Exhibit 10.44

 

 

 

ASSET PURCHASE AGREEMENT

between

NORTHLAND CABLE PROPERTIES SEVEN LIMITED PARTNERSHIP

and

CHARTER COMMUNICATIONS, LLC

Dated as of October 12, 2011

 

 

 

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TABLE OF CONTENTS

 

             PAGE   ARTICLE I DEFINITIONS      2      1.1   Certain Definitions
     2      1.2   Terms Defined Elsewhere in this Agreement      9      1.3  
Other Definitional and Interpretive Matters      10    ARTICLE II PURCHASE AND
SALE OF ASSETS; ASSUMPTION OF LIABILITIES      11      2.1   Purchase and Sale
of Assets      11      2.2   Excluded Assets      12      2.3   Assumption of
Liabilities      13      2.4   Excluded Liabilities      14      2.5   Further
Conveyances and Assumptions; Consent of Third Parties      14      2.6  
Purchase Price Allocation for Federal Income Tax Purposes      15    ARTICLE III
CONSIDERATION      15      3.1   Initial Payment      15      3.2  
Consideration      15      3.3   Payment of Purchase Price      15      3.4  
Adjustment and Prorations      16    ARTICLE IV CLOSING AND TERMINATION      18
     4.1   Closing Date      18      4.2   Termination of Agreement      18     
4.3   Procedure Upon Termination      19      4.4   Effect of Termination     
19    ARTICLE V REPRESENTATIONS AND WARRANTIES OF SELLER      20      5.1  
Organization and Good Standing      20      5.2   Authorization of Agreement   
  20      5.3   Conflicts; Consents of Third Parties      21      5.4   No Other
Consent      21      5.5   Financial Statements      22      5.6   Title to
Purchased Assets      22      5.7   Absence of Certain Developments      22   

 

I

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TABLE OF CONTENTS

(CONTINUED)

 

             PAGE     5.8   Taxes      23      5.9   Real Property      24     
5.10   System Contracts      25      5.11   Employees and Employee Benefits     
26      5.12   Labor      27      5.13   Litigation      28      5.14  
Governmental Authorizations      28      5.15   Retransmission Consent and
Must-Carry; Rate Regulation; Copyright Compliance      28      5.16   System
Information      30      5.17   Compliance with Laws      31      5.18   Bonds,
Insurance and Letters of Credit      31      5.19   Accounts Receivable      31
     5.20   Environmental Matters      31      5.21   Intellectual Property     
32      5.22   Transactions with Affiliates      32      5.23   Insurance     
33      5.24   [Reserved]      33      5.25   Financial Advisors      33     
5.26   Disclosure      33      5.27   Overbuilds      33      5.28   No Other
Representations or Warranties; Schedules      33    ARTICLE VI REPRESENTATIONS
AND WARRANTIES OF PURCHASER      34      6.1   Organization and Good Standing   
  34      6.2   Authorization of Agreement      34      6.3   Conflicts;
Consents of Third Parties      35      6.4   Litigation      35      6.5  
Financial Advisors      35      6.6   Financial Capability      35   

 

II

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TABLE OF CONTENTS

(CONTINUED)

 

             PAGE   ARTICLE VII COVENANTS      35      7.1   Access to
Information      35      7.2   Conduct of the Business Pending the Closing     
36      7.3   Consents      38      7.4   Confidentiality Agreement      39     
7.5   Publicity      39      7.6   Use of Name      39      7.7   Transition
Services      40      7.8   Bonds, Letters of Credit, Etc.      40      7.9  
Cooperation With Respect to Third Party Services      40      7.10   Limited
Partners Approval      41      7.11.   Endorsement of Checks, Etc.      42     
7.12   No Solicitation      42      7.13   Non-Competition      42      7.14  
Non-Solicit      42      7.15   Title Insurance Policies      43      7.16  
Notification to Purchaser of Changes; Additional Information      43      7.17  
Capital Leases; Evidence of Terminations      44      7.18   Environmental
Assessments      44      7.19   Fairness Opinion      45    ARTICLE VIII
EMPLOYEES AND EMPLOYEE BENEFITS      45      8.1   Employment      45    ARTICLE
IX CONDITIONS TO CLOSING      47      9.1   Conditions Precedent to Obligations
of Purchaser      47      9.2   Conditions Precedent to Obligations of Seller   
  49      9.3   Frustration of Closing Conditions      51    ARTICLE X
INDEMNIFICATION      51      10.1   Survival of Representations, Warranties and
Covenants      51      10.2   Indemnification by Seller      51      10.3  
Indemnification by Purchaser      52   

 

III

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TABLE OF CONTENTS

(CONTINUED)

 

             PAGE     10.4   Indemnification Procedures      52      10.5  
Certain Limitations on Indemnification      53      10.6   Calculation of Losses
     54      10.7   Tax Treatment of Indemnity Payments      54      10.8  
Exclusive Remedy      54    ARTICLE XI MISCELLANEOUS      55      11.1   Tax
Matters      55      11.2   Expenses      56      11.3   Waiver of Jury Trial   
  56      11.4   Entire Agreement; Amendments and Waivers      56      11.5  
Governing Law      56      11.6   Notices      56      11.7   Severability     
58      11.8   Binding Effect; Assignment      58      11.9   Non-Recourse     
58      11.10   Specific Performance      58      11.11   Counterparts      58
     11.12   No Third Party Beneficiaries      59      11.13   Attorneys’ Fees
     59      11.14   Covenant Not To Sue and Nonrecourse to Partners      59   

Exhibits

 

A Indemnity Escrow Agreement

B Form of Letter Requesting Required Consents for Real Property

C Form of Letter Requesting All Other Required Consents

D [Reserved]

E Form of Bill of Sale

F Form of Warranty Deed

G Form of Legal Opinions

H Form of Assignment and Assumption Agreement

 

IV

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ASSET PURCHASE AGREEMENT

This ASSET PURCHASE AGREEMENT (the “Agreement”), dated as of October 12, 2011
(the “Effective Date”), between Northland Cable Properties Seven Limited
Partnership, a Washington limited partnership (“Seller”), and Charter
Communications, LLC, a Delaware limited liability company (“Purchaser”).

W I T N E S S E T H:

WHEREAS, Seller owns and operates television cable Systems (as defined below)
providing video, high-speed internet and telephony services serving the
communities set forth in Schedule 1.0 hereto (each a “Community” and
collectively, the “Communities”);

WHEREAS, Seller desires to sell, transfer and assign to Purchaser, and Purchaser
desires to acquire and assume from Seller, all of the Purchased Assets and
Assumed Liabilities, all as more specifically provided herein (the
“Transaction”); and

WHEREAS, certain terms used in this Agreement are defined in Section 1.1;

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements hereinafter contained, the parties hereby agree as follows:

ARTICLE I

DEFINITIONS

1.1 Certain Definitions.

For purposes of this Agreement, the following terms shall have the meanings
specified in this Section 1.1:

“Accounts Receivable” means the rights of Seller to receive payment for services
rendered by Seller (including those billed to subscribers of the Systems and
those for services and advertising time provided by Seller) which have been
unpaid as of the Closing Date.

“Affiliate” means, with respect to any Person, any other Person that, directly
or indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, such Person, and the term “control” (including
the terms “controlled by” and “under common control with”) means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through ownership of voting
securities, by contract or otherwise.

“Affiliate Services Agreement” means that certain Trademark License Agreement
dated September 28, 2001 between Seller and Northland Telecommunications
Corporation, that certain Sales Representation Agreement dated September 29,
2001 between Seller and Cable Ad-Concepts, Inc. and that certain Software
License and Support Agreement dated September 28, 2001 between Seller and
Northland Cable Services Corporation.

 

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“Basic Services” means the lowest tier of cable television programming sold to
subscribers as a package, including broadcast and satellite service programming
for which a subscriber pays a fixed monthly fee to Seller, but not including Pay
TV, and other than through the HSI Services.

“Business” means the cable television, telephone, HSI Service and other
revenue-generating businesses that are conducted by Seller or any of its
Affiliates (including through a third party) through the Systems, and operations
relating to the Systems, except for the business and operations of an Affiliate
under an Affiliate Service Agreement or Management Agreement.

“Business Day” means any day of the year on which national banking institutions
in New York are open to the public for conducting business and are not required
or authorized to close.

“Cable Act” means Title VI of the Communications Act of 1934, as amended, 47
U.S.C. § 151, et seq., and all other provisions of the Cable Communications
Policy Act of 1984, Pub. L. No. 98-549, and the Cable Television Consumer
Protection and Competition Act of 1992, Pub L. No. 102-385, and the
Telecommunications Act of 1996, Pub. L. No. 104-104, as such statutes may be
amended from time to time, and the rules and regulations thereunder as in effect
from time to time.

“Cable Video Services” means the provision of cable television programming
through the Systems, including Basic Services, Expanded Basic Services, a la
carte tiers, premium services, digital services, HDTV, and DVR equipment rental,
Pay TV, and any new product tiers, other than through the HSI Services and the
Telephone Services.

“Closing Date” means the earlier of (i) April 30, 2012, and (ii) the soonest
practical date after all of the conditions set forth in Article IX have been
satisfied or waived; provided, however, in no event shall the Closing Date be
after April 30, 2012.

“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended.

“Code” means the Internal Revenue Code of 1986, as amended.

“Communications Act” means the Communications Act of 1934, as amended by the
Cable Communications Policy Act of 1984, the Cable Television Consumer
Protection and Completion Act of 1992 and the provisions of the
Telecommunication Act of 1996 amending Title VI of the Communications Act of
1934, and as may be further amended, and the Rules and Regulations, policies and
published decisions of the FCC thereunder, as in effect from time to time.

“Confidentiality Agreement” means the agreements of the Parties contained in
Section 7.4 of this Agreement.

“Contract” means any written agreement, indenture, note, bond, mortgage, loan,
instrument, lease, license (other than a Permit, a Franchises or a Programming
Agreement), obligation, promise or undertaking that is legally binding on
Seller, is to be assumed by Purchaser at Closing and which involves the payment
of more than $10,000.

 

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“Copyright Act” means the Copyright Act of 1976 and the rules and regulations
thereunder, each as in effect as of the date of this Agreement and as amended
from time to time.

“Employee” means all individuals as of the Effective Date, who are employed by
Seller primarily in connection with the Business, together with individuals who
are hired as employees in respect of the Business after the Effective Date but
prior to the Closing.

“Encumbrance” means any lien, charge, claim, commitment, conditional sale or
other title retention agreement, demand, easement, encroachment, lease,
limitation, mortgage, pledge restriction, security interest, restriction on
transfer, right of first refusal, title defect or other encumbrance of any kind
or nature whatsoever.

“Environmental Law” means any applicable Law currently in effect relating to the
protection of human health as it relates to environmental protection (but
excluding worker safety), the environment or natural resources, including,
without limitation, the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. § 9601 et seq.), the Hazardous Materials Transportation
Act (49 U.S.C. App. § 1801 et seq.), the Resource Conservation and Recovery Act
(42 U.S.C. § 6901 et seq.), the Clean Water Act (33 U.S.C. § 1251 et seq.), the
Clean Air Act (42 U.S.C. § 7401 et seq.) the Toxic Substances and Control Act
(15 U.S.C. § 2601 et seq.), the Federal Insecticide, Fungicide, and Rodenticide
Act (7 U.S.C. § 136 et seq.), the Feeral Water Pollution Control Act (33 U.S.C.
§ 1251 et seq.), the Oil Pollution Act of 1990, (33 U.S.C. § 2701 et seq.), and
the Safe Drinking Water Act (42 U.S.C. §§ 300f et seq.), as each has been
amended and the rules and regulations promulgated pursuant thereto.

“ERISA” means the Employment Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” means any Person that together with the Seller is or was at
any time treated as a single employer under section 414 of the Code or section
4001 of ERISA and any general partnership of which the Seller is or has been a
general partner.

“Excluded Contracts” means the Management Agreement, the Affiliate Service
Agreements and the Contracts listed on Schedule 1.1(i) hereto.

“Expanded Basic Services” means an optional tier of video services offered by
the System to its customers other than Basic Services, a la carte tiers, premium
services, digital services, HDTV, DVR, Pay TV, and any new product tiers, and
other than through the HSI Services.

“FAA” means the Federal Aviation Administration, or its successor agency.

“FCC” means the Federal Communications Commission, or its successor agency.

“Former Employee” means all individuals who were employed by Seller in
connection with the Business but who are no longer so employed on the Closing
Date.

“Franchises” means all franchise agreements and similar governing agreements,
instruments and resolutions and franchise-related Legal Requirements or
acknowledgements of Governmental Entities, whether written or oral, that are
necessary or required in order to operate the Systems and Business and to
provide the services provided by Seller through the Systems.

 

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“Furniture and Equipment” means all furniture, fixtures, furnishings, equipment,
vehicles, leasehold improvements, and other tangible personal property owned or
used by Seller, including all artwork, desks, chairs, tables, computer hardware,
copiers, telephone lines and numbers, telecopy machines and other
telecommunication equipment, cubicles and miscellaneous office furnishings and
supplies.

“GAAP” means generally accepted accounting principles in the United States.

“Governmental Authorizations” means, collectively, all Franchises, Licenses and
other authorizations, approvals, agreements, Easements, leases, permits,
qualifications, registrations, variances and similar rights for and with respect
to the conduct of the Business, including the construction and operation of the
Systems, issued by or otherwise obtained from Governmental Entities.

“Governmental Entity” means any federal, state, local or foreign government,
court, administrative agency, board or commission, political subdivision, or
other governmental authority or instrumentality.

“Hazardous Substances” means any regulated substance, toxic substance, hazardous
substance, hazardous waste, pollution, pollutant or contaminant, as defined or
referred to in any Environmental Law, as well as words of similar purport or
meaning referred to in any other Legal Requirements, including radon, asbestos,
polychlorinated biphenyls, urea formaldehyde and petroleum products and
petroleum based derivatives. Where one Legal Requirement defines any of these
terms more broadly than another, the broader definition will apply.

“HSI Services” means Internet access and other Internet data services offered by
the Systems to Seller’s customers.

“Intangibles” means all intangible assets, including customer lists, accounts
receivables, claims (excluding any claims relating to Excluded Assets) and
goodwill of the Business as a going concern, if any, owned, used or held by
Seller and used exclusively in the Business, but excluding all trademarks, trade
names, service marks, service names, logos, patents, copyrights, URLs, domain
names and other intellectual property of Seller or any of its Affiliates.

“IRS” means the United States Internal Revenue Service and, to the extent
relevant, the United States Department of Treasury.

“Knowledge of Seller” means, with respect to Seller and a particular fact or
other matter, that any of the persons set forth on Schedule 1.1(ii) or their
direct reports has actual, constructive or imputed knowledge such that such
person should reasonably be aware of such fact following a reasonable
investigation under the circumstances.

“Law” means any foreign, federal, state or local law, statute, code, ordinance,
rule, regulation, order or permit established and applicable under principles of
common law, regulation, statute or treaty.

 

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“Legal Proceeding” means any action, arbitration, suit, audit, hearing,
investigation, litigation or proceeding (public or private) by or before, or
otherwise involving a Governmental Entity or an arbitrator.

“Legal Requirement” means any Law, applied, issued, entered or otherwise adopted
or enacted by any Governmental Entity, including judicial decisions applying or
interpreting any such Legal Requirement.

“Liability” means any debt, liability or obligation (whether direct or indirect,
absolute or contingent, accrued or unaccrued, liquidated or unliquidated, or due
or to become due), and including all costs and expenses relating thereto.

“License” means any license, permit or other authorization or approval (other
than a Franchise) issued by a Governmental Entity, including to the FCC, used in
the operation of the Purchased Assets, the Business or the Systems.

“Management Agreement” means that certain Amended and Restated Agreement of
Limited Partnership of Northland Cable Properties Seven Limited Partnership,
dated September 30, 1987, by and between Northland Communications Corporation,
FN Equities Joint Venture, Richard I. Clark, and remaining parties who now or
hereafter from time to time are accepted by the Managing General Partner as
Limited Partners of Northland Cable Properties Seven Limited Partnership, as
amended and the Amended and Restated Management Agreement, dated January 3,
1990, between Northland Cable Properties Seven Limited Partnership and Northland
Communications Corporation and the replacement Exhibit A, updated January 1,
1998.

“Material Adverse Effect” means any change or effect that is materially adverse
to the Business, the operations, properties, condition (financial or otherwise)
or results of the operations of the Business taken as a whole, or the ability of
Seller to perform its obligations under this Agreement, or the validity, binding
effect or enforceability of this Agreement, other than an effect resulting from
(i) any change in the United States or foreign economies or securities or
financial markets; (ii) any change that affects any industry in which Seller
operates; (iii) any change arising in connection with hostilities, acts of war,
sabotage or terrorism or military actions or any escalation or material
worsening of any such hostilities, acts of war, sabotage or terrorism or
military actions existing or underway as of the Effective Date; (iv) any action
taken by Purchaser or its Affiliates with respect to the transactions
contemplated hereby or with respect to Seller; (v) any changes in GAAP; or
(vi) any effect resulting from any changes resulting from or relating to the
taking of any action contemplated by this Agreement.

“NCC” means Northland Communications Corporation, a Washington corporation.

“Order” means any award, decision, resolution, subpoena, order, injunction,
judgment, decree, ruling, writ, assessment or arbitration award of a
Governmental Entity or arbitrator.

“Ordinary Course of Business” means with respect to any action taken by any
Person, any action that is in the ordinary and usual course of normal day to day
operations of such Person.

 

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“Permits” means any approvals, authorizations, consents, licenses, permits or
certificates of a Governmental Entity other than Franchises.

“Permitted Encumbrances” means (i) all Encumbrances for Taxes or assessments,
special or otherwise, either not due and payable or being contested in good
faith and fully accrued or adequately reserved or otherwise provided for;
(ii) all Encumbrances representing inchoate mechanics’, materialmen’s,
carriers’, warehousemen’s, landlords’ and other statutory or similar liens
arising in the Ordinary Course of Business and not yet due and payable; and
(iii) with respect to Real Property, any current commitment, easement or claim
of easement, encroachment, limitation, restriction or other exception to title
or title defect (other than liens) that does not individually or in the
aggregate materially impair the current use, value, or operation of individual
piece of the Real Property to which it relates.

“Person” means any individual, corporation, partnership, limited liability
company, firm, joint venture, association, joint-stock company, trust,
unincorporated organization, Governmental Entity or other entity.

“Pole Attachment Agreement” means a System Contract relating to the use of any
public utility facilities, including pole line, joint pole and master contracts
for pole attachment rights and the use of conduits.

“Programming Agreements” means all contracts regarding the carriage of satellite
delivered television programming carried by the System.

“Release” means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, or leaching into the environment.

“Remedial Action” means all actions required under Environmental Laws to clean
up, remove, treat or address any Hazardous Substances in the environment at
levels exceeding those allowed by applicable Environmental Laws, including
pre-remedial studies and investigations or post-remedial monitoring and care.

“Required Consents” means all authorizations, approvals and consents required
under or in connection with any Legal Requirement or under any Purchased Assets,
Licenses, Real Property or System Contracts for (i) Seller to transfer the
Purchased Assets and the Business to Purchaser, (ii) Purchaser to conduct the
Business in accordance with applicable Legal Requirements and to own, lease, use
and operate the Purchased Assets and the Business at the places and in the
manner in which the Business is conducted and the Business are operated as of
the date of this Agreement and at all times prior to the Closing Date or
(iii) Purchaser to assume and perform the System Contracts and Governmental
Authorizations included in the Purchased Assets, except for Franchises listed on
Schedule 5.14(a).

“Real Property” means the assets owned or leased by Seller and used in the
Business consisting of realty, including appurtenances, improvements (including
towers, headend storage buildings and earth stations) and fixtures located on
such realty, and any other interests in real property, including fee interests,
rights to minerals, oil, gas and other hydrocarbons, water rights, leasehold
interests and easements, rights of access, licenses, rights of entry and wire
crossing permits (but not including interests in real property granted in System
Contracts in connection

 

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with services provided by Seller to the residents or occupants of such real
property, including access and service System Contracts with the owners of
multiple dwelling unit complexes), options, and rights of first refusal.

“Required Regulatory Approval” means any Required Consent of any Governmental
Entity.

“SEC” means the United States Securities and Exchange Commission.

“Subsidiary” means any Person of which a majority of the outstanding share
capital, voting securities or other voting equity interests are owned, directly
or indirectly, by Seller or any Person as to which Seller has a contractual
right to elect or appoint a majority of the members of such Person’s governing
body.

“Systems” means the cable television, telephone and high-speed data reception
and distribution systems owned, operated or used by Seller in the conduct of the
cable television, telephone and high-speed Internet businesses and all of the
activities and operations ancillary to such businesses, including advertising
services and other income generating businesses, conducted or carried on in the
Franchises.

“System Contract” means any crossing agreement, easement, lease, license,
multiple dwelling, bulk billing or commercial service agreement, pole line
agreement, retransmission consent agreement, subscriber agreement, underground
conduit agreement, interconnection, switching maintenance or installation
support or other contract or agreement (other than a Governmental Authorization)
held for use or used in connection with, or relating to the operation of, the
Systems or all or a portion of the Business and to which Seller is a party or
that is otherwise binding on Seller or the Systems and is in effect on the date
of this Agreement or is entered into between the date of this Agreement and the
Closing Date in compliance with this Agreement.

“Tax” or “Taxes” means (i) any and all federal, state, local or foreign taxes,
charges, fees, imposts, levies or other assessments, including all net income,
gross receipts, capital, sales, use, ad valorem, value added, transfer,
franchise, profits, inventory, capital stock, license, withholding, payroll,
employment, social security, unemployment, excise, severance, stamp, occupation,
property, escheat, unclaimed property, and estimated taxes, customs duties,
fees, assessments and charges of any kind whatsoever; and (ii) all interest,
penalties, fines, additions to tax or additional amounts imposed by any Taxing
Authority in connection with any item described in clause (i), and including any
liability for the payment of the foregoing obligations of another Person as a
result of (a) being or having been a member of an affiliated, consolidated,
combined, unitary or aggregate group; (b) being or having been a party to any
tax sharing agreement or any express or implied obligation to indemnify any
Person; and (c) being or having been a transferee, successor, or otherwise
assuming the obligations of another Person to pay the foregoing amounts.

“Taxing Authority” means the IRS and any other Governmental Entity responsible
for the administration of any Tax.

 

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“Tax Return” means any return, report or statement required to be filed with
respect to any Tax (including any attachments thereto, and any amendment
thereof), including any information return, claim for refund, amended return or
declaration of estimated Tax.

“Telephone Services” means local and long distance telephone and related voice
services offered by the Business.

“Transaction Documents” means this Agreement, and all other documents and
instruments to be executed and delivered in connection with the transactions
contemplated by this Agreement.

“WARN” shall mean the Worker Adjustment and Retraining Notification Act of 1988,
as amended, and the regulations promulgated thereunder.

1.2 Terms Defined Elsewhere in this Agreement.

For purposes of this Agreement, the following terms have meanings set forth in
the sections indicated:

 

Term

   Section

Agreement

   Preamble

Asset Acquisition Statement

   2.6

Assumed Liabilities

   2.3

Base Purchase Price

   3.2

Closing

   4.1

Commitment Properties

   7.15(a)

Community

   Preamble

Consents

   5.3

Consent Condition

   7.3(b)

Easements

   5.9(b)

Effective Date

   Preamble

Exchange Act

   7.10(b)

Employee Benefit Plans

   5.11(b)

Employee Schedule

   5.11(a)

Escrow Account

   3.3(b)

Escrow Agent

   3.3(b)

Escrow Funds

   3.3(b)

Estimated Adjustments Amount

   3.4(e)

Excluded Assets

   2.2

Excluded Liabilities

   2.4

Final Report

   3.4(f)

Financial Statements

   5.5

Indemnification Claim

   10.4(b)

Indemnity Escrow Agreement

   3.3(b)

Independent Accountants

   3.3(f)

Initial Payment

   3.1

 

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Leased Real Property

   5.9(c)

Limited Partners’ Meeting

   7.10(a)

Losses

   10.2(a)

Non-Competition Period

   7.13

Nonassignable Assets

   2.5(b)

Owned Real Property

   5.9(a)

Phase I Assessment

   7.18

Phase II Assessment

   7.18

Preliminary Report

   3.4(e)

Proxy Statement

   7.10(b)

Purchase Price

   3.2

Purchase Price Adjustments

   3.4(e)

Purchased Assets

   2.1

Purchaser

   Preamble

Purchaser Documents

   6.2

Purchaser Indemnified Parties

   10.2(a)

Purchaser Objection Notice

   3.4(e)

Qualified Plans

   5.11(c)

Real Property Leases

   5.9(b)

Restricted Area

   7.13

Restricted Party

   7.13

Revised Statements

   2.6

Seller

   Preamble

Seller Documents

   5.2

Seller Indemnified Parties

   10.3(a)

Seller Marks

   7.6

Title Commitments

   7.15(a)

Title Company

   7.15(a)

Title Defect

   7.15(c)

Title Policies

   7.15(b)

Total Consideration

   3.2

Transferred Employees

   8.1(a)

Transition Services Agreement

   7.7

1.3 Other Definitional and Interpretive Matters.

(a) Unless otherwise expressly provided, for purposes of this Agreement, the
following rules of interpretation shall apply:

(i) Calculation of Time Period. When calculating the period of time before
which, within which or following which, any act is to be done or step taken
pursuant to this Agreement, the date that is the reference date in calculating
such period shall be excluded. If the last day of such period is a non-Business
Day, the period in question shall end on the next succeeding Business Day.

(ii) Dollars. Any reference in this Agreement to $ shall mean U.S. dollars.

 

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(iii) Exhibits/Schedules. The Exhibits and Schedules to this Agreement are
hereby incorporated and made a part hereof and are an integral part of this
Agreement. All Exhibits and Schedules annexed hereto or referred to herein are
hereby incorporated in and made a part of this Agreement as if set forth in full
herein. Any matter or item disclosed on a Schedule shall be deemed to have been
disclosed in all other relevant Schedules where it should be reasonably apparent
that such disclosure relates to such other Schedules, and in no instance shall
any Schedule be deemed to have been disclosed in any other Schedule which has
“None,” “N/A” or words of similar import as disclosure. Disclosure of any item
on any Schedule shall not constitute an admission or indication that such item
or matter is material or would have a Material Adverse Effect. No disclosure on
a Schedule relating to a possible breach or violation of any Contract, Law or
Order shall be construed as an admission or indication that breach or violation
exists or has actually occurred. Any capitalized terms used in any Schedule or
Exhibit but not otherwise defined therein shall be defined as set forth in this
Agreement.

(iv) Gender and Number. Any reference in this Agreement to gender shall include
all genders, and words imparting the singular number only shall include the
plural and vice versa.

(v) Headings. The provision of a Table of Contents, the division of this
Agreement into Articles, Sections and other subdivisions and the insertion of
headings are for convenience of reference only and shall not affect or be
utilized in construing or interpreting this Agreement. All references in this
Agreement to any “Section” are to the corresponding Section of this Agreement
unless otherwise specified.

(b) The parties hereto have participated jointly in the negotiation and drafting
of this Agreement and, in the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as jointly drafted by
the parties hereto and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provision of this
Agreement.

ARTICLE II

PURCHASE AND SALE OF ASSETS; ASSUMPTION OF LIABILITIES

2.1 Purchase and Sale of Assets.

On the terms and subject to the conditions set forth in this Agreement, at the
Closing Purchaser shall purchase, acquire and accept from Seller, and Seller
shall sell, transfer, assign, convey and deliver to Purchaser all of Seller’s
property, privileges, rights and claim, tangible or intangible, real, personal
or mixed, owned or leased, used or otherwise held by Seller or hereafter
acquired prior to the Closing Date and used or held for use principally in the
conduct of the Business, including the System Contracts, Easements, Furniture
and Equipment, Governmental Authorizations, Intangibles, Real Property and all
accounts receivable and prepaid expenses relating exclusively to the Assets or
the operation of the Systems and the Records, but not including the Excluded
Assets (all of such assets and properties being referred to herein as the
“Purchased Assets”), free and clear of all liens, except for Permitted
Encumbrances.

 

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2.2 Excluded Assets.

Nothing herein contained shall be deemed to sell, transfer, assign or convey the
Excluded Assets to Purchaser and the Purchased Assets shall exclude the Excluded
Assets. Seller shall retain all right, title and interest to, in and under the
Excluded Assets. “Excluded Assets” shall mean the following assets:

(a) the Excluded Contracts;

(b) all cash, cash equivalents, bank deposits or similar cash items of Seller;

(c) any intellectual property rights of Seller;

(d) any personnel files pertaining to any Employee or Former Employee;

(e) books and records that Seller is required by Law to retain or that Seller
determines are necessary or advisable to retain; provided, however, that
Purchaser shall have the right to make copies of any portions of such retained
books and records that relate to the Business, the System or any of the
Purchased Assets for a reasonable period after Closing but in no event exceeding
3 years after Closing;

(f) Seller’s partnership books and records and other books and records related
to internal partnership matters and financial relationships with Seller’s
lenders and affiliates;

(g) any claim, right or interest of Seller in or to any refund, rebate,
abatement or other recovery for Taxes, from any Governmental Entity, for any
Franchise fees (in each case except to the extent such Taxes relate to the
Purchased Assets in respect of the post-Closing Tax period or the portion of a
period allocable to the post-Closing Tax period), together with any interest due
thereon or penalty rebate arising therefrom;

(h) all insurance policies or rights to proceeds thereof relating to the
Business;

(i) all Tax Returns and financial statements of Seller, the System and the
Business and all records (including working papers) related thereto;

(j) all prepaid charges, expenses or rent under the Real Property Leases, any
personal property leases or any such other leases or in respect of the Owned
Real Property that is attributable to any period beginning prior to and ending
before the Closing;

(k) all Employee Benefit Plans;

(l) all Programming Agreements and retransmission consent agreements;

 

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(m) advertising insertion equipment owned by third parties and advertising sales
agency or representation System Contracts providing any third party the right to
sell available advertising time for the Systems;

(n) all patents, copyrights, trademarks, trade names, service marks, service
names, logos and similar proprietary rights owned by Seller or its Affiliates,
whether or not used in the business of the Systems;

(o) all of Seller’s causes of action, claims, credits, demands or rights of
set-off against third parties, to the extent related to any Excluded Asset;

(p) All rights to receive fees for services from any Affiliate of Seller other
than fees for services, if any, rendered by Purchaser after Closing to an
Affiliate of Seller;

(q) Any and all assets or rights of Seller unrelated to the Business;

(r) All computers, equipment, software, licenses and agreements related to
Seller’s billing and subscriber management systems;

(s) Any contracts, agreements or other arrangements between Seller and any
Affiliate of Seller;

(t) all rights that accrue to Seller under this Agreement; and

(u) the assets listed on Schedule 2.2 hereto.

2.3 Assumption of Liabilities.

At the Closing, Seller shall sell, transfer, assign and convey to Purchaser, and
Purchaser shall assume, effective as of the Closing, and shall timely perform,
pay and discharge in accordance with their respective terms, the following
Liabilities of Seller (collectively, the “Assumed Liabilities”):

(a) Liabilities of Seller to all customers and advertisers of the Systems for
any advance payments or deposits for which Purchaser shall have received a
credit pursuant to Section 3.4;

(b) Liabilities with respect to the Business, the Purchased Assets, the
Transferred Employees arising after the Closing, to the extent such Liabilities
arise from or are related to any event that occurs on or after the Closing Date;

(c) all Taxes applicable to the transfer of the Purchased Assets pursuant to
this Agreement that are required to be paid by Purchaser pursuant to
Section 11.1(b) and (c);

(d) Liabilities for Taxes relating to the Business, the Purchased Assets, the
Transferred Employees for all taxable periods (or portions thereof) beginning
after the Closing Date;

 

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(e) all accrued expenses and trade accounts payable to the extent arising out of
the Business, the Purchased Assets, the Transferred Employees prior to the
Closing that are outstanding as of 12:01 a.m. on the Closing Date and are taken
into account in adjusting the Base Purchase Price pursuant to Section 3.4(d)
(i), (ii) and (iii); and

(f) Liabilities relating to amounts required to be paid by Purchaser hereunder.

2.4 Excluded Liabilities.

Purchaser is assuming only the Assumed Liabilities and shall not assume or be
liable for any other Liabilities of Seller (or any predecessor owner of all or
part of its business and assets) of whatever nature, whether presently in
existence or arising hereafter, known or unknown, contingent or otherwise, other
than Assumed Liabilities. All such Liabilities not being assumed are referred to
herein as the “Excluded Liabilities”).

2.5 Further Conveyances and Assumptions; Consent of Third Parties.

(a) From time to time following the Closing, Seller and Purchaser shall execute,
acknowledge and deliver all such further conveyances, notices, assumptions,
releases and acquittances and such other instruments, and shall take such
further actions, as may be reasonably necessary or appropriate to assure fully
to Purchaser and its successors or assigns, all of the rights, titles and
interests intended to be conveyed to Purchaser under this Agreement and the
Transaction Documents and to assure fully to Seller and its Affiliates and their
successors and assigns, the assumption of the liabilities and obligations
intended to be assumed by Purchaser under this Agreement and the Transaction
Documents, and to otherwise make effective the transactions contemplated hereby
and thereby.

(b) Nothing in this Agreement nor the consummation of the transactions
contemplated hereby shall be construed as an attempt or agreement to assign any
Purchased Asset, including any Contract, Permit, Franchise, Programming
Agreement, certificate, approval, authorization or other right, which by its
terms or by Law is nonassignable without the consent of a third party or a
Governmental Entity or is cancelable by a third party in the event of an
assignment (“Nonassignable Assets”) unless and until such consent shall have
been obtained.

(c) With respect to material System Contracts and Permits, Seller shall use its
commercially reasonable efforts to cooperate with Purchaser at its request for
up to 180 days following the Closing Date in endeavoring to obtain such consents
not obtained prior to Closing; provided, however, that other than as set forth
in Section 7.3 such efforts shall not require Seller or any of its Affiliates to
incur any expenses or Liabilities or provide any financial accommodation or to
remain secondarily or contingently liable for any Assumed Liability to obtain
any such consent. Purchaser and Seller shall use their respective commercially
reasonable efforts to obtain, or cause to be obtained, any consent,
substitution, approval or amendment required to novate all Liabilities under any
and all Contracts or other Liabilities that constitute Assumed Liabilities or to
obtain in writing the unconditional release of Seller and its Affiliates so
that, in any such case, Purchaser shall be solely responsible for such
Liabilities; provided, however, that the allocation between Seller and Purchaser
of payments of consideration, fees and costs payable to any third party (or its
agents) from whom any such consent, substitution, approval or amendment is
requested shall be governed by Section 7.3.

 

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2.6 Purchase Price Allocation for Federal Income Tax Purposes.

Seller and Purchaser shall allocate the Total Consideration as adjusted by any
amounts required to be taken into account for U.S. federal income tax purposes
as specified in Schedule 2.6 and, in accordance with such allocation, Seller
shall prepare and deliver to Purchaser copies of Form 8594 and any required
exhibits thereto (the “Asset Acquisition Statement”). Purchaser shall prepare
and deliver to Seller from time to time revised copies of the Asset Acquisition
Statement (the “Revised Statements”) so as to report any matters on the Asset
Acquisition Statement that need updating (including purchase price adjustments,
if any) consistent with the agreed upon allocation. The Total Consideration for
the Purchased Assets shall be allocated in accordance with the Asset Acquisition
Statement or, if applicable, the last Revised Statements, provided by Purchaser
to Seller, and all income Tax Returns and reports filed by Purchaser and Seller
shall be prepared consistently with such allocation. Neither Purchaser nor
Seller shall, nor shall they permit their respective Affiliates to, take any
position inconsistent with the Asset Acquisition Statement or the
then-applicable Revised Statement.

ARTICLE III

CONSIDERATION

3.1 Initial Payment.

Upon the execution of this Agreement, Purchaser shall make a cash payment in
immediately available funds in an amount equal to One Hundred and Fifty thousand
Dollars ($150,000) (the “Initial Payment”) to Seller. At Closing, the Initial
Payment together with interest at the rate of .5% per annum on such Initial
Payment shall be credited against the Purchase Price. The Initial Payment shall
be used by Seller solely to pay expenses that Seller will incur to obtain
Seller’s limited partners’ approval and a third party fairness opinion in
preparation for Closing.

3.2 Consideration.

The aggregate consideration for the Purchased Assets shall be (a) an amount in
cash equal to Three Million Dollars ($3,000,000) (the “Base Purchase Price”),
subject to adjustment as provided in Section 3.4 (as adjusted, the “Purchase
Price”), and (b) the assumption of the Assumed Liabilities (together with the
Purchase Price, the “Total Consideration”).

3.3 Payment of Purchase Price.

On the Closing Date, Purchaser shall pay the Purchase Price to Seller as
follows:

(a) Credit to the Purchaser of the Initial Payment and interest accrued thereon;

 

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(b) Three Hundred Thousand Dollars ($300,000) in cash (the “Escrow Funds”) shall
be deposited into an escrow account (the “Escrow Account”), which shall be
established pursuant to an escrow agreement, which escrow agreement (the
“Indemnity Escrow Agreement”) shall be (i) entered into on the Closing Date
among Seller, Purchaser and U.S. Bank National Association, a national banking
association (the “Escrow Agent”) and (ii) substantially in the form of Exhibit
A. On the last day of the eighteenth (18) month after Closing, the Escrow Funds,
together with interest thereon, then remaining in the escrow account less any
payments due to Purchaser or pending claims made by Purchaser pursuant to
Section 10 together with interest attributable thereto, shall be delivered to
Seller; and

(c) an amount equal to the Base Purchase Price minus the Escrow Funds minus the
Initial Payment and interest accrued thereon plus or minus (as the case may be)
the Purchase Price Adjustments proposed in the Preliminary Report, or if such
amount is disputed, the Estimated Adjustments Amount, by wire transfer in
immediately available funds.

3.4 Adjustments and Prorations.

(a) The Base Purchase Price shall be adjusted such that all revenues, expenses
and other Liabilities arising from the Systems up until 12:01 a.m. on the
Closing Date, including subscriber and advertising revenues, franchise fees,
pole and other rental charges payable with respect to cable television service,
utility charges, real and personal property taxes and assessments levied against
the Purchased Assets, property and equipment rentals, applicable copyright or
other fees, sales and service charges, taxes (except for taxes arising from the
transfer of the Purchased Assets hereunder which are covered by
Section 11.1(b)), and similar prepaid and deferred items, shall be prorated
between Purchaser and Seller in accordance with the principle that Seller shall
be responsible for all expenses, costs and Liabilities and entitled to all
revenues allocable to the conduct of the Business for the period prior to the
Closing Date, and Purchaser shall be responsible for all expenses, costs and
obligations and entitled to all revenues allocable to the conduct of the
Business on the Closing Date and for the period thereafter, all of which shall
be determined in accordance with GAAP.

(b) At Closing, the Base Purchase Price shall be increased by an amount equal to
(a) 100% of the face amount of all customer Accounts Receivable that are
outstanding on the Closing Date and have been outstanding for 30 or less from
the first day of the period to which any outstanding bill relates, (b) 95% of
the face amount of all customer Accounts Receivable that are outstanding on the
Closing Date and have been outstanding more than 30 days but less than 60 days
from the first day of the period to which any outstanding bill relates, (c) 0%
for all customer Accounts Receivable that are outstanding on the Closing Date
and have been outstanding more than 60 days from the first day of the period to
which any outstanding bill relates, and (d) 100% of the face amount of all
Accounts Receivable related to advertising services and time provided by Seller
prior to Closing.

(c) At Closing, the Base Purchase Price shall be increased by an amount equal to
100% of the face amount of all payments and sums deposited or advanced by Seller
to a landlord, utility, Governmental Body or any other party as a security
deposit or in exchange for initiation of a service and which will inure to the
benefit of Purchaser.

 

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(d) At Closing, the Base Purchase Price shall be reduced by an amount equal to
(i) any customer advance payments (i.e., customer payments received by Seller
prior to the Closing but relating to service to be provided by Purchaser after
the Closing) and deposits (including any interest owing thereon), (ii) except as
set forth in Section 3.4(c), above, any other advance payments (e.g.,
advertising payments received by Seller prior to the Closing but relating to
service to be provided by Purchaser after the Closing) and (iii) all accrued
expenses and trade accounts payable to the extent arising out of the operations
of the Business prior to the Closing that are outstanding as of 12:01 a.m. on
the Closing Date, provided that such Liabilities are assumed by Purchaser.

(e) At least five (5) Business Days prior to the Closing Date, Seller will
deliver to Purchaser a report with respect to the Systems (the “Preliminary
Report”), showing in detail the preliminary estimate of the adjustments referred
to in
Section 3.4(a)-(e) (the “Purchase Price Adjustments”), calculated in accordance
with such Section as of the Closing Date (or as of any other date(s) agreed to
by the parties), together with any documents substantiating the determination of
the Purchase Price Adjustments proposed in the Preliminary Report. The
Preliminary Report will include a Schedule setting forth advance payments and
deposits made to or by Seller, as well as Accounts Receivable information
relating to the Systems (showing sums due and their respective aging as of the
Closing Date). The estimated Purchase Price Adjustments shown in the Preliminary
Report will be reflected as adjustments to the Base Purchase Price payable at
the Closing pursuant to Section 3.4. In the event Purchaser objects to the
Seller’s calculation of any Purchase Price Adjustment as set forth in the
Preliminary Report, Purchaser shall deliver to the Seller at least two
(2) Business Days prior to the Closing a written statement in reasonable detail
describing any discrepancies believed to exist (“Purchaser Objection Notice”).
Purchaser and Seller shall use their commercially reasonable efforts to resolve
any of Purchaser’s objections to the Preliminary Report as described in
Purchaser’s Objection Notice, and Seller shall make such revisions to the
Preliminary Report as mutually agreed between Seller and Purchaser, and, if any
changes are made, shall deliver a copy of such revised Preliminary Report to
Purchaser no later than one (1) Business Day prior to the Closing. With respect
to any of Purchaser’s objections that are not resolved before the Closing Date,
the parties shall proceed as follows: (i) if the aggregate amount of Purchaser’s
unresolved objections is $100,000 or less, the Closing shall proceed with
Seller’s estimate of such disputed amounts, and (ii) if the aggregate of
Purchaser’s unresolved objections are greater than $100,000, then the mid-point
between the aggregate of Purchaser’s unresolved objections and Seller’s estimate
of such disputed amounts shall be used for purposes of proceeding to Closing.
The amount used pursuant to subclause (i) or (ii) of this Section 3.4(e) shall
be referred to as the “Estimated Adjustments Amount.”

(f) Within sixty (60) days after the Closing Date, Purchaser shall deliver to
Seller a report with respect to the Systems (the “Final Report”), showing in
detail its determination of the Purchase Price Adjustments, together with any
documents substantiating its calculation of the adjustments proposed in the
Final Report. If Seller shall conclude that the Final Report does not accurately
reflect the adjustments and prorations to be made to the Purchase Price in
accordance with this Section 3.4, Seller shall, within thirty (30) days after
its receipt of the Final Report, provide to Purchaser a written statement in
reasonable detail describing any discrepancies believed to exist. Purchaser and
Seller shall use good faith efforts to jointly resolve the discrepancies within
fifteen (15) days of Purchaser’s receipt of Seller’s

 

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written statement of discrepancies, which resolution, if achieved, shall be
binding upon all parties to this Agreement and not subject to dispute or
judicial review. If Purchaser and Seller cannot resolve the discrepancies to
their mutual satisfaction within such 15-day period, Purchaser and Seller shall,
within the following ten (10) days, shall jointly designate a nationally
recognized independent accounting firm which is mutually agreeable to, and
independent of each of, the parties (the “Independent Accountants”) to review
the Final Report together with Seller’s discrepancy statement and any other
relevant documents. The Independent Accountants shall report their conclusions
as to adjustments pursuant to this Section 3.4 which shall be conclusive on all
parties to this Agreement and not subject to dispute or judicial review absent
clerical errors or fraud. If, after adjustment as appropriate with respect to
the amount of the aforesaid adjustments paid or credited at the Closing,
Purchaser or Seller is determined to owe an amount to the other, the appropriate
party shall pay such amount thereof to the other, within three (3) Business Days
after receipt of such determination. The cost of retaining the Independent
Accountants shall be split equally between Purchaser and Seller.

ARTICLE IV

CLOSING AND TERMINATION

4.1 Closing Date.

If this Agreement is not earlier terminated in accordance with Section 4.2, the
consummation of the purchase and sale of the Purchased Assets and the assumption
of the Assumed Liabilities provided for in Article II hereof (the “Closing”)
shall take place at the offices of Seller at 101 Stewart Street, Suite 700,
Seattle Washington, 98101, or will be conducted by mail, electronic mail, and
/or telecopies or at such other place as the parties may designate in writing,
at 10:00 a.m. (Pacific Standard Time) on the Closing Date.

4.2 Termination of Agreement.

This Agreement shall terminate and/or may be terminated prior to the Closing as
follows:

(a) Automatically, at the end of business on the Closing Date if the Closing
shall not have occurred by the close of business on that day;

(b) by mutual written consent of Seller and Purchaser;

(c) by Seller or Purchaser if there shall have been instituted or threatened any
Legal Proceeding to enjoin or otherwise prevent or prohibit the consummation of
the transactions contemplated hereby, or any pending or threatened Legal
Proceeding seeking material damages that relate to or arise out of this
Agreement or the consummation of the transactions contemplated hereby;

(d) by Seller or Purchaser if there shall be in effect a final nonappealable
Order of a Governmental Entity of competent jurisdiction restraining, enjoining
or otherwise prohibiting a party from consummation of the transactions
contemplated hereby;

 

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(e) by Purchaser if Purchaser is not in material breach of its obligations under
this Agreement and Seller shall have breached or failed to perform any of its
representations, warranties, covenants or agreements set forth in this Agreement
such that the conditions set forth in Sections 9.1(a) or 9.1(b) would not be
satisfied and such breach is incapable of being cured or, if capable of being
cured, shall not have been cured to Purchaser’s reasonable satisfaction within
the earlier of ten (10) days following receipt by Seller of written notice of
such breach from the Purchaser or April 30, 2012;

(f) by Seller if Seller is not in material breach of its obligations under the
Agreement and Purchaser shall have breached or failed to perform any of its
representations, warranties, covenants or agreements set forth in this Agreement
such that the conditions set forth in Sections 9.2(a) or 9.2(b) would not be
satisfied and such breach is incapable of being cured or, if capable of being
cured, shall not have been cured to Seller’s reasonable satisfaction within the
earlier of ten (10) days following receipt by Purchaser of written notice of
such breach from Seller or April 30, 2012;

(g) by Seller within 65 days of the date of this Agreement if, within that time
period, Seller’s financial advisor notifies Seller, in writing, that it cannot
conclude that the sale of Seller assets, in the aggregate, from a financial
point of view, is fair to the Seller’s limited partners;

(h) by Seller, if and at such time the Seller’s limited partners have not
approved the Transaction.

4.3 Procedure Upon Termination.

In the event of termination by Purchaser or Seller, or both, pursuant to
Section 4.2 hereof, and except as to termination under to Section 4.2(a),
written notice thereof shall forthwith be given to the other party or parties,
and this Agreement shall terminate, and the purchase of the Purchased Assets
hereunder shall be abandoned, without further action by Purchaser or Seller.

4.4 Effect of Termination.

(a) In the event that this Agreement terminates or is validly terminated in
accordance with Sections 4.2 and 4.3, then each of the parties shall be relieved
of their duties and obligations arising under this Agreement after the date of
such termination; provided, that the obligations of the parties in this
Section 4.4 and Section 7.4 will survive any such termination and; provided,
further, that the obligations of the parties set forth in Articles X and XI
(other than Sections 11.1 and 11.10) hereof shall survive any such termination
and shall be enforceable hereunder.

(b) Nothing in this Section 4.4 shall relieve Purchaser or Seller of any
liability for a breach of any of its covenants or agreements or a breach of any
of its representations and warranties contained in this Agreement that occurred
prior to the date of termination. The damages recoverable by the non-breaching
party shall include all attorneys’ fees reasonably incurred by such party in
connection with the transactions contemplated hereby. If the Agreement is
terminated pursuant to Section 4.2(e), Seller shall repay the entire Initial
Payment to Purchaser, in addition to and not in limitation of any other remedies
Purchaser may

 

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have. If the Agreement is terminated for any reason other than Section 4.2(e),
at the time of termination any portion of the Initial Payment not yet spent on
expenses related to Seller’s limited partners’ approval and third party fairness
opinion in preparation for Closing shall be repaid to Purchaser, in addition to
and not in limitation of any other remedies Purchaser may have.

(c) Except as provided in Section 8.1(a), during the period from the Effective
Date through the date that is one (1) year following the termination of this
Agreement pursuant to Section 4.2 hereof, (i) Purchaser shall not directly or
indirectly, through any subsidiary, officer, director, agent or otherwise,
solicit the employment of or employ or retain as a consultant any executive
officer, supervisor or manager of Seller, NCC or any of their Subsidiaries or
Affiliates as of the Effective Date, and (ii) neither NCC nor Seller shall
directly or indirectly, through any Subsidiary or Affiliate (including any
subsidiary of NCC), officer, director, agent or otherwise, solicit the
employment of or employ or retain as a consultant any executive officer,
supervisor or manager of Purchaser or any Affiliate of Purchaser as of the
Effective Date. The foregoing restrictions shall not apply to individuals that
(A) are not employed by a party at the time of the solicitation, employment or
retention, (B) respond to general public advertisements of a job opening or
(C) are recruited through an employment agency not targeted at such Person’s
employees. Furthermore, after termination, Purchaser shall not oppose or seek to
prevent or frustrate any transaction or agreement that Seller may propose or
enter into relating to the sale of all or any portion of the Business.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF SELLER

Seller hereby represents and warrants to Purchaser that:

5.1 Organization and Good Standing.

Seller is a limited partnership duly organized, validly existing and in good
standing under the laws of the State of Washington and has all requisite limited
partnership power and authority to own, lease and operate its properties and to
carry on its business as now conducted. Seller is duly qualified or authorized
to do business and is in good standing under the laws of each jurisdiction in
which it owns or leases real property and each other jurisdiction in which the
conduct of its business or the ownership of its properties requires such
qualification or authorization, except where the failure to be so qualified,
authorized or in good standing would not have a Material Adverse Effect. The
jurisdictions in which Seller is qualified or authorized to do business are
listed on Schedule 5.1. Seller does not have any Subsidiaries and does not,
directly or indirectly, own or have the right or obligation to acquire any
equity interests in any other Person.

5.2 Authorization of Agreement.

Subject to obtaining the approval of a majority in interest of the limited
partners, (a) Seller has all requisite partnership power and authority to
execute and deliver this Agreement and Seller has all requisite power, authority
and legal capacity to execute and deliver each other

 

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agreement, document, or instrument or certificate contemplated by this Agreement
or to be executed by Seller in connection with the consummation of the
transactions contemplated by this Agreement (the “Seller Documents”), to perform
its obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby; (b) this Agreement and each of the Seller
Documents will be at or prior to the Closing, duly and validly executed and
delivered by Seller and, (assuming the due authorization, execution and delivery
by the other parties hereto and thereto) this Agreement constitutes, and each of
the Seller Documents when so executed and delivered will constitute, legal,
valid and binding obligations of Seller enforceable against Seller in accordance
with their respective terms except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws from time to
time in effect affecting the enforcement of creditors’ rights generally, and
(ii) as the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefore may be brought.

5.3 Conflicts; Consents of Third Parties.

Subject to obtaining the approval of a majority in interest of the limited
partners of Seller, Purchaser’s obtaining on its own behalf each of the
Franchises listed on Schedule 5.14(a), and except as set forth on Schedule 5.3
(the “Consents”), none of the execution and delivery by Seller of this
Agreement, the consummation of the transactions contemplated hereby, or
compliance by Seller with any of the provisions hereof or thereof will conflict
with, or result in any violation of or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination or cancellation
or acceleration of any obligation under, or result in the imposition of any lien
other than a Permitted Encumbrance under, any provision of (a) the certificate
of limited partnership and limited partnership agreement, as amended, of Seller;
(b) violate any Legal Requirement in any material respect, (c) require any
consent, waiver, approval or authorization of, or any filing with or notice to,
any Governmental Entity or other Person, or (d) conflict in any material respect
with or constitute a material violation or material breach of or a material
default under (without regard to requirements of notice, lapse of time or
elections of other Persons or any combination thereof), permit or result in the
termination, suspension or material modification of, result in the acceleration
of (or give any Person the right to accelerate) the performance of Seller under,
or result in the creation or imposition of any Encumbrance (other than a
Permitted Encumbrance) under, any System Contract, Franchise or License or any
other instrument that is a Purchased Asset or evidences an Assumed Liability or
any instrument or agreement by which any of the Purchased Assets are bound or
affected, except to the extent listed on Schedule 5.3.

5.4 No Other Consent.

Subject to Section 5.3, no other consent, waiver, approval, or authorization of
any Person or Governmental Entity is required on the part of Seller in
connection with the execution and delivery of this Agreement, the performance by
Seller of its obligations hereunder, or the consummation of the transactions
contemplated hereby, the absence of which would have a Material Adverse Effect.

 

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5.5 Financial Statements.

Seller has delivered to Purchaser copies of the unaudited statements of income
for the System(s) for monthly periods ending on each of the first 8 months of
2011 (such unaudited statements and those statements of income delivered
pursuant to Section 7.16(c)(ii), are referred to herein as the “Financial
Statements”). Each of the Financial Statements has been prepared in accordance
with GAAP consistently applied (except for normal year-end adjustments that are
not individually or in the aggregate material and the lack of footnotes thereto)
and from the books and records of Seller. Each of the Financial Statements
presents fairly in all material respects the results of operations for the
periods indicated therein.

5.6 Title to Purchased Assets.

(a) Seller is in possession of and has exclusive, good and marketable title to
or a valid leasehold interest in (or other rights of a lessee or licensee to use
and hold for use) the Purchased Assets (other than Real Property, which is
separately addressed in Section 5.9), free and clear of all Encumbrances (other
than those Encumbrances disclosed on Schedule 5.6(a), all of which Seller will
cause to be released prior to Closing and the Permitted Encumbrances).

(b) Except for the Excluded Assets, the Purchased Assets constitute all the
assets necessary to permit Purchaser to (i) conduct the Business and operate the
Systems substantially as they are being conducted and operated on the date of
this Agreement and (ii) perform all the Assumed Liabilities. The Purchased
Assets include inventory of a sufficient quantity to enable Purchaser to conduct
the Business, as it is conducted by Seller as of the date of this Agreement and
as of the Closing Date, for at least a 30-day period following the Closing Date.

(c) All the Equipment is listed on Schedule 5.6(c). Except as otherwise
indicated on Schedule 5.6(a) and Schedule 5.6(c), all the Equipment is owned by
Seller free and clear of all Encumbrances (other than Permitted Encumbrances),
is in good operating condition and repair, except for ordinary wear and tear and
routine repairs, and is suitable for the operation of the Systems, as they are
operated as of the date of this Agreement and as of the Closing Date.

5.7 Absence of Certain Developments.

Except as expressly contemplated by this Agreement, since the date of the
Financial Statements, Seller has conducted its business in the Ordinary Course
of Business including, without limitation:

(a) no event or events have occurred, and no circumstance has occurred, that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect;

(b) Seller has not sold, transferred or otherwise disposed of any material
Purchased Assets, except for dispositions in the Ordinary Course of Business,
and has not suffered any theft, damage, removal, destruction or casualty loss of
any material Purchased Assets not covered by insurance;

 

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(c) Seller has not changed in any material respect any of its accounting
methods, principles or practices;

(d) Seller has operated the Systems only in the usual, regular and ordinary
course and in material compliance with all applicable Legal Requirements;

(e) Seller has not entered into any settlement of pending or threatened
litigation other than any settlement that is not reasonably likely to have a
Material Adverse Effect;

(f) Seller has not adopted, amended or entered into any employment, consulting,
retention, change-in-control, collective bargaining, bonus or other cash
incentive compensation, deferred compensation, stock option or other equity
incentive compensation, health or other welfare benefit, pension, profit
sharing, retirement, severance, vacation or other employment or compensation
plan, policy, agreement, arrangement or trust for the benefit of any director,
officer, employee, agent, consultant or Affiliate of Seller; and

(g) Seller has not mortgaged, pledged or otherwise subjected to any Encumbrance
any of the Purchased Assets, whether tangible or intangible, except for
Permitted Encumbrances.

5.8 Taxes. Except as set forth in Schedule 5.8:

(a) All Tax Returns required to be filed by Seller for any pre-Closing Tax
period have been, or will be, timely filed. Such Tax Returns are, or will be,
true, complete and correct in all material respects. All Taxes due and owing by
Seller (whether or not shown on any Tax Return) have been, or will be, timely
paid.

(b) Seller has withheld and paid each Tax required to have been withheld and
paid in connection with amounts paid or owing to any Employee, independent
contractor, creditor, customer, member or other party, and complied with all
information reporting and backup withholding provisions of applicable Law.

(c) No extensions or waivers of statutes of limitations have been given or
requested with respect to any Taxes of Seller.

(d) All deficiencies asserted, or assessments made, against Seller as a result
of any examinations by any taxing authority have been fully paid.

(e) Seller is not party to any claim, action, demand, inquiry, audit, notice of
violation, proceeding, citation, subpoena, or investigation of any nature
(whether civil, criminal, administrative or otherwise) by any taxing authority.
There are no such pending or , to the Knowledge of Seller, threatened claims,
actions, demands, inquiries, audits, notices, proceedings, citations, subpoenas
or investigations by any taxing authority.

(f) There are no Encumbrances for Taxes upon any of the Purchased Assets nor, to
the Knowledge of Seller, is any taxing authority in the process of imposing any
Encumbrances for Taxes on any of the Purchased Assets (other than for current
Taxes not yet due and payable).

 

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(g) Seller is not, and has not been, a party to, or a promoter of, a “reportable
transaction” within the meaning of Section 6707A(c)(1) of the Code and Treasury
Regulations Section 1.6011 4(b).

(h) None of the Purchased Assets is property that Seller is required to treat as
being owned by any other Person pursuant to the so-called “safe harbor lease”
provisions of former Section 168(f)(8) of the Internal Revenue Code of 1954, as
amended.

(i) None of the Purchased Assets is tax-exempt use property within the meaning
of Section 168(h) of the Code.

(j) This Section 5.8 represents the sole and exclusive representation and
warranty of Seller regarding Tax matters.

5.9 Real Property.

(a) Schedule 5.9(a) lists all Real Property owned by Seller (the “Owned Real
Property”). Seller has delivered to Purchaser as to all Owned Real Property
true, correct and complete copies of all vesting deeds, title policies, title
commitments, title exception documents, surveys and environmental reports in
Seller’s possession or control and all leases or licenses encumbering the Owned
Real Property or encumbering a fixture on Owned Real Property, and all
amendments, renewals, assignments of lessee’s or lessor’s interest, memoranda of
leases and notes and correspondence to or from the lessee or lessor or licensee
or licensor. Except as set forth on Schedule 5.9(a):

(i) Seller has good, marketable, and indefeasible fee simple title to all of the
Owned Real Property, free and clear of all Encumbrances other than Permitted
Encumbrances;

(ii) There are no leases or other use or occupancy agreements granting to any
Person a right to occupy or otherwise use any part of the Owned Real Property;

(iii) There are no outstanding options, rights of first offer, rights of first
refusal or other agreements granting to any Person a right to purchase the Owned
Real Property or any part thereof or interest therein;

(iv) There are no arrangements or commitments of any kind pursuant to which the
Owned Real Property (or any part thereof or interest therein) will become
subject to any Encumbrances other than Permitted Encumbrances;

(v) There are no Persons other than Seller in possession of any Owned Real
Property or any part of any Owned Real Property;

(vi) Seller has received no notice in writing or by publication of any
appropriation, condemnation or like proceeding or of any violation of any
applicable zoning-related Legal Requirement relating to or affecting any of the
Owned Real Property, and to the Knowledge of Seller, there is no such
violations.

 

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(b) Schedule 5.9(b) lists (i) all Purchased Assets consisting of real property
leases pursuant to which any real property is leased by Seller (the “Real
Property Leases”) and (ii) all Purchased Assets consisting of other interests in
real property that are not Owned Real Property, and that have been memorialized
in writing, including easements, Licenses, rights to access, rights-of-way and
other real property interests that are used in the operation of the System
(collectively, the “Easements”). Seller has delivered to Purchaser true, correct
and complete copies of all Real Property Leases and Easements and true, correct
and complete copies of subleases, licenses licensing an interest in Real
Property or a fixture on Real Property, amendments, renewals, assignments of
lessee’s or lessor’s interest, memoranda of leases and notes and correspondence
to or from the lessee or lessor or licensee or licensor. Each Real Property
Lease and Easement is legal, valid, binding and enforceable against Seller and,
to Seller’s Knowledge, against each other party thereto in accordance with its
terms. Except as set forth on Schedule 5.9(b), Seller has not received any
notice of any violation or breach of, or any default under, any Real Property
Lease or Easement and there are presently no uncured breaches or defaults under
any Real Property Lease or Easement. To Seller’s Knowledge, no event has
occurred that, with notice or passage of time or both, would constitute a
violation or breach of, or default under, any Real Property Lease or Easement by
Seller or any other party thereto.

(c) To Seller’s Knowledge, each parcel of Owned Real Property and real property
covered by a Real Property Lease (“Leased Real Property”), including any
improvements constructed thereon and the current use thereof, conform in all
material respects to all applicable Legal Requirements and any restrictive
covenants or other Encumbrances affecting all or any part of such Real Property.
There are no material physical, structural, or mechanical defects on, and all of
the fixtures and improvements, including leasehold improvements, to the Owned
Real Property and Leased Real Property, and the Owned Real Property and Leased
Real Property are in good condition and repair, except for ordinary wear and
tear and routine repairs, are operating, and are sufficient to enable the Owned
Real Property and Leased Real Property to be used in all material respects in
the manner in which it is currently being used and operated by Seller. Each
parcel of Owned Real Property and to the Knowledge of Seller, each parcel of
Leased Real Property has access, ingress and egress, or a valid, perpetual
easement to a public right-of-way providing access, ingress and egress adequate
for their current use.

5.10 System Contracts.

(a) Schedule 5.10 sets forth a complete list of all the System Contracts (other
than Real Property Leases, Easements and railroad crossings that are listed in
Schedule 5.9(b)) and a written summary that is accurate and complete in all
material respects of each oral System Contract that is not terminable on 30 days
prior notice). Except as set forth in Schedule 5.10, Seller has performed or is
performing, in all material respects, all obligations required to be performed
by it pursuant to the terms of the System Contracts that are included in the
Purchased Assets. Seller is not in default under any System Contract that is
included in the Purchased Assets and, to Seller’s Knowledge, no other party is
in default thereunder. Each

 

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System Contract that is included in the Purchased Assets is legally valid and
binding and enforceable against Seller and, to Seller’s Knowledge, against each
other party thereto. True, correct and complete copies of all the System
Contracts have been made available to Purchaser.

(b) The Pole Attachment Agreements disclosed on Schedule 5.10 represent all
contracts, permits, privileges and other authorizations necessary to permit
Seller to maintain, operate and use utility poles and conduits as are currently
used in the Systems or are necessary for the operation of the Systems and the
Purchased Assets in accordance with the Franchises and applicable Legal
Requirements. Except as set forth on Schedule 5.10, there are no pending or
unresolved or, to the Knowledge of the Seller, threatened audits against Seller
under any Pole Attachment Agreement or with respect to any utility attachment or
conduit usage relating to the Systems. For the avoidance of doubt, for purposes
of the representations and warranties set forth in this Section 5.10, all of
Seller’s liabilities and obligations under any Pole Attachment Agreement for
unpaid attachments, safety violations, and other failures to comply in with such
Pole Attachment Agreement will be aggregated in determining whether a material
breach of such Pole Attachment Agreement has occurred, regardless of whether any
individual violation is a material breach of such Pole Attachment Agreement.

(c) All services and products sold, leased, provided or delivered by Seller to
customers of the Business prior to the Closing Date conform in all material
respects to applicable contractual commitments, express and implied warranties,
product and service specifications and quality standards, and to the Knowledge
of Seller there is no basis for any liability or other damages in connection
with such services and products. Seller has no liability and to the Knowledge of
Seller, there is no basis for any liability arising out of any injury to a
Person or property as a result of the ownership, possession, provision or use of
any service or product sold, leased, provided or delivered by the Business prior
to the Closing Date.

5.11 Employees and Employee Benefits.

(a) Seller has provided to Purchaser a schedule dated as of a recent date (the
“Employee Schedule”), setting forth a complete and accurate list of all
Employees by work location, showing the original hire date, the current position
and rate of compensation, the compensation rate type (hourly or salary) and the
scheduled hours per week of each Employee.

(b) Schedule 5.11(b) lists: (i) each “employee benefit plan”, as defined in
Section 3(3) of ERISA, (ii) each employment or individual consulting agreement,
and (iii) each other plan, policy, agreement, arrangement, obligation or
practice to provide, as compensation for services rendered, workers’
compensation, bonus or other incentive compensation, equity or equity-based
compensation, stock purchase, severance, executive compensation, deferred
compensation, sick leave, vacation pay, salary continuation, disability,
hospitalization, medical insurance, life insurance, scholarship programs,
tuition reimbursement programs, any plans subject to the requirements of section
125 of the Code, which in each case under clauses (i), (ii) or (iii) is
maintained or sponsored by Seller or to which Seller contributes or for which
the Seller otherwise has Liability, either directly or as a result of an ERISA
Affiliate, to one or more present employees of Seller (collectively, the
“Employee Benefit Plans”).

 

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(c) Each of Seller’s Employee Plans that is intended to be qualified under
Section 401(a) of the Code (“Qualified Plans”) (i) is the subject of an
unrevoked favorable determination letter from the IRS, (ii) has remaining a
period of time under the Code or applicable Treasury regulations or IRS
announcements in which to request, and make any amendments necessary to obtain
any letter from the IRS, or (iii) is a prototype or volume submitter plan
entitled, under applicable guidance, to rely on the favorable opinion or
advisory letter issued by the IRS to the sponsor of such prototype or volume
submitter plan.

(d) Each of Seller’s Employee Plans has been administered and funded without
material exception in compliance with its own terms and, where applicable, with
ERISA, the Code, the Age Discrimination in Employment Act and any other
applicable federal or state laws. None of Seller or any trade or business which
is considered a single employer with Seller under Section 4001(b)(1) of ERISA
has incurred or could reasonably be expected to incur material liability under
Title IV of ERISA or the minimum funding requirements under Section 302 of
ERISA, which such liability will not be satisfied on or prior to Closing. Seller
does not contribute to and is not required to contribute to any Multiemployer
Plan, as defined under ERISA with respect to any employees of the Systems.

(e) All contributions and premiums and obligations of Seller required by Law or
by the terms of any Employee Benefit Plan or any agreement relating thereto have
in all material respects been timely made, satisfied or accrued by Seller, and
all amounts withheld from any Transferred Employee’s paychecks have in all
material respects been properly contributed to the applicable Employee Benefit
Plan or otherwise properly applied.

(f) Each of the Employee Benefit Plans is and has been in all material respects
(A) maintained in accordance with its terms and all provisions of applicable
Law, (B) to the Knowledge of Seller, not been the subject of any breach of any
fiduciary duty with respect to which Seller or any Employee Benefit Plan may be
liable or otherwise damaged in any respect, (C) not subject to any pending or,
to the Knowledge of Seller, threatened, claim of a breach, and (D) to the
Knowledge of Seller, not been the subjected to any “prohibited transaction”
(within the meaning of either Section 4975(c) of the Code or Section 406 of
ERISA) , in each case, with where Seller or any Employee Benefit Plan would be
liable or otherwise damaged so as to have a Material Adverse Effect.

5.12 Labor.

(a) Seller is not a party to any labor or collective bargaining agreement.

(b) During the past three years there have been no strikes, work stoppages, work
slowdowns or lockouts pending or, to the Knowledge of Seller, threatened against
or involving Seller.

(c) Seller is and has been, in full compliance with all Laws relating to
employment and employment practices, terms and conditions of employment and
wages and hours, including, but not limited to, any such Laws respecting minimum
wage and overtime payments, employment discrimination, workers’ compensation,
family and medical leave, the Immigration Reform and Control Act, and
occupational safety and health requirements, and has not and is not engaged in
any unfair labor practice, in each case so as to have a Material Adverse Effect.

 

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5.13 Litigation.

Except as set forth in Schedule 5.13, and except for any investigations and
rule-making proceedings affecting the cable industry generally, (a) there are no
actions, claims, inquiries, investigations, suits or proceedings pending before
any Governmental Entity, arbitrator or mediator or, to Seller’s Knowledge, any
written threat of such against Seller that, if adversely determined, would give
rise to a material liability to Purchaser or materially adversely affect
Purchaser’s right to own or operate the Systems or conduct the Business
following the Closing; and (b) there exists no judgment requiring Seller to take
any action of any kind with respect to the Purchased Assets or the operation of
the Business or to which Seller, the Systems, the Business or the Purchased
Assets are specifically subject or by which they are specifically bound or
otherwise affected.

5.14 Governmental Authorizations.

(a) Schedule 5.14(a) is a list of the Governmental Authorizations held by
Seller. True, complete and correct copies of all the Governmental Authorizations
listed on Schedule 5.14(a) have been made available to Purchaser. The
Governmental Authorizations are currently in full force and effect, are not in
default and are valid under all applicable Legal Requirements according to their
terms. Seller has not received written notice of any legal action, governmental
proceeding or investigation that is pending against it, and to the Knowledge of
Seller, no such action, proceeding or investigation is threatened, to terminate,
suspend or modify any Governmental Authorization, and Seller is in material
compliance with the terms and conditions of all the Governmental Authorizations
and with other applicable requirements of all Governmental Entities (including
the FCC and the Register of Copyrights) relating to the Governmental
Authorizations, including all requirements for notification, filing, reporting,
posting and maintenance of logs and records.

(b) The Franchises and Licenses included in the Governmental Authorizations
listed on Schedule 5.14(a) represent all the Franchises and Licenses necessary
to operate and provide Cable Video Services, Telephone Services, and HSI
Services in the Communities. Schedule 5.14(b) includes those areas in which
Seller validly operates without a written Franchise or Governmental
Authorization. The expiration date of each Franchise covered under a Franchise
agreement is accurately set forth and described on Schedule 5.14(b). No
Governmental Entity has exercised any purchase option or right of first refusal
under any Franchise, and to Seller’s Knowledge, no Governmental Entity has the
intent to do so.

5.15 Retransmission Consent and Must-Carry; Rate Regulation; Copyright
Compliance.

(a) Set forth in Schedule 5.15 is a list of the broadcast television stations
carried by the System that have elected “must-carry” or retransmission consent
status pursuant to the Cable Act. Except as set forth on Schedule 5.15, to the
Knowledge of Seller, each broadcast television station carried by the System is
carried pursuant to a retransmission consent agreement, “must-carry” election or
other programming agreement.

 

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(b) Other than with respect to those must-carry stations identified on Schedule
5.15, no written notices or demands have been received from the FCC or from any
broadcast television station or from any other Person or Governmental Entity
(i) challenging the right of any System to carry any television broadcast
station or deliver the same or (ii) claiming that the System failed to carry a
television broadcast station required to be carried pursuant to the
Communications Act or has failed to carry a television broadcast station on a
channel designated by such station consistent with the requirements of the
Communications Act.

(c) The System is in compliance in all material respects with the provisions of
the Cable Act as such Legal Requirements relate to the rates and other fees
charged to subscribers of the System. Seller has established rates charged to
subscribers that are allowable under the Cable Act and any authoritative
interpretation thereof, to the extent such rates are subject to regulation by
any Governmental Entity, including any local franchising authority and the FCC.
Seller has made available, to Purchaser true, complete and correct copies of all
FCC rate forms and will on not less than 10 days prior notice provide such other
information not previously provided and reasonably requested by Purchaser
relating to rate regulation generally or specific rates charged to subscribers
with respect to the System. Neither Seller nor any Affiliate of Seller has
entered into or is subject to any so-called social contract or proposed
resolution with the FCC with respect to rates charged for cable television
services in any System that would be applicable to such System following Closing
and none is currently negotiating or anticipating entering into or being subject
to the same. Except as set forth in Schedule 5.15, (i) there are no outstanding
or unresolved proceedings or investigations (other than those affecting the
cable industry generally) dealing with or otherwise affecting the rates that any
System can charge (whether for programming, equipment, installation, service or
otherwise), (ii) no System is subject to any currently effective order issued by
a Governmental Entity that reduced the rates that it may charge (whether for
programming, equipment, installation, service or otherwise (including late
fees)), and (iii) no local franchising authority has been certified by the FCC
as a rate regulating authority with respect to any System.

(d) Seller has complied in all material respects, and the System is in
compliance in all material respects with the specifications set forth in Part
76, Subpart K of the rules and regulations of the FCC, Section 111 of the
Copyright Act and the rules and regulations of the U.S. Copyright Office, the
Register of Copyrights and the Copyright Royalty Tribunal and the Cable Act.

(e) Except as provided in Schedule 5.15, Seller has complied in all material
respects with the must carry, retransmission consent, and commercial leased
access provisions of the Cable Act.

(f) Except as provided in Schedule 5.15, neither Seller nor any of its
Affiliates or contractors has received any notice from any Governmental Entity
regarding the Business with respect to an intention to enforce customer service
standards pursuant to the

 

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Cable Act and Seller has not agreed with any Governmental Entity to establish
customer service standards that exceed the standards in the Cable Act. Except as
set forth on Schedule 5.14, Seller has not made any election with respect to any
cost of service proceeding conducted in accordance with Part 76.922 of Title 47
of the Code of Federal Regulations or any similar proceeding with respect to any
System.

(g) Schedule 5.15 provides the FCC required 854R registration number, if any,
with respect to each antenna structure owned by Seller relating to the Systems.
True, complete and correct copies of all FCC Forms 854R have been, or will be
within ten Business Days after the date of this Agreement, made available by
Seller to Purchaser.

(h) Seller has filed with the U.S. Copyright Office all statements of account
and other documents and instruments and has paid all royalties, supplemental
royalties, fees and other sums to the U.S. Copyright Office under the Copyright
Act with respect to the System as are required to obtain, hold and maintain the
compulsory copyright license for cable television systems prescribed in
Section 111 of the Copyright Act. Seller has not been notified or otherwise
advised of any inquiry, claim, action or demand pending before the U.S.
Copyright Office or any other Person that questions the copyright filings or
payments made by Seller with respect to the Systems. Seller has made all
requisite filings and payments with the Register of Copyrights and is otherwise
in compliance with all applicable rules and regulations of the U.S. Copyright
Office. Seller has made available to Purchaser true, complete and correct copies
of all current reports and filings for the last six semi-annual reporting
periods made or filed pursuant to copyright rules and regulations with respect
to the System.

5.16 System Information.

(a) Schedule 5.16(a) sets forth a true and accurate statement of the following
information with respect to the System, as of the date or dates set forth
therein:

(i) the approximate number of aerial miles of plant included in the System and
the approximate number of underground miles of plant included in the System,
listed by headend;

(ii) the approximate number of homes passed by the System;

(iii) the approximate miles of plant operating at the applicable megahertz
capacity;

(iv) the approximate number of subscribers to basic, expanded basic, premium and
digital cable service, HDTV, DVR, telephone and HSI service, respectively, in
each case showing for residential and commercial customers, served by the System
by subscriber type;

(v) installation supplies and other personal property consumed, sold or used in
the Business valued at $500 per item or greater and inventories of set-top-boxes
and modems.

 

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(b) Schedule 5.16(b) sets forth a materially true and accurate description of
the following information relating to the System as of the date of this
Agreement:

(i) a rate card describing the services available from the System, and the rates
charged by Seller therefor, including all rates, tariffs, and other charges for
cable television, telephone, high-speed data and other services provided by the
System; and

(ii) a channel line up that includes the stations and signals carried by the
System and the channel position of each such signal and station. The System is
capable of providing all channels, stations and signals reflected as being
carried on the System on Schedule 5.16(b).

(c) Seller has made available to Purchaser materially true and accurate
information setting forth the node size, fiber counts and return paths for the
System.

5.17 Compliance with Laws.

The ownership, leasing and use of the Purchased Assets as they are currently
owned, leased and used, and the operation of the System as currently operated,
do not violate or infringe in any material respect any Legal Requirements
currently in effect (except as to Environmental Laws, as to which Section 5.20
only applies.) Seller has not taken or omitted to take any action, and, to the
Knowledge of Seller, no event has occurred or circumstance exists, that is
reasonably likely to (with or without the passage of time or the giving of
notice) result in a violation of, conflict with, or failure on the part of
Seller to conduct the operations of the System in compliance with any applicable
Law where such failure would have a Material Adverse Effect.

5.18 Bonds, Insurance and Letters of Credit.

Each insurance policy, material performance bond, letter of credit, deposits and
similar guarantee maintained or required to be maintained in connection with the
System is set forth on Schedule 5.18.

5.19 Accounts Receivable.

All Accounts Receivable included in the Purchased Assets are bona fide and are
attributable to transactions in the ordinary course. A complete and accurate
list of the Accounts Receivable as of the Effective Date, showing the aging
thereof, is set forth on Schedule 5.19. Seller shall update the Accounts
Receivable list 5 Business Days prior to Closing. To Seller’s Knowledge, there
are no contests, claims, defenses or rights of setoff against the Accounts
Receivable relating to the amount or validity of such Accounts Receivable that
that would have, in the aggregate, a Material Adverse Effect.

5.20 Environmental Matters.

(a) Seller has, at all times, occupied, used and operated the Real Property in
compliance with all Environmental Laws.

 

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(b) Seller has not received any written notice of any alleged violation of any
Environmental Law with respect to the Real Property and has not been ordered by
any Governmental Entity to undertake any cleanup of any of the Real Property.

(c) There is no civil, criminal or administrative claim, demand, hearing,
investigation, notice, suit, proceeding or other action with respect to the Real
Property pending or, to Seller’s Knowledge, threatened against Seller relating
to any Environmental Laws.

(d) There are no facts, circumstances, conditions or occurrences regarding
Seller that could reasonably be expected to form the basis of a claim of
violation or liability against Seller under any Environmental Law or result in
any violation by Seller of any Environmental Law with respect to the Real
Property.

(e) There are no underground or above ground storage tanks, active, inactive or
abandoned on the Owned Real Property and, to Seller’s Knowledge, have not been
on the Owned Real Property in the past, and none of the Owned Real Property has
been used at any time as a dry cleaning facility, gasoline service station or a
facility for storing, pumping, dispensing or producing gasoline or any other
petroleum products (other than such storage, pumping and dispensing of fuels and
lubricants as is incidental to operation of the System) or Hazardous Substances.

(f) All chemicals, chemical compounds and mixtures that are included among the
assets of Seller are integral to and used for the conduct of its business, have
not been and are not intended to be discarded or abandoned, and are not waste or
waste materials.

(g) Seller has made available to Purchaser true, complete and correct copies of
all analyses, audits, correspondence, investigations, reviews, reports and
studies on environmental matters relating to the Real Property that are in the
possession or control of Seller.

5.21 Intellectual Property.

To Seller’s Knowledge, Seller owns all right, title and interest in and to, or
has a valid and enforceable license or other right to use, all the intellectual
property used by it in connection with the Business, which constitutes all
intellectual property rights necessary for it to operate the Systems as
currently operated, and no Person is challenging or, to Seller’s Knowledge,
infringing or otherwise violating any intellectual property owned by Seller.
Except as set forth on Schedule 5.21, Seller has not received any notice of any
claim that any intellectual property used by Seller in the operation of the
Business infringes on any intellectual property rights of any other Person.

5.22 Transactions with Affiliates.

Schedule 5.22 lists all contracts and agreements between Seller and any of
Seller’s Affiliates. Except as set forth on Schedule 5.22, none of Seller’s
Affiliates provides any assets, services or facilities to Seller that are
material to the Business and operations of the Systems.

 

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5.23 Insurance.

Seller is covered by fire and casualty, general liability, professional
liability, workers compensation, theft and automobile insurance in scope and
amount customary and reasonable for the business in which it is engaged.

5.24 [Reserved].

5.25 Financial Advisors.

Except as set forth on Schedule 5.25, the fees of which will be paid by Seller,
no Person has acted, directly or indirectly, as a broker, finder or financial
advisor for Seller in connection with the transactions contemplated by this
Agreement and no such Person is entitled to any fee or commission or like
payment in respect thereof.

5.26 Disclosure.

None of the documents or information provided to Purchaser by Seller or any
agent or employee of Seller in the course of Purchaser’s due diligence
investigation and the negotiation of this Agreement (including the Schedules)
and the Transaction Documents, including the Financial Statements, contains any
untrue statement of any material fact or omits to state a material fact
necessary in order to make the statements contained in this Agreement or such
documents or information not misleading in light of the circumstances in which
it was made. The information set forth in the Schedules is accurate and complete
in all material respects.

5.27 Overbuilds.

Except as set forth on Schedule 5.27, (i) no Person, other than Seller,
Purchaser, or their respective Affiliates, is providing cable television service
within the Communities, (ii) no Person, other than Seller, Purchaser, or their
respective Affiliates, has publicly announced an intention to provide cable
television service within the Communities, and (iii) to the Knowledge of Seller
no Person, other than Seller, Purchaser, or their respective Affiliates, has
applied for a franchise to provide cable television service within the
Communities.

5.28 No Other Representations or Warranties; Schedules.

EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS ARTICLE V (AS
MODIFIED BY THE SCHEDULES HERETO) OR IN ANY OTHER TRANSACTION DOCUMENT, NEITHER
SELLER NOR ANY OTHER PERSON MAKES ANY OTHER EXPRESS OR IMPLIED REPRESENTATION OR
WARRANTY WITH RESPECT TO SELLER, THE BUSINESS, THE PURCHASED ASSETS, THE ASSUMED
LIABILITIES OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, AND SELLER
DISCLAIMS ANY OTHER REPRESENTATIONS OR WARRANTIES, WHETHER MADE BY SELLER, ANY
AFFILIATE OF SELLER OR ANY OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS OR REPRESENTATIVES. EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES
CONTAINED IN ARTICLE V HEREOF (AS MODIFIED BY THE SCHEDULES HERETO) OR IN ANY
OTHER TRANSACTION DOCUMENT, SELLER (I) EXPRESSLY DISCLAIMS ANY REPRESENTATION OR
WARRANTY, EXPRESSED OR IMPLIED, AT COMMON LAW, BY STATUTE, OR OTHERWISE,
RELATING TO THE CONDITION OF THE PURCHASED

 

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ASSETS (INCLUDING ANY IMPLIED OR EXPRESSED WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, OR OF CONFORMITY TO MODELS OR SAMPLES OF
MATERIALS) AND (II) HEREBY DISCLAIMS ALL LIABILITY AND RESPONSIBILITY (OTHER
THAN WITH RESPECT TO CLAIMS OF FRAUD, WILLFUL MISCONDUCT AND INTENTIONAL
MISREPRESENTATION) FOR ANY REPRESENTATION, WARRANTY, PROJECTION, FORECAST,
STATEMENT, OR INFORMATION MADE, COMMUNICATED, OR FURNISHED (ORALLY OR IN
WRITING) TO PURCHASER OR ITS AFFILIATES OR REPRESENTATIVES (INCLUDING ANY
OPINION, INFORMATION, PROJECTION, OR ADVICE THAT MAY HAVE BEEN OR MAY BE
PROVIDED TO PURCHASER BY ANY DIRECTOR, OFFICER, EMPLOYEE, AGENT, CONSULTANT, OR
REPRESENTATIVE OF SELLER OR ANY OF ITS AFFILIATES). SELLER MAKES NO
REPRESENTATIONS OR WARRANTIES TO PURCHASER REGARDING THE PROBABLE SUCCESS OR
PROFITABILITY OF THE BUSINESS.

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser hereby represents and warrants to Seller that:

6.1 Organization and Good Standing.

Purchaser is a limited liability company duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
limited liability company power and authority to own, lease and operate its
properties and to carry on its business.

6.2 Authorization of Agreement.

(a) Purchaser has full limited liability company power and authority to execute
and deliver this Agreement and each other agreement, document, instrument or
certificate contemplated by this Agreement or to be executed by Purchaser in
connection with the consummation of the transactions contemplated hereby and
thereby (the “Purchaser Documents”), and to consummate the transactions
contemplated hereby and thereby; (b) the execution, delivery and performance by
Purchaser of this Agreement and each Purchaser Document have been duly
authorized by all necessary limited liability company action on behalf of
Purchaser; (c) This Agreement has been, and each Purchaser Document will be at
or prior to the Closing, duly executed and delivered by Purchaser and (assuming
the due authorization, execution and delivery by the other parties hereto and
thereto) this Agreement constitutes, and each Purchaser Document when so
executed and delivered will constitute, the legal, valid and binding obligation
of Purchaser, enforceable against Purchaser in accordance with its terms, except
(i) as enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws from time to time in effect affecting the enforcement
of creditors’ rights generally, and (ii) as the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefore may be brought.

 

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6.3 Conflicts; Consents of Third Parties.

(a) None of the execution and delivery by Purchaser of this Agreement, the
consummation of the transactions contemplated hereby, or the compliance by
Purchaser with any of the provisions hereof will conflict with, or result in any
violation of or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination or cancellation under, any
provision of (i) the certificate of formation (or other organizational and
governing documents) of Purchaser, (ii) any Contract or Permit to which
Purchaser is a party or by which Purchaser or its properties or assets are
bound, (iii) any Order of any Governmental Entity applicable to Purchaser or by
which any of the properties or assets of Purchaser are bound or (iv) any
applicable Law.

(b) No consent, waiver, approval, Order, Permit or authorization of, or
declaration or filing with, or notification to, any Person or Governmental
Entity is required on the part of Purchaser in connection with the execution and
delivery of this Agreement, the compliance by Purchaser with any of the
provisions hereof, the consummation of the transactions contemplated hereby, or
for Purchaser to conduct the Business, except for compliance with the applicable
requirements of the Hart-Scott Rodino Antitrust Improvements Act of 1976 such
other consents, waivers, approvals, Orders, Permits or authorizations the
failure of which to obtain would not have a Material Adverse Effect upon
Purchaser’s ability to consummate the transactions contemplated by this
Agreement.

6.4 Litigation.

There are no Legal Proceedings pending or, to the Knowledge of Purchaser,
threatened against Purchaser, or to which Purchaser is otherwise a party before
any Governmental Entity, which, if adversely determined, would reasonably be
expected to have a material adverse effect on the ability of Purchaser to
perform its obligations under this Agreement or to consummate the transactions
hereby. Purchaser is not subject to any Order of any Governmental Entity except
to the extent the same would not reasonably be expected to have a material
adverse effect on the ability of Purchaser to perform its obligations under this
Agreement or to consummate the transactions contemplated hereby.

6.5 Financial Advisors.

No Person has acted, directly or indirectly, as a broker, finder or financial
advisor for Purchaser in connection with the transactions contemplated by this
Agreement and no Person is entitled to any fee or commission or like payment in
respect thereof.

ARTICLE VII

COVENANTS

7.1 Access to Information.

(a) Seller agrees that, prior to the Closing, Purchaser shall be entitled,
through its officers, employees and representatives (including its legal
advisors and accountants), to make such investigation of the properties,
businesses and operations of the Systems and such

 

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examination of the books and records of the Business, the Purchased Assets and
the Assumed Liabilities as it reasonably requests and to make extracts and
copies of such books and records. Any such investigation and examination shall
be at Purchaser’s sole cost and expense, and conducted during regular business
hours upon reasonable advance notice and shall be subject to restrictions under
applicable Law. Seller shall cause the officers, employees, consultants, agents,
accountants, attorneys and other representatives of Seller to cooperate with
Purchaser and Purchaser’s representatives in connection with such investigation
and examination, and Purchaser and its representatives shall cooperate with
Seller and its representatives and shall use their reasonable efforts to
minimize any disruption to the Business. Notwithstanding anything herein to the
contrary, no such investigation or examination shall be permitted to the extent
that it would require Seller to disclose information subject to attorney-client
privilege or conflict with any confidentiality obligations to which Seller is
bound. Notwithstanding anything to the contrary contained herein, prior to the
Closing, without the prior written consent of Seller, which consent may not be
unreasonable conditioned, withheld or delayed, (i) Purchaser shall not contact
any suppliers to, or customers of, Seller and (ii) Purchaser shall not
communicate with any System employee except for such management personnel
designated by Seller as a contact for Purchaser.

(b) For a period of five years after the Closing, Purchaser will give Seller
reasonable access during Purchaser’s regular business hours upon reasonable
advance notice and under reasonable circumstances and shall be subject to
restrictions under applicable Law to books and records transferred to Purchaser
to the extent necessary for the preparation of financial statements, regulatory
filings or Tax returns of Seller or its Affiliates in respect of periods ending
on or prior to Closing, or in connection with any Legal Proceedings; provided
however, that this Section 7.1(b) shall not apply in connection with any matter
or dispute between the parties hereto or their Affiliates, including any claim
for indemnification pursuant to Article X hereof. Seller shall be entitled, at
its sole cost and expense, to make copies of the books and records to which they
are entitled to access pursuant to this Section 7.1(b).

7.2 Conduct of the Business Pending the Closing.

Between the Effective Date and the Closing, except (i) as required by applicable
Law or Contract in effect as of the Effective Date, (ii) as otherwise expressly
provided for in this Agreement or (iii) with the prior written consent of
Purchaser (which consent shall not be unreasonably withheld, delayed or
conditioned), Seller shall operate the Business in the Ordinary Course of
Business. Seller will use its commercially reasonable efforts to (i) preserve
the Business, including preserving existing relationships with franchising
authorities, suppliers, customers and others having business dealings with
Seller relating to the Systems, maintaining the Purchased Assets in good
operating condition and repair, , and maintaining service quality; (ii) keep
available the services of the Employees and pay all compensation and employment
taxes in accordance with applicable Legal Requirements; (iii) file with the
appropriate Governmental Entities all reports required to be filed under the
Governmental Authorizations and applicable Legal Requirements; (iv) implement
planned rate increases; (v) continue to carry insurance with respect to the
Business in such amounts and with respect to such risks as has been historically
carried; and (vi) comply in all material respects with all applicable Legal
Requirements with respect to the Systems or the Business. Seller will not take
actions or engage in transactions outside the Ordinary Course of Business
without first consulting with Purchaser.

 

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Without limiting the foregoing, except as otherwise required by any Legal
Requirement or any Governmental Entity or as permitted by this Agreement, until
the Closing, Seller will not, without the prior written consent of Purchaser:

(a) make any sale, assignment, transfer, conveyance, abandonment or other
disposition of any of the Purchased Assets, except for dispositions of inventory
or worn-out or obsolete equipment for fair or reasonable value in the Ordinary
Course of Business;

(b) subject any of the Purchased Assets, or any part thereof, to any Encumbrance
except Permitted Encumbrances;

(c)(i) enter into any material contract or agreement or series of related
contracts or agreements that in the aggregate would be material (other than
contracts or agreements that are terminable on no more than 30 days prior
notice), (ii) make any commitment, whether directly or indirectly by way of
guarantee or otherwise, for an expenditure relating to any System that is not in
the Ordinary Course of Business, or (iii) renew, extend, amend, modify, suspend
performance under, or terminate any System Contract or Governmental
Authorization;

(d) fail to use commercially reasonable efforts to maintain the Purchased Assets
in good condition and repair, reasonable wear and tear excepted, including
failing to perform all reasonable maintenance when scheduled or otherwise
appropriate, or fail to maintain inventory for the System at levels appropriate
to Seller’s operation of the Business;

(e) fail to maintain its Records in the usual, regular and Ordinary Course of
Business or materially change (with respect to the Business, as a whole, or the
components of the Business, individually) its accounting practices or policies
or its application thereof, except as required by GAAP, accounting or financial
reporting rules and regulations, provided that, in the event of any such
required change, Seller will promptly notify Purchaser thereof in writing;

(f) increase Employee compensation and benefits, except as may be required by
applicable Legal Requirements and normal increases in the Ordinary Course of
Business that, in the aggregate, do not result in a material increase in
benefits or compensation expense to Seller with respect to the Employees (other
than those that Seller will retain upon the Closing);

(g) offer any promotional rates not listed on Schedule 7.2(g);

(h) fail to disconnect and discontinue service to subscribers whose accounts are
delinquent;

(i) reduce the rates charged for Cable Video Services, Telephone Services, or
HSI Services or add, delete, retier or repackage any analog or digital
programming services;

(j) except in the Ordinary Course of Business consistent with past practices,
sell, transfer or lease any of the Purchased Assets to, pay, loan or advance any
amount to, or enter into any agreement or arrangement relating to the Business
with, any of its Affiliates; or

 

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(k) commit to do any of the foregoing.

7.3 Consents.

(a) Purchaser shall use its commercially reasonable efforts to obtain Franchises
in accordance with O.C.G.A 36.76.01-11 in its own name for all Communities
served by the System and listed on Schedule 5.14(a) sufficient to cover the
Purchaser’s operations of the Business and the System from and after Closing.

(b) Except as to Franchises listed on Schedule 5.14(a), Seller will employ
commercially reasonable efforts to promptly request and obtain each Required
Consent, and Purchaser will cooperate with Seller in all commercially reasonable
respects to obtain each Required Consent. Seller will promptly notify Purchaser
if, in connection with obtaining any Required Consent, a Governmental Entity or
other Person seeks to impose any condition on or change to any Governmental
Authorization or System Contract (any such condition or change being referred to
as a “Consent Condition”). Without Purchaser’s prior written consent, which may
be withheld in Purchaser’s sole discretion, Seller will not agree to any Consent
Conditions other than monetary Consent Conditions that Seller will satisfy prior
to the Closing and non-monetary Consent Conditions that are not material to the
applicable System Contract. Purchaser shall (and shall cause its Affiliates to)
cooperate with Seller, to obtain the Required Consents. Seller and Purchaser
shall each pay fifty percent (50%) of any commercially reasonable consideration,
fees and costs payable to any third party (or its agents) from whom consent or
approval is requested. Notwithstanding anything to the contrary contained in
this Section 7.3, Seller’s obligations hereunder with respect to pursuing a
Required Consent shall be fully satisfied with respect to (i) the transfer of
pole attachment or conduit contracts, if Purchaser has executed a new contract
with the respective pole company or if such pole company has indicated in
writing that it is willing to execute a new contract at or prior to the Closing
with Purchaser on terms substantially the same as the current terms thereof; and
(ii) the transfer of railroad crossing permits or contracts, if Purchaser has
executed a new permit or contract with the respective railroad company or if
such railroad company has indicated in writing that it is willing to execute a
new permit or contract at or prior to the Closing with Purchaser on terms
substantially the same as the current terms thereof.

(c) Seller will request all Required Consents for Real Property Leases by letter
substantially in the form of Exhibit B. Seller will request all other Required
Consents by letter substantially in the form of Exhibit C.

(d) Periodically prior to Closing, the parties shall provide each other with
updates regarding the then current status of each of the Required Consents and
what action has been taken with respect to obtaining such Required Consents.

(e) If, notwithstanding the exercise of their commercially reasonable efforts
and compliance with this Section 7.3, Seller is unable to obtain one or more of
the Required Consents or Required Regulatory Approvals: (i) unless otherwise
agreed by the Parties, at the Closing, Seller will transfer the affected
Purchased Asset to Purchaser notwithstanding the absence of any such Required
Consent or Required Regulatory Approval and (ii) Seller will continue to
exercise its commercially reasonable efforts to obtaining each such Required

 

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Consent and Required Regulatory Approval for a period of 12 months following the
Closing; provided, that, compliance by Seller with the provisions of this
Section 7.3(e) shall not be deemed to result in the breach of any
representations or warranties of Seller herein.

7.4 Confidentiality Agreement.

Each party shall keep secret and hold in confidence for a period of three years
following the Effective Date, any and all information relating to the other
party that is proprietary to such other party, other than the following:
(a) information that has become generally available to the public other than as
a result of a disclosure by such party; (b) information that becomes available
to such party or an agent of such party on a non-confidential basis from a third
party having no obligation of confidentiality to a party to this Agreement;
(c) information that is required to be disclosed by applicable law, judicial
order or pursuant to any listing agreement with, or the rules or regulations of,
any securities exchange on which securities of such party or any such affiliate
are listed or traded; and (d) disclosures made by any party as shall be
reasonably necessary in connection with obtaining the Consents. In connection
with disclosure of confidential information under (c) and (d) above, the
disclosing party shall give the other party hereto timely prior notice of the
anticipated disclosure and the parties shall cooperate in designing reasonable
procedural and other safeguards to preserve, to the maximum extent possible, the
confidentiality of such material. Upon Closing, Purchaser may disclose
information pertaining to the Purchased Assets, the Systems or the Business, and
such disclosure right shall in no way be limited or governed by any other
portion of this Section 7.4. Purchaser hereby acknowledges Seller has a public
disclosure and filing obligations including but not limited to the solicitation
of the approval of a majority in interest of Seller’s limited partners to the
consummation of the transactions contemplated hereby and authorizes Seller to
disclose certain information regarding the Purchaser as may be reasonably
necessary.

7.5 Publicity.

Neither Seller nor Purchaser shall issue any press release or public
announcement concerning this Agreement or the transactions contemplated hereby
without obtaining the prior written approval of the other party hereto, which
approval will not be unreasonably withheld or delayed; provided that (a) either
party may, without the other party’s prior written consent, disclose information
to its financing sources and professional advisors, including accountants,
attorneys, investors, financial advisors, bankers and other experts, (b) Seller
may, without Purchaser’s prior written consent, make public statements with
respect to this Agreement and the transactions contemplated hereby to its
general and limited partners, (c) either party may make public statements or
disclosures as may be required by applicable laws, including SEC requirements,
and (d) Seller may make such filings with the Securities and Exchange Commission
as Seller deems necessary to solicit approval of the transaction contemplated by
this Agreement from Seller’s limited partners.

7.6 Use of Name.

For a period six months after the Closing Date, Purchaser will have the
non-exclusive right to use and operate the Systems using all of the trademarks,
trade names, service marks,

 

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service names, logos and similar proprietary rights, which are or have been used
by Seller with respect to the Business or the Systems (collectively, the “Seller
Marks”). Following the expiration of such six-month period, Purchaser will
discontinue using and will dispose of all items of stationery, business cards
and literature bearing the Seller Marks; provided that, notwithstanding the
foregoing, Purchaser will not be required to remove or discontinue using any
Seller Marks affixed to converters or other items in or to be used in customer
premises or as are otherwise used in a fashion making such removal or
discontinuation commercially impracticable for Purchaser.

7.7 Transition Services. Seller will cause its managing general partner to
provide to Purchaser in connection with the Systems, transition services for a
period of up to 180 days following Closing and will use its commercially
reasonable efforts to cause necessary third parties to cooperate in the
provision of, certain transition services following the Closing, which may
include the conversion of existing call centers, billing systems, telephony
services, HSI services, support services, including access to and the right to
use its billing system, billing call center, Internet addresses, software,
Internet back bone connection, e-mail servers and related fixed assets, and
other services reasonable requested by Purchaser, pursuant to a transition
services agreement to be negotiated in good faith by the Parties within 60 days
after the date of this Agreement (the “Transition Services Agreement”). The
Transition Services Agreement will contain among other provisions the condition
that Seller or Seller’s Affiliates provide the transition services to Purchaser
at the Seller’s actual out of pocket cost and, with respect to transition
services provided by Seller’s Affiliates, at rated charged by such Affiliate in
the Ordinary Course of Business.

7.8 Bonds, Letters of Credit, Etc.

Purchaser shall execute and deliver all reasonably necessary documents, to
insure that on or before Closing, Purchaser has delivered each such bonds,
letters of credit, indemnity agreements and similar instruments currently
maintained and in effect as set forth in Schedule 5.18 in such amounts and in
favor of such entities requiring the same in connection with the Purchased
Assets, including all Permits, Franchises and Contracts.

7.9 Cooperation with Respect to Third Party Services.

(a) Except to the extent doing so will cause Seller to incur, or place Seller at
risk of incurring, a material liability, Seller will cooperate with Purchaser in
its efforts to comply with the requirements of Purchaser’s programming contracts
and channel line-up requirements with respect to Purchaser’s acquisition of the
System.

(b) Unless otherwise restricted or prohibited by any Governmental Entity or
applicable Legal Requirement or will cause Seller to incur, or place Seller at
risk of incurring, a material liability, Seller will, if requested by Purchaser,
delete prior to the Closing any distant broadcast signals that Purchaser
determines will result in unacceptable liability on the part of Purchaser for
copyright payments with respect to continued carriage of such signals after the
Closing.

 

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7.10 Limited Partners Approval.

(a) Promptly after receipt of the Fairness Opinion pursuant to Section 7.19 of
this Agreement concluding that the sale of Seller’s assets, in the aggregate, is
fair from a financial point of view to Seller’s limited partners, and after
completing SEC review of the Proxy Statement, , NCC shall call, give notice of,
convene and hold a meeting of Seller’s limited partners (the “Limited Partners’
Meeting”) for the purpose of approving this Agreement and the sale of the
Systems, Business and Purchased Assets to Purchaser pursuant to the terms of the
Seller’s limited partnership agreement and applicable limited partnership law.
Subject to the Fairness Opinion concluding that the sale of Seller’s assets, in
the aggregate, is fair from a financial point of view to Seller’s limited
partners, Seller shall solicit from Seller’s limited partners proxies in favor
of the approval of this Agreement and the sale of the Systems, Business and
Purchased Assets. Seller shall ensure that all proxies solicited pursuant to the
foregoing are solicited in compliance with all applicable Laws.

(b) In connection with the Sellers’ Limited Partners’ Meeting, Seller shall
prepare and file with the SEC a proxy statement, letter to shareholders, notice
of meeting and form of proxy accompanying the Proxy Statement that will be
provided to Seller’s limited partners in connection with the solicitation of
proxies for use at the Sellers’ Limited Partners’ Meeting, and any schedules
required to be filed with the SEC in connection therewith (collectively, as
amended or supplemented, the “Proxy Statement”). Subject to all applicable Laws,
Seller shall use its commercially reasonable best efforts to cause the Proxy
Statement to be cleared by the SEC and disseminated to the Seller’s limited
partners as promptly as practicable following the filing thereof with the SEC.
The Seller shall provide Purchaser and its counsel reasonable opportunity to
review and comment on any information used by the Seller in the Proxy Statement
regarding the Purchaser that (i) constitute “proxy materials” or “solicitation
materials” as those terms are used in Rules 14a-1 through 14a-17 promulgated
under the Securities Exchange Act of 1934 (the “Exchange Act”) or (ii) are
otherwise used for the “solicitation” of “proxies” as those terms are defined in
Rule 14a-1 promulgated under the Exchange Act, in each case prior to the filing
thereof with the SEC or the dissemination thereof to Seller’s limited partners.
Seller shall advise Purchaser, promptly after it receives notice thereof, of any
request by the SEC or its staff for an amendment or revisions to the Proxy
Statement, or comments thereon and responses thereto, or requests by the SEC or
its staff for additional information in connection therewith. If at any time
prior to the Sellers’ Limited Partners’ Meeting, any information relating to
Purchaser, or any of its respective directors, officers or Affiliates, should be
discovered by Seller or Purchaser which should be set forth in an amendment or
supplement to the Proxy Statement so that the Proxy Statement would not include
any misstatement of a material fact or omit to state any material fact necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading, the party that discovers such information shall
promptly notify the other party or parties hereto, as the case may be, and an
appropriate amendment or supplement to the Proxy Statement describing such
information shall be promptly prepared and filed with the SEC and, to the extent
required by applicable Law, disseminated to the Sellers’ Limited Partners’
Meeting. Seller shall cause the Proxy Statement to comply as to form and
substance in all material respects with the applicable requirements of the
Exchange Act, as amended, and the applicable exchange.

 

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(c) Subject to the Fairness Opinion concluding that the sale of Seller’s assets,
in the aggregate, is fair from a financial point of view to Seller’s limited
partners, the Seller shall include in the Proxy Statement the recommendation,
unanimously approved by the Board of Directors of NCC, that the limited partners
approve this Agreement and the sale of the Systems, Business and Purchased
Assets to Purchaser.

7.11 Endorsement of Checks, Etc.

Seller hereby authorizes Purchaser following the Closing to endorse for deposit
only its name on and collect for Purchaser’s account any checks received in
payment of any accounts included in the Purchased Assets, and any refunds of
deposits, prepaid expenses and similar amounts included in the Purchased Assets.
If any amounts due to the Purchaser are received by Seller, Seller will promptly
turn the same over to Purchaser.

7.12 No Solicitation.

Seller (and its directors, officers, employees, representatives and agents) will
not directly or indirectly, (a) offer the Purchased Assets, the Systems or the
Business for sale, (ii) solicit, encourage or entertain offers for such
Purchased Assets, Systems or Business, (iii) initiate negotiations or
discussions for the sale of such Purchased Assets, Systems or Business or
(iv) make information about such Purchased Assets, Systems or Business available
to any third party in connection with the possible sale of such Purchased
Assets, Systems or Business prior to the Closing Date or the date this Agreement
is terminated in accordance with its terms.

7.13 Non-Competition.

During the period beginning on the Closing Date and ending on the second
anniversary thereof (the “Non-Competition Period”), neither Seller, NCC, nor any
Affiliate of NCC (each, a “Restricted Party”) shall, within the service area
served by the communication facilities existing as of the Closing Date (the
“Restricted Area”), directly or indirectly, in any capacity, render services,
engage or have a financial interest in, any business that shall be competitive
with any such System, nor shall any Restricted Party assist any person or entity
that shall be engaged in any such business activities within the Restricted
Area, including making available any information or funding to any such person
or entity. If any Governmental Entity determines that the foregoing restrictions
are too broad or otherwise unreasonable under applicable Law, including with
respect to time or geographic area, such Governmental Entity is hereby requested
and authorized by the parties hereto to revise the foregoing restriction to
include the maximum restrictions allowable under applicable Law. Each Restricted
Party acknowledges, however, that this Section 7.13 has been negotiated by the
parties hereto and that the geographical and time limitations, as well as the
limitation on activities, are reasonable in light of the circumstances
pertaining to the Systems.

7.14 Non-Solicit.

During the three (3) year period following the Effective Date, (i) Purchaser
shall not directly or indirectly, through any Affiliate, officer, director,
agent or otherwise, solicit the employment of or employ or retain as a
consultant any executive officer, supervisor or manager of NCC or any Affiliate
of NCC (other than Seller) as of the Effective Date, and (ii) neither Seller nor
NCC shall directly or indirectly, through any Subsidiary, officer, director,
agent of Seller or NCC or otherwise, solicit the employment of or employ or
retain as a consultant any

 

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executive officer, supervisor or manager of Purchaser or any Affiliate of
Purchaser as of the Effective Date. The foregoing restrictions shall not apply
to individuals that (a) are not employed by a party at the time of the
solicitation, employment or retention, (b) respond to general public
advertisements of a job opening or (c) are recruited through an employment
agency not targeted at such Person’s employees.

7.15 Title Insurance Policies.

(a) Seller will provide to Purchaser, at Seller’s expense, within 120 days after
the date of this Agreement, commitments to issue title insurance policies on the
1992 ALTA owner’s form (or its local equivalent in any state in which ALTA
policies are not available) (“Title Commitments”) by an agent writing for
Chicago Title or another nationally recognized title insurance company (the
“Title Company”) and legible photocopies of all recorded items described as
exceptions therein, committing to insure fee simple title in the Purchaser to
each parcel of Owned Real Property and tenant’s leasehold interest in each
parcel of Leased Real Property containing a headend or tower (collectively, the
“Commitment Properties”), subject only to Permitted Encumbrances. In addition,
Purchaser may obtain, at Purchaser’s sole cost and expense, a current survey of
all Commitment Properties prepared by a duly licensed surveyor reasonably
acceptable to Purchaser.

(b) Promptly following Closing, Seller shall cause the Title Company, at
Seller’s sole cost and expense, to issue policies of title insurance (“Title
Policies”) with respect to each of the Commitment Properties with policy limits
equal to the appraised value of the property; provided, however, that Purchaser
shall be solely responsible for obtaining and paying for the cost of any such
appraisal and, in the event Purchaser elects not to do so, the policy limits
shall be equal to the fair market value of the property. The cost to obtain such
Title Commitments and Title Policies with respect to the Commitment Properties
will be paid by Seller; provided, however, that the Purchaser will pay the
premiums and charges other than with respect to the Commitment Properties and
for any additional endorsements it requests with respect to any Title Policy
other than the endorsements to delete or insure over any Title Defects.

(c) If the Purchaser notifies Seller within 90 days after the date of this
Agreement of (i) any Encumbrance (other than a Permitted Encumbrance),
(ii) other matter that prevents access to any Owned Real Property or Leased Real
Property, or (iii) any other matter that, individually or in the aggregate could
have a material adverse effect on the use or value of such Owned Real Property
or Leased Real Property (each a “Title Defect”), Seller will exercise
commercially reasonable efforts to (A) remove such Title Defect, or (B) subject
to Purchaser’s approval, cause the Title Company to commit to insure over each
such Title Defect prior to the Closing. If such Title Defect cannot be removed
prior to Closing or the Title Company does not commit to insure over such Title
Defect prior to Closing and if the Purchaser elects to waive such Title Defect
and proceed towards consummation of the transaction in accordance with this
Agreement, Purchaser and Seller will enter into a written agreement at Closing
containing the commitment of Seller to use commercially reasonable efforts to
remedy the Title Defect following Closing on terms satisfactory to Purchaser in
its reasonable discretion. At the Closing, each Party will deliver such
reasonable affidavits and other customary closing documents as are required by
the Title Company in order to issue

 

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Title Policies or to delete or insure over any Title Defects, provided that such
affidavits do not expand or limit the special or limited warranties of Seller
contemplated in the applicable deed described in Section 7.15(b).

7.16 Notification to Purchaser of Changes; Additional Information.

(a) Seller will give Purchaser prompt written notice of any event, condition or
fact that would cause any of its representations or warranties in this Agreement
were untrue when made, or would be untrue if made at any time after the date of
this Agreement.

(b) Seller will from time to time prior to the Closing promptly supplement or
amend the Schedules relating to ARTICLE V with respect to any matter (i) that
existed as of the date of this Agreement and should have been set forth or
described in such Schedules or (ii) arising after the date of this Agreement
that, if existing as of the date of this Agreement, would have been required to
be set forth or described in such Schedules in order to make any representation
or warranty set forth in ARTICLE V true and correct as of such date. No
disclosure by Seller pursuant to this Section 7.16(b), however, will be deemed
to amend or supplement such Schedules or to have qualified the representations
and warranties contained in this Agreement, unless Purchaser expressly consents
to such supplement in writing or such supplement is the result of an event
expressly authorized under the terms of this Agreement. If the effect of any
such updates to Schedules is to disclose any one or more additional properties,
privileges, rights, interests or claims as Assets that existed as of the
Effective Date, then Purchaser, by notice to Seller, will have the right (to be
exercised by written notice to Seller) to cause any one or more of such items to
be designated as and deemed to constitute Excluded Assets for all purposes under
this Agreement.

(c) By the 15th of each calendar month, and also not less than five days prior
to the Closing Date, Seller will deliver to Purchaser a report containing:

(i) a true and accurate statement of the information required to be set forth on
Schedule 5.16(a) with respect to clauses (ii), (iv) and (vi) of Section 5.16(a),
but as of the first day of such calendar month or a date no greater than ten
days prior the Closing Date, as the case may be, with all information calculated
and presented consistently with the information on
Schedule 5.16(a); and

(ii) copies of monthly Financial Statements.

7.17 Capital Leases; Evidence of Terminations.

Prior to the Closing, Seller will pay the remaining balances on any capital or
vehicle lease under which it leases any of the Purchased Assets and will deliver
such Purchased Assets to Purchaser at Closing free and clear of any Encumbrances
(other than Permitted Encumbrances). Seller will provide to Purchaser at the
Closing evidence reasonably satisfactory to Purchaser that all Encumbrances
(other than Permitted Encumbrances) affecting or encumbering the Purchased
Assets have been terminated.

7.18 Environmental Assessments. Seller acknowledges and agrees that Purchaser
may commission, at Purchaser’s sole cost and expense, a Phase I environmental
site assessment of the

 

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Real Property (a “Phase I Assessment”). If Purchaser, in its sole discretion,
determines based on the Phase I Assessment or any other information known to
Purchaser (including information disclosed in connection with the negotiation of
this Agreement or described in the Schedules hereto) further assessment
(including collection and analysis of environmental media) or other additional
testing or analysis of the Real Property (a “Phase II Assessment”) is advisable,
Purchaser may conduct or caused to be conducted such testing and analysis at
Purchaser’s sole cost and expense. Seller will comply with any reasonable
request for information made by Purchaser or its agents in connection with any
such investigation, but in no event will Seller be required under this
Section 7.18 to disclose any materials constituting attorney-client privileged
communications. Upon request by Purchaser, Seller will afford Purchaser and its
agents or representatives access to the Real Property at reasonable times and in
a reasonable manner in connection with any such investigation (subject, in the
case of Leased Real Property to the consent rights of the landlord); provided
that Purchaser shall not unreasonably interfere with Seller’s use and operation
of the Real Property. Should Purchaser commission such an investigation, such
investigation will have no effect upon the representations and warranties made
by Seller to Purchaser under this Agreement, except that if any Phase I
Assessment or Phase II Assessment documents an environmental condition that
would reasonably be construed to be a breach of Seller’s representations or
warranties herein and such breach is capable of being cured, Seller will be
deemed not to have breached such representation or warranty if Seller cures such
breach, at no cost to Purchaser, in accordance with the provisions of this
Agreement.

7.19 Fairness Opinion. Seller shall engage its financial advisor to deliver,
within 65 days of the date of this Agreement, an opinion on whether the purchase
price for sale of Seller’s assets in the aggregate, including the sale of Seller
systems not included in this Agreement, is fair, in the aggregate, from a
financial point of view, to Seller’s limited partners. Seller shall cooperate
with and provide all information reasonably requested by its financial advisor
in order to obtain the opinion.

ARTICLE VIII

EMPLOYEES AND EMPLOYEE BENEFITS

8.1 Employment.

(a) Within 30 Days following the execution and delivery of this Agreement,
Seller will provide Purchaser an updated Employee Schedule and notify Purchaser
which of the Employees, if any, listed on the Employee Schedule that Seller
intends to retain as its employees. Purchaser may make offers of employment to
any or all Employees disclosed on the Employee Schedule, other than those
Employees that Seller indicates it intends to retain. Prior to Closing, without
Seller’s consent which shall not be unreasonably withheld or delayed, Purchaser
shall not communicate directly with any Employee regarding whether Purchaser
intends to employ such Employee. All offers of employment by Purchaser will
provide for the same salary and work location with respect to each Employee as
described on such list and will not be subject to any preconditions other than
Purchaser’s usual and customary hiring procedures that are in conformance with
all applicable Legal Requirements. Employees hired by Purchaser

 

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are referred to herein as “Transferred Employees.” Except as otherwise provided
in this Section 8.1, Seller will retain liability for all obligations and
liabilities of the Employees who Purchaser does not hire at the Closing Date.

(b) Subject to applicable Legal Requirements, Purchaser will assume accruals
prior to the applicable hire date for (i) unused vacation to the lesser of 80
hours or the full amount of vacation leave accrued by such Employee but unused
as of the Closing Date under the vacation policy of Seller applicable to such
Employee, and (ii) unused sick leave to the lesser of (i) 40 hours or (ii) the
full amount of sick leave accrued by such Employee but unused as of the Closing
Date under the sick leave policy of Seller applicable to such Employee.
Purchaser will not assume any paid time off, short-term disability salary
continuation payment obligations, or long-term disability payment obligations
for any Employee who is receiving long-term disability payments from Seller at
the time of the Closing. The Employees hired by Purchaser will receive credit
for all periods of employment with Seller or its Affiliates prior to the Closing
Date for purposes of eligibility and vesting (but not for benefit accrual,
except for accrual of vacation benefits). Notwithstanding any of the foregoing,
to the extent that pre-Closing accruals for unused vacation cannot be assumed by
Purchaser under applicable Legal Requirements or under Purchaser’s vacation
policy, Purchaser will have no obligation to assume such accruals and Seller
will pay the Transferred Employees for such accruals at the Closing.

(c) Seller will make the Transferred Employees available to Purchaser prior to
the Closing for a reasonable amount of training on Purchaser’s systems, at a
mutually agreed upon time and a location reasonably designated by Purchaser.
Training shall occur no soon than 90 days prior to the anticipated Closing date,
and all expenses and costs related to such training shall be at Purchaser’s sole
cost and expense.

(d) Seller will have full responsibility and liability for offering and
providing “continuation coverage” to any “covered employee” who is an Employee,
and to any “qualified beneficiary” of such Employee, and who is in each case
covered by a “group health plan” sponsored or contributed to by Seller to the
extent that such continuation coverage is required to be provided by Seller
under Section 4980B of the Code and regulations promulgated thereunder as a
result of a “qualifying event” experienced by such covered employee or qualified
beneficiary with respect to or in connection with the transactions contemplated
by this Agreement. “Continuation coverage,” “covered employee,” “qualified
beneficiary,” “qualifying event” and “group health plan” all will have the
meanings given such terms under the Section 4980B of the Code and Section 601 et
seq. of ERISA.

(e) Seller will be responsible for the maintenance and distribution of benefits
accrued up to the Closing Date under Seller’s Employee Benefit Plans and
Employee Programs, including any 401(k) plan maintained by the Seller, pursuant
to the provisions of such plans and programs and any applicable Legal
Requirement. Purchaser will not assume any obligation or liability for any such
accrued benefits or any fiduciary or administrative responsibility to account
for or dispose of any such accrued benefits under any Employee Benefit Plan or
Employee Program.

(f) For the purposes of federal employment taxes with respect to those
Transferred Employees who are employed by Purchaser within the same calendar
year as the

 

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Closing, Purchaser shall treat the transaction contemplated by this Agreement,
as a transaction described in Treas. Reg. Sections 31.3121(a)(1)-1(b)(2) and
31.3306(b)(1)-1(b)(2). Purchaser and Seller agree to comply with the alternate
employment tax reporting procedures described in Section 5 of Internal Revenue
Service Revenue Procedure 2004-53.

(g) Seller has delivered to Purchaser descriptions of Seller’s vacation and sick
leave policies. No later than five days following the Closing Date, Seller will
provide to Purchaser a list of the accrued vacation as of the Closing Date for
each Transferred Employee.

(h) All claims and obligations under, pursuant to or in connection with any
welfare, medical, insurance, disability or other Employee Benefit Plan of Seller
or arising under any legal requirement affecting Employees of Seller incurred
through and including the Closing Date or resulting from or arising from events
or occurrences occurring or commencing through and including the Closing Date
will remain the responsibility of Seller. Purchaser will not have nor assume any
obligation or liability under or in connection with any such Employee Benefit
Plan maintained by the Seller.

(i) Nothing in this Section or elsewhere in this Agreement will be deemed to
make any Employee, or any other employee of Seller or any Affiliate of Seller, a
third party beneficiary of this Agreement.

ARTICLE IX

CONDITIONS TO CLOSING

9.1 Conditions Precedent to Obligations of Purchaser.

The obligation of Purchaser to consummate the transactions contemplated by this
Agreement is subject to the fulfillment or waiver, on or prior to the Closing
Date, of each of the following conditions (any or all of which may be waived by
Purchaser in whole or in part to the extent permitted by applicable Law):

(a) each of the representations and warranties contained in Article V that are
not qualified by reference to materiality, Material Adverse Effect or similar
language shall have been true and correct in all material respects as of the
Effective Date and shall be true and correct in all material respects on and as
of the Closing Date (except for representations and warranties which contemplate
a different date which need only be true and correct in all material respects as
of such date) as though such representations and warranties had been made on and
as of such date, and each of the representations and warranties contained in
Article V that are qualified by reference to materiality, Material Adverse
Effect or similar language shall have been true and correct in all respects when
made on the Effective Date and shall be true and correct in all respects on and
as of the Closing Date (except for representations and warranties which
contemplate a different date which need only be true and correct in all respects
as of such date) as though such representations and warranties had been made on
and as of such date;

(b) Seller shall have performed and complied in all material respects with all
covenants and agreements required in this Agreement to be performed or complied
with by it prior to the Closing Date;

 

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(c) there shall not have been instituted or threatened any Legal Proceeding to
enjoin or otherwise prevent or prohibit the consummation of the transactions
contemplated hereby, or any pending or threatened Legal Proceeding seeking
material damages that relate to or arise out of this Agreement or the
consummation of the transactions contemplated hereby or result or could result
in a Material Adverse Effect;

(d) all Required Regulatory Approvals will have been obtained and be in effect
as of the Closing Date, will be final and nonappealable, and will be in form and
substance reasonably acceptable to Purchaser; provided however, with respect to
a Franchise, Purchaser shall have obtained such authorizations as are necessary
under O.C.G.A 36.76.01-11 to own and operate the Business. Purchaser will have
received copies of all such Required Regulatory Approvals;

(e) with respect to any retransmission consent agreements for broadcast signals
carried on the Systems that are included as part of the Excluded Assets,
Purchaser shall have obtained all required retransmission consents for continued
carriage of such broadcast signals on terms and conditions reasonably
satisfactory to Purchaser;

(f) Purchaser shall have evidence reasonably satisfactory to Purchaser that all
Encumbrances (other than Permitted Encumbrances) affecting or encumbering the
Assets have been terminated, released or waived, as appropriate;

(g) between the Effective Date and the Closing Date, there will not have
occurred any event, condition or circumstance that, individually or in the
aggregate, has had a Material Adverse Effect that has not been cured by Seller
or waived by Purchaser in accordance with this Agreement;

(h) Seller shall have delivered or caused to be delivered each of the following
documents, agreements, instruments and other deliverables:

(i) a duly executed Bill of Sale, in the form attached hereto as Exhibit E;

(ii) duly executed warranty deeds for the Owned Real Property in the form
attached hereto as Exhibit F;

(iii) a duly executed Assignment and Assumption Agreement in the form of Exhibit
H hereto;

(iv) the Transition Services Agreement, duly executed by Seller;

(v) a duly executed assignment and assumption of leases agreements for the Real
Property Leases in forms reasonably acceptable to Purchaser;

 

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(vi) motor vehicle titles, separate bills of sale for specific Purchased Assets
as required by any applicable Legal Requirement, and all other documents as are
reasonably necessary to transfer title to the Purchased Assets to Purchaser;

(vii) a duly executed Non-foreign Affidavit as required by the Foreign Investors
in Real Property Tax Act;

(vii) a duly executed Indemnity Escrow Agreement in the form of Exhibit A
hereto;

(viii) certificate, dated as of the Closing Date, executed by the President of
the managing general partner of Seller, certifying to his knowledge, without
personal liability, that the conditions set forth in Sections 9.1(a) and 9.1(b)
are satisfied;

(ix) certificate of existence of Seller issued by the Office of the Secretary of
State of the State of Washington;

(x) one or more certificates, dated as of the Closing Date, executed by the
Secretary of the managing general partner of Seller, without personal liability:
(A) certifying that the resolutions, as attached to such certificate, were duly
adopted by the Board of Directors of Seller’s managing general partner,
authorizing and approving the execution of this Agreement on behalf of Seller
and the consummation of the transactions contemplated hereby and that such
resolutions remain in full force and effect; (B) certifying that the
resolutions, as attached to such certificate, were duly adopted by a majority in
interest of Seller’s limited partners, authorizing and approving the execution
of this Agreement on behalf of Seller and the consummation of the transactions
contemplated hereby and that such resolutions remain in full force and effect;
(C) certifying as to the incumbency of the person signing this Agreement and any
other documents on behalf of the managing general partner of Seller; (D) the
Certificate of Formation of Seller (copies of which shall be attached to the
Certificate), certified by the Secretary of State of its state of formation; and
(E) the Partnership Agreement of Seller (copies of which shall be attached to
the Certificate);

(xi) opinions of Seller’s counsel dated as of the Closing Date, substantially in
the forms attached hereto as Exhibit G-1 and Exhibit G-2; and

(xii) a tax clearance certificate from each jurisdiction in which Seller
operates the Business.

9.2 Conditions Precedent to Obligations of Seller.

The obligations of Seller to consummate the transactions contemplated by this
Agreement are subject to the fulfillment or waiver, prior to or on the Closing
Date, of each of the following conditions (any or all of which may be waived by
Seller in whole or in part to the extent permitted by applicable Law):

(a) Each of the representations and warranties contained in Article VI that are
not qualified by reference to materiality or similar language shall have been
true and correct in all material respects when made on the Effective Date and
shall be true and correct in all

 

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material respects on and as of the Closing Date (except for representations and
warranties which contemplate a different date which need only be true and
correct in all material respects as of such date) as though such representations
and warranties had been made on and as of such date, and each of the
representations and warranties contained in Article VI that are qualified by
reference to materiality or similar language shall have been true and correct in
all respects when made on the Effective Date and shall be true and correct in
all respects on and as of the Closing Date (except for representations and
warranties which contemplate a different date which need only be true and
correct in all respects as of such date) as though such representations and
warranties had been made on and as of such date;

(b) Purchaser shall have performed and complied in all material respects with
all covenants and agreements required by this Agreement to be performed or
complied with by Purchaser on or prior to the Closing Date;

(c) there shall not have been instituted or threatened any Legal Proceeding to
enjoin or otherwise prevent or prohibit the consummation of the transactions
contemplated hereby, or any pending or threatened Legal Proceeding seeking
material damages that relate to or arise out of this Agreement or the
consummation of the transactions contemplated hereby;

(d) a majority in interest of the limited partners of Seller shall have
consented to the transactions contemplated by this Agreement in accordance with
the terms of Seller’s partnership agreement and applicable securities laws;

(e) [Reserved]; and

(f) Purchaser shall have delivered, or caused to be delivered, to Seller the
following documents, agreements, instruments and other deliverables:

(i) the Purchase Price in accordance with Article III

(ii) a duly executed Indemnity Escrow Agreement in the form attached hereto as
Exhibit A hereto

(ii) a duly executed Assignment and Assumption Agreement in the form attached
hereto as Exhibit H hereto;

(iii) certificate of existence of Purchaser issued by the office of the
Secretary of State of the State of Delaware;

(iv) certificate signed by an authorized officer of Purchaser, dated the Closing
Date, regarding compliance with Sections 9.2(a) and (b); and

(v) certificate of the Secretary of Purchaser, dated the Closing Date and
certifying: (A) that attached thereto are true and complete copies of all
resolutions authorizing the execution, delivery and performance of this
Agreement, including the consummation of the transactions contemplated hereby,
and that all such resolutions are in full force and effect and are all the
resolutions adopted in connection with the transactions contemplated by this
Agreement, and (B) to the incumbency and specimen signature of each officer of
Purchaser executing this Agreement and/or the Transaction Documents and a
certification by another officer of Purchaser as to the incumbency and signature
of the Secretary of Purchaser.

 

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9.3 Frustration of Closing Conditions.

Neither Seller nor Purchaser may refuse to close on the grounds that a condition
to such party’s obligation to close under Section 9.1 or 9.2, respectively, has
not been satisfied unless the failure to satisfy such condition was caused by
such other party’s material breach of this Agreement.

ARTICLE X

INDEMNIFICATION

10.1 Survival of Representations, Warranties and Covenants.

(a) A claim for indemnification pursuant to Section 10.2 must be made in writing
to Seller on or before the date that is 18 months following the Closing Date,
other than with respect to claims based on a breach of the representations and
warranties relating to ERISA, Taxes, Environmental Laws, or Hazardous
Substances, which must be made in writing to Seller prior to the expiration of
the applicable statute of limitations relating to the matters covered by such
representations and warranties. A claim for indemnification pursuant to
Section 10.3 must be made in writing to Purchaser on or before the date that is
18 months following the Closing Date. Notwithstanding the foregoing or any other
provision to the contrary contained herein, with respect to claims based on the
following, such claim made in writing prior to the expiration of the applicable
statute of limitations relating to the matters covered by such representations
and warranties : (a) based on a breach of the representations and warranties
regarding Seller’s title to the Assets or either Party’s corporate power and
authority or (b) for indemnification brought pursuant to Sections 10.2(a)(i),
10.2(a)(iii), 10.2(a)(iv), 10.2(a)(v), 10.2(a)(vi), 10.2(a)(vii), 10.3(a)(i) or
10.3(a)(iii).

10.2 Indemnification by Seller.

(a) Subject to Section 10.5 hereof, Seller hereby agrees to indemnify and hold
Purchaser and its directors, officers, employees, Affiliates, stockholders,
agents, attorneys, representatives, successors and permitted assigns
(collectively, the “Purchaser Indemnified Parties”) harmless from and against
any and all losses, liabilities, claims, demands, judgments, damages, fines,
suits, actions, costs and expenses (individually, a “Loss” and, collectively,
“Losses”):

(i) Any breach or default in the performance by Seller of any covenant or
agreement of Seller contained in this Agreement or any Transaction Document to
which it is a party;

(ii) Any breach of any representation or warranty made by Seller in this
Agreement, in any Transaction Document to which it is a party or in any
schedule, exhibit, certificate or other instrument delivered by or on behalf of
Seller pursuant this Agreement or any Transaction Document;

 

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(iii) Any liability (other than an Assumed Liability) arising out of or relating
to Seller’s ownership or operation of the Purchased Assets, Business or Systems
prior to the Closing (without regard to whether a claim is asserted before or
after the Closing);

(iv) Any claim that the transactions contemplated by this Agreement violate WARN
or any similar state or local law or any bulk transfer of any jurisdiction;

(v) Any rate refund ordered by a Governmental Entity for periods prior to the
Closing Date;

(vi) The presence, generation, removal or transportation of a Hazardous
Substance on or from any of the Owned Real Property caused by Seller prior to
the Closing Date, including the costs of removal and clean-up of such Hazardous
Substance and other compliance with provisions of Environmental Laws (without
regard to whether a claim is asserted before or after the Closing); and

(vii) Any failure of Seller to perform its obligations in respect of the
Excluded Liabilities.

10.3 Indemnification by Purchaser.

(a) Subject to Section 10.5, Purchaser hereby agrees to indemnify and hold
Seller and its directors, officers, employees, Affiliates, agents, attorneys,
representatives, successors and permitted assigns (collectively, the “Seller
Indemnified Parties”) harmless from and against, and pay to the applicable
Seller Indemnified Parties the amount of, any and all Losses:

(i) Any breach or default in the performance by Purchaser of any covenant or
agreement of Purchaser contained in this Agreement or any Transaction Document
to which it is a party;

(ii) Any breach of any representation or warranty made by Purchaser in this
Agreement, in any Transaction Document to which it is a party or in any
schedule, exhibit, certificate or other instrument delivered by or on behalf of
Purchaser pursuant this Agreement or any Transaction Document; or

(iv) Any failure of Purchaser to perform its obligations in respect of the
Assumed Liabilities.

10.4 Indemnification Procedures.

(a) A claim for indemnification for any matter not involving a third-party claim
may be asserted by prompt notice to the party from whom indemnification is
sought.

 

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(b) In the event that any Legal Proceedings shall be instituted or that any
claim or demand shall be asserted by any third party in respect of which payment
may be sought under Sections 10.2 or 10.3 hereof (regardless of the limitations
set forth in Section 10.5) (an “Indemnification Claim”), the indemnified party
shall promptly cause prompt written notice of the assertion of any
Indemnification Claim of which it has knowledge and that is covered by this
indemnity to be forwarded to the indemnifying party. The failure of the
indemnified party to give reasonably prompt notice of any Indemnification Claim
shall not release, waive or otherwise affect the indemnifying party’s
obligations with respect thereto except to the extent that the indemnifying
party is prejudiced as a result of such failure. The indemnifying party shall
have the right, at its sole option and expense, to be represented by counsel of
its choice, which must be reasonably satisfactory to the indemnified party, and
to defend against, negotiate, settle or otherwise deal with any Indemnification
Claim which relates to any Losses indemnified against by it hereunder, provide
defense, negotiation, settlement or other actions shall not cost or prejudice
the indemnified party. If the indemnifying party elects to defend against,
negotiate, settle or otherwise deal with any Indemnification Claim which relates
to any Losses indemnified against by it hereunder, it shall within 30 days (or
sooner, if the nature of the Indemnification Claim so requires) notify the
indemnified party of its intent to do so. If the indemnifying party elects not
to defend against, negotiate, settle or otherwise deal with any Indemnification
Claim which relates to any Losses indemnified against hereunder, the indemnified
party may defend against, negotiate, settle or otherwise deal with such
Indemnification Claim. If the indemnifying party shall assume the defense of any
Indemnification Claim, the indemnified party may participate, at his or its own
expense, in the defense of such Indemnification Claim. The parties hereto agree
to cooperate fully with each other in connection with the defense, negotiation
or settlement of any such Indemnification Claim. Notwithstanding anything in
this Section 10.4 to the contrary, neither the indemnifying party nor the
indemnified party shall, without the written consent of the other party, settle
or compromise any claim in which any relief other than the payment of money
damages is sought against any indemnified party or, in the case of any claim
relating to an indemnified party’s liability for any Tax, if the effect of such
settlement or compromise would be to increase the indemnified party’s liability
for the payment of any Tax unless the indemnified party consents in writing to
such settlement or compromise. If the indemnifying party makes any payment on
any Indemnification Claim, the indemnifying party shall be subrogated, to the
extent of such payment, to all rights and remedies of the indemnified party to
any insurance benefits or other claims of the indemnified party with respect to
such Indemnification Claim.

(c) After any final decision, judgment or award shall have been rendered by a
Governmental Entity of competent jurisdiction and the expiration of the time in
which to appeal therefrom, or a settlement shall have been consummated, or the
indemnified party and the indemnifying party shall have arrived at a mutually
binding agreement with respect to an Indemnification Claim hereunder, the
indemnified party shall forward to the indemnifying party notice of any sums due
and owing by the indemnifying party pursuant to this Agreement with respect to
such matter.

10.5 Certain Limitations on Indemnification.

(a) No indemnification claim may be asserted by either Party pursuant to
Sections 10.2(a)(ii) or 10.3(a)(ii) until such Party has suffered Losses in
excess of an aggregate

 

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deductible equal to $15,000 (after which, such Party will be entitled to
indemnification from and against all such Losses, including the first $15,000),
provided that such deductible amount will not apply to breaches of the
representations and warranties relating to ERISA, Taxes, Environmental Laws,
Hazardous Substances, Seller’s title to the Assets or either Party’s corporate
power and authority. Each Party’s obligation to indemnify the other pursuant to
Sections 10.2(a)(ii) or 10.3(a)(ii) will be limited to, and capped at an amount
equal to the Escrow Funds (after which, such Party will have no obligation to
indemnify from and against any further such Losses), provided that such
aggregate limitation will not apply to breaches of the representations and
warranties relating to ERISA, Taxes, Environmental Laws, Hazardous Substances,
Seller’s title to the Assets or either Party’s corporate power and authority.

10.6 Calculation of Losses.

(a) The amount of any Losses for which indemnification is provided under this
Article X shall be net of any amounts actually recovered or recoverable by the
indemnified party under insurance policies or otherwise with respect to such
Losses (net of any expenses, other than Tax, incurred in connection with such
recovery). Purchaser shall use its commercially reasonable efforts to recover
under insurance policies for any Losses prior to seeking indemnification under
this Agreement.

(b) No party shall, in any event, be liable to any other Person for any
consequential, incidental, indirect, special or punitive damages of such other
Person, including loss of revenue, income or profits, diminution of value or
loss of business reputation or opportunity relating to the breach or alleged
breach hereof (other than consequential, incidental, indirect, special or
punitive damages (including loss of revenue, income or profits, diminution of
value or loss of business reputation or opportunity relating to the breach or
alleged breach hereof) owing to a third party) to the extent such loss of
revenue, income or profits, diminution of value or loss of business reputation
or opportunity is determined to be consequential, incidental, indirect, special
or punitive damages; provided, however, that such limitations with respect to
lost profits or diminution of value shall not limit Seller’s right to recover
contract damages in connection with Purchaser’s failure or refusal to close in
violation of this Agreement.

(c) The amount of any Loss for which indemnification is provided under this
Article X shall not be reduced to take into account any tax benefit realized by
the indemnified party arising from the incurrence or payment of any such Loss.

10.7 Tax Treatment of Indemnity Payments.

Seller and Purchaser agree to treat any indemnity payment made pursuant to this
Article X as an adjustment to the Purchase Price for federal, state, local and
foreign income tax purposes unless otherwise required by Law.

10.8 Exclusive Remedy.

Except with respect to (i) claims based on fraud, or (ii) claims for injunctive
or other equitable relief in connection with Sections 7.13 (non-competition) and
7.14 (non-solicit), from and after the Closing, the sole and exclusive remedy
for any breach or failure to be true and correct, or alleged breach or failure
to be true and correct, of any representation or warranty or

 

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any covenant or agreement in this Agreement or the other Transaction Documents,
shall be indemnification in accordance with this Article X. In furtherance of
the foregoing, each of the parties hereby waive, to the fullest extent permitted
by applicable Law, any and all other rights, claims and causes of action
(including rights of contributions, if any) known or unknown, foreseen or
unforeseen, which exist or may arise in the future, that it may have against
Seller or Purchaser, as the case may be, arising under or based upon any
federal, state or local Law (including any such Law relating to environmental
matters or arising under or based upon any securities Law, common Law or
otherwise).

ARTICLE XI

MISCELLANEOUS

11.1 Tax Matters.

(a) Each of Purchaser and Seller will cooperate fully, as and to the extent
reasonably requested by the other Party, in connection with the filing of Tax
Returns and any audit, litigation or other proceeding with respect to Taxes.
Such cooperation will include the retention and, upon the other Party’s request,
the provision of records and information that are reasonably relevant to any
such audit, litigation or other proceeding and making employees available on a
mutually convenient basis to provide additional information and explanation of
any material provided hereunder. Purchaser and Seller will (i) retain all books
and records with respect to Tax matters pertinent to the Purchased Assets
relating to any taxable period beginning before the Closing Date until the
expiration of the statute of limitations (and, to the extent notified by
Purchaser or Seller, any extensions thereof) of the respective taxable periods,
(ii) abide by all record retention agreements entered into with any taxing
authority, and (iii) give the other Party reasonable written notice prior to
transferring, destroying or discarding any such books and records and, if the
other Party so requests, allow the other Party to take possession of such books
and records. Purchaser and Seller, upon request, will use their commercially
reasonable efforts to obtain (or cause their respective Affiliates to obtain)
any certificate or other document from any authority or any other Person as may
be necessary to mitigate, reduce or eliminate any Tax that could be imposed
(including with respect to the transactions contemplated hereby). Seller will
further obtain, prior to Closing, a tax clearance certificate from each
jurisdiction in which Seller operates the Business.

(b) Payment of Sales, Use or Similar Taxes. Purchaser and Seller shall each be
responsible for (and shall indemnify and hold harmless each other and their
directors, officers, employees, Affiliates, agents, successors and permitted
assigns against) 50% of any sales taxes applicable to the Purchased Assets and
for all other applicable sales, use, stamp, documentary, filing, recording,
transfer or similar fees or taxes or governmental charges (including real
property transfer gains taxes, UCC 3 filing fees, FAA, ICC, DOT, real estate and
motor vehicle registration, title recording or filing fees and other amounts
payable in respect of transfer filings) in connection with the transactions
contemplated by this Agreement (other than taxes measured by or with respect to
income imposed on Seller or its Affiliates).

(c) Proration. All real property taxes, personal property taxes, or ad valorem
obligations and similar recurring taxes and fees on the Purchased Assets for
taxable

 

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periods beginning on or before, and ending after, the Closing Date, shall be
prorated between Purchaser and Seller as of the close of business on the Closing
Date on a daily basis and, for all purposes of this Agreement, such Taxes shall
be allocated between the pre-closing tax period and post-closing tax period
accordingly. Seller shall be responsible for all such taxes and fees on the
Purchased Assets accruing under such daily proration methodology during any
period up to and including the day prior to the Closing Date. Purchaser shall be
responsible for all such taxes and fees with respect to the Purchased Assets
accruing under such daily proration methodology during any period beginning on
or after the Closing Date. With respect to taxes described in this
Section 11.1(c), Seller shall timely file all Tax Returns due before the Closing
Date with respect to such Taxes and Purchaser shall prepare and timely file all
Tax Returns due after the Closing Date with respect to such Taxes. If one party
remits to the appropriate Taxing Authority payment for taxes, which are subject
to proration under this Section 11.1(c) and such payment includes the other
party’s share of such Taxes, such other party shall promptly reimburse the
remitting party for its share of such Taxes.

11.2 Expenses.

Except as otherwise provided in this Agreement, each of Seller and Purchaser
shall bear its own expenses incurred in connection with the negotiation and
execution of this Agreement and each other agreement, document and instrument
contemplated by this Agreement and the consummation of the transactions
contemplated hereby and thereby. Notwithstanding the foregoing, Purchaser and
Seller shall each be responsible for 50% of any filing fees lawfully payable to
or at the request of any Governmental Entity in connection with this Agreement,
the Seller Documents, the Purchaser Documents and the consummation of the
transactions contemplated hereby and thereby.

11.3 Submission to Jurisdiction; Consent to Service of Process; Waiver of Jury
Trial.

EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.

11.4 Entire Agreement; Amendments and Waivers.

This Agreement (including the schedules and exhibits hereto), the Transaction
Documents and the Confidentiality Agreement represent the entire understanding
and agreement between the parties hereto with respect to the subject matter
hereof and thereof. This Agreement can be amended, supplemented or changed, and
any provision hereof can be waived, only by written instrument making specific
reference to this Agreement signed by the party against whom enforcement of any
such amendment, supplement, modification or waiver is sought. No action taken
pursuant to this Agreement, including any investigation by or on behalf of any
party, shall be deemed to constitute a waiver by the party taking such action of
compliance with any representation, warranty, covenant or agreement contained
herein. The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a further or continuing waiver of
such breach or as a waiver of any other or subsequent breach. No failure on the
part of any party to exercise, and no delay in exercising, any right, power or

 

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remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of such right, power or remedy by such party preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.

11.5 Governing Law.

This Agreement shall be governed by and construed in accordance with the laws of
the State of Washington applicable to contracts made and performed in such State
without giving effect to the choice of law principles of such State that would
require or permit the application of the laws of another jurisdiction.

11.6 Notices.

All notices and other communications under this Agreement shall be in writing
and shall be deemed given (i) when delivered personally by hand, (ii) when sent
by facsimile (with written confirmation of transmission), (iii) one business day
following the day sent by overnight courier or (iv) three days after mailing by
certified mail, in each case at the following addresses and facsimile numbers
(or to such other address or facsimile number as a party may have specified by
notice given to the other party pursuant to this provision):

If to Seller, to:

c/o Northland Communications Corporation

101 Stewart Street, Suite 700

Seattle Washington, 98101

Facsimile: (206) 748-5061

Attention: Gary S. Jones, President

With a copy to

Same Address

Attention: Paul Milan, General Counsel

If to Purchaser, to

Charter Communications, LLC

12405 Powerscourt Drive

Saint Louis, Missouri 63131

Facsimile No.: (314) 965-6492

Attention: Jillian Heneghan, Corporate Finance

With a copy to:

Charter Communications, LLC

12405 Powerscourt Drive

Saint Louis, Missouri 63131

Facsimile No.: (314) 965-6640

Attention: Constance C. Kovach, Legal Department

 

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11.7 Severability.

If any term or other provision of this Agreement is invalid, illegal, or
incapable of being enforced by any law or public policy, all other terms or
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal, or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby are consummated as originally contemplated to the greatest extent
possible.

11.8 Binding Effect; Assignment.

This Agreement will be binding upon Seller and Purchaser and their respective
successors and assigns. No right, benefit or obligation under this Agreement may
be assigned by either Party without the prior written consent of the other
Party, except that Purchaser will have the right, without the consent of Seller
and without being released from any of its obligations hereunder, (i) to
transfer, pledge or assign this Agreement as security for any financing or
(ii) transfer or assign this Agreement, in whole or in part, to any Affiliate of
Purchaser. In the event of an assignment by Purchaser to an Affiliate, such
assignee will execute and deliver to Seller an agreement containing the
assumption by such assignee of the performance and observance of each covenant
and condition of this Agreement to be performed or observed by Purchaser.

11.9 Non-Recourse.

No past, present or future director, officer, employee, incorporator, member,
partner, stockholder, Affiliate, agent, attorney or representative of Seller or
its Affiliates shall have any liability for any obligations or liabilities of
Seller under this Agreement or the Seller Documents of or for any claim based
on, in respect of, or by reason of, the transactions contemplated hereby and
thereby.

11.10 Specific Performance.

In the event of failure or threatened failure by a party hereto to comply with
the terms of this Agreement, any other party shall be entitled to an injunction
restraining such failure or threatened failure and to enforcement of this
Agreement by a decree of specific performance requiring compliance with this
Agreement.

11.11 Counterparts.

This Agreement may be executed in one or more counterparts, each of which will
be deemed to be an original copy of this Agreement and all of which, when taken
together, will be deemed to constitute one and the same agreement.

 

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11.12 No Third Party Beneficiaries.

This Agreement shall not confer any rights or remedies upon any person other
than the Purchaser and the Seller and their respective successors and permitted
assigns.

11.13 Attorneys’ Fees.

If either Seller or Purchaser initiates any legal action or lawsuit against the
other involving this Agreement, the prevailing party in such action or suit
shall be entitled to receive reimbursement from the other party for all
reasonable attorneys’ fees and other costs and expenses incurred by the
prevailing party in respect of that litigation, including any appeal, and such
reimbursement may be included in the judgment or final order issued in such
proceeding.

11.14 Covenant Not To Sue and Nonrecourse to Partners.

(a) Purchaser agrees that notwithstanding any other provision in this Agreement,
any agreement, instrument, certificate or document entered into pursuant to or
in connection with this Agreement or the transactions contemplated herein or
therein and any other Transaction Document and any rule of law or equity to the
contrary, to the fullest extent permitted by law, Seller’s obligations and
liabilities under all Transaction Documents and in connection with the
transactions contemplated therein shall be nonrecourse to all general and
limited partners of Seller. As used herein, the term “nonrecourse” means that
the obligations and liabilities are limited in recourse to the assets of Seller
(for those purposes, any capital contribution obligations of the general and
limited partners of Seller or any negative capital account balances of such
partners shall not be deemed to be assets of Seller) and are not guaranteed
directly or indirectly by, or the primary obligations of, any general or limited
partner of Seller, and neither Seller nor any general or limited partner or any
incorporator, stockholder, officer, director, partner, employee or agent of
Seller or of any general or limited partner of any successor partnership or
trust, either directly or indirectly, shall be personally liable in any respect
for any obligation or liability of Seller under any Transaction Document or any
transaction contemplated therein.

(b) Purchaser hereby covenants for itself, its successors and assigns that it,
its successors and assigns will not make, bring, claim, commence, prosecute,
maintain, cause or permit any action to be brought, commenced, prosecuted,
maintained, either at law or equity, in any court of the United States or any
state thereof against any general or limited partner of Seller or any
incorporator, stockholder, officer, director, partner, employee or agent of
Seller or of any general or limited partner of Seller for (a) the payment of any
amount or the performance of any obligation under any Transaction Document or
(b) the satisfaction of any liability arising in connection with any such
payment or obligation or otherwise, including without limitation, liability
arising in law for tort (including, without limitation, for active and passive
negligence, negligent misrepresentation and fraud), equity (including, without
limitation, for indemnification and contribution) and contract (including,
without limitation, monetary damages for the breach of representation or
warranty or performance of any of the covenants or obligations contained in any
Transaction Document or with the transactions contemplated herein or therein).

[signature page follows]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective authorized officers as of the date first written above.

 

NORTHLAND CABLE PROPERTIES SEVEN LIMITED PARTNERSHIP By:   Northland
Communications Corporation Its:   Managing General Partner By:  

/S/ Gary S. Jones

Name:   Gary S. Jones Title:   President CHARTER COMMUNICATIONS, LLC By:  
Charter Communications, Inc., its manager By:  

/S/ Matt Derdeyn

Name:   Matt Derdeyn Title:   Vice President

 

ASSET PURCHASE AGREEMENT