all statements of account and other documents and instruments,
and paid all royalties, supplemental royalties, fees and other sums to the
United States Copyright Office required under the Copyright Act with respect to
the business and operation of its CATV systems as are required to obtain, hold
and maintain the compulsory copyright license for cable television systems
prescribed by Section 111 of the Copyright Act. The Partnership is in compliance
with the Copyright Act and the rules and regulations of the Copyright Office
with respect to operation of its CATV systems except for such noncompliance that
would not, individually or in the aggregate, have a material adverse effect on
the Partnership or operation of its CATV systems. The Partnership is entitled to
hold and does hold the compulsory copyright license described in Section 111 of
the Copyright Act, which compulsory copyright license is in full force and
effect and has not been revoked, canceled, encumbered or adversely affected in
any manner.
5.74 All broadcast television signals carried by the
Partnership's CATV systems are carried either pursuant to the must-carry
requirements or pursuant to executed retransmission consent agreements.
5.7.5 The operation of the Partnership's CATV systems has not
and does not violate the Communications Act of 1984, as amended, the Cable
Communications Policy Act of 1984, as amended, or the Cable Television Consumer
Protection and Competition Act of 1992, as amended (collectively, the "Cable
Act"), except for violation(s) which, individually or in the aggregate,
reasonably could not be expected to have a material adverse effect on the
Partnership or its CATV systems. Upon the written request of Buyers, Sellers
will deliver promptly after the date hereof to Buyers complete and correct
copies of all reports and filings for the past three years made or filed
pursuant to the Cable Act, the Communications Act or FCC rules or regulations
with respect to operation of the Partnership's CATV systems, copies of the
Partnership's correspondence with any governmental authority relating to rate
regulation generally or specific rates charged to subscribers of the
Partnership's CATV systems including, without limitation, copies of all
complaints filed with the FCC and any other documentation supporting an
exemption from the rate regulation provisions of the Cable Act. Upon the written
request of Buyers, Sellers will provide to Buyers true and complete copies of
all requests for franchise renewal relating to the Franchises which have been
filed since 1994 with governmental authorities.
5.8 Non-Infringement.
To Sellers' knowledge, the Partnership's operation of its CATV
systems as currently conducted does not infringe upon, or otherwise violate, the
rights of any person or entity in any copyright, trade name, trademark right,
service ▇▇▇▇, service name, patent, patent right, license, trade secret or
franchise, and there is not pending or, to the Sellers' knowledge, threatened
any action with respect to any such infringement or breach.
5.9 Accounts Receivable.
The Partnership is the true and lawful owner of its accounts
receivable and has good title to each account receivable, free and clear of all
liens, charges, pledges, encumbrances or restrictions of any nature, except for
Permitted Liens, with absolute right to transfer any interest therein. Each
account receivable of the Partnership is (i) a valid obligation of the account
debtor enforceable in accordance with its terms and (ii) in all material
respects, a true and correct statement of the account for merchandise actually
sold and delivered to, or for actual services performed and accepted by, such
account debtor.
5.10 Litigation.
Except for litigation and judgments affecting the cable
television industry generally, there is no litigation, at law or in equity, or
any proceedings before any court, commission or other governmental authority or
mediation or arbitration, pending or, to the best knowledge of Sellers,
threatened against the Partnership which (i) could impair materially the ability
of the parties to consummate the transactions contemplated by this Agreement,
(ii) could materially and adversely affect the Partnership, its assets or its
ability to operate its CATV systems or (iii) could result in the termination,
modification, suspension or limitation on the Partnership's material rights or
obligations with respect to the Franchises, licenses held by the Partnership or
material contracts of the Partnership. There is no suit, action or other
proceeding pending before any court or other governmental agency against the
Partnership to enjoin transfer of the Partnership Interests to the Buyers.
5.11 Insurance.
The Partnership has maintained and is maintaining with
financially responsible insurance companies insurance with respect to the
Partnership's employees and assets insuring the Partnership against such
casualties and contingencies and of such types and amounts as are reasonably
adequate for the size and scope of the Partnership's business and as otherwise
required by the contracts and Franchises to which the Partnership is a party.
All self-insurance arrangements by or affecting the Partnership are described on
Schedule 5.11, including any reserves established thereunder. The Partnership
has received no notification from any insurance carrier denying or disputing any
claim made by the Partnership, denying or disputing any coverage for any claim,
denying or disputing the amount of any claim or regarding the possible
cancellation of any policies. The Partnership has not received (i) any notice of
cancellation of any policy, (ii) any notice that any issuer of such policy has
filed for protection under applicable bankruptcy laws or is otherwise in the
process of liquidating or has been liquidated, (iii) any other indication that
such policies are no longer in full force and effect or that the issuer of any
such policy is no longer willing or able to perform its obligations thereunder,
or (iv) any refusal of coverage or any notice that a defense will be afforded
with reservation of rights. All premiums due on such policies have been paid,
and the aggregate amount of all claims under such policies do not exceed policy
limits. The Partnership has given notice to the insurers of all claims that may
be insured thereunder.
5.12 Partnership Assets.
The Partnership owns or leases all tangible and intangible
rights, properties and assets used in the operations of its business. The
Partnership does not hold fee title to any real property. No other affiliate of
Partnership or its partners owns any assets used in the operations of the
Partnership's business. The Partnership has valid leasehold interests in all
leased real and personal property, and good title to all other Partnership
assets. All material Partnership assets are free and clear of any and all liens,
charges, pledges, encumbrances or restrictions of any nature except for
Permitted Liens and except as provided otherwise in the immediately following
sentence. The Partnership has good and valid title to it limited partnership
interest (the "TMIP Limited Partnership Interest") in Tele-Media Investment
Partnership, L.P., a Delaware limited partnership ("TMIP"), free and clear of
any and all liens, charges, pledges, options, encumbrances or restrictions of
any nature except for (a) Permitted Liens and (b) liens, charges, pledges,
options, encumbrances and restrictions under that certain Amended and Restated
Agreement of Limited Partnership of TMIP dated as of August 21, 1992, as amended
(the "TMIP Partnership Agreement"). Since October 1, 1997, the Partnership has
not been obligated or required pursuant to the terms and conditions of the TMIP
Partnership Agreement to make any additional capital contribution to the capital
of TMIP. Since October 1, 1997, (a) no distributions have been made to the
Partnership in respect of the TMIP Limited Partnership, (b) neither TMIP nor the
Partnership has made payment of any indebtedness, and (c) there have not been
any transactions between the Partnership and any affiliates thereof other than
those which are on an arm's length basis..
5.13 Employee Benefits.
(a) All employment agreements, bonus, deferred compensation,
stock purchase, stock option, pension, profit sharing, retirement, severance,
medical, dental, disability, life insurance, and other employee benefit plans,
funds, programs or arrangements which have been maintained, established or
contributed to by the ERISA Employer (collectively the "Plans"), have been made
available to the Buyer and are listed in Schedule 5.13. For purposes hereof,
ERISA Employer means Sellers and any entity which is a member of a controlled
group within the meaning of Section 414(b), (c), (m) or (o) of the Code.
Schedule 5.13 also identifies each Plan which constitutes (i) an "employee
pension benefit plan" ("Pension Plan") as such term is defined in Section
3(2)(A) of ERISA, (ii) an "employee welfare benefit plan" ("Welfare Plan") as
such term is defined in Section 3(1) of ERISA, or (iii) a "multiemployer plan"
("Multiemployer Plan"), as such term is defined in Section 4001(a)(3) of ERISA.
The ERISA Employer does not and has not participated in any employee benefit
plan maintained by or subscribed to by any other employer.
(b) Each Plan has been administered, including the filing of
IRS Form 5500 Series, summary plan descriptions and other applicable documents,
in accordance with its terms, ERISA, the Code, and all applicable federal and
state laws.
(c) Full payment has been or will be made of all amounts that
the ERISA Employer is required, under applicable law or under any Plan or any
agreement relating to any Plan as to which the ERISA Employer is a party, to
contribute to each Plan as of the Closing Date. There have been no contributions
to any Plan in any form other than cash. No accumulated funding deficiency (as
defined in Section 302(a)(2) of ERISA and Section 412(a) of the Code), whether
or not waived, exists with respect to any Plan. There will be no change on or
before the Closing Date in the operation of any Plan or documents under which
any such Plan is maintained that will result in an increase in the liabilities
under such Plan.
(d) No assets of any Plan are invested, directly or
indirectly, in any obligation or security of the ERISA Employer or its
affiliates, or in real or personal property of the ERISA Employer or its
affiliates. With respect to any Plan, no insurance contract, annuity contract or
other agreement or arrangement with any financial or other organization would
impose a penalty, discount or other reduction on account of the withdrawal of
assets from such organization or the change in investment of such assets.
(e) Neither the ERISA Employer nor any of its affiliates has
incurred or expects any liability to the Pension Benefit Guaranty Corporation
("PBGC"), except for required premium payments, which payments incurred or
accrued up to and including the Closing Date have been or will be timely paid by
the ERISA Employer. Neither the ERISA Employer nor any of its affiliates has
ceased operations at any facility or withdrawn from any Pension Plan in a manner
which could subject it to liability under Sections 4062, 4063 or 4064 of ERISA,
and there have been no events which might give rise to any liability of the
ERISA Employer or its affiliates to the PBGC under Title IV of ERISA or which
could be anticipated to result in any claims being made against the Buyers by
the PBGC. No Reportable Event (as such term is defined in Section 4043 of ERISA)
has occurred with respect to any Pension Plan. Neither the ERISA Employer nor
any of its affiliates has incurred any withdrawal liability (including any
contingent or secondary withdrawal liability) within the meaning of Section 4201
and 4204, nor avoided withdrawal liability by virtue of compliance with Section
4204, of ERISA with respect to any Multiemployer Plan.
(f) Neither the ERISA Employer, its affiliates nor any other
person has engaged in any transaction with respect to any Plan which would
subject the Partnership or any of its affiliates to a tax, penalty or liability
for prohibited transactions under ERISA or the Code, and no director, officer or
employee of the Partnership or any of its affiliates, to the extent that he is a
fiduciary with respect to any Plan, has breached any of his responsibilities or
obligations imposed upon fiduciaries under Title I of ERISA or which would
result in any claim being made under, by or on behalf of any Plan.
(g) No action has been taken, nor has there been any failure
to take any action, nor is any action or failure to take action anticipated,
that would subject any person (including but not limited to any Plan, any
fiduciary of a Plan, the Partnership and its affiliates) to any liability for
any income, excise or other tax or penalty with respect to the operation of, or
any transactions with, any Plan.
(h) There is no pending, or to the best knowledge of the
Sellers, threatened litigation concerning any Plan, and there have been no
written or oral communications concerning any Plan with the IRS, Department of
Labor or any other federal, state or local government entity.
5.14 Accuracy of Information.
No representation, statement or information made or furnished
by the Sellers to the Buyers, including those contained in this Agreement and
the various Schedules attached to this Agreement and the other information and
statements referred to in this Agreement and furnished by the Sellers to the
Buyers pursuant to this Agreement, contains or shall contain any untrue
statement of a material fact or omits or shall omit any material fact necessary
to make the information contained in this Agreement and the schedules not
misleading. There is no fact known to the Sellers that has specific application
to the Partnership and that materially adversely affects the assets, business,
prospects, financial condition or results of operations of the Partnership that
has not been set forth in this Agreement.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF OLYMPUS
OLYMPUS REPRESENTS AND WARRANTS TO SELLERS THAT THE FOLLOWING STATEMENTS
AND REPRESENTATIONS ARE TRUE AND CORRECT AS OF THE DATE HEREOF AND WILL
ALSO BE TRUE AND CORRECT ON THE CLOSING DATE, AS FOLLOWS:
6.1 Organization.
Olympus is a limited partnership duly formed and validly
existing under the laws of the State of Delaware and is duly qualified and in
good standing in those jurisdictions where the conduct of its business or the
nature of its assets makes such qualification necessary. Olympus has full power
and authority to own and lease its properties and to conduct its business as and
where such properties are now owned or leased and such business is now being
conducted. Olympus has full power and authority to acquire and own the National
General Partnership Interest and the 98.9% National Limited Partnership
Interest.
6.2 Authorization of Agreement.
Olympus has taken all necessary partnership action to
authorize and approve this Agreement, the consummation of the transactions
contemplated hereby and the performance by Olympus of all of the terms and
conditions hereof on its part to be performed. The execution and delivery of
this Agreement, the consummation of the transactions contemplated hereby and the
fulfillment and compliance with the terms and conditions hereof do not and will
not: (a) violate any provisions of any judicial or administrative order, award,
judgment or decree applicable to Olympus, or (b) conflict with any of the
provisions of the Limited Partnership Agreement of Olympus, or (c) conflict
with, result in a breach of or constitute a default under any agreement or
instrument to which Olympus is a party or by which it is bound.
This Agreement has been duly authorized, executed and
delivered by Olympus and constitutes a legal, valid and binding obligation of
Olympus.
6.3 Litigation.
There is no litigation, at law or in equity, or any
proceedings before any commission or other governmental authority, pending or,
to the best knowledge of Olympus, threatened against Olympus which would prevent
or restrict the right or impair the ability of Olympus to consummate the
transactions contemplated by this Agreement. There is no suit or action or other
proceeding pending before any court or other governmental agency against Olympus
to enjoin the consummation of the transaction contemplated hereby.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF OLYMPUS HOLDINGS
OLYMPUS HOLDINGS REPRESENTS AND WARRANTS TO SELLERS THAT THE FOLLOWING
STATEMENTS AND REPRESENTATIONS ARE TRUE AND CORRECT AS OF THE DATE HEREOF
AND WILL ALSO BE TRUE AND CORRECT ON THE CLOSING DATE, AS FOLLOWS:
7.1 Organization.
Olympus Holdings is a limited liability company duly formed
under the laws of the State of Delaware and is duly qualified and in good
standing in those jurisdictions where the conduct of its business or the nature
of its assets makes such qualification necessary. The sole member of Olympus
Holdings is Olympus. Olympus Holdings has full power and authority to own and
lease its properties and to conduct its business as and where such properties
are now owned or leased and such business is now being conducted. Olympus
Holdings has full power and authority to acquire and own a .1% National Limited
Partnership Interest.
7.2 Authorization of Agreement.
Olympus Holdings has taken all necessary action to authorize
and approve this Agreement, the consummation of the transactions contemplated
hereby and the performance by Olympus Holdings of all of the terms and
conditions hereof on its part to be performed. The execution and delivery of
this Agreement, the consummation of the transactions contemplated hereby and the
fulfillment and compliance with the terms and conditions hereof do not and will
not: (a) violate any provisions of any judicial or administrative order, award,
judgment or decree applicable to Olympus Holdings; or (b) conflict with any of
the provisions of the articles of organization or the operating agreement of
Olympus Holdings; or (c) conflict with, result in a breach of or constitute a
default under any agreement or instrument to which Olympus Holdings is a party
or by which it is bound.
This Agreement has been duly authorized, executed and
delivered by Olympus Holdings and constitutes a legal, valid and binding
obligation of Olympus Holdings.
7.3 Litigation.
There is no litigation, at law or in equity, or any
proceedings before any commission or other governmental authority, pending or,
to the best knowledge of Olympus Holdings, threatened against Olympus Holdings
which would impair materially the ability of Olympus Holdings to consummate the
transactions contemplated by this Agreement. There is no suit or action or other
proceeding pending before any court or other governmental agency against Olympus
Holdings to enjoin the consummation of the transaction contemplated hereby.
ARTICLE VIII
CONDUCT OF BUSINESS PENDING CLOSING; HSR ACT FILING
8.1 Maintenance of Business.
Sellers covenant and agree with Buyers that from the date
hereof to and including the Closing Date that they shall cause the Partnership
to continue to operate its CATV systems, maintain the assets and properties of
the Partnership and to keep all of its business books, records and files, all in
the ordinary course of business in accordance with past practices consistently
applied. Sellers shall not permit the Partnership to sell, transfer or assign
any assets except in the ordinary course of business and for full and fair
value.
8.2 Consummation of Agreement.
Each of Sellers and Buyers shall use its commercially
reasonable efforts to perform and fulfill all obligations and conditions on its
part to be performed and fulfilled under this Agreement, to the end that the
transactions contemplated by this Agreement shall be fully carried out.
8.3 HSR Act Filing.
The parties shall cooperate with each other to file a
notification and report form with the Pre-Merger Notification Office of the
Federal Trade Commission and with the Antitrust Division of the Department of
Justice pursuant to the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Anti-Trust Improvements Act of 1976,
as amended, and the rules and regulations thereunder (collectively, the "HSR
Act"). The costs of such filing will be paid equally by the Sellers and Buyers.
ARTICLE IX
CONDITIONS TO CLOSING - BUYERS
9.1 Conditions to Obligations of Buyers.
The obligations of Buyers to consummate the purchase of the
Partnership Interests at Closing shall be subject to the satisfaction of the
following conditions precedent, except to the extent waived by Buyers in
writing:
(a) All of the representations and warranties of the Sellers
contained in this Agreement shall be true and correct in all material respects
at and as of the Closing Date as though such representations and warranties were
made at and as of such time; each of the Sellers shall have performed and be in
compliance in all material respects with all of the covenants, agreements, terms
and provisions set forth herein on its part to be observed or performed, and no
event which would constitute a breach of the terms of this Agreement on the part
of each such Seller shall have occurred and be continuing at the Closing Date.
(b) Each of Sellers shall have executed and delivered to
Buyers on the Closing Date a Certificate, dated that date, in form and substance
reasonably satisfactory to Buyers to the effect that the conditions set forth in
each of the provisions of Section 9.1(a) of this Agreement have been satisfied
in full.
(c) All documents and other items required to be delivered
hereunder to Buyers at or prior to Closing shall have been delivered or shall be
tendered at the Closing.
(d) On the Closing Date, no suit, action or other proceeding
shall be pending or threatened before any court or other governmental agency
against Sellers or Buyers in which the consummation of the transactions
contemplated by this Agreement are sought to be enjoined.
(e) All notification and report forms required to be filed on
behalf of the parties to this Agreement with the FTC and the DOJ under the HSR
Act and rules thereunder shall have been filed, and the waiting period required
to expire under the HSR Act and rules thereunder, including any extension
thereof, shall have expired or early termination of the waiting period shall
have been granted.
ARTICLE X
CONDITIONS TO CLOSING - SELLERS
10.1 Conditions to Obligations of Sellers.
The obligations of the Sellers to consummate the sale of the
Partnership Interests at Closing shall be subject to the satisfaction of the
following conditions precedent, except to the extent waived by Sellers in
writing:
(a) All of the representations and warranties of Buyers
contained in this Agreement shall be true and correct in all material respects
at and as of the Closing Date as though such representations and warranties were
made at and as of such time, and each of Buyers shall be in compliance in all
material respects with all of the covenants, agreements, terms and provisions
set forth herein on its part to be observed and performed, and no event which
would constitute a breach of the terms of this Agreement on the part of each
such Buyer shall have occurred and be continuing at the Closing Date.
(b) Each of Buyers shall have executed and delivered to
Sellers on the Closing Date a Certificate, dated that date, in form and
substance reasonably satisfactory to Sellers to the effect that the conditions
set forth in each of the provisions of Section 10.1(a) of this Agreement have
been satisfied in full.
(c) Buyers shall have delivered the Purchase Price, as
adjusted, to Sellers in accordance with Section 2.1.
(d) On the Closing Date, no suit, action or other proceeding
shall be pending or threatened before any court or other governmental agency
against Sellers or Buyers in which the consummation of the transactions
contemplated by this Agreement are sought to be enjoined.
(e) All notification and report forms required to be filed on
behalf of the parties to this Agreement with the FTC and the DOJ under the HSR
Act and rules thereunder shall have been filed, and the waiting period required
to expire under the HSR Act and rules thereunder, including any extension
thereof, shall have expired or early termination of the waiting period shall
have been granted.
(f) All documents and other items required to be delivered
hereunder to Sellers at or prior to Closing shall have been delivered or shall
be tendered at Closing.
ARTICLE XI
CLOSING
11.1 Actions to be taken by Sellers at Closing.
At Closing, each of the Sellers shall take all actions
required to be taken by it hereunder and Sellers shall deliver to Buyers (a) all
of the approvals and consents required hereunder of all necessary parties and
governmental authorities for the transfer and sale of the Partnership Interests
and the consummation of the transactions contemplated hereunder, and (b) such
other documents and certificates as required to be delivered hereunder
including, but not limited to, an Assignment of Partnership Interest in the form
of Exhibit A.
11.2 Actions to be taken by Buyers at Closing.
At Closing, each of the Buyers shall take all actions required
to be taken by it hereunder and each of Buyers shall deliver, or cause to be
delivered, to Sellers all such documents and certificates as are required to be
delivered hereunder.
ARTICLE XII
SURVIVAL AND INDEMNIFICATION
12.1 Survival of Representations and Warranties.
All representations, warranties, covenants, indemnities and
agreements contained herein shall survive the consummation of the transactions
provided for in this Agreement; provided that the representations and warranties
contained in this Agreement shall expire and be extinguished one year after the
Closing Date except for representations and warranties relating to (i) title and
ownership, which shall survive forever, (ii) environmental matters, which shall
survive for three years, (iii) financial statement matters which shall survive
for two years and (iv) tax matters, which shall survive until the expiration of
the statute of limitations with respect to liabilities related thereto.
12.2 Indemnification.
(a) Sellers, jointly and severally shall indemnify and hold
Buyers, and each of them, harmless from and against, on a net after Tax basis,
any and all claims, liabilities, damages, losses, deficiencies, suits,
proceedings, mediations, arbitrations, judgments, deficiencies, assessments,
investigations and expenses including, without limitation, reasonable attorneys'
fees and expenses and costs of suit whether suit is instituted or not and, if
instituted, whether at any trial or appellate level, and whether raised by the
parties hereto or a third party, incurred or suffered by the Buyers or any of
them (individually, a "Loss" and collectively, "Losses") arising from, in
connection with or as a result of (i) any inaccurate representations and
warranties made by the Sellers or any of them, (ii) any and all breaches of
covenants and agreements made by or on behalf of the Sellers or any of them in
this Agreement and (iii) regardless of whether it may also constitute a breach
or violation under Section 12.2(a)(i) or (ii), the operation, management or
ownership of the Partnership, arising out of or related to the period on or
prior to the Closing Date except for any obligations and liabilities taken into
account under Section 2.3 hereof and for obligations arising out of the business
activities of the Partnership subsequent to the Closing Date; provided that in
connection with the indemnification provided for in this Section, Sellers shall
not be obligated to indemnify Buyers for Losses subject to indemnification
thereunder once the total amount of Losses for which Sellers have provided
indemnification under this Section equals the Purchase Price ("Sellers' Cap").
Notwithstanding the foregoing of this Section, Buyers shall not be entitled to
be indemnified by Sellers for any Losses under this Section arising out of any
single claim or aggregate claims until the total amount of all such Losses
suffered or paid by Buyers exceeds $500,000 ("Sellers' Basket"). Buyers shall
then be entitled to be indemnified under this Section for all such Losses,
including those Losses in the Sellers' Basket.
(b) Buyers, jointly and severally shall indemnify and hold
Sellers, and each of them, harmless from and against, on a net after Tax basis,
any and all Losses arising from, in connection with or as a result of (i) any
inaccurate representations made by the Buyers or any of them, and (ii) any and
all breaches of covenants and agreements made by or on behalf of the Buyers or
any of them in this Agreement; provided that Buyers shall not be obligated to
indemnify Sellers for Losses subject to indemnification hereunder until the
total amount of Losses for which Buyers are to provide indemnification hereunder
equals $500,000 ("Buyers' Basket") and then Sellers shall be entitled to be
indemnified under this Section for all such Losses, including those Losses in
the Buyers' Basket..
12.3 Indemnification with Respect to Third-Party Claims.
(a) Definition. As used herein, a "Third-Party Claim" means a
Loss or potential Loss for which indemnification is claimed by any of Buyers or
Sellers (the "Indemnitee") under the provisions of this Article XII and which is
consequent to a claim against the Indemnitee by a person, corporation,
association, partnership or other business organization, or an individual, or a
government, any political subdivision thereof or a governmental agency by
commencement against the Indemnitee of a legal action, proceeding or
investigation, or receipt by the Indemnitee of an assertion of a claim for which
indemnification may be appropriate pursuant to this Article XII by Buyers,
Sellers, or any of them as the case may be (the "Indemnitor").
(b) Notice of Claim. The Indemnitee will give notice of a
Third-Party Claim to the Indemnitor, stating the nature thereof and enclosing
copies of any complaints, summons, written assertion of such Third-Party Claim
or similar document. No claim for indemnification on account of a Third-Party
Claim shall be made and no indemnification therefor shall be available under
this Article XII until the Indemnitee shall have given initial written notice of
its claim to the Indemnitor.
(c) Retention of Counsel by the Indemnitor. Except as
hereinafter provided, the Indemnitor shall engage counsel to defend a
Third-Party Claim, and shall provide notice to the Indemnitee not later than 15
business days following delivery by the Indemnitee to the Indemnitor of a notice
of a Third-Party Claim, such notice to include an acknowledgment by the
Indemnitor that it will be liable in full to the Indemnitee for any Losses in
connection with such Third-Party Claim. The Indemnitee will reasonably cooperate
with such counsel at the sole cost and expense of Indemnitor. The Indemnitor
will cause such counsel to consult with the Indemnitee as appropriate as to the
defense of such claim, and the Indemnitee may, at its own expenses, participate
in such defense, assistance or enforcement, but the Indemnitor shall control
such defense, assistance or enforcement. The Indemnitor will cause such counsel
engaged by the Indemnitor to keep the Indemnitee informed at all times of the
status of such defense, assistance or enforcement.
(d) Employment of Counsel by the Indemnitee.
(i) Notwithstanding the provision of
Section 12.3(c), the Indemnitee shall have the right
at the sole cost and expense of Indemnitor to engage
counsel and to control the defense of a Third-Party
Claim if the Indemnitor shall not have notified the
Indemnitee of its appointment of counsel and control
of the defense of a Third-Party Claim pursuant to
Section 12.3(c) within the time period therein
provided.
(ii) Notwithstanding the engagement of
counsel by the Indemnitor, the Indemnitee shall have
the right, at its own expense, to engage counsel to
participate jointly with the Indemnitor in, and to
control jointly with the Indemnitor, the defenses of
a Third-Party Claim if (A) the Third-Party Claim
involves remedies other than monetary damages and
such remedies, in the Indemnitee's reasonable
judgment, could have an effect on the conduct of the
Indemnitee's business, or (B) the Third-Party Claim
relates to acts, omissions, conditions, events or
other matters occurring after the Closing Date as
well as to acts, omissions, conditions, events or
other matters occurring prior to the Closing Date, or
(C) the Third Party Claim involves monetary damages
which could exceed Sellers' Cap or (D) if in any such
Third-Party Claim, the named parties to any such
proceeding (including any impleaded parties) include
both the Indemnitee and the Indemnitor or if the
Indemnitor proposes that the same counsel represent
both the Indemnitor and the Indemnitee and
representation of both parties by the same counsel
would be inappropriate due to actual or potential
differing interests between them.
(iii) If the Indemnitee chooses to
exercise its right to appoint counsel under this
Section 12.3(d), the Indemnitee shall deliver notice
thereof to the Indemnitor setting forth in reasonable
detail why it believes that it has such right and the
name of the counsel it proposes to employ. The
Indemnitee may deliver such notice at any time that
the conditions to the exercise of such right appear
to be fulfilled, it being recognized that in the
course of litigation, the scope of litigation and the
amount at stake may change. The Indemnitee shall
thereupon have the right to appoint such counsel.
(iv) The reasonable fees and expenses of
counsel and any accountants, experts or consultants
engaged by the Indemnitee in accordance with Section
12.3(d)(i) in connection with defending a Third-Party
Claim shall be paid by the Indemnitor in accordance
with the provisions of this Article XII. If the
Indemnitee's employment of counsel is for a
Third-Party Claim of the type described in
subdivision (ii)(B) or (ii)(C) of this Section
12.3(d), then subject to the provisions of Section
12.3(e), the amount of fees and expenses so payable
by the Indemnitor shall be that fraction of the
aggregate of such fees and expenses, the numerator of
which is the portion of the amount of any judgment
on, or settlement of, such Third-Party Claim for
which the Indemnitee is indemnified pursuant to this
Article XII and the denominator of which is the total
amount of such judgment or settlement, but provided
further, if such defense of a Third-Party Claim is
successful (in the sense that as a consequence
thereof, there is no Loss (other than such fees and
expenses) for which the Indemnitee is indemnified
pursuant to this Article XII), the Indemnitee and the
Indemnitor will attempt in good faith to reach an
agreement on the amount of such fees and expenses so
payable by the Indemnitor.
(e) Settlement of Third-Party Claims.
(i) The Indemnitor may settle any
Third-Party Claim solely involving monetary damages
only if (A) the amount of such settlement is to be
paid entirely by the Indemnitor pursuant to this
Article XII and (B) Indemnitee is fully released from
the Third-Party Claim.
(ii) The Indemnitor will not enter into
a settlement of a Third-Party Claim which involved a
non-monetary remedy or which will not be paid
entirely by the Indemnitor pursuant to this Article
XII without the written consent of the Indemnitee
(which consent shall not be unreasonably withheld,
delayed or conditioned).
(iii) As to any Third-Party Claim of the
type described in subsection (ii)(B) or subsection
(ii)(C) of Section 12.3(d), the Indemnitee and the
Indemnitor shall consult as to any proposed
settlement. If the Indemnitee notifies the Indemnitor
that it wishes to accept a proposed settlement and
the Indemnitor is unwilling to do so, if the amount
for which the Third-Party Claim is ultimately
resolved is greater than the amount of which the
Indemnitee desired to settle, then (A) the Indemnitee
shall be liable only for the amount, if any, which it
would have paid had the Third-Party Claim been
settled as proposed by the Indemnitee, and (B) all
reasonable attorneys' fees and expenses and costs of
suit incurred by the Indemnitee subsequent to the
time of the proposed settlement shall be paid or
reimbursed by the Indemnitor.
(iv) In determining whether to accept or
reject any settlement proposal, each party shall act
in good faith and with due regard for the reasonable
commercial and financial interests of the other.
(f) Claims as to Which Indemnification is Partially Payable.
Notwithstanding the foregoing, in the event of any settlement of, or final
judgment with respect to, a Third-Party Claim which relates to acts, omissions,
conditions, events or other matters occurring both before and after the Closing
Date, the Indemnitee and the Indemnitor shall negotiate in good faith as to the
portion of such Third-Party Claim as to which such indemnification is payable.
(g) Cooperation, etc. The Indemnitee and the Indemnitor shall
reasonably cooperate with one another in good faith in connection with the
defense, compromise or settlement of any claim or action. Without limiting the
generality of the foregoing, the party controlling the defense or settlement of
any matter shall take steps reasonably designed to ensure that the other party
and its counsel are informed at all times of the status of such matter. Neither
party shall dispose of, compromise or settle any claim or action in a manner
that is not reasonable under the circumstances and in good faith. The Indemnitor
and Indemnitee shall enter into such confidentiality and other non-disclosure
agreements as the Indemnitee or Indemnitor, as the case may be, shall reasonably
request in order to protect trade secrets and other confidential or proprietary
information of the Indemnitee or Indemnitor, as the case may be.
ARTICLE XIII
TERMINATION
13.1 Termination by Mutual Agreement.
This Agreement may be terminated prior to Closing by mutual
written agreement of Sellers and Buyers. In such event, this Agreement shall
terminate and neither Buyers nor Sellers shall have any further obligation or
liability to the other hereunder, except that Sections 16.5 and 16.6 of the
Agreement shall survive and continue in full force and effect notwithstanding
such termination.
13.2 Buyers' Default.
In the event that the transactions contemplated by this
Agreement are not consummated on the Closing Date (if and as extended) due to
Buyers' failure or refusal to close, and all of the conditions specified in
Article IX shall have been satisfied, this Agreement shall be automatically
terminated.
13.3 Sellers' Default.
In the event that the transactions contemplated by this
Agreement are not consummated on the Closing Date (if and as extended) due to
Sellers' failure or refusal to close and all of the conditions specified in
Article X shall have been satisfied, Buyers shall be entitled to pursue any and
all of its equitable and legal causes of action against Sellers.
13.4 Termination by Buyer or Seller.
This Agreement may be terminated by Buyer or Seller at any
time after September 30, 1998 (the "Termination Date") in the event that any
condition set forth in Articles IX or X hereof has not been satisfied or
tendered by the party owing performance or waived by the party for whose benefit
the condition is intended, and upon such termination, and unless due to a
default under Section 13.3, neither Buyers nor Sellers shall have any further
obligation or liability to the other hereunder, except that Sections 16.5 and
16.6 of this Agreement shall survive and continue in full force and effect
notwithstanding such termination.
ARTICLE XIV
NOTICES
14.1 Addresses for Notice.
All notices and other communications hereunder shall be in
writing and deemed to have been duly given if: (a) mailed, first class,
registered or certified mail, return receipt requested, postage prepaid; (b)
delivered by courier or overnight courier providing written evidence of receipt
for hand delivery; or (c) transmitted via telecopy:
To Buyers:
Olympus Communications, L.P.
▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Facsimile:
With copies to:
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Cable GP, Inc.
▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇, P.A.
Steel ▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
To Sellers:
Hilton Head Communications, L.P.
▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: President
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
▇▇▇▇▇ ▇▇▇▇▇▇, Esquire
Adelphia Communications Corporation
Main at Water
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Professional Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
14.2 Effectiveness of Notice.
Notice shall be deemed received the same day (when delivered
personally), three (3) days after mailing (when sent by registered or certified
mail), and the next business day (when sent by facsimile transmission or when
delivered by overnight courier. Any party to this Agreement may change the
address of the party to which all communications and notices may be sent
hereunder by addressing notices of such change in the manner provided.
ARTICLE XV
LAWS GOVERNING; VENUE
The construction and interpretation of this Agreement and the
rights of the parties shall be governed by the laws of the State of Florida,,
without regard to its conflicts of laws provisions. The parties hereby
irrevocably agree to submit all suits, actions and proceedings arising out of or
relating to this Agreement or any transactions contemplated hereby to the
exclusive jurisdiction of the United States District Court for the Southern
District of Florida or if jurisdiction is not available therein the jurisdiction
of any state court in Palm Beach County, State of Florida, and waive any and all
objections to such jurisdiction or venue that they may have under the laws of
any state or country including, without limitation, any argument that
jurisdiction, situs and/or venue are inconvenient or otherwise improper. Each
party further agrees that process may be served upon such party in any manner
authorized under the laws of the United States or Florida, and waives any
objections that such party may otherwise have to such process.
ARTICLE XVI
MISCELLANEOUS
16.1 Counterparts.
This Agreement may be executed in one or more counterparts,
all of which taken together shall constitute one instrument. Delivery of
executed signature pages hereof by facsimile transmission shall constitute
effective and binding execution and delivery thereof.
16.2 Assignment.
This Agreement may not be assigned by any party hereto without
the prior written consent of the other parties.
16.3 Entire Agreement.
This Agreement is an integrated document, contains the entire
agreement between the parties, wholly cancels, terminates and supersedes any and
all previous and/or contemporaneous oral agreements, negotiations, commitments
and writings between the parties hereto with respect to its subject matter. No
change, modification, extension, termination, notice of termination, discharge,
abandonment or waiver of this Agreement or any of the provisions hereof, nor any
representation, promise or condition relating to this Agreement, shall be
binding upon the parties hereto unless made in writing and signed by the parties
hereto. All references to this Agreement shall include the Schedules and
Exhibits.
16.4 Captions.
The captions of Sections hereof are for convenience only and
shall not control or affect the meaning or construction of any of the provisions
of this Agreement.
16.5 Expenses.
Except as otherwise expressly provided herein, each party
hereto will pay all costs and expenses, including any and all legal and
accounting fees, of its performance and compliance with all agreements and
conditions contained herein on its part to be performed or complied with.
Sellers, on one hand, and Buyers, on the other hand, shall each pay one-half of
all filing fees payable under the HSR Act.
16.6 Confidentiality.
After the Closing, the Sellers hereby agree to hold in strict
confidence all business and other information relating to the Partnership and
its businesses and, except as otherwise required by law or as to information
which becomes publicly available, not to disclose or otherwise reveal any such
confidential information to any other person or entity without in each instance
the prior written consent of the Buyers.
16.7 Further Assurances.
The parties agree to execute, acknowledge, deliver and file,
or cause to be executed, acknowledged, delivered and filed, all further
instruments, agreements or documents as may be necessary to consummate the
transactions provided for in this Agreement and to do all further acts necessary
to carry out the purpose and intent of this Agreement.
16.8 No Waiver.
No term or condition of this Agreement shall be deemed to have
been waived, nor shall there be any estoppel against the enforcement of any
provision of this Agreement, except by written instrument of the party charged
with the waiver or estoppel. No written waiver shall be deemed a continuing
waiver unless specifically stated therein, and each waiver shall operate only as
to the specific term or condition waived and shall not constitute a waiver of
the term or condition for the future or as to any act other than that
specifically waived. The waiver by any party of any other party's breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach, and the failure of any party to exercise any right or remedy
shall not operate or be construed as a waiver or bar to the exercise of such
right or remedy upon the occurrence of any subsequent breach. No delay on the
part of a party in exercising a right, power or privilege hereunder shall
operate as a waiver thereof. No waiver on the part of a party of a right, power
or privilege, or a single or partial exercise of a right, power or privilege,
shall preclude further exercise thereof or the exercise of any other right,
power or privilege. The rights and remedies of this Agreement are cumulative and
are not exclusive of the rights or remedies that a party may otherwise have at
law or in equity.
16.9 Severability.
If any one or more of the provisions of this Agreement is held
invalid, illegal or unenforceable, the remaining provisions of this Agreement
shall be unimpaired, and the invalid, illegal or unenforceable provision shall
be replaced by a mutually acceptable valid, legal and enforceable provision
which comes closest to the intent of the parties.
16.10 Binding Effect.
This Agreement shall be for the benefit of, and shall be
binding upon, the parties and their respective heirs, personal representatives,
executors, legal representatives, successors and permitted assigns.
16.11 WAIVER OF JURY TRIAL.
IF LITIGATION IS BROUGHT TO ENFORCE THIS AGREEMENT, THE
PARTIES KNOWINGLY AND INTENTIONALLY WAIVE THE RIGHT ANY OF THEM HAS TO A TRIAL
BY JURY. THE PARTIES AGREE THIS PROVISION IS A MATERIAL INDUCEMENT TO THE
PARTIES' ENTERING INTO THIS AGREEMENT.
[Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed on the day and year first above written.
NCAA HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
HILTON HEAD COMMUNICATIONS, L.P.
By: NCAA Holdings, Inc., General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
OLYMPUS COMMUNICATIONS, L.P.
By: ACP Holdings, Inc., Managing General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
OLYMPUS COMMUNICATIONS HOLDINGS, L.L.C.
By: Olympus Communications, L.P., its sole member
By: ACP Holdings, Inc.,Managing General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
