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EXHIBIT 10.30(b)
ASSET EXCHANGE AGREEMENT
DATED AS OF JANUARY 2, 2001
AMONG
CHARTER VIDEO ELECTRONICS, INC.,
ON THE ONE HAND
AND
CHARTER CABLE PARTNERS, LLC,
CHARTER COMMUNICATIONS VI, LLC,
ON THE OTHER HAND
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ASSET EXCHANGE AGREEMENT
THIS ASSET EXCHANGE AGREEMENT (the "Agreement") is made as of January
2, 2001, by and between Charter Video Electronics, Inc. ("PARTY A") and each of
Charter Cable Partners, LLC and Charter Communications VI, LLC (collectively,
"PARTY B"), with reference to the following facts and circumstances:
RECITALS
A. PARTY A owns and operates all or part of cable television systems
that are franchised and/or hold other authority to operate in and around the
municipalities listed on SCHEDULE 4.8-A.
B. PARTY B owns and operates all or part of cable television systems
that are franchised and/or hold other authority to operate in and around the
municipalities listed on SCHEDULE 4.8-B. PARTY B is comprised of two entities
both of which are single-member limited liability companies, and such entities
will be treated for federal income tax purposes as disregarded entities with
respect to Charter Communications Holding Company, LLC under Treasury Regulation
ss. 301.7701-3(b)(1)(ii).
C. The parties desire to exchange the aforesaid systems in such a
manner as to effect, to the extent reasonably possible, a like-kind exchange of
such assets under Section 1031 of the United States Internal Revenue Code, as
amended (the "Code").
AGREEMENTS
Accordingly, the parties hereby agree as follows:
1. DEFINITIONS. In addition to the terms defined elsewhere in this Agreement,
the following capitalized terms or terms otherwise defined in this Article 1
shall have the meanings set forth below:
1.1 Agreement. The term "Agreement" shall mean and refer to this Asset
Exchange Agreement.
1.2 Assets. The term "Assets" shall mean and refer to all of the
assets, privileges, contracts, licenses, permits, franchises, authorizations,
rights, interests, claims and other properties, real and personal, tangible and
intangible, of every type and description which are owned, leased, held for use
or used in such Party's Cable Business. Assets shall include Tangible Personal
Property, Owned Property, Leased Property, Other Real Property Interests,
Systems Franchises, Systems Licenses, Systems Contracts, Books and Records and
Other Intangibles. Reference to PARTY A Assets shall be deemed to refer to the
Assets of PARTY A, and reference to PARTY B Assets shall be deemed to refer to
the Assets of PARTY B.
1.3 Books and Records. The term "Books and Records" shall mean and
refer to all engineering records, files, data, drawings, blueprints, schematics,
reports, lists, plans and procedures and all other files of correspondence,
lists, records and reports concerning such Party's Cable Business, including
subscribers and prospective subscribers of such Party's
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Systems, signal and program carriage and dealings with Governmental Authorities
with respect to such Party's Systems, including all reports filed with respect
to such Party's Systems by or on behalf of such Party with the FCC and
statements of account filed with respect to such Party's Systems by or on behalf
of such Party with the U.S. Copyright Office, but excluding all documents,
reports and records relating to any employee of such Party's Systems who has not
given consent to disclosure of such documents, reports and records. Reference to
PARTY A Books and Records shall be deemed to refer to the Books and Records of
PARTY A, and reference to PARTY B Books and Records shall be deemed to refer to
the Books and Records of PARTY B, in each case, as included among such Party's
Assets.
1.4 Business Day. The term "Business Day" shall mean and refer to any
day other than a Saturday, Sunday or a day on which the banking institutions in
St. Louis, Missouri, are required or authorized to be closed.
1.5 Cable Business. The term "Cable Business" shall mean and refer to
the cable television business and other revenue-generating businesses and
related operations conducted by such Party through such Party's Systems.
Reference to PARTY A Cable Business shall be deemed to refer to the Cable
Business of PARTY A, and reference to PARTY B Cable Business shall be deemed to
refer to the Cable Business of PARTY B.
1.6 Closing. The term "Closing" shall mean and refer to the closing of
the exchange transactions contemplated by this Agreement.
1.7 Closing Time. The term "Closing Time" shall mean and refer to 11:59
p.m., Central Time, on the Closing Date.
1.8 Communications Act. The term "Communications Act" shall mean and
refer to the Communications Act of 1934, as amended, and the FCC rules and
regulations promulgated thereunder.
1.9 Contract. The term "Contract" shall mean and refer to any contract,
mortgage, deed of trust, bond, indenture, lease, license, note, franchise,
certificate, option, warrant, right or other instrument, document, obligation or
agreement, whether written or oral.
1.10 FCC. The term "FCC" shall mean and refer to the Federal
Communications Commission.
1.11 Governmental Authority. The term "Governmental Authority" shall
mean and refer to the United States of America, any state, commonwealth,
territory or possession of the United States of America and any political
subdivision or quasi-governmental authority of any of the same, including any
court, tribunal, department, commission, board, bureau, agency, body, county,
municipality, province, parish or other instrumentality of any of the foregoing.
1.12 Intellectual Property. The term "Intellectual Property" shall mean
and refer to, with respect to any Cable Business, any (a) trademarks, trade
dress, trade names, service marks, logos and other similar proprietary rights,
(b) domain names, (c) copyrights and (d)
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patents and patentable know-how, inventions and processes, in each case used in
such Cable Business.
1.13 Judgment. The term "Judgment" shall mean and refer to any
judgment, writ, order, injunction, award or decree of any court, judge, justice
or magistrate, including any bankruptcy court or judge or the arbitrator in any
binding arbitration, and any order of or by any Governmental Authority.
1.14 Leased Property. The term "Leased Property" shall mean and refer
to the leaseholds of real property included among such Party's Assets and
described as such Party's Leased Property on SCHEDULE 1.14. Reference to PARTY A
Leased Property shall be deemed to refer to the Leased Property of PARTY A, and
reference to PARTY B Leased Property shall be deemed to refer to the Leased
Property of PARTY B, in each case, as included among such Party's Assets.
1.15 Legal Requirement. The term "Legal Requirement" shall mean and
refer to any applicable common law and any statute, ordinance, code or other
law, rule, regulation, order, technical or other written standard, requirement
or procedure enacted, adopted, promulgated, applied or followed by any
Governmental Authority, including any Judgment.
1.16 Lien. The term "Lien" shall mean and refer to any security
interest, security agreement, financing statement filed with any Governmental
Authority, conditional sale or other title retention agreement, any lease,
consignment or bailment given for purposes of security, any mortgage, lien
(including any lien for Taxes), indenture, pledge, option, encumbrance, adverse
interest, constructive trust or other trust, claim, attachment, exception to,
defect in, or other condition adversely affecting title or other ownership
interest (including reservations, rights of entry, possibilities of reverter,
encroachments, protrusions, easements, rights-of-way, rights of first refusal,
restrictive covenants, leases and licenses) of any kind, which constitutes an
interest in or claim against property, whether arising pursuant to any Legal
Requirement, Systems License, Systems Franchise, Systems Contract or otherwise.
1.17 Losses. The term "Losses" shall mean and refer to any claims,
losses, liabilities, damages, penalties, costs and expenses, including interest
that may be imposed in connection therewith, expenses of investigation,
reasonable fees and disbursements of counsel and other experts, and, as
applicable, the cost to any Person making a claim or seeking indemnification
under this Agreement with respect to funds expended by such Person by reason of
the occurrence of any event or the existence or assertion of any Liens (other
than Permitted Liens) with respect to which indemnification is sought.
1.18 Other Intangibles. The term "Other Intangibles" shall mean and
refer to all intangible assets, other than such Party's Systems Franchises,
Systems Licenses and Systems Contracts, including subscriber lists, claims, and
Intellectual Property, if any, included among such Party's Assets. Reference to
PARTY A Other Intangibles shall be deemed to refer to the Other Intangibles of
PARTY A, and reference to PARTY B Other Intangibles shall be deemed to refer to
the Other Intangibles of PARTY B, in each case, as included among such Party's
Assets.
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1.19 Other Real Property Interests. The term "Other Real Property
Interests" shall mean and refer to the easements and rights of access (other
than those relating to multiple dwelling units) and other interests in real
property held by such Party in connection with such Party's Cable Business, but
not including such Party's Leased Property or such Party's Owned Property.
Reference to PARTY A Other Real Property Interests shall be deemed to refer to
the Other Real Property Interests of PARTY A, and reference to PARTY B Other
Real Property Interests shall be deemed to refer to the Other Real Property
Interests of PARTY B, in each case, as included among such Party's Assets.
1.20 Owned Property. The term "Owned Property" shall mean and refer to
the fee interests in the real property included among such Party's Assets and
described as such Party's Owned Property on SCHEDULE 1.20 and all improvements
and towers thereon and appurtenances thereto. Reference to PARTY A Owned
Property shall be deemed to refer to the Owned Property of PARTY A, and
reference to PARTY B Owned Property shall be deemed to refer to the Owned
Property of PARTY B, in each case, as included among such Party's Assets.
1.21 Party. The term "Party" shall mean and refer to either PARTY A, or
PARTY B, or each of the entities constituting PARTY A or PARTY B, in each
instance as the context requires.
1.22 Permitted Liens. The term "Permitted Liens" shall mean and refer
to (a) Liens for Taxes, assessments and governmental charges, in each case not
yet due and payable, (b) zoning laws or ordinances or any similar Legal
Requirements, (c) rights reserved to any Governmental Authority to regulate the
affected property, (d) as to Leased Property or Tangible Personal Property that
is leased, the interests of the lessors thereof, and (e) as to Owned Property,
Leased Property and Other Real Property Interests, any easements, rights-of-way,
servitudes, conditions, covenants, restrictions and minor imperfections or
irregularities in title, in each case, which are reflected in the public records
and which do not individually or in the aggregate interfere with the right or
ability of the applicable Party to own, use, enjoy or operate the Owned
Property, Leased Property or Other Real Property Interests in the manner
currently used or to convey good, marketable and indefeasible fee simple title
to the same; provided that "Permitted Liens" will not include any Lien which
could prevent or inhibit in any way (other than as permitted under clause (e))
the conduct of the business of the affected System, and provided further that
classification of any Lien as a "Permitted Lien" will not affect any liability
which a Party may have for any such Lien, including pursuant to any indemnity
obligation under this Agreement.
1.23 Person. The term "Person" shall mean and refer to any natural
person, Governmental Authority, corporation, general or limited partnership,
limited liability company, joint venture, trust, association or unincorporated
entity of any kind.
1.24 Required Consents. The term "Required Consents" shall mean and
refer to any and all consents, authorizations and approvals under or in
connection with such Party's Systems Franchises and Systems Licenses required
for (a) such Party to transfer its Assets to the other Party pursuant to this
Agreement, (b) the other Party to operate such Party's Systems and to own,
lease, use and operate such Party's Assets and Systems at the places
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and in the manner in which such Party's Assets are used and such Party's Systems
are operated as of the date of this Agreement and as of the Closing, or (c) the
other Party to assume and perform such Party's Systems Franchises and Systems
Licenses. Reference to PARTY A Required Consents shall be deemed to refer to the
Required Consents for PARTY A, and reference to PARTY B Required Consents shall
be deemed to refer to the Required Consents for PARTY B.
1.25 System. The term "System" shall mean and refer to all or part of
any cable television distribution system owned or leased by a Party, or in which
a Party has other rights of use, that are used by such Party to serve its
customers within the municipalities set forth on SCHEDULE 4.8-A (for PARTY A)
and SCHEDULE 4.8-B (for PARTY B). Reference to PARTY A Systems shall be deemed
to refer to the Systems of PARTY A, and reference to PARTY B Systems shall be
deemed to refer to the Systems of PARTY B.
1.26 Systems Contracts. The term "Systems Contracts" shall mean and
refer to all Contracts (other than such Party's Systems Franchises and Systems
Licenses) that are included among such Party's Assets, including the lease
agreements for such Party's Tangible Personal Property, pole attachment
agreements, underground conduit agreements, crossing agreements, retransmission
consent agreements, multiple dwelling, bulk billing or commercial service
agreements and the Contracts documenting such Party's Leased Property described
on SCHEDULE 1.14. Reference to PARTY A Systems Contracts shall be deemed to
refer to the Systems Contracts of PARTY A, and reference to PARTY B Systems
Contracts shall be deemed to refer to the Systems Contracts of PARTY B, in each
case, as included among such Party's Assets.
1.27 Systems Franchises. The term "Systems Franchises" shall mean and
refer to the franchises, permits and similar authorizations included among such
Party's Assets (other than such Party's Systems Licenses) described on SCHEDULE
1.27, and all rights and benefits of such Party, including the rights and
benefits arising under Section 626 of the Communications Act (47 U.S.C. 546) to
the extent applicable to such Party's Systems Franchises. Reference to PARTY A
Systems Franchises shall be deemed to refer to the Systems Franchises of PARTY
A, and reference to PARTY B Systems Franchises shall be deemed to refer to the
Systems Franchises of PARTY B, in each case, as included among such Party's
Assets.
1.28 Systems Licenses. The term "Systems Licenses" shall mean and refer
to the intangible cable television channel distribution rights, cable television
relay service (CARS), business radio and other licenses, earth station
registrations, authorizations, consents or permits issued by the FCC or any
other Governmental Authority included among such Party's Assets and described on
SCHEDULE 1.28 (other than such Party's Systems Franchises and Systems Contracts)
and all rights and benefits of such Party pertaining thereto. Reference to PARTY
A Systems Licenses shall be deemed to refer to the Systems Licenses of PARTY A,
and reference to PARTY B Systems Licenses shall be deemed to refer to the
Systems Licenses of PARTY B, in each case, as included among such Party's
Assets.
1.29 Tangible Personal Property. The term "Tangible Personal Property"
shall mean and refer to all tangible personal property included among such
Party's Assets, including towers (other than towers on such Party's Owned
Property which are fixtures
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thereon and a part thereof), tower equipment, aboveground and underground cable,
distribution systems, headend amplifiers, line amplifiers, microwave equipment,
converters, testing equipment, motor vehicles, office equipment, computers and
billing equipment, furniture, fixtures, supplies, inventory and other physical
assets relating to the Systems. Reference to PARTY A Tangible Personal Property
shall be deemed to refer to the Tangible Personal Property of PARTY A, and
reference to PARTY B Tangible Personal Property shall be deemed to refer to the
Tangible Personal Property of PARTY B, in each case, as included among such
Party's Assets.
1.30 Taxes. The term "Taxes" shall mean and refer to levies and
assessments of any kind or nature imposed by any Governmental Authority,
including all income, sales, use, ad valorem, value added, franchise, severance,
net or gross proceeds, withholding, payroll, employment, excise or property
taxes and levies or assessments related to unclaimed property, together with any
interest thereon and any penalties, additions to tax or additional amounts
applicable thereto. For purposes of determining any Tax cost or Tax benefit to
any Person, such amount will be the actual cost or benefit recognized by such
Person at the time of actual payment of the additional Tax or actual receipt of
the Tax benefit. In the event that any Loss, payment or other amount is required
to be determined on an after-Tax basis, such payment or other amount will be
determined without regard to any Tax cost or Tax benefit not actually recognized
at the time of the determination, and appropriate adjustments will be made when
and to the extent that such Tax cost or Tax benefit is actually recognized.
1.31 Other Definitions. The following terms have the meanings set forth
in the sections indicated in the table below:
Term Section
---- -------
Closing Date 8.1
Code Recital C
commercially reasonable efforts 10.9
Exchange 2.1
Exchange Groups 2.2
Matching Franchise 5.1.1
PARTY A First Paragraph
PARTY A Matching Franchise 5.1.2
PARTY A Retained Franchise 5.1.1
PARTY A System Value 3.1
PARTY B First Paragraph
PARTY B Matching Franchise 5.1.1
PARTY B Retained Franchise 5.1.2
PARTY B System Value 3.1
Primary Transfer 5.1.3
Retained Franchise 5.1.1
Subsequent Transfer 5.1.4
Taking 10.8
Transfer Tax Returns 5.2
Transfer Taxes 5.2
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1.32 Usage. The definitions in Article 1 shall apply equally to both
the singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. All references herein to Articles, Sections, Exhibits and
Schedules shall be deemed to be references to Articles and Sections of, and
Exhibits and Schedules to, this Agreement unless the context shall otherwise
require. All Exhibits and Schedules attached hereto shall be deemed incorporated
herein as if set forth in full herein and, unless otherwise defined therein, all
terms used in any Exhibit or Schedule shall have the meaning ascribed to such
term in this Agreement. The words "include," "includes" and "including" shall be
deemed to be followed by the phrase "without limitation." The words "hereof,"
"herein," and "hereunder," and words of similar import, when used in this
Agreement, shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. Unless otherwise expressly provided herein, any
agreement, instrument or statute defined or referred to herein or in any
agreement or instrument that is referred to herein means such agreement,
instrument or statute as from time to time amended, modified or supplemented,
including (in the case of agreements or instruments) by waiver or consent and
(in the case of statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments incorporated therein. All
accounting terms not otherwise defined in this Agreement will have the meanings
ascribed to them under generally acceptable accounting principles as in effect
from time to time in the United States, consistently applied.
2. EXCHANGE.
2.1 Exchange of Assets. Upon the terms and subject to the conditions
set forth in this Agreement, at the Closing, PARTY A and PARTY B agree to
exchange simultaneously the PARTY A Assets for the PARTY B Assets, free and
clear of all Liens (except Permitted Liens) (the "Exchange"). PARTY A and PARTY
B agree to use all reasonable efforts to structure the Exchange in such a way
that, to the extent reasonably possible, it will be a tax free exchange of
like-kind assets under Section 1031 of the Code.
2.2 Method of Exchange. The Exchange is to occur as follows: (A) PARTY
A Tangible Personal Property and PARTY B Tangible Personal Property are being
exchanged each for the other; (B) PARTY A Owned Property, PARTY A Leased
Property, and PARTY A Other Real Property Interests and PARTY B Owned Property,
PARTY B Leased Property, and PARTY B Other Real Property Interests are being
exchanged each for the other; and (C) PARTY A Systems Contracts, PARTY A Systems
Franchises, PARTY A Systems Licenses, and PARTY A Other Intangibles and PARTY B
Systems Contracts, PARTY B Systems Franchises, PARTY B Systems Licenses, and
PARTY B Other Intangibles are being exchanged each for the other. In each case,
the assets described in this Section 2.2 shall be exchanged each for the other
in "Exchange Groups" as defined under Treasury Regulations Sections 1.1031(a)-2
and 1.1031(j)-1, and in each case to the maximum extent permitted by Section
1031 of the Code and the regulations promulgated thereunder. Liabilities assumed
or taken subject to by each Party are being exchanged each for the other to the
maximum extent permitted under Section 1031 of the Code and regulations
thereunder.
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3. CONSIDERATION.
3.1 For the purposes of this Agreement, the aggregate gross value and
the value of each Exchange Group of the PARTY A Assets comprising all of the
PARTY A Systems shall be as set forth on SCHEDULE 3.1-A ("PARTY A System
Value"), and the aggregate gross value and the value of each Exchange Group of
the PARTY B Assets comprising all of the PARTY B Systems shall be as set forth
on SCHEDULE 3.1-B ("PARTY B System Value").
4. REPRESENTATIONS AND WARRANTIES. Each Party represents and warrants to
the other Party, as follows:
4.1 Organization and Qualification. Such Party is duly formed, validly
existing and in good standing under the laws of its jurisdiction of
formation/incorporation. As of the Closing Date, such Party has all requisite
power and authority to own, lease and use such Party's Assets owned, leased or
used by it and to conduct its Cable Business as it is currently being conducted
by it. As of the date of this Agreement, such Party is duly qualified to do
business and is in good standing under the laws of each jurisdiction in which
the ownership, leasing or use of such Party's Assets owned, leased or used by it
or the nature of its activities undertaken in connection with such Party's
Systems makes such qualification necessary.
4.2 Authority and Validity. Such Party has all requisite entity power
and authority to execute and deliver, to perform its obligations under, and to
consummate the transactions contemplated by this Agreement. The execution and
delivery by such Party of, its performance under, and its consummation of the
transactions contemplated by this Agreement have been duly and validly
authorized by all necessary entity action by or on behalf of such Party. This
Agreement has been duly and validly executed and delivered by such Party and
constitutes valid and legally binding agreement of such Party, enforceable
against it in accordance with the terms hereof, except as such enforcement may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws now or hereafter in effect relating to the enforcement of
creditors' rights generally or by principles governing the availability of
equitable remedies.
4.3 No Violation. Assuming all Required Consents have been obtained,
the execution and delivery by each Party of, its performance under, and its
consummation of the transactions contemplated by this Agreement do not and will
not: (a) violate any provision of the organizational documents of such Party;
(b) violate any provision of any Legal Requirement applicable to such Party; (c)
require any consent, approval or authorization of, or filing of any certificate,
notice, application, report or other document with, any Governmental Authority
or other Person; or (d) (i) violate, result in a breach of or constitute a
default under, (ii) permit or result in the termination, suspension or
modification of, (iii) result in the acceleration of (or give any Person the
right to accelerate) the performance of such Party under, or (iv) result in the
creation or imposition of any Lien under, any Systems Contract, Systems
Franchise, Systems License, or other instrument evidencing any of the Assets of
such Party or by which such Party or any of its assets is bound or affected,
provided, however, that no breach of any of the foregoing representations will
be deemed to
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have occurred if such occurrence does not have a material adverse effect on the
Assets being transferred pursuant hereto, or preclude the transfer thereof.
4.4 Systems Contracts. Such Party has delivered to the other Party true
and complete copies of all such Party's Systems Contracts (including each
Contract relating to such Party's Leased Property and Other Real Property
Interests), including any amendments thereto (or, in the case of oral Contracts,
true and complete written summaries thereof), and each document evidencing such
Party's ownership of its Owned Property.
4.5 Compliance with Legal Requirements. Such Party has used
commercially reasonable efforts to comply in all material respects with all the
applicable Legal Requirements.
4.6 Absence of Certain Changes or Events. Since the date of the
execution of this Agreement, there has been no material adverse change in, nor
has any event or events (other than any affecting the cable television industry
generally) occurred that, individually or in the aggregate, could reasonably be
expected to result in a material adverse change in such Party's Assets, Cable
Business, operations, condition (financial or otherwise) or results of
operations of its Systems, taken as a whole.
4.7 Tax Returns; Other Reports. Such Party has duly and timely filed in
correct form all federal, state, local and foreign Tax returns and other Tax
reports required to be filed by it, and has timely paid all Taxes which have
become due and payable, whether or not so shown on any such return or report,
the failure of which to be filed or paid could affect or result in the
imposition of a Lien upon its Assets or create any transferee or other liability
upon the other Party, except such amounts as are being contested diligently and
in good faith and are not in the aggregate material. Except as set forth on
SCHEDULE 4.7, such Party has not received any notice of, nor does such Party
have any knowledge of, any deficiency, assessment or audit, or proposed
deficiency, assessment or audit from any taxing Governmental Authority which
could affect, or result in the imposition of a Lien upon, any of its Assets or
transferee or other liability upon the other Party.
4.8 Systems Information. SCHEDULES 4.8-A and 4.8-B set forth a
materially true and accurate description, on a System-by-System basis, of the
following information relating to each Party's Systems as of the date of this
Agreement:
(a) the approximate number of aerial and underground miles of
plant included in such Party's Assets and served by each headend;
(b) the approximate number of single family homes and residential
multiple dwelling units passed by each such System;
(c) the MHZ capacity and channel capacity of each headend; and
(d) the number of subscribers served by each such System.
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5. ADDITIONAL COVENANTS.
5.1 Required Consents. If less than all of the Required Consents for
the transfer of Systems Franchises are obtained as of the Closing Date, then the
following will occur:
5.1.1 With respect to each PARTY A Systems Franchise for which a
Required Consent necessary for the transfer thereof has not been obtained as of
the Closing Date (such Systems Franchise and the PARTY A Assets pertaining
thereto, hereinafter, a "PARTY A Retained Franchise"), the parties will
negotiate in good faith to reach agreement on a PARTY B Systems Franchise (such
Systems Franchise and the PARTY B Assets pertaining thereto, hereinafter, a
"PARTY B Matching Franchise") that is to the greatest extent possible, like kind
to PARTY A Retained Franchise for purposes of Section 1031 of the Code and the
applicable exchange. A PARTY B Matching Franchise may also be a PARTY B Retained
Franchise. For purposes of this Section 5.1, a "Retained Franchise" means either
a PARTY A Retained Franchise or a PARTY B Retained Franchise or both, as the
context requires, and a "Matching Franchise" means either a PARTY A Matching
Franchise or a PARTY B Matching Franchise or both, as the context requires.
5.1.2 Similarly, with respect to each PARTY B Systems Franchise
for which a PARTY B Required Consent necessary for the transfer thereof has not
been obtained as of the Closing Date (such Systems Franchise and the PARTY B
Assets pertaining thereto, hereinafter, a "PARTY B Retained Franchise"), the
parties will negotiate in good faith to reach agreement on a PARTY A Systems
Franchise (such Systems Franchise and the PARTY A Assets pertaining thereto,
hereinafter, a "PARTY A Matching Franchise") that is to the greatest extent
possible, like kind to PARTY B Retained Franchise for purposes of Section 1031
of the Code and the applicable exchange. A PARTY A Matching Franchise may also
be a PARTY A Retained Franchise.
5.1.3 At the Closing, PARTY A and PARTY B shall transfer, convey
and assign (the "Primary Transfer") all of the PARTY A Assets other than any
PARTY A Retained Franchises and PARTY A Matching Franchises and all of the PARTY
B Assets other than any PARTY B Retained Franchises and PARTY B Matching
Franchises.
5.1.4 Following the Closing of the Primary Transfer, the parties
will continue to use commercially reasonable efforts to obtain on an expedited
basis the Required Consents for all PARTY A Retained Franchises and PARTY B
Retained Franchises. Pending such Required Consents being obtained, each of
PARTY A Retained Franchises and PARTY B Retained Franchises shall continue to be
subject to the arrangement set forth in Article 7 hereof, and shall be
transferred, conveyed, or assigned as contemplated herein as soon as practicable
following the obtaining of such Required Consents (such transfer hereinafter
referred to as a "Subsequent Transfer").
5.1.5 All references in this Agreement to the Closing and the
Closing Date will mean the Closing and Closing Date of the Primary Transfer
except as specifically provided otherwise in this Section 5.1.5. Without
limiting the foregoing, all representations and warranties (except as to those
Required Consents that have not been obtained) made in connection with the
Retained Franchises and the Matching Franchises will be made as of the Closing
Date rather than the date of the Subsequent Transfer, the other covenants in
Article
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5 will not apply to the Retained Franchises or the Matching Franchises following
the Closing Date.
5.2 Sales and Transfer Taxes. All sales, use or excise Taxes arising
from or payable by reason of the transfer of each Party's Assets ("Transfer
Taxes") and all transfer and similar taxes or assessments, including transfer
fees and similar assessments for or under Systems Franchises, Systems Licenses
and Systems Contracts, arising from or payable by reason of the conveyance of
each Party's Assets will be borne equally by each Party. Tax Returns required to
be filed with respect to Transfer Taxes ("Transfer Tax Returns") shall be
prepared and filed by the Party that has the primary responsibility under
applicable law for filing such Transfer Tax Returns.
5.3 Further Assurances. At or after the Closing, each Party at the
request of the other Party, will promptly execute and deliver, or cause to be
executed and delivered, to the other Party all such documents and instruments,
in addition to those otherwise required by this Agreement, in form and substance
reasonably satisfactory to the other Party as the other Party may reasonably
request in order to carry out or evidence the terms of this Agreement or to
collect any accounts receivable or other claims included in the Assets
transferred to the other Party. Without limiting the generality of the
foregoing, PARTY A and PARTY B will take, or cause to be taken, all actions
consistent with the terms of this Agreement, including execution and delivery of
any documents or instruments, as the other may reasonably request to effect the
qualification of the transactions contemplated hereby as a like-kind exchange
under Section 1031 of the Code.
5.4 Satisfaction of Conditions. Each Party will use its commercially
reasonable efforts to satisfy, or to cause to be satisfied, the conditions to
the obligations of the other Party to consummate the transactions contemplated
by this Agreement, as set forth in Article 6.
6. CONDITIONS PRECEDENT.
6.1 Conditions to Each Party's Obligations. The obligations of each
Party to consummate the transactions contemplated by this Agreement will be
subject to the satisfaction, at or before the Closing, of the following
conditions, one or more of which may be waived by such Party:
6.1.1 Accuracy of Representations and Warranties. The
representations and warranties of each Party in this Agreement, without giving
effect to any materiality qualifications contained therein, are true, complete
and accurate on and as of the Closing with the same effect as if made at and as
of the Closing, except to the extent that all misstatements, omissions and
inaccuracies, in the aggregate, do not have a material adverse effect on the
other Party's Assets, Cable Business, the operations, condition (financial or
otherwise) or results of operations of the Systems taken as a whole, or on the
ability of the other Party to perform its obligations under this Agreement.
6.1.2 Deliveries. Each Party shall have delivered the items and
documents required to be delivered by and pursuant to this Agreement, including
those required to be delivered by each Party to the other Party under Section
8.2.
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13
6.1.3 Legal Proceedings. No Legal Requirement of any Governmental
Authority (including any temporary Legal Requirement) shall be in effect which
would prevent or make illegal the consummation of any of the transactions
contemplated by this Agreement.
6.1.4 Consents.
(a) Except as provided in Section 5.1, Required Consents
relating to each Party's Systems Franchises shall have been obtained in form and
substance reasonably satisfactory to the other Party, or the consent of the
appropriate Governmental Authority shall be deemed to have been received in
accordance with Section 617 of the Communications Act (47 U.S.C. ss.537).
(b) Each Party shall have received evidence, in form and
substance reasonably satisfactory to it, that the other Party's Required
Consents relating to the other Party's Systems Licenses and Systems Contracts
have been obtained.
6.1.5 No Material Adverse Damage. There shall not have occurred
any damage to such Party's Assets that has materially and adversely affected, or
could reasonably be expected to materially and adversely affect, the cash flow
therefrom.
7. PRE-CLOSING MANAGEMENT ARRANGEMENT.
Pending the Closing, each Party hereby agrees that the other shall be
entitled to receive and retain any and all revenues from the operation of the
Cable Business of the other Party to be transferred pursuant hereto including,
without limitation, subscriber payments and advertising revenue, and shall be
responsible for all expenses and expenditures respecting or pertaining to such
Cable Business. Thus, each PARTY A entity shall be entitled to receive and
retain all revenues from the operation of the PARTY B Cable Business being
transferred to it, and shall be responsible for all expenses and expenditures
respecting or pertaining to such Cable Business; provided, however, that
management fees shall be limited, and shall be paid and expensed only as
allowed, by the credit agreement to which such PARTY B entity is party to or
otherwise bound, and each PARTY B entity shall be entitled to receive and retain
all revenues from the operation of the PARTY A Cable Business being transferred
to it, and shall be responsible for all expenses and expenditures respecting or
pertaining to such Cable Business; provided, however, that management fees shall
be limited, and shall be paid and expensed only as allowed, by the credit
agreement to which such PARTY A entity is party to or otherwise bound.
8. THE CLOSING.
8.1 The Closing; Time and Place. Subject to the terms and conditions of
this Agreement, the Closing shall be held at a place, date and time as mutually
agreed upon by the Parties; provided that such day shall be a Business Day (the
"Closing Date"). The transactions to be consummated at Closing shall be deemed
to have been consummated as of the Closing Time.
8.2 Delivery Obligations. At the Closing, each Party will deliver or
cause to be delivered to the other Party the following:
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14
8.2.1 ▇▇▇▇ of Sale and Assumption Agreement. The ▇▇▇▇ of Sale and
Assumption Agreement in the form mutually acceptable, transferring such Party's
Assets as contemplated hereunder.
8.2.2 Deeds. Quitclaim deeds in recordable form conveying each
parcel of such Party's Owned Property, and assignments of leases and easements
in recordable form, with respect to such Party's Leased Property and Other Real
Property Interests, each as contemplated hereunder.
8.2.3 Other. Such other documents and instruments as may be
necessary to effect the intent of this Agreement and to consummate the
transactions contemplated hereby.
9. TERMINATION AND DEFAULT.
9.1 Termination Events. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned:
9.1.1 At any time, by the mutual agreement of PARTY A and PARTY
B;
9.1.2 By either PARTY A or PARTY B at any time, if the other is
in material breach or default of any of the other's covenants, agreements or
other obligations herein;
9.1.3 By either PARTY A or PARTY B upon written notice to the
other, with respect to any transfers that have not been completed on or before
six (6) months after the date of this Agreement; or
9.1.4 By either PARTY A or PARTY B if an injunction, restraining
order or decree of any nature of any Governmental Authority of competent
jurisdiction is issued that prohibits the consummation of any of the
transactions contemplated hereby and such injunction, restraining order or
decree is final and nonappealable; provided, however, that the party seeking to
terminate this Agreement pursuant to this clause has used commercially
reasonable efforts to have such injunction, order or decree vacated or denied.
9.2 Effect of Termination. Except as set forth in Section 9.1.3, if
this Agreement is terminated pursuant to Section 9.1, all obligations of the
Parties under this Agreement will terminate, except for the obligations set
forth in Section 10.7.
10. MISCELLANEOUS PROVISIONS.
10.1 Parties Obligated and Benefited. Subject to the limitations set
forth below, this Agreement will be binding upon each of the Parties and their
respective assigns and successors in interest and will inure solely to the
benefit of the Parties and their respective assigns and successors in interest,
and no other Person will be entitled to any of the benefits conferred by this
Agreement.
10.2 Waiver. This Agreement or any of its provisions may not be waived
except in writing. The failure of any Party to enforce any right arising under
this Agreement on one
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15
or more occasions will not operate as a waiver of that or any other right on
that or any other occasion.
10.3 Captions. The section and other captions of this Agreement are for
convenience only and do not constitute a part of this Agreement.
10.4 Counterparts. This Agreement may be executed in counterparts, each
of which will be deemed an original.
10.5 Entire Agreement. This Agreement (including the Schedules and
Exhibits referred to in this Agreement, which are incorporated in and constitute
a part of this Agreement) contains the entire agreement of the Parties with
respect to the subject matter hereof and supersedes all prior oral or written
agreements and understandings with respect to such subject matter. This
Agreement may not be amended or modified except by a writing signed by all of
the parties hereto.
10.6 Severability. Any term or provision of this Agreement that is
invalid or unenforceable will be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining rights
of the Person intended to be benefited by such provision or any other provisions
of this Agreement.
10.7 Expenses. Except as otherwise expressly provided in this
Agreement, each Party will pay all of its expenses, including attorneys' and
accountants' fees, in connection with the negotiation of this Agreement, the
performance of its obligations and the consummation of the transactions
contemplated by this Agreement.
10.8 Risk of Loss. At all times prior to the Closing Time, the risk of
any loss or damage to each Party's Assets resulting from fire, theft or other
casualty (except reasonable wear and tear) or the risk that all or any part of
or interest in each Party's Assets is taken or condemned as a result of a
Governmental Authority's exercise of its powers of eminent domain, or if a
Governmental Authority having such power informs a Party that it intends to
condemn all or any part of such Party's Assets (such event being called, in
either case, a "Taking"), shall remain with the current owner of such Assets,
and such owner shall be entitled to receive and retain all insurance or
condemnation proceeds paid or payable as a result of any loss, damage or
condemnation of its Assets. With respect to any Party's Assets that are damaged
or taken and therefore are not to be transferred pursuant hereto, the Parties
agree to adjust the values of the Assets to be exchanged pursuant hereto so as
to comply with the requirements of Section 1031 of the Code and the applicable
exchange; such adjustment shall occur according to the mechanism set forth in
Section 5.1 with the necessary changes thereto.
10.9 Commercially Reasonable Efforts. For purposes of this Agreement,
"commercially reasonable efforts" will not be deemed to require a Party to
undertake extraordinary or unreasonable measures, including the payment of
amounts in excess of normal and usual filing fees and processing fees, if any,
or other payments with respect to any Contract that are significant in the
context of such Contract (or significant on the aggregate basis as to all
Contracts).
[The remainder of this page intentionally left blank]
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16
The parties have executed this Agreement as of the day and year first
above written.
CHARTER VIDEO ELECTRONICS, INC.
Federal Tax ID #: ▇▇-▇▇▇▇▇▇▇
By:________________________________________
Title:_____________________________________
CHARTER CABLE PARTNERS, LLC
Federal Tax ID #: ▇▇-▇▇▇▇▇▇▇
By:________________________________________
Title:_____________________________________
CHARTER COMMUNICATIONS VI, LLC
Federal Tax ID #: ▇▇-▇▇▇▇▇▇▇
By:________________________________________
Title:_____________________________________
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17
TABLE OF CONTENTS
Page
----
1. DEFINITIONS......................................................................................1
1.1 Agreement...............................................................................1
1.2 Assets..................................................................................1
1.3 Books and Records.......................................................................1
1.4 Business Day............................................................................2
1.5 Cable Business..........................................................................2
1.6 Closing.................................................................................2
1.7 Closing Time............................................................................2
1.8 Communications Act......................................................................2
1.9 Contract................................................................................2
1.10 FCC.....................................................................................2
1.11 Governmental Authority..................................................................2
1.12 Intellectual Property...................................................................2
1.13 Judgment................................................................................3
1.14 Leased Property.........................................................................3
1.15 Legal Requirement.......................................................................3
1.16 Lien....................................................................................3
1.17 Losses..................................................................................3
1.18 Other Intangibles.......................................................................3
1.19 Other Real Property Interests...........................................................4
1.20 Owned Property..........................................................................4
1.21 Party...................................................................................4
1.22 Permitted Liens.........................................................................4
1.23 Person..................................................................................4
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Page
----
1.24 Required Consents.......................................................................4
1.25 System..................................................................................5
1.26 Systems Contracts.......................................................................5
1.27 Systems Franchises......................................................................5
1.28 Systems Licenses........................................................................5
1.29 Tangible Personal Property..............................................................5
1.30 Taxes...................................................................................6
1.31 Other Definitions.......................................................................6
1.32 Usage...................................................................................7
2. EXCHANGE.........................................................................................7
2.1 Exchange of Assets......................................................................7
2.2 Method of Exchange......................................................................7
3. CONSIDERATION....................................................................................8
4. REPRESENTATIONS AND WARRANTIES...................................................................8
4.1 Organization and Qualification..........................................................8
4.2 Authority and Validity..................................................................8
4.3 No Violation............................................................................8
4.4 Systems Contracts.......................................................................9
4.5 Compliance with Legal Requirements......................................................9
4.6 Absence of Certain Changes or Events....................................................9
4.7 Tax Returns; Other Reports..............................................................9
4.8 Systems Information.....................................................................9
5. ADDITIONAL COVENANTS.............................................................................10
5.1 Required Consents.......................................................................10
5.2 Sales and Transfer Taxes................................................................11
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Page
----
5.3 Further Assurances......................................................................11
5.4 Satisfaction of Conditions..............................................................11
6. CONDITIONS PRECEDENT.............................................................................11
6.1 Conditions to Each Party's Obligations..................................................11
6.1.1 Accuracy of Representations and Warranties.....................................11
6.1.2 Deliveries.....................................................................11
6.1.3 Legal Proceedings..............................................................12
6.1.4 Consents.......................................................................12
6.1.5 No Material Adverse Damage.....................................................12
7. PRE-CLOSING MANAGEMENT ARRANGEMENT...............................................................12
8. THE CLOSING......................................................................................12
8.1 The Closing; Time and Place.............................................................12
8.2 Delivery Obligations....................................................................12
8.2.1 ▇▇▇▇ of Sale and Assumption Agreement..........................................13
8.2.2 Deeds..........................................................................13
8.2.3 Other..........................................................................13
9. TERMINATION AND DEFAULT..........................................................................13
9.1 Termination Events......................................................................13
9.2 Effect of Termination...................................................................13
10. MISCELLANEOUS PROVISIONS.........................................................................13
10.1 Parties Obligated and Benefited.........................................................13
10.2 Waiver..................................................................................13
10.3 Captions................................................................................14
10.4 Counterparts............................................................................14
10.5 Entire Agreement........................................................................14
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20
Page
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10.6 Severability............................................................................14
10.7 Expenses................................................................................14
10.8 Risk of Loss............................................................................14
10.9 Commercially Reasonable Efforts.........................................................14
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List of Schedules
Schedule 1.14 Leased Property
Schedule 1.20 Owned Property
Schedule 1.27 Systems Franchises
Schedule 1.28 Systems Licenses
Schedule 3.1-A PARTY A System Value
Schedule 3.1-B PARTY B System Value
Schedule 4.7 Tax Returns Deficiency/Audit Notice
Schedule 4.8-A PARTY A Systems
Schedule 4.8-B PARTY B Systems
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SCHEDULE 4.8-A
Charter Video Electronics, Inc. ("PARTY A")
CHARTER VIDEO ELECTRONICS, INC.
HEADEND SYSTEM FRANCHISE AUTHORITY STATE
------- ------ ------------------- -----
Rhinelander Rhinelander WI Argonne WI
Rhinelander ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ WI
Rhinelander Rhinelander Cassian WI
Rhinelander Rhinelander WI Crandon city WI
Rhinelander Rhinelander WI Crandon town WI
Rhinelander Rhinelander Crescent WI
Rhinelander Rhinelander Lincoln WI
Rhinelander ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ WI
Rhinelander Rhinelander Newbold WI
Rhinelander Rhinelander Nokomis WI
Rhinelander Rhinelander Pelican WI
Rhinelander Rhinelander Pine Lake WI
Rhinelander Rhinelander WI Rhinelander WI
Rhinelander ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ WI
Rhinelander Rhinelander WI Tomahawk WI
Rhinelander Rhinelander Town of Wabeno WI
Rhinelander Rhinelander Woodboro WI
23
SCHEDULE 4.8-B
Charter Cable Partners, LLC and Charter Communications VI, LLC
(collectively, "PARTY B")
CHARTER CABLE PARTNERS, LLC
HEADEND SYSTEM FRANCHISE AUTHORITY STATE
------- ------ ------------------- -----
Ashland Eau Claire WI Bayfield WI
Ashland Eau Claire WI Bayfield WI
Ladysmith Eau Claire WI ▇▇▇▇▇ WI
Dresser Eau Claire WI Dresser WI
Park Falls Eau Claire WI ▇▇▇▇▇▇▇▇▇▇ WI
Ladysmith Eau Claire WI Flambeau WI
Ladysmith Eau Claire WI Grant (Ladysmith) WI
Hayward/Stone Lake Eau Claire WI Hayward WI
Hayward/Stone Lake Eau Claire WI Hayward WI
Ladysmith Eau Claire WI Ladysmith WI
Park Falls Eau Claire WI Lake WI
Dresser Eau Claire WI Osceola WI
Park Falls Eau Claire WI Park Falls WI
Hayward/Stone Lake Eau Claire WI Sand Lake WI
Spooner Eau Claire WI ▇▇▇▇▇▇▇ WI
Dresser Eau Claire WI St Croix Falls WI
Hayward/Stone Lake Eau Claire WI Stone Lake WI
Ladysmith Eau Claire WI ▇▇▇▇ WI
Ashland Eau Claire WI Washburn WI
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CHARTER COMMUNICATIONS VI, LLC
HEADEND SYSTEM FRANCHISE AUTHORITY STATE
------- ------ ------------------- -----
Oscoda Oscoda/Ausable Alabaster MI
Oscoda Oscoda/Ausable Alcona MI
Oscoda Oscoda/Ausable Ausable MI
Oscoda Oscoda/Ausable ▇▇▇▇▇▇▇ MI
Oscoda Oscoda/Ausable Caledonia MI
Oscoda Oscoda/Ausable East Tawas MI
Oscoda Oscoda/Ausable Grant MI
Oscoda Oscoda/Ausable Greenbush MI
Oscoda Oscoda/Ausable Harrisville Township MI
Oscoda Oscoda/Ausable Harrisville City MI
Oscoda Oscoda/Ausable ▇▇▇▇▇ MI
Oscoda Oscoda/Ausable Lincoln MI
Oscoda Oscoda/Ausable Lost Lake ▇▇▇▇▇ MI
Oscoda Oscoda/Ausable Oscoda MI
Oscoda Oscoda/Ausable Ossineke MI
Oscoda Oscoda/Ausable Plainfield MI
Oscoda Oscoda/Ausable Tawas City MI
Oscoda Oscoda/Ausable Tawas Township MI
Oscoda Oscoda/Ausable ▇▇▇▇▇▇ MI
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