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EXHIBIT 10.31
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement is made effective as of April 10, 1996,
by and among MULTIVISION OF COMMERCE, INC., a Georgia corporation, and
MULTIVISION NORTHEAST, INC., a Georgia corporation, with offices at 10900
Wilshire Boulevard, Fifteenth Floor, Los Angeles, California 90024 (each
individually a "Seller" and collectively, "Sellers"); FC CABLE HOLDINGS, INC., a
Delaware corporation ("Guarantor"); and TELEVIEW, INC., a Georgia corporation,
with offices at 2000 Industrial Boulevard, Cornelia, Georgia 30531 ("Buyer").
WHEREAS, Sellers own and operate cable television systems located in
and around Commerce, Cornelia, and Jefferson, Georgia, as described in Exhibit
"A" hereto (each individually a "System" and collectively, the "Systems"); and
WHEREAS, Buyer desires to buy and Sellers desire to sell all those
assets, other than those expressly excluded from sale or assumption herein, used
or held for use by Sellers in the operation of the Systems, pursuant to the
terms hereof; and
WHEREAS, (i) Guarantor owns one hundred percent (100%) of the issued
and outstanding shares of stock in each of Sellers, and directly or indirectly
owns one hundred percent (100%) of the issued and outstanding shares of stock in
affiliated corporations owning cable television systems located throughout
Georgia and Alabama; (ii) Buyer desires that Guarantor guarantee the
representations and warranties of Sellers hereunder, guarantee the performance
by Sellers of their obligations hereunder, and covenant not to compete with
Buyer on the terms and conditions hereinbelow set forth; and (iii) Guarantor
desires to facilitate the consummation of the transactions contemplated herein
by providing such guarantees and covenant;
NOW, THEREFORE, in consideration of these premises, and the mutual
covenants, conditions, and promises hereinafter set forth, the parties hereto
represent, warrant, and agree as follows:
1.0 SALE AND PURCHASE OF ASSETS.
1.1 Assets to be Sold. Subject to the terms and conditions
hereof, Sellers, in consideration of Buyer's payment of the Purchase Price (as
defined in Section 2.0), shall sell, transfer, convey, assign, and deliver (or
cause to be sold, transferred, conveyed, assigned and delivered) to Buyer at the
Closing, free and clear of all liabilities, liens, conditions, and encumbrances
(except for those described in Section 5.7 below), and Buyer shall purchase from
Sellers at the Closing, all of the tangible and intangible assets of Sellers
used or held for use in the operation of the Systems (other than those assets
expressly excluded from sale or assumption herein), as follows (all assets
described in Sections 1.1.1 through 1.1.7 immediately below are hereinafter
collectively referred to as the "Assets"):
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1.1.1 Personal Property. Except for any items that
are excluded from assignment pursuant to Section 1.2, below, all machinery,
equipment, tools, vehicles, furniture, fixtures, leasehold improvements, office
equipment, plant, subscriber installations, inventory, and other tangible
personal property used or held for use in the operation of the Systems, as
listed in Schedule 1.1.1 hereto, or equivalent replacements, plus such additions
thereto, and less any deletions therefrom approved in writing by Buyer, as arise
in the ordinary course of business through the Closing Date (all of the
foregoing hereinafter collectively referred to as the "Personal Property");
1.1.2 Real Property. All real property, if any,
owned by Sellers and all leasehold interests in real property ("Leases"), except
for any that are excluded from assignment pursuant to Section 1.2, below, and
all other interests in real property, including all easements and rights of way,
and all improvements, buildings, structures, towers, and fixtures located
thereon, which are used or held for use in the operation of the Systems, as
described in Schedule 1.1.2 hereto (all of the foregoing hereinafter
collectively referred to as the "Real Property");
1.1.3 Governmental Licenses. Except for any that are
excluded from assignment pursuant to Section 1.2, below, all municipal, state,
and federal licenses or franchises to provide cable television service,
applications for such licenses or franchises (if any), domestic satellite, CARS,
business radio, and other licenses granted by the Federal Communications
Commission (hereinafter "FCC"), the Federal Aviation Administration (hereinafter
"FAA"), or any other administrative agency, and all authorizations and permits
relating to the Systems granted to either of Sellers or to any affiliate thereof
by any governmental instrumentality, as described in Schedule 1.1.3 hereto (all
of the foregoing hereinafter collectively referred to as the "Licenses");
1.1.4 Contracts. Except for any that are excluded
from assignment pursuant to Section 1.2, below, all contracts, personal property
leases, pole attachment agreements, and other agreements relating to the
Systems, as described in Schedule 1.1.4 hereto, and all subscriber service
agreements and such additional contracts and agreements as Sellers may have
relating to the operation of the Systems made in the ordinary course of business
and approved in writing by Buyer in accordance with Section 1.3.2 hereof (all of
the foregoing hereinafter collectively referred to as the "Contracts");
1.1.5 Miscellaneous Documentation. All warranties
(to the extent they can be assigned to Buyer), maps, plans, diagrams,
blueprints, schematics, and books and records relating to the Systems, and
personnel files for any employees of the Systems as may be hired by Buyer
effective upon the Closing (other than those books and records described in
Section 1.2.5 hereof);
1.1.6 Subscriber and Customer Lists. All subscriber
and customer lists relating to the Systems;
1.1.7 Intellectual Property. All patents, patent
applications, patent licenses, service names, copyrights, copyright
registrations, trademarks, trade names,
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service marks, and all other information and intangible assets relating to the
Systems, other than "Falcon Cable TV" or any derivatives thereof.
1.2 Excluded Assets. The Assets shall not include the
following:
1.2.1 Cash. Cash or cash equivalents, such as
demand deposits, certificates of deposit, treasury bills, and other marketable
securities, provided, however, that pursuant to Sections 2.2 and 4.0, Seller may
be required to credit Buyer with an amount of cash equal to the amount of any
subscriber deposits assumed by Buyer pursuant to Section 1.3.3;
1.2.2 Refunds. All claims, rights, and interest in
and to any refunds for federal, state, or local income or other taxes or fees of
any nature whatsoever for periods prior to and including the Closing Date,
including, without limitation, fees paid to the U.S. Copyright Office;
1.2.3 Bonds, Deposits, and Insurance Policies. All
franchise, construction, surety, fidelity, performance, and other bonds posted
by either of Sellers in connection with its ownership or operation of the
Systems, including the unused portion of any premiums therefor; all deposits
with third parties securing either of Sellers' performance of its obligations to
or on behalf of such third parties; and all insurance policies maintained by
either of Sellers in connection with its ownership or operation of the Systems;
1.2.4 Accounts Receivable. Accounts receivable
arising or accruing through the Closing Date (provided, however, that after the
Closing, Buyer shall collect such accounts receivable on Seller's behalf as
hereinbelow provided).
1.2.5 Corporate Records. Sellers' minute books,
corporate documents, corporate record books, and such other books and records as
pertain to the organization, existence, or capitalization of Sellers or any
other books and records which either of Sellers is required by law to retain;
1.2.6 Correspondence. Correspondence not relating
to the prior operation of the Systems; and
1.2.7 Miscellaneous. Sellers' programming
agreements.
1.3 Assumption of Obligations and Liabilities. As of the
Closing (as defined in Section 3.0), Buyer shall assume and pay, discharge, and
perform:
1.3.1 Insofar as they relate to the time period
after the Closing Date, the obligations and liabilities of either of Sellers
under the Leases, Licenses, and Contracts listed in Schedules 1.1.2, 1.1.3, and
1.1.4, respectively, and under Contracts made in the ordinary course of business
(other than those relating to assets excluded from the definition of Assets
pursuant to Section 1.2, above) which are cancelable without penalty upon not
more than thirty (30) days notice, and under which (i) the remaining payment
obligation with respect to any such individual Contract (exclusive of that
portion of any such obligation which is allocable to Sellers pursuant to Section
4.0, below) is less than Ten Thousand Dollars ($10,000.00), and (ii) the
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aggregate remaining payment obligation with respect to all such Contracts
(exclusive of that portion of any such obligation which is allocable to Sellers
pursuant to Section 4.0, below) is less than Fifty Thousand Dollars
($50,000.00), provided that if there are such Contracts satisfying the criterion
set forth in clause (i) which, in the aggregate, have remaining payment
obligations equaling or exceeding the amount set forth in clause (ii), Buyer
shall have the right, in its sole discretion, to designate which of such
Contracts it will assume, it being understood that Buyer is obligated to assume
such Contracts only until it cannot assume any more without thereby having
assumed such Contracts which, in the aggregate, have remaining payment
obligations equaling or exceeding the amount set forth in clause (ii);
1.3.2 Insofar as they relate to the time period
after the Closing Date, the obligations and liabilities of either of Sellers
under any other written or oral Leases, Licenses, Contracts, personal property
leases, pole attachment agreements, purchase orders, commitments, or other
agreements relating to the Systems not described on Schedule 1.1.2, 1.1.3, or
1.1.4, but which, at Buyer's sole option, are specifically assumed by Buyer by
notice in writing to either of Sellers after Buyer has been notified of the
existence of any such agreement;
1.3.3 Subscriber service agreements, including any
obligation or liability with respect to subscriber deposits or prepayments; and
1.3.4 All obligations, liabilities, and claims
arising out of Buyer's ownership of the Systems or its operation of the Systems
after the Closing Date.
1.4 Excluded Liabilities. Except for those liabilities and
obligations to be assumed by Buyer at Closing as specifically described herein,
Buyer shall not assume or become liable on (i) any other agreement, contract,
lease, liability, or obligation of either Seller, or (ii) any other
indebtedness, obligation, or liability of either Seller whatsoever, including
any litigation matter arising from the operation of the Systems prior to the
Closing Date, and any wages, salaries, overtime pay, vacation pay, holiday pay,
payroll taxes, or employee benefits relating to any of Sellers' employees
arising out of or attributable to services rendered for Sellers, or otherwise in
connection with the operation of the Systems, on or prior to the Closing Date.
2.0 PURCHASE PRICE.
The purchase price (the "Purchase Price") payable to Sellers
shall be Fifteen Million Dollars ($15,000,000.00), payable as follows:
2.1 Deposit. Upon the execution of this Agreement, Three
Hundred Thousand Dollars ($300,000.00) shall be delivered by Buyer to Community
Bank and Trust - Habersham (the "Deposit Escrow Holder") as a deposit (the
"Deposit"), and placed in a federally insured interest bearing account, with
interest on the Deposit to be retained by Buyer except as set forth below. The
Deposit shall be allocated between the respective Sellers as Sellers shall
instruct the Deposit Escrow Holder in writing prior to the Closing, and upon the
Closing shall be delivered to Sellers in accordance with such instructions and
credited against the Purchase Price to be paid by Buyer. Sellers, Buyer, and the
Deposit Escrow Holder shall sign an escrow agreement containing the terms set
forth in Exhibit 2.1 attached hereto (the "Deposit Escrow Instructions"),
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along with any standard and reasonable general provisions required by the
Deposit Escrow Holder. Should the Closing not occur for any reason, the
following shall apply:
2.1.1 Failure to Close Without Fault. If: (a) each
party hereto shall have satisfied in full all of the obligations of such party
under this Agreement which were to have been satisfied by such party prior to
the Closing and neither party shall have breached any representation, warranty,
covenant, or agreement of such party contained in this Agreement, but (b) the
Closing shall nevertheless fail to take place (without any fault on the part of
either party) because one or more conditions to the Closing shall not have been
satisfied or waived, then either party may terminate this Agreement pursuant to
Section 16.2, below, and either: (i) if the only conditions to the Closing that
have not been satisfied or waived are the obtaining of the consent to transfer
to Buyer one or more of the local cable television franchises and/or the
conditions set forth in Section 9.12 or Section 9.13, below, the Deposit, plus
any interest accrued thereon, shall be delivered to Buyer, or (ii) if any other
condition to the Closing has not been satisfied or waived, the Deposit, plus any
interest accrued thereon, shall be delivered to Sellers. If one of the
conditions not satisfied is the existence of any bona fide legal proceedings of
the nature described in Sections 9.9 or 10.9, below, any party hereto that is a
party to such legal proceedings shall have the right to elect such a
termination.
2.1.2 Failure to Close When Only Sellers Perform.
If all of the conditions set forth in Section 9 below are satisfied at or as of
the Closing (or, in the case of any condition which is to be satisfied at the
Closing, Sellers or the applicable third party shall have demonstrated a
willingness and ability to satisfy such condition if the Closing were to take
place), and Buyer shall nevertheless fail to purchase the Systems in accordance
herewith, Sellers shall retain the Deposit, plus any interest accrued thereon,
and shall have the option of electing either specific performance or rescission
of this Agreement as its sole additional remedies.
2.1.3 Failure to Close When Only Buyer Performs. If
all of the conditions set forth in Section 10 below are satisfied at or as of
the Closing (or, in the case of any condition which is to be satisfied at the
Closing, Buyer or the applicable third party shall have demonstrated a
willingness and ability to satisfy such condition if the Closing were to take
place), and Sellers shall nevertheless fail to sell the Systems to Buyer in
accordance herewith, Buyer shall be entitled to the return of the Deposit, plus
any interest accrued thereon, and shall have the option of electing either
specific performance or rescission of this Agreement as its sole additional
remedies.
2.2 Closing Date Payment and Estimated Prorations. At
Closing, Buyer will pay to Sellers the sum of Fourteen Million Seven Hundred
Thousand Dollars ($14,700,000.00). Also at Closing, the following prorations
shall occur: (i) the amount of any subscriber deposits estimated by Sellers as
likely to be held as of the Closing on behalf of subscribers of the Systems
shall be credited to Buyer; and (ii) the amount estimated by Sellers as likely
to be the net amount, as of the Closing, of any subscriber prepayments and other
proratable items described in Section 4.0, below shall be credited to Buyer or
Sellers, as applicable. The net amount of the credits described in clauses (i)
and (ii) shall be reflected in a certificate to be delivered to Buyer at least
five (5) days prior to the Closing Date, and shall be added to or subtracted
from the foregoing payment. Buyer acknowledges that the certificate to
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be provided by Sellers to Buyer pursuant to this Section 2.2 will be based upon
Sellers' best estimates as of the time it is delivered, such estimates are not
warranted as to their completeness or accuracy, and such estimates are subject
to subsequent adjustment as provided in Section 4.0. The amount to be paid at
Closing, determined as set forth above, will be allocated between the respective
Sellers as Sellers shall instruct Buyer in writing prior to the Closing, and
shall be paid directly to Sellers on the Closing Date in accordance with such
instructions by federal funds wire transfer or other means mutually agreed to in
writing by Buyer and Sellers.
3.0 CLOSING AND CLOSING DATE.
The "Closing" pursuant to this Agreement shall take place
between the twenty-fifth (25th) day of the month during which all of the
necessary consents have been obtained and all other conditions precedent to the
parties' obligations hereunder have been satisfied and the first (1st) day of
the immediately following month (with a preference that it occur on the last
business day of a month), unless otherwise mutually agreed to in writing by
Buyer and Sellers. As used herein, the term "Closing Date" shall refer to the
date of the Closing. Unless the Closing can take place by mail (i.e., by Sellers
delivering all of their closing deliveries in trust to the offices of counsel
for Buyer, King & Spalding, 191 Peachtree Street, N.E., Atlanta, Georgia
30303-1763, Attn: Horace H. Sibley, Esq., with such deliveries to be held by
said counsel pending (a) the receipt by Sellers of the balance of the Purchase
Price to be paid on the Closing Date, and (b) the delivery to Sellers' counsel
of all of the other closing deliveries to be made by Buyer hereunder), the
Closing shall take place at the offices of Sellers in Los Angeles, California.
In the event the Closing does not take place on or before October 1, 1996, this
Agreement shall become subject to termination as provided in Section 16.2, with
the results prescribed therein.
4.0 PRORATIONS.
All expenses arising from the operations of the Systems (to the
extent applicable by reason of assignment and/or assumption hereunder), and all
revenues arising from the operations of the Systems (other than revenues
relating to items which are excluded from the Assets as provided in Section
1.2), shall be prorated between Buyer and Sellers as of 11:59 p.m. on the
Closing Date so that Sellers receive the benefit of such revenues and bear such
expenses which relate to the operations of the Systems for the period through
the Closing Date and Buyer receives the benefit of such revenues and bears such
expenses relating to the operations of the Systems after the Closing Date. The
net amount of such prorations shall be adjusted by crediting Buyer with the
amount of any subscriber deposits assumed by Buyer pursuant to Section 1.3.3.
The initial statement of prorations ("the Initial Settlement Statement"), which
will reflect any adjustments to the amounts set forth in the certificate to be
provided by Sellers to Buyer pursuant to Section 2.2, above, will be prepared by
Sellers and delivered to Buyer as soon as practicable, but not later than one
hundred twenty (120) days after the Closing Date. Within thirty (30) days after
delivery of the Initial Settlement Statement, Buyer shall, in writing, provide
Sellers reasonable detail of the nature and extent of any disagreement with the
Initial Settlement Statement, and Buyer and Sellers shall have a period of
thirty (30) days in which to resolve such disagreement. If the parties are
unable to resolve such disagreement within such thirty (30) day period, the
matter shall be submitted to an accounting firm reasonably acceptable to Buyer
and Sellers, whose determination shall be binding on Buyer and Sellers. Each
party shall bear the fees
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and expenses of its own representatives, including its independent accountants,
if any, and the fees and expenses of any firm selected to resolve any
disagreement between the parties shall be borne equally by Buyer and Sellers.
Within three (3) business days following a final determination (whether as a
result of Buyer failing to give timely written notice of its disagreement with
the Initial Settlement Statement, a resolution by Buyer and Sellers of any such
disagreement, or a determination by an accounting firm selected to resolve any
disagreement between the parties), Buyer shall pay any amount owed to Sellers,
or Sellers shall pay any amount owed to Buyer, as the case may be. If any item
of revenue or expense subject to proration hereunder cannot be ascertained or
the proration cannot be calculated within the time limits set forth above, then
it shall be separately prorated as soon as possible thereafter and, subject to
the same method for resolving disagreements discussed above, appropriate payment
in satisfaction thereof shall be made within three (3) business days after its
determination.
5.0 REPRESENTATIONS AND WARRANTIES OF SELLERS.
As an inducement to Buyer to enter into this Agreement and to
consummate the transactions contemplated hereby, Sellers represent and warrant
to Buyer as follows:
5.1 Organization and Standing. Sellers are corporations duly
organized, validly existing, and in good standing under the laws of Georgia, and
are duly qualified to do business in the State of Georgia.
5.2 Corporate and Other Authorizations. Sellers have full
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby. This Agreement and all transactions
contemplated hereby have been duly and validly authorized by all necessary
actions of Sellers and of each Seller's board of directors and shareholders, and
the Agreement constitutes a legal, valid, and binding obligation of Sellers
enforceable in accordance with its terms. Neither the execution, delivery, and
performance of this Agreement nor the consummation of the transactions
contemplated hereby by Sellers will, with or without the giving of notice or the
passage of time, or both, in any material respect conflict with, result in a
default or loss of rights under, give rise to any rights of termination,
cancellation, or acceleration under, or result in the creation of any lien,
charge, or encumbrance on the Systems or the Assets pursuant to, (1) any
provision of any articles of incorporation, bylaws, corporate resolutions,
franchises, or any other document regulating the actions of either Seller; (2)
any note, bond, indenture, mortgage, deed of trust, contract, agreement, lease,
license, or other instrument or obligation relating to the Systems or the Assets
to which either Seller is a party or by which it may be bound or affected; or
(3) any law, order, judgment, ordinance, or decree to which either Seller is a
party or by which it may be bound or affected.
5.3 Consents. Except as described in Schedule 5.3, no
material permit, consent, approval, or authorization of, or declaration to or
filing with, any governmental or regulatory authority, and no material consent
or approval from any other party, is required prior to the Closing in connection
with the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
5.4 Conduct of Business in Ordinary Course. Since September
30, 1995, Sellers have conducted their business relative to the Systems only in
the ordinary course and has
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not (i) sold or otherwise disposed of any of the Assets which are, in the
aggregate, material to the operation or maintenance of the Systems, except for
inventory and/or services sold in the ordinary course of business or assets sold
or disposed of and replaced by other assets of comparable utility; (ii) to the
best of Sellers' knowledge suffered any damage, destruction, or loss not covered
by insurance which has a material adverse impact on the Systems; or (iii) to the
best of Sellers' knowledge suffered any other change, event, or condition which
materially and adversely affects the condition of the Systems, other than
changes, events, or conditions affecting the cable television industry in
general.
5.5 Claims or Legal Actions. Except as disclosed in Schedule
5.5, and excluding matters relating to the cable television industry in general,
(i) there are not to Sellers' knowledge any material claims, legal actions,
governmental investigations, or other proceedings (all collectively referred to
as "Claims") in progress or pending against or relating to either of Sellers
with respect to the Systems; (ii) there are not to Sellers' knowledge any such
Claims threatened, nor to Sellers' knowledge any basis for any such Claims;
(iii) there is not in existence to Sellers' knowledge any judgment or order
requiring either of Sellers to take any action of any kind with respect to the
Systems or the Assets, or to which the Systems or the Assets are subject or by
which they are bound or affected.
5.6 Compliance with Laws. To the best of Sellers' knowledge,
each Seller has complied in all material respects with the Licenses and all
laws, rules, regulations, and ordinances (hereinafter collectively "Laws")
applicable to the Systems.
5.7 Title to and Condition of Assets. At and as of the
Closing, each Seller will have good and marketable title to its respective
Assets to be transferred hereunder (or will have been granted the right to
transfer or cause to be transferred to Buyer such Assets), free and clear of all
liens, security interests, encumbrances, restrictions, and claims of any nature
whatsoever, except those minor imperfections of title and encumbrances, if any,
which do not materially detract from the value of the properties subject thereto
and which do not materially interfere with the present and continued use of the
Assets or with the conduct of the normal operations of the Systems. The Assets
and the Systems are functioning and operational, provided, however, Sellers make
no warranty whatsoever as to the effectiveness or quality thereof.
5.8 Copyright Filings. Sellers have filed with the U.S.
Copyright Office all notices, Statements of Account, Supplements, Declarations
of Gross Receipts, and Gross Receipts Adjustment Schedules (collectively,
"Copyright Filings") required pursuant to the rules and regulations of the
Copyright Office and copyright acts and amendments, and have paid all royalty
fees and other fees reflected in such Copyright Filings, relating to the
Systems.
5.9 Validity of Leases, Licenses, and Contracts. No actions
or inactions on the part of Sellers have caused any of the Leases, Licenses, and
Contracts to be invalid, non-binding, or other than in full force and effect.
There is not, under any Lease, License, or Contract, any material default by
either Seller which, after notice or lapse of time, or both, would constitute
such a default as a result of which any other party would have the right to
terminate such Lease, License or Contract, and to the best of Sellers'
knowledge, there is not, under any Lease, License, or Contract, any material
default by any other party or other event which, after notice or lapse of
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time, or both, would constitute such a default as a result of which either
Seller would have the right to terminate such Lease, License or Contract. True
and complete copies of all Leases, Licenses, and Contracts listed in Schedules
1.1.2, 1.1.3, and 1.1.4 have been delivered to Buyer. All reports of Seller to
the FCC and to municipal authorities are true and correct in all material
respects and have been duly filed. Other than subscriber service agreements,
contracts made in the ordinary course of business and not excluded from
assumption pursuant to Section 1.3.1 hereof, and the Leases, Licenses, and
Contracts described in Schedules 1.1.2, 1.1.3, and 1.1.4 hereto, Sellers are not
party to any contract, agreement, license, franchise or permit material to the
operation of the Systems. None of the Leases, Licenses, or Contracts would be
breached by virtue of the transactions contemplated hereby or by virtue of the
assignment thereof by Sellers to Buyer, provided any consents referred to in
Schedule 5.3 are obtained.
5.10 Franchise Fees. The current franchise fees being charged
under each of the Systems' franchises are disclosed in Schedule 5.10 hereto.
5.11 Pole Attachment Agreements. For all pole attachment
agreements relating to the Systems, the current rates being charged as pole
attachment fees and the number of poles covered by each such agreement are
disclosed in Schedule 5.11 hereto.
5.12 Labor and Employment Matters. Schedule 5.12 includes a
schedule showing the name of each person regularly employed in the operation of
the Systems, along with each such person's current annual salary rate and any
amounts paid or payable to each such person as bonus payments, indirect and/or
deferred compensation, or similar additional compensation payments for the
current and prior fiscal years. Without material exception, Sellers have
complied and will comply with all applicable laws and regulations relating to
the employment of labor. To the best of Sellers' knowledge, there are no unfair
labor practice charges or claims pending against Sellers, nor any pending or
threatened charges against Sellers with respect to any wage and hour, employment
discrimination, or other statutory violation. Neither of the Sellers is a party
to or bound by any collective bargaining agreement with respect to the
operations of the Systems, nor has either of them experienced any strikes,
grievances, claims of unfair labor practices or other collective bargaining
disputes involving the Systems or any of the employees thereof.
5.13 Benefit Plans. Neither the Systems nor the Assets are
subject to any lien arising under the Internal Revenue Code of 1986, as amended,
or the Employee Retirement Income Security Act of 1974, as amended, arising out
of any pension plans or employee benefit plans maintained or contributed to by
Sellers or any of Sellers' affiliates.
5.14 Brokerage Commission. Other than the agreement pursuant
to which Sellers have agreed to pay a brokerage commission to Communications
Equity Associates, Inc., Sellers have not entered into any agreement or other
arrangement pursuant to which a brokerage or other commission or finder's fee
will be payable arising out of the transactions contemplated by this Agreement.
5.15 No Other Commitment to Sell. No part of the Systems or
any of the Assets is directly or indirectly subject in any manner to any written
or oral commitment or any
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arrangement for the sale, transfer, assignment, or disposition thereof, in whole
or in part, except for actions taken in the ordinary course of business or
pursuant to this Agreement.
6.0 REPRESENTATIONS AND WARRANTIES OF BUYER.
As an inducement to Sellers to enter into this Agreement and to
consummate the transactions contemplated hereby, Buyer represents and warrants
to Sellers as follows:
6.1 Organization and Standing. Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Georgia, and is duly qualified to do business in the State of Georgia.
6.2 Corporate and Other Authorizations. Buyer has full power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement and all transactions contemplated hereby
have been duly and validly authorized by all necessary actions of Buyer's Board
of Directors, and the Agreement constitutes a legal, valid, and binding
obligation of Buyer enforceable in accordance with its terms. Neither the
execution, delivery, and performance of this Agreement nor the consummation of
the transactions contemplated hereby by Buyer will, with or without the giving
of notice or the passage of time, or both, in any material respect conflict
with, result in a default or loss of rights under, or result in the creation of
any lien, charge, or encumbrance pursuant to, (1) any provision of the articles
of incorporation, bylaws, corporate resolutions, franchises, or any other
document regulating the actions of Buyer; (2) any note, bond, indenture,
mortgage, deed of trust, contract, agreement, lease, license, or other
instrument or obligation to which Buyer is a party or by which it may be bound
or affected; or (3) any law, order, judgment, ordinance, or decree to which
Buyer is a party or by which it may be bound or affected.
6.3 Brokerage Commission. Buyer has not entered into any
agreement or other arrangement pursuant to which a brokerage or other commission
or finder's fee will be payable arising out of the transactions contemplated by
this Agreement.
7.0 CONDUCT OF BUSINESS OF SELLERS PENDING CLOSING.
Except as otherwise expressly provided herein, between the date
hereof and the Closing:
7.1 Operations in Ordinary Course. Sellers will conduct
their business and affairs substantially in the ordinary course and consistent
with prior practices;
7.2 Maintenance of Systems. Sellers will maintain, keep, and
preserve the Systems and Assets in the same general operating condition as on
the date hereof, ordinary wear and tear excepted;
7.3 Maintenance of Business. Sellers will use reasonable,
good faith efforts to preserve intact their businesses and organizations
relating to the Systems;
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7.4 Goodwill. Sellers will use reasonable, good faith
efforts to preserve for the benefit of Buyer the goodwill of its suppliers and
customers and others having business relations with them;
7.5 Contracts and Agreements. Except for transactions
contemplated hereby, Sellers will not enter into any contract, agreement,
commitment, or other understanding or arrangement relating to the Assets or the
Systems, other than in the ordinary course of business, and will notify Buyer in
writing at least twenty (20) days prior to the Closing Date of all material
contracts, agreements, commitments, or other understandings or arrangements
relating to the Assets or the Systems entered into in the ordinary course of
business after the effective date hereof, unless exigent circumstances require
that any such contract, agreement, commitment, or other understanding or
arrangement be entered into thereafter, in which event Buyer will promptly be
notified thereof;
7.6 Acts and Transactions. Sellers will not, except for
transactions contemplated by this Agreement or matters not within Sellers'
control, perform or take any action or incur or permit to exist any of the acts,
transactions, events, or occurrences of the type described in Section 5.4;
7.7 Breaches or Modifications. Sellers will not, except for
transactions contemplated by this Agreement, breach, cancel, modify, or amend
any Lease, Contract, or License in any material respect;
7.8 Sale or Transfer. Sellers will not sell, dispose of, or
transfer any of the Assets, except as permitted herein, or permit the creation
of any mortgage, pledge, lien or other encumbrance, security interest, or
imperfection of title thereon or with respect thereto, except for those
described in Section 5.7 and encumbrances which will be extinguished at or prior
to the Closing, without Buyer's prior written consent, which consent shall not
be unreasonably withheld or delayed;
7.9 Subscriber Rates, Deposits, Etc. Except for those
approved marketing practices described on Exhibit 7.9 and any national or
regional promotions offered or authorized by any of the companies currently
providing programming to the Systems, neither of Sellers will modify or amend
any rate, deposit, or other material condition under which it does business with
its subscribers or potential subscribers, nor undertake any special promotion
pursuant to which any subscriber or potential subscriber will be entitled to
receive any service after the Closing Date at a lesser rate than those presently
being charged for such service, or be entitled to receive any premium, prize, or
other inducement after the Closing Date; and
7.10 Representations and Warranties. Sellers will not take
any actions which would cause any of the representations and warranties of
Sellers contained in this Agreement to be untrue in any material respect as of
the Closing.
8.0 ADDITIONAL COVENANTS AND AGREEMENTS.
8.1 Access to Business and Records. During reasonable
business hours, Sellers will permit Buyer to have access to the premises in
which Sellers conduct their business
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and to all of their books, records, and personnel relating to the Systems;
provided, however, Buyer will not contact any of Sellers' employees at the
Systems, other than those at the Divisional Vice President level or higher,
without Sellers' prior consent, which consent shall not be unreasonably withheld
or delayed. Sellers will also furnish to Buyer such financial data, operating
data, contracts, and other documents which relate to the Systems as Buyer may
reasonably request; provided, however, that Buyer shall pay for the cost of
preparation of any such materials as are not normally prepared by Sellers in the
ordinary course of Sellers' business. Buyer and its representatives will be
afforded the opportunity, upon reasonable notice and at reasonable times, to
examine the business, assets, and operations of the Systems, including an
on-site inspection of the Systems and Assets. Buyer shall hold all information
obtained in such examinations confidential, except as may be required for
legitimate business purposes.
8.2 Information After Closing. For a period of five (5)
years after the Closing Date, Buyer shall give to Sellers, their
representatives, and their accountants access to any records delivered to Buyer
by either of Sellers pursuant to this Agreement, and Sellers shall give Buyer
access to any records relating to the Systems for the three (3) complete fiscal
years ending prior to the Closing Date, in each case to the extent necessary to
enable Buyer or Sellers, as the case may be, to prepare audited and unaudited
financial statements, tax returns, or other reports, and to obtain any
information any of them may require in connection with the audit of any tax
return or other report filed by any of them.
8.3 Cooperation. The parties shall each file, as quickly as
possible, any applications required to be filed by such party with any
governmental authority, including the FCC, to obtain such consents as are
necessary to assign the Licenses identified and described in Schedule 1.1.3, and
shall otherwise cooperate fully with each other and their respective counsel and
accountants in connection with any steps required to be taken as part of their
respective obligations under this Agreement, and all parties will use
reasonable, good faith efforts to consummate the transactions contemplated
hereby and to fulfill their obligations hereunder.
8.3.1 Regulatory Approvals the Responsibility of
Sellers. Sellers shall be responsible for the prompt, timely filing and diligent
pursuit of (i) any applications necessary to obtain any required permits,
consents, or approvals of the FCC (other than for the 214 Approval as defined
below), the FAA, or any state, local, county, or municipal agency or other
governmental authority, to the transfer of the Systems and the Assets, including
the Licenses, to Buyer hereunder; (ii) the renewal or extension of any expired
franchise; and (iii) any Notification and Report Forms and related material that
Sellers may be required to file with the Federal Trade Commission ("FTC") and
the Antitrust Division of the United States Department of Justice ("DOJ") under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act").
Sellers will further use their best efforts to obtain an early termination of
any applicable waiting period under the HSR Act, and will make any further
filings pursuant thereto that may be necessary, proper, or advisable in
connection therewith.
8.3.2 Regulatory Approvals the Responsibility of
Buyer. Buyer shall be responsible for the prompt, timely filing and diligent
pursuant of (i) any applications with the FCC necessary to obtain any required
permits, consents, or approvals of the FCC to Buyer's Application for Authority
pursuant to Section 214 of the Communications Act of 1934,
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as amended or as superseded (the "214 Approval"), and (ii) any Notification and
Report Forms and related material that Buyer may be required to file with the
FTC and the Antitrust Division of the DOJ under the HSR Act. Buyer will further
use its best efforts to obtain an early termination of any applicable waiting
period under the HSR Act, and will make any further filings pursuant thereto
that may be necessary, proper, or advisable in connection therewith.
8.4 No Rate Increases Without Consent. Sellers will not
implement any rate increases or channel additions or reconfigurations of the
existing tier service levels prior to the Closing, unless agreed to by Buyer in
writing.
8.5 Employees to be Hired by Buyer. Buyer shall provide
Sellers, at least thirty (30) days prior to the Closing Date (but not earlier
than five (5) days following Buyer's receipt of an executed copy of this
Agreement with Schedule 5.12 attached and initialed by Sellers), a written list
of the names of all of the Systems' current employees, if any, to be hired as
employees of Buyer after the Closing Date. Buyer has no obligation to employ any
of Sellers' employees.
8.6 Allocation of Purchase Price. The Purchase Price shall be
allocated as set forth on Schedule 8.6, or as such may be amended by mutual
agreement of the parties in the manner hereinafter provided for amendment of
this Agreement. Buyer and Sellers shall, for purposes of all federal, state, and
other income tax returns, (i) adopt the allocation as set forth on Schedule 8.6;
(ii) execute any forms required by Section 1060 of the Internal Revenue Code of
1986, as amended; and (iii) not take any position inconsistent with the
allocation in Schedule 8.6, as amended, upon examination of any tax return or
refund claim, litigation, or otherwise.
8.7 Collection of Accounts Receivable. For a period of three
(3) months after the Closing, Buyer shall collect on Sellers' behalf, and remit
to Sellers within fifteen (15) days following the last day of the month during
which the collection occurred, all accounts receivable relating to the period
prior to and including the Closing Date which are not paid directly to Sellers.
In doing so, Buyer shall use such efforts as would be ordinary and reasonable if
Buyer were collecting such accounts receivable on its own behalf (provided,
however, Buyer shall not be obligated to institute any legal proceedings or use
any collection agencies as part of such efforts), and Buyer shall, upon
reasonable notice, provide Sellers with such access to its records and personnel
as is reasonably necessary in order for Sellers to verify the collection of such
accounts receivable and the efforts expended by Buyer in doing so.
8.8 Buyer's Obligations with Respect to Programming. As of
the Closing, Buyer shall add the Systems to each of the relevant schedules or
exhibits to Buyer's then current affiliate agreements with (i) Turner Network
Television, Inc. (for the satellite television programming service known as
"Turner Network Television"); (ii) Cable News Network, Inc. (for the satellite
television programming services known as "Cable News Network" and "Headline
News"); (iii) ESPN, Inc. (for the satellite television programming services
known as "ESPN" and "ESPN2"); and (iv) USA Network (for the satellite television
programming service known as "USA Network"); all at the same level of service as
such programming services are carried by the Systems as of the Closing. In
addition, Buyer shall not delete or reduce the hours of the carriage of any
programming on the Systems for at least one hundred twenty (120) days after the
Closing without the prior written consent of Sellers.
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8.9 Third Party Consents, Waivers and Approvals. Following
the execution of this Agreement, and subject to Buyer's cooperation as set forth
in the immediately following sentence, Sellers shall promptly and diligently
pursue the waiver, consent, or approval of all persons or entities listed on
Schedule 5.3 whose waiver, consent, or approval is required to transfer any of
the Assets to Buyer on the Closing Date in all circumstances where, without such
waiver, consent, or approval, the transactions contemplated by this Agreement
would constitute an occurrence of default under the provisions of, result in the
acceleration of any obligation under, or give rise to a right of any other party
thereto to terminate its obligations under, any contractual arrangement with
Sellers. Buyer shall promptly and diligently cooperate with any reasonable
request by Sellers to cooperate in the pursuit of any such waivers, consents, or
approvals.
8.10 As-Is/Where-Is. Notwithstanding anything to the contrary
contained in this Agreement (other than the last sentence of Section 5.7) or in
any other agreement, instrument, or document delivered to Buyer in connection
with the transaction contemplated hereunder, Sellers shall not be deemed to have
made any representations or warranties, express or implied, hereunder or
thereunder regarding or with respect to the physical condition or engineering
capability of the cable plant, equipment, and other personal property
constituting the Systems and the Assets. Subject to the foregoing and to
Sellers' obligations under Sections 7.1 and 7.2 hereof, the Systems and the
Assets are being purchased hereunder "as-is, where-is", with Buyer assuming all
risks whatsoever with regard to the functionality thereof and any repairs or
replacements that may be necessary or desired.
9.0 CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS.
All obligations of Buyer at the Closing hereunder are subject to
the fulfillment of each of the following conditions at or prior to the Closing,
any or all of which may be waived in writing in whole or in part by Buyer:
9.1 Representations and Warranties. The representations and
warranties of Sellers and Guarantor contained herein shall be true and correct
in all material respects.
9.2 Covenants. Sellers shall in all material respects have
performed their obligations, agreements, and covenants contained in this
Agreement to be performed or complied with by them on or before the Closing
Date.
9.3 Consents and Approvals. Except for any consents or
approvals of from H.W. Stewart, Jr. as may otherwise be required, Sellers and
Buyer shall have obtained all consents and approvals of third persons or
parties, including the FCC, the FAA, the FTC, the DOJ, all franchise
authorities, and all other governmental authorities, bodies, or agencies having
jurisdiction over the transactions contemplated by this Agreement, or any part
thereof, necessary for the consummation of the transactions contemplated by this
Agreement. All presently expired franchises shall have been extended or renewed.
If the HSR Act is applicable to this transaction, all required waiting periods
thereunder shall have expired.
9.4 Instruments of Conveyance. Sellers shall have delivered
to Buyer a Bill of Sale and Assignment in the form of Exhibit 9.4 hereto, and
all other applicable assignments and other good and sufficient instruments of
conveyance, transfer, and assignment, all in form and
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substance reasonably satisfactory to Buyer, as shall be effective to vest in
Buyer good and marketable title in and to the Systems and the Assets transferred
pursuant to this Agreement, free and clear of all mortgages, liens,
restrictions, encumbrances, claims, and obligations, of any nature whatsoever,
except as permitted in this Agreement.
9.5 Opinion of Counsel. Buyer shall have been furnished with
an opinion of Goldman & Kagon Law Corporation, counsel for Sellers, dated the
Closing Date and addressed to Buyer, in the form attached hereto as Exhibit 9.5.
9.6 Adverse Change. Between the date of this Agreement and
the Closing, there shall have been no material adverse change in the Systems or
the Assets, other than a casualty loss which has been restored or replaced to
substantially the condition in which it existed prior to such change. For
purposes of this Agreement, the institution of or change in any laws, rules, or
regulations shall in no event be deemed to constitute an adverse change in the
Systems or the Assets.
9.7 Resolutions. Sellers and Guarantor, respectively, shall
have delivered to Buyer copies of resolutions of their respective Boards of
Directors certified as true and correct on the Closing Date by their respective
Secretaries, in the case of Sellers authorizing and approving the execution of
this Agreement and the consummation of the transactions contemplated hereby, and
in the case of Guarantor authorizing and approving the provision of its
guarantees and delivery of its covenant not to compete as set forth herein.
9.8 Certificate of Compliance. Sellers shall have delivered
to Buyer a Certificate of Compliance in the form of Exhibit 9.8 hereto, signed
by duly authorized officers of Sellers and dated the Closing Date.
9.9 Legal Proceedings. There shall not be pending or
threatened any lawsuit, claim, or legal action involving Buyer, either of
Sellers, the Assets, or the Systems relating to the transactions contemplated by
this Agreement which would, if determined adversely to Buyer, materially
increase the effective cost to it of acquiring the Systems, or if determined
adversely to either of Sellers, have a material adverse effect upon the fair
market value of the Assets or the Systems.
9.10 Certificates of Good Standing. Sellers shall have
delivered to Buyer certificates from the State of Georgia indicating that each
Seller is in good standing in the State of Georgia, issued as of a date not more
than thirty (30) days prior to the Closing Date.
9.11 Covenant not to Compete. Sellers and Guarantor shall
each have delivered to Buyer, on behalf of themselves and their affiliates, a
Non-Competition Agreement in the form of Exhibit 9.11 covering the territory
included therein.
9.12 Number of Equivalent Subscribers. The Systems will have
not less than Nine Thousand Two Hundred Fifty (9,250) Equivalent Subscribers (as
hereinbelow defined) as of the end of the most recently concluded month ending
at least ten (10) days prior to the Closing Date, as certified by Sellers in a
certificate delivered to Buyer not more than five (5) days prior to the Closing
Date, which certificate shall be certified as true, correct, and complete by the
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Treasurer or other financial officer of Sellers. The term "Equivalent
Subscribers" shall mean the sum of all "Qualified Basic Subscribers" and all
"Equivalent Basic Subscribers" in the Systems. A "Qualified Basic Subscriber"
shall mean an individual or household receiving at least basic cable service who
has paid any applicable deposit and installation fee, who has paid the normal
monthly service charge applicable to such individual or household for at least
one (1) month of basic cable service, and whose account is not more than two (2)
months in arrears (other than arrearages which, for each delinquent individual
or household, aggregate Five Dollars ($5.00) or less (hereinafter, "Exempt
Arrearages")) as of the Closing Date. For purposes of this Agreement, subscriber
arrearages shall be measured from the first day of the period of cable service
to which the earliest statement not paid by the subscriber applies. The number
of "Equivalent Basic Subscribers" shall mean, for each commercial or bulk
account, the quotient obtained by dividing (i) the total billings for the most
recently reported monthly period to such commercial or bulk account by (ii) the
standard rate charged to regular subscribers of the Systems for the levels of
service received by such commercial or bulk account.
9.13 Inspection and Compliance. Buyer's inspection of the
Systems shall not have uncovered any matters which are inconsistent, in a manner
that is materially adverse to Buyer, with any written representations about the
Systems theretofore presented to Buyer. Buyer's failure to notify Sellers, on or
before April 15, 1996, of Buyer's election to terminate this Agreement based
upon a failure to satisfy the condition set forth in this Section 9.13 shall be
deemed to constitute a waiver by Buyer of the condition set forth in this
Section 9.13.
9.14 Other Documents. Sellers shall have delivered such other
additional documents as may be reasonably requested by Buyer to consummate the
transaction.
10.0 CONDITIONS PRECEDENT TO SELLERS' OBLIGATIONS.
All obligations of Sellers at the Closing hereunder are subject
to the fulfillment of each of the following conditions at or prior to the
Closing, any one or more of which may be waived in writing in whole or in part
by Sellers:
10.1 Purchase Price. Receipt by Sellers of their respective
portions of the Purchase Price as described in Section 2.0.
10.2 Representations and Warranties. All representations and
warranties of Buyer contained herein shall be true and correct in all material
respects.
10.3 Covenants. Buyer shall, in all material respects, have
performed all of its obligations, agreements, and covenants in this Agreement to
be performed or complied with by it on or before the Closing Date.
10.4 Resolutions. Buyer shall have delivered to Sellers
copies of resolutions of its Board of Directors authorizing and approving the
execution of this Agreement and the consummation of the transactions
contemplated hereby, certified as true and correct on the Closing Date by
Buyer's Secretary.
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10.5 Certificate of Compliance. Buyer shall have delivered
to Sellers a Certificate of Compliance in the form of Exhibit 10.5 hereto,
signed by its Chief Operating Officer and dated the Closing Date.
10.6 Assumption Agreement. Buyer shall have executed and
delivered to Sellers an Assumption Agreement in the form of Exhibit 10.6, dated
the Closing Date.
10.7 Opinion of Counsel. Sellers shall have received an
opinion of King & Spalding, counsel for Buyer, dated the Closing Date and
addressed to Sellers, in the form of Exhibit 10.7 hereto.
10.8 Consents and Approvals. Sellers and Buyer shall have
obtained all consents and approvals of third persons or parties, including the
FCC, the FAA, the FTC, the DOJ, all franchise authorities, and all other
governmental authorities, bodies, or agencies having jurisdiction over the
transactions contemplated by this Agreement, or any part thereof, necessary for
the consummation of the transaction contemplated by this Agreement. If the HSR
Act is applicable to this transaction, all required waiting periods thereunder
shall have expired.
10.9 Legal Proceedings. There shall not be pending or
threatened any lawsuit, claim, or legal action relating to the transactions
contemplated by this Agreement seeking to enjoin or render unlawful, or seeking
damages arising out of, its consummation.
10.10 Other Documents. Buyer shall have delivered such other
additional documents as may be reasonably requested by Sellers to consummate the
transactions contemplated by this Agreement.
11.0 FURTHER ASSURANCES.
At and after the Closing, Sellers and Buyer will, without
further consideration, execute and deliver such further instruments and
documents and do such other acts and things as the other party or parties may
reasonably request in order to effect or confirm the transactions contemplated
by this Agreement.
12.0 INDEMNIFICATIONS AND CLAIMS THRESHOLD.
12.1 Indemnification of Buyer by Sellers. Sellers and their
successors and assigns shall indemnify and hold Buyer harmless against and in
respect of, and shall reimburse Buyer for: (i) any and all losses, liabilities,
or damages resulting from any untrue representation, breach of warranty, or
nonfulfillment of any covenant or agreement by Sellers contained herein or in
any certificate, document, or instrument delivered to Buyer hereunder by any
officer of Sellers pursuant to any express provision of this Agreement; (ii) any
and all obligations of Sellers not specifically assumed by Buyer pursuant to the
terms of this Agreement and the Assumption Agreement and relating to events
which occurred prior to the Closing; (iii) any liabilities or obligations to pay
any brokerage fees, finder's fees, or commissions to Sellers' broker,
Communications Equity Associates, Inc.; and (iv) any and all actions, suits,
proceedings, claims, demands, assessments, judgments, costs, and expenses,
including, without limitation, reasonable
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legal fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
12.2 Indemnification of Sellers by Buyer. Buyer and its
successors and assigns shall indemnify and hold Seller harmless against and in
respect of, and shall reimburse Seller for: (i) any and all losses, liabilities,
or damages resulting from any untrue representation, breach of warranty, or
nonfulfillment of any covenant or agreement by Buyer contained herein or in any
certificate, document, or instrument delivered to Sellers hereunder by any
officer of Buyer pursuant to any express provision of this Agreement; (ii) any
and all losses, liabilities, or damages resulting from Buyer's operation or
ownership of the Systems after the Closing or relating to obligations undertaken
by Buyer pursuant to the Assumption Agreement or otherwise; (iii) any
liabilities or obligations to pay any brokerage fees, finder's fees, or
commissions to any broker or agent retained by or on behalf of Buyer; and (iv)
any and all actions, suits, proceedings, claims, demands, assessments,
judgments, costs, and expenses, including, without limitation, reasonable legal
fees and expenses, incident to any of the foregoing or incurred in investigating
or attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity.
12.3 Indemnification Procedure. If any claim covered by
Section 12.1 or Section 12.2 is asserted by a third party, the party entitled to
indemnification thereunder (the "Indemnitee") shall promptly give the party
required to provide indemnification thereunder (the "Indemnitor") notice thereof
and give the Indemnitor an opportunity to defend or settle the same with counsel
of the Indemnitor's choice and at the Indemnitor's expense. The failure to give
the Indemnitor prompt notice of any such claim shall not affect the Indemnitor's
indemnification obligations, except that the Indemnitee shall be responsible for
any damages proximately incurred by the Indemnitor as a result of such failure.
The Indemnitee shall extend its full cooperation in connection with such
defense, subject to reimbursement for actual out-of-pocket expenses incurred
thereby as the result of a request by the Indemnitor. The settlement of any such
claim by the Indemnitee prior to giving the Indemnitor such opportunity or while
the Indemnitor is providing an appropriate defense, without the Indemnitor's
prior written consent (which consent shall not be unreasonably withheld or
delayed), shall release the Indemnitor from its obligations hereunder with
respect to such claim or action so settled. No settlement which fails to contain
a provision expressly negating any claim of wrongdoing on the part of the
Indemnitee shall be entered into on behalf of the Indemnitee without its prior
written consent. Such consent shall not be unreasonably withheld or delayed, and
may only be withheld to the extent the Indemnitee reasonably believes the lack
of such a provision may result in a material adverse impact on its business
operations. If the Indemnitor fails to defend any such claim within a reasonable
time, the Indemnitee shall be entitled to assume the defense thereof and the
Indemnitor shall be bound by the results obtained by the Indemnitee with respect
to such claim, and the Indemnitor shall be liable to the Indemnitee for all
expenses incurred in such defense and/or in any action to enforce its
indemnification rights hereunder, including, without limitation, reasonable
attorneys' fees and any settlement payments.
12.4 Claims Threshold. Notwithstanding anything to the
contrary contained in this Agreement, neither party shall be entitled to pursue
claims against the other arising hereunder until the aggregate amount of all of
such claims equals or exceeds One Hundred Fifty Thousand Dollars ($150,000.00)
This One Hundred Fifty Thousand Dollar ($150,000.00)
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threshold shall not apply to claims arising under Section 12.1(iii) or Section
12.2(iii), above, or with respect to either party's right to receive any amounts
as a result of the prorations pursuant to Section 4.0 of this Agreement, nor
shall it apply to any claims by Sellers that Buyer has delivered to Sellers or
the Deposit Escrow Holder, respectively, less than the amounts specified in
Section 2.0 of this Agreement to be delivered as the Closing Date Payment or the
Deposit.
13.0 NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All statements made by Sellers in this Agreement or in any
certificate delivered by or on behalf of Sellers pursuant to this Agreement
shall be deemed representations and warranties of Sellers, and all statements
made by Buyer in this Agreement or contained in any certificate delivered by or
on behalf of Buyer pursuant to this Agreement shall be deemed representations
and warranties of Buyer. All representations and warranties made by Buyer or by
Sellers hereunder, and all indemnities, covenants, and agreements relating
thereto, shall survive the Closing for a period of one (1) year or, in the case
of any representation or warranty related to taxes, for the applicable statute
of limitations related to such taxes, notwithstanding any investigation by the
parties hereto. Any claim of breach not asserted within such one (1) year period
by notice delivered in the manner provided in Section 14.0 shall be deemed
waived. There are no intended third party beneficiaries of this Agreement, and
to the extent any third party asserts any claim or cause of action arising from
the alleged breach of any representation or warranty, covenant, or agreement in
this Agreement, the statute of limitations for such alleged claim or cause of
action shall not in any way be extended or tolled by reason of this Section
13.0.
14.0 NOTICES.
Any notices or other communications to Sellers or Buyer shall be
personally delivered, sent by certified or registered mail, return receipt
requested, by Federal Express or similar service that records delivery, or by
facsimile transmission combined with any of the foregoing methods of notice, to
the addresses set forth below, or to such other address as Sellers or Buyer may
designate, from time to time, by written notice to the other.
If To Sellers: With A Copy To:
Falcon Cable TV Goldman & Kagon Law Corporation
10900 Wilshire Blvd. 1801 Century Park East
Fifteenth Floor Suite 2222
Los Angeles, CA 90024 Los Angeles, California 90067
Attn: General Counsel
If To Buyer: With A Copy To:
TeleView, Inc. Adams, Ellard & Frankum, P.C.
2000 Industrial Boulevard P.O. Drawer 1255
Post Office Box 400 20 N. Main Street
Cornelia, Georgia 30531 Cornelia, Georgia 30531
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and
King & Spalding
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1763
Attn: Horace H. Sibley, Esq.
15.0 CONFIDENTIALITY.
In the event this Agreement is terminated and the purchase and
sale contemplated hereby abandoned, the parties hereto will keep confidential
any proprietary information obtained from the other party in connection with the
transactions contemplated by this Agreement for a period of not less than three
(3) years after the termination hereof, and will promptly return to the other
party all documents, work papers, and other written material obtained by it in
connection with the transactions contemplated hereby.
16.0 TERMINATION RIGHTS.
This Agreement may be terminated by either Buyer or Sellers, if
the terminating party is not then in material default, by written notice to the
other party, upon the occurrence of either of the following, with the results
prescribed hereunder:
16.1 Material Default. If the other party defaults in the
observance or in the due and timely performance of any of its material covenants
or agreements herein contained, which default has not been cured on or prior to
the Closing Date (or any subsequent date by which the defaulting party may cure
such default), the nondefaulting party shall have the right to terminate this
Agreement.
16.2 Failure of Conditions Precedent. If any of the conditions
precedent to Closing are otherwise not fulfilled or waived on or before October
1, 1996, without either party being at fault, either party may terminate this
Agreement on or after such date with the results described in Section 2.1.1,
above, but without any further liability of either party to the other, except
for the obligations created by the provisions of Section 15.0 hereof, which
shall survive such termination; provided, however, that if the only condition
remaining unsatisfied as of such date is the obtaining of the approval of the
FCC to Buyer's application for 214 Approval, this Agreement may not be
terminated pursuant to this Section 16.2 prior to the earlier to occur of (i)
five (5) business days following the 214 Approval or (ii) November 15, 1996.
If either party shall have received written notice from the
other of the existence of a condition which would give rise to the party
receiving such written notice having the right to unilaterally terminate this
Agreement pursuant to this Section 16.0, the party receiving such written notice
may nevertheless elect at its sole option to proceed with the Closing, and such
election shall be deemed a waiver of such party's rights to indemnification with
respect to the condition described in the written notice.
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17.0 MISCELLANEOUS.
17.1 Sales and Transfer Taxes and other Transfer Fees. All
sales or use taxes, transfer taxes, stamp taxes, excise taxes, and license
taxes, and all other fees charged, in connection with the sale, transfer, or
delivery of any of the Assets to Buyer, shall be paid and borne by Buyer.
17.2 Expenses. Except as otherwise expressly provided herein,
the parties hereto shall pay their respective expenses incurred under or in
connection with this Agreement.
17.3 Attorneys' Fees. Should either Buyer or Sellers institute
any action or proceeding to enforce any provision of this Agreement, or for
damages by reason of any alleged breach of any provision of this Agreement, or
for a declaration of such party's rights or obligations hereunder, or for any
other judicial or quasi-judicial remedy, the prevailing party in such action or
proceeding shall recover from the losing party all attorneys' fees, costs, and
expenses incurred by the prevailing party for the services rendered for or on
behalf of such prevailing party.
17.4 Waiver. Either Buyer or Sellers may waive any condition,
breach, or default of this Agreement; provided, however, no waiver of any
condition, breach, or default hereunder shall be considered valid unless
contained in a writing referring to this Agreement and signed by the party
giving such waiver, and no such waiver shall be deemed a waiver of any other
condition or any subsequent breach or default of the same or similar nature.
17.5 Assignment and Binding Effect. This Agreement shall be
binding upon and inure to the benefit of each party hereto, and its successors,
assigns, and transferees. Buyer shall not assign its rights or obligations
hereunder to any person or entity other than Standard Group, Inc., a Georgia
corporation, or a subsidiary thereof, without the express written consent of
Sellers (which consent shall not be unreasonably withheld or conditioned), and
no such assignment, whether or not consented to by Sellers, shall release Buyer
from any of its obligations hereunder.
17.6 Governing Law. The construction and performance of this
Agreement shall be governed by and construed in accordance with the laws of the
State of Georgia.
17.7 Section Headings. The section headings contained herein
are for the purpose of convenience only and are not intended to define or limit
the contents of said sections.
17.8 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall constitute an original but which when
taken together shall be deemed one instrument.
17.9 Schedules and Exhibits. The Schedules and Exhibits
attached hereto shall be deemed to be incorporated by reference in this
Agreement as if fully set forth herein.
17.10 Entire Agreement. This Agreement and the exhibits,
agreements, and schedules referred to herein constitute the entire agreement of
the parties with respect to the subject matter hereof and supersedes all prior
agreements, negotiations, and oral understandings, if any. Except as otherwise
provided herein, this Agreement may not be modified, amended, or
-21-
22
terminated except by a written agreement specifically referring to this
Agreement and signed by all of the parties hereto.
18.0 GUARANTOR'S REPRESENTATIONS AND WARRANTIES AND GUARANTEE.
Guarantor hereby represents and warrants that it owns one
hundred percent (100%) of the issued and outstanding shares of stock in each of
Sellers, and directly or indirectly owns one hundred percent (100%) of the
issued and outstanding shares of stock in affiliated corporations owning cable
television systems located throughout Georgia and Alabama. Guarantor hereby
guarantees the representations and warranties of Sellers hereinabove set forth
and the performance by Sellers of their obligations herein. Guarantor further
represents and warrants that it is duly organized, validly existing, and in good
standing under the laws of Delaware, is duly qualified to do business in the
State of Georgia, and has full power and authority to enter into this Agreement
for the limited purposes expressly provided herein.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
BUYER:
TELEVIEW, INC.,
a Georgia corporation
By: /s/ Harris L. Bagley
----------------------------
Harris L. Bagley, President
SELLERS:
MULTIVISION OF COMMERCE, INC.,
a Georgia corporation
By: /s/ Jon Lunsford
----------------------------
Jon Lunsford, Vice President
MULTIVISION NORTHEAST, INC.,
a Georgia corporation
By: /s/ Jon Lunsford
----------------------------
Jon Lunsford, Vice President
-22-
23
GUARANTOR:
FC CABLE HOLDINGS, INC.,
a Delaware corporation
By: /s/ Jon Lunsford
----------------------------
Jon Lunsford, Vice President
-23-
24
SCHEDULES
1.1.1 Personal Property 5.10 Franchise Fees
1.1.2 Real Property 5.11 Pole Attachment Fees
1.1.3 Licenses and Franchises 5.12 Labor and Employment Matters
1.1.4 Contracts 7.9 Approved Marketing Practices
5.3 Consents 8.6 Allocation of Purchase Price
5.5 Claims
EXHIBITS
A. Description of Cable System Service Areas
2.1 Deposit Escrow Instructions
9.4 Bill of Sale and Assignment
9.5 Opinion of Sellers' Counsel
9.8 Sellers' Certificate of Compliance
9.11 Covenant not to Compete
10.5 Buyer's Certificate of Compliance
10.6 Assumption Agreement
10.7 Opinion of Buyer's Counsel
-24-
25
PERSONAL PROPERTY
CORNELIA
Headend Electronics Quantity
------------------- --------
REC. S.A. 9640 18
S.A. 9650 6
S.A. 9655 1
MICRODYNE 1100 1
MOD. S.A. 6330 2
S.A. 6340 4
S.A. 9220 1
S.A. 9270 2
S.A. 9260 11
CATEL TM 2400 7
PROC. S.A. 6150 10
DRAKE HCP 2550 1
OLSEN LCP 500A 1
MISC. VIDEO CIPHER II PLUS 2901 1
VIDEO CIPHER II 17
THE WEATHER STAR 1
EAGLE EE 2001 1
AIR CONDITIONER 1
TV 1
2 WAY RADIO 1
Page One of Seven
SCHEDULE 1.1.1
26
PERSONAL PROPERTY
JEFFERSON
Headend Electronics Quantity
------------------- --------
REC. S.A. 9640 4
S.A. 9650 11
S.A. 6600 9
MICRODYNE 1100 2
MOD. S.A. 6330 2
S.A. 6340 3
S.A. 6350 1
S.A. 9220 1
S.A. 9270 5
S.A. 9260 7
CATEL 2400 2
TRIPLE CORWN HEM 6
DRAKE 2250 1
DE-MOD. CATEL D-850 1
PROC. S.A. 6150 2
DRAKE HCP 2550 1
BLONDER TOUNGE 1
JERROLD CC II 2
MISC. VIDEO CIPHER 2901 1
VIDEO CIPHER II 12
220 VAC AIR COND. 1
110 VAC AIR COND. 1
13" TV 1
Page Two of Seven
SCHEDULE 1.1.1
27
PERSONAL PROPERTY
COMMERCE
Headend Electronics Quantity
------------------- --------
REC. S.A. 9640 6
S.A. 9650 9
MICRODYNE 1100 6
GARDINER 2
DX ANTENNA 2
S.A. 6600 1
MOD. S.A. 6330 4
S.A. 6340 5
S.A. 6350 1
S.A. 9260 3
S.A. 9270 1
GARDINER 2400 1
OLSEN DTM 1000 1
PROC. S.A. 6150 9
JERROLD S450P 2
DRAKE HCP 2550 1
MISC. VIDEO CIPHER 2901 1
VIDEO CIPHER II 13
EAGLE EE 2001 1
THE WEATHER STAR 1
FIBER S.A. 6460/750 TRANSMITTER 2
S.A. H.E. DRIVER AMP 1
AIR CONDITIONER 1
Page Three of Seven
SCHEDULE 1.1.1
28
PERSONAL PROPERTY
CONVERTERS & REMOTES (as of March 21, 1996)
Area No. of Converters Remotes
- ---- ----------------- -------
Habersham County 458 251
Clarksville 84 44
Demorest 37 21
Cornelia 171 123
Mt. Airy 25 14
Baldwin 48 21
Alto 23 8
Banks Co./Cornelia Headend 18 13
Banks County 16 7
Homer 20 10
Commerce 161 80
Nicholson 25 10
Jackson Co./Commerce Headend 103 41
Jackson County 9 3
Jefferson 133 58
Arcade 8 3
----- ---
Total: 1,339 707
Types of Converters
1. S.A. 8510 - 6780 - 6784
2. NSC IM78IR - M78R
3. Oaks M35B - L35 (Equal mixture of several types of converters)
4. Tusa CM1400
5. Pioneer BC2002J
6. SPC - 4000
Used S/A 8511 converters have been purchased at $30.00 each for use in the past
for the Cornelia operations.
Hand units are separate.
Page Four of Seven
SCHEDULE 1.1.1
29
PERSONAL PROPERTY
CORNELIA VEHICLES
1. 1991 Chevrolet Blazer 1GNCT18ZSM0113002
107,768 miles Tag #MXY225
2. 1991 Chevrolet Van G-10 1GCCG15ZCM7139455
75,275 miles Tag #QB9638
3. 1991 Ford F-350 Bucket 1FDKF37H3MNA48083
103,769 miles Tag #QB11676
4. 1991 Chevrolet Pickup S-10 1GCCS14R4M2243360
101,481 miles Tag# XP6542
5. 1987 Chevrolet Pickup S-10 1GCBS14EOK2181266
111,497 miles Tag # SC9346
6. 1991 Chevrolet G-10 Van 1GCCG15ZIM7140089
66,000+ miles Tag# QC42168
7. 1984 Ford F-350 2FDJF37Y4ECA307G1
162,000+ miles Tag #SC933C
Page Five of Seven
SCHEDULE 1.1.1
30
PERSONAL PROPERTY
TOWERS
Cornelia Commerce
- -------- --------
Tower Wooden Pole - 60' Tower Rohn, Guyed - 100'
HE Building Masonary 15' x 21' HE Building Metal 25' x 25'
Jefferson
Tower Rohn, Guyed - 100'
HE Building Mobile Home 15' x 45'
DISHES
Cornelia Headend
1. 10 ft. mesh looking at G-V
2. S.A. 4.5 meter multifeed looking at GI & C3
3. S.A. 2.8 meter looking at C4
4. Comtech 3.8 meter looking at SN III
Commerce Headend
1. Comtech 3.8 meter looking at G-V
2. 5.0 meter looking at C-3
3. S.A. 2.8 meter looking at C-4
4. 3.0 meter looking at G-1
5. 10 ft. mesh looking at SN III
Jefferson Headend
1. Comtech 3.8 meter looking at G-V
2. S.A. 2.8 meter looking at C-3
3. 10 ft. mesh looking at SN III
4. S.A. 4.5 multifeed looking at G-1 and C-4
Page Six of Seven
SCHEDULE 1.1.1
31
PERSONAL PROPERTY
ANTENNA DETAIL
Cornelia
1. S.A. low band quad 2-5 2
2. S.A. high bank quad 8-11 1
3. UHF Parabolic 17-36-46 1
4. High band quad 7-4 1
5. UHF broad band 69-32-34 2
Commerce
Antenna Type Height & Leg Mount Feedline Size/Type
- ------------ ------------ ----- ------------------
UHF 44' B Leg Mount 1/4"
UHF 65' C Leg Mount 1/2"
UHF 67' A Leg Mount Unused
YAGI 75' A Leg Mount 1/4"
YAGI 76' B Leg Mount 1/4"
YAGI 80' A Leg Mount 1/4"
YAGI 81' B Leg Mount 1/4"
YAGI 100' Top Top Mount 1/2"
Jefferson
Antenna Type Height & Leg Mount Feedline Size/Type
- ------------ ------------ ----- ------------------
10' Low Band 68' A Leg Mount 1/2"
5' High Band 76' B Leg Mount 9/16"
10' Low Band 83' A Leg Mount 1/2"
10' Parabolic 90' B Stand-Off 1/2"
8' Low Band 95' A Leg Mount 1/2"
20' High/Low Band 100' Top Top Mount 9/16"
Page Seven of Seven
SCHEDULE 1.1.1
32
REAL PROPERTY
OWNED PARCELS:
USE: Headend site
LOCATION: 110 State Street, Commerce
OWNER: Multivision of Commerce, Inc.
DESCRIPTION: Building, 0.41 acres
Parcel No. C05 044, Acct. No. R99108940, LT6, BLD
LEASED PARCELS:
A. USE: Cornelia headend site
LOCATION: Lot No. 207, 10th Land District of Habersham County
DATE: August 1, 1973
LESSOR: H.W. Stewart, Jr.
LESSEE: Multivision Northeast, Inc.
EXPIRATION DATE: 11/30/96
RENTAL CHARGE: $200.00/month
B. USE: Jefferson headend site
LOCATION: Cobb Street, Jefferson
DATE: Month-to month
LESSOR: Jerry Fletcher and Damon Gause
LESSEE: Multivision of Commerce, Inc.
EXPIRATION DATE: Month-to month
RENTAL CHARGE: $500.00/month
C. USE: Cornelia office/collection site
LOCATION: 920 Clarkesville Street, Cornelia
DATE: Month-to-month
LESSOR: Don Higgins Realty
LESSEE: Falcon First Cable of the Southeast, Inc.
EXPIRATION DATE: Month-to-month
RENTAL CHARGE: $650.00/month
Page One of Two
SCHEDULE 1.1.2
33
REAL PROPERTY
LEASED PARCELS (CONT.):
D. USE: Jefferson office/collection site
LOCATION: Jefferson Drugs, 127 Lee Street, Jefferson
DATE: Month-to-month
LESSOR: John Peoples
LESSEE: Multivision of Commerce, Inc.
EXPIRATION DATE: Month-to-month
RENTAL CHARGE: $40.00/month
EASEMENTS AND RIGHTS OF WAY:
1. USE: Aerial wire line crossing
LOCATION: Commerce, from 1,257' N to 257' S of MP NE22
DATE: 4/10/89
LICENSOR: Southern Railway Company
LICENSEE: Multivision of Commerce, Inc.
EXPIRATION DATE: 60 days' written notice
RENTAL CHARGE: $4,350.00/year
Page Two of Two
SCHEDULE 1.1.2
34
LICENSES AND FRANCHISES
FCC LICENSES:
TYPE: Business Radio License
LICENSEE: Multivision Northeast, Inc.
CALL SIGN: WNBZ957
EXPIRATION DATE: March 16, 2000
FRANCHISES:
A. COMMUNITY: Town of Alto, GA
FRANCHISE HOLDER: Falcon First Cable of the Southeast, Inc.
ORDINANCE NUMBER: None
DATE GRANTED: 7/13/93
EXPIRATION DATE: 7/13/08
B. COMMUNITY: City of Arcade, GA
FRANCHISE HOLDER: Multivision of Commerce, Inc.
ORDINANCE NUMBER: None
DATE GRANTED: 2/16/81
EXPIRATION DATE: 2/16/11 (?)
C. COMMUNITY: City of Baldwin, GA
FRANCHISE HOLDER: Multivision Northeast, Inc.
ORDINANCE NUMBER: 09-12-88-01
DATE GRANTED: 10/3/88
EXPIRATION DATE: 10/3/03
D. COMMUNITY: Banks County, GA
FRANCHISE HOLDER: Falcon First Communications, L.P.
ORDINANCE NUMBER: None
DATE GRANTED: 1/5/82
EXPIRATION DATE: 1/5/97
Page One of Three
SCHEDULE 1.1.3
35
LICENSES AND FRANCHISES
FRANCHISES (CONT.):
E. COMMUNITY: City of Clarkesville, GA
FRANCHISE HOLDER: Falcon First Communications, L.P.
ORDINANCE NUMBER: None
DATE GRANTED: 9/6/88
EXPIRATION DATE: 9/6/03
F. COMMUNITY: City of Commerce, GA
FRANCHISE HOLDER: Falcon First Cable of the Southeast, Inc.
ORDINANCE NUMBER: 89-503; Resolution 89-1102
DATE GRANTED: 5/20/80
EXPIRATION DATE: 5/20/95
G. COMMUNITY: City of Cornelia, GA
FRANCHISE HOLDER: Multivision Northeast, Inc.
ORDINANCE NUMBER: None
DATE GRANTED: 5/16/66
EXPIRATION DATE: 9/2/96
H. COMMUNITY: City of Demorest, GA
FRANCHISE HOLDER: Multivision Northeast, Inc.
ORDINANCE NUMBER: 09-12-88-01
DATE GRANTED: 11/1/88
EXPIRATION DATE: 11/1/03
I. COMMUNITY: Habersham County, GA
FRANCHISE HOLDER: Multivision Northeast, Inc.
ORDINANCE NUMBER: None
DATE GRANTED: 1/12/77
EXPIRATION DATE: 1/18/07
Page Two of Three
SCHEDULE 1.1.3
36
LICENSES AND FRANCHISES
FRANCHISES (CONT.):
J. COMMUNITY: Town of Homer, GA
FRANCHISE HOLDER: Multivision of Commerce, Inc.
ORDINANCE NUMBER: None
DATE GRANTED: 1/11/83
EXPIRATION DATE: 1/11/98
K. COMMUNITY: Jackson County, GA
FRANCHISE HOLDER: Falcon First, Inc.
ORDINANCE NUMBER: None
DATE GRANTED: 2/16/95
EXPIRATION DATE: 2/16/10
L. COMMUNITY: City of Jefferson, GA
FRANCHISE HOLDER: Falcon Cable TV
ORDINANCE NUMBER: None
DATE GRANTED: 2/16/81
EXPIRATION DATE: 2/16/96
M. COMMUNITY: Town of Mt. Airy, GA
FRANCHISE HOLDER: Falcon Community Ventures I, L.P.
ORDINANCE NUMBER: None
DATE GRANTED: 3/7/94
EXPIRATION DATE: 3/7/09
N. COMMUNITY: Town of Nicholson, GA
FRANCHISE HOLDER: Multivision of Commerce, Inc.
ORDINANCE NUMBER: None
DATE GRANTED: 12/6/82
EXPIRATION DATE: 12/6/97
Page Three of Three
SCHEDULE 1.1.3
37
CONTRACTS
A. POLE ATTACHMENT AGREEMENTS: As described on SCHEDULE 5.11
B. OTHER CONTRACTS:
1. PARTIES: Falcon First [Cable of the] Southeast, Inc.
and Cates Communication
DATE: August 5, 1992
DESCRIPTION: Cable installation and burial
TERMS: $4.00/foot for road boring; $35.00 for up to 350
feet of burial, $0.10/foot for additional burial
EXPIRATION DATE: At will
Page One of One
SCHEDULE 1.1.4
38
CONSENTS
GOVERNMENTAL CONSENTS:
A. GOVERNMENTAL AUTHORITY: City of Alto
NATURE OF CONSENT: Franchise Transfer (notice only)
B. GOVERNMENTAL AUTHORITY: City of Arcade
NATURE OF CONSENT: Franchise Transfer
C. GOVERNMENTAL AUTHORITY: City of Baldwin
NATURE OF CONSENT: Franchise Transfer (acceptance only)
D. GOVERNMENTAL AUTHORITY: Banks County
NATURE OF CONSENT: Franchise Transfer
E. GOVERNMENTAL AUTHORITY: City of Clarkesville
NATURE OF CONSENT: Franchise Transfer
F. GOVERNMENTAL AUTHORITY: City of Commerce
NATURE OF CONSENT: Franchise Transfer
G. GOVERNMENTAL AUTHORITY: City of Cornelia
NATURE OF CONSENT: Franchise Transfer
H. GOVERNMENTAL AUTHORITY: City of Demorest
NATURE OF CONSENT: Franchise Transfer
I. GOVERNMENTAL AUTHORITY: City of Homer
NATURE OF CONSENT: Franchise Transfer (acceptance only)
Page One of Three
SCHEDULE 5.3
39
CONSENTS
GOVERNMENTAL CONSENTS (cont.):
J. GOVERNMENTAL AUTHORITY: Jackson County
NATURE OF CONSENT: Franchise Transfer (notice only)
K. GOVERNMENTAL AUTHORITY: City of Jefferson
NATURE OF CONSENT: Franchise Transfer
L. GOVERNMENTAL AUTHORITY: Habersham County
NATURE OF CONSENT: Franchise Transfer (notice only)
M. GOVERNMENTAL AUTHORITY: Town of Mt. Airy
NATURE OF CONSENT: Franchise Transfer (notice only)
N. GOVERNMENTAL AUTHORITY: Town of Nicholson
NATURE OF CONSENT: Franchise Transfer (acceptance only)
NON-GOVERNMENTAL CONSENTS:
1. CONSENTING PARTY: H. M. Stewart, Jr.
NATURE OF CONSENT: Cornelia headend site lease assignment
2. CONSENTING PARTY: Georgia Power
NATURE OF CONSENT: Pole attachment agreements assignment
3. CONSENTING PARTY: Habersham Electric Membership Corp.
NATURE OF CONSENT: Pole attachment agreement assignment
Page Two of Three
SCHEDULE 5.3
40
CONSENTS
NON-GOVERNMENTAL CONSENTS (cont.):
4. CONSENTING PARTY: Mid-Georgia Telephone Corp.
NATURE OF CONSENT: Pole attachment agreements assignment
5. CONSENTING PARTY: City of Commerce
NATURE OF CONSENT: Pole attachment agreement assignment
6. CONSENTING PARTY: Jackson Electric Membership Corp.
NATURE OF CONSENT: Pole attachment agreements assignment
7. CONSENTING PARTY: Standard Telephone Company
NATURE OF CONSENT: Pole attachment agreement assignment
Page Three of Three
SCHEDULE 5.3
41
CLAIMS
NONE
Page One of One
SCHEDULE 5.5
42
FRANCHISE FEES
A. COMMUNITY: Town of Alto
ANNUAL FEE: 5% of Gross Subscriber Receipts
B. COMMUNITY: City of Arcade
ANNUAL FEE: 5% of Gross Revenue
C. COMMUNITY: City of Baldwin
ANNUAL FEE: 5% of Gross Revenue
D. COMMUNITY: Banks County
ANNUAL FEE: 5% of Gross Revenue
E. COMMUNITY: City of Clarkesville
ANNUAL FEE: 3% of Gross Revenue
F. COMMUNITY: City of Commerce
ANNUAL FEE: 5% of Gross Revenue
G. COMMUNITY: City of Cornelia
ANNUAL FEE: 5% of Gross Revenue
H. COMMUNITY: City of Demorest
ANNUAL FEE: 5% of Gross Revenue
I. COMMUNITY: Habersham County
ANNUAL FEE: 5% of Gross Revenue
Page One of Two
SCHEDULE 5.10
43
FRANCHISE FEES
J. COMMUNITY: Town of Homer
ANNUAL FEE: 3% of Gross Basic Service Payments
K. COMMUNITY: Jackson County
ANNUAL FEE: 5% of Gross Subscriber Receipts
L. COMMUNITY: City of Jefferson
ANNUAL FEE: 5% of Gross Revenue
M. COMMUNITY: Town of Mt. Airy
ANNUAL FEE: 5% of Gross Subscriber Receipts
N. COMMUNITY: Town of Nicholson
ANNUAL FEE: 3% of Gross Subscriber Revenue
Page Two of Two
SCHEDULE 5.10
44
POLE ATTACHMENT FEES
A. LICENSOR: Georgia Power
LICENSEE: Multivision Northeast, Inc.
DATED: 1/14/91
COMMUNITIES SERVED: Cornelia, Habersham County, Mt. Airy
ANNUAL FEE: $20,935
NUMBER OF POLES: 3965
B. LICENSOR: Georgia Power
LICENSEE: Multivision of Commerce, Inc.
DATED: 1/15/91
COMMUNITIES SERVED: Arcade, Banks County, Homer Jackson County,
Jefferson
ANNUAL FEE: $4,287
NUMBER OF POLES: 812
C. LICENSOR: Habersham Electric Membership Corp.
LICENSEE: Multivision Northeast, Inc.
DATED: 3/19/79
COMMUNITIES SERVED: Habersham County
ANNUAL FEE: $22,295
NUMBER OF POLES: 4039
D. LICENSOR: Mid-Georgia Telephone Corp.
LICENSEE: Commerce Cable Communications
DATED: 8/20/80
COMMUNITIES SERVED: Jackson and Banks Counties
ANNUAL FEE: $8,165
NUMBER OF POLES: 1080
Page One of Two
SCHEDULE 5.11
45
POLE ATTACHMENT FEES
E. LICENSOR: City of Commerce
LICENSEE: Multivision of Commerce, Inc.
DATED: Unknown
COMMUNITIES SERVED: Commerce
ANNUAL FEE: $2,887
NUMBER OF POLES: 802
F. LICENSOR: Jackson Electric Membership Corp.
LICENSEE: Jackson County Cablevision
DATED: 6/17/81
COMMUNITIES SERVED: Unknown
ANNUAL FEE: $13,169
NUMBER OF POLES: 1860
G. LICENSOR: Standard Telephone Company
LICENSEE: Falcon First Communications, L.P.
DATED: 2/15/92
COMMUNITIES SERVED: Habersham County, GA
ANNUAL FEE: $7,563.00
NUMBER OF POLES: 1,313
Page Two of Two
SCHEDULE 5.11
46
LABOR AND EMPLOYMENT MATTERS
EMPLOYEE 1995 1996 BASE
NAME POSITION COMPENSATION SALARY
- -------- -------- ------------ ---------
Phylliss E. Hopper CSR $ 7,163.61 $12,854.44
Scott H. Lewis CSR $17,794.48 $16,619.20
Connie C. Ramsey CSR $23,617.53 $22,339.20
Dennis E. Fish, Jr. Installer $13,520.00
Ronald P. Gary Installer $20,834.37 $15,371.20
Matthew L. Hayes Installer $20,926.59 $15,371.20
Kenneth A. Kinsey Lead Technician $34,129.68 $29,827.20
William C. McEntire Technician $25,692.07 $20,238.40
Jerry R. Hallford Technician $29,595.63 $25,147.20
Page One of One
SCHEDULE 5.12
47
APPROVED MARKETING PRACTICES
Page One of One
SCHEDULE 7.9
48
ALLOCATION OF PURCHASE PRICE
Total Value
-----------
Office Furniture & Equipment $ 8,000
Office Building & Headend - Commerce 27,810
Tower & Antenna 89,610
Headend Electronics 421,270
Headend Building 18,800
Trunk & Distribution - Underground 412,776 (38.22 U/G miles @ $10,800 per mile)
Trunk & Distribution - Overhead 3,566,364 (383.48 O/H miles @ $9,300 per mile)
Subscriber Connect Cost 330,785 (9,451 subscribers @ $35 per sub)
Non-addressable Converters 40,170 (1,339 converters @ $30 per unit)
Remotes 1,768 (707 remotes @ $2.50 per unit)
Shop Tools & Test Equipment 5,500
Autos & Trucks 94,300
-----------
Total Property, Plant & Equipment 5,017,153
Franchise Cost 9,482,847
Covenant not to Compete 500,000
-----------
Purchase Price $15,000,000
===========
Page One of One
SCHEDULE 8.6
49
SERVICE AREAS
SERVICE AREA KNOWN AS THE COMMERCE, GEORGIA SYSTEM
Commerce Nicholson
Homer Part of Banks and Jackson County
SERVICE AREA KNOWN AS THE CORNELIA, GEORGIA SYSTEM
Habersham County Mount Airy
Clarkesville Baldwin
Demorest Alto
Cornelia Part of Banks County
SERVICE AREA KNOWN AS THE JEFFERSON, GEORGIA SYSTEM
Arcade
Jefferson
Part of Jackson County
Page One of One
EXHIBIT A
50
DEPOSIT ESCROW INSTRUCTIONS
ESCROW AGREEMENT
This Escrow Agreement is made as of the 15th day of April, 1996, by and
among MULTIVISION OF COMMERCE, INC., a Georgia corporation, and MULTIVISION
NORTHEAST, INC., a Georgia corporation (each individually a "Seller" and
collectively, "Sellers"); TELEVIEW, INC., a Georgia corporation ("Buyer"); and
COMMUNITY BANK AND TRUST - HABERSHAM, as Escrow Agent ("Escrow Agent").
1. Buyer shall deposit with Escrow Agent, in escrow, the sum of
Three Hundred Thousand Dollars ($300,000.00).
2. Escrow Agent shall accept said sum and establish and maintain a
separate account therefor (the "Escrow Account").
3. Escrow Agent shall invest and reinvest the funds in the Escrow
Account at the direction and risk of Buyer during the term of the escrow. Upon
written instructions signed by an officer of Buyer, Escrow Agent shall invest
and reinvest the Escrow Account in one or more of the following investments (the
"Obligations") from time to time:
(A) Direct obligations of, or obligations the principal of
and interest on which are unconditionally guaranteed by, the United States of
America;
(B) Repurchase Agreements with Escrow Agent involving
securities of the kind described in (A) above; or
(C) Money market funds authorized to invest in short term
securities issued or guaranteed as to principal and interest by the U.S.
Government and Repurchase Agreements with respect to such securities.
No Obligation shall have a maturity which exceeds fifteen (15) days
beyond the date upon which the investment in the Obligation is made. Interest
and other earnings on the Obligations shall be added to the Escrow Account. Any
loss incurred from an investment and/or any investment fee will be borne by the
Escrow Account. Investment and reinvestment of the Escrow Account shall be made
only in Obligations. Escrow Agent is authorized to use Buyer's Federal Tax I.D.
Number in connection with any obligations.
4. Upon receipt of a letter, in a form substantially similar to
that attached hereto as Attachment A, officially signed on behalf of Sellers and
Buyer, Escrow Agent shall liquidate all or a portion of the Obligations and to
pay the full balance and proceeds of the Escrow Account, or such portion as may
be designated in the letter, as Sellers and Buyer shall jointly direct. Sellers
shall have the right to unilaterally direct Escrow Agent as to the allocation
between the respective Sellers of the amounts to be paid pursuant to any such
joint letter.
Page One of Five
EXHIBIT 2.1
51
5. (a) Sellers and Buyer shall hold Escrow Agent harmless and
indemnify Escrow Agent against any loss, liability, expenses (including
attorney's fees and expenses), claim, or demand arising out or in connection
with the performance of its obligations in accordance with the provisions of
this Agreement, except for gross negligence or willful misconduct of Escrow
Agent. The foregoing indemnities in this paragraph shall survive the resignation
of Escrow Agent or the termination of this Agreement.
(b) Escrow Agent's duties are only such as are specifically
provided herein, and Escrow Agent shall incur no liability whatsoever to Sellers
or Buyer except for gross negligence or willful misconduct. Escrow Agent shall
have no responsibility hereunder other than to follow faithfully the
instructions herein contained. Escrow Agent may consult with counsel and shall
be fully protected in any action taken in good faith in accordance with such
advice. Escrow Agent shall be fully protected in acting in accordance with any
written instructions given to it hereunder and believed by it to have been
executed by the proper parties. Escrow Agent shall not be liable for interest on
the Escrow Account except as specifically agreed upon by Escrow Agent and the
respective parties hereto.
(c) Buyer and Sellers shall each pay Escrow Agent a fee of
Three Hundred Seventy-Five Dollars ($375.00) as compensation for the ordinary
administrative services to be rendered hereunder. Sellers and Buyer shall each
pay one-half (1/2) of all expenses of Escrow Agent, including its attorney's
fees and expenses, which it may incur in connection with the performance of its
duties under this Agreement, or under the indemnity provided in Section 5.(a)
hereof, and Escrow Agent's claim therefor shall constitute a first lien against
the Escrow Account. Sellers' agreements in this Section 5.(c) and in Section
5.(e) hereof shall not limit or otherwise affect any indemnification or
contribution rights of either Seller vis-a-vis Buyer.
(d) Should any dispute arise with respect to the payment and/or
ownership or right of possession of the Escrow Account, Escrow Agent is
authorized and directed to retain in its possession, without liability to
anyone, all or any part of said Escrow Account until such dispute shall have
been settled either by mutual agreement by the parties concerned or by the final
order, decree, or judgment of a court or other tribunal of competent
jurisdiction in the United States of America and time for appeal has expired and
no appeal has been perfected, but Escrow Agent shall be under no duty whatsoever
to institute or defend any such proceedings.
(e) Escrow Agent may resign at any time by giving written notice
thereof to the other parties hereto, but such resignation shall not become
effective until a successor escrow agent shall have been appointed and shall
have accepted such appointment in writing. If an instrument of acceptance by a
successor escrow agent shall not have been delivered to Escrow Agent within
thirty (30) days after the giving of such notice of resignation, the resigning
Escrow Agent may at the expense of Buyer and Sellers petition any court of
competent jurisdiction for the appointment of a successor escrow agent.
Page Two of Five
EXHIBIT 2.1
52
6. This Agreement shall be construed in accordance with the laws of
the State of Georgia. It may be executed in several counterparts, each one of
which shall constitute an original and all collectively shall constitute but one
instrument.
7. Any notice, consent or request to be given in connection with
any of the terms or provisions of this Agreement shall be in writing and shall
be sent by First Class mail, postage prepaid, telecopier and confirmed in
writing or delivered:
(A) (i) if to Escrow Agent by U.S. Mail Delivery, to its office
at _____________ _________________________________________, Attention:
__________________________;
(ii) if to Escrow Agent by courier, to its office at
_______________________ _________________________________________, Attention:
__________________________;
(iii) if to Escrow Agent by Telecopier, to be followed by an
original in writing by U.S. Mail Delivery or courier, Telecopier No. (___)
___-____.
(B) (i) if to Sellers by U.S. Mail Delivery, to their office at
10900 Wilshire Boulevard, 15th Floor, Los Angeles, California 90024;
(ii) if to Sellers by courier, to their office at 10900
Wilshire Boulevard, 15th Floor, Los Angeles, California 90024;
(iii) if to Sellers by Telecopier, to be followed by an
original in writing by U.S. Mail Delivery or courier, Telecopier No. (310)
824-4824 or 208-3655.
(C) (i) if to Buyer by U.S. Mail Delivery, to its office at 2000
Industrial Boulevard, Post Office Box 400, Cornelia, Georgia 30531;
(ii) if to Buyer by courier, to its office at 2000 Industrial
Boulevard, Post Office Box 400, Cornelia, Georgia 30531;
(iii) if to Buyer by Telecopier, to be followed by an original
in writing by U.S. Mail Delivery or courier, Telecopier No. (706) 778-5684.
8. This Agreement shall terminate on November 15, 1996, unless
previously terminated by fully disbursing the Escrow Account. Any investments in
the Escrow Account on the aforesaid termination date shall be liquidated and the
proceeds thereof plus any cash balance in the Escrow Account shall be remitted
as Sellers and Buyer shall jointly direct; provided, however, Sellers shall have
the right to unilaterally direct Escrow Agent as to the allocation between the
respective Sellers of the amounts to be paid pursuant to any such joint
direction by Sellers and Buyer.
Page Three of Five
EXHIBIT 2.1
53
IN WITNESS WHEREOF, the parties have been duly executed this Escrow
Agreement as of the date first above written.
TELEVIEW, INC.,
a Georgia corporation
By: /s/ Harry L. Bagley
--------------------------------
Harris L. Bagley, President
MULTIVISION OF COMMERCE, INC.,
a Georgia corporation
By: /s/ Jon Lunsford
--------------------------------
Jon Lunsford, Vice President
MULTIVISION NORTHEAST, INC.,
a Georgia corporation
By: /s/ Jon Lunsford
--------------------------------
Jon Lunsford, Vice President
COMMUNITY BANK AND
TRUST - HABERSHAM
By /s/ Illegible Signature
--------------------------------
SENIOR VICE PRESIDENT
& TRUST OFFICER
Page Four of Five
EXHIBIT 2.1
54
ATTACHMENT A
Community Bank and Trust - Habersham
____________________________________
____________________________________
Attention: ________________________
Re: Escrow Account No. _______________ among Multivision Of Commerce,
Inc., Multivision Northeast, Inc.; Teleview, Inc.; and Community
Bank and Trust - Habersham, as Escrow Agent (the "Escrow Account")
Ladies and Gentlemen:
Please liquidate so much of the investments held in the Escrow Account
as are necessary to distribute the amount of _________________________, and
distribute such amount by (wire transfer) (cashier's check) to
_____________________ (if wire transfer - Name of bank, bank's ABA# and
customer's account number for credit) or as ______________________ shall
otherwise direct.
Very truly yours,
_____________________________
By __________________________
and
_____________________________
By __________________________
Page Five of Five
EXHIBIT 2.1
55
BILL OF SALE AND ASSIGNMENT
Pursuant to the Asset Purchase Agreement made effective as of
_______________ (the "Agreement"), by and between MULTIVISION OF COMMERCE, INC.,
a Georgia corporation, and MULTIVISION NORTHEAST, INC., a Georgia corporation
(each individually a "Seller" and collectively, "Sellers") and TELEVIEW, INC., a
Georgia corporation ("Buyer"), for good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged:
(1) Sellers do hereby sell, assign, transfer, and convey unto Buyer,
and its successors and assigns, each and all of the Assets (as such term is
defined in the Agreement), intending hereby to convey all of Sellers' right,
title, and interest therein.
(2) Sellers hereby covenant and agrees with Buyer, and its successors
and assigns, to do, execute, acknowledge, and deliver, or to cause to be done,
executed, acknowledged, and delivered, to Buyer and/or its successors and
assigns, all such further acts, deeds, assignments, transfers, conveyances,
powers of attorney, and assurances that may be reasonably requested by Buyer to
facilitate the selling, assigning, transferring, conveying, delivering,
assuring, and confirming, to Buyer and its successors or assigns, or for aiding
and assisting in collecting or reducing to possession, any or all of the Assets.
(3) Sellers hereby warrant to Buyer and its successors and assigns that
Sellers have legal title to the Assets transferred by them hereunder and that
such Assets are free and clear of all liens, security interests, encumbrances,
restrictions, and claims of any nature whatsoever, except those minor
imperfections of title and encumbrances, if any, which do not materially detract
from the value of the properties subject thereto and which do not materially
interfere with the present and continued use of the Assets or with the conduct
of the Systems' normal operations, and Sellers covenants defend such title based
on claims originating prior to the date hereof.
(4) This Bill of Sale and Assignment shall be binding upon the
successors and assigns of Sellers and shall inure to the benefit of the
successors and assigns of Buyer.
IN WITNESS WHEREOF, Sellers have executed and delivered this Bill of
Sale and Assignment as of this ______ day of _____________, 1996.
MULTIVISION OF COMMERCE, INC., MULTIVISION NORTHEAST, INC
a Georgia corporation a Georgia corporation
By: _____________________________ By: ____________________________
Jon Lunsford, Vice President Jon Lunsford, Vice President
Page One of One
EXHIBIT 9.4
56
_____________, 1996
Harris L. Bagley, President
TeleView, Inc.
2000 Industrial Boulevard
Post Office Box 400
Cornelia, Georgia 30531
Dear Mr. Bagley:
This opinion is being delivered to you pursuant to Section 9.5 of the
Asset Purchase Agreement made effective as of _______________ (the "Agreement"),
by and between MULTIVISION OF COMMERCE, INC., a Georgia corporation, and
MULTIVISION NORTHEAST, INC., a Georgia corporation (each individually a "Seller"
and collectively, "Sellers") and TELEVIEW, INC., a Georgia corporation
("Buyer"). All capitalized terms not otherwise defined herein have the same
meanings as defined in the Agreement.
We are attorneys admitted to practice in the State of California. We
have acted as general counsel for Sellers in connection with the negotiation and
execution of the Agreement. We are not admitted to the practice of law in the
State of Georgia, and in rendering those aspects of this opinion covered in the
opinion of _______________________ delivered concurrently herewith, we have
relied solely on such opinion. In addition, we call Buyer's attention to the
fact that no opinion is expressed herein other than with respect to the laws of
the State of California and the State of Georgia (to the extent set forth above)
and the federal laws of the United States of America (other than the
Communications Act of 1934 and the rules and regulations of the Federal
Communications Commission and the Copyright Royalty Tribunal thereunder, and the
rules and regulations of the Federal Aviation Administration).
We further call Buyer's attention to the fact that this letter includes
an opinion as to the legal enforceability of a covenant not to compete.
Applicable law provides that, in general, such covenants constitute agreements
in restraint of trade and are enforceable only to the extent reasonably limited
in nature, geographic area, and duration. Whether a particular covenant not to
compete is reasonably limited in nature, geographic area, and duration is
determined from all of the facts and circumstances of the particular
transaction. No opinion is expressed herein as to whether Sellers' covenants not
to compete granted in connection herewith is reasonably limited in nature,
geographic area, or duration.
Page One of Three
EXHIBIT 9.5
57
Harris L. Bagley, President
TeleView, Inc.
___________ __, 1996
Page Two
In rendering this opinion, we have examined Sellers' files and records,
and any other records, files, documents, and other evidence we deemed pertinent
and necessary to our rendering of this opinion. We have assumed the genuineness
of all signatures on, and the authenticity of, all documents submitted to us as
originals; and the conformity to original documents of all documents submitted
to us as certified or photostatic copies. We have also assumed the due and valid
execution, delivery, and performance of the Agreement by Buyer, and the
legality, validity, binding effect, and enforceability of the Agreement as it
relates to Buyer. With respect to factual matters, we have relied solely on the
representations of officers and employees of Sellers. We have not conducted an
independent field investigation of the Systems nor have we examined its
day-to-day operations.
Based on the foregoing, we are of the opinion that:
(1) Sellers are corporations having all requisite power and
authority to own, lease, and use their properties and assets, and are entitled
to carry on their business of operating the Systems as and in the places where
such properties and assets are now owned, leased, or operated and such business
is now conducted. Sellers have full power and authority to enter into the
Agreement and to consummate the transactions contemplated thereby.
(2) Sellers have taken all actions required in order to
authorize the execution, delivery, and performance of the Agreement, and none of
such acts will violate any requirement created by law, by any provision of any
articles of incorporation, bylaws, corporate resolutions, or any other documents
governing the actions of either Seller, or by the provisions of any contract or
other commitment to which either of Sellers is a party.
(3) Guarantor has full power and authority to enter into the
Agreement for the limited purposes expressly provided therein, and has taken all
actions required in order to authorize the execution, delivery, and performance
of the Agreement as to such limited purposes. None of such acts will violate any
requirement created by law, by any provision of any articles of incorporation,
bylaws, corporate resolutions, or any other documents governing the actions of
Guarantor, or by the provisions of any contract or other commitment to which
Guarantor is a party.
(4) The instruments of conveyance, transfer, and assignment of
real and personal property delivered to Buyer at the closing of the transaction
contemplated by the Agreement are legally valid as to form under Georgia law so
as to fully transfer to Buyer all of Sellers' right,
Page Two of Three
EXHIBIT 9.5
58
Harris L. Bagley, President
TeleView, Inc.
___________ __, 1996
Page Three
title, and interest in and to the assets and properties specified therein, and
the specific assignments of real property interests which are to be recorded in
the public records are in proper form for recordation.
(4) Except as set forth in the Agreement and the Schedules and
Exhibits thereto, we have no knowledge of any litigation, proceeding, or
governmental investigation, existing or threatened, which affects the title or
interest of Sellers in or to any of the properties or assets assigned or
transferred under the Agreement, or which would prevent or adversely affect the
ownership, use, or operation of same by Buyer.
This opinion is given solely for Buyer's benefit, and no other person
or entity is entitled to rely hereon.
Very truly yours,
GOLDMAN & KAGON
LAW CORPORATION
Page Three of Three
EXHIBIT 9.5
59
CERTIFICATE OF COMPLIANCE
MULTIVISION OF COMMERCE, INC., a Georgia corporation, and MULTIVISION
NORTHEAST, INC., a Georgia corporation (each individually a "Seller" and
collectively, "Sellers") hereby certify, pursuant to Section 9.8 of the Asset
Purchase Agreement made effective as of ____________________, by and between
Sellers and TELEVIEW, INC., a Georgia corporation (the "Agreement"), that:
1. Sellers have performed and complied with all of its material
obligations, agreements, and covenants contained in the Agreement to be
performed or complied with on or before the date hereof; and
2. The representations and warranties of Sellers contained in the
Agreement are true and correct in all material respects, and there have been no
material adverse changes in the condition of the Systems (as that term is
defined in the Agreement), other than changes, events, or conditions affecting
the cable television industry in general.
IN WITNESS WHEREOF, Sellers have executed and delivered this
Certificate of Compliance as of this ____ day of _______________, 1996.
MULTIVISION OF COMMERCE, INC., MULTIVISION NORTHEAST, INC
a Georgia corporation a Georgia corporation
By: _____________________________ By: ____________________________
Jon Lunsford, Vice President Jon Lunsford, Vice President
Page One of One
EXHIBIT 9.8
60
NON-COMPETITION AGREEMENT
This Non-Competition Agreement is delivered pursuant to the Asset
Purchase Agreement made effective as of ________ (the "Agreement"), by and
between MULTIVISION OF COMMERCE, INC., a Georgia corporation, and MULTIVISION
NORTHEAST, INC., a Georgia corporation (each individually a "Seller" and
collectively, "Sellers") and TELEVIEW, INC., a Georgia corporation ("Buyer").
All capitalized terms not otherwise defined herein have the same meanings as
defined in the Agreement.
W I T N E S S E T H:
WHEREAS, pursuant to the Agreement, Sellers are concurrently herewith
selling, assigning, transferring, conveying, and delivering to Buyer, with
certain exceptions, the tangible and intangible assets defined in the Agreement
as the Assets; and
WHEREAS, in partial consideration for such sale, assignment, transfer,
conveyance, and delivery of the Assets, the Agreement requires Sellers and FC
Cable Holdings, Inc., a Delaware corporation ("Parent"), to agree not to compete
with Buyer as hereinbelow set forth;
NOW, THEREFORE, pursuant to the terms of the Agreement and for good and
valuable consideration, Sellers and Parent hereby agree as follows:
1. For a period of five (5) years after the Closing Date, neither
Sellers and nor Parent nor any affiliate of any of them shall not own, manage,
or operate any business which engages in the business of operating a cable
television system or telephone system in the areas listed on Exhibit "A" hereto.
2. Notwithstanding anything contained herein, the ownership of
securities of any company owning, managing, or operating a cable television
system within such area is permitted if such securities are publicly traded on a
national securities market, and if such ownership does not constitute more than
five percent (5%) of all outstanding securities of the same class or provide
effective control of such company.
3. If any portion of this agreement is held to be illegal,
unenforceable, void, or voidable, the remainder shall remain in full force and
effect, and this agreement shall be deemed altered and amended to the minimum
extent necessary to bring it within the legal requirements for enforceability.
Page One of Three
EXHIBIT 9.11
61
IN WITNESS WHEREOF, Sellers have executed and delivered this
Non-Competition Agreement as of this ____ day of __________, 1996.
MULTIVISION OF COMMERCE, INC., MULTIVISION NORTHEAST, INC
a Georgia corporation a Georgia corporation
By: _____________________________ By: ____________________________
Jon Lunsford, Vice President Jon Lunsford, Vice President
FC CABLE HOLDINGS, INC.,
a Delaware corporation
By: _____________________________
Jon Lunsford, Vice President
Page Two of Three
EXHIBIT 9.11
62
EXHIBIT "A"
NONCOMPETE TERRITORY:
THE COMMERCE, GEORGIA SYSTEM SERVICE AREA
Commerce Nicholson
Homer Banks and Jackson County
THE CORNELIA, GEORGIA SYSTEM SERVICE AREA
Habersham County Mount Airy
Clarkesville Baldwin
Demorest Alto
Cornelia Banks County
THE JEFFERSON, GEORGIA SYSTEM SERVICE AREA
Arcade
Jefferson
Jackson County
ADDITIONAL AREAS:
Towns County, Georgia Habersham County, Georgia
Union County, Georgia Banks County, Georgia
Clay County, North Carolina Jackson County, Georgia
Lumpkin County, Georgia Rabun County, Georgia
White County, Georgia Hall County, Georgia
Dawson County, Georgia
Page Three of Three
EXHIBIT 9.11
63
CERTIFICATE OF COMPLIANCE
TELEVIEW, INC., a Georgia corporation ("Buyer"), hereby certifies,
pursuant to Section 10.5 of the Asset Purchase Agreement made effective as of
____________________, by and between Buyer MULTIVISION OF COMMERCE, INC., a
Georgia corporation, and MULTIVISION NORTHEAST, INC., a Georgia corporation,
that:
1. Buyer has in all material respects performed all of its material
obligations and agreements and complied with all of its covenants contained in
the Agreement to be performed or complied with on or before the date hereof; and
2. The representations and warranties of Buyer contained in the
Agreement are in all material respects true and correct.
IN WITNESS WHEREOF, Buyer has executed and delivered this Certificate
of Compliance as of this ____ day of ______________, 1996.
TELEVIEW, INC.,
a Georgia corporation
By: ___________________________
Harris L. Bagley, President
Page One of One
EXHIBIT 10.5
64
ASSUMPTION AGREEMENT
This Assumption Agreement is delivered pursuant to the Asset Purchase
Agreement made effective as of ________ (the "Agreement"), by and between
MULTIVISION OF COMMERCE, INC., a Georgia corporation, and MULTIVISION NORTHEAST,
INC., a Georgia corporation (each individually a "Seller" and collectively,
"Sellers") and TELEVIEW, INC., a Georgia corporation ("Buyer"). All capitalized
terms not otherwise defined herein have the same meanings as defined in the
Agreement.
W I T N E S S E T H:
WHEREAS, pursuant to the Agreement, Sellers are concurrently herewith
selling, assigning, transferring, conveying, and delivering to Buyer, with
certain exceptions, the tangible and intangible assets defined in the Agreement
as the Assets; and
WHEREAS, in partial consideration for such sale, assignment, transfer,
conveyance, and delivery of the Assets, the Agreement requires Buyer to assume
and pay, discharge, and perform certain obligations of Sellers;
NOW, THEREFORE, pursuant to the terms of the Agreement and for good and
valuable consideration, Buyer hereby assumes and undertakes and agrees to pay,
discharge, and perform in accordance with the terms and conditions thereof each
of the following:
(1) insofar as they relate to the time period after the
Closing Date, the obligations and liabilities of either of Sellers under the
Leases, Licenses, and Contracts listed in Schedules 1.1.2, 1.1.3, and 1.1.4 to
the Agreement, respectively, and under Contracts made in the ordinary course of
business (other than those relating to assets excluded from the definition of
Assets pursuant to Section 1.2, above) which are cancelable without penalty upon
not more than thirty (30) days notice, and under which (i) the remaining payment
obligation with respect to any such individual Contract (exclusive of that
portion of any such obligation which is allocable to Sellers pursuant to Section
4.0, below) is less than Ten Thousand Dollars ($10,000.00), and (ii) the
aggregate remaining payment obligation with respect to all such Contracts
(exclusive of that portion of any such obligation which is allocable to Sellers
pursuant to Section 4.0, below) is less than Fifty Thousand Dollars
($50,000.00), provided that if there are such Contracts satisfying the criterion
set forth in clause (i) which, in the aggregate, have remaining payment
obligations equaling or exceeding the amount set forth in clause (ii), Buyer
shall have the right, in its sole discretion, to designate which of such
Contracts it will assume, it being understood that Buyer is obligated to assume
such Contracts only until it cannot assume any more without thereby having
assumed such Contracts which, in the aggregate, have remaining payment
obligations equaling or exceeding the amount set forth in clause (ii);
Page One of Two
EXHIBIT 10.6
65
(2) insofar as they relate to the time period after the
Closing Date, the obligations and liabilities of either of Sellers under any
other written or oral Leases, Licenses, Contracts, personal property leases,
pole attachment agreements, purchase orders, commitments, or other agreements
relating to the Systems not described on any of Schedules 1.1.2, 1.1.3, or 1.1.4
to the Agreement, but which, at Buyer's sole option, are specifically assumed by
Buyer by notice in writing to either of Sellers after Buyer has been notified of
the existence of any such agreement;
(3) any obligation or liability with respect to subscriber
service agreements, subscriber deposits, and prepayments; and
(4) all obligations, liabilities, and claims arising out of
Buyer's ownership of the Systems or its operation of the Systems on and after
the Closing Date.
Except for those liabilities and obligations to be assumed by Buyer as
specifically described herein, Buyer shall not assume or become liable on (i)
any other agreement, contract, lease, liability, or obligation of either Seller,
or (ii) any other indebtedness, obligation, or liability of either Seller
whatsoever, including any litigation matter arising from the operation of the
Systems prior to the Closing Date, and any wages, salaries, overtime pay,
vacation pay, holiday pay, payroll taxes, or employee benefits relating to any
of Sellers' employees arising out of or attributable to services rendered for
Sellers, or otherwise in connection with the operation of the Systems, on or
prior to the Closing Date.
This Assumption Agreement shall inure to the benefit of and be binding
upon the successors and assigns of Sellers and Buyer.
IN WITNESS WHEREOF, Buyer has executed and delivered this Assumption
Agreement as of this ____ day of ______________, 1996.
TELEVIEW, INC.,
a Georgia corporation
By: ___________________________
Harris L. Bagley, President
Page Two of Two
EXHIBIT 10.6
66
___________ __, 1996
Mr. Frank J. Intiso
Chief Operating Officer
Falcon Cable TV
10900 Wilshire Boulevard
Fifteenth Floor
Los Angeles, California 90024
Dear Mr. Intiso:
This opinion is being delivered to you pursuant to Section 10.7 of the
Asset Purchase Agreement made effective as of ______________ (the "Agreement"),
by and between MULTIVISION OF COMMERCE, INC., a Georgia corporation, and
MULTIVISION NORTHEAST, INC., a Georgia corporation (each individually a "Seller"
and collectively, "Sellers") and TELEVIEW, INC., a Georgia corporation
("Buyer"). All capitalized terms not otherwise defined herein have the same
meanings as defined in the Agreement.
We have acted as counsel to Buyer in connection with the negotiation
and execution of the Agreement. In rendering this opinion, we have examined
_______________________________________________________________________________
________________________________________________________________, and any other
records, files, documents, and other evidence we deemed pertinent and necessary
to our rendering of this opinion. We have assumed the genuineness of all
signatures on, and the authenticity of, all documents submitted to us as
originals; and the conformity to original documents of all documents submitted
to us as certified or photostatic copies. We have also assumed the due and valid
execution, delivery, and performance of the Agreement by Sellers, and the
legality, validity, binding effect, and enforceability of the Agreement as it
relates to Sellers. With respect to factual matters, we have relied solely upon
the representations of officers and employees of Buyer. We have not conducted
any independent investigation other than as set forth in this letter.
Based upon the foregoing, we are of the opinion that:
1. Buyer is a corporation duly organized, validly existing,
and in good standing under the laws of the state of Georgia, is qualified to do
business in the state of Georgia, and has full power and authority to enter into
the Agreement and to carry out the transactions contemplated thereby.
Page One of Two
EXHIBIT 10.7
67
Mr. Frank J. Intiso
Chief Operating Officer
Falcon Cable TV
______________ __, 1996
Page Two
2. The Agreement has been duly executed and delivered by
Buyer, and Buyer has taken all actions required in order to authorize and
consummate the Agreement and all transactions contemplated thereby. The
execution, delivery, and performance of the Agreement will not violate any
requirement created by law, by Buyer's articles of incorporation, by-laws, or
any other documents governing its actions, or by any contract or commitment to
which Buyer is a party.
This opinion is solely for Sellers' benefit, and no other person or
entity is entitled to rely hereon.
Very truly yours,
______________________________
Page Two of Two
EXHIBIT 10.7
68
FALCON FIRST SUBSCRIBER REPORT - SYSTEM: ATHENS
BASIC END OF
SUBSCRIBERS PERIOD 1995
----------- -----------
10 Athens 3,856 5.14%
20 Limestone County 3,889 5.18%
30 Elkmont 207 0.28%
40 Killen 775 1.03%
50 Center Star 471 0.63%
60 West Killen 247 0.33%
70 Rogersville 693 0.92%
80 Elgin 391 0.52%
90 Lexington 265 0.35%
100 North Rogersville 59 0.08%
110 Anderson 84 0.11%
120 Lawrence County 58 0.08%
130 Town Creek 311 0.41%
140 Courtland 136 0.18%
150 North Courtland 117 0.16%
160 Leighton 363 0.48%
170 Colbert County 741 0.99%
180 Spring Valley 446 0.59%
190 Barton 213 0.28%
200 Cherokee 561 0.75%
210 Burnsville 271 0.36%
220 Belmont 732 0.98%
230 Tishomingo 171 0.23%
240 Golden 109 0.15%
410 Scottsboro 5,499 7.33%
420 Hollywood 326 0.43%
430 Section 340 0.45%
440 Dutton 117 0.16%
450 Cedar Bluff 761 1.01%
460 Gurley 295 0.39%
470 Paint Rock 101 0.13%
480 Rainsville 1,079 1.44%
490 Shiloh 48 0.06%
500 Fyffe 212 0.28%
510 Powell 153 0.20%
520 De Kalb County 19 0.03%
530 Jackson Co. (Scottsboro) 4 0.01%
540 Jackson Co. (Section) 3 0.00%
550 Jackson Co. (Paint Rock) 1 0.00%
590 Colbert Co. (Cherokee) 38 0.05%
600 Tishomingo Co. (Burnsville) 2 0.00%
610 Tishomingo Co.(Belmont) 53 0.07%
620 Lauderdale Co. (Rogersville) 176 0.23%
24,393 32.50%
------
75,047
69
FALCON FIRST SUBSCRIBER REPORT - SYSTEM: DALTON
BASIC END OF
SUBSCRIBERS PERIOD 1995
----------- -----------
10 Whitfield Co. (Dalton) 11,882 15.83%
20 Dalton 7,237 9.64%
30 Tunnel Hill 755 1.01%
40 Varnell 182 0.24%
50 Cohutta 338 0.45%
60 Catoosa Co. (Dalton) 144 0.19%
70 Catoosa Co. (Ringgold) 4,633 6.17%
80 Ringgold 948 1.26%
200 Habersham County 3,237 4.31%
210 Clakesville 534 0.71%
220 Demorest 358 0.48%
230 Cornelia 1,332 1.77%
240 Mt. Airy 136 0.18%
250 Baldwin 506 0.67%
260 Alto 199 0.27%
270 Banks Co. (Cornelia) 115 0.15%
280 Helen 0 0.00%
290 White County 0 0.00%
300 Banks Co. (Commerce) 74 0.10%
310 Homer 99 0.13%
320 Commerce 977 1.30%
330 Nicholson 183 0.24%
340 Jackson Co. (Commerce) 645 0.86%
350 Jackson Co. (Jefferson) 52 0.07%
360 Jefferson 721 0.96%
370 Arcade 39 0.05%
35,326 47.07%
------
75,047
70
FALCON FIRST SUBSCRIBERS REPORT - PLATTSBURGH
BASIC END OF
SUBSCRIBERS PERIOD 1995
----------- -----------
10 City of Plattsburgh 4,957 6.61%
20 Town of Plattsburgh 3,270 4.36%
30 Schuyler Falls 1,152 1.54%
40 Peru 1,141 1.52%
50 Keeseville (Clinton Co.) 328 0.44%
60 Chesterfield 148 0.20%
70 Ausable 177 0.24%
80 Keeseville (Essex Co.) 296 0.39%
90 Town of Dannemora 27 0.04%
100 Village of Dannemora 236 0.31%
110 Saranac 409 0.54%
120 Village of Dannemora (Saranac) 112 0.15%
130 Beekmantown 1,038 1.38%
140 Plattsburgh AFB 74 0.10%
150 Black Brook 246 0.33%
160 Jay 430 0.57%
170 Wilmington 230 0.31%
180 Village of Westport 164 0.22%
190 Town of Westport 82 0.11%
200 Elizabethtown 335 0.45%
210 Lewis 157 0.21%
220 Long Lake 319 0.43%
15,328 20.42%
------
75,047