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Exhibit 10.41
FALCON HOLDING GROUP, L.P.
PARTNERSHIP OPTION AGREEMENT
FOR
ADVANCE TV OF CALIFORNIA, INC.
This Agreement is made and entered into as of July 15, 1996, by and
among Advance TV of California, Inc. ("Advance") and Falcon Holding Group,
L.P., a Delaware limited partnership ("FHGLP").
WHEREAS, Advance is currently a limited partner in FHGLP pursuant to
the Third Amended and Restated Agreement of Limited Partnership of FHGLP dated
as of December 28, 1995 (the "Partnership Agreement");
WHEREAS, Advance desires to acquire an option to purchase additional
FHGLP partnership interests from FHGLP; and
WHEREAS, FHGLP desires to cause Advance, under certain terms and
conditions to purchase such partnership interests.
NOW, THEREFORE, the parties hereby agree as follows:
1. Defined Terms. Capitalized terms defined in the Partnership
Agreement are used herein with the meanings so defined.
2. Option. In consideration of the receipt of $20,000 and for
other good and valuable consideration, FHGLP on the date hereof, irrevocably
grants to the Nathanson the option to purchase partnership interests (the
"Partnership Interests") of the Company represented by a Percentage Interest of
2.1856% which will have an Adjusted Capital Contribution Account equal to the
Purchase Price (as defined below) (the "Optioned Interests") upon the terms and
conditions set forth in this Agreement.
3. Purchase Price. The purchase price for the Optioned Interests
(the "Purchase Price") shall be the applicable Purchase Price on the date of
exercise. The initial Purchase Price for the Optioned Interests for the first
twelve months of this Agreement shall be $8,315,000. On each anniversary date
of this Agreement, the Purchase Price for the next succeeding year shall be
equal to 105% of the Purchase Price for the preceding year. The consideration
received for the option shall be applied against the Purchase Price upon
exercise of this option.
4. Adjustments and Option. In the event that the outstanding
Partnership Interests of FHGLP are changed into or exchanged for a different
number or kind of units or partnership interests or any other securities of
FHGLP by reasons of merger, consolidation, recapitalization or
reclassification, or otherwise, the Optioned Interests subject to this option
shall be appropriately and equitably adjusted in number and kind to the extent
that after such event Advance's proportionate interest in
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FHGLP as represented by the Optioned Interests shall be maintained as before
the occurrence of such event.
5. Expiration of the Option. This option may be exercised at any
time until the first of the following events: (a) the expiration of ten (10)
years from the date the option is granted, or (b) the effective date of (i) a
merger or consolidation of FHGLP with another person, (ii) the acquisition by
another person of all or substantially all the assets or a majority of the then
outstanding partnership interests of FHGLP, or (iii) the dissolution and
liquidation of FHGLP (collectively, the "Dissolution Events"). At least thirty
(30) days prior to the effective date of any Dissolution Event, FHGLP shall
give Advance's notice of such event if this option has then not been exercised.
6. FHGLP's Rights to Require Exercise of the Option. In the
event this option has not been exercised on or before fifteen (15) days prior
to a Dissolution Event, then FHGLP may require Advance to purchase the Optioned
Interests prior to the date of such Dissolution Event. FHGLP may exercise its
right to require Advance to exercise this option by delivery to Advance a
notice in writing signed on behalf of FHGLP stating that Advance is required
pursuant to this Paragraph 6 to exercise the option and upon the receipt of
such notice by Advance, Advance shall be considered to have provided the
requisite notice under Paragraph 7 and to have exercised this option.
7. Manner of Exercise. This option may be exercised by Advance
by delivery to FHGLP by a notice in writing signed by Advance stating that the
option is thereby exercised. In the case of any exercise other than in
connection with a Dissolution Event, the Purchase Price shall be paid either by
(i) cash or check of the Purchase Price for the Optioned Interests or (ii) the
transfer by Advance of other Partnership Interests of FHGLP owned by Advance at
their then fair market value on the date the option is exercised in an amount
equal to the Purchase Price of the Optioned Interests. In the case of an
exercise in connection with a Dissolution Event, the obligation to pay the
Purchase Price shall be non-recourse to Advance and the Purchase Price shall be
paid solely out of distributions otherwise payable to Advance by FHGLP with
respect to the Optioned Interests and any other Partnership Interests in FHGLP
then held by Advance. FHGLP is expressly authorized to withhold distributions
with respect to the Optioned Interests and any other Partnership Interests of
Advance and to apply such withholdings to the Purchase Price of the Optioned
Interests.
8. Rights as a Partner. Advance shall not be nor have any rights
and privileges of a Partner in FHGLP with respect to the Optioned Interests
until this option is fully exercised.
9. Investment Representation.
9.1 Unregistered Securities. Advance understands that
neither the option granted by this Agreement the Partnership Interests covered
thereby have been registered under the Securities Act of 1933, as amended (the
"Act") on the ground that the offer
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and sale of securities provided for in this Agreement is exempt from the
registration requirements of the Act pursuant to Section 4(2) of the Act and
Regulation D promulgated thereunder, and that the Company's reliance on such
exemption is predicated in part on Advance's representations set forth herein.
9.2 Qualified Investor. Advance is an "accredited
investor" as defined in Regulation D promulgated under the Act and by reason of
the business or financial experience of its control persons has the capacity to
protect its own interest in an investment in the Partnership Interests.
Advance has had the opportunity to ask questions of the Company and to obtain
any information requested concerning the Company and the accuracy of the
information supplied, and all questions which have been asked on behalf of
Advance have been answered by the Company to the satisfaction of Advance.
9.3 Investment Intent. The rights under this Agreement
and the Partnership Interests covered hereby are being or will be acquired by
Advance for investment, for its own account, and not directly or indirectly for
the account of any other person, and not with a view to or for sale in
connection with any distribution of the Partnership Interests. Advance has no
present intention of selling, granting participation in, or otherwise
distributing the Partnership Interests. Advance does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer, or
grant participations, to such person or to any other third person, with respect
to the Partnership Interests. Advance understands and acknowledges that this
Agreement is being executed by the Company in reliance upon the foregoing
representations and warranties.
9.4 No Public Market. Advance has been advised that no
public market now exists for the Partnership Interests, that a public market
may never exist and that Advance therefore may have to hold the Partnership
Interests indefinitely.
9.5 Restrictions on Transfer. Advance understands that
if the Company does not register with the Securities and Exchange Commission
(the "SEC"), pursuant to Section 12 or 15 of the Securities Exchange Act of
1934 (the "1934 Act"), or if a registration statement covering the securities
under the Act is not in effect when Advance desires to sell the Partnership
Interests, Advance may be required to hold the Partnership Interests for an
indeterminate period. Advance also understands that any sale of the
Partnership Interests which might be made by Advance in reliance upon Rule 144
under the Act may be made only in limited amounts in accordance with the terms
and conditions of that rule.
10. Amendments. The provisions of this Agreement may be waived,
offered, amended, modified or appealed in whole or in part only by the written
consent of all parties to this Agreement.
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11. Successors and Assigns. This Agreement shall be binding on
and enforceable by and against the parties to it and their respective heirs,
legal representatives and successors.
12. Notices. Any notice under or pursuant to this Agreement shall
be in writing and shall be delivered either by personal delivery, by telecopier
or similar electronic medium or by overnight courier addressed as follows:
If to FHGLP: Falcon Holding Group, L.P.
10900 Wilshire Boulevard
Fifteenth Floor
Los Angeles, CA 90024
If to Advance: Advance TV of California, Inc.
10900 Wilshire Boulevard
Fifteenth Floor
Los Angeles, Ca 90024
Attn: Marc Nathanson
All such notices shall be effective when delivered or received at the office or
by the party receiving such notice.
13. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
FALCON HOLDING GROUP, L.P., a
Delaware limited partnership
By Falcon Holding Group, Inc.
its general partner
By /s/ STANLEY S. ITSKOWITCH
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Stanley S. Itskowitch
Executive Vice President
ADVANCE TV OF CALIFORNIA, INC.
By /s/ GREG NATHANSON
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Greg Nathanson, Secretary
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