\n120-Day Period Section 7.1(d)(1)(A)<\/p>\nAdjustment Assets Section 2.5(b)(1)<\/p>\n
Adjustment Liabilities Section 2.5(b)(2)<\/p>\n
Agent Section 11.8<\/p>\n
Assumed Employees Section 6.9(a)<\/p>\n
Assumed Liabilities Section 2.2<\/p>\n
Audited Financial Statements Section 3.5(a)<\/p>\n
Buyer First Paragraph<\/p>\n
Buyer’s 10-K Section 5.6(a)<\/p>\n
Buyer’s 10-Q Section 5.6(a)<\/p>\n
Cash Consideration Section 2.3(a)(1)<\/p>\n
Claimant Section<\/p>\n
Closing Cash Payment Section 2.6<\/p>\n
Closing Equivalent Subscribers Section 2.5(a)<\/p>\n
Closing Net Liabilities Section 2.5(b)<\/p>\n
Deposit Escrow Property Section 2.4(a)<\/p>\n
Designated Material Consent Franchise Section 6.4(b)<\/p>\n
Designated Non-Material Consent Section 6.4(b)
\nFranchise<\/p>\n
Escrow Registrable Securities Section 2.4(b)<\/p>\n
– 11 –<\/p>\n
Financial Statements Section<\/p>\n
Final Closing Statement Section 2.7(b)<\/p>\n
FVP First Paragraph<\/p>\n
GECC Section 6.7(c)<\/p>\n
GECC Facility Consent Section 6.7(c)<\/p>\n
General Partner First Paragraph<\/p>\n
Indemnifying Party Section<\/p>\n
Limited Partner Seller First Paragraph<\/p>\n
Material Consent Franchise Section 7.1(d)(1)<\/p>\n
Material Renewal Franchise Section 6.4(c)<\/p>\n
Net Closing Cash Payment Section 2.7(a)<\/p>\n
Post-Closing Adjustments Escrow Section 2.7(a)<\/p>\n
Post-Closing Adjustment Funds Section 2.7(a)<\/p>\n
Post-Closing Indemnity Escrow Section 10.3<\/p>\n
Post-Closing Indemnity Property Section 10.3<\/p>\n
Preliminary Closing Statement Section 2.6<\/p>\n
Purchase Consideration Section 2.3(a)<\/p>\n
Renewal Franchises Section 6.1(a)(1)<\/p>\n
Renewal Window Section 6.4(d)<\/p>\n
Seller Recitals<\/p>\n
SPC Seller First Paragraph<\/p>\n
Stock Consideration Section 2.3(a)(2)<\/p>\n
Stock Consideration Registrable Section 6.17
\n Securities<\/p>\n
Unaudited Financial Statements Section 3.5(a)<\/p>\n
Warn Act Section 9(a)<\/p>\n
<\/c><\/s><\/caption>\n<\/table>\n
– 12 –<\/p>\n
1.3 Rules of Construction.<\/p>\n
Words used in this Agreement, regardless of the gender and number
\nspecifically used, shall be deemed and construed to include any other gender and
\nany other number as the context requires. As used in this Agreement, the word
\n“including” is not limiting, and the word “or” is not exclusive. Except as
\nspecifically otherwise provided in this Agreement in a particular instance, a
\nreference to a Section is a reference to a Section of this Agreement, a
\nreference to an Exhibit is a reference to an Exhibit to this Agreement, and the
\nterms “hereof,” “herein,” and other like terms refer to this Agreement as a
\nwhole, including the Disclosure Schedules and the Exhibits to this Agreement,
\nand not solely to any particular part of this Agreement. The descriptive
\nheadings in this Agreement are inserted for convenience of reference only and
\nare not intended to be part of or to affect the meaning or interpretation of
\nthis Agreement.<\/p>\n
ARTICLE 2<\/p>\n
SALE AND PURCHASE OF PURCHASED INTERESTS;
\n ASSUMPTION OF LIABILITIES; ADDITIONAL PURCHASE
\n CONSIDERATION<\/p>\n
2.1 Agreement to Sell and Buy.<\/p>\n
Subject to the terms and conditions set forth in this Agreement, each
\nSeller hereby agrees to sell, transfer, and deliver to Buyer at the Closing, and
\nBuyer hereby agrees to purchase at the Closing, the Purchased Interests held by
\nsuch Seller, free and clear of all Encumbrances.<\/p>\n
2.2 Assumption of Obligations.<\/p>\n
In consideration of the sale of the Purchased Interests, concurrently
\nwith the Closing, Buyer shall assume all obligations and liabilities associated
\nwith the Purchased Interests purchased by Buyer, whether such obligations and
\nliabilities arose prior to the Closing or arise after the Closing, including
\n(and notwithstanding any provision of applicable partnership law to the
\ncontrary) all obligations and liabilities arising out of the ownership of the
\nGeneral Partnership Interest (collectively, the “Assumed Liabilities”). After
\nthe Closing Buyer shall cause the FrontierVision Companies to discharge all of
\ntheir obligations and liabilities, whether such obligations and liabilities
\narose prior to the Closing or arise after the Closing, including all obligations
\nand liabilities relating to the business and operations of the Systems; provided
\nthat Buyer shall not be deemed to have assumed directly any obligations and
\nliabilities of the FrontierVision Companies vis-a-vis any Person that is not a
\nparty to this Agreement or entitled to indemnification under this Agreement. In
\naddition, nothing in this Section 2.2 shall impair Buyer’s rights under Sections
\n2.5, 2.8 and 2.9 or Buyer’s indemnification rights under Article 10 after the
\nClosing (subject in each case to the limitations provided therein).<\/p>\n
– 13 –<\/p>\n
2.3 Additional Purchase Consideration for Purchased Interests.<\/p>\n
(a) In addition to assuming the Assumed Liabilities,
\nBuyer shall pay and deliver to Sellers as consideration for the sale of the
\nPurchased Interests (the “Purchase Consideration”):<\/p>\n
(1) A cash payment equal to Six Hundred Million
\nDollars ($600,000,000),
\nsubject to adjustment in accordance with this Article 2 (the “Cash
\nConsideration”);<\/p>\n
(2) 7,000,000 shares of ACC Class A Common
\nStock, together with the kind
\nand amounts of securities, cash and other property that Sellers would have held
\nor been entitled to receive as of the Closing (whether resulting from a stock
\nsplit, subdivision, combination or reclassification of the outstanding capital
\nstock of Buyer, or in redemption thereof, or as a result of any merger,
\nconsolidation, acquisition or other exchange of assets to which Buyer may be a
\nparty or otherwise) had Sellers held such shares of ACC Class A Common Stock as
\nof the date of this Agreement and retained such shares, and all securities, cash
\nand other property distributed or issued with respect to or in substitution or
\nexchange therefor, during the period from the date of this Agreement through
\n(and including) the Closing Date (collectively, the “Stock Consideration”). To
\nthe extent Adelphia pays cash to the Sellers pursuant to Section 8.1(a)(4) in
\nlieu of delivering the ACC Class A Common Stock (or other securities, cash and
\nproperty described in the preceding sentence), the term “Stock Consideration”
\nshall include all such cash as the context requires.<\/p>\n
(b) The Cash Consideration (and any adjustments thereto)
\nand the Stock Consideration shall be allocated among the Purchased Interests and
\nthe Sellers as determined by the Sellers and delivered to Buyer in writing at
\nleast two days prior to the Closing. Not more than 44% of the aggregate Purchase
\nConsideration shall be allocated to the purchase and sale of the Purchased
\nInterests held by the SPC Sellers.<\/p>\n
2.4 Escrow Deposit; Registration Rights.<\/p>\n
(a) Deposit of ACC Class A Shares. Simultaneously with
\nthe execution of this Agreement, and as a material inducement to FVP and Sellers
\nto enter into this Agreement, Buyer shall cause 1,000,000 shares of ACC Class A
\nCommon Stock to be issued in the name of FVP and delivered to the Escrow Agent
\nto be held in escrow pursuant to the terms of the Deposit Escrow Agreement,
\nwhich is to be executed concurrently herewith by Buyer, FVP, and the Escrow
\nAgent. The “Deposit Escrow Property” means, collectively, the 1,000,000 shares
\nof ACC Class A Common Stock deposited pursuant to this Section 2.4(a), together
\nwith the kind and amounts of securities, cash and other property that Sellers
\nwould have held or been entitled to receive as of the date the Deposit Escrow
\nProperty is released in accordance with this Agreement (whether resulting from a
\nstock split, subdivision, combination or reclassification of the outstanding
\ncapital stock of Buyer, or in redemption thereof, or as a result of any merger,
\nconsolidation, acquisition or other exchange of assets to which Buyer may be a
\nparty or otherwise) had Sellers held such shares of ACC Class A Common Stock as
\nof the date of this Agreement and retained such shares, and all securities, cash
\nand other property distributed or issued<\/p>\n
– 14 –<\/p>\n
with respect to or in substitution or exchange therefor, during the period from
\nthe date of this Agreement through (and including) the date the Deposit Escrow
\nProperty is released in accordance with this Agreement, and also includes, to
\nthe extent relevant, all cash deposited with the Escrow Agent pursuant to
\nSection 2.4(b) and all earnings thereon.<\/p>\n
(b) Deposit Registration Rights Agreement. Simultaneously
\nwith the execution of this Agreement, and as a material inducement to FVP and
\nSellers to enter into this Agreement, Buyer shall execute and deliver the
\nDeposit Registration Rights Agreement, pursuant to which Buyer will grant FVP
\ncertain rights as provided therein in respect of the shares of ACC Class A
\nCommon Stock or other securities constituting the Deposit Escrow Property (the
\n“Escrow Registrable Securities”). As soon as practicable after the execution of
\nthis Agreement, Buyer shall file an appropriate registration statement under the
\nSecurities Act covering the registration of all of such Escrow Registrable
\nSecurities. Buyer shall then use commercially reasonable efforts to cause such
\nregistration statement to be declared effective under the Securities Act as soon
\nas practicable thereafter and kept effective in accordance with the provisions
\nof the Deposit Registration Rights Agreement, and Buyer shall otherwise comply
\nwith the provisions of the Deposit Registration Rights Agreement. If a
\nregistration statement covering the registration of all of such Escrow
\nRegistrable Securities has not been declared effective under the Securities Act
\n(and such registration statement shall not be subject to any stop order or
\nproceeding seeking a stop order) on the earlier of (1) the date FVP terminates
\nthis Agreement in accordance with Section 9.2 as a result of a willful breach of
\nthis Agreement by Buyer (including a willful breach as described in the first
\nsentence of Section 9.4(c)), and (2) May 31, 1999, Buyer shall deposit with the
\nEscrow Agent, on the next business day, cash in an amount equal to the aggregate
\nfair market value of the shares of ACC Class A Common Stock or other securities
\nconstituting the Deposit Escrow Property (computed on the basis of the Weighted
\nAverage Trading Price of such shares of ACC Class A Common Stock or other
\nsecurities for the ten day trading period beginning on the thirteenth trading
\nday prior to the date on which Buyer deposits such cash amount pursuant to this
\nsentence). Upon such payment by Buyer to the Escrow Agent, all of such shares of
\nACC Class A Common Stock or other securities constituting the Deposit Escrow
\nProperty shall be released and paid over to Buyer but all cash funds, if any,
\nincluded in the Deposit Escrow Property and previously held by the Escrow Agent
\nshall be retained by the Escrow Agent as part of the Deposit Escrow Property.<\/p>\n
(c) Release of Deposit Escrow Property. At the Closing,
\nall of the Deposit Escrow Property shall be released from escrow and returned to
\nBuyer. Upon termination of this Agreement prior to the Closing in accordance
\nwith Article 9, all of the Deposit Escrow Property shall be released from escrow
\nand returned to Buyer except as provided in the following sentence. If FVP
\nterminates this Agreement in accordance with Section 9.2 as a result of a
\nwillful breach of this Agreement by Buyer (including a willful breach as
\ndescribed in the first sentence of Section 9.4(c)), all of the Deposit Escrow
\nProperty shall be released from escrow and paid over to FVP on the next business
\nday, provided that FVP shall be entitled to receive all cash if the condition
\nspecified in the last sentence of Section 2.4(b) is applicable, and FVP shall be
\nentitled to enforce this Section 2.4 against Buyer notwithstanding any provision
\nto the contrary in Section 9.4(c). On the day of the occurrence of any of the
\nforegoing events, FVP and Buyer will execute and deliver to the Escrow Agent
\njoint written instructions containing<\/p>\n
– 15 –<\/p>\n
appropriate disbursement instructions consistent with this Section 2.4(c) and
\nthe Deposit Escrow Agreement.<\/p>\n
2.5 Cash Consideration Adjustments.<\/p>\n
(a) Closing Equivalent Subscribers. The Cash
\nConsideration shall be decreased by the number, if any, by which the number of
\nClosing Equivalent Subscribers is less than 700,000, multiplied by $2,928. For
\npurposes of this Agreement, “Closing Equivalent Subscribers” means the total
\nnumber of Equivalent Subscribers for all of the Systems as of the Adjustment
\nTime; provided, however, that if the systems exchange transactions between the
\nFrontierVision Companies and InterMedia Partners of Kentucky, L.P. referred to
\nin Section 6.1 of FrontierVision’s Disclosure Schedule are consummated prior to
\nthe Closing hereunder, none of the subscribers served by the InterMedia systems
\nacquired in such transactions shall be included in Closing Equivalent
\nSubscribers but the number of Closing Equivalent Subscribers represented by the
\nsubscribers served by the Systems sold to InterMedia (determined as if the
\neffective time of the consummation of the respective InterMedia transactions
\nwere the Adjustment Time hereunder) shall be included in Closing Equivalent
\nSubscribers; and provided further, however, that the provisions of Section
\n6.4(e) shall apply to the extent relevant.<\/p>\n
(b) Closing Net Liabilities. The Cash Consideration
\nshall be decreased by the amount, if any, by which the Closing Net Liabilities
\nexceed $1,150,000,000 and shall be increased by the amount, if any, by which the
\nClosing Net Liabilities are less than $1,150,000,000. For purposes of this
\nAgreement, “Closing Net Liabilities” means Adjustment Liabilities as of the
\nAdjustment Time, decreased by Adjustment Assets as of the Adjustment Time.<\/p>\n
(1) Subject to the other provisions of this
\nSection 2.5(b), “Adjustment Assets” means, as of any date, the sum of: (A) cash
\nand cash equivalents, (B) prepaid expenses, deposits, and other current assets
\n(other than inventory); (C) Accounts Receivable and other receivables; (D) tax
\nrefunds due to any of the FrontierVision Companies for any tax period ending
\nprior to the Adjustment Time; (E) the amount of Reimbursable Capital
\nExpenditures; (F) the amount of the cash consideration paid by the
\nFrontierVision Companies in connection with the systems exchange transactions,
\nif consummated prior to the Closing hereunder, with InterMedia Partners of
\nKentucky L.P. referred to in Section 6.1 of FrontierVision’s Disclosure
\nSchedule; (G) the aggregate amount of any cash investments made by the
\nFrontierVision Companies in The Maine Internet Works, Inc. and Landmark Net
\nAccess, Inc. after the date of this Agreement and prior to the Adjustment Time
\n(provided that any such investments shall not be included unless Buyer consented
\nto such investments); (H) the amount of the net asset, if applicable, referred
\nto in Section 6.7(e); and (I) the amount of the insurance premiums paid by the
\nFrontierVision Companies prior to the Adjustment Time as contemplated by Section
\n6.13, in each case of clauses (A) through (D) computed for the FrontierVision
\nCompanies on a consolidated basis and without duplication in accordance with
\nGAAP and in each case of clauses (E) through (I) as agreed above. Exhibit F
\nreferred to below in Section 2.5(c) identifies and describes the “other
\nreceivables” referenced in clause (C) above that would be included in Adjustment
\nAssets if the Closing<\/p>\n
– 16 –<\/p>\n
Date were the date of this Agreement. The disclosure made pursuant to the
\nimmediately preceding sentence is for informational purposes only.<\/p>\n
(2) Subject to the other provisions of this
\nSection 2.5(b), “Adjustment Liabilities” means, as of any date, the sum of: (A)
\naccounts payable; (B) expenses of the FrontierVision Companies relating to the
\nconsummation of the transactions contemplated by this Agreement, including fees
\nand expenses of attorneys, accountants, financial advisors and broker fees, if
\nsuch fees and expenses are paid by the FrontierVision Companies after the
\nClosing Date, but excluding any expenses that Buyer agrees to pay or is
\nobligated to pay pursuant to this Agreement; (C) accrued and unpaid expenses;
\n(D) subscriber’s prepayments and deposits; (E) Tax payments due and payable by
\nany of the FrontierVision Companies to any Governmental Authority for all Tax
\nperiods ending on or prior to the Adjustment Time; (F) all other FrontierVision
\nLiabilities as of the Adjustment Time; (G) subject to Section 6.18, $5,500,000
\n(which represents the amount by which the amount of rebuild\/upgrade capital
\nexpenditures of the FrontierVision Companies budgeted for the period beginning
\nOctober 23, 1998 and ending December 31, 1998 with respect to the Systems
\nacquired pursuant to the State Cable Acquisition Agreement exceeded the amount
\nof capital expenditures actually made by the FrontierVision Companies for such
\nperiod with respect to such Systems); (H) $2,000,000 (which represents the
\namount by which the amount of rebuild\/upgrade capital expenditures of the
\nFrontierVision Companies budgeted for the period beginning July 1, 1998 and
\nending December 31, 1998 with respect to the Systems other than the Systems
\nacquired pursuant to the State Cable Acquisition Agreement exceeded the amount
\nof capital expenditures actually made by the FrontierVision Companies for such
\nperiod with respect to such other Systems); (I) the cash amount required to pay
\noff vehicle leases held by the FrontierVision Companies, if any; (J) the amount
\nas illustrated in Section 2.5 of FrontierVision’s Disclosure Schedule as the
\n“Net Carriage Adjustment” and as updated for activity through the Closing Date;
\n(K) the amount of cash and other monetary purchase price consideration (net of
\nreasonable out-of-pocket transaction costs and expenses) received by the
\nFrontierVision Companies in connection with the sale of systems to Helicon
\nPartners I, L.P. consummated on January 7, 1999, plus the amount of cash and
\nother monetary purchase price consideration (net of reasonable out-of-pocket
\ntransaction costs and expenses) received by the FrontierVision Companies in
\nconnection with the sale of other systems and assets, including without
\nlimitation, the sale of the Rockland, Maine office site real estate parcel
\nreferenced in Section 3.8 of FrontierVision’s Disclosure Schedule, if any,
\nconsummated after the date of this Agreement and prior to the Closing Date; (L)
\nthe amount of cash and other monetary purchase price consideration payable by
\nthe FrontierVision Companies under the purchase contract for the Chillicothe,
\nOhio real estate parcel referenced in Section 3.8 of FrontierVision’s Disclosure
\nSchedule, but only to the extent to which such amount has not been paid by the
\nFrontierVision Companies prior to the Closing Date; (M) the FrontierVision
\nCompanies’ share of any out-of-pocket costs and expenses incurred in connection
\nwith relocating the Luckey headend site referred to in Section 3.6 (Item A.2) of
\nFrontierVision’s Disclosure Schedule, but only to the extent to which such costs
\nand expenses have not been paid by the FrontierVision Companies prior to the
\nClosing; (N) $3,937,500.00; (O) $200,000.00 (representing the amount payable in
\nconnection with the matter disclosed in Section 3.6 (Item A.1) of
\nFrontierVision’s Disclosure Schedule that is not covered by clause (F) above);
\n(P) the aggregate amount of any cash distributions received by the
\nFrontierVision Companies from The Maine Internet Works,<\/p>\n
– 17 –<\/p>\n
Inc. and Landmark Net Access, Inc. after December 31, 1998 and prior to the
\nAdjustment Time; (Q) the amount paid by Buyer at the Closing with respect to
\nFVP’s Executive Deferred Compensation Plan as contemplated by Section 6.9(f);
\n(R) the amount, if any, required to be included as an Adjustment Liability
\npursuant to Section 6.4(e); (S) the amount of the net liability, if applicable,
\nreferred to in Section 6.7(e); (T) $10,000,000, reduced by the aggregate amount
\nof capital expenditures actually made by the FrontierVision Companies during the
\nperiod beginning January 1, 1999 and ending on the Closing Date with respect to
\nthe Waterville, Ohio and Bedford, Michigan Systems upgrade and rebuild projects
\nlisted in Section 2.5 of FrontierVision’s Disclosure Schedule; and (U) the
\naggregate amount of the programming costs savings to the FrontierVision
\nCompanies as a result of the Programming Supply Agreement with Buyer, in each
\ncase of clauses (A) through (F) computed for the FrontierVision Companies on a
\nconsolidated basis and without duplication in accordance with GAAP and in each
\ncase of clauses (G) through (U) as agreed above. The parties agree that to the
\nextent any liability qualifies as an Adjustment Liability pursuant to more than
\none clause of this paragraph, it shall be included only once and without
\nduplication.<\/p>\n
(3) The amount of “Reimbursable Capital
\nExpenditures” equals the amount by which (A) the aggregate amount of capital
\nexpenditures actually made by the FrontierVision Companies during the period
\nbeginning January 1, 1999 and ending on the Closing Date with respect to any of
\nthe Systems upgrade and rebuild projects listed in Section 2.5 of
\nFrontierVision’s Disclosure Schedule (it being understood that in no event will
\nany capital expenditures made to complete the New Philadelphia retrofit, Bangor,
\nAmesbury, and Ironton\/Ashland upgrade and rebuild projects to the point of
\ncompletion described in Section 2.5(D) of FrontierVision’s Disclosure Schedule
\nor any capital expenditures made by the FrontierVision Companies with respect to
\nthe Waterville, Ohio and Bedford, Michigan Systems upgrade and rebuild projects
\nlisted in Section 2.5 of FrontierVision’s Disclosure Schedule be included in the
\namount for this clause (A)) exceeds (B) the amount, if any, by which (1) the
\namount of Budgeted Other Capital Expenditures exceeds (2) the amount of Actual
\nOther Capital Expenditures; provided that if the amount in clause (B)(2) exceeds
\nthe amount in clause (B)(1), the amount for clause (B) shall be zero. As used in
\nthis subsection (3), the following terms have the following meanings:<\/p>\n
(A) “Budgeted Other Capital
\nExpenditures” means the aggregate cumulative amount of capital expenditures
\nbudgeted for all of the capital expenditures categories included in all
\ncategories other than “Upgrade\/Rebuild” on the Capital Expenditures Budget for
\nthe period beginning January 1, 1999 and ending on the Closing Date (the amount
\nbudgeted for the month in which the Closing occurs to be prorated in the event
\nthe Closing Date occurs on a day other than the first or last day of a month).<\/p>\n
(B) “Actual Other Capital Expenditures”
\nmeans the aggregate amount of capital expenditures actually made by the
\nFrontierVision Companies during the period beginning January 1, 1999 and ending
\non the Closing Date with respect to all of the capital expenditure categories
\nincluded in all categories other than “Upgrade\/Rebuild” on the Capital
\nExpenditures Budget, computed on a basis consistent with the accounting
\nmethodologies used to compute the Budgeted Other Capital<\/p>\n
– 18 –<\/p>\n
Expenditures, which in turn was prepared on a basis consistent with the
\naccounting procedures used to prepare the Financial Statements.<\/p>\n
(C) “Capital Expenditures Budget” means
\nthe monthly capital expenditures budget for the FrontierVision Companies for
\ncalendar year 1999 that is included in Section 2.5 of FrontierVision’s
\nDisclosure Schedule.<\/p>\n
(4) To the extent consistent with GAAP, revenues
\nand expenses shall be treated as prepaid or accrued so as to reflect the
\nprinciple that revenues and expenses attributable to the period prior to the
\nAdjustment Time shall be for the account of Sellers and revenues and expenses
\nattributable to the period after the Adjustment Time shall be for the account of
\nBuyer.<\/p>\n
(5) Deferred income Taxes of any FrontierVision
\nCompany shall not be treated as Adjustment Assets or Adjustment Liabilities.<\/p>\n
(6) To the extent any liability that would be an
\nAdjustment Liability but for the fact that all or any portion of such liability
\nis transferred by a FrontierVision Company (including Main Security
\nSurveillance, Inc. for this purpose) to and assumed by The Maine Internet Works,
\nInc. or Landmark Net Access, Inc. prior to the Adjustment Time, such liability
\nshall be treated as an Adjustment Liability (but without duplication) in any
\nevent.<\/p>\n
(c) Example Calculation. Attached hereto as Exhibit F is
\nan example calculation of Closing Net Liabilities for illustrative purposes
\nonly, prepared on the basis of good faith estimates of Adjustment Assets and
\nAdjustment Liabilities made by FVP as if the Closing Date were January 31, 1999.
\nFVP makes no representation and warranty to any other party with respect to the
\naccuracy of Exhibit F.<\/p>\n
2.6 Payment at Closing.<\/p>\n
No later than seven business days prior to the date scheduled for the
\nClosing, FVP shall prepare and deliver to Buyer a written report (the
\n“Preliminary Closing Statement”) setting forth FVP’s estimates of Closing Net
\nLiabilities and Closing Equivalent Subscribers, determined in accordance with
\nSection 2.5 and this Section 2.6. The Preliminary Closing Statement shall be
\nprepared by FVP in good faith and shall be certified by FVP to be its good faith
\nestimate of the Closing Net Liabilities and Closing Equivalent Subscribers as of
\nthe date thereof. FVP shall make available to Buyer such information as Buyer
\nshall reasonably request relating to the matters set forth in the Preliminary
\nClosing Statement. If Buyer does not agree with any estimated amount set forth
\nin the Preliminary Closing Statement, then on or prior to the third business day
\nprior to the date scheduled for the Closing, Buyer may deliver to FVP a written
\nreport setting forth in reasonable detail its good faith estimates (supported by
\nsubstantial evidence) of any amount set forth in the Preliminary Closing
\nStatement with which Buyer disagrees. In the case of any such estimated amount
\nas to which Buyer delivers its own estimate on or before such third business
\nday, FVP and Buyer will endeavor in good faith to agree prior to the Closing on
\nthe<\/p>\n
– 19 –<\/p>\n
appropriate amount of such estimate to be used for calculating the Closing Cash
\nPayment (as defined below). At the Closing Buyer shall pay to Sellers the amount
\nof the Cash Consideration, as adjusted at Closing on the basis of the
\nPreliminary Closing Statement, with any changes thereto mutually agreed to
\nbetween Buyer and FVP (the “Closing Cash Payment”) in accordance with the
\nprovisions of Section 8.3(a)(2). In the case of any such estimated amount as to
\nwhich Buyer delivers its own estimate on or before such third business day and
\nas to which FVP and Buyer do not so agree prior to the Closing, at the Closing
\nthe difference (if any) between the amount of the Closing Cash Payment that
\nwould be determined using the estimates set forth in FVP’s Preliminary Closing
\nStatement (with any changes thereto mutually agreed to between Buyer and FVP)
\nand the amount of the Closing Cash Payment that would be determined using the
\nestimates of Buyer that remain in dispute will be transferred by Buyer to the
\nEscrow Agent, to be held in the Post-Closing Adjustments Escrow and disbursed in
\naccordance with the provisions of Section 2.7.<\/p>\n
2.7 Post-Closing Payment of Cash Consideration Adjustments.<\/p>\n
(a) Post-Closing Adjustments Escrow. At the Closing,
\nBuyer, Sellers and the Escrow Agent shall execute the Post-Closing Escrow
\nAgreement, in accordance with which, on the Closing Date, in addition to any
\ndeposit to be made pursuant to Section 2.6, Buyer will deposit $5,000,000 with
\nthe Escrow Agent to hold in escrow on behalf of Sellers solely in order to
\nprovide a fund for any payment to which Buyer may be entitled in accordance with
\nSection 2.7(c) (such escrow, the “Post-Closing Adjustments Escrow,” and such
\n$5,000,000, together with any amounts deposited in the Post-Closing Adjustments
\nEscrow pursuant to Section 2.6, and any earnings thereon, the “Post- Closing
\nAdjustment Funds”). None of the Post-Closing Adjustment Funds will be available
\nfor any purpose other than as described above and as described in Section 2.9
\nand shall not be available to satisfy any obligation of Sellers under Article
\n10. The Post-Closing Adjustments Escrow will be administered, and the
\nPost-Closing Adjustment Funds will be held and disbursed, in accordance with the
\nprovisions of this Section 2.7 and the Post-Closing Escrow Agreement. The
\nClosing Cash Payment less the amounts deposited in the Post-Closing Adjustments
\nEscrow pursuant to Sections 2.6 and this 2.7(a) shall be referred to as the “Net
\nClosing Cash Payment.”<\/p>\n
(b) Final Closing Statement. Within one hundred twenty
\ndays after the Closing Date, Buyer shall prepare and deliver to the General
\nPartner a written report (the “Final Closing Statement”) setting forth Buyer’s
\nfinal estimates of Closing Net Liabilities and Closing Equivalent Subscribers,
\ndetermined in accordance with Section 2.5. The Final Closing Statement shall be
\nprepared by Buyer in good faith and shall be certified by Buyer to be, as of the
\ndate prepared, its good faith estimate of the Closing Net Liabilities and
\nClosing Equivalent Subscribers. Buyer shall allow the General Partner and its
\nagents access at all reasonable times after the Closing Date to copies of the
\nbooks, records and accounts of the FrontierVision Companies and make available
\nto the General Partner such information as the General Partner reasonably
\nrequests to allow the General Partner to examine the accuracy of the Final
\nClosing Statement. Within thirty days after the date that the Final Closing
\nStatement is delivered by Buyer to the General Partner, the General Partner
\nshall complete its examination thereof and may deliver to Buyer a written report
\nsetting forth any proposed adjustments to any amounts set forth in the<\/p>\n
– 20 –<\/p>\n
Final Closing Statement. If the General Partner notifies Buyer of its acceptance
\nof the amounts set forth in the Final Closing Statement, or if the General
\nPartner fails to deliver its report of any proposed adjustments within the
\nthirty day period specified in the preceding sentence, the amounts set forth in
\nthe Final Closing Statement shall be conclusive, final, and binding on the
\nparties as of the last day of such thirty day period. Buyer and the General
\nPartner shall use good faith efforts to resolve any dispute involving the
\namounts set forth in the Final Closing Statement. If the General Partner and
\nBuyer fail to agree on any amount set forth in the Final Closing Statement
\nwithin fifteen days after Buyer receives the General Partner’s report pursuant
\nto this Section 2.7, then the General Partner shall retain a national
\nindependent accounting firm which is approved by Buyer to make the final
\ndetermination, under the terms of this Agreement, of any amounts under dispute.
\nBuyer hereby approves the appointment of any of the “Big Five” accounting firms
\nselected by the General Partner so long as such firm does not then serve as the
\nindependent auditor of any of the FrontierVision Companies or the General
\nPartner or Buyer. The selected accounting firm shall endeavor to resolve the
\ndispute as promptly as practicable and such firm’s resolution of the dispute
\nshall be final and binding on the parties, and a judgment may be entered thereon
\nin any court of competent jurisdiction. All of the costs and expenses of the
\nselected accounting firm and its services rendered pursuant to this Section 2.7
\nshall be borne by Buyer, on the one hand, and Sellers, on the other hand, as
\nnearly as possible in the proportion to the amount by which the determination of
\nall matters related to such costs and expenses varies from the positions of
\nBuyer and the General Partner on all such matters. Any fees to be borne by
\nSellers pursuant to the preceding sentence shall be paid out of the Post-Closing
\nAdjustment Funds in accordance with the provisions of Section 2.7(c).<\/p>\n
(c) Payment of Cash Consideration Adjustments.<\/p>\n
(1) Within three business days after the General
\nPartner delivers to Buyer its proposed adjustments to the Final Closing
\nStatement, the amounts not in dispute shall be determined and the Escrow Agent
\nshall release and pay over to Buyer and\/or Sellers, as the case may be, the
\nappropriate amount of the Post-Closing Adjustment Funds not in dispute;
\nprovided, however, that out of any amounts payable to Sellers an amount equal to
\nthe greater of $25,000 or one percent (1%) of the amount in dispute shall
\ncontinue to be held in the Post-Closing Adjustments Escrow to cover (A) the
\nfees, if any, payable by Sellers pursuant to the last sentence of Section 2.7(b)
\nwith respect to the final determination of the Cash Consideration and (B) the
\nfees payable by Sellers to the Escrow Agent pursuant to the Post-Closing Escrow
\nAgreement. For example, if (i) the Closing Cash Payment was determined to be
\n$600,000,000; (ii) the Net Closing Cash Payment was determined to be
\n$594,000,000; (iii) the Cash Consideration determined on the basis of Buyer’s
\nFinal Closing Statement was $595,000,000; and (iv) the Cash Consideration
\ndetermined on the basis of Buyer’s Final Closing Statement (with any adjustments
\nproposed by the General Partner pursuant to Section 2.7(b)) was $597,000,000;
\nthen $3,000,000 (i.e., $600,000,000 less $597,000,000) would be paid by the
\nEscrow Agent to Buyer, and $1,000,000 (i.e, $595,000,000 less $594,000,000) less
\nthe amount of the reserve for Sellers’ fees would be paid to Sellers. The
\nbalance in the Post-Closing Adjustments Escrow would be held by the Escrow Agent
\nuntil the amount of the Cash Consideration is finally determined pursuant to
\nSection 2.7(b)) (whether by agreement of the parties or by final resolution of
\nany accounting firm).<\/p>\n
– 21 –<\/p>\n
Upon and within three business days after such final determination, the Escrow
\nAgent shall release and pay over to Buyer and\/or Sellers, as the case may be,
\nthe appropriate amount of the Post-Closing Adjustment Funds based upon such
\nfinal determination; provided, however, that any payments to be made to Sellers
\nshall be reduced by the fees and expenses to be paid by Sellers if not already
\nreserved. To the extent there are not sufficient monies in the Post-Closing
\nAdjustments Escrow to distribute the amount determined to be payable to Sellers
\npursuant to this Section 2.7, Buyer will pay to Sellers in cash the amount of
\nsuch deficiency within three business days of the date of such determination. To
\nthe extent there are not sufficient monies in the Post-Closing Adjustments
\nEscrow to distribute the amounts determined to be payable to Buyer pursuant to
\nthis Section 2.7, the amount of such deficiency will be paid to Buyer from the
\nPost-Closing Indemnity Escrow to the extent of any Post-Closing Indemnity
\nProperty therein within three business days of the date of such determination.<\/p>\n
(2) If Buyer has not delivered the Final Closing
\nStatement to the General Partner within twenty days after the end of the 120-day
\nperiod referred to in Section 2.7(b), the Escrow Agent shall release and pay
\nover to Sellers all of the Post-Closing Adjustment Funds.<\/p>\n
(3) If the General Partner has not delivered its
\nreport of any proposed adjustments to the Final Closing Statement within the
\nthirty day period following its receipt of the Final Closing Statement, the
\nEscrow Agent shall release and pay out the Post-Closing Adjustment Funds based
\nupon the Final Closing Statement delivered by Buyer.<\/p>\n
(4) Notwithstanding the above provisions, if
\nBuyer has provided notice of a claim to the General Partner pursuant to Section
\n2.9(b), a portion of the Post-Closing Adjustment Funds sufficient to reimburse
\nBuyer for any such claim and to pay Sellers’ share of any fees and expenses
\nunder Section 2.9(b) shall be retained in the Post-Closing Adjustments Escrow
\nand shall not be distributed until such claims are finally resolved in
\naccordance with Section 2.9(b).<\/p>\n
(5) All earnings attributable to each portion of
\nthe Post-Closing Adjustment Funds shall be paid to the party entitled to such
\nportion of the Post-Closing Adjustment Funds in accordance with this Section 2.7
\nor Section 2.9 to the extent applicable (except all earnings attributable to the
\nportion of the Post-Closing Adjustment Funds, if any, used to pay the Sellers’
\nshare of any fees and expenses payable out of the Post-Closing Adjustment Funds
\npursuant to said Sections shall be paid to Sellers).<\/p>\n
(6) Any amount which becomes payable pursuant to
\nthis Section 2.7 will constitute an adjustment to the Cash Consideration for all
\npurposes.<\/p>\n
(7) All payments to be made to Sellers under
\nthis Section 2.7 shall be paid by wire or accounts transfer of immediately
\navailable funds to one or more accounts designated by Sellers by written notice
\nto the Escrow Agent or Buyer, as applicable.<\/p>\n
– 22 –<\/p>\n
(8) All payments to be made to Buyer under this
\nSection 2.7 shall be paid by wire or accounts transfer of immediately available
\nfunds to one or more accounts designated by Buyer by written notice to the
\nEscrow Agent or Sellers, as applicable.<\/p>\n
(9) No later than the close of business on the
\nfirst business day after it is determined in accordance with this Section 2.7
\nand Section 2.9 that Buyer and\/or Sellers are entitled to all or any portion of
\nthe Post-Closing Adjustment Funds, the General Partner and Buyer will execute
\nand deliver to the Escrow Agent joint written instructions containing
\nappropriate disbursement instructions consistent with this Section 2.7 and
\nSection 2.9 and the Post-Closing Escrow Agreement.<\/p>\n
2.8 Seller Specific Liabilities.<\/p>\n
(a) If it is determined at the Closing (based upon a good
\nfaith showing by Buyer supported by substantial evidence and that is agreed to
\nby the SPC Seller that owns the Capital Stock of the SPC in question) that any
\nof the SPCs has any indebtedness or liability (other than any indebtedness or
\nliability disclosed in Section 4.3 or in Section 4.3 of FrontierVision’s
\nDisclosure Schedule) that will not otherwise be discharged at the Closing, then
\nthe amount of Cash Consideration payable to such SPC Seller shall be decreased
\nby the dollar amount of such indebtedness or liability as agreed to by such SPC
\nSeller and Buyer. If it is determined at the Closing (based upon a good faith
\nshowing by Buyer supported by substantial evidence and that is agreed to by the
\nSeller in question) that any of the Purchased Interests held by a Seller is
\nsubject to an Encumbrance and that will not otherwise be discharged and released
\nat the Closing, then the amount of Cash Consideration payable to such Seller
\nshall be decreased by the dollar amount necessary to discharge and release such
\nEncumbrance as agreed to by such Seller and Buyer. Buyer agrees to notify the
\nappropriate Seller promptly upon becoming aware of any matter that could give
\nrise to a claim under this Section 2.8 that was not disclosed in this Agreement
\nor in FrontierVision’s Disclosure Schedule. If such Seller and Buyer cannot
\nagree on the appropriate amount of the decrease in Cash Consideration payable to
\nsuch Seller by the time scheduled for the Closing, then Buyer shall deposit a
\nportion of the Closing Cash Payment equal to the amount of Buyer’s claim
\n(together with an amount equal to the greater of $25,000 or one percent (1%) of
\nthe amount of Buyer’s claim to cover the fees, if any, payable by such Seller
\npursuant to Section 2.8(b) with respect to an accounting firm’s final
\ndetermination) with the Escrow Agent to hold in a separate escrow on behalf of
\nsuch Seller solely in order to provide a fund for any payment to which Buyer may
\nbe entitled in accordance with this Section 2.8 (each such escrow, a
\n“Post-Closing Section 2.8 Escrow,” and such deposit, together with any earnings
\nthereon, the “Post-Closing Section 2.8 Funds”), and the amount of the Closing
\nCash Payment payable to such Seller shall be decreased by the amount so
\ndeposited. None of the Post-Closing Section 2.8 Funds will be available for any
\npurpose other than as described above and shall not be available to satisfy any
\nobligation of Sellers under Article 10. The Post-Closing Section 2.8 Escrow will
\nbe administered, and the Post-Closing Section 2.8 Funds will be held and
\ndisbursed, in accordance with the provisions of this Section 2.8 and the
\nPost-Closing Escrow Agreement.<\/p>\n
– 23 –<\/p>\n
(b) After the Closing, Buyer and such Seller shall use
\ngood faith efforts to resolve any dispute involving the validity and amount of
\nany claim made by Buyer pursuant to this Section 2.8. If such Seller and Buyer
\nfail to agree on the validity and amount of any such claim within fifteen days
\nafter the Closing, then such Seller shall retain a national independent
\naccounting firm which is approved by Buyer to make the final determination,
\nunder the terms of this Agreement, regarding the validity and amount of any such
\nclaim. Buyer hereby approves the appointment of any of the “Big Five” accounting
\nfirms selected by such Seller so long as such firm does not then serve as the
\nindependent auditor of any of the FrontierVision Companies or the General
\nPartner or Buyer. The selected accounting firm shall endeavor to resolve the
\ndispute as promptly as practicable and such firm’s resolution of the dispute
\nshall be final and binding on the parties, and a judgment may be entered thereon
\nin any court of competent jurisdiction. All of the costs and expenses of the
\nselected accounting firm and its services rendered pursuant to this Section 2.8
\nshall be borne by Buyer, on the one hand, and such Seller, on the other hand, as
\nnearly as possible in the proportion to the amount by which the determination of
\nall matters related to such costs and expenses varies from the positions of
\nBuyer and such Seller on all such matters.<\/p>\n
(c) Within three business days after any matter governed
\nby this Section 2.8 is finally resolved (whether by agreement of the parties or
\nby final resolution of an accounting firm), the amount of Post-Closing Section
\n2.8 Funds payable to Buyer and\/or such Seller shall be released and paid over to
\nBuyer and\/or such Seller in accordance with such final resolution. To the extent
\nthere are not sufficient monies in the Post-Closing Section 2.8 Escrow to
\ndistribute the amounts determined to be payable to Buyer pursuant to this
\nSection 2.8, the amount of such deficiency will be paid to Buyer from the
\nPost-Closing Indemnity Escrow to the extent of any Post-Closing Indemnity
\nProperty therein within three business days of the date of such determination.
\nAll payments to be made to such Seller or Buyer, as the case may be, under this
\nSection 2.8 shall be paid by wire or accounts transfer of immediately available
\nfunds to one or more accounts designated by such Seller or Buyer, as the case
\nmay be, by written notice to the Escrow Agent. No later than the close of
\nbusiness on the first business day after it is determined in accordance with
\nthis Section 2.8 that Buyer and\/or a Seller is entitled to all or any portion of
\nthe Post-Closing Section 2.8 Funds being held in a Post-Closing Section 2.8
\nEscrow for the benefit of Buyer and such Seller, such Seller and Buyer will
\nexecute and deliver to the Escrow Agent joint written instructions containing
\nappropriate disbursement instructions consistent with this Section 2.8 and the
\nPost-Closing Escrow Agreement.<\/p>\n
(d) All earnings attributable to each portion of the
\nPost-Closing Section 2.8 Funds shall be paid to the party entitled to such
\nportion of the Post-Closing 2.8 Funds in accordance with this Section 2.8
\n(except all earnings attributable to the portion of the Post-Closing Section 2.8
\nFunds, if any, used to pay a Seller’s share of any fees and expenses payable out
\nof the Post-Closing Section 2.8 Funds pursuant to this Section 2.8 shall be paid
\nto such Seller).<\/p>\n
(e) Any amount which becomes payable pursuant to this
\nSection 2.8 will constitute an adjustment to the Cash Consideration for all
\npurposes.<\/p>\n
– 24 –<\/p>\n
2.9 Additional Cash Consideration Adjustments.<\/p>\n
(a) If, at any time prior to the Closing, Buyer becomes
\n aware of any fact, event,
\ncircumstance, or action, the existence or occurrence of which, if not corrected
\nor remedied prior to the Closing, would, in Buyer’s good faith and reasonable
\nbelief, and supported by substantial evidence, require the Sellers to indemnify
\nBuyer pursuant to Section 10.2(a) as a result of an untrue representation or a
\nbreach of warranty by FVP contained in Sections 3.9 (with respect to any
\nrearrangements or rehabilitations of cable trunk only as specified in the
\npenultimate sentence of Section 3.9), 3.11(g) (with respect to payment of
\ncopyright fees only), 3.11(k), 3.11(l) (with respect to payment of pole
\nattachment fees only), or 3.14 or as a result of the existence of an Encumbrance
\non the Assets of the FrontierVision Companies that is not a Permitted
\nEncumbrance, Buyer shall immediately give notice to FVP of such fact, event,
\ncircumstance or action. If Buyer desires to seek an adjustment to the Cash
\nConsideration in respect of such matter, Buyer shall so state in its notice and
\nspecify in reasonable detail the factual basis for the claim and the amount
\nthereof. Buyer shall certify in such notice that the basis and amount of the
\nclaim were determined in good faith by Buyer and such claim must be supported by
\nsubstantial evidence. Buyer agrees to make available to FVP and its authorized
\nrepresentatives the information relied upon by Buyer to substantiate the claim.
\nIf the matter is cured prior to the Closing, Buyer shall not be entitled to any
\nadjustment to the Cash Consideration pursuant to this Section 2.9 in respect of
\nsuch matter. If Buyer and FVP agree at or prior to the Closing to the validity
\nand amount of such claim, the Cash Consideration shall be reduced by such
\namount. If Buyer and FVP do not agree to the validity or the amount of the claim
\nat or prior to the Closing, then Buyer shall deposit a portion of the Closing
\nCash Payment equal to the amount of Buyer’s claim with the Escrow Agent to hold
\nin escrow on behalf of Sellers solely in order to provide a fund for any payment
\nto which Buyer may be entitled in respect of a claim made under this Section
\n2.9(a) (such escrow, the “Post-Closing Section 2.9 Escrow,” and such deposit,
\ntogether with any earnings thereon, the “Post-Closing Section 2.9 Funds”). None
\nof the Post-Closing Section 2.9 Funds will be available for any purpose other
\nthan as described above and shall not be available to satisfy any obligation of
\nSellers under Article 10. The Post-Closing Section 2.9 Escrow will be
\nadministered, and the Post-Closing Section 2.9 Funds will be held and disbursed,
\nin accordance with the provisions of this Section 2.9 and the Post-Closing
\nEscrow Agreement.<\/p>\n
(b) If, at any time after the Closing and prior to end of
\nthe 120-day period following the Closing, Buyer becomes aware of any fact,
\nevent, circumstance, or action that existed or occurred prior to the Closing
\nand, because it was not corrected or remedied prior to the Closing, requires, in
\nBuyer’s good faith and reasonable belief, and supported by substantial evidence,
\nthe Sellers to indemnify Buyer pursuant to Section 10.2(a) as a result of an
\nuntrue representation or a breach of warranty by FVP contained in Sections 3.9
\n(with respect to any rearrangements or rehabilitations of cable trunk only as
\nspecified in the penultimate sentence of Section 3.9), 3.11(g) (with respect to
\npayment of copyright fees only), 3.11(k), 3.11(l) (with respect to payment of
\npole attachment fees only), or 3.14 or as a result of the existence of an
\nEncumbrance on the Assets of the FrontierVision Companies that is not a
\nPermitted Encumbrance, and Buyer desires to seek an adjustment to the Cash
\nConsideration in respect of such matter, Buyer shall promptly give notice to the
\nGeneral Partner of such fact, event, circumstance or action and specify in
\nreasonable detail the factual basis for the claim and the amount thereof. Buyer<\/p>\n
– 25 –<\/p>\n
shall certify in such notice that the basis and amount of the claim were
\ndetermined in good faith by Buyer and such claim must be supported by
\nsubstantial evidence. An amount of Post-Closing Adjustment Funds sufficient to
\nreimburse Buyer for any claim made in accordance with this Section 2.9(b) and to
\npay Sellers’ share of any fees and expenses under Section 2.9 shall be retained
\nin the Post- Closing Adjustments Escrow and shall not be distributed until such
\nclaim is finally resolved in accordance with this Section 2.9. Buyer agrees to
\nmake available to FVP and its authorized representatives the information relied
\nupon by Buyer to substantiate the claim. If Buyer and FVP agree to the validity
\nand amount of such claim, the Cash Consideration shall be reduced by such amount
\nand a portion of the Post-Closing Adjustment Funds equal to such amount shall be
\nreleased and paid over to Buyer.<\/p>\n
(c) Buyer and the General Partner shall use good faith
\nefforts to resolve any dispute
\ninvolving the validity and amount of any claim made by Buyer pursuant to this
\nSection 2.9. If the General Partner and Buyer fail to agree on the validity and
\namount of any such claim within fifteen days after the Closing (with respect to
\na claim made pursuant to Section 2.9(a)) or the date the claim is made by Buyer
\n(with respect to a claim made pursuant to Section 2.9(b)), then the General
\nPartner shall retain a national independent accounting firm which is approved by
\nBuyer to make the final determination, under the terms of this Agreement,
\nregarding the validity and amount of any such claim. The selection of an
\naccounting firm, the resolution of a dispute submitted to an accounting firm,
\nand responsibility for the resulting costs and expenses with respect to any
\nclaims subject to this Section 2.9 shall be governed by the provisions of
\nSection 2.7(b) that govern such matters.<\/p>\n
(d) If the General Partner or Buyer believes any such
\nclaim is not an appropriate
\nmatter to be determined by an accounting firm, the General Partner or Buyer may
\nsubmit the matter to binding arbitration under the Commercial Arbitration Rules
\nof the American Arbitration Association. Such arbitration shall take place in
\nWashington, D.C. unless the parties select a different site by mutual agreement.
\nAll of the costs and expenses of arbitration pursuant to this Section 2.9 shall
\nbe borne by Buyer, on the one hand, and Sellers, on the other hand, as nearly as
\npossible in the proportion to the amount by which the determination of all
\nmatters related to such costs and expenses varies from the positions of Buyer
\nand the General Partner on all such matters, unless the arbitrator finds that
\nthe position asserted by either party is without merit, in which case such party
\nshall bear the entire expenses of arbitration, including reasonable attorney’s
\nfees of the other party. The arbitration determination shall be final and
\nbinding on the parties, and a judgment may be entered thereon in any court of
\ncompetent jurisdiction.<\/p>\n
(e) Within three business days after any matter governed
\n by this Section 2.9 is finally
\nresolved (whether by agreement of the parties, by final resolution of an
\naccounting firm, or by final resolution by an arbitrator), the amount of
\nPost-Closing Section 2.9 Funds or Post-Closing Adjustment Funds, as applicable,
\npayable to Buyer, on the one hand, and\/or Sellers, on the other hand, shall be
\nreleased and paid over to Buyer and\/or Sellers in accordance with such final
\nresolution. To the extent there are not sufficient monies in the Post-Closing
\nSection 2.9 Escrow or the Post-Closing Adjustments Escrow, as applicable, to
\ndistribute the amounts determined to be payable to Buyer pursuant to this<\/p>\n
– 26 –<\/p>\n
Section 2.9, the amount of such deficiency will be paid to Buyer from the
\nPost-Closing Indemnity Escrow to the extent of any Post-Closing Indemnity
\nProperty therein within three business days of the date of such determination.
\nAll payments to be made to Sellers or Buyer, as the case may be, under this
\nSection 2.9 shall be paid by wire or accounts transfer of immediately available
\nfunds to one or more accounts designated by Sellers or Buyer, as the case may
\nbe, by written notice to the Escrow Agent. No later than the close of business
\non the first business day after it is determined in accordance with this Section
\n2.9 that Buyer and\/or Sellers are entitled to all or any portion of the
\nPost-Closing Section 2.9 Funds and\/or Post-Closing Adjustment Funds, the General
\nPartner and Buyer will execute and deliver to the Escrow Agent joint written
\ninstructions containing appropriate disbursement instructions consistent with
\nthis Section 2.9 and the Post-Closing Escrow Agreement.<\/p>\n
(f) All earnings attributable to each portion of the
\nPost-Closing Section 2.9 Funds
\nshall be paid to the party entitled to such portion of the Post-Closing Section
\n2.9 Funds in accordance with this Section 2.9 (except all earnings attributable
\nto the portion of the Post-Closing Section 2.9 Funds, if any, used to pay the
\nSellers’ share of any fees and expenses payable out of the Post-Closing Section
\n2.9 Funds pursuant to this Section 2.9 shall be paid to the Sellers).<\/p>\n
(g) Any amount which becomes payable pursuant to this
\nSection 2.9 will constitute
\nan adjustment to the Cash Consideration for all purposes.<\/p>\n
ARTICLE 3<\/p>\n
REPRESENTATIONS AND WARRANTIES OF FVP<\/p>\n
Subject to any provisions of this Agreement limiting, qualifying or
\nexcluding any of the representations or warranties made herein, FVP represents
\nand warrants to Buyer as set forth in this Article 3.<\/p>\n
3.1 Organization and Authority of FVP.<\/p>\n
FVP is a limited partnership duly formed, validly existing, and in good
\nstanding under the laws of the State of Delaware. FVP has the requisite
\npartnership power and authority to own, lease, and operate its properties, to
\ncarry on its business in the places where such properties are now owned, leased,
\nor operated and such business is now conducted, and to execute, deliver and
\nperform this Agreement and the other Transaction Documents to which FVP is a
\nparty according to their respective terms.<\/p>\n
3.2 Authorization and Binding Obligation.<\/p>\n
The execution, delivery, and performance by FVP of this Agreement and
\nthe other Transaction Documents to which FVP is a party have been duly
\nauthorized by all necessary partnership action on the part of FVP. This
\nAgreement and the other Transaction Documents to which FVP is a party have<\/p>\n
– 27 –<\/p>\n
been duly executed and delivered by FVP (or, in the case of Transaction
\nDocuments to be executed and delivered at Closing, when executed and delivered
\nwill be duly executed and delivered) and constitute (or, in the case of
\nTransaction Documents to be executed and delivered at Closing, when executed and
\ndelivered will constitute) the legal, valid, and binding obligation of FVP,
\nenforceable against FVP in accordance with their terms, except as the
\nenforceability of this Agreement and such other Transaction Documents may be
\nlimited by bankruptcy, insolvency, or similar laws affecting creditors’ rights
\ngenerally or by judicial discretion in the enforcement of equitable remedies,
\nand as rights to indemnification may be limited by federal or state securities
\nlaws or the public policies embodied therein.<\/p>\n
3.3 Organization and Ownership of FrontierVision Companies.<\/p>\n
(a) Section 3.3 of FrontierVision’s Disclosure Schedule
\nsets forth the name of each
\nFrontierVision Company, including the jurisdiction of incorporation or formation
\nof each, as the case may be. Each FrontierVision Company that is a corporation
\nis a corporation duly incorporated, validly existing, and in good standing under
\nthe laws of the jurisdiction of its incorporation. Each FrontierVision Company
\nthat is a limited partnership is a limited partnership duly formed, validly
\nexisting, and in good standing under the laws of the jurisdiction of its
\nformation. Each FrontierVision Company that is a limited liability company is a
\nlimited liability company duly formed, validly existing, and in good standing
\nunder the laws of the jurisdiction of its formation. Each FrontierVision Company
\nis duly qualified and in good standing as a foreign corporation, limited
\npartnership, or limited liability company, as the case may be, in each
\njurisdiction listed in Section 3.3 of FrontierVision’s Disclosure Schedule,
\nwhich are all jurisdictions in which such qualification is required, except
\nwhere such failure to be so qualified would not have a material adverse effect
\non the conduct of such FrontierVision Company’s business. Except as disclosed in
\nSection 3.3 of FrontierVision’s Disclosure Schedule, no FrontierVision Company,
\ndirectly or indirectly, owns, of record or beneficially, any outstanding
\nsecurities or other interest in any Person (each such Person, an “Investment
\nPerson”) or has the right or obligation to acquire, any outstanding securities
\nor other interest in any Person. The FrontierVision Company that owns the
\nCapital Stock of each such Investment Person owns such Capital Stock free and
\nclear of all Encumbrances.<\/p>\n
(b) Section 3.3 of FrontierVision’s Disclosure Schedule
\nsets forth the authorized,
\nissued and outstanding Capital Stock of FVP and each other FrontierVision
\nCompany and the record and beneficial owner of the issued and outstanding
\nCapital Stock of each of them. All of such issued and outstanding Capital Stock
\nof the FrontierVision Companies has been duly authorized, validly issued, and
\nhas not been issued in violation of any federal or state securities laws. Except
\nas set forth in Section 3.3 of FrontierVision’s Disclosure Schedule, the owner
\nof the Capital Stock of each FrontierVision Company owns such Capital Stock free
\nand clear of all Encumbrances (except that no representation is made in this
\nArticle 3 as to any partnership interests in FVP held by any Seller or any SPC
\nor as to any Capital Stock of any SPC held by any SPC Seller). Except as
\ndisclosed in Section 3.3 of FrontierVision’s Disclosure Schedule, there are no
\noutstanding securities, options, warrants, calls, rights, commitments,
\nagreements, arrangements or undertakings of any kind to which any<\/p>\n
– 28 –<\/p>\n
FrontierVision Company is a party or by which any of them is bound obligating
\nsuch FrontierVision Company to issue, deliver or sell, or cause to be issued,
\ndelivered or sold, any additional Capital Stock of such FrontierVision Company
\nor obligating such FrontierVision Company to issue, grant, extend or enter into
\nany such security, option, warrant, call, right, commitment, agreement,
\narrangement or undertaking. FVP has delivered to Buyer complete and correct
\ncopies of the Charter Documents of each FrontierVision Company as in effect on
\nthe date hereof. Section 3.3 of FrontierVision’s Disclosure Schedule describes
\nthe Capital Stock or other investment interests held and beneficially owned by
\nthe FrontierVision Companies with respect to the Investment Persons.<\/p>\n
3.4 Absence of Conflicting Agreements; Consents.<\/p>\n
Except for the expiration or termination of any applicable waiting
\nperiod under the HSR Act, the filing by FVP, any other FrontierVision Company,
\nand\/or the Sellers with the SEC of any reports required to be filed in
\nconnection with the consummation of the transactions contemplated hereby, or as
\nset forth in Section 3.4 of FrontierVision’s Disclosure Schedule, the execution,
\ndelivery and performance by FVP of this Agreement and the other Transaction
\nDocuments to which FVP is a party (with or without the giving of notice, the
\nlapse of time, or both): (A) do not require the Consent of, notice to, or filing
\nwith any Governmental Authority or any other Person under any Franchise, FCC
\nLicense or Material Contract; (B) will not conflict with any provision of the
\nCharter Documents of FVP or any other FrontierVision Company, each as currently
\nin effect; (C) assuming receipt of all Consents, will not conflict with, result
\nin a breach of, or constitute a default under any Legal Requirement to which FVP
\nor any of the other FrontierVision Companies is bound; (D) assuming receipt of
\nall Consents, will not conflict with, constitute grounds for termination of,
\nresult in a breach of, constitute a default under, or accelerate or permit the
\nacceleration of any performance required by the terms of any Franchise, FCC
\nLicense, or Material Contract; and (E) will not result in the creation of any
\nEncumbrance upon the Assets. Notwithstanding the foregoing, FVP does not make
\nany representation or warranty regarding any of the foregoing that may result
\nfrom the specific legal or regulatory status of Buyer or as a result of any
\nother facts that specifically relate to the business or activities in which
\nBuyer is or proposes to be engaged other than the cable television business.<\/p>\n
3.5 Financial Statements.<\/p>\n
(a) FVP has furnished Buyer with true and complete copies
\nof the audited financial
\nstatements listed in Section 3.5 of FrontierVision’s Disclosure Schedule
\n(collectively, the “Audited Financial Statements”) and of the unaudited
\nfinancial statements listed in Section 3.5 of FrontierVision’s Disclosure
\nSchedule (collectively, the “Unaudited Financial Statements,” and collectively
\nwith the Audited Financial Statements, the “Financial Statements”), and such
\nFinancial Statements are by this reference incorporated into and deemed a part
\nof FrontierVision’s Disclosure Schedule.<\/p>\n
(b) Except as disclosed in Section 3.5 of
\nFrontierVision’s Disclosure Schedule and except, in the case of the Unaudited
\nFinancial Statements, for the omission of footnotes and changes resulting from
\ncustomary and recurring year-end adjustments, the Financial Statements: (1) have
\nbeen<\/p>\n
– 29 –<\/p>\n
prepared from the books and records of the FrontierVision Companies to which
\nthey relate, with no material difference between such Financial Statements and
\nthe financial records maintained, and the accounting methods applied, by the
\nFrontierVision Companies for tax purposes; (2) have been prepared in accordance
\nwith GAAP consistently applied and maintained throughout the periods indicated
\n(except as indicated in the notes thereto); and (3) present fairly in all
\nmaterial respects the financial condition of the FrontierVision Companies to
\nwhich they relate as at their respective dates and the results of operations for
\nthe periods then ended.<\/p>\n
3.6 Absence of Undisclosed Liabilities.<\/p>\n
None of the FrontierVision Companies has any indebtedness, liability,
\nor obligation except for: (a) indebtedness, liabilities and obligations that are
\nreflected or reserved against in the latest balance sheet of such FrontierVision
\nCompany included in the Financial Statements; (b) indebtedness, liabilities and
\nobligations under the Debt Documents, Contracts, Franchises, Licenses, or
\nEmployee Plans; (c) indebtedness, liabilities and obligations that were incurred
\nafter the date of the latest balance sheet of such FrontierVision Company
\nincluded in the Financial Statements either in the ordinary course of business
\nor in compliance with the covenants of FVP set forth in Section 6.1 or that (to
\nthe extent not discharged prior to the Closing) will be included as Adjustment
\nLiabilities in the computation of Closing Net Liabilities (none of which
\nindebtedness, liabilities or obligations results from a claim or lawsuit
\nrelating to a breach of contract, breach of warranty, tort or infringement that,
\nif adversely determined, would have a material adverse effect on the business,
\nfinancial condition, assets or liabilities of the FrontierVision Companies,
\ntaken as a whole; and (d) contingent asserted and unasserted liabilities and
\nobligations set forth in Section 3.6 of FrontierVision’s Disclosure Schedule.<\/p>\n
3.7 Absence of Certain Changes.<\/p>\n
(a) Since December 31, 1997, except as disclosed in the
\nQuarterly Reports on Form
\n10-Q of FrontierVision Operating Partners, L.P. for any of the quarters ended
\nMarch 31, 1998, June 30, 1998 and September 30, 1998, or as disclosed in the
\nQuarterly Reports on Form 10-Q of FrontierVision Holdings, L.P. for any of the
\nquarters ended March 31, 1998, June 30, 1998 and September 30, 1998, or as
\ndisclosed in any public document filed by FrontierVision Operating Partners,
\nL.P. or FrontierVision Holdings, L.P. with the SEC after September 30, 1998, or
\nas disclosed in Section 3.7 of FrontierVision’s Disclosure Schedule and except
\nfor matters occurring after the date hereof that are permitted by the provisions
\nof this Agreement or consented to by Buyer, no FrontierVision Company has: (1)
\nmade any sale, assignment, lease, or other transfer of assets other than in the
\nordinary course of business with suitable replacements being obtained therefor
\n(unless such assets were obsolete); or (2) issued any note, bond, or other debt
\nsecurity or created, incurred, assumed, or guaranteed any indebtedness for
\nborrowed money other than pursuant to the Debt Documents listed in Section 1.1
\nof FrontierVision’s Disclosure Schedule.<\/p>\n
(b) Since December 31, 1998, except as disclosed in
\nSection 3.7 of FrontierVision’s Disclosure Schedule and except for matters
\noccurring after the date of this Agreement that are permitted<\/p>\n
– 30 –<\/p>\n
by the provisions of this Agreement or consented to by Buyer, no FrontierVision
\nCompany has made or promised any material increase in compensation payable or to
\nbecome payable to any of the employees (including executive officers) of any
\nFrontierVision Company other than in the ordinary course of business or as
\ncontemplated under any employment arrangement currently in effect.<\/p>\n
3.8 Franchises, Licenses, Material Contracts.<\/p>\n
Section 3.8 of FrontierVision’s Disclosure Schedule contains a list of
\nthe Franchises (including the Franchising Authority which granted each Franchise
\nand the stated expiration date of each Franchise), FCC Licenses and Material
\nContracts in effect on the date hereof, which list is true, correct and complete
\nin all material respects. Without material exception and subject to the last
\nsentence of this Section 3.8, the Franchises and the Licenses constitute all of
\nthe authorizations of Governmental Authorities necessary or required for the
\nconstruction, maintenance and operations of the Systems as currently conducted.
\nFVP has delivered to Buyer true and complete copies of all Franchises, FCC
\nLicenses and Material Contracts as in effect on the date hereof. Subject to the
\nlast sentence of this Section 3.8, the Franchises, FCC Licenses and Material
\nContracts are in full force and effect (subject to expiration at the end of
\ntheir current term) and are valid, binding and enforceable upon the
\nFrontierVision Company that is a party thereto and, to FVP’s knowledge, the
\nother parties thereto in accordance with their terms, except to the extent such
\nenforceability may be affected by bankruptcy, insolvency, or similar laws
\naffecting creditors’ rights generally and by judicial discretion in the
\nenforcement of equitable remedies. Except as disclosed in Section 3.8 of
\nFrontierVision’s Disclosure Schedule, the FrontierVision Companies are in
\nmaterial compliance with the terms of the Franchises, Licenses and Material
\nContracts, and as of the date of this Agreement none of the FrontierVision
\nCompanies has received any written notice (or to FVP’s knowledge after due
\ninquiry of the regional managers of the Systems, oral notice) from a Franchising
\nAuthority to the effect that any of the FrontierVision Companies are not
\ncurrently in material compliance with the terms of the Franchise granted by such
\nFranchising Authority. Except as set forth in Section 3.4 or 3.8 of
\nFrontierVision’s Disclosure Schedule, none of the Franchises grants to any
\nFranchising Authority or any other Person any right of first refusal or right to
\npurchase the assets of any System that would be triggered by the consummation of
\nthe purchase and sale of the Purchased Interests. Except as set forth in Section
\n3.8 of FrontierVision’s Disclosure Schedule, a valid request for renewal has
\nbeen timely filed under Section 626(a) of the Cable Act with the proper
\nFranchising Authority with respect to each Franchise in respect of which the
\nstatutory time period for making such filing has expired. Subject to the
\nprovisions of Sections 6.1 and 6.4, FVP shall not have any obligation to renew
\nor extend any Franchises, Licenses or Material Contracts as a condition to
\nBuyer’s obligations under this Agreement.<\/p>\n
3.9 Title to and Condition of Real Property and Tangible Personal
\nProperty.<\/p>\n
Section 3.9 of FrontierVision’s Disclosure Schedule lists all Real
\nProperty parcels owned in fee by any of the FrontierVision Companies as of the
\ndate of this Agreement (excluding easements, rights-of-way, and similar
\nauthorizations) and describes the current use thereof. Except as disclosed in
\nSection 3.9 of FrontierVision’s Disclosure Schedule, a copy of each deed
\npursuant to which any of the<\/p>\n
– 31 –<\/p>\n
FrontierVision Companies acquired a fee estate in a Real Property parcel that is
\ncurrently owned by it (including any title insurance policies issued to such
\nFrontierVision Company that are related to such parcels) have been delivered to
\nBuyer by FVP. Section 3.9 of FrontierVision’s Disclosure Schedule lists the Real
\nProperty leased by any of the FrontierVision Companies as of the date of this
\nAgreement and describes the current use thereof and indicates the stated
\nexpiration date of the current term of such leases. Except as disclosed in
\nSection 3.9 of FrontierVision’s Disclosure Schedule: (a) the FrontierVision
\nCompany that owns a fee estate in a Real Property parcel has good and marketable
\ntitle thereto; (b) the FrontierVision Company that owns any material item of
\nTangible Personal Property has good and valid title thereto; (c) the
\nFrontierVision Company that leases Real Property pursuant to any of the Material
\nLeases has a valid leasehold interest therein (subject to expiration of such
\nMaterial Lease in accordance with its terms); and (d) the FrontierVision Company
\nthat leases any material item of Tangible Personal Property has a valid
\nleasehold interest therein (subject to expiration of such lease in accordance
\nwith its terms), in each case of (a), (b), (c) and (d) above, free and clear of
\nall Encumbrances other than Permitted Encumbrances. The FrontierVision Companies
\nown, lease or otherwise have rights to use all real property (excluding
\neasements, rights-of-way and similar authorizations) and tangible personal
\nproperty necessary to operate the Systems as presently conducted by the
\nFrontierVision Companies in all material respects. Notwithstanding the express
\nlanguage of this Section 3.9 or as may otherwise be provided in this Agreement,
\nno representation or warranty is being made as to title to the internal wiring,
\nhouse drops, and unrecorded dwelling-unit easements, rights of entry or
\nrights-of-way held or used by the FrontierVision Companies. Except for such
\nrearrangements or rehabilitations of a System’s cable trunk as may be necessary
\nin the ordinary course of business for that System taken as a whole, the
\nFrontierVision Companies have no obligation to rearrange or rehabilitate any of
\nsuch cable trunk. Buyer acknowledges that, except as expressly warranted in this
\nSection 3.9 and Sections 3.14, 3.15 and 3.16, all Real Property, all
\nimprovements thereon, and all other Tangible Personal Property are being sold or
\nassigned “as is-where is” and Buyer shall not be entitled to make any claim
\nagainst FVP or Sellers arising out of or relating to the condition thereof.<\/p>\n
3.10 Intangibles.<\/p>\n
Section 3.10 of FrontierVision’s Disclosure Schedule contains a
\ndescription of the material Intangibles (exclusive of those required to be
\nlisted in Section 3.8 of FrontierVision’s Disclosure Schedule), that are owned
\nor leased by any of the FrontierVision Companies and that are necessary for the
\nconduct of the business or operations of the Systems. To FVP’s knowledge, except
\nas to potential copyright liability arising from the performance, exhibition or
\ncarriage of any music on the Systems or as disclosed in Section 3.10 of
\nFrontierVision’s Disclosure Schedule, it is not infringing upon any trademarks,
\ntrade names, copyrights or similar intellectual property rights of others.<\/p>\n
3.11 Information Regarding the Systems.<\/p>\n
(a) Subscribers. Section 3.11 of FrontierVision’s
\nDisclosure Schedule sets forth the approximate number of Equivalent Subscribers
\nas of the date indicated therein (including the<\/p>\n
– 32 –<\/p>\n
approximate number of Equivalent Subscribers served in each Franchise Area and
\nserved by each headend, in each case as of the date indicated therein).<\/p>\n
(b) Operating Revenue. Section 3.11 of FrontierVision’s
\nDisclosure Schedule sets
\nforth the approximate “Operating Revenue” of the Systems on a consolidated basis
\nas of the date indicated therein, as “Operating Revenue” is defined therein.<\/p>\n
(c) Certain Systems Information. Section 3.11 of
\nFrontierVision’s Disclosure
\nSchedule sets forth the approximate number of plant miles for each System, the
\napproximate bandwidth capability of each System, the channel lineup for each
\nSystem, and the monthly rates charged for each class of service offered by each
\nSystem, which information is true and correct in all material respects, in each
\ncase as of the applicable dates specified therein and subject to any
\nqualifications set forth therein.<\/p>\n
(d) Franchise and FCC Matters. All material reports
\nrequired to be filed by any of
\nthe FrontierVision Companies with any of the Franchising Authorities or the FCC
\nhave been duly filed and were materially correct when filed. The FrontierVision
\nCompanies are permitted under all applicable Franchises and FCC Regulations to
\ndistribute the television broadcast signals distributed by the Systems (except
\nfor any inadvertent failure by the Systems to comply with the FCC’s
\nnonduplication and syndex rules) and to utilize all carrier frequencies
\ngenerated by the operations of the Systems, and are licensed in all material
\nrespects to operate all the facilities required by Legal Requirements to be
\nlicensed (except where the failure to be so authorized or licensed would not
\nmaterially impair the operation of the Systems as presently conducted).<\/p>\n
(e) Request for Signal Carriage. Except for
\nnonduplication and blackout notices
\nreceived in the ordinary course of business, none of the FrontierVision
\nCompanies has received any FCC order requiring any System to carry a television
\nbroadcast signal or to terminate carriage of a television broadcast signal with
\nwhich it has not complied, and to FVP’s knowledge, except as disclosed in
\nSection 3.11 of FrontierVision’s Disclosure Schedule, the FrontierVision
\nCompanies have complied with all written and bona fide requests or demands
\nreceived from television broadcast stations to carry or to terminate carriage of
\na television broadcast signal on a System.<\/p>\n
(f) Rate Regulatory Matters. Section 3.11 of
\nFrontierVision’s Disclosure Schedule
\nsets forth a list of all Governmental Authorities that are certified to regulate
\nrates of the Systems pursuant to the Cable Act and FCC Regulations as of the
\ndate of this Agreement and all Franchise Areas in which a complaint regarding
\nrates has been filed with the FCC as of November 12, 1998 (other than those that
\nhave been rejected by the FCC or have been withdrawn). As of the date of this
\nAgreement, none of the FrontierVision Companies has received any written notice
\nfrom any Governmental Authority that it has any obligation or liability to
\nrefund to subscribers of the Systems any portion of the revenue received by such
\nFrontierVision Company from subscribers of the Systems (excluding with respect
\nto deposits for converters, encoders, decoders and related equipment and other
\nprepaid items). Buyer acknowledges that, except as expressly warranted in this
\nSection 3.11(f), FVP is not making any<\/p>\n
– 33 –<\/p>\n
representation or warranty regarding any Rate Regulatory Matter and, except as
\nexpressly provided in Section 10.2(c), Buyer shall not be entitled to make any
\nclaim against FVP or Sellers arising out of or relating to any Rate Regulatory
\nMatter.<\/p>\n
(g) Copyright. To the extent necessary to operate the
\nSystems, the FrontierVision
\nCompanies are entitled to hold and do hold the compulsory copyright license
\ndescribed in Section 111 of the Copyright Act, which compulsory copyright
\nlicense is in full force and effect and has not been revoked, canceled,
\nencumbered or adversely affected in any material respect except relating to any
\nimmaterial disputes which may arise after the date hereof with respect to
\ncopyright fees payable with respect to the operation by the FrontierVision
\nCompanies of the Systems. The FrontierVision Companies have paid all material
\ncopyright fees that are due and payable with respect to the operation by the
\nFrontierVision Companies of the Systems (or have accrued a liability with
\nrespect thereto which will be included as an Adjustment Liability in the
\ncomputation of Closing Net Liabilities) and have set aside an adequate reserve
\non their books for the payment of all copyright fees that are required to be
\naccrued but are not yet due and payable.<\/p>\n
(h) Insurance. The Systems and Assets are insured
\nagainst claims, loss or damage
\nin amounts generally customary in the cable television industry and consistent
\nwith the FrontierVision Companies’ past practices.<\/p>\n
(i) Purchase and Sale Agreements. Section 3.11 of
\nFrontierVision’s Disclosure
\nSchedule lists all definitive purchase and sale agreements pursuant to which the
\nSystems were acquired. A copy of each such agreement has been delivered to
\nBuyer. The FrontierVision Companies have not collected any payment as of the
\ndate of this Agreement from any “seller” under any of such purchase and sale
\nagreements in respect of any indemnification claim made against any such
\n“seller” by the FrontierVision Companies for a breach of any representation or
\nwarranty by any such “seller” regarding the condition of any of the Systems
\nacquired from any such “seller.” Except as disclosed in Section 3.11 of
\nFrontierVision’s Disclosure Schedule, no FrontierVision Company is bound by any
\ncontractual noncompete or similar restrictive covenant. The FrontierVision
\nCompanies have paid all amounts that are due and payable under the purchase and
\nsale agreements referred to above (or have accrued a liability with respect
\nthereto which will be included as an Adjustment Liability in the computation of
\nClosing Net Liabilities).<\/p>\n
(j) Overbuilds. To FVP’s knowledge, as of the date of
\nthis Agreement, except as
\ndisclosed in Section 3.11 of FrontierVision’s Disclosure Schedule, the Systems
\nare the only cable television systems presently servicing the Franchise Areas
\n(other than any cable television system owned, operated or managed by Buyer or
\nany Subsidiary or Affiliate of Buyer).<\/p>\n
(k) Franchise Fees. The FrontierVision Companies have
\npaid all franchise fees that
\nare due and payable with respect to the operation by the FrontierVision
\nCompanies of the Systems (or have accrued a liability with respect thereto which
\nwill be included as an Adjustment Liability in the computation of Closing Net
\nLiabilities).<\/p>\n
– 34 –<\/p>\n
(1) Pole Attachments. The FrontierVision Companies have
\npaid all pole attachment
\nfees that are due and payable with respect to the operation by the
\nFrontierVision Companies of the Systems (or have accrued a liability with
\nrespect thereto which will be included as an Adjustment Liability in the
\ncomputation of Closing Net Liabilities). As of the date of this Agreement,
\nexcept as disclosed in Section 3.11 of FrontierVision’s Disclosure Schedule, no
\npole attachment audits are pending and the FrontierVision Companies have not
\nreceived written notice of any pending pole attachment audit.<\/p>\n
3.12 Taxes.<\/p>\n
The FrontierVision Companies have filed or caused to be filed all
\nrequired federal Tax Returns and all other material required Tax Returns with
\nthe appropriate Governmental Authorities in all jurisdictions in which such Tax
\nReturns are required to be filed by the FrontierVision Companies (except Tax
\nReturns for which the filing date has been extended and such extension period
\nhas not expired), and all Taxes shown on such Tax Returns have been properly
\naccrued or paid to the extent such Taxes have become due and payable. FVP has
\ndelivered to Buyer true, correct and complete copies of the Tax Returns (in the
\nform filed) listed in Section 3.12 of FrontierVision’s Disclosure Schedule. The
\nFinancial Statements reflect an adequate reserve for all material unpaid Taxes
\npayable by the FrontierVision Companies for all Tax periods and portions thereof
\nthrough the date of such Financial Statements. Any unpaid Taxes of the
\nFrontierVision Companies for all periods ending prior to the Closing Date and
\nnot reflected on such Financial Statements will be included as an Adjustment
\nLiability in the computation of Closing Net Liabilities. Except as disclosed in
\nSection 3.12 of FrontierVision’s Disclosure Schedule, none of the FrontierVision
\nCompanies has executed any waiver or extensions of any statute of limitations on
\nthe assessment or collection of any Tax or with respect to any liability arising
\ntherefrom. Except as disclosed in Section 3.12 of FrontierVision’s Disclosure
\nSchedule, none of the federal, state or local income Tax Returns filed by the
\nFrontierVision Companies has been audited by any taxing authority. Except as set
\nforth in Section 3.12 of FrontierVision’s Disclosure Schedule, there are no Tax
\naudits pending and no outstanding agreements or waiver extending the statutory
\nperiod of limitations applicable to any federal, state or local Tax Return of
\nany of the FrontierVision Companies for any period.<\/p>\n
3.13 Employee Plans.<\/p>\n
(a) Employee Plans. Section 3.13 of FrontierVision’s
\nDisclosure Schedule contains
\na list of all Employee Plans (true and correct copies of which have been
\ndelivered to Buyer). None of the FrontierVision Companies or any of their ERISA
\nAffiliates is or has been required to contribute to any “multiemployer plan,” as
\ndefined in ERISA Section 3(37), nor has any FrontierVision Company or any such
\nERISA Affiliate (or any former ERISA Affiliate with respect to the period in
\nwhich such entity was an ERISA Affiliate) experienced a complete or partial
\nwithdrawal, within the meaning of ERISA Section 4203 or 4205, from such a
\n“multiemployer plan.” Except as required under Code Section 4980B or ERISA
\nSections 601-609, no Employee Plan provides health or medical coverage to<\/p>\n
– 35 –<\/p>\n
former employees of the FrontierVision Companies. As of the Adjustment Time the
\nFrontierVision Companies will have accrued in accordance with GAAP a liability
\nfor all health benefit claims filed as of such time and all claims incurred but
\nnot reported as of such time.<\/p>\n
(b) Qualified Plans. Except as disclosed in Section 3.13
\nof FrontierVision’s
\nDisclosure Schedule, with respect to each Employee Plan, and after taking into
\nconsideration the effect of the payments to be made with respect to the Employee
\nPlans: (1) each such Employee Plan that is intended to be tax-qualified is the
\nsubject of a favorable determination letter except as described in Section 3.13
\nof FrontierVision’s Disclosure Schedule; (2) no material liability to the
\nPension Benefit Guaranty Corporation is expected by FVP to be incurred by the
\nFrontierVision Companies or any of their ERISA Affiliates (or any former ERISA
\nAffiliate with respect to the period in which such entity was an ERISA
\nAffiliate) with respect to any Employee Plan; (3) no non-exempt prohibited
\ntransaction, within the definition of Section 4975 of the Code or Title 1, Part
\n4 of ERISA, has occurred which would subject the FrontierVision Companies or any
\nof their ERISA Affiliates (or any former ERISA Affiliate with respect to the
\nperiod in which such entity was an ERISA Affiliate) to any material liability;
\n(4) there is no accumulated funding deficiency, termination or partial
\ntermination, or requirement to provide security with respect to any Employee
\nPlan; (5) the fair market value of the assets of any Employee Plan would exceed
\nthe value of all liabilities and obligations of such Employee Plan if such plan
\nwere to terminate on the Closing Date; and (6) the transactions contemplated by
\nthis Agreement will not result in liability under ERISA to FVP or the
\nFrontierVision Companies or Buyer, or any of their respective ERISA Affiliates.<\/p>\n
(c) Labor Unions. As of the date of this Agreement,
\nother than as disclosed in
\nSection 3.13 of FrontierVision’s Disclosure Schedule, none of the FrontierVision
\nCompanies is party to or bound by any collective bargaining agreement. As of the
\ndate of this Agreement, other than as disclosed in Section 3.13 of
\nFrontierVision’s Disclosure Schedule, to the knowledge of FVP, (1) none of the
\nemployees of the FrontierVision Companies is presently a member of any
\ncollective bargaining unit related to his or her employment and (2) no
\ncollective bargaining unit has filed a petition for representation of any of the
\nemployees of the FrontierVision Companies.<\/p>\n
3.14 Environmental Laws.<\/p>\n
Except as disclosed in Section 3.14 of FrontierVision’s Disclosure
\nSchedule: (a) the FrontierVision Companies’ operations with respect to the
\nSystems comply in all material respects with all applicable Environmental Laws
\nas in effect on the date of this Agreement; (b) none of the FrontierVision
\nCompanies has used the Real Property for the manufacture, transportation,
\ntreatment, storage or disposal of Hazardous Substances except for gasoline and
\ndiesel fuel and such use of Hazardous Substances (in cleaning fluids, solvents
\nand other similar substances) customary in the construction, maintenance and
\noperation of a cable television system and in amounts or under circumstances
\nthat would not reasonably be expected to give rise to material liability for
\nremediation; and (c) to FVP’s knowledge, the Real Property complies and has
\ncomplied in all material respects with all applicable Environmental Laws. Except
\nas disclosed in Section 3.14 of FrontierVision’s Disclosure<\/p>\n
– 36 –<\/p>\n
Schedule, as of the date of this Agreement, no Environmental Claim has been
\nfiled or issued against the FrontierVision Companies.<\/p>\n
3.15 Claims and Litigation.<\/p>\n
Except as disclosed in Section 3.15 of FrontierVision’s Disclosure
\nSchedule, as of the date of this Agreement, there is no claim, legal action,
\narbitration or other legal, administrative or tax proceeding, nor any order,
\ndecree or judgment, in progress or pending, or to FVP’s knowledge threatened in
\nwriting, against or relating to the FrontierVision Companies, the Assets or the
\nbusiness or operations of any of the Systems (other than FCC and other
\nproceedings generally affecting the cable television industry and not specific
\nto the FrontierVision Companies and other than rate complaints or certifications
\nfiled by customers or Franchising Authorities) that would have a material
\nadverse effect on FVP’s ability to perform its obligations under this Agreement
\nor that would have a material adverse effect on the business, financial
\ncondition, assets or liabilities of any of the FrontierVision Companies.<\/p>\n
3.16 Compliance With Laws.<\/p>\n
Except as disclosed in Section 3.16 of FrontierVision’s Disclosure
\nSchedule and except for any such noncompliance as has been remedied, each of the
\nFrontierVision Companies has complied in all material respects with, and the
\nSystems and the Assets are in compliance in all material respects with, all
\napplicable Legal Requirements (including, without limitation, the Code, ERISA,
\nthe National Labor Relations Act, the Cable Act, FCC Regulations, and the
\nCopyright Act). Notwithstanding the foregoing or any other provision of this
\nAgreement to the contrary, and without limiting the provisions of Section 6.14,
\nFVP does not make any representation or warranty with respect to compliance with
\nany Legal Requirements dealing with, limiting or affecting the rates which can
\nbe charged by cable television systems to their customers (whether for
\nprogramming, equipment, installation, service or otherwise) or any other Rate
\nRegulatory Matter.<\/p>\n
3.17 Transactions with Affiliates.<\/p>\n
Except as disclosed in the Financial Statements or Section 3.17 of
\nFrontierVision’s Disclosure Schedule, none of the FrontierVision Companies has
\nbeen involved in any business arrangement or business relationship with any
\nAffiliate of any of the FrontierVision Companies (other than another
\nFrontierVision Company), and no Affiliate of any of the FrontierVision Companies
\n(other than another FrontierVision Company) owns any property or right, tangible
\nor intangible, that is used in the business of the FrontierVision Companies
\n(other than in its capacity as a direct or indirect equity or debt holder of the
\nFrontierVision Companies).<\/p>\n
3.18 Broker.<\/p>\n
Neither FVP nor any of the other FrontierVision Companies or any Person
\nacting on their behalf has incurred any liability for any finders’ or brokers’
\nfees or commissions in connection with the<\/p>\n
– 37 –<\/p>\n
transactions contemplated by this Agreement except as described in Section 11.1
\nor disclosed in Section 3.18 of FrontierVision’s Disclosure Schedule.<\/p>\n
3.19 Securities Law Matters.<\/p>\n
(a) FVP represents that it is an “accredited investor”
\nas that term is defined in
\nRegulation D under the Securities Act and that it has such knowledge and
\nexperience in financial and business matters that it is capable of evaluating
\nthe merits and risks of acquisition of the Escrow Registrable Securities and of
\nmaking an informed investment decision with respect thereto, and understands all
\nrisks of holding the Escrow Registrable Securities for an indefinite period of
\ntime.<\/p>\n
(b) FVP acknowledges receipt of copies of Buyer’s 10-K
\nand Buyer’s 10-Q.<\/p>\n
(c) FVP is aware that the Escrow Registrable Securities
\nare not currently registered
\nunder the Securities Act or under any state securities laws.<\/p>\n
(d) FVP agrees that it will not transfer the Escrow
\nRegistrable Securities without
\ncompliance with the registration and other provisions of all applicable
\nsecurities laws and acknowledges that each certificate representing the Escrow
\nRegistrable Securities which it receives will be marked with an appropriate
\nlegend to such effect (which legend will be removed in accordance with the
\nprovisions of the Deposit Registration Rights Agreement).<\/p>\n
(e) FVP is purchasing the Escrow Registrable Securities
\nsolely for investment
\npurposes, with no present intention to sell the Escrow Registrable Securities
\n(other than pursuant to an effective registration statement).<\/p>\n
(f) FVP understands that it must bear the economic risk
\nof the investment represented by the purchase of the Escrow Registrable
\nSecurities for an indefinite period.<\/p>\n
(g) FVP agrees not to offer, sell, or otherwise dispose
\nof the shares of the Escrow Registrable Securities at any time prior to the
\nsecond anniversary of the date FVP acquires the Escrow Registrable Securities,
\nunless such offer, sale, or other disposition is (1) registered under the
\nSecurities Act, or (2) in compliance with an opinion of counsel of FVP,
\ndelivered to Buyer and reasonably acceptable to it, to the effect that such
\noffer, sale, or other disposition thereof does not violate the Securities Act.<\/p>\n
(h) FVP acknowledges that the certificate(s) representing
\nthe Escrow Registrable Securities delivered hereunder shall bear the following
\nlegend (which legend will be removed in accordance with the provisions of the
\nDeposit Registration Rights Agreement):<\/p>\n
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
\n UNDER THE FEDERAL OR STATE SECURITIES LAWS AND MAY NOT BE<\/p>\n
– 38 –<\/p>\n
OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED OR ASSIGNED
\n FOR VALUE, DIRECTLY OR INDIRECTLY, NOR MAY THE SECURITIES BE
\n TRANSFERRED ON THE BOOKS OF THE CORPORATION, WITHOUT
\n REGISTRATION OF SUCH SECURITIES UNDER ALL APPLICABLE FEDERAL
\n OR STATE SECURITIES LAWS OR COMPLIANCE WITH AN APPLICABLE
\n EXEMPTION THEREFROM.<\/p>\n
THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO CERTAIN
\n RESTRICTIONS ON TRANSFER AS SET FORTH IN A REGISTRATION RIGHTS
\n AGREEMENT, A COPY OF WHICH MAY BE OBTAINED FROM THE
\n CORPORATION.<\/p>\n
3.20 Cure.<\/p>\n
For all purposes under this Agreement, the existence or occurrence of
\nany events or circumstances which constitute or cause a breach of a
\nrepresentation or warranty of FVP (including without limitation FrontierVision’s
\nDisclosure Schedule) on the date such representation or warranty is made shall
\nbe deemed not to constitute a breach of such representation or warranty if such
\nevent or circumstance is cured on or prior to the Closing Date or the earlier
\ntermination of this Agreement.<\/p>\n
ARTICLE 4<\/p>\n
REPRESENTATIONS AND WARRANTIES OF SELLERS<\/p>\n
Subject to any provisions of this Agreement limiting, qualifying or
\nexcluding any of the representations or warranties made herein, each Seller
\nseverally represents and warrants to Buyer (with respect to such Seller and not
\nwith respect to any other Seller) as set forth in this Article 4.<\/p>\n
4.1 Authority of Sellers; Authorization and Binding Obligation.<\/p>\n
Such Seller has the requisite corporate, partnership, limited liability
\ncompany or other applicable power, authority and legal capacity to execute,
\ndeliver and perform this Agreement and the other Transaction Documents to which
\nsuch Seller is a party according to their respective terms. The execution,
\ndelivery, and performance by such Seller of this Agreement and the other
\nTransaction Documents to which such Seller is a party have been duly authorized
\nby all necessary action on the part of such Seller. This Agreement and the other
\nTransaction Documents to which such Seller is a party have been duly executed
\nand delivered by such Seller (or, in the case of Transaction Documents to be
\nexecuted and delivered at Closing, when executed and delivered will be duly
\nexecuted and delivered) and constitute (or, in the case of Transaction Documents
\nto be executed and delivered at Closing, when executed and delivered will
\nconstitute) the legal, valid, and binding obligation of such Seller, enforceable
\nagainst such Seller in accordance with their terms, except as the enforceability
\nof this Agreement and such other Transaction Documents may be limited by
\nbankruptcy, insolvency, or similar<\/p>\n
– 39 –<\/p>\n
laws affecting creditors’ rights generally or by judicial discretion in the
\nenforcement of equitable remedies, and as rights to indemnification may be
\nlimited by federal or state securities laws or the public policies embodied
\ntherein.<\/p>\n
4.2 Absence of Conflicting Agreements; Consents.<\/p>\n
Except for the expiration or termination of any applicable waiting
\nperiod under the HSR Act, the filing by FVP, any other FrontierVision Company
\nand\/or the Sellers with the SEC of any reports required to be filed in
\nconnection with the consummation of the transactions contemplated hereby, or as
\nset forth in Section 4.2 of FrontierVision’s Disclosure Schedule, the execution,
\ndelivery and performance by such Seller of this Agreement and the other
\nTransaction Documents to which such Seller is a party (with or without the
\ngiving of notice, the lapse of time, or both): (A) do not require the Consent
\nof, notice to, or filing with any Governmental Authority or any other Person
\nthat has not been obtained; (B) will not conflict with any provision of the
\nCharter Documents of such Seller (and, in the case of the SPC Sellers, the
\nCharter Documents of the SPC owned by such Seller) as currently in effect; (C)
\nassuming receipt of all Consents, will not conflict with, result in a breach of,
\nor constitute a default under any Legal Requirement to which such Seller (and,
\nin the case of the SPC Sellers, to which the SPC owned by such Seller) is bound;
\n(D) assuming receipt of all Consents, will not conflict with, constitute grounds
\nfor termination of, result in a breach of, constitute a default under, or
\naccelerate or permit the acceleration of any performance required by the terms
\nof any material agreement or instrument to which such Seller (and, in the case
\nof the SPC Sellers, to which the SPC owned by such Seller) is bound; and (E)
\nwill not result in the creation of any Encumbrance upon the Purchased Interests
\nheld by such Seller (and, in the case of the SPC Sellers, upon the limited
\npartnership interest in FVP held by the SPC owned by such Seller).
\nNotwithstanding the foregoing, no Seller makes any representation or warranty
\nregarding any of the foregoing that may result from the specific legal or
\nregulatory status of Buyer or as a result of any other facts that specifically
\nrelate to the business or activities in which Buyer is or proposes to be engaged
\nother than the cable television business.<\/p>\n
4.3 Title to Purchased Interests.<\/p>\n
(a) The General Partner represents that it holds of
\nrecord and owns beneficially the
\nGeneral Partnership Interest and the Subordinated Notes set forth by its name in
\nSection 4.3 of FrontierVision’s Disclosure Schedule, free and clear of all
\nEncumbrances.<\/p>\n
(b) Each Limited Partner Seller represents that it holds
\n of record and owns
\nbeneficially the Limited Partnership Interest and the Subordinated Notes set
\nforth by its name in Section 4.3 of FrontierVision’s Disclosure Schedule, free
\nand clear of all Encumbrances.<\/p>\n
(c) Each SPC Seller represents that it holds of record
\nand owns beneficially the
\nSubordinated Notes listed next to its name in Section 4.3 of FrontierVision’s
\nDisclosure Schedule and that the SPC listed next to its name in Section 4.3 of
\nFrontierVision’s Disclosure Schedule holds of record and owns beneficially the
\nlimited partnership interest in FVP and the Subordinated Notes set<\/p>\n
– 40 –<\/p>\n
forth by such SPC’s name in Section 4.3 of FrontierVision’s Disclosure Schedule,
\nfree and clear of all Encumbrances. Each SPC Seller represents that it holds of
\nrecord and owns beneficially 100% of the issued and outstanding Capital Stock of
\nthe SPC listed next to such SPC Seller’s name in Section 4.3 of FrontierVision’s
\nDisclosure Schedule, free and clear of all Encumbrances. All of the issued and
\noutstanding Capital Stock of the SPC owned by such SPC Seller has been duly
\nauthorized, validly issued, fully paid and nonassessable, and has not been
\nissued in violation of any federal or state securities laws. Each SPC Seller
\nrepresents that the SPC owned by such SPC Seller has not and does not own any
\nassets or other properties (other than the respective limited partnership
\ninterests in FVP and the Subordinated Notes held by such SPC, and, in the case
\nof 1818 II Cable Corp. and Olympus Cable Corp., the respective limited
\npartnership interests in the General Partner held by such SPC, which interests
\nin the General Partner shall be distributed, directly or indirectly, to the SPC
\nSeller which owns such SPC immediately prior to the Closing) or conduct any
\nbusiness or have any indebtedness, liabilities or obligations other than rights,
\nobligations, and liabilities arising under this Agreement and the partnership
\nagreement of FVP, the SPC Notes (which SPC Notes shall be canceled by the SPC
\nSeller that holds such SPC Note concurrently with the Closing) or as disclosed
\nin Section 4.3 of FrontierVision’s Disclosure Schedule.<\/p>\n
(d) Except as disclosed in Section 4.3 of
\nFrontierVision’s Disclosure Schedule and
\nexcept for this Agreement and rights granted under the partnership agreement of
\nFVP, such Seller (and, in the case of the SPC Sellers, the SPC owned by such
\nSeller) (1) is not party to, and has not granted to any other Person, any
\noptions, warrants, subscription rights, rights of first refusal or any other
\nrights providing for the acquisition or disposition of partnership interests or
\nother equity interests in the FVP (and, in the case of the SPC Sellers, in the
\nSPC owned by such Seller), and (2) is not a party to any voting agreement,
\nvoting trust, proxy or other agreement or understanding with respect to the
\nvoting of any of the Purchased Interests or the Capital Stock of any of the
\nFrontierVision Companies.<\/p>\n
4.4 Broker.<\/p>\n
Neither such Seller nor any Person acting on its behalf has incurred
\nany liability for any finders’ or brokers’ fees or commissions in connection
\nwith the transactions contemplated by this Agreement except as described in
\nSection 11.1.<\/p>\n
4.5 Taxes.<\/p>\n
There are no Tax audits pending and no outstanding agreements or waiver
\nextending the statutory period of limitations applicable to any federal, state,
\nor local Tax Return of the SPC the capital stock of which is owned by such SPC
\nSeller for any period.<\/p>\n
4.6 Securities Law Matters.<\/p>\n
– 41 –<\/p>\n
(a) Each such Seller who is an “Accredited Investor”
\nrepresents that the information
\nprovided in such Seller’s “Accredited Investor Questionnaire” delivered herewith
\nis true, correct and complete.<\/p>\n
(b) Such Seller, either individually or together with his
\n representatives and advisors,
\nhas such knowledge and experience in financial and business matters that it is
\ncapable of evaluating the merits and risks of acquisition of the Stock
\nConsideration Registrable Securities and of making an informed investment
\ndecision with respect thereto, and understands all risks of holding the Stock
\nConsideration Registrable Securities for an indefinite period of time.<\/p>\n
(c) Such Seller acknowledges receipt of copies of Buyer’s
\n10-K and Buyer’s 10-Q.<\/p>\n
(d) Such Seller has carefully considered and has, to the
\nextent such Seller believes
\nsuch discussion necessary discussed with such Seller’s professional legal, tax,
\naccounting and financial advisors the suitability of an investment in the Stock
\nConsideration Registrable Securities for such Seller’s particular tax and
\nfinancial situation and has determined that the Stock Consideration Registrable
\nSecurities is a suitable investment for such Seller.<\/p>\n
(e) Such Seller agrees that it will not transfer the
\nStock Consideration Registrable
\nSecurities without compliance with the registration and other provisions of all
\napplicable securities laws.<\/p>\n
(f) Such Seller is purchasing the Stock Consideration
\nRegistrable Securities solely
\nfor investment purposes, with no present intention to sell the Stock
\nConsideration Registrable Securities (other than pursuant to an effective
\nregistration statement).<\/p>\n
(g) Such Seller understands that it must bear the
\neconomic risk of the investment represented by the purchase of the Stock
\nConsideration Registrable Securities for an indefinite period.<\/p>\n
(h) Such Seller agrees not to offer, sell, or otherwise
\ndispose of the shares of the Stock Consideration Registrable Securities at any
\ntime prior to the second anniversary of the date such Seller acquires the Stock
\nConsideration Registrable Securities, unless such offer, sale, or other
\ndisposition is (1) registered under the Securities Act, or (2) in compliance
\nwith an opinion of counsel of the Seller, delivered to Buyer and reasonably
\nacceptable to it, to the effect that such offer, sale, or other disposition
\nthereof does not violate the Securities Act.<\/p>\n
(i) Such Seller acknowledges that the certificate(s)
\nrepresenting the Stock Consideration Registrable Securities delivered hereunder
\nshall be issued to such Seller with the following legend (which legend will be
\nremoved in accordance with the provisions of the Stock Consideration
\nRegistration Rights Agreement):<\/p>\n
– 42 –<\/p>\n
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
\n UNDER THE FEDERAL OR STATE SECURITIES LAWS AND MAY NOT BE
\n OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED OR ASSIGNED
\n FOR VALUE, DIRECTLY OR INDIRECTLY, NOR MAY THE SECURITIES BE
\n TRANSFERRED ON THE BOOKS OF THE CORPORATION, WITHOUT
\n REGISTRATION OF SUCH SECURITIES UNDER ALL APPLICABLE FEDERAL
\n OR STATE SECURITIES LAWS OR COMPLIANCE WITH AN APPLICABLE
\n EXEMPTION THEREFROM.<\/p>\n
THE SECURITIES REPRESENTED HEREBY ARE SUBJECT TO CERTAIN
\n RESTRICTIONS ON TRANSFER AS SET FORTH IN A REGISTRATION RIGHTS
\n AGREEMENT, A COPY OF WHICH MAY BE OBTAINED FROM THE
\n CORPORATION.<\/p>\n
4.7 Cure.<\/p>\n
For all purposes under this Agreement, the existence or occurrence of
\nany events or circumstances which constitute or cause a breach of a
\nrepresentation or warranty of such Seller (including without limitation
\nFrontierVision’s Disclosure Schedule) on the date such representation or
\nwarranty is made shall be deemed not to constitute a breach of such
\nrepresentation or warranty if such event or circumstance is cured on or prior to
\nthe Closing Date or the earlier termination of this Agreement.<\/p>\n
ARTICLE 5<\/p>\n
REPRESENTATIONS AND WARRANTIES OF BUYER<\/p>\n
Buyer represents and warrants to FVP and each Seller as set forth in
\nthis Article 5.<\/p>\n
5.1 Organization; Authorization and Binding Obligation.<\/p>\n
Buyer is a corporation duly incorporated, validly existing, and in good
\nstanding under the laws of the State of Delaware. Buyer has the requisite
\ncorporate power and authority to own, lease, and operate its properties, to
\ncarry on its business in the places where such properties are now owned, leased,
\nor operated and such business is now conducted, and to execute, deliver and
\nperform this Agreement and the other Transaction Documents to which Buyer is a
\nparty according to their respective terms. Buyer is duly qualified and in good
\nstanding as a foreign corporation in each jurisdiction in which such
\nqualification is required.<\/p>\n
– 43 –<\/p>\n
5.2 Authorization and Binding Obligation.<\/p>\n
The execution, delivery, and performance by Buyer of this Agreement and
\nthe other Transaction Documents to which Buyer is a party have been duly
\nauthorized by all necessary corporate, shareholder or other action on the part
\nof Buyer. This Agreement and the other Transaction Documents to which Buyer is a
\nparty have been duly executed and delivered by Buyer (or, in the case of
\nTransaction Documents to be executed and delivered at Closing, when executed and
\ndelivered will be duly executed and delivered) and constitute (or, in the case
\nof Transaction Documents to be executed and delivered at Closing, when executed
\nand delivered will constitute) the legal, valid, and binding obligation of
\nBuyer, enforceable against Buyer in accordance with their terms, except as the
\nenforceability of this Agreement and such other Transaction Documents may be
\nlimited by bankruptcy, insolvency, or similar laws affecting creditors’ rights
\ngenerally or by judicial discretion in the enforcement of equitable remedies,
\nand as rights to indemnification may be limited by federal or state securities
\nlaws or the public policies embodied therein.<\/p>\n
5.3 Absence of Conflicting Agreements; Consents.<\/p>\n
Except for the expiration or termination of any applicable waiting
\nperiod under the HSR Act and the filing by Buyer with the SEC of any reports
\nrequired to be filed in connection with the consummation of the transactions
\ncontemplated hereby, the execution, delivery and performance by Buyer of this
\nAgreement and the other Transaction Documents to which Buyer is a party (with or
\nwithout the giving of notice, the lapse of time, or both): (a) do not require
\nany Consent, declaration to, or filing with any Governmental Authority or any
\nother Person; (b) will not conflict with any provision of the Charter Documents
\nof Buyer, as currently in effect; (c) will not conflict with, result in a breach
\nof, or constitute a default under any Legal Requirement to which Buyer is bound;
\nand (d) will not conflict with, constitute grounds for termination of, result in
\na breach of, constitute a default under, or accelerate or permit the
\nacceleration of any performance required by the terms of any material agreement
\nor instrument to which Buyer is a party or bound. Notwithstanding the foregoing,
\nBuyer does not make any representation or warranty regarding any of the
\nforegoing that may result from the specific legal or regulatory status of any
\nSeller or any FrontierVision Company or as a result of any other facts that
\nspecifically relate to the business or activities in which any Seller or any
\nFrontierVision Company is or proposes to be engaged other than the cable
\ntelevision business.<\/p>\n
5.4 Capital Structure; ACC Class A Common Stock.<\/p>\n
(a) All of the shares of ACC Class A Stock deposited into
\nescrow in accordance with
\nthe Deposit Escrow Agreement as contemplated by Section 2.4(a): (1) have been
\nduly authorized and validly issued, fully paid and nonassessable, not subject
\nto, or issued in violation of, any preemptive rights and have not been issued in
\nviolation of any federal or state securities laws; and (2) have the same rights
\nand powers as all other shares of ACC Class A Common Stock issued and
\noutstanding as of the date of this Agreement. If released to FVP in accordance
\nwith this Agreement, on the date of such release, all of the securities
\nconstituting the Deposit Escrow Property: (1) shall have been duly<\/p>\n
– 44 –<\/p>\n
authorized and validly issued, fully paid and nonassessable, not subject to, or
\nissued in violation of, any preemptive rights and not issued in violation of any
\nfederal or state securities laws; and (2) shall have the same rights and powers
\nas all other shares of ACC Class A Common Stock (or, if any of the securities
\nconstituting the Deposit Escrow Property are not shares of ACC Class A Stock, as
\nall other securities of the same class and series) issued and outstanding as of
\nthe date of this Agreement.<\/p>\n
(b) On the Closing Date, all of the shares of ACC Class A
\nCommon Stock constituting the Stock Consideration (or, if applicable, all of the
\nsecurities of any other class or series constituting the Stock Consideration):
\n(1) shall have been duly authorized and validly issued, fully paid and
\nnonassessable, not subject to, or issued in violation of, any preemptive rights
\nand not issued in violation of any federal or state securities laws; and (2)
\nshall have the same rights and powers as all other shares of ACC Class A Common
\nStock (or, if any of the securities constituting the Stock Consideration are not
\nshares of ACC Class A Stock, as all other securities of the same class and
\nseries) issued and outstanding as of the date of this Agreement.<\/p>\n
5.5 Claims and Litigation.<\/p>\n
As of the date of this Agreement, there is no claim, legal action,
\narbitration, governmental investigation or other legal, administrative or tax
\nproceeding, nor any order, decree or judgment, in progress or pending, or to
\nBuyer’s knowledge threatened in writing, against or relating to Buyer or the
\nassets or business of Buyer or its Subsidiaries (other than FCC and other
\nproceedings generally affecting the cable television industry and not specific
\nto Buyer or its Subsidiaries and other than rate complaints or certifications
\nfiled by customers or franchising authorities), that would have a material
\nadverse effect on Buyer’s ability to perform its obligations under this
\nAgreement or that could reasonably be expected to have a material adverse effect
\non the business, financial condition, assets or liabilities of Buyer and its
\nSubsidiaries, taken as a whole.<\/p>\n
5.6 SEC Reports.<\/p>\n
(a) Buyer’s financial statements contained in its Annual
\nReport on Form 10-K for
\nthe fiscal year ended March 31, 1998 (“Buyer’s 10-K”) present fairly the
\nconsolidated financial operations of Buyer for the fiscal year then ended, in
\nconformity with GAAP. Buyer’s interim financial statements contained in its
\nQuarterly Report on Form 10-Q for the quarter ended September 30, 1998 (“Buyer’s
\n10-Q”) reflect all adjustments which are, in Buyer’s management’s opinion,
\nnecessary to a fair statement of the results for the interim period presented
\nand necessary to present fairly Buyer’s consolidated financial position as of
\nSeptember 30, 1998 and its consolidated results of operations for the quarter
\nended September 30, 1998 and cash flows from consolidated operations for the
\nquarter ended September 30, 1998.<\/p>\n
(b) Except as set forth in Buyer’s 10-Q or in any public
\ndocument filed by Buyer with
\nthe SEC after September 30, 1998, Buyer’s capitalization (including for this
\npurpose, all outstanding options, warrants and other rights to acquire Capital
\nStock or other securities of Buyer) is as set forth<\/p>\n
– 45 –<\/p>\n
in Buyer’s 10-K to the extent required to be set forth in Buyer’s 10-K. The ACC
\nClass A Common Stock is not subject to any preemptive right, claim or other
\ninterest of any Person.<\/p>\n
(c) Except as set forth in any public document filed by
\nBuyer or Hyperion
\nTelecommunications, Inc. or Olympus Communications, L.P. with the SEC after
\nSeptember 30, 1998: (1) there has not been, since September 30, 1998, any
\nmaterial adverse change in the financial condition, results of operations of
\nBuyer, or any damage, destruction or loss which materially and adversely affects
\nthe financial condition, results of operations or future prospects of Buyer; and
\n(2) as of the date of this Agreement, Buyer has not entered into any commitment
\nor transaction material to Buyer’s business.<\/p>\n
(d) No statement made in Buyer’s 10-K or Buyer’s 10-Q or
\nany public document filed by Buyer or Hyperion Telecommunications, Inc. or
\nOlympus Communications, L.P. with the SEC after September 30, 1998, nor any
\nstatement, representation or warranty made by Buyer in this Agreement or the
\nother Transaction Documents (including schedules and exhibits), contains any
\nuntrue statement of any material fact or omits a material fact necessary to make
\nthe statements contained herein or therein, in light of the circumstances in
\nwhich they were made, not misleading.<\/p>\n
5.7 Broker.<\/p>\n
Neither Buyer nor any Person acting on behalf of Buyer has incurred any
\nliability for any finders’ or brokers’ fees or commissions in connection with
\nthe transactions contemplated by this Agreement except as described in Section
\n11.1.<\/p>\n
5.8 Investment Purpose; Investment Company.<\/p>\n
Buyer is acquiring the Purchased Interests for investment for its own
\naccount and not with a view to the sale or distribution of any part thereof
\nwithin the meaning of the Securities Act. Buyer is not an “investment company”
\nas defined in the Investment Company Act of 1940, as amended.<\/p>\n
5.9 Cure.<\/p>\n
For all purposes under this Agreement, the existence or occurrence of
\nany events or circumstances which constitute or cause a breach of a
\nrepresentation or warranty of Buyer on the date such representation or warranty
\nis made shall be deemed not to constitute a breach of such representation or
\nwarranty if such event or circumstance is cured on or prior to the Closing Date
\nor the earlier termination of this Agreement.<\/p>\n
ARTICLE 6<\/p>\n
SPECIAL COVENANTS AND AGREEMENTS<\/p>\n
– 46 –<\/p>\n
The parties covenant and agree as follows, provided that, except with
\nrespect to express agreements and covenants of a Seller contained in this
\nArticle 6 (including Sections 6.5, 6.12 and 6.15), no Seller shall have any
\nobligation or liability prior to the Closing with respect to any agreement or
\ncovenant of FVP set forth in this Article 6 (it being understood and agreed by
\neach Seller that nothing in this sentence shall impair or diminish the
\nindemnification obligations of Sellers under Article 10 after the Closing,
\nincluding with respect to any covenant of FVP set forth in this Article 6).<\/p>\n
6.1 Operation of Business Prior to Closing.<\/p>\n
Except as required by applicable Legal Requirements or as contemplated
\nin FrontierVision’s Disclosure Schedule or Section 6.1(c), without the consent
\nof Buyer (which consent shall not be unreasonably withheld), between the date
\nhereof and the Closing Date, FVP will operate and cause the FrontierVision
\nCompanies to operate the Systems in the ordinary course of business (subject to,
\nand except as modified by, compliance with the following negative and
\naffirmative covenants) and abide by the following negative and affirmative
\ncovenants:<\/p>\n
(a) Negative Covenants. The FrontierVision Companies
\nshall not do any of the following:<\/p>\n
(1) Franchises. Fail to use commercially
\nreasonable efforts to renew on
\nsubstantially the same or on other commercially reasonable terms any Franchise
\nthat has expired or will expire after the date hereof and prior to the Closing
\nDate in accordance with its terms; provided, however, the FrontierVision
\nCompanies shall not agree to any material changes to the terms of any Franchise
\nwithout Buyer’s prior written consent and provided further that FVP shall not be
\nrequired to take any steps necessary to obtain renewals of any Franchise earlier
\nthan such steps are required to be taken by applicable FCC Regulations, and
\nobtaining renewals of any Franchise shall not be a condition precedent to
\nBuyer’s obligations hereunder except as provided in the immediately following
\nsentence). The parties agree that the obligations of the FrontierVision
\nCompanies with respect to the renewal of the Franchises referred to in Section
\n3.8(F) of FrontierVision’s Disclosure Schedule (Renewal Letters Not Timely
\nFiled), exclusive of the Penobscot Indian Nation (ME) and Town of Friendsville
\n(MD) Franchises (the “Renewal Franchises”) are governed solely by Section 6.4
\nand 7.1(d) and not this Section 6.1(a)(1).<\/p>\n
(2) Contracts. Modify or amend in any material
\nrespect, except in the
\nordinary course of business, any Contract that shall survive the Closing; or
\nenter into any new Contracts that will be binding on the FrontierVision
\nCompanies following the Closing except: (A) agreements for the provision of
\ncable television services to residential customers; (B) the renewal or extension
\nof any existing Contract on its existing terms, in all material respects, in the
\nordinary course of business; (C) contracts or commitments entered into in the
\nordinary course of business that are terminable on not more than sixty days
\nprior notice or that do not involve post-Closing obligations in excess of
\nTwentyFive Thousand Dollars ($25,000) in any one case or in excess of Five
\nHundred Thousand Dollars ($500,000) in the aggregate; or (D) with respect to
\nutility pole attachment agreements, Contracts with<\/p>\n
– 47 –<\/p>\n
terms as customarily required by the utility whose poles are utilized, and
\nexcept in any event, subject to their legal obligations and constraints, the
\nFrontierVision Companies will not enter into a new collective bargaining
\nagreement without providing Buyer a reasonable opportunity to review and approve
\nthe proposed terms of such agreement, which approval shall not be unreasonably
\nwithheld by Buyer.<\/p>\n
(3) Disposition of Assets. Sell, assign, lease,
\nswap, or otherwise transfer or
\ndispose of any of the Assets, except as set forth in Section 6.1 of
\nFrontierVision’s Disclosure Schedule and except for assets consumed or disposed
\nof in the ordinary course of business or assets (other than any System as a
\nwhole) that are replaced by replacement property of substantially equivalent
\nkind and use.<\/p>\n
(4) Encumbrances. Create, assume or permit to
\nexist any Encumbrance upon
\nthe Assets, except for Permitted Encumbrances or other Encumbrances disclosed in
\nFrontierVision’s Disclosure Schedule.<\/p>\n
(5) Indebtedness. Permit the FrontierVision
\nCompanies to incur any
\nadditional indebtedness for borrowed money except pursuant to the Debt Documents
\nlisted in Section 3.8 of FrontierVision’s Disclosure Schedule and that (if not
\nrepaid at or prior to the Closing) is included in Adjustment Liabilities in the
\ncomputation of Closing Net Liabilities.<\/p>\n
(6) Marketing Programs. Implement any new
\nmarketing plans that are materially different from marketing plans previously
\nimplemented by the FrontierVision Companies.<\/p>\n
(7) Channel Lineups; Rate Changes. Make channel
\n additions or channel
\nsubstitutions or change the channel lineup for any System or change the customer
\nrates charged by any System or enter into any new carriage agreements, except as
\nset forth in Section 6.1 of FrontierVision’s Disclosure Schedule.<\/p>\n
(b) Affirmative Covenants. FVP shall, and shall cause
\nthe FrontierVision
\nCompanies to, do the following:<\/p>\n
(1) Access to Information. Subject to Buyer’s
\nobligations hereunder to
\nmaintain the confidentiality of Confidential Information, allow Buyer and its
\nauthorized representatives reasonable access during normal business hours to the
\nAssets, physical plant, offices, properties and records for the purpose of
\ninspection, and furnish or cause to be furnished to Buyer or its authorized
\nrepresentatives all information with respect to the Assets or the FrontierVision
\nCompanies that Buyer may reasonably request. Any investigation or request for
\ninformation shall be conducted in such a manner as not to interfere with the
\nbusiness or operations of the Systems. Buyer hereby agrees that it shall
\npromptly provide written notice to FVP or such Seller if based upon information
\nprovided to Buyer or through its investigation, Buyer determines that FVP or a
\nSeller is in breach in any material respect of any of its representations or
\nwarranties set forth in this Agreement.<\/p>\n
– 48 –<\/p>\n
(2) Insurance. Maintain the existing insurance
\npolicies on the Systems andthe Assets (or comparable replacement policies).<\/p>\n
(3) Books and Records. Maintain the
\nFrontierVision Companies’ books and records in accordance with past practices.<\/p>\n
(4) Financial Information. Furnish to Buyer
\nwithin forty-five days after the
\nend of each month between the date hereof and the Closing Date, an unaudited
\nconsolidated balance sheet and statement of operations and statement of cash
\nflows for the FrontierVision Companies for such month, which financial
\ninformation shall be prepared from the FrontierVision Companies’ books and
\nrecords maintained in the ordinary course of business in accordance with past
\npractices.<\/p>\n
(5) Compliance with Laws. Comply in all
\nmaterial respects with all Legal Requirements applicable to the FrontierVision
\nCompanies and the operation of the Systems.<\/p>\n
(6) Keep Organization Intact. Except with
\nrespect to any voluntary departure
\nof any of the FrontierVision Companies’ employees between the date hereof and
\nClosing, use its commercially reasonable efforts to preserve intact its business
\nand organization relating to the Systems and preserve for Buyer the goodwill of
\nthe FrontierVision Companies’ suppliers, customers and others having business
\nrelations with it.<\/p>\n
(7) Specified Rebuild and Upgrade Projects.
\nProceed with the rebuild and upgrade projects identified in Section 2.5 of
\nFrontierVision’s Disclosure Schedule in the ordinary course of business.<\/p>\n
(8) Franchise Renewal Letters. File a request
\nfor renewal under Section
\n626(a) of the Cable Act with the proper Franchising Authority with respect to
\neach Franchise in respect of which the time period for making such filing will
\nexpire on or before the Closing Date.<\/p>\n
(9) Year 2000 Remediation Plan. Proceed with
\nthe Year 2000 Remediation
\nPlan of the FrontierVision Companies in accordance in all material respects with
\nthe provisions of such plan, a copy of which has been provided to Buyer.<\/p>\n
(10) Rate Changes. Implement the rate changes
\nset forth in Section 6.1 of
\nFrontierVision’s Disclosure Schedule in accordance with the implementation
\nschedule set forth therein with respect to each such rate change.<\/p>\n
(11) Purchase and Sale Agreement Indemnification
\nClaims. Pursue in the
\nordinary course of business consistent with the past practice of the
\nFrontierVision Companies any indemnification claims regarding the condition of
\nany of the Systems acquired from the “sellers” under the purchase and sale
\nagreements referred to in Section 3.11(i) that the FrontierVision Companies may<\/p>\n
– 49 –<\/p>\n
have against such “sellers” pursuant to the indemnification provisions thereof.
\nThe FrontierVision Companies will apply any payments actually collected after
\nthe date of this Agreement in respect of any such claims to remedying the matter
\nin respect of which the payments were collected or will include the amount of
\nany such payment that is not so applied as an Adjustment Liability in the
\nComputation of Closing Net Liabilities (but shall have no obligation pursuant to
\nthis provision to expend more than the amount collected on remedying such
\nmatter).<\/p>\n
(c) Certain Permitted Actions. Notwithstanding anything
\nin this Agreement(including Sections 6.1(a) and (b) above) to the contrary,
\nBuyer consents and agrees as follows:<\/p>\n
(1) Contractual Commitments. FVP, the General
\nPartner and the other
\nFrontierVision Companies may comply with all of their contractual commitments
\nunder their existing Contracts and under any Contracts entered into after the
\ndate of this Agreement in compliance with Section 6.1(a)(2) or with Buyer’s
\nconsent (in each case, as such Contracts may be in effect from time to time in
\naccordance with Section 6.1(a)(2) or with Buyer’s consent). FVP, the General
\nPartner and the other FrontierVision Companies may take such actions as are
\ncontemplated by the other Sections of this Agreement (excluding Sections 6.1(a)
\nand (b)) and otherwise comply with their obligations under the other Sections of
\nthis Agreement (excluding Sections 6.1(a) and (b)).<\/p>\n
(2) Pending Acquisitions\/Swaps\/Sales. The
\nFrontierVision Companies may consummate the transactions set forth in Section
\n6.1 of FrontierVision’s Disclosure Schedule.<\/p>\n
(3) Holdings Exchange Offer. FrontierVision
\nHoldings, L.P. and
\nFrontierVision Holdings Capital II Corporation may consummate the Exchange Offer
\nand comply with its other obligations contemplated in the Registration Rights
\nAgreement dated as of December 9, 1998 among FrontierVision Holdings, L.P.,
\nFrontierVision Holdings Capital II Corporation, J.P. Morgan Securities Inc. and
\nChase Securities Inc.<\/p>\n
(4) Excluded Assets. The FrontierVision
\nCompanies may assign each of the
\nExcluded Assets to the General Partner, its designees or any other Person prior
\nto the Closing; provided that such assignments, either individually or in the
\naggregate, do not result in any adverse Tax consequence to any of the
\nFrontierVision Companies which is not included in Adjustment Liabilities in the
\ncomputation of Closing Net Liabilities.<\/p>\n
(5) Other Matters. The FrontierVision Companies
\n may take the other actions
\nset forth in Section 6.1 of FrontierVision’s Disclosure Schedule.<\/p>\n
6.2 Confidentiality; Press Release.<\/p>\n
FVP and the Sellers may from time to time in the
\ncourse of this transaction
\ndisclose to Buyer information and material concerning FVP and the Sellers, the
\nFrontierVision Companies, the Assets and the Systems, including proprietary
\ninformation, contracts, marketing<\/p>\n
– 50 –<\/p>\n
information, technical information, product or service concepts, subscriber
\ninformation, rates, financial information ideas, concepts and research and
\ndevelopment (any of the foregoing and any analysis, compilations, studies or
\nother documents prepared by or on behalf of Buyer in respect thereof are
\nhereafter collectively referred to as “Confidential Information”). The term
\n“Confidential Information” does not include any item of information that (1) is
\npublicly known at the time of its disclosure, (2) is lawfully received from a
\nthird party not bound in a confidential relationship with a party hereto, (3) is
\npublished or otherwise made known to the public by any source other than a party
\nbound by the provisions hereof, or (4) was generated by Buyer independently.
\nBuyer agrees that Confidential Information received from FVP and the Sellers
\nshall be used solely in connection with the transaction contemplated by this
\nAgreement. Buyer agrees that it shall treat confidentially and not directly or
\nindirectly, divulge, reveal, report, publish, transfer or disclose, for any
\npurpose whatsoever (other than to its investors, financing sources and agents
\nfor the purpose of consummating the transactions contemplated by this Agreement,
\neach of whom shall maintain the confidentiality of such Confidential
\nInformation), all or any portion of the Confidential Information disclosed to it
\nby FVP or the Sellers. In the event of a breach of the covenants contained in
\nthis Section 6.2, FVP and the Sellers shall be entitled to seek injunctive
\nrelief as well as any and all other remedies at law or equity. If the Closing
\ndoes not occur, the Confidential Information, except for that portion which
\nconsists of analysis, compilations, studies or other documents prepared by or on
\nbehalf of Buyer, will be returned to FVP or the Sellers, as appropriate,
\nimmediately upon FVP’s or a Seller’s request therefor; and that portion of the
\nConfidential Information which consists of analysis, compilations, studies or
\nother documents prepared by or on behalf of Buyer will be held by Buyer and kept
\nconfidential and subject to the terms of this Section 6.2, or will be destroyed.<\/p>\n
(b) No party will issue any press release or make any other
\npublic announcements concerning this Agreement or the transaction contemplated
\nhereby except in consultation with the other parties, except for disclosures
\nrequired by law (including any legal obligations imposed on Buyer in connection
\nwith its status as a publicly-held corporation and any legal obligations imposed
\non any of the FrontierVision Companies in connection with their status as
\nreporting companies under the Exchange Act or in connection with the Holdings
\nExchange Offer contemplated in Section 6.1(c)(3)). With respect to press
\nreleases or any other public announcements required by law (including the legal
\nobligations referred to in the parenthetical clause of the immediately preceding
\nsentence), the party intending to make such release or disclosure shall provide
\nthe other parties with an advance copy and a reasonable opportunity to review.<\/p>\n
6.3 Cooperation; Commercially Reasonable Efforts.<\/p>\n
The parties shall cooperate with each other and their respective
\ncounsel and accountants in all commercially reasonable respects in connection
\nwith any actions required to be taken as part of their respective obligations
\nunder this Agreement, and otherwise use their commercially reasonable efforts to
\nconsummate the transactions contemplated hereby and to fulfill their obligations
\nhereunder as expeditiously as practicable. Buyer shall provide to FVP and
\nSellers such information relating to Buyer and its Subsidiaries and their
\nbusinesses and operations as FVP and Sellers shall reasonably request.<\/p>\n
– 51 –<\/p>\n
FVP shall provide to Buyer such information relating to the FrontierVision
\nCompanies and their businesses and operations as Buyer shall reasonably request.
\nFollowing the execution of this Agreement FVP and Buyer will negotiate in good
\nfaith to agree to a mutually satisfactory Programming Supply Agreement
\nconsistent in all material respects with the discussions to date between the
\nparties with respect to the subject matter thereof. .<\/p>\n
6.4 Consents.<\/p>\n
Subject to the other provisions of this Section 6.4 and this Agreement,
\nthe parties agree as follows:<\/p>\n
(a) Following the execution hereof, FVP shall use
\ncommercially reasonable efforts,
\nand shall cause the FrontierVision Companies to use commercially reasonable
\nefforts, to obtain as expeditiously as possible all Consents (other than the
\nCredit Agreement Consent and the GECC Facility Consent, which shall be governed
\nsolely by Section 6.7(a) or Section 6.7(c) as appropriate), required to be
\nobtained by the FrontierVision Companies, including Consents under the
\nFranchises, Licenses and Contracts of the FrontierVision Companies, and the
\nrenewal of the Renewal Franchises. Buyer agrees to cooperate with FVP and the
\nFrontierVision Companies in all commercially reasonable respects in obtaining
\nthe foregoing Consents and renewals. In furtherance of the foregoing, FVP and
\nBuyer agree to cooperate in preparing and completing an application on FCC Form
\n394 (or other appropriate form) and appropriate letters of transmittal for each
\nFranchise Consent listed in Section 3.4 of FrontierVision’s Disclosure Schedule
\nand use their best efforts to file completed applications with the appropriate
\nFranchising Authorities within thirty days after the execution of this Agreement
\n(and in any event within forty-five days after the execution of this Agreement).
\nEffective upon filing of each Franchise Consent application, FVP and Buyer shall
\nbe deemed to have agreed that such application is “facially complete.” FVP and
\nBuyer also agree to cooperate in preparing and completing an appropriate
\napplication and letters of transmittal for each Consent listed in Section 3.4 of
\nFrontierVision’s Disclosure Schedule relating to Licenses and Contracts of the
\nFrontierVision Companies and using their best efforts to file completed
\napplications with the FCC or other appropriate Person within thirty days after
\nthe execution of this Agreement (and in any event within forty-five days after
\nthe execution of this Agreement). FVP shall also use commercially reasonable
\nefforts to cause all such Consents relating to Franchises and Contracts to
\ninclude a provision that permits Buyer to transfer the Purchased Interests to
\nany Affiliate of Buyer that agrees in writing as a condition to such transfer to
\nbe bound by any and all obligations of Buyer in connection therewith; provided
\nthat FVP shall have no additional obligation with respect to obtaining such a
\nprovision if the inclusion of such a provision would cause such Consent to be
\nunreasonably withheld, delayed or otherwise conditioned; and provided further
\nthat if the Franchising Authority or other Person from whom such Consent is
\nrequested objects to the inclusion of such a provision such request will be
\nimmediately withdrawn.<\/p>\n
(b) In the event that after the execution of this
\nAgreement, FVP and Buyer mutually
\nagree that an application on FCC Form 394 is required to be filed in order to
\nrequest a Franchise Consent that is not listed in Section 3.4 of
\nFrontierVision’s Disclosure Schedule, FVP and Buyer agree<\/p>\n
– 52 –<\/p>\n
to cooperate in preparing and completing an application on FCC Form 394 (or
\nother appropriate form) and appropriate letters of transmittal and using their
\nbest efforts to file a completed application with the appropriate Franchising
\nAuthority within ten days after FVP and Buyer agree that Consent is required.
\nEffective upon filing of each Franchise Consent application, FVP and Buyer shall
\nbe deemed to have agreed that such application is “facially complete.”<\/p>\n
In the event that after the execution of this Agreement, a Franchising
\nAuthority that did not receive a Franchise Consent request on FCC Form 394 (or
\nother appropriate form) pursuant to Section 6.4(a) asserts that its Consent is
\nrequired in order to consummate the transactions contemplated by this Agreement,
\nFVP and Buyer will notify the other party and cooperate with each other in good
\nfaith to determine whether they agree that Consent is required. If FVP and Buyer
\ncannot agree within five business days after both parties are notified of such
\nFranchising Authority’s assertion, FVP and Buyer shall mutually retain a law
\nfirm to make the final determination (which law firm shall be experienced in
\ncable franchising matters and shall not then serve as legal counsel to any of
\nthe FrontierVision Companies or Buyer). The selected law firm shall endeavor to
\nresolve the dispute as promptly as practicable and such firm’s resolution of the
\ndispute shall be final and binding on the parties. All of the costs and expenses
\nof the selected law firm and its services rendered pursuant to this paragraph
\nshall be borne by whichever of FVP or Buyer is the nonprevailing party.<\/p>\n
If it is finally determined pursuant to this Section 6.4(b) (by
\nagreement of FVP and Buyer or by resolution of a law firm) that a Franchise
\nConsent is required from such Franchising Authority, and the Franchise in
\nquestion relates to a Franchise Area that serves a number of subscribers equal
\nto or greater than the number of subscribers served by the Franchise Area that
\nserves the fewest number of subscribers of all of the Franchise Areas related to
\nthe Material Consent Franchises (based on the number of subscribers specified
\nfor each such Franchise Area in Section 3.11(A) of FrontierVision’s Disclosure
\nSchedule) (such a Franchise, a “Designated Material Consent Franchise”), then
\nFVP and Buyer agree to cooperate in preparing and completing an application on
\nFCC Form 394 (or other appropriate form) and appropriate letters of transmittal
\nand using their best efforts to file a completed application with the
\nappropriate Franchising Authority within ten days after the date it is
\ndetermined a Franchise Consent is required. Effective upon filing of each
\nFranchise Consent application, FVP and Buyer shall be deemed to have agreed that
\nsuch application is “facially complete.”<\/p>\n
If it is finally determined pursuant to this Section 6.4(b) (by
\nagreement of FVP and Buyer or by resolution of a law firm) that a Franchise
\nConsent is required from such Franchising Authority but the Franchise in
\nquestion is not a Designated Material Consent Franchise (all such Franchises
\nthat are not a Designated Material Consent Franchise, a “Designated Non-Material
\nConsent Franchise”), and the Franchise Areas relating to all such Designated
\nNon-Material Consent Franchises serve in the aggregate at least 35,000
\nsubscribers (based on the number of subscribers specified for each such
\nFranchise Area in Section 3.11(A) of FrontierVision’s Disclosure Schedule), then
\n(except to the extent that Buyer agrees that no Franchise Application will be
\nfiled for a particular Designated Non-Material Consent Franchise), FVP and Buyer
\nagree to cooperate in preparing and completing an application on FCC Form 394
\n(or other appropriate form) and appropriate letters of transmittal for each
\nDesignated Non-Material Consent<\/p>\n
– 53 –<\/p>\n
Franchise identified to such date and using their best efforts to file a
\ncompleted application with the appropriate Franchising Authority within ten days
\nafter the date it is determined such filings are required pursuant to this
\nparagraph. Effective upon filing of each Franchise Consent application, FVP and
\nBuyer shall be deemed to have agreed that such application is “facially
\ncomplete.”<\/p>\n
(c) FVP and Buyer shall promptly furnish to any
\nGovernmental Authority or other
\nPerson from whom a Consent or Franchise renewal is requested such accurate and
\ncomplete information regarding the FrontierVision Companies and Buyer, including
\nfinancial information and other information relating to the cable and other
\nmedia operations of the FrontierVision Companies and Buyer, as a Governmental
\nAuthority or other Person may reasonably require in connection with obtaining
\nany such Consent or renewal. Notwithstanding anything in this Agreement to the
\ncontrary, but subject to the provisos below in this Section 6.4(c), Buyer
\nacknowledges and agrees that FVP will control and manage the process of
\nobtaining such Consents and Franchise renewals and that neither Buyer nor any of
\nits employees, agents, representatives or any other Person acting on behalf of
\nBuyer will contact any Governmental Authority or other Person who is party to a
\nFranchise, License or Contract of the FrontierVision Companies, including those
\nfrom whom a Consent or Franchise renewal is sought, for the purpose of seeking
\nany amendment, modification or changes to any Franchise, License or Contract,
\nfor the purpose of waiving or extending the time period in which such
\nGovernmental Authority or other Person is required to act on the request for
\nConsent or renewal, or for any other purpose that would have the result of
\nunduly hindering or delaying the receipt of any such Consent, waiver or renewal;
\nprovided that it is understood and agreed that nothing herein shall prevent
\nBuyer (or its employees, agents, representatives and any other Person acting on
\nbehalf of Buyer) from communicating (by letter, press release, or otherwise)
\nfollowing consultation with FVP with any such Governmental Authority (whether or
\nnot a Consent is being sought from it) in order to provide information relating
\nto Buyer and transition issues regarding Buyer and the Systems following the
\nClosing Date or from responding to requests initiated by Governmental
\nAuthorities or other Persons from whom a Consent is sought so long as such
\nresponse does not relate to any of the foregoing prohibited matters and Buyer
\nshall use commercially reasonable efforts to apprise FVP of all such requests.<\/p>\n
(d) If in connection with the process of obtaining any
\nConsent, a Governmental
\nAuthority or other Person seeks to impose any condition or any change to a
\nFranchise, License or Contract to which such Consent relates that would be
\napplicable to Buyer or any FrontierVision Company as a requirement for granting
\nits Consent, FVP shall promptly notify Buyer of such fact and FVP shall not
\nagree to such condition or change except as agreed to by Buyer in writing;
\nprovided that if such condition or change relates to a Consent with respect to a
\nMaterial Consent Franchise or a Designated Material Consent Franchise that is
\nthen in the Renewal Window, Buyer hereby accepts (and agrees that FVP may accept
\non behalf of Buyer and the FrontierVision Companies without the need for any
\nfurther agreement by Buyer in writing) any such conditions or changes that are
\ncommercially reasonable taken as a whole (it being agreed by Buyer for purposes
\nof this Agreement, without limiting whether any other terms are commercially
\nreasonable, that so long as the proposed renewal term of such Franchise is at
\nleast ten years, that a requirement to complete an upgrade\/rebuild of the System
\nserving<\/p>\n
– 54 –<\/p>\n
such Franchise Area up to 750 MHz by a date that is no earlier than three years
\nfrom the Closing Date and\/or a requirement to pay franchise fees up to the
\namount permitted by the Cable Act is commercially reasonable). For purposes of
\nthis Agreement, the term “Renewal Window” means that the Franchise in question
\nis due to expire within three years from the date of determination.<\/p>\n
If in connection with the process of obtaining a renewal of any Renewal
\nFranchise, a Franchising Authority seeks to renew such Franchise on terms that
\ndiffer in any materially adverse respect from the terms of the existing
\nFranchise, FVP shall promptly notify Buyer of such fact and FVP shall not agree
\nto such condition or change except as agreed to by Buyer in writing; provided
\nthat Buyer hereby accepts (and agrees that FVP may accept on behalf of Buyer and
\nthe FrontierVision Companies without the need for any further agreement by Buyer
\nin writing) the following: (1) a renewal of the City of Auborn (ME), City of
\nLewiston (ME), and Town of Lisbon (ME) Franchises on substantially the same
\nterms as the respective terms of renewal specified in such existing Franchises;
\n(2) a renewal of the Town of Tremont (ME), Town of Bar Harbor (ME), City of Old
\nTown (ME), and Town of Orrington (ME) Franchises on substantially the same terms
\nas the terms of the existing City of Bangor (ME) Franchise; (3) a renewal of the
\nTown of Southwest Harbor (ME) Franchise on substantially the same terms as the
\nterms contained in the draft franchise proposal previously delivered to Buyer;
\n(4) a renewal of the Village of Holgate (OH) Franchise on substantially the same
\nterms as the terms contained in the draft franchise proposal previously
\ndelivered to Buyer; (5) a renewal of the City of Defiance (OH) Franchise on
\nsubstantially the same terms as the terms contained in the draft franchise
\nproposal previously delivered to Buyer; (6) a renewal of the Village of Albany
\n(OH) and Town of Spring Hope (NC) Franchises on terms that are commercially
\nreasonable taken as a whole (it being agreed by Buyer for purposes of this
\nAgreement, without limiting whether any other terms are commercially reasonable,
\nthat so long as the proposed renewal term of the Renewal Franchise is at least
\nten years, that a requirement to complete an upgrade\/rebuild of the System
\nserving such Franchise Area up to 750 MHz by a date that is no earlier than
\nthree years from the Closing Date and\/or a requirement to pay franchise fees up
\nto the amount permitted by the Cable Act is commercially reasonable).<\/p>\n
Buyer agrees that all fees, costs and expenses of such conditions or
\nchanges shall be borne by Buyer directly or indirectly as the owner of the
\nFrontierVision Companies. Buyer also agrees that after the Closing it will cause
\nthe FrontierVision Companies to comply with the provisions of all of the
\nFranchises and will not withhold its consent to any requirement that the
\nFrontierVision Companies comply with the rebuild\/upgrade requirements contained
\nin the Franchises as set forth in Section 6.4 of FrontierVision’s Disclosure
\nSchedule (as such requirements may be modified with Buyer’s consent) that is
\nimposed by a Franchising Authority as a condition to its approval of a request
\nfor Consent or request for a Franchise renewal.<\/p>\n
(e) If prior to the Closing hereunder any Franchising
\nAuthority purchases the assets
\nof any System (or portion thereof) that serves the Franchise Area covered by the
\nFranchise granted by such Franchising Authority pursuant to any right of first
\nrefusal in such Franchise that is triggered by the consummation of the purchase
\nand sale of the Purchased Interests, an amount equal to the product of (1) the
\nnumber of Closing Equivalent Subscribers represented by the subscribers served
\nin such<\/p>\n
– 55 –<\/p>\n
Franchise Area (determined as if the effective time of the consummation of the
\nrespective sale of such to the Franchising Authority were the Adjustment Time
\nhereunder) multiplied by (2) $2,928 shall be included as an Adjustment Liability
\nin the computation of Closing Net Liabilities, and the target number of 700,000
\nClosing Equivalent Subscribers referred to in Section 2.5(a) shall be reduced by
\nsuch number of Closing Equivalent Subscribers. FVP will not agree and will not
\npermit the FrontierVision Companies to agree to sell the assets of any System
\n(or portion thereof) pursuant to a right of first refusal in a Franchise as
\ndescribed above if the closing thereof would occur after the Closing hereunder
\nand the purchase consideration would be less than the amount equal to the
\nproduct of (1) the number of Closing Equivalent Subscribers represented by the
\nsubscribers served in such Franchise Area (determined as if the effective time
\nof the consummation of the respective sale of such to the Franchising Authority
\nwere the Adjustment Time hereunder) multiplied by (2) $2,928.<\/p>\n
(f) If, notwithstanding their commercially reasonable
\nefforts, FVP and the other
\nFrontierVision Companies are unable to obtain any required Consents or Franchise
\nrenewal, none of FVP or any of the Sellers shall be liable to Buyer for any
\nbreach of covenant and after the Closing none of FVP or any of the Sellers shall
\nhave any further obligation with respect to obtaining any such Consents or
\nrenewals or any liability for the failure of such Consents or renewals to be
\nobtained. Except as provided in this Agreement or with respect to the Credit
\nAgreement Consent, nothing herein shall require the expenditure or payment of
\nany funds (other than in respect of normal and usual attorneys fees, filing fees
\nor other normal costs of doing business) or the giving of any other
\nconsideration by FVP, any Seller or any of the FrontierVision Companies in order
\nto obtain any Consent or renewal.<\/p>\n
6.5 HSR Act Filing.<\/p>\n
As soon as practicable after the execution of this
\nAgreement, but in any event
\nno later than forty-five days after such execution, FVP, as the “acquired
\nperson,” and Buyer, as the “acquiring person,” will each complete and file, or
\ncause to be completed and filed, a premerger notification and report under the
\nHSR Act that is consistent with the rules and regulations of the Federal Trade
\nCommission (the “FTC”) and that requests early termination of the waiting period
\nimposed by the HSR Act. FVP and Buyer shall use commercially reasonable efforts
\nto respond as promptly as reasonably practicable to any inquiries received from
\nthe FTC and the Antitrust Division of the Department of Justice (the “Antitrust
\nDivision”) for additional information or documentation and to respond as
\npromptly as reasonably practicable to all inquiries and requests received from
\nany other Governmental Authority in connection with antitrust matters. FVP and
\nBuyer shall use commercially reasonable efforts to overcome any objections which
\nmay be raised by the FTC, the Antitrust Division or any other Governmental
\nAuthority having jurisdiction over antitrust matters. The fees relating to the
\nfilings required by the HSR Act shall be shared equally by Buyer, on the one
\nhand, and Sellers, on the other hand.<\/p>\n
(b) Each of the other parties to this Agreement and their
\nAffiliates will cooperate
\nwith FVP and Buyer in causing such filings to be made as expeditiously as
\npracticable, will promptly file, after any request by the FTC or Antitrust
\nDivision and after appropriate negotiation with the FTC<\/p>\n
– 56 –<\/p>\n
or the Antitrust Division of the scope of such request, any information or
\ndocuments so requested, and will furnish FVP and Buyer with copies of any
\ncorrespondence from or to, and notify FVP and Buyer of any other communications
\nwith, the FTC and Antitrust Division that relates to the transactions
\ncontemplated by this Agreement.<\/p>\n
(c) If the parties subsequently determine that any filing
\nby any of the Sellers or their
\nAffiliates is required in connection with the consummation of the transactions
\ncontemplated by this Agreement, including the acquisition by any of the Sellers
\nof ACC Class A Common Stock, such Seller and, as necessary, Buyer, will each
\ncomplete and file, or cause to be completed and filed, a premerger notification
\nand report under the HSR Act that is consistent with FTC rules and regulations
\nand that requests early termination of the waiting period imposed by the HSR
\nAct. Each of the parties making such filings shall use commercially reasonable
\nefforts to: (1) respond as promptly as reasonably practicable to any inquiries
\nreceived from the FTC and the Antitrust Division for additional information or
\ndocumentation; (2) respond as promptly as reasonably practicable to all
\ninquiries and requests received from any other Governmental Authority in
\nconnection with antitrust matters; and (3) overcome any objections which may be
\nraised by the FTC, the Antitrust Division or any other Governmental Authority
\nhaving jurisdiction over antitrust matters. The filing fees related to any
\nfiling required to be made under this subsection (c) shall be shared equally
\nbetween the “acquiring person” and the “acquired person” for each such filing,
\nexcept that if any filing is required solely as a result of the purchase and
\nsale of the SPC Stock contemplated hereby (as opposed to direct partnership
\ninterests in FVP), any filing fees related to such filings shall be paid solely
\nby the SPC Seller(s) who own(s) the SPC Stock in question.<\/p>\n
6.6 Buyer’s Qualifications and Financing.<\/p>\n
(a) Buyer will not take any action that does, or could
\nreasonably be expected to,
\ndisqualify Buyer to be the transferee of control of the FrontierVision Companies
\nas the holder of the Franchises and the owner and operator of the Assets and
\nSystems. Should Buyer become aware of any fact or circumstance that would
\ndisqualify Buyer as the transferee of control of the FrontierVision Companies,
\nBuyer will promptly notify FVP and Sellers in writing thereof and will remove
\nany such disqualifying fact or circumstance.<\/p>\n
(b) Buyer will not take any action that is inconsistent
\nwith its obligations under this
\nAgreement or which does, or would reasonably be expected to, materially hinder
\nor delay the consummation of the transaction contemplated by this Agreement.
\nWithout limiting the generality of the foregoing, at all times between the date
\nhereof and the Closing Date, Buyer will take all necessary or advisable actions
\nto ensure, and Buyer will ensure, that Buyer is able to deliver the Cash
\nConsideration and the Stock Consideration at Closing. From the date hereof until
\nClosing, Buyer will promptly notify FVP and Sellers of any event that occurs or
\ncircumstance that arises that could prevent Buyer from being able to deliver the
\nCash Consideration or Stock Consideration at Closing.<\/p>\n
– 57 –<\/p>\n
6.7 Discharge of Debt Documents.<\/p>\n
(a) Promptly following the execution of this Agreement,
\nFVP will approach the
\nagent banks under the Credit Agreement to seek requisite lender consent (the
\n“Credit Agreement Consent”) to permit the outstanding loans and commitments
\nunder the Credit Agreement to remain outstanding after the Closing, and FVP will
\nuse its best efforts to obtain such Consent. FVP will keep Buyer reasonably
\ninformed as to FVP’s inquiries and the agent banks’ responses with respect
\nthereto. Buyer acknowledges and agrees that FVP has no obligation (other than to
\nuse best efforts as provided above) to obtain the Credit Agreement Consent and
\nthat obtaining the Credit Agreement Consent is not a condition precedent to
\nBuyer’s obligations hereunder and that this Section 6.7(a) in no way limits
\nBuyer’s obligation under Section 6.7(b) if the indebtedness under the Credit
\nAgreement becomes due and payable at the Closing. FVP shall afford Buyer the
\nopportunity to discuss and negotiate the Credit Agreement Consent with the agent
\nbanks and other lenders under the Credit Agreement. It is understood and agreed
\nthat both FVP and Buyer shall have a reasonable opportunity to review and the
\nright to approve the Credit Agreement Consent documentation and terms thereof
\nprior to execution thereof.<\/p>\n
(b) If the Credit Agreement Consent is not obtained,
\nBuyer shall cause all obligations
\nof the FrontierVision Companies under the Credit Agreement (including all
\nprincipal, accrued and unpaid interest and all other amounts) that becomes due
\nand payable concurrently with the consummation of the Closing to be discharged
\nin full at the Closing.<\/p>\n
(c) Promptly following the execution of this Agreement,
\nFVP will approach General
\nElectric Capital Corporation (“GECC”) to seek consent (the “GECC Facility
\nConsent”) to permit the Equipment Leasing Facility to remain outstanding after
\nthe Closing, and FVP will use its commercially reasonable efforts (which shall
\nin no event require the expenditure or payment of funds or the giving of any
\nother consideration by FVP, any Seller or any of the FrontierVision Companies in
\norder to obtain the GECC Facility Consent) to obtain such Consent. FVP will keep
\nBuyer reasonably informed as to FVP’s inquiries and GECC’s responses with
\nrespect thereto. Buyer acknowledges and agrees that FVP has no obligation (other
\nthan to use commercially reasonable efforts as provided above) to obtain the
\nGECC Facility Consent and that obtaining the GECC Facility Consent is not a
\ncondition precedent to Buyer’s obligations hereunder. If GECC withholds its
\nconsent, FVP will cause all indebtedness outstanding under such Equipment
\nLeasing Facility to be repaid at or before the Closing.<\/p>\n
(d) Buyer acknowledges and agrees that the Issuers under
\n the Indentures will be
\nrequired to make an Offer of Redemption under each of the Indentures within
\nthirty days of the Closing Date, in the case of the 1996 Indenture, and within
\nthirty-five days of the Closing Date, in the case of the 1997 Indenture and the
\n1998 Indenture. Buyer will cause the Issuers to discharge all of their
\nobligations under the Indentures in accordance with their terms.<\/p>\n
(e) FVP will cause the FrontierVision Companies to
\nterminate all of its interest rate protection and similar agreements and
\ndischarge all of their obligations thereunder at or prior to the<\/p>\n
– 58 –<\/p>\n
Closing unless Buyer has delivered reasonable prior notice to FVP specifying
\nthat Buyer desires the FrontierVision Companies to maintain the effectiveness of
\none or more of such agreements as specified in Buyer’s notice. If the
\nFrontierVision Companies maintain the effectiveness of one or more of such
\nagreements at Buyer’s request, the amount of the net asset shall be included as
\nan Adjustment Asset in the computation of Closing Net Liabilities, if
\napplicable, or the amount of the net liability shall be included as an
\nAdjustment Liability in the computation of Closing Net Liabilities, if
\napplicable.<\/p>\n
6.8 Retention and Access to the FrontierVision Companies’ Records.<\/p>\n
Except as provided in Section 6.10(c)(1), the General Partner and
\nSellers shall, for a period of five years from the Closing Date, have access to,
\nand the right to copy, at their expense, during usual business hours upon
\nreasonable prior notice to Buyer, all of the books and records relating to the
\nFrontierVision Companies, Assets and Systems that were transferred to Buyer
\npursuant to this Agreement. Buyer shall retain and preserve all such books and
\nrecords for such five year period. Subsequent to such five year period, Buyer
\nshall only destroy such books and records if there is no ongoing litigation,
\ngovernmental audit or other proceeding, and subsequent to thirty days’ notice to
\nthe General Partner and Sellers of their right to remove and retain such books
\nand records, or to copy such books and records prior to their destruction.<\/p>\n
6.9 Employee Matters.<\/p>\n
(a) Except as otherwise provided in this Section 6.9,
\nnothing herein shall require
\nBuyer or the FrontierVision Companies to continue the employment of any
\nemployees of the FrontierVision Companies for any period of time following the
\nClosing. Within thirty days after representatives of Buyer meet with the
\nFrontierVision Companies’ corporate-level employees to discuss employment
\nopportunities with Buyer following the Closing, FVP shall provide to Buyer a
\nlist of all employees of the FrontierVision Companies and shall designate those
\ncorporate-level employees that are not available for continued employment with
\nthe FrontierVision Companies following the Closing. Within a reasonable period
\nof time following the receipt of such list and no less than sixty days prior to
\nthe Closing Date, Buyer shall provide FVP with written notice of which of the
\navailable employees of the FrontierVision Companies Buyer intends to retain
\nfollowing the Closing (the “Assumed Employees”). FVP shall cause the
\nFrontierVision Companies to terminate the employment of all employees that are
\nnot Assumed Employees on or prior to the Closing. Notwithstanding the foregoing,
\nBuyer agrees to provide FVP with written notice of which of the available
\nemployees of the FrontierVision Companies Buyer intends to retain following the
\nClosing at least 100 days prior to the Closing in the event that Buyer intends
\nto terminate or to cause any FrontierVision Company to terminate 50 or more
\nemployees (when considered together with those employees to be terminated as
\ndesignated by any FrontierVision Company) during the 90-day period prior to and
\nincluding the Closing to permit FVP to make any required notices under the
\nWorker Adjustment and Retraining Notification Act, as amended (“WARN Act”). In
\nthe event that Buyer fails to provide such notice to FVP, Buyer agrees that it
\nwill retain a sufficient number of employees employed by the FrontierVision
\nCompanies as of the Closing to ensure that 50 or more employees do not
\nexperience “employment loss” as that term<\/p>\n
– 59 –<\/p>\n
is defined in the WARN Act during the 90-day period prior to and including the
\nClosing. Buyer shall continue to employ such employees for a period of at least
\n90 days after the Closing, except for such employees who voluntarily terminate
\nemployment, retire or are discharged for cause. Buyer shall be solely
\nresponsible for and shall indemnify and hold Sellers harmless from any liability
\narising under the WARN Act after the Closing arising out of Buyer’s failure to
\nprovide adequate advanced written notice to FVP or arising out of Buyer’s
\nfailure to continue the employment of any FrontierVision Company employee as
\nrequired in this Section 6.9(a). Buyer shall have no obligation to provide
\nseverance benefits to any employee of the FrontierVision Companies who terminate
\nemployment on or prior to Closing.<\/p>\n
(b) As of and immediately after the Closing each Assumed
\nEmployee shall be
\nemployed in the same position and on the same terms and conditions prevailing as
\nof the Closing, and each Assumed Employee who continues his employment after the
\nClosing shall receive credit for past service with any of the FrontierVision
\nCompanies for all purposes of eligibility and vesting under Buyer’s Employee
\nPlans and for all other purposes under Buyer’s vacation, sick leave or other
\nbenefit programs or arrangements. Buyer shall not otherwise be required to
\nmaintain any particular level of benefits for any of the Assumed Employees
\nexcept that Buyer will not discuss any potential changes in employment terms or
\nbenefits with the Assumed Employees prior to the Closing. Notwithstanding the
\nforegoing, upon Buyer’s request, FVP will coordinate with Buyer to permit Buyer
\nto meet with any of the corporate-level Assumed Employees to discuss employment
\nopportunities following the Closing, including position, salary and other
\nemployment benefits (and the requirement that such employee must continue
\nemployment in the same position and on the same terms and conditions shall not
\napply to any corporate-level Assumed Employees).<\/p>\n
(c) Buyer shall assume full responsibility and liability
\nfor offering and providing
\n“continuation coverage” to any “qualified beneficiary” who is covered by a
\n“group health plan” sponsored or contributed to by any FrontierVision Company or
\nany of their ERISA Affiliates and who has experienced a “qualifying event” or is
\nreceiving “continuation coverage” on or prior to the Closing. “Continuation
\ncoverage,” “Qualified beneficiary,” “Qualifying event” and “group health plan”
\nall shall have the meanings given such terms under Section 4980B of the Code and
\nSection 601 et seq. of ERISA. Buyer shall hold the FrontierVision Companies and
\nany entity required to be combined with the FrontierVision Companies (within the
\nmeaning of Sections 414(b), (c), (m) or (o) of the Code) harmless from and fully
\nindemnify them against any costs, expenses, losses, damages and liabilities
\nincurred or suffered by them directly or indirectly, including, but not limited
\nto, reasonable attorneys’ fees and expenses, which relate to continuation
\ncoverage and arise as a result of any action or omission by any FrontierVision
\nCompany or any of their ERISA Affiliates or because Buyer is deemed to be a
\nsuccessor employer to any FrontierVision Company or any of their ERISA
\nAffiliates.<\/p>\n
(d) If the employment of any Assumed Employee who
\ncontinues his employment
\nwith the FrontierVision Companies after the Closing is terminated within the
\none-year period immediately following the Closing, such employee shall be
\nentitled to receive severance benefits in accordance with the provisions of the
\nFrontierVision Severance Pay Plan disclosed in Section 3.13 of<\/p>\n
– 60 –<\/p>\n
FrontierVision’s Disclosure Schedule. Notwithstanding the foregoing or anything
\nin the FrontierVision Severance Pay Plan to the contrary, Buyer shall have no
\nobligation to provide any severance benefits to any such employee discharged for
\ncause.<\/p>\n
(e) At or prior to the Closing, FVP and the other
\nFrontierVision Companies shall
\nenter into appropriate release agreements with James C. Vaughn and John S. Koo,
\npursuant to which each party irrevocably waives, releases and forever discharges
\nthe other party (including the agents, servants, employees, directors, officers,
\naffiliates, divisions, partners and representatives of FVP and the other
\nFrontierVision Companies) of and from any and all actions, causes of actions,
\ncharges, complaints, claims, liabilities, and expenses (including, without
\nlimitation, attorneys’ fees and costs) of any nature whatsoever, known or
\nunknown, in law and equity, arising from the employment agreements by and
\nbetween FVP and each of James C. Vaughn and John S. Koo.<\/p>\n
(f) At the Closing, Buyer shall cause all amounts due
\nunder the FrontierVision
\nPartners, L.P. Executive Deferred Compensation Plan to be paid as directed by
\nFVP. An amount equal to the aggregate amount of such payments shall be included
\nas an Adjustment Liability in the computation of Closing Net Liabilities. The
\nparticipants under the Plan shall deliver appropriate releases to Buyer with
\nrespect to its rights under the Plan contingent upon receipt of the Closing
\npayment due to such participant.<\/p>\n
6.10 Tax Matters.<\/p>\n
The following provisions shall govern the allocation of responsibility
\nbetween Buyer and Sellers for certain tax matters following the Closing Date:<\/p>\n
(a) Tax Periods Ending on or Before the Closing Date.
\nThe General Partner shall
\nprepare or cause to be prepared and file or cause to be filed all Tax Returns
\nfor the FrontierVision Companies for all periods ending on or prior to the
\nClosing Date which are required to be filed after the Closing Date. Such Tax
\nReturns shall be prepared in accordance with each FrontierVision Company’s past
\ncustom and practice (subject to applicable Legal Requirements and determined on
\nthe basis of the appropriate permanent records of such FrontierVision Company),
\nand allocations of items of income and gain and loss and deduction shall be made
\nusing the closing of the books method. In the case of any FrontierVision Company
\nthat is a partnership or limited liability company, such Tax Returns shall be
\nprepared in accordance with the Charter Documents of such FrontierVision Company
\nas in effect on the Closing Date. In preparing each FrontierVision Company’s Tax
\nReturns, the General Partner shall consult with Buyer in good faith and shall
\nprovide Buyer with drafts of such Tax Returns (together with the relevant
\nback-up information) for review at least twenty days prior to filing. After the
\nClosing, Buyer shall not prepare or cause to be prepared or file or cause to be
\nfiled any Tax Return for the FrontierVision Companies for any period ending on
\nor prior to the Closing Date, except as any Seller adversely affected thereby
\nmay agree in writing.<\/p>\n
– 61 –<\/p>\n
(b) Tax Periods Beginning Before and Ending After the
\nClosing Date. Buyer shall
\nprepare or cause to be prepared and file or cause to be filed any Tax Returns of
\nthe FrontierVision Companies for Tax periods which begin before the Closing Date
\nand end after the Closing Date. Such Tax Returns shall be prepared in accordance
\nwith each FrontierVision Company’s past custom and practice (subject to
\napplicable Legal Requirements and determined on the basis of the appropriate
\npermanent records of such FrontierVision Company). In preparing such Tax
\nReturns, Buyer shall consult with the General Partner in good faith and shall
\nprovide the General Partner with drafts of such Tax Returns (together with the
\nrelevant back-up information) for review at least twenty days prior to filing.<\/p>\n
(c) Cooperation on Tax Matters.<\/p>\n
(1) Buyer and the General Partner shall
\ncooperate fully, as and to the extent
\nreasonably requested by the other party, in connection with the filing of Tax
\nReturns pursuant to this Section 6.10 and any audit, litigation, or other
\nproceeding with respect to Taxes. Such cooperation shall include the retention
\nand (upon the other party’s request) the provision of records and information
\nwhich are reasonably relevant to any such audit, litigation, or other proceeding
\nand making employees available on a mutually convenient basis to provide
\nadditional information and explanation of any material provided hereunder. Buyer
\nand the General Partner agree (A) to retain all books and records with respect
\nto Tax matters pertinent to the FrontierVision Companies relating to any taxable
\nperiod beginning before the Closing Date until the expiration of the statute of
\nlimitations (and, to the extent notified by Buyer or the General Partner, any
\nextensions thereof) of the respective taxable periods, and to abide by all
\nrecord retention agreements entered into with any taxing authority, and (B) to
\ngive the other party reasonable written notice prior to transferring, destroying
\nor discarding any such books and records and, if the other party so requests,
\nBuyer or the General Partner, as the case may be, shall allow the other party to
\ntake possession of such books and records to the extent they would otherwise be
\ndestroyed or discarded.<\/p>\n
(2) Buyer and the General Partner further agree,
\n upon request, to use
\ncommercially reasonable efforts to obtain any certificate or other document from
\nany Governmental Authority or any other Person as may be necessary to mitigate,
\nreduce or eliminate any Tax that could be imposed (including Taxes with respect
\nto the transactions contemplated hereby).<\/p>\n
(d) Tax Sharing Agreements. All tax sharing agreements
\nor similar agreements with
\nrespect to or involving the FrontierVision Companies shall be terminated as of
\nthe Closing Date and, after the Closing Date, the FrontierVision Companies shall
\nnot be bound thereby or have any liability thereunder.<\/p>\n
(e) Certain Taxes. All transfer, documentary, sales,
\nuse, stamp, registration and other
\nsuch Taxes and fees (including any penalties and interest) incurred in
\nconnection with this Agreement shall be borne one-half by Buyer and one-half by
\nSellers. Buyer and the General Partner will cooperate<\/p>\n
– 62 –<\/p>\n
in all reasonable respects to prepare and file all necessary Tax Returns and
\nother documentation with respect to all such transfer, documentary, sales, use,
\nstamp, registration and other Taxes and fees.<\/p>\n
6.11 FrontierVision Name.<\/p>\n
Buyer agrees that the General Partner shall retain the right to the
\nname “FrontierVision” after the Closing and agrees to change the name of each of
\nthe FrontierVision Companies within one year after the Closing to a name that
\ndoes not include any variant of “FrontierVision” and agrees not to otherwise use
\nthe “FrontierVision” name or any variant thereof thereafter, subject to Buyer’s
\nindemnification obligations under Section 10.4(c).<\/p>\n
6.12 Releases.<\/p>\n
After the Closing neither Buyer nor its Affiliates will have any claim
\nagainst (except as expressly provided in Article 10), or be entitled to enforce
\nany provision of the existing partnership agreement of FVP (or either of the
\nLimited Partnership Interests and Note Purchase Agreements pursuant to which the
\nSellers made their investments in FVP) against, any Seller or any Affiliate of
\nany Seller or any officer or director of any Seller or any Affiliate of any
\nSeller, and any and all such claims (except claims made pursuant to Article 10)
\nare hereby waived and released. At the Closing, subject to Section 6.13, each
\nSeller shall execute and deliver to Buyer a Seller Release. At the Closing,
\nsubject to Section 6.13, each Person designated on Exhibit H shall execute and
\ndeliver to Buyer a Management Release.<\/p>\n
6.13 Directors and Officers Insurance.<\/p>\n
Prior to the Closing FVP will purchase on behalf of the FrontierVision
\nCompanies a General Partners Liability\/Limited Partnership Reimbursement
\ninsurance policy in scope and coverage substantially similar to the policy
\nquotation received by Buyer from American Dynasty Surplus Line Insurance Company
\non February 16, 1999, covering the officers and directors of the FrontierVision
\nCompanies and the members of FVP’s Advisory Committee. The amount of any
\npremiums paid by the FrontierVision Companies prior to the Adjustment Time in
\nrespect of such policy shall be included as an Adjustment Asset in the
\ncomputation of Closing Net Liabilities. Buyer agrees to cause the FrontierVision
\nCompanies to keep such policy in effect for at least the three year period
\nfollowing the Closing Date.<\/p>\n
6.14 Rate Regulatory Matters.<\/p>\n
The parties acknowledge and agree that notwithstanding anything in this
\nAgreement or any other Transaction Document to the contrary (including any
\nrepresentation or warranty made by FVP in Sections 3.11(e), 3.15 or 3.16), any
\nmatter relating to, in connection with or resulting or arising from any Rate
\nRegulatory Matter, or any actions taken prior to or after the date hereof by any
\nFrontierVision Company to comply with or in a good faith attempt to comply with
\nany Rate Regulatory Matter<\/p>\n
– 63 –<\/p>\n
(including any rate reduction, refund, penalty or similar action having the
\neffect of reducing the rates previously or subsequently paid by subscribers,
\nwhether instituted or implemented by or imposed on any FrontierVision Company
\nand changes to rate practices instituted or implemented by or imposed on any
\nFrontierVision Company), shall not: (a) cause or constitute, directly or
\nindirectly, a breach by any FrontierVision Company or any Seller of any of its
\nrepresentations, warranties, covenants or agreements contained in this Agreement
\nor any other Transaction Document (and such representations, warranties,
\ncovenants, and agreements shall hereby be deemed to be modified appropriately to
\nreflect and permit the impact and existence of such Rate Regulatory Matters and
\nto permit any action by any FrontierVision Company to comply with or attempt in
\ngood faith to comply with such Rate Regulatory Matters; (b) otherwise cause or
\nconstitute, directly or indirectly, a default or breach by any FrontierVision
\nCompany or any Seller under this Agreement or any other Transaction Document;
\n(c) result in the failure of any condition precedent to the obligations of Buyer
\nunder this Agreement or any other Transaction Document; (d) otherwise excuse
\nBuyer’s performance of its obligations under this Agreement or any other
\nTransaction Document; or (e) except as expressly provided in Section 10.2(c),
\ngive rise to any claim for indemnification or other compensation by Buyer or any
\nadjustment to the Stock Consideration or Cash Consideration.<\/p>\n
6.15 Distribution by SPCs of Interest in General Partner;
\nCancellation of SPC Notes.<\/p>\n
(a) Immediately prior to the Closing, each of Brown
\nBrothers Harriman & Co. and
\nOlympus Growth Fund II, L.P., both of which are SPC Sellers, will cause the
\nrespective SPC owned by it to distribute, directly or indirectly, to such SPC
\nSeller the limited partnership interest in the General Partner held by such SPC
\n(together with all of its rights and obligations under the partnership agreement
\nof the General Partner). Such partnership interests in the General Partner are
\nnot included in the Purchased Interests and shall not be sold and transferred to
\nBuyer hereunder.<\/p>\n
(b) Each SPC Seller that holds any SPC Note shall cause
\nall such SPC Notes to be
\ncanceled concurrently with the Closing. Buyer shall not assume any liability
\nwith respect to any SPC Notes, and no SPC shall have any continuing liability
\nafter the Closing with respect to any SPC Notes.<\/p>\n
6.16 Cooperation on Buyer SEC Matters.<\/p>\n
(a) FVP shall cooperate with Buyer and its counsel and
\naccountants in connection
\nwith any filing required to be made by Buyer with the SEC. FVP shall provide to
\nBuyer such information relating to the FrontierVision Companies and their
\nrespective business and operations as Buyer may reasonably request. All costs,
\nexpenses and fees incurred in connection with the inclusion by Buyer of such
\ninformation in any such filing shall be borne by Buyer, and Buyer shall
\nindemnify and hold harmless FVP and the Sellers from any Losses resulting from
\nthe inclusion by Buyer of any such information in any such filing, except Buyer
\nshall not have any indemnification liability to the FrontierVision Companies to
\nthe extent any Losses arise out of any information included by Buyer in reliance
\nupon and in conformity with written information furnished by the FrontierVision
\nCompanies expressly for use in connection with such filings.<\/p>\n
– 64 –<\/p>\n
(b) FVP hereby consents to the inclusion by Buyer of
\nfinancial statements of the
\nFrontierVision Companies, if requested to be so included by Buyer, in any report
\nrequired to be filed by Buyer with the SEC, the National Association of
\nSecurities Dealers’ Automated Quotations (“NASDAQ”) System or any stock exchange
\npursuant to applicable Legal Requirements, including the Securities Act and the
\nExchange Act. All costs, expenses and fees incurred in connection with the
\ninclusion by Buyer of financial statements of the FrontierVision Companies in
\nany such report shall be borne by Buyer, and Buyer shall indemnify and hold
\nharmless FVP and the Sellers from any Losses resulting from the inclusion by
\nBuyer of financial statements of the FrontierVision Companies in any such
\nreport. FVP agrees to obtain the consent of the independent public accountants
\nof the FrontierVision Companies to the inclusion of such financial statements in
\nany report so required to be filed by Buyer with the SEC, NASDAQ System or any
\nstock exchange.<\/p>\n
6.17 Stock Consideration Registration Rights Agreement.<\/p>\n
(a) Simultaneously with the execution of this Agreement,
\n and as a material
\ninducement to Sellers to enter into this Agreement, Buyer shall execute and
\ndeliver the Stock Consideration Registration Rights Agreement, pursuant to which
\nBuyer will grant Sellers certain rights as provided therein in respect of the
\nshares of ACC Class A Common Stock and other securities constituting the Stock
\nConsideration (such shares and other securities, the “Stock Consideration
\nRegistrable Securities”). Buyer shall perform all of its obligations under the
\nStock Consideration Registration Rights Agreement in accordance with their
\nterms.<\/p>\n
(b) Prior to the Closing FVP will make a written request
\nto the “Minor Holders”
\nunder the Stock Consideration Registration Rights Agreement with respect to
\ncompliance with certain “Sales Notice” procedures, and establish a “preferred
\nbroker” to facilitate such Sales Notices, all as more fully described in
\nParagraph 2(b) of the Stock Consideration Registration Rights Agreement. No
\n“Minor Holder” will be liable to Buyer or any other party for any damages
\nsustained by Buyer or any other party as a result of the failure of such Minor
\nHolder to make a Sales Notice as requested by FVP.<\/p>\n
6.18 State Cable Systems.<\/p>\n
The FrontierVision Companies acquired certain of the Systems from State
\nCable TV Corporation and Better Cable TV Company on October 23, 1998 pursuant to
\na purchase and sale agreement referred to in Section 3.11 of FrontierVision’s
\nDisclosure Schedule (the “State Cable Acquisition Agreement”). The
\nFrontierVision Companies have filed, or intend to file after the execution of
\nthis Agreement, an indemnification claim against the sellers thereunder based on
\ntheir breach of certain representations and warranties relating to the bandwidth
\ncapacity of such Systems. In consideration of the inclusion as an Adjustment
\nLiability of item (G) in Section 2.5(b)(2), FVP and Buyer hereby agree as
\nfollows: (1) Sellers shall be entitled to the first $5,500,000 which is
\ncollected by or on behalf of the FrontierVision Companies, either before or
\nafter the Closing hereunder, in respect of such claim (to the extent it relates
\nto the plant miles in respect of which item (G) in Section 2.5(b)(2)<\/p>\n
– 65 –<\/p>\n
relates) and Buyer shall be entitled to any amounts collected in excess of
\n$5,500,000; and (2) if such claim is not finally resolved prior to the Closing
\nhereunder, Buyer shall offer to engage the General Partner to proceed with the
\nclaim on behalf of and as the agent of the FrontierVision Companies, will
\ncooperate and cause the FrontierVision Companies to cooperate with the General
\nPartner in all reasonable respects in connection therewith, and if any such
\namounts are collected by or on behalf of the FrontierVision Companies after the
\nClosing hereunder, Buyer shall cause the first $5,500,000 in the aggregate of
\nsuch monies (less any such amounts collected by the FrontierVision Companies
\nprior to the Closing) to be remitted promptly to the General Partner for the
\nbenefit of Sellers; provided, however, that (A) the General Partner shall not be
\nrequired to accept such engagement or proceed with such claim and Buyer may
\nterminate the engagement of the General Partner at any time provided that Buyer
\nshall still cause the first $5,500,000 in the aggregate of such monies (less any
\nsuch amounts collected by the FrontierVision Companies prior to the Closing) to
\nbe remitted promptly to the General Partner for the benefit of Sellers except
\nthat out of any monies to be remitted to the General Partner pursuant to this
\nclause (B) there shall be deducted Buyer’s reasonable out-of-pocket costs and
\nexpenses actually incurred, if any, in connection with prosecuting such claim
\nafter the Closing and provided further that if the amount of the monies
\ncollected after the Closing exceeds $5,500,000, Sellers shall only bear a pro
\nrata portion of Buyer’s out-of-pocket costs and expenses based on a fraction,
\nthe numerator of which is equal to $5,500,000 and the denominator of which is
\nequal to the total amount of the monies collected; and (B) the General Partner
\nshall not waive or settle such claim without the prior written consent of Buyer
\n(which consent shall not be unreasonably withheld) if the settlement relates to
\nany indemnification claim other than the claim described above in subsection (1)
\nor otherwise impairs the rights of the FrontierVision Companies with respect to
\nany other indemnification claims under the State Cable Acquisition Agreement.<\/p>\n
6.19 Lien Searches.<\/p>\n
FVP shall deliver to Buyer, at least two weeks prior to the Closing
\nDate, an accurate list of the current address of each Seller’s respective
\nprincipal place of business, or if such Seller has no principal place of
\nbusiness, such Seller’s respective residence, and upon delivery of such list FVP
\nshall be deemed to have represented and warranted to Buyer that each such
\naddress is the true and correct address that it purports to be with respect to
\neach Seller as of such date.<\/p>\n
6.20 Distant Signals; Copyright Matters.<\/p>\n
Unless otherwise restricted or prohibited by any Governmental
\nAuthority, Legal Requirement or Contract, if requested by Buyer, FVP will cause
\nthe FrontierVision Companies to delete prior to the Closing any distant
\nbroadcast signal the continued carriage of which will in Buyer’s reasonable
\njudgment result in a substantial increase to Buyer’s copyright liability;
\nprovided, however, that Buyer shall give FVP reasonable advance notice to permit
\nthe FrontierVision Companies to comply with its notice obligations in connection
\nwith a signal deletion and FVP shall have no obligation to cause the deletion of
\nsuch signal unless Buyer agrees to reimburse the Sellers for any out-of-pocket
\ncosts and<\/p>\n
– 66 –<\/p>\n
expenses that may be incurred by the FrontierVision Companies in connection with
\ndeleting any such signals (other than nominal costs and expenses).<\/p>\n
ARTICLE 7<\/p>\n
CONDITIONS TO OBLIGATIONS OF BUYER AND SELLERS<\/p>\n
7.1 Conditions to Obligations of Buyer.<\/p>\n
All obligations of Buyer at the Closing hereunder are subject to the
\nfulfillment prior to or at the Closing of each of the following conditions:<\/p>\n
(a) Representations and Warranties of FVP. As to the
\nrepresentations and warranties
\nof FVP set forth in Article 3, (1) those representations and warranties set
\nforth in Article 3 which are expressly stated to be made solely as of the date
\nof this Agreement or another specified date shall be true and correct in all
\nrespects as of such date, and (2) all other representations and warranties of
\nFVP set forth in Article 3 shall be true and correct in all respects at and as
\nof the time of the Closing as though made at and as of that time, except in each
\ncase of clauses (1) and (2) to the extent that the aggregate effect of the
\ninaccuracies in such representations and warranties as of the applicable times
\ndoes not constitute a material adverse change in the business, financial
\ncondition, assets or liabilities of the FrontierVision Companies, taken as a
\nwhole, when compared with the state of facts that would exist if all such
\nrepresentations and warranties were true in all respects as of the applicable
\ntimes, not giving effect to any inaccuracies resulting from any actions taken in
\naccordance with the provisions of this Agreement, any event that arose in the
\nordinary course of business, any changes in economic conditions that are
\napplicable to the cable industry generally on a national, state, regional or
\nlocal basis, any changes in conditions (including Rate Regulatory Matters, and
\nother federal, state or local governmental actions, legislation or regulations)
\nthat are applicable to the cable industry generally on a national, state,
\nregional or local basis, or any changes in competitive activities.<\/p>\n
(b) Representations and Warranties of Sellers. As to the
\n representations and
\nwarranties of Sellers set forth in Article 4, (1) those representations and
\nwarranties set forth in Article 4 which are expressly stated to be made solely
\nas of the date of this Agreement or another specified date shall be true and
\ncorrect in all respects as of such date, and (2) all other representations and
\nwarranties of Sellers set forth in Article 4 shall be true and correct in all
\nrespects at and as of the time of the Closing as though made at and as of that
\ntime, except in each case of clauses (1) and (2) to the extent that the
\naggregate effect of the inaccuracies in such representations and warranties as
\nof the applicable times does not materially impair Sellers’ ability to perform
\ntheir obligations under this Agreement and the other Transaction Documents to
\nwhich they are party.<\/p>\n
(c) Covenants. FVP and the Sellers shall have performed
\nand complied with all
\ncovenants and agreements required by this Agreement (other than by Sections 6.4
\nand 6.7, which are governed by the immediately following sentence) to be
\nperformed or complied with by them prior to<\/p>\n
– 67 –<\/p>\n
or at the Closing, except to the extent that the aggregate effect of the failure
\nto so perform or comply has not had a material adverse effect on the business,
\nfinancial condition, assets or liabilities of the FrontierVision Companies,
\ntaken as a whole. FVP shall have performed and complied with in all material
\nrespects all covenants and agreements required by Sections 6.4, 6.7 and 6.16 to
\nbe performed or complied with by it prior to or at the Closing.<\/p>\n
(d) Franchise Consents and Franchise Renewals.<\/p>\n
(1) A Consent of the Franchising Authority shall
\nhave been obtained for each
\nFranchise designated in Section 3.4 of FrontierVision’s Disclosure Schedule as a
\n“Material Consent Franchise” and for each Designated Material Consent Franchise,
\nif any. Notwithstanding the preceding sentence, and for purposes of satisfaction
\nof the condition in this subsection (1):<\/p>\n
(A) Consent with respect to any Material
\n Consent Franchise or any
\nDesignated Material Consent Franchise shall be deemed obtained on the date the
\n120-Day Period expires if such Franchising Authority fails to approve or deny
\nthe request for Consent by such date and the failure to approve the request for
\nConsent was not principally caused by any of the following: a nonfrivolous
\ndispute by the Franchising Authority as to the FrontierVision Companies’ (or any
\npredecessor’s) noncompliance with the Franchise (provided that FVP has provided
\nBuyer with evidence reasonably satisfactory to Buyer supporting FVP’s contention
\nthat such dispute is frivolous); a nonfrivolous dispute by the Franchising
\nAuthority as to Buyer’s qualifications to be the transferee of control of the
\nFrontierVision Companies as the holder of the Franchise in question (provided
\nthat FVP has provided Buyer with evidence reasonably satisfactory to Buyer
\nsupporting FVP’s contention that such dispute is frivolous); or the withholding
\nof consent by FVP or Buyer to any requirements that would be imposed by the
\nFranchising Authority as a condition to granting such Consent (although nothing
\nherein shall be deemed to limit the provisions of Section 6.4(d) relating to
\nchanges and conditions that Buyer is required to accept and that FVP may accept
\non behalf of Buyer and the FrontierVision Companies). The term “120-Day Period”
\nmeans, with respect to any Franchise, the 120 day period commencing on the date
\non which the Consent application on FCC Form 394 (or other appropriate form)
\nrequired to be filed with respect to such Franchise was filed with the
\nappropriate Franchising Authority, plus the number of days, if any, that FVP has
\nagreed with a Franchising Authority to extend the 120-day period provided by
\nSection 617 of the Cable Act.<\/p>\n
(B) Consent with respect to any Material
\nConsent Franchise or
\nDesignated Material Consent Franchise that is not in the Renewal Window shall be
\ndeemed obtained on the sixtieth day (subject to the proviso below) after the
\ndate the 120-Day Period expires, or if the Franchising Authority has
\naffirmatively denied the request for Franchise Consent, the sixtieth day after
\nthe date of such denial, if such Franchising Authority fails to approve or fails
\nto reverse its denial of the request for Consent by such date and the failure to
\napprove or reverse its denial of the request for Consent was not principally
\ncaused by a non-frivolous dispute by the Franchising Authority as to the
\nFrontierVision Companies’ (or a predecessor’s) noncompliance with the Franchise
\n(provided that FVP has provided Buyer with evidence reasonably satisfactory to
\nBuyer supporting FVP’s contention that<\/p>\n
– 68 –<\/p>\n
such dispute is frivolous); provided, however, that the sixty day extension
\nperiod referred to above shall be reduced by each day that the Franchise Consent
\napplication was filed after the forty-fifth day after the execution of this
\nAgreement (with respect to applications filed pursuant to Section 6.4(a)) or
\nfiled after the tenth day after the date it was determined that such application
\nwas required to be filed (with respect to applications filed pursuant to Section
\n6.4(b)) if such delay in filing was principally caused by Buyer.<\/p>\n
(2) The Renewal Franchises shall have been
\nrenewed in accordance with the
\nprovisions of Section 6.4. The condition in this subsection (2) shall be deemed
\nsatisfied as to any Renewal Franchise (other than the City of Lewiston (ME),
\nCity of Auborn (ME), and City of Defiance (OH) Franchises) if such Franchise is
\nextended on its existing terms to a date that permits either the FrontierVision
\nCompanies (prior to the Closing) or Buyer (after the Closing) to file a request
\nfor renewal under Section 626(a) of the Cable Act prior to the expiration of the
\nstatutory time period for making such filing (determined on the basis of the new
\nexpiration date).<\/p>\n
(3) A Consent of the Franchising Authority under
\n the Town of Manchester
\n(ME), the Town of Winthrop (ME), the Town of Peru (ME), the Town of Fairfield
\n(ME), the Town of Milo (ME), and the City of Brewer (ME) Franchises shall have
\nbeen obtained (with an acknowledgment by such Franchising Authority that the
\nFrontierVision Companies are not in default under the Franchise) or the date by
\nwhich the FrontierVision Companies are required to complete any upgrade\/rebuild
\nrequirements set forth in such Franchises shall have been extended at least
\nthree years such that the FrontierVision Companies are not in default under the
\nFranchise.<\/p>\n
(e) FCC Consents. Consent of the FCC shall have been
\nobtained with respect to
\neach CARS License listed in Section 3.8 of FrontierVision’s Disclosure Schedule.<\/p>\n
(f) Lease Consents. Consent of the lessor under the
\noffice leases designated as
\n“Material Consent Leases” in Section 3.4 of FrontierVision’s Disclosure Schedule
\nshall have been obtained.<\/p>\n
(g) Hart-Scott-Rodino. The requisite waiting period, if
\nany, under the HSR Act shall have expired or been terminated.<\/p>\n
(h) Judgment. There shall not be in effect on the date on
\n which the Closing is to
\noccur any judgment, decree, or order of a court of competent jurisdiction or
\nother prohibition having the force of law that would prevent or make unlawful
\nthe Closing, provided that Buyer shall have used commercially reasonable efforts
\nto prevent the entry of any such judgment, decree, order or other legal
\nprohibition and to appeal as expeditiously as possible any such judgment,
\ndecree, order or other legal prohibition that may be entered and shall have
\notherwise taken commercially reasonable actions to cause any such judgment,
\ndecree, order or other legal prohibition to cease to be in effect as
\nexpeditiously as possible.<\/p>\n
– 69 –<\/p>\n
(i) No Material Adverse Change. No event shall have
\noccurred between December
\n31, 1998 and the date on which the Closing is to occur that has had a material
\nadverse effect on the business, financial condition, assets or liabilities of
\nthe FrontierVision Companies, taken as a whole, other than events or changes
\ndisclosed in this Agreement or FrontierVision’s Disclosure Schedule, or an event
\nthat arose in the ordinary course of business, any changes in economic
\nconditions that are applicable to the cable industry generally on a national,
\nstate, regional or local basis, any changes in conditions (including Rate
\nRegulatory Matters, and other federal, state or local governmental actions,
\nlegislation or regulations) that are applicable to the cable industry generally
\non a national, state, regional or local basis, or any changes in competitive
\nactivities.<\/p>\n
(j) Lien Searches. FVP shall have delivered to Buyer, at
\n least two weeks prior to
\nthe Closing Date, UCC financing statement, tax lien and judgment searches dated
\nnot more than thirty days prior to the Closing Date (including copies of
\ndocuments listed on each search, if any) with respect to each of the Sellers
\nperformed by a search firm reasonably satisfactory to Buyer in the jurisdiction
\nof each Seller’s respective principal place of business, or if such Seller has
\nno place of business, in the jurisdiction of his or her respective residence as
\nset forth in the list delivered by FVP pursuant to Section 6.19 (except that
\nthis condition shall not be deemed unsatisfied by the failure to deliver a
\nsearch at least two weeks prior to the Closing Date if such search does not
\nevidence any Encumbrance on the Purchased Interests or the Assets that is not a
\nPermitted Encumbrance or if any such Encumbrance that is not a Permitted
\nEncumbrance is removed at or prior to the Closing).<\/p>\n
(k) Deliveries. Sellers shall have made or stand willing
\n to make all the deliveries to Buyer described in Section .<\/p>\n
7.2 Conditions to Obligations of Sellers.<\/p>\n
All obligations of each Seller at the Closing hereunder are subject to
\nthe fulfillment prior to or at the Closing of each of the following conditions:<\/p>\n
(a) Representations and Warranties. As to the
\nrepresentations and warranties of
\nBuyer set forth in Article 5, (1) those representations and warranties set forth
\nin Article 5 which are expressly stated to be made solely as of the date of this
\nAgreement or another specified date shall be true and correct in all respects as
\nof such date, and (2) all other representations and warranties of Buyer set
\nforth in Article 5 shall be true and correct in all respects at and as of the
\ntime of the Closing as though made at and as of that time, except in each case
\nof clauses (1) and (2) to the extent that the aggregate effect of the
\ninaccuracies in such representations and warranties as of the applicable times
\ndoes not constitute a material adverse change in the business, financial
\ncondition, assets or liabilities of Buyer and its Subsidiaries, taken as a
\nwhole, when compared with the state of facts that would exist if all such
\nrepresentations and warranties were true in all respects as of the applicable
\ntimes, not giving effect to any inaccuracies resulting from any actions taken in
\naccordance with the provisions of this Agreement, any event that arose in the
\nordinary course of business, any changes in economic conditions that are
\napplicable to the cable industry generally on a national, state, regional or
\nlocal basis, any<\/p>\n
– 70 –<\/p>\n
changes in conditions (including Rate Regulatory Matters, and other federal,
\nstate or local governmental actions, legislation or regulations) that are
\napplicable to the cable industry generally on a national, state, regional or
\nlocal basis, or any changes in competitive activities.<\/p>\n
(b) Covenants. Buyer shall have performed and complied
\nwith in all material
\nrespects all covenants and agreements required by this Agreement to be performed
\nor complied with by it prior to or at the Closing.<\/p>\n
(c) Hart-Scott-Rodino. The requisite waiting period, if
\nany, under the HSR Act shall
\nhave expired or been terminated.<\/p>\n
(d) Judgment. There shall not be in effect on the date on
\n which the Closing is to
\noccur any judgment, decree, or order of a court of competent jurisdiction or
\nother prohibition having the force of law that would prevent or make unlawful
\nthe Closing, provided that FVP shall have used commercially reasonable efforts
\nto prevent the entry of any such judgment, decree, order or other legal
\nprohibition and to appeal as expeditiously as possible any such judgment,
\ndecree, order or other legal prohibition that may be entered and shall have
\notherwise taken commercially reasonable actions to cause any such judgment,
\ndecree, order or other legal prohibition to cease to be in effect as
\nexpeditiously as possible.<\/p>\n
(e) No Material Adverse Change. No event shall have
\noccurred between the date
\nof this Agreement and the date on which the Closing is to occur that has had a
\nmaterial adverse effect on the business, financial condition, assets or
\nliabilities of Buyer and its Subsidiaries, taken as a whole, other than an event
\nthat arose in the ordinary course of business, any changes in economic
\nconditions that are applicable to the cable industry generally on a national,
\nstate, regional or local basis, any changes in conditions (including Rate
\nRegulatory Matters, and other federal, state or local governmental actions,
\nlegislation or regulations) that are applicable to the cable industry generally
\non a national, state, regional or local basis, or any changes in competitive
\nactivities.<\/p>\n
(f) Stock Consideration. The shares of ACC Class A
\nCommon Stock to be paid and
\nissued to Sellers as the Stock Consideration (or, if applicable, all of the
\nsecurities of any other class or series constituting the Stock Consideration):
\n(1) shall have been duly authorized and validly issued, fully paid and
\nnonassessable, not subject to, or issued in violation of, any preemptive rights
\nand not issued in violation of any federal or state securities laws; (2) shall
\ncomply with the provisions of the Stock Consideration Registration Rights
\nAgreement; and (3) shall have the same rights and powers as all other shares of
\nACC Class A Common Stock (or, if any of the securities constituting the Stock
\nConsideration are not shares of ACC Class A Stock, as all other securities of
\nthe same class or series) issued and outstanding as of the date of this
\nAgreement.<\/p>\n
(g) Stock Consideration Registration Rights Agreement.
\nThe Stock Consideration
\nRegistration Rights Agreement shall be in full force and effect in accordance
\nwith its terms and Buyer shall have performed all of its obligations therein in
\naccordance with their terms. An appropriate<\/p>\n
– 71 –<\/p>\n
registration statement covering the registration of all of the Stock
\nConsideration Registrable Securities shall have been declared effective under
\nthe Securities Act in accordance with the provisions of the Stock Consideration
\nRegistration Rights Agreement (and such registration statement shall not be
\nsubject to any stop order or proceeding seeking a stop order). All of the Stock
\nConsideration Registrable Securities shall be listed on the NASDAQ National
\nMarket System, New York Stock Exchange or American Stock Exchange or other major
\nmarket system or exchange reasonably acceptable to Sellers.<\/p>\n
(h) Deliveries. Buyer shall have made or stand willing
\nto make all the deliveries
\ndescribed in Section .<\/p>\n
ARTICLE 8<\/p>\n
CLOSING AND CLOSING DELIVERIES<\/p>\n
8.1 Closing.<\/p>\n
(a) Closing Date.<\/p>\n
(1) Subject to satisfaction or, to the extent
\npermitted by law, waiver, of the
\nclosing conditions described in Article 7, and subject to Sections 8.1(a)(2),
\n8.1(a)(3) and 8.1(a)(4), the Closing shall take place on the tenth business day
\nafter FVP or Buyer provides written notice to the other party after satisfaction
\nor waiver of the conditions set forth in Sections 7.1(d), (e), (f) and (g) and
\nSection 7.2(c) (provided that without Buyer’s consent, the Closing Date shall
\nnot be earlier than the earlier of the date on which all Franchise Consents are
\nobtained and the date that is sixty days after the date on which the 120-Day
\nPeriod has expired for each Franchise in respect of which a Franchise Consent
\napplication was filed; provided, however, that the sixty day extension period
\nreferred to above shall be reduced by each day that the Franchise Consent
\napplication was filed after the forty-fifth day after the execution of this
\nAgreement (with respect to applications filed pursuant to Section 6.4(a)) or
\nfiled after the tenth day after the date it was determined that such application
\nwas required to be filed (with respect to applications filed pursuant to Section
\n6.4(b)) if such delay in filing was principally caused by Buyer)); and provided
\nfurther that without the consent of both FVP and Buyer the Closing Date shall
\nnot be earlier than the tenth business day after FVP or Buyer provides written
\nnotice to the other party that the Closing is permitted to take place in
\naccordance with the preceding provisions of this Section 8.1(a)(1)), or on such
\nearlier or later date as FVP and Buyer shall mutually agree. If such tenth
\nbusiness day (or any other date for the Closing agreed to by FVP and Buyer)
\nwould extend the date for the Closing beyond the Upset Date, the Upset Date
\nshall be extended to the day after such tenth business day or other date agreed
\nto for the Closing, as applicable.<\/p>\n
(2) If on the date on which the Closing would
\notherwise be required to take
\nplace pursuant to Section 8.1(a)(1), (A) there shall be in effect any judgment,
\ndecree, or order of a court of competent jurisdiction that would prevent or make
\nunlawful the Closing, or (B) any other circumstance beyond the reasonable
\ncontrol of FVP or Sellers or Buyer (but which shall not in any<\/p>\n
– 72 –<\/p>\n
event include any matters relating to financing of the transactions contemplated
\nhereby) shall exist that would prevent the Closing or the satisfaction of any of
\nthe conditions precedent to any party set forth in Article 7, then either FVP or
\nBuyer may, at its option, postpone the date on which the Closing is required to
\ntake place until the tenth business day after either party provides written
\nnotice to the other party, as soon as practicable after such conditions are
\nsatisfied, such judgment, decree, or order ceases to be in effect, or such other
\ncircumstance ceases to exist; provided, however, that a party’s postponement of
\nthe date on which the Closing is required to take place shall not restrict the
\nexercise by FVP or Buyer of its rights under Section 9.2 or 9.3, as applicable.<\/p>\n
(3) If on the date on which the Closing would
\notherwise be required to take
\nplace pursuant to Section 8.1(a)(1), the Credit Agreement Consent has not been
\nobtained, then Buyer may, at its option, postpone the date on which the Closing
\nis required to take place until such date, but in no event later than June 30,
\n1999, to be set by Buyer on at least ten business days’ written notice to FVP.<\/p>\n
(4) If on the date on which the Closing would
\notherwise be required to take
\nplace pursuant to the foregoing subsections of this Section 8.1(a), the
\nconditions set forth in Sections 7.2(f) or (g) have not been satisfied, then
\neither FVP or Buyer may, at its option (but it shall not be compelled to do so),
\npostpone the date on which the Closing is required to take place until such
\ndate, but in no event later than the Upset Date, to be set by either party on at
\nleast ten business days’ written notice to the other party, as soon as
\npracticable after such conditions are satisfied; provided, however, that a
\nparty’s postponement of the date on which the Closing is required to take place
\nshall not restrict the exercise by FVP or Buyer of its rights under Section 9.2
\nor 9.3, as applicable; and provided, further, that if such conditions set forth
\nin Sections 7.2(f) and (g) have not been satisfied in any event by the Upset
\nDate, Buyer shall be deemed to have willfully breached this Agreement with the
\nattendant consequences set forth in Sections 2.4 and 9.4; provided, further,
\nhowever, that Buyer may on the Upset Date, but only on the Upset Date, satisfy
\nthe conditions set forth in Sections 7.2(g) and (h) by being ready, able, and
\nwilling to deliver on the Upset Date, in lieu of the Stock Consideration
\nRegistrable Securities, additional cash consideration in an amount equal to the
\naggregate fair market value of the Stock Consideration Registrable Securities
\n(computed on the basis of the Weighted Average Trading Price of the ACC Class A
\nCommon Stock or other security constituting the Stock Consideration for the ten
\ntrading day period beginning on the thirteenth trading day prior to the Upset
\nDate.<\/p>\n
(b) Closing Place. The Closing shall be held at the
\noffices of Dow, Lohnes & Albertson, PLLC, 1200 New Hampshire Avenue, N.W., Suite 800, Washington, D.C.
\n20036, or any other place or time as FVP and Buyer shall mutually agree.<\/p>\n
8.2 Deliveries by Sellers.<\/p>\n
Prior to or at the Closing, Sellers shall deliver or cause to be
\ndelivered to Buyer the following:<\/p>\n
– 73 –<\/p>\n
(a) Purchased Interests. An assignment agreement
\nproviding for the assignment of
\nthe Purchased Interests to Buyer, in a form reasonably satisfactory to Buyer,
\ntogether with any notes or certificates representing the Purchased Interests,
\nduly endorsed for transfer.<\/p>\n
(b) Officer’s Certificate of FVP. A certificate executed
\nby FVP, dated as of the
\nClosing Date, certifying that the closing conditions specified in Sections
\n7.1(a) and (c) have been satisfied as to FVP, except as disclosed in said
\ncertificate.<\/p>\n
(c) Secretary’s Certificate. A certificate executed by
\nFVP, dated as of the Closing
\nDate, (1) certifying that the resolutions, as attached to said certificate, were
\nduly adopted by the Advisory Committee of FVP, authorizing and approving the
\nexecution by FVP of this Agreement and the other Transaction Documents to which
\nFVP is a party and the consummation of the transactions contemplated hereby and
\nthereby and that such resolutions remain in full force and effect; (2)
\ncertifying that the resolutions, as attached to said certificate, were duly
\nadopted by the Board of Directors of FrontierVision Inc., authorizing and
\napproving the execution by FVP and the General Partner of this Agreement and the
\nother Transaction Documents to which they are a party and the consummation of
\nthe transactions contemplated hereby and thereby and that such resolutions
\nremain in full force and effect; and (3) providing, as attachments thereto,
\nCertificates of Good Standing for FVP and each of the other FrontierVision
\nCompanies certified by an appropriate state official of the State of their
\norganization, all certified by such state officials as of a date not more than
\nfifteen days before the Closing Date.<\/p>\n
(d) Consents. Copies of Consents which have been
\nobtained by FVP or Sellers prior to the Closing.<\/p>\n
(e) Corporate, Financial, and Tax Records. All corporate
\nrecords (including minute
\nbooks and stock books and registers) and financial and tax records of each of
\nthe FrontierVision Companies that are not located at one of the offices or sites
\nincluded in the Real Property.<\/p>\n
(f) Post-Closing Escrow Agreement. The Post-Closing
\nEscrow Agreement, duly executed by each Seller and the Escrow Agent.<\/p>\n
(g) Noncompetition Agreement. The Noncompetition
\nAgreements, duly executed by each Person designated on Exhibit A.<\/p>\n
(h) Opinion of Counsel. An opinion of Dow, Lohnes & Albertson, PLLC, counsel to
\nFVP, dated as of the Closing Date, substantially in the form of Exhibit C
\nhereto.<\/p>\n
(i) Seller Releases. A Seller Release, duly executed by
\neach Seller.<\/p>\n
(j) Management Releases. A Management Release, duly
\nexecuted by each Person designated on Exhibit H.<\/p>\n
– 74 –<\/p>\n
8.3 Deliveries by Buyer.<\/p>\n
Prior to or at the Closing, Buyer shall deliver to Sellers the
\nfollowing:<\/p>\n
(a) Purchase Consideration.<\/p>\n
(1) An assumption agreement providing for the
\nassumption by Buyer of the
\nAssumed Liabilities, in a form reasonably satisfactory to Sellers.<\/p>\n
(2) The Closing Cash Payment as follows: (A)
\n$5,000,000 will be paid to the
\nEscrow Agent for deposit in the Post-Closing Adjustments Escrow pursuant to
\nSection 2.7; (B) any amount required to be deposited in the Post-Closing
\nAdjustments Escrow pursuant to Section 2.6 will be paid to the Escrow Agent; (C)
\nany amount required to be deposited in a Post-Closing Section 2.8 Escrow
\npursuant to Section 2.8 will be paid to the Escrow Agent; (D) any amount
\nrequired to be deposited in the Post-Closing Section 2.9 Escrow pursuant to
\nSection 2.9 will be paid to the Escrow Agent; and (E) the balance of the Closing
\nCash Payment will be paid by wire or accounts transfer of immediately available
\nfunds to one or more accounts designated by Sellers by written notice to Buyer
\nnot less than two days prior to the Closing.<\/p>\n
(3) The Stock Consideration as follows: (A)
\nstock certificates representing
\n1,000,000 shares of ACC Class A Common Stock in the aggregate will be issued and
\nregistered in the name of Seller or Sellers’ designees as directed by the
\nSellers by written notice to Buyer not less than two days prior to the Closing
\nand transferred to the Escrow Agent for deposit in the Post-Closing Indemnity
\nEscrow pursuant to Section 10.3, and (B) stock certificates representing the
\nportion of the Stock Consideration which is not transferred to the Escrow Agent
\nwill be issued and registered in the name of Seller or Sellers’ designees as
\ndirected by the Sellers by written notice to Buyer not less than two days prior
\nto the Closing and delivered to Sellers or Sellers’ designees; or, if Buyer
\ndelivers cash pursuant to Section 8.1(a)(4) in lieu of the Stock Consideration
\nRegistrable Securities, (A) an amount equal to the aggregate fair market value
\nof 1,000,000 shares of ACC Class A Common Stock (computed on the basis of the
\nWeighted Average Trading Price of the ACC Class A Common Stock for the ten
\ntrading day period beginning on the thirteenth trading day prior to the Closing
\nDate) will be transferred to the Escrow Agent for deposit in the Post-Closing
\nIndemnity Escrow pursuant to Section 10.3, and (B) the portion of the Stock
\nConsideration which is not transferred to the Escrow Agent will be paid by wire
\nor accounts transfer of immediately available funds to one or more accounts
\ndesignated by Sellers by written notice to Buyer not less than two days prior to
\nthe Closing.<\/p>\n
(b) Officer’s Certificate. A certificate executed by
\nBuyer, dated as of the Closing
\nDate, certifying that the closing conditions specified in Sections 7.2(a) and
\n(b) have been satisfied, except as disclosed in said certificate.<\/p>\n
– 75 –<\/p>\n
(c) Secretary’s Certificate. A certificate executed by
\nBuyer, dated as of the Closing
\nDate, (1) certifying that the resolutions, as attached to said certificate, were
\nduly adopted by the Board of Directors of Buyer, authorizing and approving the
\nexecution by Buyer of this Agreement and the other Transaction Documents to
\nwhich Buyer is a party and the consummation of the transactions contemplated
\nhereby and thereby and that such resolutions remain in full force and effect;
\nand (2) providing, as attachments thereto, a Certificate of Good Standing for
\nBuyer certified by an appropriate state official of the State of Delaware,
\ncertified by such state official as of a date not more than fifteen days before
\nthe Closing Date.<\/p>\n
(d) Post-Closing Escrow Agreement. The Post-Closing
\nEscrow Agreement, duly
\nexecuted by Buyer and the Escrow Agent.<\/p>\n
(e) Opinion of Counsel. Opinions of Buchanan Ingersoll
\nProfessional Corporation,
\ncounsel to Buyer, dated as of the Closing Date, substantially in the form of
\nExhibit D hereto.<\/p>\n
ARTICLE 9<\/p>\n
TERMINATION<\/p>\n
9.1 Termination by Agreement.<\/p>\n
This Agreement may be terminated at any time prior to the Closing by
\nagreement between FVP and Buyer.<\/p>\n
9.2 Termination by FVP.<\/p>\n
This Agreement may be terminated at any time prior to the Closing by
\nFVP and the purchase and sale of the Purchased Interests abandoned, upon written
\nnotice to Buyer, upon the occurrence of any of the following:<\/p>\n
(a) Conditions. If on any date determined for the
\nClosing in accordance with Section
\n8.1 if each condition set forth in Section 7.1 has been satisfied (or will be
\nsatisfied by the delivery of documents at the Closing) or waived in writing on
\nsuch date and either a condition set forth in Section 7.2 has not been satisfied
\n(or will not be satisfied by the delivery of documents at the Closing) or waived
\nin writing on such date or Buyer has nonetheless refused to consummate the
\nClosing. Notwithstanding the foregoing, FVP may not rely on the failure of any
\ncondition set forth in Section 7.2 to be satisfied if such failure was
\nprincipally caused by FVP’s or any Seller’s failure to act in good faith or a
\nbreach of or failure to perform any of its representations, warranties,
\ncovenants or other obligations in accordance with the terms of this Agreement.<\/p>\n
(b) Upset Date. If the Closing shall not have occurred
\non or prior to the Upset Date,
\nunless the failure of the Closing to occur was principally caused by FVP’s or
\nany Seller’s failure to act<\/p>\n
– 76 –<\/p>\n
in good faith or a breach of or failure to perform any of its representations,
\nwarranties, covenants or other obligations in accordance with the terms of this
\nAgreement; provided that (1) if on the Upset Date the Closing has not occurred
\nsolely because any notice period required by Section 8.1(a) has not lapsed, the
\nUpset Date shall be extended to a date that is one business day after the lapse
\nof such period; and (2) if FVP is required to file a Franchise Consent
\napplication pursuant to Section 6.4(b), then FVP may extend the Upset Date from
\ntime to time at its sole option by notice to Buyer to a date that is one
\nbusiness day after the later of (A) the date that is 210 days after the last
\nFranchise Consent application was filed pursuant to Section 6.4(b) and (B) 90
\ndays after the last affirmative denial by a Franchising Authority of a request
\nfor such Franchise Consent.<\/p>\n
9.3 Termination by Buyer.<\/p>\n
This Agreement may be terminated at any time prior to the Closing by
\nBuyer and the purchase and sale of the Purchased Interests abandoned, upon
\nwritten notice to FVP, upon the occurrence of any of the following:<\/p>\n
(a) Conditions. If on any date determined for the
\nClosing in accordance with Section
\n8.1 if each condition set forth in Section 7.2 has been satisfied (or will be
\nsatisfied by the delivery of documents at the Closing) or waived in writing on
\nsuch date and either a condition set forth in Section 7.1 has not been satisfied
\n(or will not be satisfied by the delivery of documents at the Closing) or waived
\nin writing on such date or Sellers have nonetheless refused to consummate the
\nClosing. Notwithstanding the foregoing, Buyer may not rely on the failure of any
\ncondition set forth in Section 7.1 to be satisfied if such failure was
\nprincipally caused by Buyer’s failure to act in good faith or a breach of or
\nfailure to perform any of its representations, warranties, covenants or other
\nobligations in accordance with the terms of this Agreement.<\/p>\n
(b) Upset Date. If the Closing shall not have occurred
\non or prior to the Upset Date,
\nunless the failure of the Closing to occur was principally caused by Buyer’s
\nfailure to act in good faith or a breach of or failure to perform any of its
\nrepresentations, warranties, covenants or other obligations in accordance with
\nthe terms of this Agreement or failure to satisfy the conditions set forth in
\nSections 7.2(f) or (g); provided that (1) if on the Upset Date the Closing has
\nnot occurred solely because any notice period required by Section 8.1(a) has not
\nlapsed, the Upset Date shall be extended to a date that is one business day
\nafter the lapse of such period; and (2) if FVP is required to file a Franchise
\nConsent application pursuant to Section 6.4(b), then FVP may extend the Upset
\nDate from time to time at its sole option by notice to Buyer to a date that is
\none business day after the later of (A) the date that is 210 days after the last
\nFranchise Consent application was filed pursuant to Section 6.4(b) and (B) 90
\ndays after the last affirmative denial by a Franchising Authority of a request
\nfor such Franchise Consent.<\/p>\n
9.4 Effect of Termination.<\/p>\n
– 77 –<\/p>\n
If this Agreement is terminated as provided in this Article 9, then
\nthis Agreement will forthwith become null and void and there will be no
\nliability on the part of any party to any other party or any other Person in
\nrespect thereof, provided that:<\/p>\n
(a) Surviving Obligations. The obligations of the
\nparties described in Sections 6.2,
\n9.4 and 11.1 (and all other provisions of this Agreement relating to expenses)
\nwill survive any such termination. In addition, if FVP is entitled to receive
\nthe Deposit Escrow Property in accordance with Section 2.4, all of Buyer’s
\nobligations with respect to the Deposit Escrow Property, including its
\nobligations under the Deposit Escrow Agreement and under the Deposit
\nRegistration Rights Agreement will survive any such termination.<\/p>\n
(b) Withdrawal of Applications. All filings,
\napplications and other submissions
\nrelating to the transfer of the Purchased Interests shall, to the extent
\npracticable, be withdrawn from the Governmental Authority or other Person to
\nwhom made.<\/p>\n
(c) Willful Breach by Buyer. No such termination will
\nrelieve Buyer from liability
\nfor a willful breach of this Agreement (which shall be deemed to include without
\nlimitation any failure by Buyer to satisfy the conditions set forth in Sections
\n7.2(f) or (g) by the date on which the Closing would otherwise be required to
\ntake place pursuant to Section 8.1, subject to the provisions of Section
\n8.1(a)(4), or in any event by the Upset Date), and in such event the Deposit
\nEscrow Property shall be released from escrow and delivered to FVP. Subject to
\nBuyer’s continuing obligations described in Section 9.4(a), the delivery of the
\nDeposit Escrow Property to Sellers in compliance with the provisions of Section
\n2.4 shall be liquidated damages and constitute full payment and the exclusive
\nremedy for any damages suffered by FVP and Sellers by reason of Buyer’s breach
\nof this Agreement prior to the Closing. If the Deposit Escrow Property is not
\ndelivered to Sellers in compliance with the provisions of Section 2.4, FVP and
\nSellers shall have all rights and remedies available at law or equity to enforce
\nthe provisions of Section 2.4.<\/p>\n
(d) Willful Breach by FVP or Sellers. No such
\ntermination will relieve FVP from
\nliability for its willful breach of this Agreement, and in such event Buyer
\nshall have all rights and remedies available at law or equity, including the
\nremedy of specific performance against FVP. No such termination will relieve any
\nSeller from liability for its willful breach of this Agreement, and in such
\nevent Buyer shall have all rights and remedies available at law or equity,
\nincluding the remedy of specific performance against such breaching Seller.<\/p>\n
(e) No Recourse. Anything in this Agreement or
\napplicable law to the contrary
\nnotwithstanding, in the event this Agreement is terminated as provided in this
\nArticle 9, Buyer will have no claim or recourse against any of FVP’s, the
\nGeneral Partner’s, or any Seller’s respective officers, directors, shareholders,
\npartners, employees, agents or Affiliates (excluding from “Affiliates” for this
\npurpose FVP, the General Partner and the other Sellers themselves) as a result
\nof the breach of any representation, warranty, covenant or agreement of FVP or
\nany Seller contained herein or otherwise arising out of or in connection with
\nthe transactions contemplated by this Agreement or the business<\/p>\n
– 78 –<\/p>\n
or operations of the FrontierVision Companies prior to the Closing, it being
\nunderstood that FVP shall have no liability for any breach by a Seller and no
\nSeller will have any liability for any breach by FVP or another Seller.<\/p>\n
9.5 Attorneys’ Fees.<\/p>\n
Notwithstanding any provision in this Agreement that may limit or
\nqualify a party’s remedies, in the event of a default by any party that results
\nin a lawsuit or other proceeding for any remedy available under this Agreement,
\nthe prevailing party shall be entitled to reimbursement from the defaulting
\nparty of its reasonable legal fees and expenses (whether incurred in
\narbitration, at trial, or on appeal).<\/p>\n
ARTICLE 10<\/p>\n
SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
\n INDEMNIFICATION; CERTAIN REMEDIES<\/p>\n
10.1 Survival.<\/p>\n
All representations, warranties and covenants set forth herein will
\nsurvive the Closing, provided that all claims made in respect of such
\nrepresentations, warranties and covenants will be subject to any applicable
\nlimitations set forth in this Article 10.<\/p>\n
10.2 Indemnification by Sellers.<\/p>\n
After the Closing, but subject to Section 10.5, each Seller hereby
\nagrees to indemnify and hold Buyer harmless against and with respect to, and
\nshall reimburse Buyer for:<\/p>\n
(a) any and all Losses resulting from any untrue
\nrepresentation or breach of warranty
\nby FVP or the nonfulfillment of any covenant to be performed by FVP prior to the
\nClosing contained in this Agreement or any other Transaction Document to which
\nFVP is a party;<\/p>\n
(b) any and all Losses resulting from any untrue
\nrepresentation or breach of warranty
\nby such Seller or the nonfulfillment of any covenant by such Seller contained in
\nthis Agreement or any other Transaction Document to which such Seller is a
\nparty; and<\/p>\n
(c) any rate refund liability imposed on any of the
\nFrontierVision Companies for any
\nperiod ending prior to the Adjustment Time by a final order or decision issued
\nby a Governmental Authority (but only to the extent of the out-of-pocket costs
\npayable in respect thereof and it being understood and agreed that any claim for
\nindemnification in respect of any rate refund liability may be made only
\npursuant to this Section 10.2(c) and not under any other provision of this
\nSection 10.2); provided, however, that Buyer may make a claim pursuant to this
\nSection 10.2(c) upon the issuance of<\/p>\n
– 79 –<\/p>\n
an initial adverse order or decision by a Governmental Authority with respect to
\none of the FrontierVision Companies for any period ending prior to the
\nAdjustment Time that could result in an obligation of the Sellers to indemnify
\nBuyer under this Section 10.2(c) in order to preserve its rights under this
\nArticle 10 pending appeal or other final resolution of such order or decision.<\/p>\n
(d) any and all Losses resulting from the matters
\ndisclosed in Sections 3.14 and 3.15
\nof FrontierVision’s Disclosure Schedule (other than matters relating to Rate
\nRegulatory Matters, including, without limitation, the matters disclosed in
\nitems 1 and 2 of said Section 3.15) and the tax audits disclosed in Section 3.12
\nof FrontierVision’s Disclosure Schedule.<\/p>\n
(e) any and all Losses resulting from any pole attachment
\nfees payable with respect to the operation by the FrontierVision Companies of
\nthe Systems for any period ending prior to the Adjustment Time.<\/p>\n
(f) any and all Losses resulting from the matter
\ndisclosed in Item A.4 of Section 3.6 of FrontierVision’s Disclosure Schedule
\nrelating to a dispute between the FrontierVision Companies and CSG.<\/p>\n
(g) any and all Losses resulting from amounts that are
\npayable by the FrontierVision
\nCompanies to the other parties under the purchase and sale agreements referred
\nto in Section 3.11(i).<\/p>\n
10.3 Post-Closing Escrow Agreement.<\/p>\n
FVP and Buyer have agreed on and delivered to the Escrow Agent a form
\nof Post-Closing Escrow Agreement in the form of Exhibit B hereto. Following the
\nexecution of this Agreement FVP and Buyer will cooperate in good faith with the
\nEscrow Agent (or another Person who FVP and Buyer mutually select to serve as
\nthe escrow agent thereunder) to agree with the Escrow Agent (or such other
\nPerson) on the final form of the Post-Closing Escrow Agreement including such
\nchanges to the form attached as Exhibit B as are requested or recommended by the
\nEscrow Agent and are mutually acceptable to FVP and Buyer (such acceptance not
\nto be unreasonably withheld by FVP and Buyer). FVP and Buyer agree to take such
\nadditional actions and enter into appropriate amendments to the Transaction
\nDocuments as may reasonably be necessary to reflect the final form of
\nPost-Closing Escrow Agreement. Subject to the foregoing, at the Closing, Buyer,
\nSellers and the Escrow Agent shall execute the Post-Closing Escrow Agreement, in
\naccordance with which, on the Closing Date, in addition to the deposit
\ncontemplated by Section 2.7 and in addition to any deposit required by Sections
\n2.6, 2.8 or 2.9, Buyer will deposit 1,000,000 shares of ACC Class A Common Stock
\nwith the Escrow Agent on behalf of Sellers in order to provide a fund for, and
\nthe exclusive source for, the payment of any indemnification to which Buyer is
\nentitled under this Article 10 (such escrow, the “Post-Closing Indemnity
\nEscrow”). The Post-Closing Indemnity Escrow will be administered, and the
\nPost-Closing Indemnity Property (as defined below) will be held and disbursed,
\nin accordance with the provisions of this Article 10 and the Post-Closing Escrow
\nAgreement. The “Post-Closing Indemnity Property” means, collectively, the
\n1,000,000 shares of ACC Class A Common Stock deposited with the Escrow<\/p>\n
– 80 –<\/p>\n
Agent pursuant to this Section 10.3, together with the kind and amounts of
\nsecurities, cash and other property that Sellers would have held or been
\nentitled to receive as of the date the Post-Closing Indemnity Property is
\nreleased in accordance with this Agreement (whether resulting from a stock
\nsplit, subdivision, combination or reclassification of the outstanding capital
\nstock of Buyer, or in redemption thereof, or as a result of any merger,
\nconsolidation, acquisition or other exchange of assets to which Buyer may be a
\nparty or otherwise) had Sellers held such shares of ACC Class A Common Stock as
\nof the Closing Date and retained such shares, and all securities, cash and other
\nproperty distributed or issued with respect to or in substitution or exchange
\ntherefor, during the period from the Closing Date through (and including) the
\ndate the Post-Closing Indemnity Property is released. Subject to the terms and
\nconditions contained in the Post-Closing Escrow Agreement and the Stock
\nConsideration Registration Rights Agreement, the Sellers will have the right to
\ncause the shares of ACC Class A Common Stock or other securities constituting
\nthe Post-Closing Indemnity Property to be sold and converted to cash from time
\nto time. If Buyer delivers cash pursuant to Section 8.1(a)(4) in lieu of the
\nStock Consideration Registrable Securities, Buyer will deposit cash in the
\namount determined pursuant to the second part of Section 8.3(a)(3) in the
\nPost-Closing Indemnity Escrow and the term “Post-Closing Indemnity Property”
\nshall mean such deposit plus any earnings thereon.<\/p>\n
10.4 Indemnification by Buyer.<\/p>\n
After the Closing, but subject to Section 10.5, Buyer hereby agrees to
\nindemnify and hold Sellers harmless against and with respect to, and shall
\nreimburse Sellers for:<\/p>\n
(a) any and all Losses resulting from any untrue
\nrepresentation, breach of warranty, or nonfulfillment of any covenant by Buyer
\ncontained in this Agreement or any other Transaction Document to which Buyer is
\na party;<\/p>\n
(b) any and all Losses resulting from any liability or
\nobligation of the FrontierVision Companies arising from or related to any event
\noccurring after the Closing Date, and any Assumed Liabilities and any liability
\nor obligation that was reflected as an Adjustment Liability in computing Closing
\nNet Liabilities under Article 2;<\/p>\n
(c) any and all Losses arising as a result of the
\noccurrence of the Closing without the receipt of any Consent (including any
\nConsent under a Franchise, but excluding any Consent that was not either
\ndisclosed in FrontierVision’s Disclosure Schedule or determined to require
\nConsent pursuant to Section 6.4(b) or requested prior to the Closing), waiver of
\na Franchising Authority’s right of first refusal under a Franchise, or renewal
\nof any Franchise; and<\/p>\n
(d) any and all Losses resulting from the use of the
\n“FrontierVision” name or any variant thereof by Buyer and\/or its Affiliates
\nand\/or the FrontierVision Companies from and after the Closing.<\/p>\n
– 81 –<\/p>\n
10.5 Certain Limitations on Indemnification Obligations.<\/p>\n
Notwithstanding anything in this Agreement to the contrary:<\/p>\n
(a) No Seller will be required to indemnify or otherwise
\nbe liable to Buyer for any matter described in Section 10.2 unless and until the
\naggregate amount of all Losses of Buyer arising therefrom for which Sellers
\nwould have indemnification liability to Buyer but for this Section 10.5(a),
\nexceeds $1,000,000, in which event Sellers will be liable for all such Losses;
\nprovided, however, that this Section 10.5(a) shall not apply to any amount
\npayable to Buyer pursuant to Section 2.7 or Section 2.9 or Section 10.2(c) (but
\nonly in respect of a claim that Buyer could have made under Section 10.2(c)
\nimmediately after the Closing) or Section 10.2(d) or Section 10.2(e) (but only
\nin respect of a claim that Buyer could have made under Section 10.2(e)
\nimmediately after the Closing) or Section 10.2(f) or Section 10.2(g), but no
\namounts paid to Buyer pursuant to the sections referred to in this proviso (as
\nlimited in this proviso) shall be treated as Losses for purposes of determining
\nwhen Buyer’s Losses exceed $1,000,000.<\/p>\n
(b) No Seller will be required to indemnify or otherwise
\nbe liable to Buyer with respect to any Losses arising under Section 10.2 unless
\nBuyer gives Sellers written notice of a claim pursuant to Section 10.2 on or
\nprior to the date that is eighteen months after the Closing Date; provided that,
\nthe Post-Closing Indemnity Property shall be released to Sellers as follows:<\/p>\n
(1) On the first business day following the date
\nthat is six months after the Closing Date (the “Initial Release Date”):<\/p>\n
(A) if on the Initial Release Date the
\nPost-Closing Indemnity Property consists solely of shares of ACC Class A Common
\nStock or other Stock Consideration Registrable Securities, then the number of
\nshares of ACC Class A Common Stock or other Stock Consideration Registrable
\nSecurities equal to one-half of the total number of such shares deposited into
\nthe Post- Closing Indemnity Escrow on the Closing Date, less the total number of
\nshares that were previously paid out to Buyer in respect of claim(s) made by
\nBuyer pursuant to this Article 10 or Article 2, and less the number of shares
\nthe fair market value of which equals the aggregate dollar value of all bona
\nfide claims made by Buyer pursuant to this Article 10 or Article 2 that remain
\noutstanding on the Initial Release Date, shall be released from escrow and paid
\nover to Sellers (the number of shares to be appropriately adjusted to give
\neffect to any stock split, combination or similar event);<\/p>\n
(B) if on the Initial Release Date the
\nPost-Closing Indemnity Property consists solely of cash funds, then an amount in
\ncash equal to one-half of the total amount of cash funds that would have been in
\nthe Post-Closing Indemnity Escrow on the Initial Release Date if no payments had
\nbeen made to Buyer out of the Post-Closing Indemnity Escrow during such period,
\nless the dollar value of all payments (whether in the form of shares or cash)
\nthat were previously paid out to Buyer in respect of claim(s) made by Buyer
\npursuant to this Article 10 or Article 2, and less the aggregate dollar<\/p>\n
– 82 –<\/p>\n
value of all bona fide claims made by Buyer pursuant to this Article 10 or
\nArticle 2 that remain outstanding on the Initial Release Date, shall be released
\nfrom escrow and paid over to Sellers;<\/p>\n
(C) if on the Initial Release Date the
\nPost-Closing Indemnity Property consists partly of shares of ACC Class A Common
\nStock or other Stock Consideration Registrable Securities and partly of cash
\nfunds, then the number of shares of ACC Class A Common Stock or other Stock
\nConsideration Registrable Securities equal to one-half the total number of such
\nshares that would have been in the Post-Closing Indemnity Escrow on the Initial
\nRelease Date if no payments in the form of such shares had been made to Buyer
\nout of the Post-Closing Indemnity Escrow during such period, less the total
\nnumber of shares that were paid out to Buyer in respect of claim(s) made by
\nBuyer pursuant to this Article 10 or Article 2, and less the number of shares
\nthe fair market value of which equals the aggregate dollar value of all bona
\nfide claims made by Buyer pursuant to this Article 10 or Article 2 that remain
\noutstanding on the Initial Release Date (except to the extent an amount in cash
\nhas been reserved for any portion of such outstanding claims), shall be released
\nfrom escrow and paid over to Sellers (the number of shares to be appropriately
\nadjusted to give effect to any stock split, combination or similar event), and
\nan amount in cash equal to one-half of the total amount of cash funds that would
\nhave been in the Post-Closing Indemnity Escrow on the Initial Release Date if no
\npayments in the form of cash had been made to Buyer out of the Post-Closing
\nIndemnity Escrow during such period, less the dollar value of all payments that
\nwere previously paid out in the form of cash to Buyer in respect of claim(s)
\nmade by Buyer pursuant to this Article 10 or Article 2, and less the aggregate
\ndollar value of all bona fide claims made by Buyer pursuant to this Article 10
\nor Article 2 that remain outstanding on the Initial Release Date (except to the
\nextent a number of shares has been reserved for any portion of such outstanding
\nclaims), shall be released from escrow and paid over to Sellers; and<\/p>\n
(2) on the first business day following the date
\nthat is eighteen months after the Closing Date (the “Second Release Date”) all
\nremaining Post-Closing Indemnity Property, less a number of shares of ACC Class
\nA Common Stock or other Stock Consideration Registrable Securities or an amount
\nin cash or a combination thereof as directed by the General Partner the
\naggregate dollar value of which is equal to the aggregate dollar amount of any
\nbona fide claims made by Buyer that remain outstanding on the Second Release
\nDate, shall be released from escrow and paid over to Sellers.<\/p>\n
Attached hereto as Exhibit I for illustrative purposes only is an example of how
\nthe preceding provisions are intended to work. Thereafter, any remaining
\nPost-Closing Indemnity Property shall be released from escrow and paid over to
\nSellers or Buyer in accordance with this Agreement and the Post- Closing Escrow
\nAgreement. To the extent any payment is made to Buyer out of the Post-Closing
\nIndemnity Property pursuant to Sections 2.7, 2.8 or 2.9 or this Article 10, and
\nthe Post-Closing Indemnity Property consists of both Stock Consideration
\nRegistrable Securities and cash, the General Partner shall designate which
\nportion of the payment shall be made in the form of shares (based on its fair
\nmarket value on the date of payment as computed as provided in Section 10.5(c))
\nor cash or combination of both. On the business day that it is determined in
\naccordance with this Section 10.5(b) and this Article 10 that Buyer and\/or
\nSellers are entitled to all or any portion of the Post-Closing Indemnity
\nProperty, the General Partner and Buyer will execute and deliver to the Escrow
\nAgent joint<\/p>\n
– 83 –<\/p>\n
written instructions containing appropriate disbursement instructions consistent
\nwith this Section 10.5(b) and this Article 10 and the Post-Closing Escrow
\nAgreement.<\/p>\n
(c) All payments required to be made by Sellers or any
\nSeller in respect of their indemnification obligations under this Article 10
\nshall be made solely from the Post-Closing Indemnity Property. For purposes of
\nthis Article 10 and the Post-Closing Escrow Agreement, the fair market value of
\na share of ACC Class A Common Stock or other Stock Consideration Registrable
\nSecurity on any day shall be computed by reference to the Weighted Average
\nTrading Price of such stock or other security for the ten trading day period
\nbeginning on the thirteenth trading day prior to the date of determination.<\/p>\n
(d) Anything in this Agreement or applicable law to the
\ncontrary notwithstanding, other than with respect to the Post-Closing Indemnity
\nProperty as provided for and limited in this Article 10 (and other than with
\nrespect to the Post-Closing Adjustment Funds as provided for and limited in
\nSection 2.7, the Post-Closing Section 2.8 Funds as provided for and limited in
\nSection 2.8, and the Post-Closing Section 2.9 Funds as provided for and limited
\nin Section 2.9) after the Closing no Seller (or any officer, director,
\nshareholder, partner, employee, agent or Affiliate of such Seller) shall have
\nany obligation or liability to Buyer under Article 10, and Buyer will have no
\nclaim or recourse against any Seller (or any officer, director, shareholder,
\npartner, employee, agent or Affiliate of such Seller) as a result of the breach
\nof any representation, warranty, covenant or agreement of FVP or any Seller
\ncontained herein or otherwise arising out of or in connection with the
\ntransactions contemplated by this Agreement or the business or operations of the
\nFrontierVision Companies, other than claims relating to the Noncompetition
\nAgreements or the Deposit Registration Rights Agreement or the Stock
\nConsideration Registration Rights Agreement (which shall each be governed by its
\nrespective terms); and the Post-Closing Indemnity Property, the Post-Closing
\nAdjustment Funds, the Post-Closing Section 2.8 Funds and the Post-Closing
\nSection 2.9 Funds (in each case as provided for and limited by the provisions of
\nthis Agreement) shall be the sole and exclusive remedy for any such claim by
\nBuyer for any such matters, whether such claims are framed in contract, tort or
\notherwise.<\/p>\n
(e) The amount payable to the Claimant by the
\nIndemnifying Party in respect of a Loss shall be computed net of any insurance
\ncoverage with respect thereto that reduces the amount of such Loss that would
\notherwise be sustained, and Buyer and each Seller agree to use commercially
\nreasonable efforts to collect any and all insurance proceeds to which it may be
\nentitled in respect of any Loss.<\/p>\n
(f) Sellers will not be liable with respect to any Loss
\nto the extent that the amount of such Loss was included as an Adjustment
\nLiability in the computation of Closing Net Liabilities in accordance with
\nArticle 2.<\/p>\n
(g) Notwithstanding anything in this Agreement to the
\ncontrary, no Seller shall have any liability or obligation (for indemnification
\nor otherwise) arising as a result of the occurrence of the<\/p>\n
– 84 –<\/p>\n
Closing without certain Consents or Buyer’s waiver of any closing condition, nor
\nshall any adjustment be made to the Cash Consideration in respect of the
\nforegoing.<\/p>\n
(h) Buyer will not be required to indemnify or otherwise
\nbe liable to any Seller with respect to any Losses arising under Section 10.4(a)
\nwith respect to an untrue representation or breach of warranty set forth in
\nSection 5.6 unless Sellers give Buyer written notice of such a claim on or prior
\nto the date that is thirty days after the expiration of the statute of
\nlimitations with respect to such claim.<\/p>\n
(i) Buyer will not be required to indemnify or otherwise
\nby liable to any Seller with respect to Losses arising under Section 10.4(d) to
\nthe extent such Losses result from the matter disclosed in Section 3.10(B) of
\nFrontierVision’s Disclosure Schedule.<\/p>\n
10.6 Procedure for Indemnification.<\/p>\n
The procedure for indemnification shall be as follows:<\/p>\n
(a) The party claiming indemnification (the “Claimant”)
\nshall promptly give notice to the party from which indemnification is claimed
\n(the “Indemnifying Party”) of any claim, whether between the parties or brought
\nby a third party, specifying in reasonable detail the factual basis for the
\nclaim and the amount thereof (if known and quantifiable).<\/p>\n
(b) With respect to claims solely between the parties,
\nfollowing receipt of notice from the Claimant of a claim, the Indemnifying Party
\nshall have thirty days to make such investigation of the claim as the
\nIndemnifying Party deems necessary or desirable. For the purposes of such
\ninvestigation, the Claimant agrees to make available to the Indemnifying Party
\nand its authorized representatives the information relied upon by the Claimant
\nto substantiate the claim. If the Claimant and the Indemnifying Party agree at
\nor prior to the expiration of the thirty-day period (or any mutually agreed upon
\nextension thereof) to the validity and amount of such claim, the Indemnifying
\nParty shall immediately pay to the Claimant the full amount of the claim. If the
\nClaimant and the Indemnifying Party do not agree within the thirty-day period
\n(or any mutually agreed upon extension thereof), the Claimant may seek
\nappropriate remedy at law or equity.<\/p>\n
(c) With respect to any claim by a third party as to
\nwhich the Claimant is entitled to indemnification under this Agreement, the
\nIndemnifying Party shall have the right at its own expense, to participate in or
\nassume control of the defense of such claim, and the Claimant shall cooperate
\nfully with the Indemnifying Party, subject to reimbursement for actual
\nout-of-pocket expenses incurred by the Claimant as the result of a request by
\nthe Indemnifying Party. If the Indemnifying Party elects to assume control of
\nthe defense of any third-party claim, the Claimant shall have the right to
\nparticipate in the defense of such claim at its own expense. If the Indemnifying
\nParty does not elect to participate in or assume control of the defense of any
\nthird-party claim, the Claimant will not enter into any settlement of such claim
\nwhich could result in indemnification liability unless the Claimant gives the
\nIndemnifying Party prior written notice of such settlement. If the Indemnifying
\nParty does not<\/p>\n
– 85 –<\/p>\n
thereupon elect to assume the defense of such claim within five business days
\nafter such notice is given, then the Claimant may enter into such settlement and
\nsuch settlement will be binding upon Buyer and Sellers for purposes of
\ndetermining whether any indemnification payment is required pursuant to this
\nArticle 10.<\/p>\n
10.7 Treatment of Indemnification Payments.<\/p>\n
Buyer and Sellers will treat all payments made pursuant to this Article
\n10 (including all payments made to Buyer out of the Post-Closing Indemnity
\nProperty but excluding the release of any Post-Closing Indemnity Property to
\nSellers) as an adjustment to the Purchase Consideration for all purposes.<\/p>\n
ARTICLE 11<\/p>\n
MISCELLANEOUS<\/p>\n
11.1 Fees and Expenses.<\/p>\n
Except as otherwise provided in this Agreement, each party shall pay
\nits own expenses incurred in connection with the authorization, preparation,
\nexecution, and performance of this Agreement, including all fees and expenses of
\ncounsel, accountants, agents, and representatives. Buyer and Sellers agree that
\nthe brokerage fee payable to Daniels & Associates shall be paid by Buyer in the
\nevent the Closing occurs hereunder. Buyer and Sellers agree that the fees and
\nexpenses incurred in connection with the lien searches described in Section
\n7.1(j) shall be borne one-half by Buyer and one-half by Sellers.<\/p>\n
11.2 Notices.<\/p>\n
All notices, demands, and requests required or permitted to be given
\nunder the provisions of this Agreement shall be in writing, may be sent by
\ntelecopy (with automatic machine confirmation), delivered by personal delivery,
\nor sent by commercial delivery service or certified mail, return receipt
\nrequested, shall be deemed to have been given on the date of actual receipt,
\nwhich may be conclusively evidenced by the date set forth in the records of any
\ncommercial delivery service or on the return receipt, and shall be addressed to
\nthe recipient at the address specified below, or with respect to any party, to
\nany other address that such party may from time to time designate in a writing
\ndelivered in accordance with this Section 11.2:<\/p>\n
– 86 –<\/p>\n
If to Buyer:
\nAdelphia Communications Corporation
\nMain at Water Street
\nCoudersport, Pennsylvania 16915
\nAttention: James M. Kane,
\n Vice President Corporate Development
\nTelecopier: (814) 274-7098
\n with copies (which shall not
\n constitute notice) to:
\nBuchanan Ingersoll Professional Corporation
\nOne Oxford Centre, 21st Floor
\nPittsburgh, Pennsylvania 15219
\nAttention: Bruce I. Booken, Esq.
\nTelecopier: (412) 562-1041
\n If to FVP (prior to the Closing) or the General Partner (after the
\n Closing):
\nFrontierVision Partners, L.P.
\n1777 South Harrison Street
\nSuite P-200
\nDenver, Colorado 80210-3925
\nAttention: James C. Vaughn, President
\nTelecopier: (303) 757-6105
\n with a copy (which shall not
\n constitute notice) to:<\/p>\n
If to a Seller:<\/p>\n
Dow, Lohnes & Albertson, PLLC 1200 New Hampshire Avenue, N.W.
\nSuite 800
\nWashington, D.C. 20036
\nAttention: John T. Byrnes, Esq. and
\n J. Christopher Redding, Esq.
\nTelecopier: (202) 776-2222<\/p>\n
At the address specified for such Seller
\non the attached Exhibit E<\/p>\n
11.3 Benefit and Binding Effect.<\/p>\n
This Agreement shall be binding upon and inure to the benefit of the
\nparties hereto and their respective successors and permitted assigns; provided
\nthat (a) neither this Agreement nor any of the rights, interests or obligations
\nhereunder may be assigned by FVP or a Seller without the prior written consent
\nof Buyer (which consent shall not be unreasonably withheld or delayed), and (b)
\nneither this Agreement nor any of the rights, interests or obligations hereunder
\nmay be assigned by Buyer without the prior written consent of FVP (prior to the
\nClosing) or the General Partner (after the Closing) (which consent shall not be
\nunreasonably withheld or delayed). Notwithstanding the provisions of the
\nimmediately preceding sentence, Buyer may assign all or any portion of its
\nrights (but not its obligations) under this Agreement to one or more
\nSubsidiaries or Affiliates of Buyer, without the prior<\/p>\n
– 87 –<\/p>\n
written consent of FVP or the General Partner; provided that (1) such assignee
\nexecutes documentation reasonably satisfactory to Sellers evidencing such
\nassignment, and (2) Buyer remains liable to perform the obligations in full to
\nbe performed by Buyer hereunder, and (3) no such assignment would be reasonably
\nlikely to hinder or delay the Closing as reasonably determined by Sellers.
\nConsent shall be deemed to be reasonably withheld if the consenting party
\nreasonably determines that the assignment would be reasonably likely to hinder
\nor delay the Closing. In the event of a permitted assignment by Buyer, Buyer, as
\nwell as such assignee, shall remain liable hereunder for all purposes and the
\nrepresentations, warranties and covenants made by Buyer shall apply equally to
\nthe assignee (modified as appropriate for the organization of the assignee). In
\nno event may Buyer assign its obligations with respect to the Stock
\nConsideration or Deposit Escrow Property without FVP’s consent (prior to
\nClosing) or the General Partner’s consent (after the Closing), which may be
\nwithheld in its sole and absolute discretion. This Agreement is not intended to
\nconfer upon any Person other than the parties hereto any rights or remedies
\nhereunder, except the provisions of Section 6.9 are intended for the benefit of,
\nand may be relied upon by, the Assumed Employees, and the provisions of Section
\n6.13 are intended for the benefit of, and may be relied upon by, the officers
\nand directors of the FrontierVision Companies and the members of FVP’s Advisory
\nCommittee.<\/p>\n
11.4 Further Assurances .<\/p>\n
After the Closing the parties shall take any actions and execute any
\nother documents that may be necessary or desirable to the implementation and
\nconsummation of this Agreement upon the reasonable request of the other party,
\nat the expense of the requesting party.<\/p>\n
11.5 GOVERNING LAW.<\/p>\n
THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED, AND ENFORCED IN
\nACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO
\nTHE CHOICE OF LAW PROVISIONS THEREOF).<\/p>\n
11.6 Entire Agreement.<\/p>\n
This Agreement, the Disclosure Schedules and the Exhibits hereto, and
\nthe other Transaction Documents to be delivered by the parties pursuant to this
\nAgreement, collectively represent the entire understanding and agreement between
\nBuyer, FVP, and Sellers with respect to the subject matter of this Agreement and
\nsupersedes all prior agreements, understandings and negotiations between the
\nparties. Buyer acknowledges that none of FVP or any other FrontierVision Company
\nor any Seller has made any, or makes any, promises, representations, warranties,
\ncovenants or undertakings, express or implied, other than those expressly set
\nforth in this Agreement. Notwithstanding the first sentence of this Section
\n11.6, this Agreement does not impair or otherwise affect the validity of (1) any
\nconsent whenever granted by any Seller with respect to the execution, delivery,
\nand performance of this Agreement or any other document or instrument relating
\nto the subject matter of this Agreement or (2) any power of attorney whenever
\ngranted by any Seller authorizing any Person to execute and deliver<\/p>\n
– 88 –<\/p>\n
on behalf of such Seller this Agreement or any other document or instrument
\nrelating to the subject matter of this Agreement.<\/p>\n
11.7 Amendments; Waiver of Compliance; Consents.<\/p>\n
This Agreement may be amended and any provision of this Agreement may
\nbe waived; provided that any such amendment or waiver (a) will be binding upon
\nFVP prior to the Closing only if such amendment or waiver is set forth in a
\nwriting executed by FVP, (b) will be binding upon a Seller prior to the Closing
\nonly if such amendment or waiver is set forth in a writing executed by FVP and
\nhas been approved by 75% of the voting members of FVP’s Advisory Committee (with
\na certificate delivered by FVP stating that such required approval has been
\nobtained being conclusive evidence thereof), and (c) will be binding upon a
\nSeller after the Closing only if such amendment or waiver is set forth in a
\nwriting executed by the General Partner and has been approved by 75% of the
\nvoting members of FVP’s Advisory Committee (as constituted immediately prior to
\nthe Closing) (with a certificate delivered by the General Partner stating that
\nsuch required approval has been obtained being conclusive evidence thereof), and
\n(d) will be binding upon Buyer only if such amendment or waiver is set forth in
\na writing executed by Buyer. No waiver shall operate as a waiver of, or estoppel
\nwith respect to, any subsequent or other matter not expressly waived.<\/p>\n
11.8 Consent and Agreements of Sellers.<\/p>\n
(a) Pursuant to a separate agreement each Seller has
\nappointed FVP and the General
\nPartner, each with power to act separately (for all periods prior to the
\nClosing) and the General Partner (for all periods from and after the Closing) as
\nthe true and lawful attorney-in-fact and agent of each Seller (in such capacity,
\nFVP and the General Partner are referred to as the “Agent”), to act for each
\nSeller in Seller’s name, place and stead with respect to this Agreement and the
\nother Transaction Documents and all of the transactions contemplated hereby and
\nthereby. Buyer shall be entitled to rely exclusively upon any communication
\ngiven by Agent and shall not be liable in any manner whatsoever for any action
\ntaken or not taken in reliance upon Agent. Any payments made, at Agent’s request
\nand instruction, by Buyer to Agent pursuant to the terms of this Agreement and
\nthe other Transaction Documents shall fully discharge Buyer for any liability to
\nany Seller in connection with such payment, as fully and completely as if such
\npayment had been made directly to such Seller. Buyer hereby agrees to accept and
\nrely on the actions of Agent as if it were the action of a Seller or Sellers.<\/p>\n
(b) Each Seller consents to the execution, delivery and
\nperformance of this
\nAgreement by FVP, the General Partner and each other Seller and to the taking by
\nFVP, each FrontierVision Company, the General Partner and each other Seller of
\nall actions contemplated by this Agreement to be taken by such Person. Subject
\nto the terms and conditions of this Agreement, each Seller agrees to consummate
\nthe transactions contemplated by this Agreement in accordance with its terms, as
\nit may be amended pursuant to Section 11.7.<\/p>\n
– 89 –<\/p>\n
11.9 Counterparts.<\/p>\n
This Agreement may be signed in counterparts with the same effect as if
\nthe signature on each counterpart were upon the same instrument.<\/p>\n
[REMAINDER OF PAGE INTENTIONALLY BLANK;
\n SIGNATURES ON FOLLOWING PAGES]<\/p>\n
– 90 –<\/p>\n
IN WITNESS WHEREOF, this Agreement has been executed by Buyer, FVP, the
\nGeneral Partner and the other Sellers as of the date first written above.<\/p>\n
BUYER:<\/p>\n
ADELPHIA COMMUNICATIONS CORPORATION<\/p>\n
By: \/s\/ Timothy J. Rigas
\n Name: Timothy J. Rigas
\n Title: Executive Vice President<\/p>\n
FVP:<\/p>\n
FRONTIERVISION PARTNERS, L.P., by FVP GP, L.P., its general partner, by
\nFrontierVision Inc., its general partner<\/p>\n
By: \/s\/ James C. Vaughn
\n James C. Vaughn, President<\/p>\n
GENERAL PARTNER:<\/p>\n
FVP GP, L.P., by FrontierVision Inc., its general
\npartner<\/p>\n
By: \/s\/ James C. Vaughn
\n James C. Vaughn, President<\/p>\n
[THIS IS A SIGNATURE PAGE
\n TO THE PURCHASE AGREEMENT]<\/p>\n
S-1<\/p>\n
LIMITED PARTNER SELLERS:<\/p>\n
JP Morgan Investment Corporation
\n60 Wall Street SBIC Fund, L.P.
\nFirst Union Capital Partners, Inc.
\nTahosa Investors
\nKensington Investment Associates
\nPegasus Partners
\nProsperity Associates
\nSBF Investments Ltd.
\nL. Phillips Runyon III
\nRoth Trading Company
\nWashington Partners
\nDuff Ackerman Goodrich – FrontierVision, L.P.
\nEOS Partners SBIC, L.P.
\nRichard King Mellon Foundation
\nArthur Miltenberger (Mellon Family Investment Co.,
\nIV)
\nJ. Cashew Corporation
\nBertelson Family Trust
\nJohn C. Unkovic
\nRoger S. Ahlbrandt
\nDr. Anne McBride Curtis
\nBruce D. Evans
\nFrances C. Hardie
\nHardie Brothers
\nJames H. Hardie
\nJohn D. Margolis Trust
\nGrover Sams
\nAugustus O. Schroeder
\nJustin J. Stevenson III
\nJohn W. Weiser
\nMallard Investments Limited Partnership
\nOlympus Executive Fund, L.P.
\nLeslie Abbey
\nJonathan Abbey
\nMichael Rothbard
\nJames C. Vaughn
\nJohn S. Koo
\nWilliam P. Brovsky<\/p>\n
[THIS IS A SIGNATURE PAGE
\n TO THE PURCHASE AGREEMENT]<\/p>\n
S-2<\/p>\n
William J. Mahon
\nJames W. McHose
\nAlbert D. Fosbenner
\nRichard G. Halle’
\nJoyce L. Vermace
\nRobert J. Valentine
\nIan R. Dennett
\nDavid M. Heyrend
\nTodd E. Padgett
\nGalan F. Fernandes
\nDaniel P. Callahan
\nR. Bruce Ellis
\nDavid C. Apel
\nKristine M. Rogers
\nDebra L. Graham
\nBrian L. Seifarth
\nKeith A. Tyrrell
\nJerry R. Wert
\nBrian P. Hart
\nRobert D. Gordon
\nJudith B. Pierce
\nStephen R. Trippe
\nKeith R. Froleiks
\nGary Crosby
\nKathleen B. Hounsell
\nJames B. Underwood
\nJill Farschman
\nCraig A. Waskou
\nLisa L. Powers
\nDebbie J. Dougherty
\nRobert A. Dallmer
\nBonnie J. Bosekrus<\/p>\n
By FrontierVision Partners, L.P., Agent and Attorney- in-Fact for each Limited
\nPartner Seller, by FVP GP, L.P., its general partner, by FrontierVision Inc.,
\nits general partner<\/p>\n
By: \/s\/ James C. Vaughn
\n James C. Vaughn, President<\/p>\n
[THIS IS A SIGNATURE PAGE
\n TO THE PURCHASE AGREEMENT]<\/p>\n
S-3<\/p>\n
SPC SELLERS:<\/p>\n
1818 Fund II, L.P.
\nOlympus Growth Fund II, L.P.
\nCarson Group Inc.
\nSendal Investment Limited
\nMonte Coral, S.L.
\nAZATE S.L.
\nSalzburg Corporation
\nClover Enterprises
\nKinnari Limited
\nLeeward Holdings
\nStaniard Limited
\nSolar Group S.A.
\nEnglewood Enterprises
\nGrove Enterprises
\nWalvis Bay Limited
\nDatronics Limited
\nBrinkley Holdings Limited
\nSalt Lake Enterprises, Inc.
\nCromwell International Corp.<\/p>\n
By FrontierVision Partners, L.P., Agent and Attorney- in-Fact for each SPC
\nSeller, by FVP GP, L.P., its general partner, by FrontierVision Inc., its
\ngeneral partner<\/p>\n
By: \/s\/ James C. Vaughn
\n James C. Vaughn, President<\/p>\n
[THIS IS A SIGNATURE PAGE
\n TO THE PURCHASE AGREEMENT]<\/p>\n
{The Registrant agrees to furnish supplementally to the Commission upon request
\na copy of the schedules to this agreement. The schedules contain customary
\ninformation for schedules to agreements of this type.} <\/p>\n
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