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Home My WebLink About990109.tiff RESOLUTION RE: APPROVE TRANSFER AND ASSIGNMENT OF FRANCHISE AGREEMENT FROM FANCH CABLEVISION OF COLORADO, L.P., DBA INTERMOUNTAIN CABLE COMM, A COLORADO CORPORATION TO US CABLE OF COASTAL-TEXAS L.P. WHEREAS, the Board of County Commissioners of Weld County, Colorado, pursuant to Colorado statute and the Weld County Home Rule charter, is vested with the authority of administering the affairs of Weld County, Colorado, and WHEREAS, Fanch Cablevision of Colorado, L.P., dba Intermountain Cable Comm, a Colorado corporation ("Fanch") is duly authorized to operate and maintain a cable communications system in Weld County ("the System"), pursuant to the terms and conditions of a franchise granted by the Board of County Commissioners by Resolution of the Board on December 18, 1996, ("the Franchise"), and WHEREAS, Fanch has entered into a Purchase Agreement dated August 19, 1998 ("the Agreement") with US Cable Acquisition, LLC ("Acquisition LLC"), an affiliate of US Cable of Coastal-Texas, L.P., a New Jersey limited partnership ("US Cable"), in which Fanch has agreed to sell the System to Acquisition LLC, and WHEREAS, prior to or concurrent with the closing of the transactions contemplated in the Agreement, Acquisition LLC will assign all its rights and obligations under the Agreement to US Cable, and WHEREAS, US Cable is not currently qualified, but has made assurances that US Cable will be qualified, to transact business in the State of Colorado as of the date of closing on the Agreement, and WHEREAS, the approval of the Board of County Commissioners is required to transfer the Franchise, and WHEREAS, US Cable will hold the Franchise after closing on the Agreement, and will be required, pursuant to the Franchise Agreement, to comply with all of the terms and conditions contained therein, and WHEREAS, FCC Form 394 with respect to the above stated transaction has been filed with the Board of County Commissioners, and WHEREAS, the parties have requested consent by the Board of County Commissioners to the Transaction. NOW THEREFORE, BE IT RESOLVED by the Board of County Commissioners of Weld County, Colorado, that the Board consents to the transfer by Fanch Cablevision of Colorado, L.P. to US Cable of all Fanch's right, title and interest in, and duties and obligations arising under the Franchise, to the extent that such consent is required by the terms of the Franchise and applicable law. CC .' CA l t.6 ��t. Ctl�n ti. u P '^� ORD94 RE: TRANSFER AND ASSIGNMENT OF FRANCHISE AGREEMENT PAGE 2 BE IT FURTHER RESOLVED that the actual transfer of the Franchise shall not be effective until and unless an actual written assignment is executed and delivered to US Cable by Fanch Cablevision of Colorado, L.P., and not until and unless US Cable is authorized to transact business in the State of Colorado. US Cable shall provide the Board with proof of such authority to transact business in the State of Colorado and also notice that such transfer of the Franchise has occurred within thirty (30) days after each of the specified events (i.e., the Franchise transfer and obtaining authority to conduct business in the State of Colorado) has occurred. The above and foregoing Resolution was, on motion duly made and seconded, adopted by the following vote on the 18th day of January, 1999. BOARD OF COUNTY COMMISSIONERS fitas COUNTY, C ORADO ATTEST: 4P404,4 /A Dal K:. Hall, Chair Weld County Clerk toe 1r2•41/Pp� .im i.7 �� arbara J. Kirkmeyer,Po Tem BY: �i__Deputy Clerk to the lletirros eorge Baxter AP E AS TO FORM: EXCUSED DATE OF SIGNING (AYE) M. J. Geile y rn EXCUSED DATE OF SIGNING (AYE) Glenn Vaad 990109 ORD94 Kit a TO: Board of County Commissioners for Weld County _ FROM: Cyndy Giauque, Assistant Weld County Attorney DATE: January 11, 1999 COLt RADO RE: Transfer of Fanch Cablevision Franchise to US Cable Fanch Cablevision of Colorado, L.P., doing business as Intermountain Cable Comm, a Colorado corporation, ("Fanch")has a cable communications franchise in Weld County which was granted by the Board on December 18, 1996. Paragraph 27 of the Franchise Agreement requires Fanch to get the Board's approval if Fanch sells or transfers its rights or interests to another company. Fanch has announced plans to sell its assets to an affiliate of US Cable, at which time the franchise to operate the system will be transferred to US Cable. As of October, 1998, US Cable was not yet qualified to conduct business in the State of Colorado, but it has made assurances that US Cable will be qualified to do business in Colorado as of the date of closing. The closing of the transaction is expected to occur in January, 1999', and the contract specifies January 31, 1999 as the target closing date. After the purchase and sale, US Cable will still be required to comply with all of the terms and conditions of the franchise. Attached are copies of Paragraph 27, the introductory letter from Fanch Communications, Inc., and Form FCC 394. A proposed Resolution approving the transaction is also attached. I recommend that the Board approve the Resolution. 9gvio9 o,t 99 / C z occurrence of such event shall be treated as a notification that a change in control of the franchise has taken place and such change in control is subject to the consent of the County. 26.5 Receivership or Bankruptcy. The County shall have the right to cancel this franchise 120 days after the initiation of bankruptcy proceedings by or against Fanch or the appointment of a receiver or trustee, to take over and conduct the business of Fanch, whether in receivership, reorganization, bankruptcy, or other action or proceeding, unless such bankruptcy, reorganization, receivership, trusteeship or other action or proceeding shall have been vacated prior to the expiration of said 120 days, or unless: a. Within 120 days after the election or appointment, such receiver or • trustee shall have fully complied with all of the provisions of the franchise and remedied any defaults thereunder; and • b. Within 120 days, such receiver or trustee shall have executed an agreement duly approved by the court having jurisdiction whereby such receiver or trustee assumes and agrees to be bound by each and every provision of this franchise. 26.6 Removal of Cable System. At the expiration of the term for which this franchise has been granted, or upon its termination or revocation as provided herein, Fanch shall forthwith, upon notice by the County, remove at Fanch's own expense all designated portions of the Cable System from all streets and public ways within the County, and shall restore said streets and public ways to their former condition; provided, however, Fanch shall have the right to sell, at fair market value, its physical plant to a subsequent franchisee, subject to County approval in which case said plant need not be removed and Fanch shall continue to operate the Cable System during such interim period prior to the sale. If Fanch fails to remove or operate its facilities upon request, the County may perform the work at Fanch's expense. Any property of Fanch remaining in place 180 days after the expiration, termination or revocation of this franchise shall be considered permanently abandoned and may become the property of the County at its discretion. 27. TRANSFER OF OWNERSHIP OR CONTROL. 27.1 The Cable System and this franchise shall not be sold, assigned, transferred, leased, or disposed of, either in whole or in part, either by involuntary sale or by voluntary sale, merger, consolidation, or mortgaged in any manner, nor shall title thereto, either legal or equitable, or any right, interest, or property therein pass to or vest in any person or entity, without the prior consent of the County, which consent shall not be unreasonably withheld. 27.2 The provisions of this section shall apply to the sale or transfer of all or a majority of Fanch's assets, merger (including any parent and its subsidiary corporation), consolidation, creation of a subsidiary corporation or sale or transfer of stock in Fanch so as to create a new • controlling interest. The term "controlling interest" as used herein is not limited to majority • stock ownership, but includes actual working control in whatever manner exercised. a. The parties to the merger, sale or transfer shall make a written request to the 17 1:0'1. 9 County for its approval of a merger, sale or transfer and furnish all information related to the merger, sale or transfer required by law and the County. b. Upon receipt of all requested information, the County shall render a final . written decision on the request within 120 days of the request. If the County fails to render a final decision on the request within 120 days, such request shall be deemed granted unless the requesting party and the County agree to an extension of time. c. Within 30 days of any merger, transfer or sale, if approved or deemed granted by the County, Fanch shall file with the County a copy of a written instrument evidencing such merger, sale or transfer of ownership or control, or lease, certified and sworn to as correct by Fanch and the transferee shall file its sworn acceptance and agreement to abide by each and every provision of this Franchise Agreement. 27.3 In reviewing a request for merger, sale or transfer, the County may inquire into the legal, technical and financial qualifications of the prospective.controlling party or transferee, and Fanch shall assist the County in so inquiring. The County may condition its consent upon such terms and conditions as it deems reasonably appropriate; provided, however, the County shall not unreasonably withhold its approval; and any such terms and conditions so attached shall be related to the legal, technical, and financial qualifications of the prospective controlling party or transferee and to the resolution of outstanding and unresolved issues of noncompliance with the terms and conditions of this franchise by Fanch. 28. COOPERATION. The parties recognize that it is in their mutual best interests for the Cable System to be operated as efficiently as possible and for the construction of the system to occur in accordance with the requirements and schedule set forth in this franchise. To achieve this, the parties agree to cooperate with each other in accordance with the terms and provisions of this franchise. 29. WAIVER. The failure of the County at any time to require performance by Fanch of any provision hereof shall in no way affect the right of the County hereafter to enforce the same. Nor • shall the waiver by the County of any breach of any provision hereof be taken or held to be a waiver of any succeeding breach of such provision, or as a waiver of the provision itself. 30. BOOKS AND RECORDS. Fanch agrees that the County may review such of Fanch's books and records, during normal business hours and on a nondisruptive basis, as is reasonably necessary to monitor compliance with the terms hereof. Such records shall include, but shall not be limited to, any public records required to be kept by Fanch pursuant to the rules and regulations of the FCC. Copies of all petitions, applications and communications sent to or exchanged between Fanch and the FCC, Securities and Exchange Commission or any other federal or state regulatory commission or agency having jurisdiction in respect to any matter affecting Cable System operations, so far as the same pertains to any aspect of the service or operations of Fanch in the County, shall also be submitted to the County within 30 days upon request of the County. 31. CUMULATIVE PROVISION. The rights and remedies reserved to the County by this franchise are cumulative and shall be in addition to and not in derogation of any other rights or 18 FANCH COMMUNICATIONS INC. 1998 OCT 1 3 Mg a 07 1873 South Bellaire Street Suite 1550 CERTIFIED MAIL: P 221 350 059 CLERK Denver,Colorado 80222 (3756-5600 TO THE BOARD Fax) 756-5774 October 9, 1998 Weld County Government 915 10th Street Greeley, CO 80631 Ladies and Gentlemen: This letter is to notify you of certain transactions involving your local cable television operator, Fanch Cablevision of Colorado. Fanch of Colorado has entered into a Purchase Asset Agreement with an affiliate of US Cable pursuant to which the cable television system (the "System") which serves your community, including the franchise (the "Franchise") to operate the System will be transferred to US Cable. The closing of the Transaction (the "Closing") is expected to occur in January 1999 when required regulatory and third party approvals have been obtained. US Cable has been a nationally recognized multiple system operator (MSO) since 1975. The company currently has cable operations in five (5) states, namely, New Mexico, Texas, South Carolina, Georgia and Florida and affiliates of the company also operate systems in the telephone industry both domestically and international. We respectfully request your consent to the transfer of the Franchise in your community to US Cable to be effective as of the Closing. Accompanying this letter is a completed FCC Form 394 with information regarding US Cable's qualifications. We have also included proposed transfer resolutions for your convenience. We believe the enclosed materials provide you with the information necessary to make a prompt determination on our request. Both Fanch of Colorado and US Cable will appreciate it if you would take all actions necessary in connection with this request for consent as soon as possible, including putting these matters on a meeting agenda at your earliest convenience. Please return the signed resolution to me. Fanch of Colorado and US Cable look forward to working cooperatively with you to insure a smooth transition of the cable system serving your community and are available to meet with you to answer any questions or concerns you may have. I will call you in the next week to discuss any questions you may have. 990109 Please sign the attached Acknowledgement to evidence your receipt of these documents. Sincerely, Fanch Cablevision of Colorado, LP By: N . eter Locke Title: Vice President 990109 FeSeral Communications Commission Approved by OMB • Washington,D.C.20554 3060-0573 FCC 394 APPLICATION FOR FRANCHISE AUTHORITY CONSENT TO ASSIGNMENT OR TRANSFER OF CONTROL OF CABLE TELEVISION FRANCHISE ORIGINAL FOR FRANCHISE AUTHORITY USE ONLY SECTION I. GENERAL INFORMATION DATE September 16,1998 1. Community Unit Identification Number: C00332 2. Application for: lid Assignment of Franchise Transfer of Control 3. Franchising authority: Weld County,Colorado 4. Identify community where the system/franchise that is the subject of the assignment or transfer of control is located: Weld County,Colorado • 5. Date system was acquired or(for system's constructed by the transferor/assignor)the date on which service was provided to the first subscriber in the franchise area: January 31,1997 6. Proposed effective date of closing of the transaction assigning or transferring ownership of the system to January 31,1999 transferee/assignee: 7.Attach as an Exhibit a schedule of any and all additional information or material filed with this Exhibit No. application that is identified in the franchise as required to be provided to the franchising authority 1 when requesting its approval of the type of transaction that is the subject of this application. PART I-TRANSFEROR/ASSIGNOR 1. Indicate the name,mailing address,and telephone number of the transferor/assignor. Legal name of Transferor/Assignor(if individual,list last name first) Fanch Cablevision of Colorado,Limited Partnership(CO) Assumed name used for doing business(if any) CableComm Mailing street address or P.O.Box 1873 South Bellaire Street,Suite 1.550 City Denver State Colorado ZIP Code 80222 Telephone No. (include area code) (303) 756-5600 2.(a)Attach as an Exhibit a copy of the contract or agreement that provides for the assignment or transfer of Exhibit No. control(including any exhibits or schedules thereto necessary in order to understand the terms thereof). If there is 2 only an oral agreement,reduce the terms to writing and attach. (Confidential trade,business, pricing or marketing information,or other information not otherwise publicly available,may be redacted). (b) Does the contract submitted in response to(a)above embody the full and complete agreement between the transferor/assignor and the transferee/assignee? ❑ Yes El No If No,explain in an Exhibit. *As permitted by Item 2.(a),the Schedules to the Agreement have Exhibit No. been omitted. Certain confidential,business pricing or marketing information not otherwise N/A* publicly available has been redacted from the purchase agreement. FCC 394 September 1996 • PART II - TRANSFEREE/ASSIGNEE • 1.(a) Indicate the name, mailing address, and telephone number of the transferee/assignee. Legal name of Transferee/Assignee (if individual , list last name first) US Cable of Coastal -Texas, L.P. Assumed name used for doing business (if any) US Cable of Colorado (upon qualification to do business in State of Colorado) Mailing street address or P.U. Box 28 West Grand Avenue City State ZIP Code Telephone No. (include area Montvale New Jersey 07645 code) (201) 930-9000 (b) Indicate the name, mailing address, and telephone number of person to contact, if other than transferee/assignee. Name of contact person (list last name first) Joseph Appio Firm or company name (if any) US Cable Corporation Mailing street address or P.U. Box 28 West Grand Avenue City Montvale State ZIP Code 07645 Telephone No. (include area New Jersey code) (201) 930-9000 ext. 400 or ext. 101 (c) Attach as an Exhibit the name, mailing address, and telephone number of each additional Exhibit No. person who N/A should be contacted, if any. (d) Indicate the address where the system's records will be maintained. Street address 14700 West 66th Place, Unit #12 City Arvada State Colorado ZIP Code 80004 • 2. Indicate on an attached exhibit any plans to change the current terms and conditions of Exhibit No. service and operations of the system as a consequence of the transaction for which approval is 3 sought. FCC 394 (Page 2) 990109 September 1996 {'/ SECTION I. TRANSFEREE'S/ASSIGNEE'S LEGAL QUALIFICATIONS 1. Transferee/Assignee is: ❑ Corporation a. Jurisdiction of incorporation: d. Name and address of registered agent in jurisdiction: b. Date of incorporation: c. For profit or not-for-profit: 0 Limited a. Jurisdiction in which formed: c. Name and address of registered agent Partnership New Jersey in jurisdiction: Montvale Plaza 28 West Grand Avenue, Montvale, NJ 07645 b. Date of formation: May 9. 1997 ❑ General a: Jurisdiction whose laws govern b. Date of formation: Partnership formation: ❑ Individual El Other. Describe in an Exhibit. Exhibit No N/A • 2. List the transferee/assignee, and, if the transferee/assignee is not a natural person, each of its officers, directors, stockholders beneficially holding more than 5% of the outstanding voting shares, general partners, and limited partners holding an equity interest of more than 5%. Use only one column for each individual or entity. Attach additional pages if necessary. (Read carefully - the lettered items below refer to corresponding lines in the following table.) (a) Name, residence, occupation or principal business. and principal place of business. (If other than an individual , also show name, address and citizenship of natural person authorized to vote the voting securities of the applicant that it holds.) List the applicant first, officers, next, then directors and, thereafter, remaining stockholders and/or partners. (b) Citizenship. (c) Relationship to the transferee/assignee (e.g. , officer, director. etc.). (d) Number of shares or nature of partnership interest. (e) Number of votes. (f) Percentage of votes. (a) US Cable of (a) US Cable of (a) Lake Capital (a) Eastfield (a) Stephen Myers (a) Michael Anderson Coastal-Texas, LP Lake Forest, Corp. Trust Inc. 28 West Grand Avenue Montvale. NJ 07645 (b) New Jersey (b) New Jersey (b) Illinois (b) US Trust (b) US Citizen (b) US Citizen Partnership Corporation (c) (c) General (c) Limited (c) An Indirect 9% (c) Officer/Director (c) Officer/Director Transferree/Assignee Partner Partner Beneficial of General Partner of General Partner (see attached fdr Ownership and Owner More Than and Owner More Than Directors/Officers) 5% of the Equity (see 5% of the Equity attached chart) (see attached chart) (d) N/A (d) General (d) Limited (d) See Attached (d) See Attached (d) See Attached Partner Partner Chart for Chart for Derivative Chart for Derivative Derivative Ownership Ownership _ Ownership (e) N/A (e) 100% (e) N/A (e) N/A (e) N/A (e) N/A (f) N/A (f) 100% (f) N/A (f) N/A (f) N/A (f) N/A FCC 394 Page 3 September 1996 • 990109 The names of the Directors and Officers of Transferee/Assignee are: Directors Stephen E. Myers Michael C. Anderson James D. Pearson Officers Stephen E. Myers, President Michael C. Anderson, Vice President/Secretary. James D. Pearson, Vice President/Treasurer/Assistant Secretary G. Joseph Appio, Vice President The address of each of the above officers is 28 West Grand Avenue, Montvale, NJ 07645 All Directors and Officers of Transferee/Assignee are U.S. Citizens. 990109 OWNERSHIP STRUCTURE p (as of September 15, 1998) Stephen Myers as Beneficial Owner SS#152-3&6491 Stephen Myers Michael Anderson J /ames Pearson Eastfield Trust SS#152-38-6491 SS#355-30-0488 SS#049-44-4474 34% \ 51% .2 \ 10% / 5% \ 2 \ \ / .2 \ / US Cable of Lake Forest,Inc. El#22-2842768 General Partner A 26.9423 Liberty Lake Inc.El#84-0982429 - Tale-Communications Limited Partner Inc. 7- \ / - / \ 1% A (Public Company) Stephen Myers\ Michael Anderson James Pearson SS#152-38-6491 SS#355-30-0488 SS#049-44-4474 88% / 10% I \ 2%K 2 Lake Capital Corp. Stephen Myers(1'\ El#22-2299402 SS#152-38-6491 Limited Partner Limited Partner 19.8% US Cable of Coastal- 44.7248% / Texas,LP,a New Jersey Limited Partnership Eft 22-2308225 Michael Anderson\ • / \ / \ SS#355-30-0488 / \ / \ Limited Partner Stephen Myers Michael Anderson 5.0973% / 90% 10% K 2 \ 2 / The derivative ownership of the partnership follows: as Lake Cable Investment Stephen Myers()) 77.046593% James Pearson(2) El#22-2775055 Eastfield Trust 9.1604% SS#049-44-4474 Limited Partner (Stephen Myers Beneficial Owner) Limited Partner Michael Anderson 9.90011% 1.2858% James Pearson(2) 2.892915% 1.1498% / Telecommunications,Inc. 1% (1)It is contemplatred an approximate 20%interest held by MR.Myers will be transferred prior to cosine to a trust in which he is a primary beneficiary. (2)Alter capital contributions made by the partners referred above are recovered by the partners,Mr.Pearson will be entitled to an additional approximate 9%. 990109 . 3. If the applicant is a corporation or a limited partnership, is the transferee/assignee formed under the laws of, or duly qualified to transact business in, the State or other jurisdiction in ILI which the system operates? ❑Yes No If the answer is No, explain in an Exhibit. Exhibit No. 4 4. Has the transferee/assignee had any interest in or in connection with an application which has been dismissed or denied by any franchise authority? • ❑ Yes IL No • If the answer is Yes, describe circumstances in an Exhibit. Exhibit No. • WA 5. Has an adverse finding been made or an adverse final action been taken by any court or administrative body with respect to the transferee/assignee in a civil, criminal or administrative ❑ Yes IL No proceeding, brought under the provisions of any law or regulation related to the following: any felony; revocation, suspension or involuntary transfer of any authorization (including cable franchises)to provide video programming services; mass media related antitrust or unfair competition; fraudulent statements to another governmental unit; or employment discrimination? If the answer is Yes, attach as an Exhibit a full description of the persons and matter(s) Exhibit No. involved, including an identification of any court or administrative body and any proceeding (by -N/A dates and file numbers, if applicable), and the disposition of such proceeding. 6. Are there any documents, instruments, contracts or understandings relating to ownership or future ownership rights with respect to any attributable interest as described in Question 2 ❑ Yes El No• (including, but not limited to, non-voting stock interests, beneficial stock ownership interests, options,warrants, debentures)? If Yes, provide particulars in an Exhibit. 7. Do documents, instruments, agreements or understandings for the pledge of stock of the transferee/assignee, as security for loans or contractual performance, provide that: (a) voting ❑ Yes No rights will remain with the applicant, even in the event of default on the obligation; b in the event of default, there will be either a private or public sale of the stock; and (c) prior to the exercise of any ownership rights by a purchaser at a sale described in (b), any prior consent of the FCC and/or of the franchising authority, if required pursuant to federal, state or local law or pursuant to the terms of the franchise agreement will be obtained? If No, attach as an Exhibit a full explanation. *There are no documents, instruments, Exhibit No. agreements or understanding for the pledge of stock of the Transferee/Assignee as security N/A* for loans or contractual performance. SECTION III -TRANSFEREE'S/ASSIGNEE'S FINANCIAL QUALIFICATIONS • 1. The transferee/assignee certifies that it has sufficient net liquid assets on hand or available from committed resources to consummate the transaction and operate the facilities for three ❑X Yes No months. 2. Attach as an Exhibit the most recent financial statements, prepared in accordance with Exhibit No. generally accepted accounting principles, including a balance sheet and income statement for 5 at least one full year, for the transferee/assignee or parent entity that has been prepared in the ordinary course of business, if any such financial statements are routinely prepared. Such statements, if not otherwise publicly available, may be marked CONFIDENTIAL and will be maintained as confidential by the franchise authority and its agents to the extent permissible under local law. SECTION IV-TRANSFEREE'S/ASSIGNEE'S TECHNICAL QUALIFICATIONS Set forth in an Exhibit a narrative account of the transferee's/assignee's technical qualifications, Exhibit No. experience and expertise regarding cable television systems, including, but not limited to, summary 6 information about appropriate management personnel that will be involved in the system's management and operations. The transferee/assignee may, but need not, list a representative sample of cable systems currently or formerly owned or operated. FCC 394(Pegs 4) 990109 September 1996 SECTION V - CERTIFICATIONS Part I - Transferor/Assignor All the statements made in the application and attached exhibits are considered material representations, and all the Exhibits are a material part hereof and are incorporated herein as if set out in full in the application. Signature e.C-Fc(DcO MfCMj ( AC , I CERTIFY that the statements in this application are true, complete and correct to the best of my knowledge and belief and are made in good faith. Date WILLFUL FALSE STATEMENTS MADE ON THIS FORM ARE PUNISHABLE BY FINE AND/OR IMPRISONMENT. U.S. CODE, TITLE 18, Z_1`J SECTION 1001. Print full name' i—F•,—�,4 gj �#. Dvj Check a propriate classifi at'9n: r i' Individual , General Partner 0 Corporate Officer ❑ Other. Explain: (Indicate Title) Part II - Transferee/Assignee All the statements made in the application and attached Exhibits are considered material representations, and all the Exhibits are a material part hereof and are incorporated herein as if set out in full in the application. The transferee/assignee certifies that he/she: (a) Has a current copy of the FCC's Rules governing cable television systems. (b) Has a current copy of the franchise that is the subject of this application, and of any applicable state laws or local ordinances and related regulations. (c) Will use its best efforts to comply with the terms of the franchise and applicable state laws or local ordinances and related regulations, and to effect changes, as promptly as practicable. in the operation of the system, if any changes are necessary to cure any violations thereof or defaults thereunder presently in effect or ongoing. Signature US Cable of Lake Forest, Inc. I CERTIFY that the statements in this application are true, complete and correct to the best of my knowledge and belief and are made in good faith. By: G.JoZh A io; its Vic resident Date WILLFUL FALSE STATEMENTS MADE ON THIS FORM ARE September 16, 1998 PUNISHABLE BY FINE AND/OR IMPRISONMENT. U.S. CODE, TITLE 18, SECTION 1001. Print full name G.Joseph Appio Check appropriate classification: �( Corporate Officer ❑ Other, Explain: ❑ Individual General Partner ❑ (Indicate Title) 990109 FCC 394(Pepe 5) September 1996 EXHIBIT 1 The franchise agreement does not contain specific information requirements when the approval of the franchise authority is requested for the type of transaction that is the subject of this application. 1 September 16, 1998 990109 EXHIBIT 2 Documents pertaining to transfer. September 8, 1998 990109 r r PURCHASE AGREEMENT dated as of August 19, 1998 among MARK TWAIN CARLEVISION LIMITED PARTNERSHIP, FANCH CABLEVISION OF COLORADO, LIMITED PARTNERSHIP, and CITATION CABLE SYSTEMS, LTD. ("Sellers") and US CABLE ACQUISITION, LLC ("Buyer" ) eoroee 990109 I. TABLE OF CONTENTS ARTICLE 1. CERTAIN DEFINITIONS 1 ARTICLE 2 . PURCHASE AND SALE . . . 8 Section 2 . 1 Covenant of Purchase and Sale; Stock and Assets Section 2 .2 Excluded Assets Section 2.3 Assumed and Retained Obligations and Liabilities Section 2 .4 Purchase Price; Payment; Allocation Section 2 .5 Indemnity Escrow Section 2 .6 Current Items Amount Section 2 .7 Closing Adjustments ARTICLE 3 . RELATED MATTERS 17 Section 3 .1 HSR Act Compliance Section 3 .2 Bulk Sales Section 3 .3 Use of Names and Logos Section 3 .4 Transfer Taxes Section 3 .5 Sellers ' Obligations Several and Not Joint Section 3 .6 Noncompetition ARTICLE 4 . BUYER'S REPRESENTATIONS AND 18 WARRANTIES Section 4 .1 Organization of Buyer Section 4 .2 Authority Section 4 .3 No Conflict; Required Consents Section 4 .4 Litigation Section 4 .5 Finders and Brokers Section 4 .6 Financial Ability Section 4 .7 Full Access Section 4 . 7 Taxpayer Identification Number Section 4 .8 Sellers Representations and Warranties ARTICLE 5 . SELLERS' REPRESENTATIONS AND 20 WARRANTIES Section 5 .1 Organization and Qualification of Sellers Section 5.2 Authority Section 5 .3 No Conflict Section 5 .4 Title to Assets; Sufficiency Section 5.5 Franchises, Licenses and Contracts Section 5 . 6 Real Property Section 5 .7 Equipment Section 5 . 8 Employee Benefits Section 5 . 9 Employees i ce roce 990109 r 4 Section 5 .10 Litigation Section 5 . 11 Tax Returns; Other Reports Section 5.12 Legal Compliance Section 5 .13 Systems Information Section 5. 14 Environmental Section 5 . 15 Financial Information Section 5 . 16 Taxpayer Identification Number Section 5 .17 Bonds Section 5 .18 Finders, Brokers and Advisors Section 5 .19 Disclaimer of Warranty Section 5 .20 Billing' Systems Section 5 .21 Overbuilds ARTICLE 6 . COVENANTS 28 Section 6 .1 Certain Affirmative Covenants of Sellers Regarding the Systems Section 6 .2 Certain Negative Covenants of Sellers Section 6.3 Employee Matters Section 6 .4 Confidentiality Section 6 .5 Notification of Certain Matters Section 6 .6 Billing Services After Closing Section 6 .7 Commercially Reasonable Efforts Section 6. 8 Consents Section 6 . 9 Risk of Loss; Condemnation Section 6 .10 Title Insurance Commitments; Environmental Studies; Surveys Section 6 .11 Rights of First Refusal ARTICLE 7 . CONDITIONS PRECEDENT 43 Section 7. 1 Conditions to Buyer' s Obligations Section 7.2 Conditions to Sellers ' s Obligations Section 7.3 Non-Assignment ARTICLE 8 . CLOSING 47 Section 8.1 Closing; Time and Place Section 8 .2 Sellers ' Deliveries Section 8 .3 Buyer' s Deliveries ARTICLE 9 . TERMINATION 49 Section 9 . 1 Termination Events Section 9 .2 Effect of Termination ARTICLE 10. REMEDIES IN THE EVENT OF TERMINATION 50 PRIOR TO CLOSING Section 10.1 Default by Buyer Section 10 .2 Default by Sellers ii et UWE" • 9.mOi qn 4 ARTICLE 11. INDEMNIFICATION 51 Section 11.1 Indemnification by Sellers Section 11.2 Indemnification by Buyer Section 11 .3 Indemnified Third Party Claim Section 11.4 Determination of. Indemnification Amounts and Related Matters Section 11.5 Time and Manner of Certain Claims Section 11. 6 Limitation on Indemnification ARTICLE 12 . MISCELLANEOUS 54 Section 12 .1 Expenses Section 12 .2 Waivers Section 12 .3 Notices Section 12 .4 Entire Agreement; Amendments Section 12.5 Binding Effect; Benefits Section 12 .6 Headings, Schedules, and Exhibits Section 12 .7 Non-;Recourse Section 12. 8 Counte-rparts Section 12 .9 Publicity' Section 12 .10 governing Law Section 12 .11 Third Parties; Joint Ventures Section 12 .12 Construction Section 12.13 Further Acts iii 990199 ef, .Qncr PURCHASE AGREEMENT THIS PURCHASE AGREEMENT (this "Agreement") is made and entered into as of August 19th, 1998, by and among Mark Twain Cablevision Limited Partnership, a Missouri limited partnership whose federal taxpayer identification number is 84-1061307 ("Twain" ) ; Fanch Cablevision of Colorado, Limited Partnership, a Delaware limited partnership whose federal taxpayer identification number is 84- 1063710 ("FCOL" ) ; and Citation Cable Systems, Ltd. , a Colorado limited partnership whose federal taxpayer identification number is 84-1151520 ("Citation") (Twain, FCOL and Citation are sometimes referred ,to collectively herein as the "Sellers" , and each of them is sometimes individually referred to as a "Seller" ) ; and US Cable Acquisition, LLC, a Delaware limited liability company whose federal taxpayer identification number is 22-3600587 ("Buyer" ) . RECITALS a) Sellers own and operate cable television systems that serve the areas described on Schedule 1 . 0 (the "Service Areas") . b) Sellers have agreed to convey to Buyer, and Buyer has agreed to purchase from Sellers, the Assets (as hereinafter defined) , other than the Excluded Assets (as hereinafter defined) , upon the terms and conditions set forth in this Agreement. AGREEMENTS In consideration of the mutual covenants and promises set forth herein, Buyer and Sellers agree as follows: ARTICLE I CERTAIN DEFINITIONS As used in this Agreement, the following terms, whether in singular or plural forms, shall have the following meanings : "Accounts Receivable" shall mean, as of the Closing Date, all subscriber, advertising, trade, tower rental or other accounts receivable of the Sellers, determined in accordance with GAAP, representing amounts owed to the Sellers in connection with their operation of the Business in the ordinary course of business. "Affiliate" shall mean, with respect to any Person, any other Person controlling, controlled by or under common control with such Person, with "control" for such purpose meaning the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities or voting interests, by contract or otherwise. 94101"9 "Agreement" means this Purchase Agreement including all schedules and exhibits attached hereto, as may be amended from time to time . "Allocation" has the meaning set forth at Section 2 .4 (d) . "Assets" has the meaning set forth at Section 2 . 1. . "Assumed Obligations and Liabilities" has the meaning set forth at Section 2 .3 (a) . "Basic Cable" means the lowest level package of programming services that includes all retransmitted off-air broadcast signals and that must be purchased in order to subscribe to other levels of service, as indicated on Schedule 5 .13 . "Bill of Sale" means the Bill of Sale and Assignment in the form annexed hereto as Exhibit C. "Billing Services Agreement" has the meaning set forth at Section 6 .6 (a) . "Bulk Subscribers" shall mean, for each bulk-pay or commercial account, the quotient obtained by dividing (a) the aggregate dollar monthly amount billed for the month in which Closing occurs to such bulk/commercial account for cable television services by (b) the standard monthly retail rate charged from the applicable headend for (I) Basic Cable, if the bulk/commercial account receives Basic Cable and does not receive Expanded Cable, or (II) Basic Cable and Expanded Cable, if the bulk/commercial account receives both Basic Cable and Expanded Cable. In making this calculation there shall be included only billings to commercial/bulk accounts that (i) have paid in full at least one monthly bill for cable television service, (ii) are not pending disconnection, (iii) are not, as of the Closing Date, delinquent in payment for services for more than two monthly billing cycles (exclusive of account balances of $8 . 00 or less for any particular bulk/commercial account) . For purposes of this definition, bills covering a monthly billing cycle shall be deemed due on the first day of the billing cycle. For example, if a billing cycle runs from the 14" of a month until the 13" of the following month, then a bill rendered for the period July 14 through August 13 is due on July 14 , is one billing cycle delinquent on August 14, and two billing cycles delinquent due on September 14 . "Business" shall mean the business of owning, operating and maintaining the Systems, including the provision of cable television service by Sellers to subscribers of the Systems . "Business Day" shall mean any day other than Saturday, Sunday or a day on which banking institutions in New York, New York are required or authorized to be closed. 2 990I09 "Business 's Financial Statements" has the meaning set forth at Section 5. 15 . "Cable Act" means Title VI of the Communications Act of 1934, as amended, 47 U.S.C. §§ 151 et. sect. , and all provisions of the Cable Communications Policy Act of 1984, the Cable Television Consumer Protection and Competition Act of 1992, and the Telecommunications Act of 1996, as such statutes may be amended from time to time, and the rules and regulations promulgated thereunder. "Closing" has the meaning given in Section 8 .1 (a) . "Closing Date" has the meaning given in Section 8 . 1 (a) . "Code" shall mean the Internal Revenue Code of 1986, as amended, and the regulations thereunder, or any subsequent legislative enactment thereof, as in effect from time to time . "Commercially Reasonable Efforts" shall mean such efforts as do not require the party to (i) undertake extraordinary or unreasonable measures, including, without limitation, the initiation or prosecution of legal proceedings or the payment of fees in excess of normal and usual filing and processing fees or (ii) assume any material additional liability or make any material additional commitment. "Communications Act" means the Communications Act of 1934 , as amended. "Contracts" has the meaning set forth at Section 2.1. "Copyright Act" means the Copyright Act of 1976, as amended. "Current Items Amount" has the meaning set forth at Section 2. 6 . "Deposit Escrow Agreement" shall mean the Deposit Escrow Agreement among Buyer, Sellers and Escrow Agent, substantially in the form annexed hereto as Exhibit A. "Earnest Money Payment" has the meaning set forth at Section 2.4 (b) . "EBU' s" shall mean the sum of (A) Good Subscribers plus (b) Bulk Subscribers. "Eligible Accounts Receivable" has the meaning set forth at Section 2 . 6 (a) . "Employee Benefit Plan" means any pension, retirement, profit- sharing, deferred compensation, vacation, severance, bonus, 3 en I OTO9 incentive, medical, vision, dental, disability, life insurance or any other employee benefit plan as defined in Section 3 (3) of ERISA to which Sellers contribute or which Sellers sponsor or maintain, or by which any of the Sellers is otherwise bound. "Environmental Reports" has the meaning set forth at Section 6 .10. "Equipment" has the meaning set forth at Section 2 . 1. "ERISA" has the meaning set forth at Section 5 . 8 . "Escrow Agent" shall mean Citizens bank of Rhode Island or such other party as Buyer and Sellers shall agree. "Escrow Agreements" means the Deposit Escrow Agreement and the Indemnity Escrow Agreement. "Excluded Assets" has the meaning set forth at Section 2 .2 . "Expanded Cable" means the package or packages of programming service that are offered separately from Basic Cable for a charge that is in addition to the charge for Basic 'Cable, and that can only be purchased by subscribers that also receive Basic Cable; provided that "Expanded Cable" does, not include Pay TV, a la carte programming tiers, or other programming services offered on a per- channel or pay-per-view basis. "Expenses" has the meaning set forth at Section 2 . 6 (c) "Extendable Franchises" means the Franchises listed on Schedule 7 .1 (h) . "FAA" means the Federal Aviation Administration. "FCC" means the Federal Communications Commission. "Final Adiustment Certificate" has the meaning set forth at Section 2.7 (b) . "Franchises" has the meaning set forth at Section 2 . 1 . "GAAP" shall mean generally accepted accounting principles as in effect in the United States of America. "Good Subscriber" shall mean each household or individual or business (other than commercial accounts and accounts that pay on a bulk basis on behalf of multiple users) that at the date of determination (i) subscribes to at least Basic Cable provided by a System (exclusive of secondary outlets and courtesy accounts) , (ii) pays the System' s standard rate for Basic Cable (which standard rate may be subject to a senior citizen discount) , (iii) has paid 4 g9p;109 for at least one month of service, (iv) is not pending disconnection, and (v) is not delinquent in payment for cable television services for more than two monthly billing cycles, exclusive of account balances of $8 . 00 or less. For purposes of this definition, bills rendered for a monthly billing period shall be deemed due on the first day of the monthly billing period. A monthly billing cycle runs from a particular day in a month until the day in the following month whose date is one less than the first day of the billing cycle (e.g. the 14th of a month until the 13th of the following month) . For example, if a billing cycle runs from the 14ih of a month until the 13`h of the following month, then a bill rendered for the period July 14 through August 13 is due on July 14, is one billing cycle delinquent on August 14 , and two billing cycles delinquent due on September 14 . "Governmental Authority" means the United States of America, any state, commonwealth, territory, or possession thereof, and any political subdivision or quasi-governmental authority of any of the same, including any court, tribunal, department, bureau, commission or board. "Hazardous Substances" shall mean any substance presently classified designated as "hazardous" or "toxic" under the Comprehensive Environmental Response Compensation and Liability Act of 1980, 42 U.S.C. Section 9601, et . seg. , the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901, et. seq. , the Federal Water Pollution Control Act, 33 U.S.C. Section 1247, et. seq. , the Clean Air Act, 42 U.S.C. Section 2001, et. sea. , and the Community Right to Know Act, 42 U.S.C. Section 11001, et . sea. , all as amended. "HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. "Immaterial Contracts" shall mean (i) subscription agreements with customers for cable television services provided by the Systems, (ii) oral employment agreements terminable at will without penalty or severance obligation, (iii) miscellaneous service contracts terminable at will without penalty, and (iv) other contracts (other than Franchises, FCC licenses, headend leases and pole attachment agreements) that are not material to operation of any of the Systems and that do not involve liabilities exceeding $20, 000 in any single instance or $100, 000 in the aggregate. "Indemnitee" has the meaning set forth at Section 11 .3 (a) "Indemnity Escrow Amount" has the meaning set forth at Section 2 .5 . "Indemnitor" has the meaning set forth at Section 11.3 (a) "Indemnity Escrow Agreement" shall mean the Indemnity Escrow 5 Agreement among Buyer, Sellers and Escrow Agent, substantially in the form annexed hereto as Exhibit B. "Initial Adjustment Certificate" has the meaning set forth at Section 2 . 7 (a) "Judgment" means any judgment, writ, order, injunction, award, or decree of any court, judge, justice, magistrate, Governmental Authority or arbitrators. "Leased Real Property" has the meaning set forth at Section 2 .1. "Legal Requirements" means applicable common law and any statute, ordinance, code or other law, rule, regulation, or order enacted, adopted or promulgated by any Governmental Authority, including, without limitation, Judgments and the Franchises. "Licenses" has the meaning set. forth at Section 2 . 1. "Lien" means any lien, pledge, encumbrance, mortgage, deed of trust, security interest, financing statement filed with any Governmental Authority, conditional sale or other title retention agreement; and any lease, consignment, bailment or interest in property given for purposes of security, whether arising by agreement or under any statute, law, regulation or ordinance. "Litigation" means any claim, action, suit, proceeding, arbitration, investigation, hearing, or other similar activity or procedure that could result in a Judgment. "Losses" means any claims, losses, liabilities, damages, penalties, costs, and expenses, including, without limitation, reasonable counsel fees and costs and expenses incurred in the investigation, defense or settlement of any claims covered by the indemnification provided for in Article 11 hereof, but shall in no event include incidental or consequential damages. "Material Contracts" shall mean all Contracts other than Immaterial Contracts. "Material Consents" has the meaning set forth at Section 7 .1 (g) _ "Noncompetition Agreement" has the meaning set forth at Section 3 .6 . "Outside Closing Date" has the meaning set forth at Section 8 .1 (b) . "Owned Real Property" has the meaning set forth at Section 2 .1. 6 q �# v "Owner" means any general partner or any limited partner of a Seller, or any partner, stockholder, member, director or officer of any entity that is a partner of a Seller. "Pay TV" means premium programming services selected by and sold to subscribers on a per-channel or per-program basis. "Permitted Lien" means (i) Liens for Taxes that are not yet due and payable or that are being contested in good faith by appropriate proceedings and for which adequate reserves have been established by Sellers, (ii) rights reserved to any Governmental Authority to regulate the affected property, (iii) as to leased Assets, interests of the lessors thereof and Liens affecting the interests of the lessors thereof, (iv) inchoate materialmen' s, mechanics' , workmen' s, repairmen' s or other like Liens arising in the ordinary course of business, (v) as to any parcel of Owned Real Property or Leased Real Property, easements that are not violated by existing structures, building restrictions, deed restrictions, rights of subsurface and mineral owners, and similar Liens none of which adversely affect or impair the use thereof as it is currently being used by Sellers in the ordinary course of their business, and (vi) Liens described on Schedule 5 .4 that will be released at or before closing. "Person" means any natural person, Governmental Authority, corporation, general or limited partnership, joint venture, trust, association, limited liability Company, or unincorporated entity of any kind. "Pole Attachment Agreements" means pole attachment authorizations and agreements held by an Operating Entity that relate to a System and that authorize attachment of cable to utility poles and/or the location of cable in underground conduits, and were granted by a public utility or other Person providing utility services or by a municipality or other Governmental Authority. "Purchase Price" has the meaning set forth at Section 2 .4 (a) . "Real Property" means the Owned Real Property and the Leased Real Property. "Real Estate Inspection Period" shall have the meaning set forth at Section 6 . 10 . "Remaining Systems" shall have the meaning set forth at Section 6 .11 . "Removed Systems" shall have the meaning set forth at Section 6 .11. • "Required Consents" has the meaning set forth at Section 5 .3 . 7 "Service Areas" has the meaning set forth in the Recitals. "Surveys" shall have the meaning set forth at Section 6 . 10 . "System" means any of the Systems. "Systems" shall mean the cable television systems owned by Sellers serving the Service Areas designated on Schedule 1 . 0 . "Taxes" shall mean all levies and assessments imposed by any Governmental Authority, including but not limited to income, sales, use, ad valorem, value added, franchise, severance, net or gross proceeds, withholding, payroll, employment, excise or property taxes, and interest, penalties and other government charges with respect thereto. "Taxing Authority" shall mean any federal, state, local or foreign governr::._ntal body or political subdivision with the power to impose Taxes. "Tax Returns" shall mean any return, report, information return or other document (including any related or supporting information) filed or required to be filed with any Taxing Authority in connection with the determination, assessment, collection, administration or reposition of any Taxes . "Title Commitments" and "Title Defects" shall have the meanings set forth at Section 6 .10 . "Transaction Documents" shall mean this Agreement, the Escrow Agreements, and each other instrument, document, certificate and agreement required or contemplated to be executed and delivered hereunder and thereunder. "To Sellers' Knowledge" or the equivalent means to the actual knowledge of Jack Pottle, Robert C. Fanch, Peter Locke or Jeffrey D. Elberson, after due inquiry of the general managers of the Systems. "Withheld Systems" has the meaning given at Section 7.3 . ARTICLE II. PURCHASE AND SALE Section 2.1 Covenant of Purchase and Sale. Purchase and Sale of Sellers Assets. Subject to the terms and conditions set forth in this Agreement, at Closing Sellers shall sell, convey, assign, and transfer to Buyer, and Buyer shall acquire from Sellers, free and clear of all Liens (except for Permitted Liens, it being understood that with respect to those 8 ,l'1{1{ s Permitted Liens described in clauses (i) and (iv) of the definition of "Permitted Liens" that are monetary obligations of Sellers and that are assumed by Buyer or to which the Assets are subject, there would be an adjustment to the Purchase Price under Section 2 . 6 (c) hereof) , all right, title and interest of Sellers in all of the assets and properties, real and personal, tangible and intangible, used or held for use by Sellers in their operation of the Business (the "Assets") , including, without limitation, the following: i. Equipment . All tangible personal property owned by Sellers and used in connection with the Systems, including, without limitation, antennae, aboveground and underground cable, distribution systems, headend and line amplifiers, feeder line cable, distribution plant, programming signal decoders for each satellite service which scrambles its signal, housedrops, including disconnected housedrops, subscribers, devices (including converters, encoders, transformers behind television sets and fittings) , utility poles (if owned by Sellers) , local origination equipment, vehicles and trailers, microwave equipment, testing equipment, electronic devices, trunk and distribution coaxial and optical fiber cable, power supplies, conduit, vaults and pedestals, grounding and pole hardware, headend hardware (including origination, earth stations, transmission and distribution systems) , test equipment, power supplies, billing equipment at System field locations, furniture, ' fixtures, supplies, inventory, and other physical assets, including but not limited to the vehicles. and test equipment described on Schedule 2 . 1 (i) (collectively, the "Equipment") . ii. Real Property. All interests in real property used by Sellers in connection with the operation of the Business, including all improvements, fixtures and appurtenances thereon, owned by Sellers, described on Schedule 2 . 1 (ii) (I) ("Owned Real Property" ) , or leased by Sellers, described on Schedule 2 .1 (ii) (II) ("Leased Real Property" ; and together with the Owned Real Property, the "Real Property") . Real Property includes the leases by which Seller leases real estate from the owners thereof (the "Real Estate Leases") , as described on Schedule 2 .1 (ii) (II) . iii. Franchises. All of the existing authorizations from Governmental Authorities and other entities that control access to homes or customers served by the Systems, for construction, maintenance and operation of the Systems, as listed on Schedule 2 .1 (iii) (individually, a "Franchise" and collectively, the "Franchises") presently held by Sellers . iv. Licenses. The cable television relay service (CARS) , business radio and other licenses, authorizations, or permits issued by the FCC or any other Governmental Authority used in the operation of the Business that are held by Sellers and in effect as of the date hereof or (subject to Article VI hereof) entered into or obtained by Sellers in the ordinary course of business ;between 9 99.0;1r.!�Y9'. the date hereof and the Closing Date, including, without limitation, the Licenses described on Schedule 2 . 1 (iv) (the "Licenses") _ v. Contracts. Other contracts relating exclusively to the operation of the Systems, including the private easements or rights of access, contractual rights to easements, Pole Attachment Agreements or joint line agreements, tower space lease agreements, advertising agreements, underground conduit agreements, crossing agreements, bulk and commercial service agreements, retransmission consent agreements and must-carry requests relating to the Business in effect as of the date hereof or (subject to Article VI hereof) entered or obtained in the ordinary course of business between the date hereof and the Closing Date as permitted by this Agreement (other than Excluded Assets) , as described on Schedule 2 .1 (v) (the "Contracts") . vi. Accounts Receivable. All Accounts Receivable of the Sellers other than amounts due or to become due for programming launch fees relating to programming launched before Closing and disclosed on Schedule 2 .3 (a) . vii. Goodwill. The goodwill associated with the Business . viii. Books and Records . All engineering records, files, data, drawings, blueprints, schematics and maps, if any, of the Systems, payroll records, reports and records concerning customers and subscribers and prospective customers and subscribers of the Systems, including, but not limited to, all reports filed by or on behalf of Sellers with the FCC since 1996 with respect to the Systems and statements of account filed by or on behalf of Sellers since 1995 with the U.S. Copyright Office with respect to the Systems. Section 2.2 Excluded Assets. Notwithstanding the provisions of Section 2 . 1, the Assets shall not include the following, which shall be retained by Sellers or, in the case of clause (v) below, by the customers (the "Excluded Assets") : i . programming agreements and affiliation agreements of Sellers; ii . insurance policies and rights and claims thereunder; iii . bonds, letters of credit, surety instruments, and other similar items; iv. cash and cash equivalents of Sellers; 10 :collate 990 09 } v. equipment owned by customers of the Business, such as converters purchased by customers and house wiring; vi. any agreement, right, asset or property owned or leased by Sellers that is not used or held for use in connection with their operation of the Systems; vii . all billing systems and office and telephone equipment located in Denver, Colorado; viii. real estate interests in Denver, Colorado or otherwise outside the Service Areas; ix. telemarketing systems located in Denver, Colorado; x. all claims, rights, and interest of Sellers in and to refunds of Taxes or fees of any nature, or other claims against third parties, relating to the operation of the Systems prior to the Closing Date, other than Accounts Receivable; xi. the account books of original entry, general ledgers and financial records of Sellers used in connection with the Systems; provided, however, that Sellers shall (i) from time to time upon reasonable notice from Buyer, provide to Buyer access to any of such books and records as then may be in Sellers' possession if required by Buyer for business purposes, including without limitation such historical rate information and subscriber billing information as Sellers possess concerning the Systems, and (ii) retain possession of such books and records (including billing and subscriber payment information from the beginning of 1995 to the extent possessed by Sellers) for a reasonable period, not to exceed three (3) years from the Closing Date (except for Tax-related books and records which shall be retained by Sellers for at least seven (7) years from the Closing Date) ; xii . subject to the provisions of Section 3 . 3, Sellers ' trademarks, trade names, service marks, service names, logos, and similar proprietary rights, including the name "CableComm" ; and xiii . any assets of Twain in the States of Arizona, Indiana and Mississippi. Section 2 .3 Assumed and Retained Obligations and Liabilities. a. Assumed Obligations and Liabilities . Subject to the terms and conditions of this Agreement, from and after the Closing Date, Buyer shall assume, pay, discharge, and perform the following (the ??, 11 9,009 4 "Assumed Obligations and Liabilities" ) : i . those obligations and liabilities attributable to periods after the Closing Date under or with respect to the Franchises, Licenses and Contracts listed on the Schedules to this Agreement and Contracts entered into after the date of this Agreement to the extent permitted by Section 6 .1 and 6 . 2 hereof; ii . other obligations and liabilities of Sellers (including those used in computing the Current Items Amount) to the extent that there shall be a reduction in the Purchase Price with respect thereto pursuant to Section 2 . 6; iii. the obligation to continue carriage of programming described on Schedule 2 .3 (a) for the periods described on such schedule, and any liability resulting from failing to continue such carriage, provided that (A) the amount of the liability assumed by Purchaser under this clause (iii) is limited to $575, 000 and (B) the liability assumed under this clause (iii) shall not be adjusted for under Section 2 .6 hereof or otherwise; and iv. all obligations and liabilities arising out of Buyer' s ownership of the Assets and/or operation of the Systems and the Business after the Closing Date. b. Retained Obligations and Liabilities. The following obligations and liabilities arising out of or relating to the Assets and the Business other than the Assumed Obligations and Liabilities shall remain and be the obligations. and liabilities of Sellers (collectively, the "Retained Obligations and Liabilities") : i . all obligations and liabilities arising out of or relating to the Litigation and Judgments which relate to periods prior to the Closing Date or which are referred to on Schedule 5 . 10 ; ii. unless specifically assumed by Buyer, all obligations and liabilities arising before the Closing Date with respect to the operation. of the Systems prior to the Closing Date and obligations and liabilities arising before the Closing Date under the Franchises, Contracts, Licenses, Owned Real Property and Leased Real Property, excluding, however, obligations and liabilities included in the Current Items Amount; and iii . all obligations and liabilities with respect to the Excluded Assets . 12 r.tf Section 2 .4 Purchase Price. a. Purchase Price. As consideration for its purchase of the Assets, Buyer shall pay to Sellers (allocated among Sellers as provided at subsection (d) of this Section 2 . 4) a . total price of f _ which amount shall be subject to adjust under certain circumstances as set forth herein (the "Purchase Price") . b. Earnest Money Payment . Upon execution of this Agreement, Buyer shall pay to, Escrow Agent the sum of, ' I ( Earnest Money Payment w is sna ,ne e a y Escrow "Agent pursuant to a Deposit Escrow Agreement in the form attached hereto as Exhibit A ( "Deposit Escrow Acreement" ) , and which Earnest Money Payment and interest earned thereon shall be paid as follows: i . to Sellers for application to the Purchase Price on the Closing Date if the Closing occurs; ii. to Sellers if this Agreement is terminated prior to Closing as a result of breach of any of Buyer' s covenants or ' warranties set forth herein, provided that no Seller is then in material breach of its representations and warranties or covenants hereunder such that a condition to Buyer' s obligation to close under Section 7 . 1 hereof is not satisfied; or iii. to Buyer if this Agreement is terminated prior to Closing as a result of breach of Sellers ' covenants or warranties set forth herein, or without breach by any party. All fees, costs and expenses of the Escrow Agent to be paid pursuant to the Deposit Escrow Agreement shall be payable one-half by Buyer and one-half by Sellers . c . Payment of Purchase Price. At Closing, Buyer shall pay to Sellers the balance of the Purchase Price plus or minus the Current Items Amount (as appropriate) as calculated and estimated in the Initial Adjustment Certificate, less the Indemnity Escrow Amount that shall have been deposited by Buyer into the indemnity escrow account established pursuant to Section 2 . 5 below. d. Purchase Price Allocation. The Purchase Price is allocated among the Sellers as follows : Ito Citation; a to FCOL; ands Twain. The portion of the Purchase Price allocated to tangible personal property shall be of which is attributable to Citation, to FCOL and _ to Twain. The remainder of the 13 04 `Ci g tante m 99,b1: :9 Purchase Price shall be allocated to intangible assets and goodwill . Buyer and Sellers shall file all Tax returns and schedules thereto (including, without limitation, those returns and forms required by Section 1060 of the Code) consistent with the foregoing. Section 2 .5 Indemnity Escrow. On the Closing Date Buyer shall pay the aggregate sum of millmig ( "Indemnity Escrow Amount") to_ the Escrow Agent to be held under an Indemnity Escrow Agreement in the form attached hereto as Exhibit B ( "Indemnity Escrow Agreement" ) . The Indemnity Escrow Amount shall be allocated among each Seller in the same proportion as the Purchase Price is allocated among Sellers.. The Indemnity Escrow Account allocable to each Seller, less the amount of any claims against such Seller paid therefrom and less any unresolved claims for indemnification by Buyer under Section 11 . 1 hereof against that particular Seller, shall be paid to such Seller six (6) months after the Closing Date. All fees, costs and expenses of the Escrow Agent to be paid pursuant to the Indemnity Escrow Agreement shall be payable one half by Buyer and one half by Sellers. Section 2 . 6 Current Items Amount. In addition to the payment by Buyer of the Purchase Price, Buyer or Sellers, as appropriate, shall pay to the other the net amount of the adjustments and prorations effected pursuant to Sections 2 .6 (a) , (b) , (c) , (d) and (e) (collectively, the "Current Items Amount") . a. Accounts Receivable . Sellers shall be entitled to a credit in an amount equal to (i) 100% of accounts receivable arising from advertising sales and tower rentals that are four months or less past due, with monthly tower rental payments deemed due at the end of the month for which tower space was provided, and payments for advertising deemed due at the end of the month during which the advertisement was aired, (ii) one hundred percent (100%) of the face amount of all Eligible Accounts Receivable no part of which (other than $8 . 00 or less) is more than one monthly billing cycle past due as of the Closing Date, (iii) ninety-seven percent (97%) of the face amount of all Eligible Accounts Receivable that are more than one monthly billing cycle but no part of which (other than $8 . 00 or less) is more than two monthly billing cycles past due as of the Closing Date, and (iv) zero percent (0%) of the face amount of Eligible Accounts Receivable any part of which (other than $8 . 00 or less) are more than two monthly billing cycles past due as of the Closing Date . "Eligible Accounts Receivable" shall mean accounts receivable of the Sellers resulting from their provision of cable television and/or data service (excluding receivables from sale of advertising and tower rental) prior to the 14 1Q9 Closing Date, other than receivables for cable television service owed by subscribers any part of which (other than $8 .00) are more than two billing cycles past due at the Closing Date . For purposes of making "past due" calculations under this paragraph as it relates to Eligible Accounts Receivable, the monthly billing statements of the Sellers shall be deemed to be due and payable on the first day of the period during which the service for which such billing statements relate is provided. b. Advance Payments and Deposits. Buyer shall be entitled to a credit in an amount equal to the aggregate of (i) all refundable deposits of subscribers of the Systems as of the Closing Date, for converters, decoders, and similar items, including deposits from inactive subscribers whose service terminated six (6) months or less prior to the Closing Date, but not including deposits relating to persons who at the Closing Date have been inactive for six months or longer (as to which Sellers shall retain liability, if any) and (ii) the appropriate portion of all payments received by Sellers prior to Closing for services to be rendered by Buyer after the Closing Date. c. Expenses. As of the Closing Date, all expenses relating to the Assets and the operation of the Systems, including those set forth below (the "Expenses") shall be prorated, in accordance with GAAP, according to the principle that all such Expenses for periods prior to the Closing Date shall be for the account of Sellers, and all such expenses for periods after the Closing Date shall be for the account of Buyer: i. Franchise fees, and periodic rental or license fees under the Licenses, Contracts and Real Estate Leases; ii . Property taxes assessed on the Assets; iii . Sales tax imposed on the provision of cable television service (but specifically excluding sales and transfer taxes imposed on the sale of the Assets pursuant to this Agreement) ; iv. Accrued vacation pay of System employees; v. Expenses for utilities, rents and service charges, and other goods or services furnished to the Business; vi. copyright fees based on signal carriage by the Systems; and vii. FCC annual fees for the year in which Closing occurs (which are generally prepaid one year in advance) . Provided, however, that any Expenses payable under or with respect to any Excluded Asset shall not be prorated, nor shall there be a 15 P proration of programming launch fees received by Sellers prior to Closing or receivable by Sellers for programming launches made before Closing and disclosed on Schedule 2 . 3 (a) (all of which payments and receivables will be retained by Sellers) . Section 2.7 Closing Adjustments. a. The Initial Adjustment Certificate. No later than five (5) days prior to the Closing Date, Sellers shall deliver to Buyer Sellers ' certificate estimated as of the Closing Date ("Initial Adjustment Certificate" ) setting forth the number and calculation of EBU's and all adjustments including the Current Items Amount proposed to be made at the Closing as of the Closing Date. Prior to Closing, Sellers shall provide Buyer or Buyer' s representative with copies of all books and records as Buyer may reasonably request for purposes of verifying the Initial Adjustment Certificate and Sellers shall make a representative of Sellers available at Sellers' offices to meet with Buyer' s accountants and other representatives. The Initial Adjustment Certificate shall be used to determine adjustments to the Purchase Price at Closing. b. Trueup of Current Items Amount. As soon as practicable after the Closing Date, and in any event within ninety (90) days after the Closing Date, Buyer shall deliver to Sellers a final calculation calculated as of the Closing Date, of the Current Items Amount, together with such supporting documentation as Sellers may reasonably request, in a certificate (the "Final Adjustment Certificate") , which shall evidence in reasonable detail the nature and extent of each calculation. The Final Adjustment Certificate shall be final and conclusive unless objected to by Sellers in writing within thirty (30) days after delivery. Sellers and Buyer shall attempt jointly to reach agreement as to the amount of the Current Items Amount within forty-five (45) days after receipt by Buyer of such written objection by Sellers, which agreement, if achieved, shall be binding upon both parties to this Agreement and not subject to dispute or review. If Sellers and Buyer cannot reach agreement as to the amount of the closing adjustments within such forty-five (45) day period, Sellers and Buyer agree to submit promptly any disputed adjustment to Deloitte & Touche in Denver, Colorado, which shall resolve the disputed items, and whose decision shall be binding. Sellers on the one hand and Buyer on the other hand shall each pay a portion of the fees and expenses of Deloite & Touche based on the share of disputed amounts that are resolved in favor of the other party. For example, if $10, 000 is in dispute and $3, 000 is resolved in favor of Sellers, then Buyer would pay 30% of the accountants fees and expenses and Sellers would pay 70%. Any amounts due Buyer or Sellers for closing adjustments shall be paid by the party owing such amount (or, to the extent disputed amounts are held by the Escrow Agent, shall be paid by the Escrow Agent pursuant to joint written instructions of Buyer and Sellers in accordance with such final resolution) not • 16 .e 1 i rs later than five (5) Business Days after such amounts shall have become final and conclusive. ARTICLE III. RELATED MATTERS Section 3 .1 HSR Act Compliance. As soon as practicable after the execution of this Agreement, and in any event within thirty (30) days after the date of this Agreement, Buyer and Sellers shall each file all required notifications under the HSR Act . Buyer shall pay one half of the filing fees required thereby, and Sellers shall pay the other one- half of the filing fees required thereby. Thereafter Buyer and Sellers shall promptly comply with all requests_ for additional information and shall diligently pursue termination of the waiting period under the HSR Act and procurement of all required consents thereunder; provided that if approval under the HSR Act is not obtained within 120 days after the date of initial filing thereunder, then either party may terminate this Agreement unless failure to obtain such consent was the result of such party's failure to use Commercially Reasonable Efforts to obtain such consent . Section 3 .2 Bulk Sales. Buyer and Sellers each waive compliance by the other with all bulk sales Legal Requirements applicable to the transactions contemplated hereby. Section 3 .3 Use of Names and Logos. For a period of one hundred twenty (120) days after Closing, Buyer shall be entitled to use the trademarks, trade names, service marks, service names, logos, and similar proprietary rights of Sellers to the extent incorporated in or on the Assets. Thereafter Buyer shall cease any use of such trademarks, trade names, service marks, service names, logos, and similar proprietary rights of Sellers. Prior to Closing Sellers shall provide to Buyer a list of the trademarks, service marks, logos, trade names, service names and similar proprietary rights used by Sellers in operating the Systems . Section 3 .4 Transfer Taxes. Buyer on the one hand and Sellers on the other hand shall each pay one-half (4) of any sales, use, transfer, and similar Taxes (other than income taxes attributable to periods prior to Closing or income taxes imposed on any income and gain of Sellers arising from the sale of the Assets pursuant to this Agreement) arising from or payable by reason of the transactions contemplated by this Agreement . 17 r�'. Section 3 .5 Sellers ' Obligations Several and not Joint The obligations of each of the Sellers under this Agreement, and the representations, warranties and covenants of the Sellers hereunder, are several and not joint, and no Seller is or shall be liable for a breach by another Seller of any obligation, covenant, representation or warranty herein. The representations and warranties of each Seller herein apply only to that Seller and its Systems and Assets, and not to any other Seller or to any Systems or Assets of any other Seller. Section 3 .6 Non-Competition. At Closing Sellers shall execute, and shall cause Robert C. Fanch to execute an agreement in form reasonable satisfactory to Sellers ("Non-Competition Agreement" ) by which they agree that for a period of five (5) years after closing none of Sellers or Robert C. Fe.rch, or any entity controlled directly or indirectly (incl_aing effective control) by Robert C. Fanch, will own a controlling interest in, or be employed or retained as an officer, employee or independent contractor by, any system that distributes and sells television programming by wire or cable in any of the areas covered by the Franchises as of the Closing Date. ARTICLE IV BUYER'S REPRESENTATIONS AND WARRANTIES Buyer represents and warrants to Sellers, as of the date of this Agreement and as of Closing, as follows : Section 4.1 Organization of Buyer. Buyer 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 power and authority to own and lease the properties and assets it currently owns and leases and to conduct its activities as such activities are currently conducted. Buyer is qualified to do business and. in good standing, and at the Closing Date will be qualified to do business and in good standing, in all jurisdictions in which the nature of the business conducted by it or to be conducted by it following Closing makes such qualification necessary. Section 4.2 Authority. Buyer has all requisite corporate, partnership or limited liability Company (as appropriate) power and authority to execute, deliver, and perform this Agreement and the other Transaction Documents to which it is a party and consummate the transactions contemplated by this Agreement and the other Transaction Document:; 18 eoltee • a • 0 to which it is a party. The execution, delivery, and performance of this Agreement and each other Transaction Document to which it is a party and the consummation of the transactions contemplated by this Agreement and each Transaction Documents to which Buyer is a party have been duly and validly authorized ' by all necessary corporate, partnership or limited liability Company action on the part of Buyer. This Agreement' has'been, and the other Transaction Documents to which Buyer is a party will be on or prior to the Closing, duly and validly executed and delivered by Buyer, and this Agreement and, each of the other Transaction Documents to which Buyer is a party constitutes and-will constitute on or prior to Closing the valid and binding 'obligation of Buyer, enforceable against Buyer in accordance with their respective terms, except as may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors ' rights generally or the availability of equitable remedies. Section 4.3 No Conflict; Required Consents. Except- for approval under the HSR Act, and except for consents of GovernmentalAuthorities as may be required for transfer of the Assets 'to Buyer, the execution, delivery, and performance by Buyer of this. Agreement and the other Transaction Documents to which it is a party, and the consummation of the transactions contemplated herein, do not and will not (i) conflict with or violate any provision of the [partnership agreement, partnership certificate, articles of incorporation, bylaws, articles of organization or operating agreement] of Buyer, (ii) violate any provision of any Legal Requirement, (iii) conflict with, violate, result in a breach of, or-constitute a default under any agreement to which Buyer is a party or by which Buyer or the assets or properties owned or leased by it are bound or affected, or (iv) require any consent, approval, or authorization of, or filing of any certificate, notice, application, report, other document with, any Governmental Authority or other Person. Section 4 .4 Litigation. Except for any Litigation as may affect the cable television industry (national or regional) generally, there is no Litigation pending or, to Buyer' s knowledge, threatened by, against, affecting, or relating to Buyer or any of its Affiliates in any court or before any Governmental Authority or any arbitrator that, if . adversely determined, would restrain or materially hinder or delay the consummation of the transactions contemplated by this Agreement, or cause any of such transactions to be rescinded, or impair Buyer' s ability to complete the transactions contemplated hereby. Section 4.5 Finders and Brokers. Buyer has not employed any financial advisor, broker, or finder, or incurred any liability for any financial advisory, brokerage, finder's or similar fee or commission, for which Sellers will in any way have any liability in connection with the transactions contemplated by this Agreement . Section 4 .6 Financial Ability. Buyer or its principals have the financial capability, including all equity and the ability to obtain debt financing, necessary to consummate the transactions contemplated herein and pay the Purchase Price. Section 4 ..7 Full Access. Buyer' s representatives have received access to Sellers ' books and records, the Assets, and the facilities of the Systems to the extent reasonably requested by Buyer, and Sellers have cooperated with Buyer to the end that Buyer has been able to conduct its own inspection and investigation of the Systems and the Assets to Buyer's reasonable satisfaction andhas independently investigated, analyzed and appraised the condition, value, prospects . and profitability thereof and performed such other presigning due diligence in connection with the transactions contemplated by this Agreement in accordance with the normal practice of Buyer. Section 4..8 Sellers' Representations and Warranties As of the date hereof, Buyer does not have knowledge that any of Sellers ' representations or warranties set forth at Article V hereof are untrue in any respect. Section 4 .9 Taxpayer Identification Number. Buyer' s U.S. Taxpayer Identification Number is as set forth in the introductory paragraph of this Agreement . ARTICLE V SELLERS' REPRESENTATIONS AND WARRANTIES Subject to Section 3 .5 hereof, Sellers represent and warrant to Buyer, as of the date of this Agreement and as of Closing, as follows : Section 5 .1 Organization and Qualification of Sellers . a. Each Seller is a limited partnership duly organized and validly existing under the laws of the state of its formation, and has all requisite partnership power and authority to own, lease and use the Assets and to conduct the Business as it is currently conducted. 20 b. Each Seller is duly qualified to do business and validly existing as a foreign limited partnership in each state where Systems owned by it are located. Section 5.2 Authority. Sellers have all requisite partnership power and authority to execute, deliver, and perform this Agreement and each other Transaction Document to which they are a party and consummate the transactions contemplated hereby and thereby. The execution, delivery, and performance of this Agreement and each other Transaction Document to which a Seller is a party and the consummation of the transactions contemplated by this Agreement and each other Transaction Document to which a Seller is a party have been duly and validly authorized by all necessary partnership or corporate action on the part of Sellers. This Agreement and each other Transaction Document to which a Seller is a party has been or will be on or prior to the Closing, duly and validly executed and delivered by Sellers, and this Agreement and each other Transaction Document to which a Seller is a party constitute and will constitute on or prior to the Closing, the legal, valid, and binding obligation of Sellers, enforceable against Sellers in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency or similar laws affecting creditors rights generally or the availability of equitable remedies. Section 5.3 No Conflict; Required Consents. The execution, delivery, and performance by Sellers of this Agreement and each other Transaction Document to which they are a party do not and will not (i) conflict with or violate any provision of the partnership agreement of any Seller, (ii) subject to obtaining the consents listed on Schedule 5 .3 (the "Required Consents") and waiver of any rights of first refusal held by franchising authorities in Minnesota and Shelbina, Missouri, conflict with, violate, result in a breach of, or constitute a default under any material Real Estate Lease, Franchise, License or Contract, or (iii) result in the creation or imposition of any Lien or other encumbrance against or upon any of the Assets; in each case other than a conflict, violation, breach or default that would not impair the ability of Sellers to perform hereunder and that would not have a material adverse effect on the Business of any Seller taken as a whole. Section 5.4 Title to Assets; Sufficiency. (a) Except for Permitted Liens, Sellers have good and marketable title to (or, in the case of Assets that are leased, valid leasehold interests in) and possession of the Assets, free and clear of all Liens other than Liens that will be terminated, released, removed or satisfied by the Closing Date . 21 ,Lr 9904419 (b) Except for the Excluded Assets (including without limitation the need of Buyer to provide its own programming contracts and billing systems (subject to the Billing Services Agreement) , and the need to institute new Employee Benefit Plans) and except for the absence of various easements, private access agreements and/or commercial service agreements permitting the Sellers to locate cable on real property owned by third ,parties which individually or in the aggregate do not and will not have a material adverse effect on the Business of any Seller taken as a whole, the Assets constitute all material property and rights, real and personal, tangible and intangible, necessary or required to operate the Business as currently operated and conducted. (c) The vehicles listed on Schedule 2 .1 (i) are all of the vehicles of Sellers used in connection with the Systems . Section 5.5 Franchises, Licenses and Contracts. (a) Sellers have delivered to Buyer true and complete copies of each of the Franchises, Licenses, and Material Contracts and all amendments, assignments and consents thereto. (b) Schedule 2 .1 (iii) lists all Franchises held by Sellers in connection with the Systems . Schedule 2 .1 (iv) lists all Licenses held by Sellers in connection with the Systems . Schedule 2 .1 (v) lists all Material Contracts to which Sellers are a party relating to the Systems. (c) Except as described on Schedule 5 . 5, to Sellers ' knowledge there has not occurred an uncured default by the Sellers nor, to Sellers' knowledge, by any other Person under any of the Franchises, Licenses, or Material Contracts that would materially adversely affect the Business of any Seller taken as a whole. (d) The Franchises, Licenses and Material Contracts are in full force and effect, except as would not have a material adverse effect on the Business of any Seller taken as a whole. (e) To Sellers ' knowledge as of the date of this Agreement, except as set forth on Schedule 5. 5, Sellers have not been notified by any utility Company of any required pole rearrangement or related work. (f) To Sellers' knowledge as of the date of this Agreement, except as set forth in the Franchises and as set forth on Schedule 5 . 5, Sellers have not made any commitments to any franchising authority to make any material capital expenditures. 22 atelee s rag A n Section 5. 6 Real Property. Schedule 2 .1 (i) (I) sets forth a list and description of all real property owned by Sellers and used in the Business . Schedule 2 .1 (i) (II) sets forth a list of all real property leased by Sellers and used in the Business. The Sellers hold or shall hold at Closing the fee interests in all Owned Real Property and the leasehold interests to all Leased Real Property, in each case free and clear of any Liens, except for Permitted Liens . To Sellers ' knowledge there are not pending any condemnation actions or special assessments or any pending proceedings for changes in the zoning with respect to such Real Property or any part thereof that individually or in the aggregate would have a material adverse effect on the Business taken as a whole. Except as would not have a material adverse effect on the Business taken as a whole the leases and subleases by which the Sellers lease the Leased Real Property are valid, subsisting, binding and enforceable in accordance with their respective terms. Sellers have delivered to Buyer true and complete copies of deeds for the Owned Real Estate, and true and complete copies of the leases for the Leased Real Estate. Section 5.7 Equipment. Except as otherwise expressly provided herein, (i) Sellers make no warranty as to the condition, fitness or suitability of the Equipment, and (ii) the Equipment is sold "AS IS, WHERE IS" . Section 5.8 Employee Benefits. To the knowledge of Sellers, neither Sellers nor any Employee Benefit Plan (as defined in the Employee Retirement Income Security Act of 1974, as amended ("ERISA") ) , maintained by Sellers is in violation of the provisions of ERISA; no reportable event within the meaning of Sections 4043 of ERISA has occurred and is continuing with respect to any such Employee Benefit Plan; and no prohibited transaction within the meaning of Title I of ERISA has occurred with respect to any such Employee Benefit Plan. Buyer is not required under ERISA, the Code or any collective bargaining agreement to establish, maintain or continue any Employee Benefit Plan maintained by Sellers or any of their Affiliates. All Employee Benefit Plans and employee welfare plans maintained by Sellers are described on Schedule 5 . 8 . Sellers have delivered to Buyer copies of Sellers ' employee benefit plans. Sellers are participating employers in the TWFanch Employee Savings and Retirement Plan ("Sellers ' Savings Plan" ) . There have been no nonexempt "prohibited transactions" within the meaning of Section 406 of ERISA or Section 4975 of the Code involving the assets of Sellers' Savings Plan. Any and all amounts which Sellers are required to pay as contributions or otherwise with respect to Sellers ' Savings Plan have been timely paid. Sellers ' Savings Plan 23 rt 990109 � e »:4T r' r e has been established, maintained, operated and administered in all material respects in accordance with its terms and all applicable law. There are no pending or, to Sellers ' knowledge, threatened or anticipated claims involving Sellers' savings Plan, other than routine claims for benefits. Sellers have delivered to Buyer a true and complete copy of Sellers ' Savings Plan. Section 5 .9 Employees. a. There are no collective bargaining agreements applicable to any Person employed by the Sellers that renders services in connection with the Systems or the Business, and the Sellers have no duty to bargain with any labor organization with respect to any such Person. There are not pending any unfair labor practice charges against the Sellers, nor is there any demand for recognition or any other request' or demand from a labor organization for representative status with respect to any Person employed by the Sellers that renders services in connection with the Systems. b. Sellers are in substantial compliance with all applicable Legal Requirements respecting employment conditions and practices, have withheld and paid all amounts required by any applicable Legal Requirements to be withheld from the wages or salaries of its employees, and are not liable for any arrears of wages or any Taxes (other than wages and Taxes that have not become due or payable) or penalties for failure to comply with any of the foregoing. c. None of the Sellers is a party to any written employment agreement relating to employees or consultants of the Business that would bind Buyer after Closing. d. Sellers have separately delivered to Buyer on a confidential basis a list of the names, titles, job descriptions, and rates of compensation of all of the employees of the Sellers whose duties relate exclusively to the Systems, including the length of time such employee has been employed with the Sellers, and whether such employee is full time or part time. Section 5.10 Litigation. Except as set forth on Schedule 5 . 10 and any Litigation or Judgment affecting the cable television industry generally, there is no Litigation or Judgment outstanding or pending or, to Sellers ' knowledge, threatened, involving or affecting the Sellers, the Systems, or the Assets which, if adversely determined, would be likely to have a material adverse effect on the Business of any Seller taken as a whole. To Sellers ' knowledge, no facts or circumstances exist that could reasonably be expected to give rise to any such Litigation or Judgment that will have a material adverse effect on the financial condition or operation of the 24 9901t ' Business of any Seller taken as a whole or the ability of Sellers to perform their obligations under this Agreement . Section 5.11 Tax Returns; Other Reports. a. Sellers have as of the date hereof, and will have as of the Closing Date, timely filed, all Tax Returns and all other reports that reasonably may affect Buyer' s rights of ownership of the Assets that are required to be filed as of the date hereof, or which are required to be filed on or before the Closing Date, as the case may be. All such Tax Returns were and will be prepared in good faith. b. Other than sales and transfer taxes payable in respect of the sale of the Assets pursuant to this Agreement, all Taxes due and payable by Sellers on or before the date hereof or the Closing Date, as the case may be, the non-payment of which could result in a lien upon the Sellers Assets, have been or will be timely paid, except to the extent any such Taxes are being contested in good faith by appropriate proceedings by Sellers. Section 5.12 Legal Compliance. a. Except as otherwise expressly provided herein and in the Schedules hereto, the operation of the Systems and the Business is in compliance with all applicable Legal Requirements, including without limitation, the Communications Act, the Copyright Act, the Cable Act, and the rules and regulations of the FCC, the FAA and the United States Copyright Office, including, without limitation, rules and laws governing system registration, use of aeronautical frequencies and signal carriage, equal employment opportunity, cumulative leakage index testing and reporting, signal leakage, and subscriber privacy, except to the extent that the failure to so comply with any of the foregoing would not either individually or in the aggregate reasonably be expected to have a material adverse effect on the Business of any Seller taken as a whole. b. Without limiting the generality of the foregoing, except to the extent that the failure to comply with any of the following would not either individually or in the aggregate reasonably be expected to have a material adverse effect on the Business taken as a whole, and: i . The Systems have been registered with the FCC; ii. All notices, statements of account, supplements and other documents required under Section 111 of the Copyright Act and under the rules of the Copyright Office with respect to the carriage of off-air signals by the Systems since the beginning of 1997 have been duly filed, and the proper amount of copyright fees have been paid on a timely basis. (except as 25 _9O1o9. to potential copyright liability arising from the performance, exhibition or carriage of any music on the Systems which applies to or affects the cable television industry generally, as to which no warranty is made) , and the Systems qualify for the compulsory 'license under Section 111 of the Copyright Act . iii . The Sellers are in compliance with the must carry and retransmission consent provisions of the Cable Act, except for such noncompliance as would not have a material adverse effect on the Systems taken as a whole. iv. The Sellers are in compliance with their obligations with regard to protecting the privacy rights of any past or present customers of the Systems, except for such noncompliance as would not have a material adverse effect on the Business of any Seller taken as a whole. v. Sellers have given timely notice under Section 626 of the Cable Act of their desire to renew all Franchises that expire less than 30 months after the date of this Agreement . Section 5.13 Systems Information.. Schedule 5 .13 sets forth with reasonable accuracy and completeness the following information as of the dates set forth on such schedule with respect to each of the Systems, and since the dates set forth on such schedule there has been no material change in such information: a. for each Seller, a summary of services offered and rates charged, and approximate number of customers subscribing to each class of service; b. a listing of communities served by the Systems; c. approximate number of dwelling units (including detached homes, apartment units, condominium units, and commercial establishments, in each case regardless of whether Sellers possess a right of entry) passed by the Systems for each Seller; d. approximate miles of plant for each Seller; and e. the approximate channel capacity of the Systems of each Seller. Section 5.14 Environmental. a. To Sellers ' knowledge, none of the Real Property is listed on the National Priorities Lists or the Comprehensive Environmental Response, Compensation, Liability Information System ("CERCLIS" ) , or is the subject of any "Superfund evaluation or 26 ateee '; . ;.40i�9, . investigation, or any other investigation or proceeding of any Governmental Authority evaluating whether any remedial action is necessary to respond to any release of Hazardous Substances on or in connection with the Real Property. b. To the knowledge of Sellers, the Sellers are in compliance with all Legal Requirements with respect to pollution or protection of the environment, including Legal Requirements relating to actual or threatened emissions, discharges, or releases of Hazardous Substances into the ambient air, surface water, ground water, land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Substances . The Sellers have received no notice or order of liability to remedy, or recommending remediation of, any environmental damage at the Real Estate. Section 5.15 Financial Information. a. Sellers have delivered to Buyer correct and complete copies of the balance sheets and related statements of income of the Sellers for the years ended December 31, 1996 and 1997, and for the year-to-date period ended June 30, 1998 (the "Business ' s Financial Statements") . The Business ' s Financial Statements have been prepared in the ordinary course of business, are based on the books and records of the Sellers, were prepared in accordance with GAAP consistently applied and present fairly the financial condition and results of operations of the Sellers as of the dates and for the periods indicated. b. Except for conditions affecting the cable television industry as a whole, since June 30 , 1998 there has been no material adverse change in the financial condition or operations of Sellers . Section 5 .16 Taxpayer Identification Number. Sellers ' U.S. Taxpayer Identification Numbers are as set forth in the introductory paragraph of this Agreement . Section 5.17 Bonds. Schedule 5 .17 sets forth the material franchise, construction, fidelity, performance, and other bonds, letters of credit, surety instruments and similar items posted by Sellers in connection with the Business . Buyer understands and agrees that at Closing Buyer will be required to replace these bonds, letters of credit, surety instruments and similar items with its own bonds, so that the existing bonds, letters of credit, surety instruments and similar items will be released promptly after Closing. Sellers have provided to Buyer a list of all casualty and liability and business interruption insurance carried by Sellers with respect to the Business . Within 45 days after execution of this Agreement Sellers 27 ''� r`' 990109):: will deliver to Buyer a list of all persons listed as additional insureds on Sellers ' insurance policies . Section 5.18 Finders; Brokers and Advisors Except for the engagement of Waller Capital Corporation, with respect to which Sellers shall have sole responsibility for the payment of all amounts owed, Sellers have not employed any • financial advisory, broker or finder or incurred any liability for any financial advisory, brokerage, finder' s or similar fee or commission in connection with the transactions contemplated by its Agreement . • Section 5.19 Disclaimer of Warranty. Sellers shall not be liable for or bound in any manner by, and Buyer has not relied upon, any express or implied, oral or written information, warranty, guaranty, promise, statement, inducement or representation pertaining to the Assets, the Systems or the Business (including projections as to income from and expense of any. System, or the uses which can be made of, or the value, prospects or profitability of such System) , except as is expressly set forth in this Agreement and the Schedules attached to this Agreement. Section 5.20 Intentionally Left Blank. Section 5.21 Overbuilds. Except as set forth on Schedule 5 .21, at the date of this Agreement there are no competing wired cable television systems serving any of the areas where the Systems ' plant is built, and, to Sellers ' knowledge, no franchise or application therefor is pending with, nor has any franchise been issued by, any local franchising authority which grants to a competing cable television operator the right to operate a cable television system within the Service Areas; provided that in certain unincorporated county areas served by the Systems other persons may hold franchises and/or operate cable television systems in portions of the county not served by Sellers, and may have the authority to serve the entire county, including portions thereof served by the Systems . ARTICLE VI COVENANTS Section 6.1 Certain Affirmative Covenants of Sellers Regarding the Syt;tems. Except as Buyer may otherwise consent in writing, which consent may be withheld in Buyer' s sole discretion) between the date of this Agreement and Closing (or, if earlier, termination of . 28 this Agreement) , Sellers shall : a. complete the capital expenditure projects set forth on Schedule 6 . 1 (a) ; b. operate the Business in the ordinary course of business consistent with the Sellers ' past practices; c_ unless prevented by law or the act of a governmental body, implement the rate increases budgeted by Sellers for the summer and fall of 1998; provided that if Sellers desire to make modifications to the amounts and timing thereof, Sellers shall obtain Buyer' s approval thereof, which approval shall not be unreasonably withheld or delayed if the modification involves a minor variation in timing and/or amount and is consistent with prudent business practices; d. use Commercially Reasonable Efforts to operate the Business in substantial compliance with applicable Legal Requirements; e. submit renewal notices pursuant to Section 626 of the cable Act with respect to Franchises that fall within the "renewal window" provided under such provision of the Cable Act between the date of execution of the Cable Act and the Closing Date; f. use their Commercially Reasonable Efforts to preserve the current business organization of the Business intact, including preserving existing relationships with Persons having business with the Business; g. provide Buyer and its counsel, lenders, accountants, and other representatives reasonable access to the Business, the employees of the Business, the Real Property, the other Assets, and Sellers' books and records relating to the Business during normal business hours, provided that such access shall not unreasonably disrupt the normal business operations of the Business; h. deliver to Buyer copies of any monthly and quarterly financial statements for the Business and monthly subscriber reports regularly prepared by Sellers, at any time from the date hereof until Closing (or, if earlier, termination of this Agreement) ; and i . continue to carry and maintain in full force and effect its existing bonds and casualty and liability insurance with respect to the Business through and including the Closing Date, with such changes thereto as may be made in Sellers ' discretion in the ordinary course of business. Notwithstanding the foregoing, Sellers shall not be required to implement any rate increases after December 31, 1998 and are not 29 required to complete a 1999 operating budget . Section 6.2 Certain Negative Covenants of Sellers. Except as Buyer may otherwise consent in writing, which consent may be withheld at Buyer' s sole discretion, or as otherwise contemplated by this Agreement, between the date hereof and Closing (or, if earlier, termination of this Agreement) , Sellers shall not do or cause to be done any of the following: a. modify, terminate, suspend or abrogate any Franchise, License or material Contract other than in the ordinary course of business where there will not result a material adverse effect on the Business taken as a whole, except for such modifications, terminations, suspensions or obligations as would not have a material adverse effect on the Business taken as a whole; b. enter into additional franchises, licenses or contracts that would require aggregate payments of more than $25, 000 per year, other than renewals of existing Franchises, Licenses and Contracts in the ordinary course of business; c. except for Excluded Assets, sell, assign, lease or otherwise dispose of any of the Assets, unless such Assets are consumed or disposed of in the ordinary course of business or in conjunction with the acquisition of replacement property of equivalent kind and value, or are no longer used or useful in the business or operation of the Systems and there is no need to replace such Assets; d. increase the rate of pay of System employees except for periodic raises in accordance with past practices, and increases contemplated by Sellers ' 1998 operating budget (a copy of which budget has been delivered to Buyer) ; e. except as may be required by a Legal Requirement, implement any tiering, re-tiering or repackaging of cable television programming of a System, provided that the Sellers may modify rates charged and may rearrange or collapse programming tiers in accordance with past practices or industry practice or in accordance with the Sellers' 1998 operating budgets which have been delivered to Buyer, and may launch new programming services in accordance with the plan attached as Schedule 6 .2 (e) ; or f. engage in extraordinary marketing practices other than (i) marketing practices that are consistent with past practices used during the 18 months prior to the date hereof and (ii) with respect to a 200 home development in Bay City, Wisconsin, free basic cable for one month. Buyer acknowledges that Sellers ' past marketing practices are door-to-door sales, direct mail, telemarketing, newspaper advertising, free installation for new 30 eiitoft„. � 9 , . subscribers, free upgrades of a pay service to existing pay customers, payment of commissions to employees for sales of basic, pay and cableguard service, late pay collections and detection of unauthorized connections, In marketing according to past practices, Sellers shall not materially modify the nature of the marketing practices (e.g. , in door-to-door campaigns, Sellers shall not materially increase commissions paid over the level of commissions paid in prior door-to-door campaigns) . Section 6.3 Employee Matters. a. Immediately prr to .Clong, Sellers shall terminate or cause; tho beiperbinat io si ed all of the following employees (collectively "System Emplloyees-") (a) Selilers' employees who primarily perform services with respect to 'the operations of theSystems,, and; "(ii) eemployees , of ,the{ Denver , customer' '.service center that 'provide customer service for the Systems.. Sellers shall be responsible for all amounts owed to any employee of Sellers through the Closing Date, including wages, salaries, incentive compensation or bonus agreements, or other benefits or payments on account of termination. b.. Buyer may offeir (but is not obligated„ to offer) employment! to any or all System' Employees as of the Closing Date. Sellers will not interfere with Buyer' s efforts to hire System Employees. Buyer shall notify Sellers at least thirty (30) days prior to the Closing Date as to which System Employees will be offered employment by Buyer and the terms of employment offered to each such person. Buyer shall recognize the term of service with Sellers of any System Employee hired by Buyer at the time of the Closing or immediately thereafter in determining such employee' s vacation benefits under Buyer' s vacation plan. Buyer also shall permit any former employee of Sellers hired by Buyer at the time of Closing or immediately thereafter (a "Transferred Employee" ) to participate in Buyer's group health plan without imposing any waiting periods so long as such employee was covered by Sellers ' health plan immediately prior to the Closing. To the extent that accrued vacation time is included in the Current Items Amount, Buyer shall permit any Transferred Employee to take any such accrued vacation at whatever times the employee would have been entitled to take such vacation had the employee not left the employ of Sellers, or shall pay such employee for any such accrued vacation time that such employee is not able to take under Buyer' s vacation plan. c. Nothing in this Agreement shall be construed to create any third party beneficiary rights in favor of any person not a party to this Agreement or to constitute an offer of employment, employment agreement or condition of employment for any of the employees of the Business . 31 990109 d. Each Transferred Employee shall cease to participate in each of Sellers ' employee benefit plans (and plans of Sellers ' affiliates) for periods on and after the Closing Date. As of the Closing Date, Transferred Employees (and their eligible dependents and beneficiaries) shall be eligible to participate in Buyer' s health, retirement, vacation and other benefit plans. Buyer shall credit Transferred Employees for length of service with Sellers and their affiliates for purposes of eligibility and vesting under such plans. Notwithstanding the foregoing, as of and immediately after the Closing, Buyer shall provide (i) the.Transferred Employees (and their eligible dependents and beneficiaries) health coverage under plans or programs of Buyer, and (ii) for the waiver with respect to Transferred Employees under such plans or programs of any pre- existing condition exclusions and waiting periods (except to the extent that such exclusions would have then applied or waiting periods were not satisfied under Asset Seller' s health plans) . Buyer shall use commercially reasonable efforts to amend its 401 (k) plan if necessary to accommodate the transfer to Buyer' s plan of the account balances of Transferred Employees so long as such modifications do not result in material expense to Buyer. e. As soon as administratively practicable after the date of Buyer's receipt from Sellers of a copy of a favorable determination letter from the Internal Revenue Service with respect to the qualified status of the Sellers Savings Plan, as amended through such date, and receipt by Sellers from Buyer of (i) a copy of the most recent IRS determination letter with respect to the qualification of any defined contribution plan then being maintained by Buyer under Sections 401 (k) and 401 (m) of the Code ("Buyer' s Savings Plan") , (ii) a copy of Buyer' s Savings Plan and any amendments thereto„ including any amendments Buyer determines are required under Section 411 (d) (6) of: the Code with respect to the transfer described ,herein from the Sellers ' Savings Plan to the Buyer's Savings Plan, and (iii) any other documentation reasonably requested by Sellers with respect to the qualification of Buyer' s Savings Plan, Sellers shall,, in accordance with Section 414 (1) of the Code, transfer, or cause to be transferred, to Buyer' s Savings Plan the account balances under the Sellers ' Savings Plan of those Transferred Employees who as of the date of such transfer are participants in the Sellers ' Savings Plan and who are actively employed by Buyer, together with cash assets of Sellers ' Savings Plan in an amount equal to such account balances, determined as of the date of such transfer. Upon receiptof such assets of Sellers ' Savings Plc by Buyer' s Savings Plan, Buyer' s Savings Plan shall assume liar-;ility for such account balances to the extent of such assets transferred. Notwithstanding anything in this Agreement to the contrary, Sellers shall, jointly and severally, indemnify Buyer and Buyer' s Savings Plan and hold each of them harmless from any and all liability arising, in whole or in part, directly or indirectly, from the transfer of assets from Sellers ' Savings Plan, except to the extent that (i) such liability is satisfied, in accordance with ERISA and the Code, from the assets so transferred, 32 h, 990, 09. or (ii) such liability results from the acts or omissions of Buyer or a fiduciary of Buyer' s Savings Plan. For the period beginning on the date of this agreement and ending on the date on which Buyer's Savings Plan receives such assets of Sellers ' Savings Plan, Sellers hereby covenant (i) to maintain, operate and administer Sellers ' Savings Plan (and any related trust) in all material respects in accordance with its terms, all applicable laic, and the qualification requirements of Sections 401 (a) , 401 (k) , 401 (m) and 501 (a) of the Code, (ii) to timely pay to Sellers ' Savings Plan any and all amounts which Sellers are required to pay as contributions or otherwise with respect thereto, and (iii) not to engage in or permit any other person or entity to engage in any nonexempt prohibited transaction (within the meaning to meaning of Section 406 of ERISA or Section 4975 of the Code) with respect to the assets of Sellers ' Savings Plan. Notwithstanding the foregoing provisions of this Section 6 .3, no transfer of such assets of Sellers ' Savings Plan and no assumption of liability by Buyer' s Savings Plan shall occur, if, as of the date such transfer is to occur, Buyer does not maintain any defined contribution plan. f. From the date hereof through the date of the Closing, Sellers shall not either directly or indirectly, influence or attempt to influence any person not to accept any offer of employment with Buyer in the Systems. From the date of the Closing through the date which is six (6) months after the Closing, Sellers shall not, directly or indirectly, offer employment to or otherwise retain any person who is or was employed by Buyer in the Systems at any time during such six-month period. From the date of the Closing through the date which is eighteen (18) months after the Closing, Sellers shall not, directly or indirectly, solicit for employment any person who is employed by Buyer in the Systems or otherwise induce or attempt to induce any person to terminate or modify his or her employment with Buyer in the Systems. Section 6.4 Confidentiality. Any nonpublic information that either party ("Recipient Party") may obtain from the other ("Disclosing Party") in connection with this Agreement with respect to the Disclosing Party or the Systems shall be confidential and, unless and until Closing shall occur, Recipient Party shall not disclose any such information to any third party (other than its directors, officers, partners and employees, and representatives of its advisers and lenders whose knowledge thereof is necessary in order to facilitate the consummation of the transactions contemplated hereby) or use such information to the detriment of Disclosing Party; provided that (i) Recipient may use and disclose any such information once it has been publicly disclosed (other than by Recipient Party in breach of its obligations under this Section) or that rightfully has come into the possession of Recipient Party (other than from Disclosing Party) , and (ii) to the extent that Recipient Party may 33 kJf�4�;1;'6 0 become compelled by Legal Requirements to disclose any of such information, Recipient Party may disclose such information if it shall have made all reasonable efforts, and shall have afforded Disclosing Party the opportunity., to obtain an appropriate protective order, or other satisfactory assurance of confidential treatment, for the information compelled to be disclosed. If this Agreement is terminated, Recipient Party shall use all reasonable efforts to cause to be delivered to Disclosing Party, and retain no copies of, any documents, work papers and other materials obtained by or on the behalf of Recipient Party from Disclosing Party, whether so obtained before or after the execution hereof. The rights and obligations of Buyer and Sellers under this Section 6 .5 shall survive Closing or the termination of this Agreement . Notwithstanding the foregoing, the following will not constitute a part of the information for the purposes of this Section: a. information that a party can show was known by the Recipient Party prior to the disclosure thereof by the Disclosing Party; b. information that is or becomes generally available to the public other than as a result of a disclosure directly or indirectly by the Recipient Party in breach of this Section 6 .4 ; c. information that is independently developed by the Recipient Party; or d. information that is or becomes available to the Recipient Party on a non-confidential basis from a source other than the Disclosing Party, provided that such source is not known by the Recipient Party to be bound by any obligation or confidentiality in relation thereto. Section 6.5 Notification of Certain Matters. Each of Buyer and Sellers will promptly notify the other in writing of any fact, event, circumstance, action or omission of which it obtains knowledge, the existence or occurrence of which would cause any of the notifying party' s representations or warranties under this Agreement not to be true in any material respect. Section 6 , 6 Billing Services After Closing. For a period of up to three (3) monthly billing cycles after Closing, if requested by Buyer, Sellers shall provide billing services to Buyer for rendering bills to subscribers of the Systems, pursuant to a Billing Agreement in the form attached hereto as Exhibit H (the "Billing Service Agreement") . The Billing Service Agreement shall provide that Sellers shall be liable only for gross negligence or misconduct in connection with any such . 34 services rendered to Buyer, and, without limiting the foregoing, shall have no liability for damages of any kind incurred by Buyer relating to such billing services unless resulting solely and directly from Sellers ' gross negligence or misconduct . (b) Pursuant to the Billing Service Agreement, Buyer will also pay charges imposed by Sellers and Sellers ' billing 'vendors to transfer billing data to Buyer' s billing systems or vendors, or to format or convert Subscriber or billing data. With respect to subscriber and billing data on Sellers ' CBIS billing systems, Buyer shall pay Sellers ' charges for any transfer, formatting or copying of subscriber and billing data, including charges that are customary in billing conversions of this nature, including charges not to exceed $7,500 for each of Buyer' s billing vendors to which a conversion is required. Section 6.7 Commercially Reasonable Efforts. Each party shall use Commercially Reasonable Efforts to take all steps within its power, and will cooperate with the other party, to cause to be fulfilled those of the conditions to the other party' s obligations to consummate the transactions contemplated by this Agreement that are dependent upon its actions, and to execute and deliver such instruments and take such other commercially reasonable best actions as may be necessary to carry out the intent of this Agreement and consummate the transactions contemplated hereby. Section 6 .8 Consents. a. Sellers and Buyer will use Commercially Reasonable Efforts to attempt to obtain as soon as practicable consents of franchising authorities, other Governmental Authorities, utility companies, landlords and others whose consent is required for the transfer of the Assets to Buyer; and Buyer will cause its representatives to attend meetings of franchising authorities where action on a requested approval to transfer is to be considered. Sellers will also use Commercially Reasonable Efforts to cause the term of the Extendable Franchises and the Franchise for Norwood/Young America/Hamburg to be extended for a period agreed upon by Sellers and Buyer. b. Promptly after the execution of this Agreement, but no later than thirty (30) days after the date hereof, Sellers and Buyer shall make application to the FCC for the consent and approval of the FCC to the transfer of the ownership or control of all FCC Licenses of the Systems from Sellers to Buyer. c. On or prior to the expiration of forty-five (45) days after the date of this Agreement, Sellers and Buyer shall, each at its own expense, prepare and file Applications for Franchise 35 eopon looteee 990*..9.. Authority consent to Assignment or Transfer of Control of Cable Television Franchise FCC 394 ( "Forms 394 " ) with the local Governmental Authorities that have issued Franchises to Sellers and which require franchise authority consent to transfer, and shall file all additional information required by such Franchises or applicable local Legal Requirements or that the Governmental Authorities deem necessary or appropriate in connection with their consideration of the request of Sellers and Buyer that such authority approve of the transfer of the Franchises to Buyer. Thereafter Buyer or its representatives shall be given reasonable advance notice of, and shall attend such meetings and provide such information as the franchising authorities may reasonably request in connection with their consideration o.f the request for approval to transfer the Franchises to the Buyer. d. Without limiting the foregoing, Buyer will deliver promptly to the Governmental Authorities for those Governmental Permits transferred at Closing all bonds, letters of credit, indemnity agreements, or deposits required by such Governmental Authorities, provided the terms thereof are not substantially more onerous than the terms of the existing bonds, letters of credit and deposits maintained by Sellers as listed on Schedule 5 . 17, and will use its Commercially Reasonable Efforts to cooperate with Sellers to obtain a release by such Governmental Authorities of Sellers ' bonds, letters of credit, indemnity agreements, and certificates of deposit . Section 6 .9 Risk of Loss; Condemnation. Sellers will bear the risk of any loss or damage to the Assets resulting from fire, theft , other casualty, condemnation or taking at all times prior to the Closing. If any such loss, damage, condemnation or taking is so substantial as to prevent resumption of normal operation prior to the Closing Date of Systems serving more than five percent (5%) of the EBU' s of the Systems at December 31, 1997, then Buyer may either (i) terminate this Agreement or (ii) elect to close, in which event (A) all insurance proceeds (including business interruption insurance proceeds applicable to periods after Closing, and casualty insurance) would be assigned to Buyer, (B) there would be no reduction in price, and (C) Sellers will be deemed to have made no warranties concerning the damaged Assets; provided further that if Buyer elects to terminate this Agreement Sellers may elect to reduce the Purchase Price by the reasonably estimated value of repairing the casualty and/or the value of the condemned Systems, in which event the Buyer and Sellers shall negotiate such amount in good faith for 60 days (if Sellers and Buyer agree on such amount, this Agreement shall not be terminated and the Purchase Price shall be reduced by the agreed- upon amount ; if they cannot agree then this Agreement would be terminated at the end of the 60-day negotiation period) . If such loss, casualty or taking does not cause more than five percent (5%) 36 990109 of the Systems ' EBU' s to have service suspended beyond the Closing Date then neither party may terminate this Agreement. Without limiting the foregoing, if any such loss, damage, condemnation or taking is so substantial as to prevent resumption of normal operation prior to the Closing Date of Systems serving more than two percent (2%) of the EBU' s of the Systems at December 31, 1997, then Buyer may postpone the Closing for up to thirty (30) days . If the acquisition is completed notwithstanding such loss, damage or taking, then all insurance proceeds and condemnation proceeds paid or payable as a result of the occurrence of the event causing such loss, damage or condemnation will be delivered by Sellers to Buyer at the Closing, or the rights to such proceeds will be assigned by Sellers to Buyer at the Closing if not yet paid over to Sellers . Section 6.10. Title Insurance Commitments; Environmental Studies; Surveys (a) Buyer shall have the option to obtain, at its own expense, during the period of sixty (60) days after the date hereof (the "Real Estate Inspection Period") (i) commitments of title insurance ("Title Commitments" ) issued by a nationally-recognized title insurance Company selected by Buyer (a "Title Company" ) , committing to insure fee title to those parcels of the Owned Real Property listed on Schedule 6 . 10 (i) and leasehold title to those parcels of Leased Real Property listed on Schedule 6 . 10 (i) , by ALTA (1992) owner's policies of title insurance, (ii) surveys of said parcels of the Owned Real Property and the Leased Real Property in such form as is necessary to obtain the. title insurance to be issued pursuant to the Title Commitments with the standard printed exceptions relating to survey matters deleted (the "Surveys" ) , certified to Buyer and to the Title Company issuing the Title Commitment with respect to that parcel of Real Property, and (iii) Phase 1 environmental reports concerning the parcels of the Owned Real Property and the Leased Real. Property listed on Schedule 6 .10 (ii) (together with any Phase 2 report, "Environmental Reports") . Except for Permitted Post Period Reports, Buyer shall not obtain Title Commitments or Surveys on properties not listed on Schedule 6 . 10 (i) , or Environmental Reports on properties not listed on Schedule 6 .10 (ii) . ' Buyer shall deliver to Seller true and complete copies of all such Title Commitments, Surveys and Environmental Reports within five Business Days after Buyer' s receipt thereof. The Environmental Reports must be performed by environmental consulting or engineering firms reasonably acceptable to Buyer and Seller. If any Phase 1 environmental report discloses a potential presence of Hazardous Substances or violations of Legal Requirements that is sufficiently material to reasonably warrant a Phase 2 report, then Buyer shall have the right beyond such 60 day period, subject to prior written approval of Sellers which approval shall not be unreasonably withheld, to obtain Phase 2 reports with respect to such Real Property, in which event the Real Estate Inspection Period shall be extended accordingly (but not more than 37 414)21100, 7 990109 60 days) as to such Real Property. Any such Phase 2 report shall be ordered promptly after receipt and analysis of the respective Phase 1 report . If Buyer proposes to undertake a Phase 2 environmental study on any parcel of real estate, Buyer shall provide Sellers with a plan for such proposed study prior to commencing the same, and Sellers shall have the right (which Sellers must exercise by written notice to Buyer within 10 days after receipt of Buyer' s proposal) to refuse to agree to a request by Buyer to perform a Phase 2` environmental study on any property based solely on Sellers ' reasonable belief that the proposed Phase 2 study will cause material damage to the Assets or materially interrupt or impair the operation of the applicable System. If Sellers so refuse to allow a Phase 2 study, Buyer may terminate this Agreement, or Buyer may elect to close notwithstanding such refusal; and if Buyer elects to 'close notwithstanding such refusal (i) Buyer may not thereafter terminate this Agreement based on Title Defects or Environmental Defects for the applicable property or properties, (ii) Buyer shall not have any recourse against Sellers based on such Title Defects or Environmental Defects except as provided in clause (iii), of this sentence, and (iii) if within 9 months after Closing Buyer incurs environmental remediation expenses in respect of .Environmenta.l Defects at the site (s) for which Seller refused to allow a Phase 2 study Sellers will reimburse Buyer for such remediation costs; provided that (A) in no event shall the aggregate amount of reimbursements by Sellers under this clause (iii) plus any remediation costs incurred by Sellers prior to Closing in respect of Environmental Defects and Title Defects exceed 011.11111 and (B) this clause (iii) shall be inapplicable if a Purchase Price reduction is made under subsection (b) or subsection (c) of this Section 6 . 10 . (b) In the event that the Title Commitments or Surveys reveal the existence of any matter which renders title to such Real Property to be other than as represented herein or prevents access to or the use of such Real Property for the purposes of which it is currently used such that use of the Real Property by Buyer would be materially impaired (in any such case a "Title Defect" ) , and Buyer requests that Sellers remedy the same, then Sellers shall be obligated to use diligent efforts to either cure the Title Defect or cause the title Company to insure over it, provided that Sellers shall not be obligated to expend more than an aggregate of $200, 000 in seeking to remedy all Title Defects and Environmental Defects; and if it is reasonably expected, that the cost of such remediation together with the actual or . estimated expense of remedying Environmental Defects will exceed then Sellers shall have no obligation to undertake such remediation. Sellers ' decision regarding whether it will or will not undertake remediation shall be made by written notice to Buyer within 10 days after all Title Defects and Environmental Defects are disclosed to Sellers. If in such circumstance Sellers elect not to undertake such remediation, Buyer may, by notice to Sellers given within 15 days after Sellers ' election not to remediate, terminate this Agreement, or Buyer may, 38 gor by notice to Sellers given within 15 days after Sellers ' election not to remediate, elect to close notwithstanding such election by Sellers not to undertake such remediation; and if Buyer elects to close notwithstanding such election by Sellers (i) Buyer may not thereafter terminate this Agreement based on Title Defects or Environmental Defects disclosed in Title Commitments and Environmental Reports theretofore obtained or otherwise known by Buyer, (ii) Buyer shall not have any recourse against Sellers based on such Title Defects or Environmental Defects, and (iii) at Closing the Purchase Price shall be reduced by provided that there shall be no such reduction in the Purchase Price under this subsection (b) if there is a Purchase Price reduction under subsection (c) below. (c) In the event that the Environmental Reports reveal the presence of Hazardous Substances on the Real Property that could reasonably result in liability- to the owner or user thereof, or if the Environmental Reports reveal noncompliance with Legal Requirements governing environmental protection, (in any such case, an "Environmental Defect" ) , S'ellers shall be obligated to use diligent efforts to cure any such Environmental Defect, provided that, Sellers shall not be obligated to expend more than an aggregate of immume in seeking to remedy all Environmental Defects and "Title Defects or if it is reasonably expected that the cost of such remediation together with the actual or estimated cost of remedying Title Defects will exceed Sthen Sellers shall have: no obligation to undertaken such remediation. Sellers ' decision regarding whether it will or will not undertake remediation shall be made by written notice to Buyer within 10 days after all Title Defects and Environmental Defects are disclosed to Sellers. If in such circumstance Sellers elect not to undertake such remediation, Buyer may, by notice to Sellers given within 15 days after Sellers ' election not to remediate, terminate this Agreement, or Buyer may, by notice to Sellers given within 15 days after Sellers ' election not to remediate, proceed to close notwithstanding the Sellers ' failure to undertake such remediation. If Buyer elects to close notwithstanding Sellers' election not to undertake remediation (i) Buyer may' not thereafter terminate this Agreement based on Title Defects or Environmental Defects, (ii) Buyer shall not have any recourse against Sellers based on such Title Defects or Environmental Defects disclosed in Title Commitments and Environmental Reports theretofore obtained or otherwise known by Buyer, and I(iii) at Closing the Purchase Price shall be reduced by diMMOMMO, provided that there shall be no such reduction in the Purchase Price under this subsection (c) if there is a Purchase Price reduction under subsection (b) above. (d) After the Real Estate Inspection Period, except for Title Defects or Environmental Defects identified in a Permitted Post Period Report (as hereinafter defined) , Buyer shall not have the right to terminate this Agreement based on Title Defects or Environmental Defects, nor shall Buyer make any claim for 39 9,01®,9 indemnification pursuant to the provisions of Article XI based on Title Defects or Environmental Defects disclosed in such Title Commitments, Surveys or Environmental Reports. For purposes hereof, a Permitted Post Period Report shall be a Title Commitment or Survey or an.Environmental Report obtained after the Real Estate Inspection Period as a result of : (i) knowledge obtained by Buyer after the Real Estate Inspection Period other than through title examinations, surveys or environmental studies performed by or on behalf of Buyer, and supported by verifiable information that Buyer shall have delivered to Sellers and that shows a reasonable basis for further investigation of the title and/or environmental status of the applicable property; (ii) the lenders to Buyer requiring the same notwithstanding a good faith indication from Buyer' s lenders prior to the expiration of the Real Estate Inspection Period that such Report would not be required, provided that as soon as practicable after the execution of this Agreement Buyer will request its lenders in writing to designate as soon as practicable those parcels of real estate. for which the lenders will require Title Commitments,. Surveys and/or Environmental Reports, and Buyer shall promptly furnish to Sellers a copy, of such letter and the lenders ' reply thereto, and Buyer, will use its commercially reasonable efforts to cause its lenders to identify any such properties prior to the end of the 45`" day after execution of this Agreement; or (iii) routine updates of Title Commitments with respect to a parcel of Real Estate issued by the title company that prepared the Title Commitment (provided that such updates may not extend the scope of the original title search) . The timetable for obtaining any Permitted Post Period Report shall be the same as provided in subsection (a) of this Section 6.10, with the applicable time periods running from the date the property subject to a Permitted Post Period Report is identified. Sellers ' obligation to correct Title Defects or Environmental Defects identified in any Permitted Post Period Report shall be governed by and limited by the provisions of subparagraphs (b) and (c) above. (e) If Buyer terminates this Agreement under subsection (a) , subsection (b) or subsection (c) of this Section 6 . 10, and provided that Buyer is not otherwise in default of any of its covenants, obligations or warranties hereunder, Sellers shall be obligated to reimburse Buyer for one half of Buyer' s documented out-of-pocket expenses payable to persons that are not affiliated with Buyer incurred by Buyer in connection with obtaining the Environmental 40 Reports and Title Commitments, provided that in no event shall Sellers be required to pay more than r to Buyer upon such a termination of this Agreement. (f) Buyer shall indemnify Sellers and hold Sellers harmless from and against any damage to Real Property incurred by Sellers in connection with Buyer' s obtaining any Environmental Reports . (g) Sellers have delivered to Buyer copies of all recent title policies and environmental reports concerning the Real Estate that are in Sellers ' possession. Section 6 .11 Rights of First Refusal (a) Under the Franchises issued by municipalities in the State of Minnesota and by Shelbina, Missouri, the franchising authority may have the right to purchase the Franchise and the System served thereunder in the event of a proposed transfer of the Franchise. In the event any franchising authorities under such Franchises elect to acquire any of the Systems (all such Systems acquired by franchising authorities are referred to herein as "Removed Systems") then the following shall apply: (i) The Removed Systems shall become "Excluded Assets" ; (ii) The number "69, 500" at Section 7 .1 (1) below shall be reduced to a number that is the product of 69,500 times a fraction, the numerator of which is the number of EBUs at June 30 , 1998 in the Systems that are not Removed Systems (the "Remaining Systems" ) and the denominator of which is the actual number of EBUs in all Systems at June 30, 1998 ; (iii) The percentages referred to at Section 7. 1 (g) and 7.1 (h) below shall be deemed to refer to percentage of EBUs in the Remaining Systems; (iv) All representations, warranties and covenants of Sellers herein shall apply only to the Remaining Systems and shall not apply to the Removed Systems; and (v) The Purchase Price shall be reduced by the sum of (i) the product of the number of EBUs at June 30 , 1998 in Removed Systems owned by Twain and located in Twain' s "Minnesota Region" and ` (ii) the product of the number of EBUs at June 30, 1998 in Removed Systems owned by Twain in the "Minnesota/Wisconsin Region" anda, (iii) the product of the number of EBUs at June 30, 1998 in Removed Systems owned by Twain in the "Missouri Region" and and (iv) the number of EBUs at June 30, 1998 in Removed Systems owned by Citation and L 41 °; 0199. and such reduction shall be applied to that portion of the Purchase Price allocated to Twain or Citation as the case may be; and (vi) The Indemnity Escrow Amount shall be reduced by the same proportion as the Purchase Price is reduced under subsection (v) of this Section 6 .11, and the reduction in the Indemnity Escrow Amount shall be allocated to Twain. (b) If any Removed System includes a headend facility that also serves and is connected to a Remaining System, then prior to Closing Sellers shall either construct a new headend to serve the Remaining Systems that were served by the headend of the Removed System or cause the affected Remaining Systems to be connected to the headend of another Remaining System, with all such construction to be in accordance with all applicable laws, regulations and industry standards. With respect to any new headend constructed by Sellers: (i) such headend shall have at least the same capability as the replaced headend and shall be compatible with the distribution plant to be served by it; (ii) no item of equipment used in the construction of such headend shall be older than the corresponding item of equipment used in the headend being replaced; (iii) such headend and the distribution system served by it shall function in a manner substantially similar to the replaced headend and the distribution system served by it; and (iv) at Buyer' s request and direction, such headend shall be an upgrade from the replaced headend, and Buyer shall pay any incremental costs associated with such upgrade. (c) If any Removed System contains cable television plant that is used to provide signal to any Remaining System such that the removal of the Removed System will eliminate the signal received by the affected Remaining Systems, then Sellers will provide means, in accordance with all applicable laws, regulations and industry standards, and for the affected Remaining Systems to obtain signal equivalent to the signal they received at June 30, 1998 . (d) If any franchising authority elects to acquire a System but later (but prior to Closing) elects not to acquire the System, such System shall thereupon cease to be an Excluded Asset or a Removed System and such System shall be acquired by Buyer as if it had never been a Removed System. Section 6.12 . Customer Service (a) Buyer shall be solely responsible for customer service for the Systems from and after Closing. (b) For a period of up to six months after the date hereof Buyer shall have the right to utilize the office space and 42 games r- equipment in that portion of the office on the first floor at 1873 South Bellaire Street, Denver, Colorado heretofore utilized by Seller for customer service for the Systems (the "Customer Service Floor Area" ) , provided that Buyer shall utilize its own employees in providing such customer service. In such event, Buyer will reimburse Seller within 30 days of receipt of an invoice for a ratable portion of rent, common area charges, parking, utilities, insurance, furniture and fixture leases, and telephone leases for such office space, based on the relative amount of the office suite on the first floor used by the customer service operations on the one hand and by Seller' s billing operations on the other hand. In addition, Buyer shall reimburse Seller for telephone charges billed to Seller for telephone usage by Buyer. (c) Sellers warrant to Buyer that the Customer Service Floor Area that will be available to Buyer is suitable for providing customer service .for the Systems in the manner that Sellers or their affiliates presently provide customer service for the Systems. (d) Buyer may terminate its use of Seller' s office space and equipment pursuant to this Section 6 . 12 on ten (10) days written notice to Sellers. ARTICLE VII CONDITIONS PRECEDENT Section 7.1 Conditions to Buyer' s Obligations. The obligations of Buyer to consummate the transactions contemplated by this Agreement shall be subject to the following conditions, any one or more of which may be waived by Buyer in its sole discretion. a. Accuracy of Representations and Warranties. The representations and warranties of Sellers in this Agreement (without regard to materiality qualifications included therein) shall be true and accurate in all material respects at and as of Closing with the same effect as if made at and as of Closing, except for changes expressly contemplated under this Agreement and except for representations and warranties made only at and as of a certain date, which representations and warranties shall be true and accurate in all material respects as of such date. b. Performance of Agreements. Sellers shall have performed and complied with in all material respects the obligations and covenants in this Agreement to be performed and complied with by them at or before Closing. c. Officer' s Certificate. Buyer shall have received a certificate executed by an executive officer of a general partner of each Seller, dated as of Closing, certifying that the conditions 43 990109 m.. T specified in Sections 7 .1 (a) and (b) have been satisfied. d. Leaal Proceedinas . No Judgment shall have been entered and not vacated by any Governmental Authority of competent jurisdiction that enjoins, restrains, makes illegal, or prohibits consummation of the transactions contemplated by this Agreement, and there shall be no Litigation pending or threatened (other than Litigation instituted by or on behalf of Buyer or its Affiliates) that seeks or that, if successful, would have the effect of any of the foregoing. e. Opinion of Sellers ' Counsel . Buyer shall have received an opinion of Cameron & Mittleman, counsel to Sellers, dated as of Closing, substantially in the form of Exhibit E. f. Opinion of Sellers ' FCC Counsel . Buyer shall have received an opinion of Cole, Raywid & Braverman, special communications counsel to Sellers, dated as of Closing, substantially in the form of Exhibit F. g. Consents. Consents required to be obtained from Governmental Authorities or other entities that issued the Franchises for the assignment of the Franchises shall have been obtained, or new franchises shall have been issued to Buyer, such that there can be lawfully assigned to Buyer Franchises (including Franchises where no approval to assign or change control is required) and/or Buyer shall have obtained its own franchises, covering in the aggregate at leasaillaulle of the EBU' s of the Systems. In addition, the other consents marked on Schedule 5 . 3 with an asterisk ("Material Consents" ) shall have been obtained. Such consents shall not be subject to conditions that would materially adversely affect the Business taken as a whole. h. Extension of Certain Franchises. The term of the Franchise for Norwood/Young America/Hamburg, Minnesota shall have been extended for a period acceptable to Buyer on terms not materially more burdensome than those currently in effect under such Fr chise; and the term of Extendable Franchises covering at least of the EBU' s served under the Extendable Franchises shall have been extended to a date reasonably acceptable to Buyer on terms not materially more burdensome than those currently in effect under such Franchises . i . Liens . Sellers shall have delivered evidence satisfactory to Buyer that all Liens other than Permitted Liens have been terminated, released, removed, satisfied or waived, or will be terminated, released, removed, satisfied or waived simultaneously with the Closing. j . Transfer Documents . Sellers shall have delivered to Buyer the Bill of Sale, special warranty deeds for the Owned Real Estate, and other instruments of transfer sufficient to convey 44 come naO 09 title to the Assets in accordance with the terms of this Agreement (in recordable form where appropriate) and otherwise in form and substance reasonably satisfactory to Buyer and its counsel . k. HSR Act Waiting Period. The waiting period under the HSR Act shall have expired. 1. Minimum EBU' s . The Systems (including any Withheld Systems) shall have at least 69, 500 EBU' s . m. No Material Adverse Change . There shall have occurred no material adverse change in the condition of the Business, financial or otherwise, taken as a whole, other than changes attributable to events or circumstances affecting the cable television industry generally, changes in general economic conditions, and changes resulting from competition, and changes in financial markets. n. Simultaneous Transactions . The acquisition of Assets from each of the Sellers shall occur simultaneously. Section 7.2 Conditions to Sellers ' Obligations. The obligations of Sellers to consummate the transactions contemplated by this Agreement shall be subject to the following conditions, any one or more of which may be waived by Sellers, in its sole discretion: a. Accuracy of Representations and Warranties . The representations and warrantiesof Buyer in this Agreement (without regard to materiality e'qualiflcations included therein) shall be true and accurate in all material respects at and as of Closing with the same effect as if made at and as of Closing, except for changes expressly contemplated under this Agreement and except for representations and warranties made only at and as of a certain date, which representations and warranties shall be true and accurate in all material respects as of such date. b. Performance of. Agreements : Buyer shall have performed in all material respects all obligations and agreements and complied in all material respects with all covenants in this Agreement to be performed and complied with by it at or before Closing. c . Officer' s Certificate . Sellers shall have received a certificate executed by an executive officer of Buyer, dated as of Closing, certifying that the conditions specified in Sections 7 .2 (a) and (b) have been satisfied. d. Legal Proceedings. No Judgment shall have been entered and not vacated by any Governmental Authority of competent 45 99019eute,pe . FW. jurisdiction that enjoins, restrains, makes illegal, or prohibits consummation of the transactions contemplated hereby, and there shall be no Litigation pending or threatened that seeks or that, if successful, would have the effect of any of the foregoing. e. Opinion of Buyer' s Counsel . Sellers shall have received an opinion of Baer Marks & Upham, LLP, special counsel to Buyer, dated as of Closing, substantially in the form of Exhibit G. f . Consents. Consents required to be obtained from Governmental Authorities that issued the Franchises for the assignment of the Franchises of the Sellers shall have been obtained, or new franchises shall have been issued to Buyer on substantially similar terms, such, that there can be lawfully assigned to Buyer (including Franchises where no approval to assign or change control is required) and/or Buyer shall have obtained its own franchises, covering in the aggregate at least - alealb of the EBU' s of the Systems. In addition, the Material Consents shall have been obtained. g. HSR Act Waitinc Period. The waiting period under the HSR Act shall have expired. h. Simultaneous Transactions . The acquisition of Assets from each of the. Sellers shall occur simultaneously Section 7.3 Non-Assignment. If at Closing at least of the ': EBU' s are covered by Franchises'that 'either (i), 3o.`not require consent to transfer, or (ii) for which consent to transfer has been obtained in accordance with this Agreement or (iii) are issued directly to Buyer (collectively "Assigned Franchises") , then Buyer shall acquire all of the Systems and no special arrangement shall be made with respect to Franchises for which consent to transfer is required but is not obtained, and there shall be no adjustment in the Purchase Price . If at Closing Assigned Franchises cover or more, but less than OS of t e . ,- s, then the Closing shall proceed but with respect to those Franchises that require consent to transfer and for which transfer consent has not been obtained, there shall be no change in the Purchase Price, and the applicable Seller (s) and Buyer shall enter into a management agreement containing terms c '.' rally contained in agreements of this type, by which Buyer s ..;.,;.1 manage the applicable System(s) (the "Withheld Systems" ) and Buyer shall retain all cash flow of such Withheld Systems until the consent to transfer such System is obtained, whereupon the applicable Withheld System and Franchise shall be assigned to Buyer. If Buyer requests the sale of any Withheld System prior to its transfer to Buyer, the applicable Seller shall use reasonable commercial efforts to sell the same, and in the event of any such 46 fiOnte eon109 re sale the proceeds of the sale, after expenses of sale, shall be paid to Buyer. On the first anniversary of the Closing Date, any Withheld System that has not been sold shall be conveyed to Buyer, regardless of whether or not the franchise transfer consent was obtained. ARTICLE VIII CLOSING Section 8 .1 Closing; Time and Place a. Subject to the terms and conditions of this Agreement, the closing of the transactions contemplated by this Agreement ( "the Closing" ) shall be held at the offices of Sellers at 1873 South Bellaire Street, Suite 1550, Denver, Colorado, at 10 : 00 a.m. , local time, on January 31, 1999, or at such earlier or later date as may be agreed upon by Sellers and Buyer (the "Closing Date" ) . r ura rm If the If the last IClosiiusiness Dayof th ehen the Closing/Shall be e"ld monthin which all such conditions are satisfied or waived. Either party may notify the other that all such conditions have been satisfied or waived and may set the Closing for the last Business Day of the month in which such notice is given. Section 8 .2 Sellers' Deliveries. At Closing, Sellers shall deliver or cause to be delivered to Buyer the following: a. Bill of Sale . Executed counterparts of the Bill of Sale in the form of Exhibit C (the "Bill of Sale") ; b. Stock Certificates . The original certificates evidencing the Stock, duly endorsed for transfer to Buyer. c. Officer' s Certificate. The certificate described in Section 7. 1 (c) ; d. Evidence of Authorizing Actions . Evidence reasonably satisfactory to Buyer that Sellers have taken all action necessary to authorize the execution of this Agreement and the consummation of the transactions contemplated hereby; e. Opinion of Sellers ' Counsel . The opinion described 47 in Section 7. 1 (e) ; f . Opinion of Sellers ' FCC Counsel . The opinion described in Section 7 .1 (f) ; g. Noncompetition Agreement. The Noncompetition Agreement. h. Vehicle Titles. Title certificates to all vehicles that constitute Assets, endorsed for transfer of title to Buyer, and any separate bills of sale and other vehicle title transfer documentation required by the laws of the state in which such vehicles are titled; i . Documents and Records. All (i) existing blueprints, schematics, working drawings, plans, specifications, projections, statistics, engineering records, original plant records, construction, and as-built maps in Sellers ' possession relating to the Systems, and (ii) customerlists, files and records used by the Sellers in connection with the operation of the Systems, including , lists of all pending subscriber hook-ups, disconnects and all repair orders, supply orders and any other records pertinent to the operation of the Systems. Delivery of the foregoing shall be deemed made to the extent such lists, files, and records ' are located as of the Closing Date at any of the offices included in the Owned Real Property or the Leased Real Property; and j . Insumbencv. An incumbency certificate of a general partner of the Sellers evidencing the authority of the entities and individuals who are signatories to this Agreement and each other Transaction Documents to which Sellers are a party. Section 8 .3 Buyer's Deliveries. At Closing, Buyer shall deliver or cause to be delivered to Seller the following: a. Purchase Price and Current Items Amount : The Purchase Price plus or minus the Current Items Amount, as determined in accordance with the provisions of Section 2 . 7 (a) and the Earnest Money Payment and interest thereon; b. Bill of Sale . Executed counterparts of the Bill of Sale; c. Assumption Agreement.. An assumption agreement in the form attached hereto as Exhibit D. d. Officer' s Certificate. The certificate described in Section 7.2 (c) ; 48 at,0109 Viet* e. Evidence of Authorizations . Evidence reasonably satisfactory to Sellers that Buyer has taken all action necessary to authorize the execution of this Agreement and the consummation of the transactions contemplated hereby; f. Incumbency. An incumbency certificate of Buyer evidencing the authority of the entities and individuals who are signatories to this Agreement and each other Transaction Documents to which Buyer is a party; and g. Opinion of Buyer' s Counsel . The opinion described in Section 7.2 (e) . ARTICLE IX TERMINATION Section 9.1 Termination Events. This Agreement may be terminated and the transactions contemplated hereby may be abandoned as follows: a At any time, by the mutual written agreement of Buyer and Sellers; b. By either Buyer or Sellers, provided that the terminating party is not in material default in the performance of its obligations hereunder, upon written notice to the other, if the other is in material breach or default of its respective covenants, agreements, or other obligations herein, or if any of its representations herein are not true and accurate in all material respects when made or when otherwise required by this Agreement to be true and accurate, and such breach, default or failure is not cured within sixty (60) days of receipt of notice that such breach, default or failure exists or has occurred (provided that no such cure period shall apply to Buyer' s failure to close the transaction contemplated hereby on the Closing Date if the conditions set forth at Section 7.1 hereof have been satisfied) . c. By either Buyer or Sellers, provided that the terminating party is not in material default in the performance of its obligations hereunder, upon written notice to the other on or after the Outside Closing Date if any conditions to its obligations set forth in Sections 7.1 and 7.2, respectively, shall not have been satisfied on or before the Outside Closing Date; or d. As otherwise provided herein. No party may terminate this Agreement after the Closing has occurred. 49 f 99©.109 Section 9 .2 Effect of Termination. If this Agreement shall be terminated pursuant to Section 9 . 1, all obligations of the parties hereunder shall terminate, except for the obligations set forth in Sections 6 .4, 10 . 1, 10 .2 , and 12 .1. Termination of this Agreement pursuant to Section 9 . 1 (b) shall not limit or impair any remedies that Buyer or Sellers may have with respect to a breach or default by the other of its covenants, agreements or obligations hereunder. ARTICLE X REMEDIES IN THE EVENT OF TERMINATION PRIOR TO CLOSING Section 10.1 Default by Buyer. If Buyer shall default in the performance of its obligations under this Agreement in any material respect or if, as a result of Buyer's breach of its obligations pursuant to this Agreement, the conditions precedent to Sellers ' obligation to close specified in Section 7.2 are not satisfied, and Sellers shall not then be in material default in the performance of its obligations hereunder such that a condition to Buyer' s obligation to close under Section 7.1 has not been satisfied, Sellers shall be entitled to the Deposit Escrow Amount and all interest and earnings thereon, as liquidated damages and, in addition and without waiving their right to the Deposit Escrow Amount, Sellers may seek specific performance of Buyer' s obligation to close. Section 10.2 Default by Sellers. If Sellers shall default in the performance of their obligations under this Agreement in any material respect or if, as a result of Sellers ' breach of their obligations pursuant to this Agreement, the conditions precedent to Buyer' s obligation to close specified in Section 7.1 are not satisfied, and Buyer shall not then be in default in the performance of its obligations hereunder in any material respect, Buyer shall be entitled, at Buyer' s sole option, either: a. to require Sellers to consummate and specifically perform the sale in accordance with the terms of this Agreement, if necessary through injunction or other court order or process; or b. to terminate this Agreement by written notice to Sellers and to have the Deposit Escrow Amount and all interest and earnings thereon returned to Buyer. The Deposit Escrow Amount shall also be returned to Buyer if Buyer or Seller terminates this Agreement pursuant to the provisions of Section 6. 10 hereof. The foregoing shall be Buyer' s sole and exclusive remedies for termination of this Agreement, and under no circumstances shall 50 9010 lelee 9 9 Sellers be liable to Buyer for monetary damages upon termination of this Agreement prior to Closing. ARTICLE XI INDEMNIFICATION Section 11.1 Indemnification by Sellers. From and after Closing, subject to Sections 11.4, 11 . 5 and 11. 6 hereof, each Seller severally (and not jointly) shall indemnify and hold harmless Buyer from and against any and all Losses arising out of or resulting from the following: a. Any representations and warranties made by such Seller in this Agreement (with each Seller' s representations and warranties limited as provided at Section 3 .5) not being true and accurate when made or when required by this Agreement to be true and accurate; b. As to any Seller, any liabilities and obligations arising out of or relating to the operation of the Systems of such Seller prior to the Closing Date, including, without limitation, the Retained Liabilities and Obligations, but excluding any liabilities and obligations that are applied to reduce the Purchase Price pursuant to Section 2 .6 hereof; c. Any obligation to refund to subscribers of the Systems any payments made by such subscribers for service received by them prior to Closing, unless the obligation to make refunds results from Buyer' s consent to such refunds or Buyer's request that such refunds be required, provided that the Buyer' s acquiescence to a governmental order not requested by Buyer shall not be deemed consent; and d. Any and all actions, suits, proceedings, claims, demands, assessments, judgments, costs and expenses, including without limitation, legal fees and expenses, incident to any of the foregoing or incurred in investigating or attempt to avoid the same or to oppose the imposition thereof, or in enforcing this indemnity. Section 11.2 Indemnification by Buyer. From and after Closing, Buyer shall indemnify and hold harmless Sellers and each Owner from and against any and all Losses arising out of or resulting from the following: a. Any representations and warranties made by Buyer in this Agreement not being true and accurate when made or when required by this Agreement to be true and accurate; b. Any of the Assumed Obligations and Liabilities; 51 i ` c 9901109 c. Any liabilities and obligations arising out of or relating to the operation of the Systems or the ownership of the Stock subsequent to the Closing Date; and d. Any and all actions, suits, proceedings, claims, demands, assessments, judgments, costs and expenses, including without limitation, legal fees and expenses, incident to any of the foregoing or incurred in investigating or attempt to avoid the same or to oppose the imposition thereof, or in enforcing this indemnity. Section 11.3 Indemnified Third Party Claim. a. If any Person not a party to this Agreement shall make any demand or claim or file or threaten to file or continue any Litigation with respect to which Buyer or Sellers is entitled to indemnification pursuant to Sections 11.1 or 11.2, respectively, then within ten (10) days after notice (the "Notice" ) by the party entitled to such indemnification (the "Indemnitee") to the other (the "Indemnitor" ) of such demand, claim or Litigation, the Indemnitor shall have the option, at its sole cost and expense, to retain counsel for the Indemnitee (which counsel shall be reasonably satisfactory to the In.demnitee) , to defend any such Litigation. Thereafter, the Indemnitee shall be permitted to participate in such defense at its own expense, provided that, if the named parties to any such Litigation (including any impleaded parties) include both the Indemnitor and the Indemnitee or, if the Indemnitor proposes that the same counsel represent bath the Indemnitee and the Indemnitor and representation of both parties by the samm counsel would be inappropriate due to actual or potential differ..r.g interests between them, then the Indemnitee shall have the right to retain its own counsel at the cost and expense of the Indemnitor, unless the Indemnitor shall acknowledge in writing its indemnity obligation, in which event the retention by Indemnitee of its own counsel shall be at its cost and expense. If the Indemnitor shall fail to respond within ten (10) days after receipt of the Notice, the Indemnitee may retain counsel and conduct the defense of such Litigation as it may in its sole discretion deem proper, at the sole cost and expense of the Indemnitor. b. The Indemnitee shall provide reasonable assistance to the Indemnitor and provide access to its books, records and personnel as the Indemnitor reasonably requests in connection will the investigation or defense of the indemnified Losses. The Indemnitor shall promptly upon receipt of reasonable supporting documentation reimburse the Indemnitee for out-of-pocket costs and expenses incurred by the latter in providing the requested assistance. c. In the event that Indemnitor desires to compromise or settle any such claim, Indemnitee shall have the right to 52 consent to such settlement or compromise; provided, however, that if such compromise or settlement is for money damages only and will include a full release and discharge of Indemnitee, and Indemnitee withholds its consent to such com ro ise' or settlement, Indemnitor and Indemnitee agree that (i) Wemn (tor' s liability shall be limited to the amount of the proposed 'settlement and Indemnitor shall thereupon be relieved of any further liability with respect to such claim, and (ii) from and' `a4'ftier such date, lndemnitee will undertake all legal costs and expenses in connection with such claim and shall indemnify Indemnitor from any further liability or obligation to such third party in connection with such claim in excess of the amount of the proposed settlement . If Indemnitor fails Ito defend any claim within a reasonable time, Indemnitee shall be entitled to assume the defense thereof, and Indemnitor shall be liable to Indemnitee for its expenses reasonably incurred, including attorney's fees and payment of any settlement amount or judgment_ Section 11.4 Determination of Indemnification Amounts and Related Matters. a. In calculating amounts payable to an Indemnitee hereunder, the amount of the indemnified losses shall be reduced by the amount of any insurance proceeds paid to the Indemnitee for such Losses. b. The provisions of Sections 11.3 and 11.4 shall be applicable to any claim for indemnification made under any other provision of this Agreement and all references in Sections 11.3 and 11.4 to Sections 11. 1 and 11.2 shall be deemed to be references to such other provisions of this Agreement. Section 11.5 Time and Manner of Certain Claims. Except as otherwise provided herein, the representations, warranties of Buyer and Sellers in this Agreement shall survive Closing for a period of six (6) months, except that the representations and warranties at Sections 5 .2 (authority) , 5 .4 (a) (title) , 5.11 (taxes) and 5 .18 (brokers) shall survive for the period of the applicable statute of limitations. Buyer' s and Sellers' rights to make claims dated thereafter shall likewise expire and be extinguished on such date. Neither Sellers nor Buyer shall have any liability under Sections 11.1 or 11. 2, respectively, for breach of representation or warranty, unless a claim for Losses for which indemnification is sought thereunder is asserted by the party seeking indemnification by written notice to the party from whom indemnification is sought within the said survival period. Section 11.6 Limitation on Indemnification. (a) The indemnification obligation of each Seller under 53 �° 990409, Section 11.1 (a) hereof shall be limited to the following amounts for each Seller: Twain SI FCOL Citation i k99! Total Notwithstanding anything herein to the contrary Buyer' s recourse against any Seller after Closing for any breach of warranty, representation or covenant by such Seller shall be limited to the amounts set forth above except that each Seller' s liability for breach of the warranty at any of Sections 5 .2 (authority) , 5 .4 (a) (title) or 5.18 (brokers) shall be limited to the portion of the Purchase Price attributable to that Seller. (b) No Seller shall be required to ms . a payment to Buyer pursuant to this Article XI except to the ext.int that the total of the amount owed by such Seller for breach of representation or warranty equals or exceeds One Hundred Thousand Dollars ($100, 000) . (c) Buyer shall not be required to make a payment to any Seller pursuant to this Article XI except to the extent that the total amount owed to such Seller for breach of a representation or warranty equals or exceeds One Hundred Thousand Dollars ($100, 000) . (d) The provisions of this Section 11.6 shall be applicable to any claim for indemnification made under any other provision of this Agreement, and all references in Section 11 . 6 shall be deemed to be references to such other provisions of this Agreement. ARTICLE XII MISCELLANEOUS Section 12.1 Expenses. Except as otherwise expressly provided in this Agreement, each of the parties shall pay its own expenses and the fees and expenses of its counsel, accountants, and other experts in connection with this Agreement. Section 12.2 Waivers. No action taken pursuant to this Agreement, including any investigation by or on behalf of any party hereto, shall be deemed to constitute a waiver by the party taking the action of compliance with any representation, warranty, covenant or agreement contained herein or in any document delivered pursuant hereto. The waiver by any party hereto of any condition or of a breach of another provision of this Agreement shall not operate or be construed as a 54 waiver of any other condition or subsequent breach. The waiver by any party of any of the conditions precedent to its obligation under this Agreement shall not preclude it from seeking redress for breach of this Agreement other than with respect to the condition so waived. Section 12 .3 Notices. All notices, requests, demands„ applications, services of process, and other communications which are required to be or may be given under this Agreement shall be in writing and shall be deemed to have been duly given if sent by facsimile transmission, delivered by overnight or other courier service, or mailed, certified first class mail, postage prepaid, return receipt requested, to the parties hereto at the following addresses: To Sellers: c/o Fanch Communications, Inc. 1873 South Bellaire Street Suite 1550 Denver, Colorado 80222 Attention: Jeffrey D. Elberson, Executive Vice President Telecopy-303-756-8420 Copies (which shall not constitute notice) to: Cameron & Mittleman 56 Exchange Terrace Providence, Rhode Island 02903 Attention: David L. Mayer Telecopy-401-331-5787 To Buyer: 28 West Grand Avenue Montvale, New Jersey 07645 Attention: James D. Pearson Telecopy -201-930-9232 Copies (which shall not constitute notice) to: Stanley E. Bloch, Esq. Baer Marks & Upham LLP 805 Third Avenue New York, New York 10022 or to such other address as any party shall have furnished to the other by notice given in accordance with this Section. Such notice shall be effective, (i) if delivered by courier service or by facsimile transmission, upon actual receipt by the intended 55 eo1 , 9301:09 recipient, or (ii) if mailed, upon the earlier of five (5) days after deposit with the U. S . Postal Service or the date of delivery as shown on the return receipt therefor. Section 12.4 Entire Agreement; Amendments . This Agreement embodies the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral or written, with respect thereto. This Agreement may not be modified orally, but only by an agreement in writing signed by the party or parties against whom any waiver, change, amendment, modification, or discharge may be sought to be enforced. Section 12 .5 Binding Effect; Benefits. This Agreement shall inure to the benefit of and will be binding upon the parties hereto and their respective heirs, legal Representatives, successors, and permitted assigns . Neither Buyer nor Sellers .shall assign this Agreement or delegate any of Its duties hereunder to any other Person without the prior written consent of the other . Notwithstanding the foregoing, at or following Closing Buyer may assign its rights under this Agreement as collateral to its institutional lender (s) . In addition, prior to Closing Buyer may assign this Agreement prior to Closing to J5 cable of Coastal Texas, LLC, provided that notwithstanding any such assignment Buyer together with the assignee shall be and remain liable for all of Buyer' s obligations hereunder. Nothing in this Agreement, express or implied, is intended to confer upon any person other than the parties hereto and their respective successors and-permitted assigns, any rights, remedies or obligations under or by reason of this Agreement. Section 12 .6 Eeadinge, Schedules, and Exhibits. The section and other headings contained in this Agreement are for reference purposes only and will not affect the meaning or interpretation of this Agreement. Reference to schedules and exhibits shall, unless otherwise indicated, refer to the schedules or exhibits attached to this Agreement, which shall be incorporated in and constitute a part of this Agreement by such reference. Section 12 .7 Non-Recourse. No Owner, and no employee, partner, member, officer, director, manager or shareholder of any of Sellers or Buyer shall have any liability hereunder. Section 12.8 Counterparts. , Mi" 56 t49 This Agreement may be executed in any number of counterparts, each of which, when executed, shall be deemed to be an original and all of which together will be deemed to be one and the same instrument. Section 12.9 Publicity. Sellers and Buyer shall consult with and cooperate with the other with respect to the content and timing of all press releases and other public announcements, and any oral or written statements to Sellers ' s employees concerning this Agreement and the transactions contemplated hereby. Neither Sellers nor Buyer shall make any such release, announcement, or statements without the prior written consent of the other, which shall not be unreasonably withheld or delayed; that in no event may any such announcement refer to the price or terms of the transaction without the consent of both parties . Notwithstanding the foregoing, that Sellers or Buyer may at any time make any announcement required by Legal Requirements so long as such party, promptly upon learning of such requirement, notices the other of such requirement and consults with the other in good faith with respect to the wording of such announcement. Section 12.10 Governing Law. The validity, performance, and enforcement of this Agreement and all transaction documents, unless expressly provided to the contrary, shall be governed by the laws of the State of New York without giving effect to the principles of conflicts of law of such state. Each party hereby submits to the jurisdiction of the appropriate courts of the State of New York and agrees to be served with legal process from any of such courts . Each party hereby irrevocably waives, to the fullest extent permitted by law, any objection that it may have, whether now or in the future, to the laying of venue in, or to the jurisdiction of, any and each of such courts for the purpose of any such suit, action, proceeding or judgment and further waives any claim that any such suit, action, proceeding or judgment has been brought in an inconvenient forum.. Section 12.11 Third Parties; Joint Ventures. This Agreement constitutes an agreement solely among the Parties hereto, and, except as otherwise provided herein, is not intended to and will not confer any right, remedies, obligation, or liabilities, legal or equitable, including any right of employment on any Person (including but not limited to any employee or former employee of Sellers) other than the parties hereto and their respective successors or assigns, or otherwise constitute any Person a third party beneficiary under or by reason of this Agreement . Nothing in this Agreement, expressed or implied, is intended to or shall constitute the parties hereto partners . or 57 participants in a joint venture. Section 12.12 Construction. This Agreement has been negotiated by Buyer and Sellers and their respective legal counsel, and legal or equitable principles that might require the construction of this Agreement or any provision of this Agreement against the party drafting this Agreement shall not apply in any construction or interpretation of this Agreement. Section 12 .13 Further Acts. Buyer and Sellers shall, without further consideration, execute and deliver such further instruments and documents and do such other acts and things as the other may reasonably request in order to confirm the transactions contemplated by this Agreement. Without limiting the foregoing, Sellers shall deliver to Buyer any and all checks, drafts or other forms of payment received in respect of any of the Accounts Receivable acquired by Buyer pursuant to the terms of this Agreement and any of the Accounts Receivable subsequent to the Closing Date derived from the operations of the Business. 58 eot Stek IN WITNESS WHEREOF, Buyer and Sellers have executed this Agreement as of the date first written above . BUYER: US Cable Acquisition, LLC By '— ---- ---- aame : A e+ ,/�� / Title : 1 / /lam.. SELLERS : Mark Twain Cablevision Limited Partnership By its general partner, FMTC Acquisition Corp. By: Name: Title : Citation Cable Systems, Ltd. By its general partner, FCI Communications General Partnership By its general partner, FCI Communications, Inc . By: Name: Title : Fanch Cablevision of Colorado, Limited Partnership By its general partner, RCF Video Management, Inc. By: Name: Title : 57 99;aso, IN WITNESS WHEREOF, Buyer and Sellers have executed this Agreement as of the date first written above. :i►- - BUYER: US Cable Acquisition, LLC By: Name : Title : SELLERS : Mark Twain Cablevision Limited Partnership By its general partner, FMTC Acquisition Corp. BY •�� e£rrFRE9' 0, Ga-&-rzso:.) Title :64.4) Citation Cable Systems, Ltd. By its general partner, FCI Communications General Partnership By its general partner, FCI Communications, In . B 'J N , itle: 7 Fanch Cablevision of Colorado, Limited Partnership By its general partner, RCF Video Management, B V` Na - ' LLD, SCI V Title :/. 59 99 tO9 00 EXHIBITS and SCHEDULES EXHIBITS: A - Deposit Escrow Agreement B Indemnity Escrow Agreement C Bill of Sale and Assignment D Assumption Agreement E Opinion of Sellers ' Counsel F Opinion of Sellers ' FCC Counsel G Opinion of Buyer' s Counsel H Billing Agreement SCHEDULES: 1. 0 2 .1 (i) 2 . 1 (ii) (I) i 2 .1 (ii) (II) 2 .1 (iii) ter.. . 2 .1 (iv) 2 .1 (v) 2 .3 (a) 5.3 5 .4 k .,.mrna. 5. 5 IIIIIIMMINEMMIllausnerreastimrtnn 5 . 8 5 . 10 musso amaFtffiE.9,;I i J -., 5 . 13 5 .17 5 .21 ,mk;.":E "r 'la9%L i{I'.anJ. r 6 .1 (a) 6 .2 (e) 6 .10 (i) 6 .10 (ii) 7.1 (h) g:\wpein\dots\1mt\fancfi\sale98\uscabletnitteen 990109 EXHIBIT A DEPOSIT ESCROW AGREEMENT This Deposit Escrow Agreement (the "Escrow Agreement" ) is made and entered into this 19th day. of August, 1998, by and among Mark Twain Cablevision Limited Partnership; Fanch Cablevision of Colorado, Limited Partnership; and. Citation Cable Systems, Ltd. (collectively the "Sellers") ; and [US Cable Acquisition, LLC] , a Delaware limited liability company ( "Buyer" ) ; and Citizens Bank of Rhode Island, a Rhode Island banking corporation, as escrow agent (the "Escrow Agent" ) . RECITALS : A. Sellers and Buyer have entered into that certain Purchase Agreement dated as of August 19, 1998 (the "Purchase Agreement" ) pursuant to which Sellers have agreed to se1l, 4nd Buyer has agreed to purchase, certain of Sellers ' ,properties and assets . B. In accordance with the terms of the .Purchase Agreement, Buyer shall simultaneously deposit with EscrowAgent, as an earnest money deposit, ;tppon the terms set forth in the Purchase Agreement and tsero Agreement . e' C. Capitalized', 'terms used herein and not otherwise defined shall have '.the meanings ascribed to them in the Purchase Agreement . NOW, THEREFORE;; for and in consideration of the mutual covenants contained herein, and other ,H gbod and valuable consideration, the receipt and sufficiency of ,which are hereby acknowledged by the execution and delivery hereof, the parties hereto do mutually agree as follows : 1. Agent. Sellers and Buyer hereby appoint and designate the Escrow Agent as escrow agent for the purposes herein set forth. All references to the "'Escrow Agent, " as' that #,term is used herein, shall ,refer to the Escrow Agent solely inits cCap,acity as such, and not to it in any other capacity whatsoever -whether as individual, agent, fiduciary, trustee or otherwise_`` The Escrow Agent shall have no obligation to assure, or participate in the enforcement or performance of the Purchase Agreement whether or not the Escrow Agent shall have knowledge or notice to the. terms thereof, or any acts or omissions relating thereto. 2 . Deposit of Escrow Money. Pursuant to the terms of the Purchase Agreement, on the date hereof, Buyer is delivering to the Escrow Agent to be deposited in the Escrow Account . The term "Escrow Depose " as used herein refers, as of any date, to such sum plus earnings thereon less disbursements or payments authorized as provided herein as of such date. eotoce s9 *a9 • 3 . Investment of Money in the Escrow Account . The Escrow Agent shall invest the Escrow Deposit in Permitted Investments (as defined herein) as instructed jointly by Buyer and Sellers in writing from time to time during the term of this Escrow Agreement . Any and all investment earnings on money in the Escrow Account shall be held by the Escrow Agent and dealt with and paid in the same manner as set forth in Section 5 hereof respecting the Escrow Deposit . Decisions as to'.purchase or sale of each such Permitted Investments shall be made jointly by Sellers and Buyer. "Permitted Investments" means : (i) marketable direct obligations issued or unconditionally guaranteed by the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within three (3 ) months from the date of acquisition thereof; (ii) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within three (3) months from the date of acquisition thereof and having, at the time of acquisition, the highest rating obtainable from either Standard & Poor' s Corporation or Moody's Investors Service, Inc. ; (iii) commercial paper having, at the time of acquisition, the highest rating obtainable from either Standard & Poor ' s Corporation or Moody' s Investors Service, Inc. ; (iv) certificates of deposit, other time deposits, and bankers ' acceptances maturing within three (3 ) months ' from the date of acquisition thereof issued by the Escrow Agent or any bank operating under the laws of the United States of America or any state thereof or the District of Columbia which has combined capital and surplus of not less than $100 , 000, 000 ; or (v) • institutional money market funds organized under the laws of the United States of America or any state thereof that invests solely in any of the investments permitted under clauses (i) , (ii) , (iii) , and (iv) hereof . To the extent that any portion of the Escrow Deposit may not be readily invested in such investments, the Escrow Agent may invest such portion of the Escrow Deposit in a money market trust account or interest bearing deposit account of the Escrow . Agent, as jointly instructed in writing by Sellers and Buyer. The Escrow Agent shall have no authority or duty to invest the Escrow Account in any other obligations except as provided in this Section 3 . The Escrow Agent may use its own bond department in investing the Escrow Deposit as aforesaid. Escrow Agent shall not have any liability for any loss sustained as a result of any investment, made pursuant to and in accordance with the instructions of the parties hereto as a: result of any liquidation of any investment prior to its maturity or for the failure of the parties to give the Escrow Agent instructions to invest or reinvest the Escrow Fund or any earnings thereon. 4 . Presentation and Payment of. Claims . Any claim by Buyer or Sellers for the Escrow Deposit (each a "Claim" ) shall be made in accordance with this Section 4 . In the event that Sellers believe they are entitled under Article X of the Purchase Agreement to have the Escrow Deposit paid to them, Sellers shall simultaneously 2 notify the Escrow Agent and Buyer in writing of a Claim, which notice shall state the basis of the Claim (a "Sellers ' Claim" ) . In the event (x) the Buyer believes that it is entitled under Article X of the Purchase Agreement to have the Escrow Deposit paid to it, then Buyer shall simultaneously notify the Escrow Agent and Sellers of a Claim, which notice shall state the basis .of the Claim (a "Buyer Claim") . Buyer or Sellers may contest a Claim by the other party by giving written notice to the Escrow Agent and the other party (each, an "Objection") within twenty (20) days after receipt of notice of a Claim ( "Objection Period" ) . The timely delivery of an Objection to a Claim will give rise to a contested claim (each, - a "Contested Claim" ) . If the party receiving notice of a Claim does not deliver an Objection prior to the termination of an Objection Period, such party shall be deemed to have accepted the Claim as valid. Each Claim and Objection must be made in good faith upon a reasonable basis. S . Payment of the Escrow Deposit . If the Closing shall occur, Sellers and Buyer notify Escrow Agent in writing thereof, and the Escrow Agent shall transfer the Escrow Deposit as Sellers and Buyer direct as provided herein. Not later than two (2) Business Days following the expiration of an Objection Period relating to a Sellers ' Claim, :if there is no Objection to the Sellers ' Claim', 'the Escrow Agent shall pay the Escrow Deposit to Sellers in immediately available funds by wire transfer to such account as Sellers shall have designated to the Escrow Agent . Not later than two (2) Business Days following the expiration of an Objection Period relating to a Buyer Claim, if there is no objection to the Buyer Claim, the Escrow Agent shall pay the Escrow Deposit to Buyer in immediately available funds by wire transfer to such account as Buyer shall have designated to the Escrow Agent . If there is a Contested Claim, the Escrow Agent will distribute the Escrow Deposit only in accordance with the final judgment, order or decree of the court or other judicial or arbitral body that decided the underlying claim or in accordance with a settlement agreement between Sellers and Buyer (any such judgment , order, decree or agreement being a "Determination of Claim" ) . If the Determination of Claim requires payment of the Escrow Deposit to Buyer, the Escrow Agent shall pay such amount in immediately available funds by wire transfer to such account as Buyer shall have designated to the Escrow Agent within two (2) Business Days of receipt of such Determination of Claim. If the Determination of Claim requires payment to Sellers, the Escrow Agent shall pay such amount in immediately available funds by wire transfer to such account as Sellers shall have designate.-: to the Escrow Agent within two (2) Business Days of receipt of such Determination of Claim. Interest and earnings on the Escrow Deposit shall be retained by Escrow Agent as part of he Escrow Deposit, and shall be paid to the party to whom the Escrow Deposit is paid pursuant to the terms hereof . 9904 6 . Rights, Obligations and Indemnification of the Escrow Agent . (a) Conflictina Demands . In case of conflicting demands upon it, Escrow Agent shall have no liability if it retains the Escrow Deposit until such time as said conflicting demands shall have been withdrawn or the rights of the respective parties shall have been settled by court adjudication, arbitration, joint order or otherwise. (b) Escrow Agent ' s Duties. Escrow Agent ' s duties and responsibilities shall be limited to those expressly set forth in this Agreement and Escrow Agent shall not be subject to, nor obliged to recognize, any other agreement between, or direction or instruction of, any or all of the parties hereto even though reference thereto may be made herein; provided, however, with Escrow Agent ' s written consent, this Agreement may be amended at any time or times by an instrument in writing signed by all of the then parties hereto. (c) Limitations On Duties . The duties and obligations of the Escrow Agent hereunder shall be determined solely by the express provisions of this Escrow Agreement and no implied duties or obligations shall be read into this Escrow Agreement against the Escrow Agent . The Escrow Agent shall be under no obligation to refer to the Purchase Agreement or any other documents between or among the parties related in any way to this Escrow Agreement. (d) Restriction on Liability. The Escrow Agent shall not be liable to anyone by reason of any error of judgment, or for any act done or step taken or omitted by it in good faith, or for any mistake of fact or law, or for anything which it may do or refrain from doing in connection herewith, unless caused by or arising out of its own gross negligence or bad faith. (e) Non-liability of Escrow Agent . If any property subject hereto is at any time attached, garnished or levied upon, under any court order, or in case the payment , assignment, transfer, conveyance or delivery of any such property shall be stayed or enjoined by any court order, or in case any order, judgment or decree shall be made or entered by any court affecting such property, or any part thereof, then in any of such events, Escrow Agent is authorized, in its sole discretion, to rely upon and comply with any such order, writ, judgment or decree, which it believes is binding upon it, and if it complies with any such order, writ, judgment or decree, it shall not be liable to any of the parties hereto or to any 4 • L 990109 other person, firm or corporation by reason of such compliance, even though such order, writ, judgment or decree may be subsequently reversed, modified, annulled, set aside or vacated. (f) Indemnification of Escrow Agent . Buyer and Sellers jointly and severally agree to indemnify the Escrow Agent for, and hold it harmless against, any loss, liability, cost or expense (including without limitation reasonable attorneys ' fees, costs and expenses) incurred by the Escrow Agent without gross negligence or bad faith on the part of the Escrow Agent (or any of its agents or employees) in connection with its entering into and carrying out its duties under this Agreement, including without limitation any cost or expense of defending itself against any claim of liability which arises in connection with disputes or controversies arising hereunder other than those relating to the regular administration of the Escrow Account; provided, however, that the Sellers on the one hand and the Buyer on the other hand shall each be liable only for one half of any amounts payable under this paragraph 6 (f) . (g) Resignation of Escrow Agent . The Escrow Agent may resign without obtaining the order of any court, by giving at least thirty (30) days prior written notice (unless waived) to Sellers and Buyer and upon the taking of all the actions as described in this Subparagraph (i) by the Escrow Agent, the Escrow Agent shall have no further responsibilities hereunder to Sellers and Buyer or to any other person in connection with this Escrow Agreement . Such resignation shall be effective upon the appointment by Sellers and Buyer of a successor agent, which shall be a bank having combined capital and surplus of at least $100 , 000, 000 . Any such successor agent shall be appointed by a written instrument mutually satisfactory to and executed by Sellers, Buyer, the Escrow Agent and the successor agent, and said instrument shall include among its provisions an assignment by the Escrow Agent of custody of the Escrow Deposit to the successor agent . Any successor agent appointed under the provisions of this Escrow Agreement shall have all of the same rights, powers, privileges, immunities and authority with respect to the matters contemplated herein as are granted herein to the original Escrow Agent . 7 . Fees and Expenses . Escrow Agent ' s fees and expenses hereunder shall be paid one half by Buyer and one half by Sellers . Escrow Agent ' s fee shall be $1, 500 for the first year or portion thereof that this Agreement is in effect, and $100 per month after such first year. The Escrow Agent may deduct unpaid fees from the Escrow Account . 5 eat* 9uw. 9 • 8 . Notices . All notices, requests, demands , applications , services of process, and other communications which are required to be or may be given under this Agreement shall be in writing and shall be deemed to have been duly given if sent by facsimile transmission, delivered by overnight or other courier service, or mailed, certified first class mail, postage prepaid, return receipt requested, to the parties hereto at the following addresses : To Sellers : c/o Fanch Communications, Inc . 1873 South Bellaire Street Suite 1550 Denver, Colorado 80222 Attention: Jeffrey D. Elberson, Executive Vice President Telecopy-303-756-8420 Copies (which shall not constitute notice) to : Cameron & Mittleman 56 Exchange Terrace Providence, Rhode Island 02903 Attention: David L. Mayer Telecopy-401-331-5787 To Buyer: 28 West Grand Avenue Montvale; New Jersey 07645 Attention: James D. Pearson Telecopy -201-930-9232 Copies (which shall not constitute notice) to: Stanley E. Bloch, Esq. Baer Marks & Upham LLP 805 Third Avenue New York, New York 10022 To Escrow Agent : Citizens Bank of Rhode Island One Citizens Plaza Providence, Rhode Island 02903 Attention: Jane E. Labouliere, Corporate Trust or to such other address as any party shall have furnished to the other by notice given in accordance with this Section. Such notice 6 aeee 9901.09 shall be effective, (i) if delivered by courier service or by • facsimile transmission, upon actual receipt by the intended recipient, or (ii) if mailed, upon the earlier of five (5) days after deposit with the U. S . Postal Service or the date of delivery as shown on the return receipt therefor. 9 . Entire Aareement : Governing Law. This Escrow Agreement contains the entire agreement of the parties with regard to the matters set forth herein and it may not be amended or modified except in writing signed by Buyer, Sellers and the Escrow Agent . This Escrow Agreement shall be governed by, and construed and enforced in accordance with, the internal laws, and not the law of conflicts, of the State of Rhode Island and the Escrow Account shall be administered at the offices of the Escrow Agent . 10 . Successors and Assigns . This Escrow Agreement shall be binding upon and inure to the benefit of the parties hereto and their successors and permitted assigns . Except as otherwise provided herein, this Escrow Agreement shall not be assignable without the prior written consent of the other parties, except that Buyer may assign this Agreement to an entity to which it assigns its rights and obligations under the Purchase Agreement , so long as • such assignment is permitted by the Purchase Agreement . 11. Not an Amendment . This Escrow Agreement is not intended to amend or supersede Section 11 or any other provision of the Purchase Agreement . 12 . Tax Identification Numbers . Each party hereto, except the Escrow Agent, shall provide the Escrow Agent with its Tax Identification Number (TIN) as assigned by the Internal Revenue Service. All interest or other income earned under the Escrow Agreement shall be allocated and paid as provided herein and reported by the recipient to the Internal Revenue Service as having been so allocated and paid. 13 . Confirmation of Transfer Instructions : Certain Account Numbers . (a) In the event funds transfer instructions are given (other than in writing at the time of execution of the Purchase Agreement), whether in writing, by telecopier or otherwise, the Escrow Agent is authorized to seek confirmation of such instructions by telephone call-back to the person or persons designated on Schedule 2 hereto, and the Escrow Agent may rely upon the confirmations of anyone purporting to be the person or persons so designated. The persons and telephone numbers for call-backs may be changed only in a writing actually received and acknowledged by the Escrow Agent . The parties to this Escrow Agreement acknowledge that such security procedure is commercially reasonable . 7 nQ �C"e0.��b VL J90S+ 409 (b) It is understood that the Escrow Agent, in connection with any funds transfer may rely solely upon any account numbers or similar identifying number provided by either of the other parties hereto to identify (i) such party, (ii) such party' s bank, or (iii) an intermediary bank. 14 . Counterparts . This Escrow Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which, taken together, shall constitute but one and the same document . IN WITNESS WHEREOF, this Escrow Agreement has been duly executed on the date first above' written. SELLERS : Mark Twain Cablevision Limited Partnership By its general partner, FMTC Acquisition Corp. By: Title : Citation Cable Systems, Ltd. By its general partner, FCI Communications General Partnership By its general partner, FCI Communications, Inc . By: Title : Fanch Cablevision of Colorado, Limited Partnership By its general partner, RCF Video Management, Inc. By: Title : 8 990109 IA \. BUYER: US Cable Acquisition, LLC By: Titles : ESCROW AGENT Citizens Bank of Rhode Island By: Title : g:\wpwir.\flocs\lmt\fanch\sa1e9B\EXBIHIT9seven 9 e010 99.0109 EXHIBIT B INDEMNITY ESCROW AGREEMENT [Note: Sellers may require three (3) separate Indemnity Escrow Agreements, in which event this Exhibit will be modified accordingly] This Indemnity Escrow Agreement (the "Escrow Agreement" ) is made and entered into this day of , 1998, by and among Mark Twain Cablevision Limited Partnership ( "Twain") ; Fanch Cablevision of Colorado, Limited Partnership ( "FCOL" ) ; and Citation Cable Systems, Ltd. (",Citation" ) (Twain, FCOL and Citation are sometimes referred to collectively as the "Sellers" ) and US Cable Acquisition, LLC, a Delaware limited liability company ( "Buyer") ; and Citizens Bank of Rhode Island, a Rhode Island banking corporation, as escrow agent (the "Escrow Agent" ) . RECITALS A. Sellers and Buyer entered into that certain Purchase Agreement dated as of August 19, 1998 (the "Purchase Agreement" ) pursuant to which Sellers agreed to sell, and Buyer agreed to purchase certain of Sellers ' properties and assets . B. This Escrow Agreement is intended to provide the assurance to Buyer contemplated by Section 11 . 1 of the Purchase Agreement in respect of obligations of Sellers to provide indemnification under the Purchase Agreement to Buyer. C. Capitalized terms used and not otherwise defined shall have the meanings ascribed to them in the Purchase Agreement . NOW, THEREFORE, for and in consideration of the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the execution and delivery hereof, the parties hereto do mutually agree as follows (terms used herein and not otherwise defined shall have the meanings ascribed to them in the Purchase Agreement) : 1 . Agent. Sellers and Buyer hereby appoint and designate the Escrow Agent as escrow agent for the purposes herein set forth. All references to the "Escrow Agent, " as that term is used herein, shall refer to the Escrow Agent solely in its capacity as such, and not to it in any other capacity whatsoever whether as individual, agent, fiduciary, trustee or otherwise. The Escrow Agent shall have no obligation to assure, or participate in the enforcement or performance of the Purchase Agreement whether or not the Escrow Agent shall have knowledge or notice of the terms hereof, or any acts or omissions relating thereto. 99010' 9 2 . Deposit of Escrow Money. Pursuant to the terms of the Purchase Agreement, on the date hereof, Buyer is delivering to the Escrow Agent the sum of to be deposited by Escrow Agent into a bank account .(t' e`^"+Ersrclrow Account" ) and invested as set forth herein. The term "Escrow Deposit" as used herein refers, as of any date, to such sum plus earnings thereon less disbursements or payments authorized as provided herein as of such date . A portion of the Escrow Deposit is allocated to each Seller, as follows: Seller Allocable Amount of Escrow Deposit Twain FCOL Citation Each such portion of the Escrow Fund allocable to each Seller shall constitute a separate and distinct fund, it being understood that no Seller has any liability for an indemnification obligation of another Seller under the Purchase Agreement, and no portion of the Escrow Deposit allocated to a Seller may be used to satisfy a Claim against any other Seller. 3 . Investment of Money in the Escrow Account . The Escrow Agent shall invest the Escrow Deposit in Permitted Investments (as defined herein) as instructed jointly by Buyer and Sellers in writing from time to time during the term of this Escrow Agreement. Decisions as to purchase or sale of each such Permitted Investments shall be made jointly by Buyer and Sellers in their absolute discretion. "Permitted Investments" means : (i) marketable direct obligations issued or unconditionally guaranteed by the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within three (3) months from the date of acquisition thereof; (ii) marketable direct obligations issued by any state of the United States of America or any political subdivision of any such state or any public instrumentality thereof maturing within three (3) months from the date of acquisition thereof and having, at the time of acquisition, the highest rating obtainable from either Standard & Poor' s Corporation or Moody' s Investors Service, Inc. ; (iii) commercial paper having, at the time of acquisition, the highest rating obtainable from either Standard & Poor' s Corporation or Moody' s Investors Service, Inc. maturing within three (3) months from the date of acquisition thereof; (iv) certificates of deposit, other time deposits, and bankers' acceptances maturing within three (3) months from the date of acquisition thereof issued by the Escrow Agent or any bank operating under the laws of the United States of America or any state thereof or the District of Columbia which has combined capital and surplus of not less than $100, 000, 000; or (v) institutional money market funds organized under the laws of the United States of America or any state thereof that invest solely in any of the investments permitted under 2 eOt_ s90 A 1 . 109 clauses (i) , (ii) , (iii) , and (iv) hereof. To the extent that any portion of the Escrow Deposit may not be readily invested in such investments, the Escrow Agent.may invest such portion of the Escrow Account in a money market trust account or interest bearing deposit account of the Escrow Agent, as instructed jointly by Buyer and Sellers. The Escrow Agent shall have no authority or duty to invest the Escrow Deposit in any other obligations except as provided in this Section 3 . The Escrow Agent may use its own bond department in investing the Escrow Deposit as aforesaid. Escrow Agent in its capacity as escrow agent hereunder shall not have any liability for any loss sustained as a result of any investment made pursuant to the instructions of the parties hereto given in accordance herewith as a result of any liquidation of any investment prior to its maturity or for the failure of the parties to give the Escrow Agent instructions to invest or reinvest the Escrow Fund or any earnings thereon. 4 . presentation and Payment of Claims. (a) Buyer may from time to time make demand of the Escrow Agent for claims of indemnification under the Purchase Agreement by serving upon the Escrow Agent and Sellers a written notice demanding payment of an indemnification claim arising under Section 11. 1 of the Purchase Agreement (including, without limitation, • claims for indemnification against third party claims asserted • against Buyer) . Such notice shall be deemed given only upon receipt by Sellers and the Escrow Agent and shall not be deemed given hereunder unless such .notice shall set forth the nature of the claim, the amount of the claim., which Seller the claim relates to, and a statement of the facts underlying the claim in sufficient detail so that the nature of the claim and the basis of any liability of such Seller under the Purchase Agreement can be reasonably ascertained by a reasonable person within the time contemplated in Section 4 (b) hereof . (b) The Seller against which the claim is made may reply to such demand made under Section 4 (a) hereof by written notice given to Buyer with a copy to the Escrow Agent, which notice shall state whether such Seller(s) agree or disagree that the claim asserted by Buyer is a valid claim under the Purchase Agreement and agree or disagree with respect to the amount of the claim. If, within .thirty (30) days after the date of the receipt by Sellers or Escrow Agent of the demand, the applicable Seller does not give to the Escrow Agent and Buyer a notice which asserts that a dispute exists with respect to such claim, then the portion of the Escrow Agent shall pay to Buyer from the portion of the Escrow Deposit allocable to the applicable Seller the amount of the claim and the Escrow Deposit allocable to such Seller shall be reduced to the extent thereof. In no event may any portion of the Escrow Deposit allocated to a particular Seller be used to pay a claim against any other Seller. Unless .otherwise notified by Sellers in writing, Escrow Agent shall assume that the demand was received by Sellers 3 eke k) 990109 r �r on the same day as received by Escrow Agent . If such notice from Sellers admits that a portion of the claim is a valid claim under Section 11 .1 of the Purchase Agreement , the Escrow Agent shall disburse to Buyer the amount so admitted. (c) If the notice given by a Seller as provided in Section 4 (b) hereof disputes the claim asserted by Buyer or the amount thereof, then the amount of the demand less any amount admitted by such Seller as due Buyer by its notice under Section • 4 (b) and disbursed to Buyer, shall be treated as a disputed claim ("Disputed Claim" ) and the amount of such claim shall be held by the Escrow Agent as an undivided portion of the Escrow Deposit allocable to such Seller until the earlier to occur of (i) its receipt of a joint direction executed by such Seller and Buyer with respect to such amount, or (ii) the receipt of a final judgment, order or decree of the court or other judicial body that decided the underlying claim with respect to such amount ( "Final Judgment") . The aggregate of all such! Disputed Claims in respect of the Escrow Deposit is sometimes herein referred to as the "Reserve" . Unless otherwise advised by Buyer or Sellers in writing, Escrow Agent shall assume that the notice was received by Buyer or Sellers on the same day as received by Escrow Agent. 5 . Distributions. (a) On 1999 [exactly six (6) months from Closing] , the Escrow Agent shall disburse to each Seller the amount of the Escrow Deposit allocable to such Seller then held by the Escrow Agent less the aggregate amount of the Reserve allocable to such Seller and less the amount of any claims against such Seller previously paid from the portion of the Escrow Deposit allocable to such Seller. (b) The Escrow Agent shall make such distributions to Buyer or Sellers as shall be specified in a joint written direction to the Escrow Agent executed by Buyer and Sellers and delivered to the Escrow Agent . (c) On and in accordance with a Final Judgment, the Escrow Agent shall make such distributions to Buyer, Sellers or both, as shall be specified in a Final Judgment . (d) Any distribution required to be made by the Escrow Agent under this Agreement shall be made by the Escrow Agent within two (2) Business Days following liquidation or transfer of an investment required for such distribution. (e) In the event that the Escrow Agent shall disburse any portion of the Escrow Deposit to Purchaser or any Seller pursuant to this Agreement, the Escrow Agent shall also disburse to 4 soot°. Purchaser or such Seller (as the case may be) all interest and other earnings with respect to the portion of the Escrow Deposit thus disbursed. 6 . Rights , Obligations and Indemnification of the Escrow Agent . (a) Conflicting Demands. In case of conflicting demands upon it, Escrow Agent shall have no liability if it retains the Escrow Deposit until such time as said conflicting demands shall have been withdrawn or the rights of the respective parties shall have been settled by court adjudication, arbitration, joint order or otherwise . (b) Escrow Agent ' s Duties. Escrow Agent ' s duties and responsibilities shall be limited to those expressly set forth in this Agreement and Escrow Agent shall not be subject to, nor obliged to recognize, any other agreement between, or direction or instruction of, any or all of the parties hereto even though reference thereto may be made herein; provided, however, with Escrow Agent 's written consent, this Agreement may be amended at any time or times by an instrument in writing signed by all of the then parties hereto. (c) Limitations On Duties . The duties and obligations of the Escrow Agent hereunder shall be determined solely by the express provisions of this Escrow Agreement and no implied duties or obligations shall be read into this Escrow Agreement against the Escrow Agent . The Escrow Agent shall be under no obligation to refer to the Purchase Agreement or any other documents between or among the parties related in any way to this Escrow Agreement . (d) Restriction on Liability. The Escrow Agent shall not be liable to anyone by reason of any error of judgment, or _ for any act done or step taken or omitted by it in good faith, or for any mistake of fact or law, or for anything which it may do or refrain from doing in connection herewith, unless caused by or arising out of its own gross negligence or bad faith. (e) Non-liability of Escrow Agent . If any property subject hereto is at any time attached, garnished or levied upon, under any court order, or in case the payment, assignment, transfer, conveyance or delivery of any such property shall be stayed or enjoined by any court order, or in case any order, judgment or decree shall be made or entered by any court affecting such property, or any part thereof, then in any of such events, Escrow Agent is authorized, in its sole discretion, to rely upon and 990109 comply with any such order, writ, judgment or decree, which it believes is binding upon it , and if it complies with any such order, writ, judgment or decree, it shall not be liable to any of the parties hereto or to any other person, firm or corporation by reason of such compliance, even though such order, writ, judgment or decree may be subsequently reversed, modified, annulled, set aside or vacated. (f) Indemnification of Escrow Agent . Buyer and Sellers jointly and severally agree to indemnify the Escrow Agent for, and hold it harmless against, any loss, liability, cost or expense (including without limitation reasonable attorneys ' fees, costs and expenses) incurred by the Escrow Agent without gross negligence or bad faith on the part of the Escrow Agent (or any of its agents or employees) in connection with its entering into and carrying out its duties under this Agreement, including without limitation any cost or expense of defending itself against any claim of liability which arises in connection with disputes or controversies arising hereunder other than those relating to the regular administration of the Escrow Account; provided, however, that the Sellers on the one hand and the Buyer on the other hand shall each be liable only for one half of any amounts payable under this paragraph 6 (f) . (g) Resignation of Escrow Agent . The Escrow Agent may resign without obtaining the order of any court, by giving at least thirty (30) days prior written notice (unless waived) to Sellers and Buyer and upon the taking of all the actions as described in this Subparagraph (i) by the Escrow Agent, the Escrow Agent shall have no further responsibilities hereunder to Sellers and Buyer or to any other person in connection with this Escrow Agreement. Such resignation shall be effective upon the appointment by Sellers and Buyer of a successor agent; which shall be a bank having combined capital and surplus of at least $100, 000, 000 . Any such successor agent shall be appointed by a written instrument mutually satisfactory to and executed by Sellers, Buyer, the Escrow Agent and the successor agent, and said instrument shall include among its provisions an assignment by the Escrow Agent • of custody of the Escrow Deposit to the successor agent . Any successor agent appointed under the provisions of this Escrow Agreement shall have all of the same rights, powers, privileges, immunities and authority with respect to the matters contemplated herein as are granted herein to the original Escrow Agent . 7 . Fees and Expenses . Escrow Agent ' s fees and expenses hereunder shall be paid one half by Buyer and one half by Sellers. 6 • gt', Escrow Agent ' s fee shall be $1, 500 for the first year or portion thereof that this Agreement is in effect, and $100 per month after • such first year. The Escrow Agent may deduct unpaid fees from the Escrow Account . 8 . Notices. All notices, requests, demands, applications, services of process, and other communications which are required to be or may be given under this Agreement shall be in writing and shall be deemed to have been duly given if sent by facsimile transmission, delivered by overnight or other courier service, or mailed, certified first class mail, postage prepaid, return receipt requested, to the parties hereto at the following addresses: To Sellers: c/o Fanch Communications, Inc . 1873 South Bellaire Street Suite 1550 Denver, Colorado 80222 Attention: Jeffrey D. Elberson, Executive Vice President Telecopy-303-756-8420 Copies (which shall not constitute notice) to: Cameron & Mittleman 56 Exchange Terrace Providence, Rhode Island 02903 Attention: David L. Mayer Telecopy-401-331-5787 To Buyer: 28 West Grand Avenue Montvale, New Jersey 07645 Attention: James D. Pearson Telecopy -201-930-9232 Copies (which shall not constitute notice) to: Stanley E. Bloch, Esq. Baer Marks &Upham LLP 805 Third Avenue New York, New York 10022 To Escrow Agent : Citizens Bank of Rhode Island One Citizens Plaza Providence, Rhode Island 02903 Attention: Jane Labouliere, Corporate Trust 7 990109 or to such other address as any party shall have furnished to the other by notice given in accordance with this Section. Such notice shall be effective, (i) if delivered by courier service or by facsimile transmission, upon actual receipt by the intended recipient, or (ii) if mailed, upon the earlier of five (5) days after deposit with the U. S. Postal Service or the date of delivery as shown on the return receipt therefor. 9 . Entire Agreement : Governing Law. This Escrow Agreement contains the entire agreement of the parties with regard to the matters set forth herein and it may not be amended or modified except in writing signed by Buyer, Sellers and the Escrow Agent. This Escrow Agreement shall be governed by, and construed and enforced in accordance with, the internal laws, and not the law of conflicts, of the State of Rhode Island. 10. Successors and Assigns. This Escrow Agreement shall be binding upon and inure to the benefit of the parties hereto and their successors and permitted assigns . Except as otherwise provided herein, this Escrow Agreement shall not be assignable without the prior written consent of the other parties . 11. Not an Amendment. This Escrow Agreement is not intended to amend or supersede Section 11 of the Purchase Agreement, or any other provision of the Purchase Agreement . 12 . Tax Identification Numbers . Each party hereto, except the Escrow Agent, shall provide the Escrow Agent with its Tax Identification Number (TIN) as assigned by the Internal Revenue Service. All interest or other income earned under the Escrow Agreement shall be allocated and paid as provided herein and reported by the recipient to the Internal Revenue Service as having been so allocated and paid. 13 . Confirmation of Transfer Instructions : Certain Account Numbers. (a) In the event funds transfer instructions are given (other than in writing at the time of execution of the Purchase Agreement) , whether in writing, by telecopier or otherwise, the Escrow Agent is authorized to seek confirmation of such instructions by telephone call-back to the person or persons designated on Schedule 2 hereto, and the Escrow Agent may rely upon the confirmations of anyone purporting to be the person or persons so designated. The persons and telephone numbers for call-backs may be changed only in a writing actually received and acknowledged by the Escrow Agent. The parties to this Agreement acknowledge that such security procedure is commercially reasonable . (b) It is understood that the Escrow Agent, in connection with any funds transfer may rely solely upon any account numbers or 8 eOt € 9 9g01 similar identifying number provided by either of the other parties hereto to identify (i) such party, (ii) such party' s bank, or (iii) an intermediary bank. 14 . Counterparts . This Escrow Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which, taken together, shall constitute but one and the same document . IN WITNESS WHEREOF, this Escrow Agreement has been duly executed on the date first above written. SELLERS: Mark Twain Cablevision Limited Partnership By its general partner, FMTC Acquisition Corp. By: Title: Citation Cable Systems, Ltd. By its general partner, FCI Communications General Partnership By its general partner, FCI Communications, Inc. By: Title : Fanch Cablevision of Colorado, Limited Partnership By its general partner, RCF Video Management, Inc. By: Title : BUYER: US Cable Acquisition, LLC By: Title : 9 epit 99-0109 ESCROW AGENT: Citizens Bank of Rhode Island By: Title: 9:\wpviv\dots\Ltt\taace\aalesa\txx nTs.ev.o 10 en. a 990 09 EXHIBIT C BILL OF SALE AND ASSIGNMENT KNOW ALL PERSONS BY THESE PRESENTS, that Mark Twain Cablevision Limited Partnership; Fanch Cablevision of Colorado, Limited Partnership, and Citation Cable Systems, Ltd. (collectively "Sellers") for and in consideration of the Purchase Price (as hereinafter defined) , and other good and valuable consideration to it paid by [US cable Acquisition, LLC] , a Delaware limited liability company ("Buyer" ) , the receipt, sufficiency and adequacy of which are hereby acknowledged, do hereby bargain, sell, assign, transfer, convey and deliver unto Buyer, the "Assets" as defined in that certain Purchase Agreement made by and among Buyer and Sellers dated as of August 19, 1998 (the "Purchase Agreement") , other than real property held in fee by Sellers which is conveyed to Buyer as of the date hereof pursuant to special warranty deeds. Any capitalized terms used herein and not defined herein shall have the meanings ascribed to them in the Purchase Agreement . Except as expressly provided in the Purchase Agreement, Sellers hereby expressly disclaim any and all warranties or representations made to Buyer, whether relating to the condition, the operation, the adequacy or otherwise of the personal property which is part of the Assets. IN THAT CONNECTION, EXCEPT AS EXPRESSLY PROVIDED IN THE PURCHASE AGREEMENT, BUYER HEREBY AGREES THAT IT WILL ACCEPT THE PERSONAL PROPERTY WHICH IS PART OF THE ASSETS "AS IS" AND "WHERE IS" . SELLERS MAKE NO WARRANTY OR REPRESENTATION WHATSOEVER, EITHER ORAL OR WRITTEN, OR EXPRESS OR IMPLIED, AS TO MERCHANTABILITY OR THE CONDITION OF THE PERSONAL PROPERTY WHICH IS PART OF THE ACQUIRED ASSETS. OR THE FITNESS OR SUITABILITY THEREOF FOR ANY PARTICULAR OR GENERAL USE OR PURPOSE EXCEPT AS EXPRESSLY PROVIDED IN THE PURCHASE AGREEMENT. Sellers covenant that they will execute and deliver such documents as may be necessary to further evidence and effect the sale, transfer, conveyance and assignment of the personal property which is part of the Assets to Buyer and the vesting of title thereto in Buyer. This Bill of Sale and Assignment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which, taken together, shall constitute one and the same instrument. This Bill of Sale and Assignment shall be binding upon and inure to the benefit of Buyer and Sellers and their respective successors and permitted assigns. This Bill of Sale and Assignment may not be assigned by any party without the prior written consent of the other party hereto. Further, nothing set forth herein shall 1 be deemed to constitute any person or entity as a third party beneficiary of this Bill Of Sale and Assignment . THIS BILL OF SALE AND ASSIGNMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS, AND NOT THE LAW OF CONFLICTS, OF THE STATE OF NEW YORK. IN WITNESS WHEREOF, Sellers have caused this Bill of Sale and Assignment to be executed and delivered on this day of 1998 . SELLERS: Mark Twain Cablevision Limited Partnership By its general partner, FMTC Acquisition Corp. By: Title : • Citation Cable Systems, Ltd. By its general partner, FCI Communications General Partnership By its general partner, FCI' Communications, Inc. By: Title: Fanch Cablevision of. Colorado, Limited Partnership By its general partner, RCF Video Management, Inc . By: Title: DULY ACKNOWLEDGED AND AGREED TO AS OF THE DATE FIRST SET FORTH ABOVE: BUYER: US Cable Acquisition, LLC By: Title : G:WPWIN\DOCS\LC\PANOINSALSWECRIBITSseven 2 eatOee 990109 EXHIBIT D ASSUMPTION AGREEMENT THIS ASSUMPTION AGREEMENT (this "Agreement" ) is dated 1998 and made by and among Mark Twain Cablevision Limited Partnership; Fanch Cablevision of Colorado, Limited Partnership; and Citation Cable Systems, Ltd. (collectively "Sellers" ) and ("Buyer") . RECITALS : A. Sellers and Buyer have entered into that certain Purchase Agreement dated August 19, 1998 (the "Purchase Agreement") , whereby Buyer is acquiring certain assets, and assuming certain of the obligations and liabilities, of Sellers upon the terms and conditions more fully set forth therein. B. In connection with the Purchase Agreement and to more fully effectuate the transactions contemplated thereunder, the parties hereto are entering into this Agreement for the assumption by Buyer of the "Assumed Obligations and Liabilities" , as defined in the Purchase Agreement, pursuant to Section 2 .3 (a) of the Purchase Agreement. NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and the Purchase Agreement and for other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the parties hereto covenant and agree as follows (all capitalized terms used in this Agreement and not defined herein shall have the same meanings ascribed to them in the Purchase Agreement) : 1. Incorporation of Recitals . The recitals set forth above constitute an integral part of this Agreement and are incorporated herein by reference. 2 . Assumption. As partial consideration for Buyer' s receipt of the Acquired Assets, Buyer hereby assumes and covenants to abide by and agrees to pay, discharge, perform and fulfill, as and when due or required, all of the Assumed Obligations and Liabilities. 3 . Sellers' Liability. Buyer acknowledges and agrees that Sellers shall have no further obligation with respect to the Assumed Obligations and Liabilities, whether by contract or otherwise, and that Buyer shall pay, discharge and perform all of the Assumed Obligations and Liabilities as and when the same are or shall become due or required. 4 . Amendments: Waivers. This Agreement cannot be changed or terminated orally and no waiver of compliance with any provision or condition hereof and no consent provided for herein shall be ellk 'A 9° a 09 effective unless evidenced by an instrument in writing duly executed by the party hereto sought to be charged with such waiver or consent . No waiver of any term or provision hereof shall be construed as a further or continuing waiver of such term or provision or any other term or provision. 5. Binding Effect: Assignment. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. This Agreement may not be assigned by any party without the prior written consent of the other parties hereto. 6 . Third Party Beneficiary. This Agreement is entered into only for the benefit of the parties and their respective successors and assigns, and nothing hereunder shall be deemed to constitute any person a third party beneficiary to this Agreement. 7. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS, AND NOT THE LAW OF CONFLICTS, OF THE STATE OF NEW YORK. S . Severability. If any provision of this Agreement is finally determined to be illegal, void or unenforceable such determination shall not, of itself, nullify this Agreement which shall continue in full force and effect subject to the conditions and provisions hereof . 9 . Construction: Counterparts. The Section headings of this Agreement are for convenience of reference only and do not form a part hereof and do not in any way modify, interpret or construe the intentions of the parties . This Agreement may be executed in one or more counterparts, and all such counterparts shall constitute one and the same instrument. 2 SWIMS IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. SELLERS: Mark Twain Cablevision Limited Partnership By its general partner, FMTC Acquisition Corp. By: Title : Citation Cable Systems, Ltd. By its general partner, FCI Communications General Partnership By its general partner, FCI Communications, Inc. By: Title : Fanch Cablevision of Colorado, Limited Partnership By its general partner, RCF Video Management, Inc. By: Title : BUYER: [US CARLE ACQUISITION, LLC] By: Title : G:\mnmmanniccmins. 3 +�ggr � 990109 EXHIBIT E FORM OF OPINION OF' SELLERS ' COUNSEL Ladies and Gentlemen: We have acted as counsel to Mark Twain Cablevision Limited Partnership ( "Twain") ; Fanch Cablevision of Colorado, Limited Partnership ("FCOL") ; and Citation Cable Systems, Ltd. ("Citation" ) (collectively the "Sellers") in connection with the transactions contemplated by the Purchase Agreement, dated as of August 19, 1998 between Sellers and US cable Acquisition, LLC ( "Buyer") . Except as otherwise specified herein, terms defined in the Purchase Agreement and used herein are used as defined therein. In that connection, we have examined executed counterparts of the Purchase Agreement, the Bill of Sale, the Assumption Agreement, the Escrow Agreement and the Indemnification Escrow Agreement . We have also examined the originals or certified, conformed or photographic copies of such other documents, records, agreements and certificates and have made such examinations of law as we have deemed necessary to enable us to render the opinions hereinafter set forth. As to questions of fact relating to the Sellers material to the opinions hereinafter set forth, we have relied upon certificates of appropriate officers of the Sellers. Based upon the foregoing, we are of the opinion that: 1. Each of Twain, FCOL and Citation is a limited partnership duly formed and in good standing under the laws of the sate of its organization (i.e. , Delaware in the case of FCOL, Missouri in the case of Twain, and Colorado in the case of Citation) , with all requisite power and authority to conduct its business and operations as presently conducted. 2 . Sellers have all requisite power and authority to execute, deliver and perform the Purchase Agreement and all bills of sale, deeds and other documents contemplated therein to be executed and delivered by Sellers (collectively, the "Transaction Documents") . The execution, delivery and performance of the Purchase Agreement and each of the other Transaction Documents to which any Seller is a party have been duly authorized by all necessary action by such Seller(s) . The Purchase Agreement and each of the other Transaction Documents to which any Seller is a party have been duly executed and delivered by such Seller (s) and each is the valid and binding obligation of such Seller (s) enforceable against such Seller(s) in accordance with its respective terms, except as enforcement may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws affecting the rights of creditors generally, and except that equitable remedies may be unavailable. 9901C9 ethtMe 3 . After the inquiry described herein, except as disclosed in the Purchase Agreement and the schedules thereto, we have no knowledge of any (i) material proceedings at law or in equity pending against Sellers, or (ii) material proceedings at law or in equity threatened against Sellers , or (iii) any Judgment which is outstanding against Sellers, or to or by which Sellers is subject or bound which (x) results in any modification, termination, suspension, impairment or reformation of any Franchise, License or Contract or any right or privilege thereunder in a manner that could reasonably be expected to have a material adverse effect on Sellers or (y) materially adversely affects the ability of Sellers to consummate any of the transactions contemplated by the Purchase Agreement. 4 The execution, delivery and performance by Sellers of the Purchase Agreement and the other Transaction Documents do not contravene the certificate of limited partnership or agreement of limited partnership of any of Sellers. We are members of the bar of the States of Rhode Island and Massachusetts and do not herein intend to express any opinions as to any matters governed by any laws other than the State of Colorado, the partnership and general corporate law of the States of Delaware, Missouri and Colorado and the Federal laws of the United States of America (other than any Federal communications laws, which are the subject of a separate opinion being delivered to you by Sellers ' special communications counsel . ) Very truly yours, CAMERON & MITTLEMAN, LLP 9:\vpvin\flocs\lmt\fanch\sele98\E%HIBITSseven 2 �yr�yj� a� EXHIBIT F FORM OF OPINION OF SELLERS ' FCC COUNSEL [Letterhead of Sellers ' FCC Counsel] , 1998 Attention: Re: Purchase Agreement dated as of August 19, 1998 (the "Agreement") , by and among Mark Twain Cablevision Limited Partnership; Fanch Cablevision of Colorado, Limited Partnership; and Citation Cable Systems, Ltd. (collectively "Sellers") and (the "Buyer") Ladies and Gentlemen: This letter is rendered to you pursuant to Section 7. 1 (f) of the Agreement . Capitalized terms used herein without definition shall have the meanings ascribed to them in the Purchase Agreement . We have acted as special communications counsel to Sellers. This opinion is limited to certain matters, as expressly set forth in the numbered paragraphs below, arising under the Communications Act of 1934, as amended by the Cable Communications Policy Act of 1984, the Cable Consumer Protection and Competition Act of 1992 ( "1992 Cable Act") and the Telecommunications Act of 1996 (hereinafter collectively referred to as the "Act") ; the rules and regulations of the Federal Communications Commission ( "FCC" ) promulgated pursuant thereto; Section 111 of the Copyright Act of 1976, as amended (the "Copyright Act" ) ; and the rules and regulations of the U.S. Copyright Office promulgated pursuant thereto, all as applicable to the cable television operations conducted by the Sellers in the communities listed on Attachment 1 hereto (the "Cable Systems") . We have not reviewed, and are not rendering an opinion with respect to, matters of compliance with the requirements of local franchises, regulations and ordinances applicable to the Cable Systems. For purposes of this opinion, we have examined originals or copies of such documents, certificates, and public records as we have deemed necessary or appropriate . We have also examined the Agreement . We have assumed the genuineness of all signatures, the conformity to original documents of all documents submitted to us as certified or photocopies and the authenticity of the originals of such latter documents . As to various questions of fact in no e 99009 • connection with this opinion, we have relied upon our examination of the publicly available files of the FCC, our own files, and pertinent statements and representations of representatives of the Sellers . It is possible that there may be matters pending before the FCC relating to Sellers of which we do not have knowledge because such matters have not yet been identified in the appropriate files of the FCC. Based upon, subject to and limited by the foregoing, we are of the opinion that: 1 . The Sellers hold all material licenses, permits and authorizations from the FCC required for the operation of the Cable Systems as we have been informed they are currently being operated. Attachment 1 hereto lists all such FCC licenses, permits and authorizations held by the Sellers ( "FCC Licenses" ) . All such FCC Licenses remain in full force and effect . The assignment of the FCC Licenses to the Buyer has been approved by the FCC, to the extent such approval is required, and to our knowledge, such assignment authorizations are currently in effect and have not been revoked. 2 . No other material FCC authorizations, consents or approvals are required by the Sellers in order to own and operate the Cable Systems as we have been informed they are currently being operated. Subject to obtaining approvals to transfer FCC licenses, the execution, delivery and performance by Seller of the Agreement will not result in any violation of the Communications Act or the rules, regulations or written policies of the FCC, and will not . cause any forfeiture or impairment of any FCC License. 3 . All communities served by the Cable Systems have been registered with the FCC. These communities and their FCC community unit identifiers are listed on Attachment 2 . 4 . All required notifications have been filed with, and all necessary authorizations have been received from, the FCC with respect to the utilization by the Cable Systems of any frequencies in the 108-137 MHZ and 225-400 MHZ bands which we have been advised are currently being utilized on the Cable Systems. FCC Forms 320 containing a passing Cumulative Signal Leakage Index ( "CLI" ) , as defined by the FCC, have been filed annually for each community served by the Cable System since 1996 . 5 . All required Cable Television Annual Employment Reports (FCC Form 394-A) have been filed for the Sellers and the Cable Systems for the calendar year 1993 through 1998 . The Sellers employment units have been certified by the FCC for EEO compliance in each year from 1993 through 1997 . To our knowledge, the FCC has not acted on the 1998 EEO reports on FCC Form 395-A filed by the Seller covering the FCC employment units relevant to the Cable Systems. 2 4rAtPee 990109 6 . Annual Reports of the Cable Television System (FCC Forms 325, Schedule A) have been filed for the Cable Systems in 1996 (covering the reporting year 1995) , and in 1997 (covering the reporting year 1996) . 7 . To the best of our knowledge, after due inquiry, there are no outstanding judgments, decrees or orders which have been issued by the FCC against the Sellers or the Cable Systems . Other than proceedings affecting the cable television industry generally, there are no actions or proceedings (including but not limited to "must-carry" complaints) pending before or, to the best of our knowledge, threatened by the FCC regarding the Sellers or the Cable Systems. Except as disclosed in the Agreement and the Schedules to the Agreement and except as noted in Attachment hereto, based solely upon the representations of the Seller or its agents and our review of the unofficial log reports (described in Attachment ) for FCC Form 328 and Form 329 prepared by the FCC or its independent contractor, to our knowledge (x) no franchising authority has submitted Form 328 to the FCC requesting FCC certification to regulate the rates charged by the Seller for basic cable service; and (y) there is no pending complaint on FCC Form 329 concerning the rates charged by the Seller for cable programming service. Except as disclosed in the Agreement and the Schedules to the Agreement and except as noted in Attachment hereto, there have been no FCC rate decisions relating to the Cable Systems. 8 . All Statements of Account required pursuant to Section 111 of the Copyright Act for the accounting periods beginning with the July 1 - December 31, 1995 accounting period and ending with the January 1, 1998 - June 30, 1998 [Depending on Closing Date] accounting period, and accompanying royalty payments, have been filed with the U.S. Copyright Office in connection with the operation of the Cable Systems. To the best of our knowledge, there is no actual or threatened litigation by the U.S. Copyright Office or any other person with respect to any copyright filings or royalty fee payments made for the Cable System. Except as set forth on Attachment hereto, based solely upon the representations of the Seller or its agents and on our review of the Copyright Office ' s available public records, to our knowledge there have been no inquiries issued or made by the Copyright Office to Seller questioning or challenging any of the Copyright Filings or related royalty payments made by the Seller with respect to the Systems for the semi-annual accounting periods identified above. Except as provided below, this opinion is rendered only to you and is solely for your benefit and the benefit of your lenders in connection with the Purchase Agreement and the transactions contemplated thereby. This opinion may not be relied upon by any other person for any purpose without our prior written consent . Each of the Buyer' s lending institutions that is providing financing in connection with the transactions contemplated by the 3 eotoee. 99019 + • Agreement may rely upon this opinion letter as if such letter was specifically addressed to each such institution subject to the assumptions, limitations and exceptions contained herein. Disclosure of this opinion letter may also be made for informational purposes only (i) to the extent required by statute, rule, regulation or judicial process; (ii) to bank examiners, auditors or accountants; and (iii) to Buyer' s legal counsels . Sincerely, g:\wpwin\docs\lmt\fanch\sale9B\EXHI3ISSseven LE 990109 ATTACHMENT TO FCC OPINION The opinion in Paragraph No. 7 above concerning FCC Form 328 rate certifications is based on the unofficial log report for FCC Form 328 dated [October 20, 1995] „ as supplemented by a log report dated [July 11, 1996] , prepared by the FCC or its independent contractor. The opinion in Paragraph No. 7 above concerning FCC Form 329 rate complaints is based on the unofficial log report for FCC Form 329 dated [December 8, 1995] , as supplemented by a log report dated [January 27, 1997) , prepared by the FCC or its independent contractor [Dates of FCC log reports to be updated at Closing. ] coltoce 1 99 1 �• EXHIBIT G FORM OF OPINION OF BUYER ' S COUNSEL [Date] [Name and Address of Sellers] Ladies and Gentlemen: [Buyer' s counsel ' s customary introductory language] 1 . Buyer is a [corporation/partnership/limited liability company] validly existing under the laws of the State of with all requisite general partnership power and authority to conduct its business and operations as presently conducted. 2 . Buyer has all requisite entity power and authority to execute, deliver and perform the Purchase Agreement and the Assumption Agreement and all other documents contemplated therein to be executed and delivered by Buyer (collectively, the "Transaction Documents") . The execution, delivery and performance of the Purchase Agreement and the other Transaction Documents to Which Buyer is a party have been duly authorized by all necessary partnership action by Buyer. The Asset Purchase Agreement and the other Transaction Documents to which Buyer is a party have each been duly executed and delivered by Buyer and each is the valid and legally binding obligation of Buyer enforceable against Buyer in accordance with its respective terms subject to insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors ' rights and to general equity principles. 3 . The execution, delivery and performance by Buyer to which Buyer is a party of the Purchase Agreement and the other Transaction Documents do not contravene Buyer' s [articles of incorporation, bylaws, partnership agreement, certificate of limited partnership, articles of organization, operating agreement, as applicable] . 2 99019 I, 4 . There is no Judgment against or affecting Buyer or its \ affiliates that would be likely to affect the sale of assets pursuant to the Purchase Agreement or the Sellers ' right to retain the Purchase Price. There is no lawsuit or administrative proceeding pending or, to our knowledge, threatened against Buyer or any of its affiliates that if adversely determined would be likely to have a material adverse effect on the sale of assets pursuant to the Purchase Agreement or the Sellers ' right to retain the Purchase Price . [Conclusion] Very truly yours, Buyer' s Counsel g:\vpvin\flocs\1mt\fanch\sa1e98\E%HIHITsseven 3 eoto€€ 990109 EXHIBIT H SUBSCRIBER BILLING AGREEMENT AGREEMENT dated as of , 1999 between Mark Twain Cablevision Limited Partnership, a Missouri limited partnership, Fanch Cablevision of Colorado Limited Partnership, a Delaware limited partnership, and Citation Cable Systems, Ltd., a Colorado limited partnership (collectively "Seller") and US Cable Acquisition, LLC, a Delaware limited liability company ("Buyer"). Recitals: On the date hereof Buyer has acquired from Seller certain cable television systems serving communities in Colorado, Wisconsin and .Minnesota pursuant to an •Asset Acquisition Agreement dated August _, 1998 between Buyer and Seller and certain affiliates of Seller (the "Purchase Agreement"). Capitalized terms used herein shall have the meanings given them in the Purchase Agreement unless otherwise defined herein. Buyer has requested that Seller provide billing services to Buyer for the period from the date hereof through the date that i cycles from the date hereof ("Billing Period"),and Seller has agreed"to piovi ee such billing services as provided herein. In consideration of the mutual promises set forth herein, Buyer and Seller hereby agree as follows: ARTICLE 1. DEFINITIONS 1.1 Definitions.The following terms shall have the following meanings when used herein: Subscriber - The total number of (i) individual or household subscribers plus (ii) multi-family accounts including bulk-billed apartment buildings, motels, hotels, mobile home parks and private developments plus (Hi) bulk-billed commercial accounts, all as set forth on the most recent billing report. Systems-The cable television systems in the states of Wisconsin, Minnesota and Colorado sold by Seller to Buyer ARTICLE 2. BILLING SERVICES 2.1 Services. (a) Seller shall render bills to Subscribers of the Systems for the billing cycles during the Billing Period. In connection therewith Seller will: Perform cycle billing cutoffs and transmit billing file to Georgia US Data for statement production and mailing. 990109 �y �(��yy��gp en Receive lockbox payments processed from Wells Fargo and send remittances to Buyer weekly. Post lockbox payments to Customer records and send verification of batch detail or cash summaries to Buyer. Approve customer adjustments and post such adjustments only with Buyer's approval. Research and process customer refunds and bad debt write-offs, as directed by Buyer. Maintain Subscriber database. Provide one set of standard billing reports to Buyer each month (Seller is not required to provide additional copies or more frequent copies). (b) Seller shall have no obligations hereunder except as specifically set forth above. Buyer shall be solely responsible for tin Systafter the Billing Period. (c) Payments will be collected and routed through Wells Fargo lockbox unless otherwise agreed by the parties. (d) Billing cycles will remain as they exist at present, with four billing cycles as follows: (i) 1st through end of month (cutoff is 21st day of previous month); (ii) 8th of month through 7th of following month (cutoff is 28th day of previous month); (iii) 17th of month through 16th of following month (cutoff is 7th day of month); (iv)25th of month through 24th of next month (cutoff is 14th of month). (e) File maintenance. ARTICLE 3. SUPPORT During the period that Seller performs billing services to Buyer hereunder an employee or contractor designated by Seller shall be available for atotal of 20 hours during the term of this Agreement to provide assistance to Buyer and answer Buyer's questions regarding customer service and billing for the Systems. ARTICLE 4. CHARGES AND PAYMENT 4.1 Service Fees. Buyer shall pay Seller the following amounts: A. Billing-Monthly fee -2- eote 990109 (Includes postage) B. Certain Direct Costs. Buyer will reimburse Seller for, or will pay directly if so directed by Buyer, the direct costs of lockbox service relating to the billing services performed hereunder, and the telephone service charges incurred in providing billing services hereunder. C. Conversion. Buyer shall pay Seller conversion fees ofer data base converted plus expenses for consulting and parameter set up. D. Special Requests. Requests including but not limited to rate changes, generation of tapes and other special projects not described above in Article 2 shall be billed on a per quote basis. E. The payments for billing pursuant to clause A and any reimbursable costs under Section 2 shall be paid within thirty (30) days after Buyer's receipt of the invoice. Payment for all other services shall be due within 30 days after Buyer's receipt of the invoice. Payments not made when due will bear interest at 18% per annum until paid in full. ARTICLE 5. GENERAL 5.1 Limitation of Liability. In performing its services hereunder Seller shall have no liability except in the event of its willful misconduct or gross negligence. In no event shall Seller be liable for incidental or consequential damages. 5.2 Assignment. All provisions contained in this Agreement shall extend to and be binding upon the parties and their respective successors and assigns. Neither party may assign this Agreement without the prior written consent of the other party, which consent shall not be unreasonably withheld. Notwithstanding the foregoing, Seller may assign its rights under this Agreement to any person or entity controlling, controlled by, or under common control with Seller, including without limitation F.C.I. Corp.,and Buyer may assign its rights under this Agreement to any person or entity controlling, controlled by, or under common control with Buyer. 5.2 Governing Law. This Agreement shall be governed by the laws of the State of Colorado. 5.3 Final Agreement. This Agreement (including the Exhibits attached hereto) sets forth the entire agreement between the parties respecting the subject matter hereof other than the Purchase Agreement and supersedes all negotiations, conversations, discussions, correspondence, memorandums and agreements between the parties concerning such subject matter other than the Purchase Agreement. -3- 99010.9 5.4 Buyer's Best Efforts. Buyer shall use diligent efforts to transition all billing functions for the Systems to Buyer's own systems as soon as practicable after the date hereof. 5.5 Notice. Any notice required or permitted to be given by Buyer to Seller shall be sent to: 1873 South Bellaire Street, Suite 1550 Denver, Colorado 80222 Attention: President and any notice required or permitted to be given by Seller to Buyer shall be given to: 28 West Grand Avenue Montvale, New Jersey 07645 • Attention: James D. Pearson All such notices shall be given in writing by certified mail, return receipt requested, overnight courier or telecopier(provided the receiving party transmits a confirmation to the transmitting party)and shall be deemed given on the date shown on the applicable return receipt or confirmation. Either party may change its address or addressee sellforth above by giving the other notice of such change in accordance with the provisions of this Section. 5.6 Headings. The Article and Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any purpose. 5.7 Force Majeure. Neither party shall be liable for any failure to perform its obligation under this Agreement if prevented from doing so by a cause or causes beyond its reasonable control, including, but not limited to, earthquakes, riots, strikes, blackouts, war or war operations, restraints of government, or other causes which cannot with reasonable diligence be controlled or prevented by such party, provided that Buyer's obligation hereunder to pay Seller for services previously rendered at the time of the occurrence of any force majeure condition shall not be terminated. 5.8 Mod ification/Waiver. Subject to the following sentence,this Agreement may be modified or terminated by mutual agreement only by a writing, signed by the parties hereto, and the failure of either party to exercise in any respect any right provided for herein shall not be deemed to be a waiver of any right hereunder. Notwithstanding the foregoing, Buyer shall be entitled to terminate this Agreement at any time by giving Seller ten (10) days written notice thereof. -4- eatote 990109 f 5.9 Severability. In the event any terms and conditions of this Agreement shall be deemed invalid by any court ofrcompetent jurisdiction, such terms, shall be severed from this Agreement and this Agreement::shall, in all other respects, remain in full force and effect. 5.10 Execution in Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 5.11 Subscriber Reports and Records. All reports and records generated during the Billing Period or otherwise in connection with Seller's provision of the services described in Article 2 (in any form whatsoever) shall be and remain the sole property of Buyer. As soon as possible upon termination or expiration of this Agreement for any reason, Seller shall deliver all originals and copies of all such reports and records to Buyer. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above. Mark Twain Cablevision Limited Partnership ("Seller") By its general partner, FMTC Acquisition Corp. By: Title: Fanch Cablevision of Colorado, Limited Partnership By its general partner, RCF Video Management, Inc. By: Title: -5- A Citation Cable Systems, Ltd. By its general partner, FCI Communications, Inc. By: Title: US Cable Acquisition, L.L.C. ("Buyer") By: Title: G:\WPWIN\DOCSLLMIIFANCH'SAI F98\billingagnal _g_ go 99-.0109 EXHIBIT 3 • Transferee/Assignee does not currently have any plans to change the service and operations of the system as a consequence of this transaction. • • • September 16, 1998 • 99pi,,j9 EXHIBIT 4 US Cable of Coastal-Texas, LP d/b/a US Cable of Colorado is not currently qualified to do business in Colorado. However, to the extent qualification to do business in Colorado is required by law, it will do so. September 16, 1998 99:0109 EXHIBIT 5 Attached are the financial statements of US Cable of Coastal-Texas, LP. September 16, 1998 990: w;9 r I r v 1 � I i I y Financial Statements and Other Financial Information US Cable of Coastal-Texas (A Limited Partnership) Period from July 3, 1997 to December 31, 1997 i - I � ' s aS 1 ry. Y 4'� qli I 1 � llt: �1 I� r s J It l.* JERNST&YO UNG LLP 9%=109 • US Cable of Coastal-Texas (A Limited Partnership) Financial Statements and Other Financial Information December 31, 1997 Contents Report of Independent Auditors 1 Financial Statements Balance Sheet 2 Statement of Operations 3 Statement of Partners' Capital 4 Statement of Cash Flows 5 Notes to Financial Statements 6 Other Financial Information Report of Independent Auditors on Other Financial Information 11 Subscriber Revenues by Franchise Area 12 990109 JERNST&YOUNG LLP . Continental Plaza Ill ■ Phone: 201 343 4095 433 Hackensack Avenue Hackensack,New Jersey 07601 Report of Independent Auditors Partners US Cable of Coastal-Texas (A Limited Partnership) • We have audited the accompanying balance sheet of US Cable of Coastal-Texas (a limited partnership) as of December 31, 1997, and the related statements of operations, partners' capital and cash flows for the period from July 3, 1997 (date of commencement of Partnership operations) to December 31, 1997. These financial statements are the responsibility of the Company'.s management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of US Cable of Coastal-Texas at December 31, 1997, and the results of its operations and its cash flows for the period from July 3, 1997 to December 31, 1997 in conformity with generally accepted accounting principles. tWILL? April 8, 1998 990109 Ernst&Young LLP is a member of Ernst&Young International,Ltd. 1 US Cable of Coastal-Texas (A Limited Partnership) Balance Sheet December 31, 1997 Assets (Note 3) Property,plant and equipment (Note 2): Cable system equipment $ 18,425,103 Converters, less allowance for unrecoverable converters of$6,200 124,543 Buildings and building improvements 107,329 Land 86,207 Other equipment 1,369,654 • 20,112,836 Less allowances for depreciation (1,854,064) 18,258,772 Cash and cash equivalents 2,606,894 ( Accounts receivable from subscribers, less allowance of$6,600 324,529 Prepaid expenses 122,870 Escrow deposits and other assets 109,998 Deferred costs and intangibles (Note 2): • Goodwill, less accumulated amortization of$371,000 11,484,417 Franchise costs, less amortization of$205,000 2,074,402 Loan origination costs, less accumulated amortization of$37,000 332,911 Other deferred costs, less accumulated amortization of$26,000 244,665 $ 35,559,458 Liabilities and partners' capital Liabilities: Bank loan and notes payable (Note 3) $ 30,000,000 Accounts payable and accrued expenses 2,215,826 Subscriber deposits and deferred income 222,369 32,438,195 Commitments and contingencies (Notes 5 and 6) Partners' capital (Note 1) 3,121,263 $ 35,559,458 See accompanying notes. • 990109 2 US Cable of Coastal-Texas (A Limited Partnership) Statement of Operations Period from July 3, 1997 to December 31, 1997 Revenues: Revenues from subscribers S7,782,398 Other income 211,458 7,993,856 Operating expenses: Pay television and satellite services 1,760,656 Salaries and related items 835,630 Management fees (Note 4) 319,409 Other selling, general and administrative 1,514,771 4,430,466 Income before depreciation and amortization and interest expense 3,563,390 Depreciation and amortization 2,493,119 Interest expense (Note 3) 1,166,415 Net loss $ (96,144) See accompanying notes. 990109 3 US Cable of Coastal-Texas (A Limited Partnership) Statement of Partners' Capital Period from July 3, 1997 to December 31, 1997 General Limited Partners Partners Total Partners' capital at July 3, 1997 $866,843 $2,350,564 $3,217,407 Net loss in 1997 (25,903) (70,241) (96,144) Partners' capital at December 31, 1997 $840,940 $2,280,323 $3,121,263 See accompanying notes: 990109 4 US Cable of Coastal-Texas (A Limited Partnership) Statement of Cash Flows Period from July 3, 1997 to December 31, 1997 Operating activities Net loss $ (96,144) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation of property, plant and equipment 1,854,064 Amortization of deferred costs and intangibles 639,055 Provision for bad debts 428 Changes in operating assets and liabilities: ( Accounts receivable from subscribers (169,766) Prepaid expenses 41,989 Escrow deposits and other assets 6,018 Accounts payable and accrued expenses 729,521 Subscriber deposits and deferred income 36,961 Net cash provided by operating activities 3,042,126 Investing activities Purchase of property, plant and equipment,net (1,958,246) Increase in deferred costs (483,426) Net cash used in investing activities (2,441,672) fFinancing activities Repayment of amount due to affiliate (29,000,000) Proceeds from bank loan 30,000,000 Net cash provided by financing activities 1,000,000 Increase in cash and cash equivalents 1,600,454 Cash and cash equivalents at July 3, 1997 1,006,440 Cash and cash equivalents at December 31, 1997 $ 2,606,894 f See accompanying notes. f 990109 5 US Cable of Coastal-Texas (A Limited Partnership) Notes to Financial Statements December 31, 1997 1. Organization US Cable of Coastal-Texas (the Partnership or USCCT) is a limited partnership organized in 1997 for the purpose of operating cable television systems in the areas of West Texas, New Mexico and the coastal areas of South Carolina, Georgia and Florida (the "Systems"). Prior to July 3, 1997, these Systems were owned by US Cable of Lake County, in which the general and limited partners of the Partnership, excluding Liberty Lake, Inc., owned an aggregate 50% interest. The remaining 50% interest was owned by Liberty Lake, Inc. On July 3, 1997, the net assets of the Systems were transferred to the Partnership, and the Partnership commenced operations. In connection with the increase in ownership interest from 50% to 99% by the partners, exclusive of Liberty Lake, Inc., the carrying value of the net assets was increased by $16.2 million representing 49% of the aggregate fair value of such net assets as of the date of transfer. At December 31, 1997, the Systems have developed in areas approximating 1,578 miles with approximately 42,595 subscribers in service. Under the terms of the May 9, 1997 limited partnership agreement, the Partnership interests are as follows: { General Limited US Cable of Lake Forest, Inc. 26.9423% Stephen E. Myers 44.7248% Michael C. Anderson 5.0973 James D. Pearson 1.1498 Lake Cable Investment Corporation 1.2858 Liberty Lake, Inc. 1.0000 Lake Capital Corp. 19.8000 2. Significant Accounting Policies Property, Plant and Equipment Property, plant and equipment are stated at cost. Depreciation is provided as follows: Estimated Assets Depreciation Method Useful Life Cable system equipment Principally straight-line 5 to 8 years Converters 200% declining balance 7 years Building and building Straight-line or 150% improvements declining balance 15 to 20 years Other equipment 200% declining balance 5 to 7 years 4 990109 6 • i US Cable of Coastal-Texas (A Limited Partnership) Notes to.Financial Statements (continued) 1. Organization (continued) Profit and Loss Distributions Profit and loss distributions are made under the terms of the Partnership agreement and are generally allocated to the Partners in accordance with their respective Partnership interests (see Note 1). 2. Significant Accounting Policies (continued). Deferred Costs and Intangibles Deferred costs and intangibles include costs incurred to obtain franchises, costs of acquiring long-term financing, costs of covenants not to compete, goodwill and certain organizational costs. All deferred costs are amortized on the straight-line method generally as follows: Assets Period of Amortization Franchise costs Remaining lives of the franchises Loan origination costs Remaining term of the loan Covenant not to compete costs 5 years Organization costs 5 years Goodwill 15 years Franchise Fees The Partnership records franchise fees collected from subscribers as a liability. Income Taxes Income taxes are not provided because the income or loss of the Partnership is to be reported on the tax returns of the Partners. Cash Equivalents Cash equivalents represent short-term investments which mature within ninety days from date of investment. The carrying value of cash equivalents approximates fair value. 990.109 7 US Cable of Coastal-Texas (A Limited Partnership) Notes to Financial Statements (continued) 2. Significant Accounting Policies (continued) Management's Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 3. Bank Loan and Notes Payable The Partnership has a $30,000,000 credit agreement with two banks which provides for a $20 million term loan and a$10 million revolving credit facility. Commencing March 31, 1999, principal becomes payable in increasing quarterly installments through-June 30, 2002, plus the Partnership may be required to make an annual excess cash flow payment, as defined. The loan bears interest payable quarterly, based upon an interest rate option selected by the Partnership and adjusted based upon the results of a certain financial ratio. The rate in effect at December 31, 1997 was 7.6%. The Partnership is required to pay a commitment fee of'A% on the unused portion of the revolving credit facility. The terms of the agreement include, in addition to, other requirements, that the Partnership maintain compliance with certain financial ratios and limit capital expenditures and lease payments. The loan is collateralized by all of the assets of the Partnership, the stock of certain General and Limited partners, all General and Limited Partnership interests and the assignment of certain contracts of the Partnership. As of December 31, 1997, maturities of long-term debt are as follows: 1998 $ — 1999 2,000,000 2000 2,500,000 2001 3,000,000 2002 22,500,000 Interest paid from July 3, 1997 through December 31, 1997 totaled $992,000. 990109 8 • } US Cable of Coastal-Texas (A Limited Partnership) Notes to Financial Statements (continued) 4. Related Parties US Cable Corporation, an affiliate of certain General and Limited Partners, has been engaged to manage the operations of the Partnership for a monthly fee equal to 4% of the Partnership's gross subscriber receipts. Payment of such fees is subordinated to payment of principal and interest on the credit agreement discussed in Note 3. Unpaid management fees of approximately $10,000 are included in accounts payable and accrued expenses at December 31, 1997. 5. Franchise Agreements Under various franchise agreements with local municipalities, the Partnership has non- exclusive rights principally for 15 years to operate cable television systems, generally renewable for periods ranging from 5 to 15 years, which, in most cases, are at the option of the municipality. The terms of the agreements currently provide for a majority of the municipalities to receive a franchise fee of between 2% and 5% of gross subscriber revenues. At the end of the original franchise period, certain municipalities have the option of purchasing the respective portion of the cable television system for the fair market value as determined by arbitration. Operations of the Partnership are subject to the provisions of the Cable Television Consumer Protection and Competition Act of 1992 and the Telecommunications Act of 1996 which include, among other requirements, certain operating standards and rate determinations. } 6. Commitments The Partnership leases office and warehouse space under noncancelable operating leases. Future minimum rental commitments on such leases having terms in excess of one year, are as follows: 1998 $112,000 1999 118,000 2000 107,000 2001 105,000 2002 73,000 Thereafter 35,000 } 990109 9 US Cable of Coastal-Texas (A Limited Partnership) Notes to Financial Statements (continued) 6. Commitments (continued) In addition, the Partnership has entered into various lease agreements for the use of utility poles within the franchise areas. Such agreements are for various periods and are generally renewable. Future rental commitments under these agreements, based on the franchise areas awarded at December 31, 1997, are estimated at $190,000 per year. Rental expense for all operating leases was as follows: Pole Rental Leases Total From July 3, 1997 to December 31, 1997 $86,000 $61,000 $147,000 7. Employee Benefit Plan The Partnership participates in a multi-employer defined contribution plan that qualifies as a deferred salary arrangement under Section 401(a) of the Internal Revenue Code. All full-time employees meeting minimum service requirements are eligible to participate and may contribute up to 18% of their pre-tax earnings, subject to certain Internal Revenue Code restrictions. The Partnership matches 50% of each employee's contribution up to an annual maximum of $500 per employee. Total Partnership contributions for the period from July 3, 1997 to December 31, 1997 were $5,000 and are included in salaries and related items. 8. Fair Value of Financial Instruments The Partnership's financial instruments at December 31, 1997 are comprised of cash equivalents and bank loans payable. The carrying value of cash equivalents•and bank loans payable approximates fair value. 9. Impact of Year 2000 (Unaudited) The Partnership is currently in the process of evaluating its information technology and developing a plan to ensure all of its critical information technology systems are ready for the year 2000. This evaluation includes vendor-supplied software as well as outside service bureaus which perform billing services for the Partnership. Based on preliminary evaluation, the Partnership currently expects the project to be substantially complete by mid 1999 and does not expect related costs to be significant. The Partnership does not expect this project to have a significant effect on operations. 9t. , 19 10 US Cable of Coastal-Texas (A Limited Partnership) Subscriber Revenues by Franchise Area Period from July 3, 1997 to December 31, 1997 Ravenal $47,292 Meggett and Yong Island 55,819 Folly Beach 156,855 Charleston County 72,935 Kiawah Island 465,580 Rockville 5,572 Seabrook Island 255,087 Fripp Island 212,776 Hunting Island 3,642 Harbor Island 51,809 Lady's Island 556,076 Dataw Island 69,888 Tybee City 334,448 Skidaway Island 552,811 Darien 82,720 Mc Intosh 62,485 Jekyll Island 162,056 Bay Club 6,630 East Ridge 8,732 Tara 80,769 Yemassee 78,568 North Cove 19,532 Martins Creek 9,022 Chatham County 19,792 Hollywood 66,784 South Harbor 5,823 St. Mary's 596,507 Camden County 127,941 Awendaw 65,131 Edisto Beach 260,622 ,Johns Island • 231,872 City of Charleston 47,939 Bohicket/Bay Point 17,795 Town of Megget 14,125 Mount Pleasant 90,734 990 1 12 US Cable of Coastal-Texas (A Limited Partnership) Subscriber Revenues by Franchise Area (continued) Period from July 3, 1997 to December 31, 1997 Wild Dunes $ 315,659 Ft. Stockton 523,656 Seagraves 120,550 Seminole 348,549 Denver City 281,754 Van Horn 157,340 Hagerman 34,673 Dexter 34,270 W. Odessa 381,956 McCamey 115,588 Rankin 53,460 Comstock 9,563 Sanderson 45,542 Lajitas 14,547 Alpine 378,725 Iraan 70,397 Total subscriber revenues $7,782,398 . 0109 13 a EXHIBIT 6 - Transferee's/Assignee's Technical. Qualifications • September 16, 1998 99U1: 19 Narrative of Transferee's Technical Qualifications,Experience and Expertise Regarding Cable Television Systems Transferee/Assignee is under the operational structure of US Cable Corporation, a multiple system operator (MSO) with a proven track record in the cable television industry. US Cable Corporation has compiled a record of responsible growth and development in the industry since 1976 and is respected as a progressive and innovative cable operator. US Cable's first acquisition was in Walton,New York, in 1976 and by 1980 the company had acquired twelve more systems in upstate New York. Between 1980 and 1988 the company won franchises covering 250,000 homes, primarily in the Chicago market. In 1980, US Cable activated the first 54-channel, fully addressable, 400 MHz cable television system on a "turnkey" basis with Jerrold Electronics a Division of General Instrument Corporation. In total the company constructed over 3,000 miles of plant. In 1997,the company was the country's 37`b largest MSO. The company has always emphasized technical achievement. For example, in Paterson, New Jersey the company's cable system was used for two-way data transmission to operate the city's traffic control system. The company is testing high speed modem services. Today, the company has established successful cable operations in five states namely, New Mexico, Texas, South Carolina, Georgia and Florida. These operations are separated into two operating regions comprised of a local Management Team consisting of a General Manager, Office Manager and Chief Technician. Each regional office employs technical staffing ranging from construction to maintenance making each region self-reliant. The technical staff reports to the Chief Technician/Engineer who inturn reports to the General Manager who ultimately reports to the corporate office. The addition of the Fanch acquisition will add two additional regions to the company. The corporate office comprises of a Vice President of Operations and a Director of Engineering. The Vice President of Operations is responsible for overseeing the day-to- day operations of each cable system and ensures that proper policies regarding customer service, maintenance and installations are adhered to. The Director of Engineering, a SCTE member, is responsible for compliance with strict technical guidelines and construction practices. The Director is also responsible for compliance with Cumulative Leakage Index, (CLI), a requirement of the FCC and all federal and state mandated guidelines. Essential functions of the Director include correcting and recommending design modifications, conducting tests on newly constructed and existing systems and regularly inspecting the progress and quality of construction projects. The Director of Engineering is required to have a minimum of 10 years experience in broadband and digital communications and current knowledge of OSHA regulations. Depending on the size and complexity of each cable system, the number of field technicians varies,but generally systems have one technician for every 1,500 subscribers. 990109 These technicians are the front line employees responsible for the daily maintenance, reliability and performance of all or part of the cable system. Training is available to all technical employees within the system. All new employees are required to complete some form of training and/or course work available through the National Cable Television Institute (NCTI). US Cable is an active member of the National Cable Television Association (NCTA). 990109 , ......, „se.. .r The Hanover Insurance Companies ® The Hanover Insurance Company ❑ Massachusetts Bay Insurance Company FRANCHISE BOND Bond No. BLZ1553503 Know all men by these presents, That Joshua Cablevision as Principal, and L4N(THE HANOVER INSURANCE COMPANY, a corporation of the State of New Hampshire, 0 MASSACHUSETTS BAY INSURANCE COMPANY, a corporation of the Commonwealth of Massachusetts, having its executive office in Worcester, Massachusetts as Surety, are held and firmly bound unto weld Cmtnry, P n 75s, Greeley, Colorado 80632 • hereinafter referred to as Obligee in the penal sum of Two Thousand and 00/100 ($ 2,000.00 ) for the payment of which, well and truly to be made, we bind ourselves, our heirs, executors, administrators, successors and assigns, jointly and severally, firmly by these presents, the liability of the S -ty being limited to said penal sum regardless of the number of years this bond remains in force or is renew of the number of premiums that shall be payable or paid, the number of Subscribers to the system and/or •al fees which may be required and incurred. WHEREAS, the Obligee has granted a franchise 'p; • u-k the public streets and places within the Municipality to transmit and distribute electric. , •u ses �� • g •n open line-coaxial antenna system for television receivers located within sai. Welt ‘laity NOW THEREFORE, the •n•' ion of t •• •,atiot i s '� , hat if the above bound principal shall faithfully perform,well and truly obs; rve a Id fu I t t: ms n c n• tions of the franchise, then this obligation shall be null and void; otherwise, it shay re .i in ull for�,e n effect until terminated or cancelled. PROVIDED, HOWEVER, its be - c•ndition precedent to any right of recovery hereunder, that in event of any default on the part of the Prin ipal, a written statement of the particular facts showing the date and nature of such default shall be immediate' delivered to the Surety by certified mail at 440 Lincoln Street, Worcester, Massachusetts 01605. AND PROVIDED FURTHER that no action, suit or proceeding shall be had or maintained against the Surety on this instrument unless the same be brought or instituted and process served upon the Surety within twelve months after an act of breach or cancellation of this bond or termination of said franchise,whichever occurs first. This Bond may be terminated or cancelled by Surety by giving thirty (30) days prior notice in writing to Principal and said Obligee, such notice to be given by certified mail. Such termination or cancellation shall not affect any liability incurred or accrued under this Bond prior to the effective date of such termination or cancellation. IN WITNESS WHEREOF, the said Principal and Surety have signed and sealed this instrument this 17th day of July 19 87 WITNESS: Joshua Cablevision (Seal) (Principal) Approved and Accepted by: .z;, 4 OA ( ale) Obligee El THE HANOVER INSURANCE COMPANY 0 MASSACHUSETTS BAY INSURANCE COMPANY TitleeX1:24 4 Mtom Date Shirley A. Harkins • 870042 , Form 181-1079 (8/81) ra The Hanover Insurance Company POWER OF ATTORNEY CERTIFIED COPY KNOW ALL MEN BY THESE PRESENTS:That THE HANOVER INSURANCE COMPANY,a corporation organized and existing under the laws of the State of New Hampshire, does hereby constitute and appoint — James J. Nevins, William G. Franey, Brenda L. Davis, John R. Muha, II, and/or Shirley A. Harkins — of Capitol Heights, Maryland and each is its true and lawful Attorneys)-in-fact to sign,execute, seal,acknowledge and deliver for,and on its behalf,and as its act and deed,at any place within the United States,or,if the following line be filled in, only within the area therein designated any and all bonds, recognizances, undertakings, contracts of indemnity or other writings obligatory in the nature thereof, as follows: — Any such obligations in the United States, in any amount — And said Company hereby ratifies and confirms all and whatsoever said Attomey(s)-in-fact may lawfully do in the premises by virtue of these presents. This appointment is made under and by authority of the following Resolution passed by the Board of Directors of said Company at a meeting held on the seventh day of October, 1981. a quorum being present and voting, which resolution is still in effect: -RESOLVED.Thai the President or any Vice President in conjunction with any Assistant Vier President be and they are hereb,authorized and engww reed it.appoint Attorneys-in-fact of the Company.in its name and as its acts.to execute and acknowledge for and on its behalf as Surety an'and all bonds.rervcnizances.contracts of indemnity.waivers of citation and all other writings obligatory in the nature thereof.with power to attach thereto the seal of the Company.An,such writings so executed by such Attorneys-in-fact shall be as binding neon the Company as if they had been duly executed and acknowledged b, the regularly elected officers of the Company in their own proper persons. IN WITNESS WHEREOF.THE HANOVER INSURANCE COMPANY has caused these presents to be sealed with its corporate seat duly attested by its Vice President and its Assistant Vice President. this 4th day of March 19 86 THE HANOVER INSURANCE COMPANY • Vice President ,,,yarunrrayaaea � (Seal) 1111____:±_tos �C�.V , .• ° •> F Assistant Vice President , c �Cric e,-r . THE COMMONWEALTH OF MASSACHUSETES •v s, * F.°;, COUNTY OF WORCESTER U.S. A , a On this 4th day of Ma't4rtt a i�F 1986 , before me came the above named Vice President and Assistant Vice President of The3lanAtit.InsuraneFY;Lmpa y.to me personally known to be the individuals and officers described herein,and acknowledged that the sealaffifq •ate••' mp3rµmentis the corporate seal of The Hanover Insurance Company and that the said corporate seal and their signaturestiei blikeris', r y„Mixed ands 'bed to s 'd intent by the uthorily and direction of said Corporation. •r,aa ,911,,,,p' '(//iJ 1. 1a,• (Seal) Notary Public My Commission Expires May 29, 1992 I,the undersigned Assistant Vice President of The Hanover Insurance Company,hereby certify that the above and foregoing is a full. true and correct copy of the Original Power of Attorney issued by said Company,and do hereby further certify that the said Power of Attorney is still in force and effect. This Certificate may be signed by fascimile under and by authority of the following resolution of the Board of Directors of The Hanover Insurance Company at a meeting held on the 7th day of October, 1981 "RESOLVED,That an,and all Powers of Attorney,and Certified Copies of such Powers of\nonce,and unification in its pee t thereto.gran b•d and executed by the President'r an,Tice President in conjunction with any Assistant lire President of the f.ompan%shall he binding on the l:.nnpam to the same extent as if all signatures thereon were manually affixed even though one or more of an, such signatures thereon may In.facsimile. ' GIVEN under my hand and the seal of said Company, at Worcester, Massachusetts. this 17th day of July 19 87 FORM 111.0402 16/851 111 Assistant Vice President 870042 Hello