MACC/Comcast - Data Services Agreement FRANCHISE EXTENSION AGREEMENT
WHEREAS, Comcast of Oregon II, Inc. ("Comcast Oregon") currently holds, through its
subsidiary, Comcast of Tualatin Valley, Inc. ("Comcast Tualatin"), formerly TCI Cablevision of
the Tualatin Valley, Inc., a cable franchise with the City of Tigard ("City"), with an effective
date of February 1, 1999, which was to expire on January 31, 2014 ("Franchise"); and
WHEREAS, the City entered into an Intergovernmental Agreement, in accordance with
ORS Chapter 190, with the Metropolitan Area Communications Commission ("MACC") for
transfer of administration responsibilities associated with the Franchise, including renewal
negotiations;and
WHEREAS, the City and Comcast Oregon subsequently agreed, pursuant to a franchise
extension agreement dated April 7, 2014, to extend the term of the Franchise to December 31,
2014; and
WHEREAS, MACC, on behalf of the City, has been working to process Comcast's
response to MACC's request for a formal renewal proposal for renewal of the Franchise in
accordance with 47 U.S.C. 546 ("Proposal");and
WHEREAS, the City and Comcast Oregon wish to extend the Franchise to allow for
additional negotiations toward agreement on a renewed franchise agreement, as well as to
provide time for MACC to process Comcast's Proposal under the formal renewal process, prior
to expiration of the Franchise.
NOW, THEREFORE, the City and Comcast Oregon agree as follows:
1. The Franchise shall be extended to expire on June 30, 2015, unless a renewed
franchise agreement takes effect prior to that date, in which case the Franchise shall
expire on the effective date of the renewed franchise.
I
2. All provisions of the Franchise,other than the duration of the Franchise as set forth in
Section 1, shall remain in full force and effect through the expiration date set forth
herein.
3. The parties do not waive any rights which they enjoy under law as a result of agreeing
to this Franchise Extension Agreement.
ACCEPTED this �*-day of L?& 2014.
City of Tigard,Oregon
By:
PrintName:
Title: �1.�✓Id(d��
ACCEPTED this 3eday of�Qn va�� ,201X.5-
Comcast of Oregon II nc.
By:
Print Name: Timothy T.Nester
Title: SVP-Finance and A69P)IMInr'
2
FRANCHISE EXTENSION AGREEMENT
WHEREAS, Comcast of Oregon II, Inc. ("Comcast"), formerly TCI of the Tualatin
Valley, Inc., currently holds a cable franchise with Tigard, Oregon ("City"), with an effective
date of February 1, 1999, which will expire on January 31, 2014 ("Franchise"); and
WHEREAS, the City entered into an Intergovernmental Agreement, in accordance with
ORS Chapter 190, with the Metropolitan Area Communications Commission ("MACC") for
transfer of administration responsibilities associated with the Franchise, including renewal
negotiations; and
WHEREAS, MACC, on behalf of the City, has been working to process Comcast's
request for renewal of the Franchise in accordance with 47 U.S.C. 546; and
WHEREAS, the parties have agreed to extend the term of the Franchise to allow
additional time for the renewal process to conclude.
NOW, THEREFORE, the City and Comcast agree as follows:
1. The Franchise shall be extended to expire on December 31, 2014, unless a renewed
franchise agreement takes effect prior to that date, in which case the Franchise shall
expire on the effective date of the renewed franchise.
2. All provisions of the Franchise, other than the duration of the Franchise as set forth in
Section 2.3, shall remain in full force and effect through the expiration date set forth
herein.
3. Neither party waives any right which it enjoys under law as a result of agreeing to this
Franchise extension.
ACCEPTED this 14th day of January, 2014.
Tigard, Oregon
By:
Print Nam
Title: r'
IJ
ACCEPTED this day of jl:'neJj 2014.
Comcastof Oregon
By:
Print Name: T imo t,T Nester
Title: SVP-Finance and Accounting
COMMUNICATIONS COMMISSION
REPRESENTING:BANKS,BEAVERTON,CORNELIUS,DURHAM,FOREST GROVE,GASTON,HILLSBORO,KING CITY,LAKE OSWEGO,NORTH PLAINS,RIVERGROVE,TIGARD,TUALATIN,WEST LINNANDWASHINGTON COUNTY
CAW TV FRANCAISE REC{UTATION . TEIECOMMUNICOONS AdVICE ANd SUPPORT • Public COMMUNICATIONS NETWORk 'PCN) • TUAIATIN VAIIEY COMMUNITY TV
April 15, 2014
TO: City Recorders/Clerks
MACC Member Jurisdictions
FR: Fred Christ, MACC
RE: Comcast Franchise Extensions - through Dec. 31, 2014
Attached is Comcast's counter-signed extension of the MACC Franchise
that your Council passed in January or February of this year. We
apologize for the long wait following the Council's action, but Comcast was
less than proficient in handling the signatures.
Please contact me with any questions. Thanks.
Fred Christ
Policy & Regulatory Affairs Mgr.
MACC
fchrist(d,)maccor.org
503.645.7365 x206
AMENDMENT NO. 1
TO THE INTERGOVERNMENTAL AGREEMENT
SHARED USE OF PUBLIC COMMUNICATION NETWORK, INTERNET ACCESS,
COMMUNCIATION DEVICES AND COMPUTER-EQUIPMENT.
Paragraph two of section IV is deleted and replaced with the following:
2. New Participants. Any new party that,wishes to become a Participant in this
Agreement must be approved by a majority of the existing Participants, by vote of
the Liaisons, and must pay a fee set by the Participants. The fee is required
regardless of the length of time remaining in this Agreement. If approved by the
Liaisons, a new party shall become a Participant in this Agreement upon receipt of
the fee and authorization for participation in this Agreement. A revised Appendix
A will be sent to all Participants.
Appendix A—The list of Participants is amended to include the following:
City of Beaverton
Tualatin Valley Fire and Rescue
Tualatin Valley Community Access
Metropolitan Area Communications Commission
Unified Sewerage Agency
It is understood and agreed that all other terms and conditions of the original agreement
are still in effect.
The Participants hereby accept the terms and conditions of this Amendment.
City of Hillsboro:
Gary Ehrenfeld
SignatuW Printed Name Date
Was n County:
Dave Maeaens r ��
Signature PrintedName Date
APPROVED AS TO FORM
Amendment No.1AST SIgTANT�COU�NTY COUNSEL Pagel
Intergovernmental Agreement FOR WASHINGTON COUNTY, ORE.
a
City of Lake.Oswego:
60
Signature Printed Name Date
City o Tigard:
Signature Printed Name Date
Tualatin Valley Water District:
` q
Signature Printed Name Date
Amendment No. I Page 2
Intergovernmental Agreement
APPENDIX A
List of Participants
City of Hillsboro
Washington County - Support Services
Washington'County- Cooperative Library Services
City of Tigard
City of Lake Oswego
Tualatin Valley Water District
City of Beaverton
Tualatin Valley Fire and Rescue
Tualatin Valley Community Access
Metropolitan Area Communications Commission
Unified,Sewerage Agency
Amendment No. 1 Page 3
Intergovernmental Agreement
M,ACCMETROPOLITAN AREA
COMMUNICATIONS COMMISSION
(11ble TV; Flanchise Regulation Telecommunications Service, and Support Public (onimunications Netwoek (PB)
June 12, 1:998
Mr. Paul DeBruyn
IS Manager
City of Tigard
13125 SW Hall Blvd
P.O. Box 233397
Tigard, OR 97223
RE: PCN Contract —Appendix A, Revision 1
Dear Paul:
Enclosed are three originals of Appendix A, Revision 1 to the current contract for PCN
network data services. The revision supersedes the existing Appendix A, on July 1,
1998, and continues through June 30, 1999.
Be aware that we are currently renegotiating the franchise agreement with TCI, which
expires February 1999. This contract remains valid with the exception in Paragraph 2.1,,
under "Term of Agreement", of the PCN Data (and Voice) Services Agreement.
Please sign all originals on page 12,-designating payment option "A" or "B". Retain one
set of originals for your records and return the remaining two sets of originals to my
attention.
A reminder that if you choose payment option "B" (pay 1 year in advance and receive a
5% discount), the contract terms (Paragraph 1 Ob) states that the advance payment
must be made no later than 30 days after commencement of Appendix A term. To take
advantage of option "B", TCI of Tualatin Valley must be paid by August 1, 1998.
If you have any questions, do not hesitate to give me a call.
Sincerely,
Raul B. Torres
Telecommunications Specialist
Enclosures: 3 original contracts for signature
PROVIDING SERVICE SINCE 1980
1815 NW.169TH PLACE, SUITE 6020 • SEAVERTON, OREGON 97006-4886 (503) 645-7365 FAX (503) 645-0999
Durham,
MACC/TCI of Tualatin Valley PCN Data Services Agreement
City of Tigard — FY 1998-99, Revision.A
Page i i
APPENDIX A, REVISION 1
CITY OF TIGARD
SERVICES AND RATES
The following rates shall be applicable during the term of this agreement (July 1, 1998 through
June 30, 1999).
High Saeed Data Services
Public Agency shall operate LANCity Broadband Interface devices between 41.75 MHz and
47.75 MHz on the reverse side and between 234.0 MHz and 240.0 MHz on the forward side
(Channel "T-13 "to" M").
It is recognized by Public Agency that MACC may assign additional use of these frequencies by
other agencies, provided both MACC and Public Agency agree that the additionalequipment
and applications would not be deleterious to communications by Public Agency and its clients.
Public Agency Site Operating LANCity Device:
City Hall
13125 SW Hall Blvd
Tigard, OR 97223
Monthly Rates
The monthly charge to Public Agency for each LANcity device shall be dependent upon the
cumulative number of devices simultaneously assigned to the PCN Channel "T-13" to "M" in
accordance with the following schedule:
TOTAL NUMBER OF PRICE PER DEVICE
LANCITY DEVICES PER MONTH
1 TO 5 $ 319.49
6 TO 10 . $287.23
11 TO 15 $258.24
. 16 TO 20 $232.17
21 TO 24 $208.74
Over 25 $ 176.20
Upon commencement of this Agreement, on July Jr, 1998, the following number of LANcity
devices is expected to be on PCN Channel "T-13" to "M". These numbers are estimates only.
Public Agency will be billed in accordance with the actual number of devices in place on July 1,
1998.
MACC/TCI of Tualatin Valley PCN Data.Services Agreement
City of Tiaard - FY 1998-99; Revllsion A
Page 12
Appendix A, Revision 1 — Continued
Channel "T-13" to "M" using LANcity Bridges —The City of Beaverton -three (3); The City of
Hillsboro - eight (8); The City of Lake Oswego—five (5); The City of Tualatin —two (2); and
Public Agency with one (1).
Therefore, the total number of LANCity bridges relevant to this Agreement on the PCN, for the
purpose of providing an initial rate, is nineteen (19). This allows the City's of Beaverton, Lake
Oswego, Hillsboro, Tualatin, and Public Agency with an initial rate of$232.17 per month, per
device.
Upon commencement of this agreement on July 1, 1998, Public Agency will have one (1)
LANCity device on the above frequencies, providing a rate of$232.17 per month, per device.
TOTAL MONTHLY RATE FOR HIGH SPEED DATA SERVICES $ 232:17
UPON COMMENCEMENT OF AGREEMENT
MONTHLY TOTAL FOR ALL SERVICES LISTED HEREIN: $ 232.17
OPTION "A' (PUBLIC AGENCY IS BILLED MONTHLY): $ 232.17
OPTION "B" * (PUBLIC AGENCY IS BILLED ONCE DURING
THE FIRST MONTH OF THE AGREEMENT FOR
COMPLETE TWELVE MONTHS: 5% DISCOUNT
APPLIED)..... ANNUAL RATE: $ 2,646.74
REPRESENTATIVE OF PUBLIC AGENCY PLEASE CHECK AND SIGN PAYMENT OPTION
SELECTED:
OPTION "A" (Monthly Billings)
AUTHORIZING SIGNATURE
X OPTION "B",(Annual,Advance Billing,.with 5% Discount)
AUTHORIZING SIGNATURE-
* See Section 10b j
lirther clarification.
INTERGOVERNMENTAL AGREEMENT
SHARED USE OF PUBLIC COMMUNICATION NETWORK, INTERNET
ACCESS, COMMUNICATION DEVICES AND COMPUTER EQUIPMENT
This. agreement is entered into by and between the. units of local government,
departments/agencies of'local government, and districts listed in Appendix A, which is
incorporated into this Agreement by this reference. Each entity listed shall be referred to as
"Participant"
WHEREAS ORS 190.010 authorizes each Participant to enter into this Agreement for the
performance of any or all functions and activities that each Participant has authority to
perform;
WHEREAS, each Participant finds it desirous to enter into this Agreement;
Now, therefore,each Participant agrees as follows:
I. OBJECTIVES OF THE AGREEMENT
1. This Agreement will allow each of the Participants to:
a. Share the usage of advanced technology such as the Internet;
b. Share all the equipment and services associated with interfacing/accessing
the Internet;
C. Share in the cost of the acquired equipment and services to
interface/access the Internet,
d. Develop internal expertise and share this expertise among the participants;
e. Provide security to all participants using the Internet; and
f. Become a model for units of local government sharing the technology,
expertise and cost to benefit the citizens and taxpayers of Washington ,
County and the participating jurisdictions.
II. SERVICES PROVIDED DURING THE TERM OF THE AGREEMENT
1. Responsibilities of All Participants. Each Participant shall:
a. Equally share in the costs of purchase and installation of a Sun
Sparestation 20 with the necessary firewall software.
PAGE 1 -INTERNET IGA JULY 12,1996 455 PM
b. Equally share in the costs of purchase and installation of a 256 K fractional
T-1 Frame Relay connection to the Internet. This service will be provided
by a selected Internet Provider.
2. City of Hillsboro Responsibilities. The City of Hillsboro will make available a
Sun Server as well as an NT server to support Internet services for participants
during the duration of this agreement. The City 'agrees to provide on-going
support and maintenance to the NT server.
3. Washington County - Support Services Responsibilities. Support Services will
house the Internet equipment or replacements and associated software in the
County's data center for the duration of this agreement.
4. Washington County - Cooperative Library Services Responsibilities.
Cooperative Library Services will provide access and use of a Cisco 2501 router
for connection to fractional T-1 Frame Relay connection to the Internet for the
duration of this Agreement.
III. GENERAL RESPONSIBILITIES
1. All Participants. Each Participant agrees to:
a. Maintain.secure computer connections to the shared broadband minimum
infrastructure configuration in accordance with the Procedures Manual .
b. Use the shared Wide Area Network in a manner that will not impair other
Participants' use of the Wide Area Network and the Internet connection.
C. Meet on a regular basis, or as required, with all Participants in this
Agreement to establish and modify procedures for use of the shared
broadband channel and the Internet connection. The group shall be called
the Broadband User's Group.
d. Appoint a person to act as a "Liaison' for this Agreement who shall have
authority to execute the Procedures Manual and any amendments to that
document and be the BUG Member.
IV. COMPENSATION
1. Initial Payment. All Participants shall contribute five thousand nine hundred
fifty-eight dollars and ninety-eight cents ($5958:98) ("Initial Payment") to be
included as a Participant in this Agreement. This will cover the initial cost of the
Internet server and firewall software. Any unexpended money will be retained
PAGE 2-INTERNET IGA JULY 12,1996 455 PM
and used to upgrade the server and associated hardware and software, as
authorized by majority vote of BUG members.
2. New Participant(s). Any new party that wishes to become a Participant in this
.Agreement must be approved by a majority of the existing Participants and
must pay an initial fee to be defined at time of application. This payment will
be required regardless.of the length of time remaining in this Agreement.
3. Ongoing Maintenance. All Participants agree to share equally in the on-going
costs of maintenance as well as maintaining a connection to the Internet. The
equipment including all hardware and software shall be listed in an attached
equipment schedule. The schedule shall be updated as new equipment is
purchased.
4. Initial Payment Refund. The Initial Payment is nonrefundable regardless of the
withdraw of participation by any Participant or termination of this Agreement.
V. ACCOUNTING AND FINANCIAL MANAGEMENT
1. City of Hillsboro responsibilities. The City of Hillsboro will:
a. All expenses will be paid by the City of Hillsboro. The City of Hillsboro
will invoice the other participants as outlined in IV. 3., including a copy of
the original invoice.
b. Follow accounting and financial management procedures as outlined in
the Procedures Manual and in accordance with its purchasing rules.
Should there be a conflict between the Procedures Manual and its
purchasing rules, the purchasing rules shall prevail.
2. Participant responsibilities. All maintenance expenses incurred by the
Participants on their own equipment; that is not identified on the Attachment,
are the responsibility of the respective Participants. All invoices relating to
expenses for hardware/software maintenance or troubleshooting consulting on
the equipment identified in the Attachment will be submitted to the City of
Hillsboro. Any changes to maintenance rates and Internet connection must be
brought to the BUG meeting for prior approval. Any Participant may dispute
troubleshooting consulting expenses. This dispute may be referred and voted
upon at the next BUG meeting.
VI. PROCEDURES MANUAL AND BUG MEETINGS
1. Preparation. A separate document referred to as the "Procedures Manual" will
be prepared and used in conjunction with this Agreement by the BUG. The
PAGE 3-INTERNET IGA JULY 12,1996 0A55 PM
Procedures Manual is intended to provide operational definitions for Participant
responsibilities in a format that can be changed as needs are identified over
time.
2. Amendment. The Procedures Manual may be amended at any meeting of the
BUG by two-thirds vote of those Members present, provided notice of such
amendments has been given in writing to all Members at least two weeks prior
to this meeting.
3. Review. The Procedure Manual shall be reviewed annually.
4. BUG Members. Each Participant shall have one voting Member of the BUG.
5. Quorum Requirements. Unless otherwise stated in this Agreement, a quorum
(one half plus one) of Members is required for any formal action at a BUG
meeting.
VII. EQUIPMENT
1. Ownership. All equipment and software shall be owned jointly by each
Participant in equal proportion.
2. Future' Use. The equipment and associated software acquired (excluding
Section 11. 2. and 4.) during the course of this Agreement shall be made available
to all Participants that wish to renew this Agreement. If no agreement can be
obtained that is mutually satisfactory to allthe Participants, it will be agreed that
all the equipment and software purchased during the course of this Agreement
will be sold. If any Participant indicates an interest in purchasing the
equipment/software, a meeting will be called for all the Participants. Each
Participant can submit a sealed bid for all the hardware/software purchased
under this Agreement. The highest sealed bid will have ownership of the
hardware/software. If no sealed bids are obtained, the City of Hillsboro will be
asked to sellthe hardware/software to a third party and distribute the money
received in equal proportion to all Participants. Any funds remaining in the
account will be divided equally among the participants.
VIII. GENERAL PROVISIONS
1. Term of the Agreement. The term of this Agreement shall be from execution by
each party through and including June 30,2001.
2. Reviewed. This Agreement may be reviewed annually by the Participants.
PAGE 4-INTERNET IGA JULY 12,1996 455 PM
3. Amendment. This Agreement may be amended by mutual agreement of all
Participants.
4. Personnel. All personnel authorized to perform work or any functions under
this Agreement shall remain the employee of its original employer regardless of
the work or functions performed pursuant to this Agreement
5. Indemnification. Within the limits of the Oregon Tort Claims Act, each
Participant will indemnify and hold each other harmless from and against any
and all claims for bodily injury or property damage arising out of the
negligence of its employees or agents.
6. Termination. This Agreement may be terminated by mutual consent of all
Participants.
7. Withdrawal. Any Participant may withdraw from participation by providing
60 days written notice to each other Participant. The withdrawing Participant
will be responsible for all expenses incurred to the effective date of withdrawal.
The Participants hereby accept the terms and conditions of this Agreement:
City��f sboro:
Gordon Faber Ma or - w
Signature Printed Name Dane
Gail Waibel 9ft Recorder
ignature Printed Name Date
Washington County:
Linda B. Peters 10-Z2-,16
Signature Printed Name Date
APPROVED WASHINGTON COUNTY
APPROVED AS TO FORM BOARD OF COM//MISSIOO��NERS
MINUTE ORDER N .. 6........../y/...........
DATE .........................�tiHE
ASSISTANT COUNTY COUNSEL ,,,
FOR WASHINGTON COUNTY, ORE. sw&A- �Y�a- ••••
CLERK OFAAD
PAGE 6-INTERNET IGA JULY 12,1996 AD AM
City of Lake Oswego:
'�• Alice L. Schlenker, Mayor Sept 16, 1996
Signature Printed Name Date
Authorized by Resolution 96-43 approved Sept 3 , 1996
City of Tigard:
✓AA4
Si ture Printed Name Date
Tuala ' Valley Water District:
Jesse Lowman August 22 , 1996
Signature Printed Name Date
'PAGE 6-INTERNET IGA JULY 12,19964:Q AM
• J
APPENDIX A
LIST OF PARTICIPANTS
City of Hillsboro
Washington County Support Services
Washington County- Cooperative Library Services
City of Tigard
City of Lake Oswego
Tualatin Valley Water District
PAGE 7-INTERNET IGA JULY 1211996,4:55 VM
-.:RESOLUTION-96-43
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE OSWEGO
AUTHORIZING THE MAYOR TO SIGN AN INTERGOVERNMENTAL AGREEMENT
WITH THE CITY OF HILLSBORO AND OTHERS, KNOWN AS THE BROADBAND
USERS GROUP,FOR INTERNETSERVICES`.
WHEREAS,The City of Lak&Oswego'and•the City of Hillstioro an d-others';'are desirou&of..
initiating and maintaining a relationship for Internet services; and,
WHEREAS, it is necessary for.the City and the City of Hillsboro and others to execute and enter
into an agreement in order to establish and continue-this relationship;
NOW THEREFORE, BE IT RESOLVED by the City Council of the City of Lake Oswego that:
Section 1. The City Council of the City of Lake Oswego authorizes the Mayor to execute on
behalf of the City of Lake Oswego the intergovernmental agreement with the City of Hillsboro
and others for Internet services, attached hereto as Exhibit A.
Considered and enacted at a regular meeting of the City Council of the City of Lake Oswego at a
regular meeting held on the 3rd day of September 91996.
AYES: Klamaer, Mayor Schlenker, Chrisman, Anderson, Atherton, Puskas, Prosser
NOES: None
ABSTAIN: None
EXCUSED: None
Alice Schlenker
Mayor
ATTEST:
sti Hitchcock
City Recorder
ZAPOVED AST .
City Attorney's Office
Vii���4R b�R�✓��P��3 c��, frrr-�F T� p t3ctiv 7`/6�`t /A.'� �� ,✓ fi .d�XJ
PM
-141L
J�t�✓ M v G fr AA
7
I Pc. 7v CM-rt l S
Vow Pv;S
SUPPLEMENTAL AGREEMENT
DATED AS OF JUNE 20, 1995
BY AND AMONG
COLUMBIA ASSOCIATES, L.P.,
COLUMBIA INTERNATIONAL, INC.,
COLUMBIA CABLE OF OREGON,,
WILLAMETTE CABLE TV, INC.,'
LIBERTY OF GREENWICH, INC.,
TCI WEST, INC.,
TCI/CI MERGER SUB CORP.,
TCI/CA MERGER SUB CORP.
If-Ull-NIVNORRIM9050051 3U'01 IJMIIIA.IXX*\'I*('ISIJI'1'1_A(i5
TABLE OF CONTENTS
ARTICLE l - GLOSSARY OF DEFINED TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . 4
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 2 - DESCRIPTION OF TRANSACTIONS . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 29
2.1 Preliminary Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
2.2 Redemption Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . 32
2.3 Intermediate Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . . . . . . 32
2.4 Cl Purchase and Merger Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE 3 - ASSETS: EXCLUDED ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 '
3.1 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.2 Excluded Assets . . . . . . . . . . . : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
ARTICLE 4 - CONSIDERATION. ADJUSTMENTS AND ALLOCATIONS . . . . . . . . . . . . 37
4.1 - CA Merger Consideration . . . . . . . . . . . ... . . . . . . . . . . . . . . . . . . . . . . . . . . 37
4.2 Composition and Payment of CCW Minority Interest Amount, Cl Purchase
Consideration, CA Merger Consideration and Escrow Deposits . . . . . . . . . . . . 37
4.3 Computation of CA Liquidation Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.4 Computation of Value of Non System Assets . . . . . . . . . . . . . . . . . . . . . . . . . . 43
4.5 Computation of Cl, Holder and LGI Shares . . . . . . . . . . . . . . . . . . . . . . 43
4.6 Computation of Willamette Value and Willamette Per Share Value . . . . . . . . . . 44
4.7 Consideration Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
4.8 Final Determination of Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
4.9 Payment and Performance of Liabilities and Obli atg ions . . . . . . . . . . . . . . . . . 5.1
4.10 Additional Provisions With Respect to Intermediate Transaction . . . . . . . . . . . . 52
ARTICLE 5 - CLOSING.TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
5.1 Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
5.2 Closing Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
5.3 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . : . . . . . . . . . 66
6.1 Representations and Warranties of the Partnership and CI . . . . . . . . . . . . . . . . . 66
6.2 Representations and Warranties of the TCI Parties . . . . . . . . . . . . . . . . . . . . . . 83
ARTICLE 7 - ACTIVITIES PRIOR TO CLOSING . . . . . . . . . . . . . . . . . . : . ... . . . . . . . . . . 85
7.1 Covenants of the Partnership and Cl . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . 85
7.2 Hart-Scott Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
7.3 Regulatory and Other Matters: Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
7.4 TCI Parties' Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
Ili\CIJIsNIVNORRIS\90500515\COLl1Mi)IA.IXX1'1'(:IS111'1'LA(i5 — 1 —
ARTICLE 8 - CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
8.1 Conditions to the Obl4zations of the TCI Parties to Consummate the
Redemption Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100
8.2 Conditions to the Obligations of the TCI Parties to Consummate the Cl
Purchase and Merger Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
8.3 Conditions to Obligations of the Partnership and Cl to Consummate the
Redemption Transaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104
8.4 Conditions to Obligations of the Partnership and Cl to Consummate the CI
Purchase and Merger Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
ARTICLE 9 - INDEMNIFICATION . . . . . . . . . . . 107
9.1 Indemnification by Cl and the Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
9.2 Indemnification by the TCI Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
9.3 Defense of Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
9.4 Limitation of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
ARTICLE 10 - CASUALTY OR LOSS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116
ARTICLE 11 - Cl WAIVER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
ARTICLE 12 - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
12.1 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
12.2 Survival of Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 118
.12.3 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . . . . . . . . . . 118
12.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119
12.5 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . 120
12.6 Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
12.7 Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. . . . . . . 120
12.8 Captions . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . 121
12.9 Certain Additional Obligations of the Representative; Representative
Liability` . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
12.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
12.11 Choice of Law . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
12.12 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 125
12.13 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... . . . . . . . . 125
11ACINNIVNORRIM905W515\C01 11MIIIA.IXX 1TC15111'1'l.A(;S
EXHIBITS
Exhibit 2.1(a) - Form of Amendment to the Partnership Agreement
Exhibit 2.1(c) - Form of Amendment to CCO Partnership Agreement
Exhibit 4.2(a) - Form of Closing Escrow Agreement
Exhibit 5.2(a)(vii) - Form of Opinion of Messrs. Rubin Baum Levin Constant and
Friedman
Exhibit 5.2(a)(viii) - Form of Opinion of Messrs. Cole, Raywid and Braverman
Exhibit 5.2(b)(viii) - Form of Noncompetition Agreement
Exhibit 5.2(c)(ii) - Form of Opinion of General Counsel to TCI and TCI Parties
SCHEDULES
SCHEDULE A - SYSTEMS
SCHEDULE 1.1 - ACCOUNTS WHICH PAY AFTER2 MONTHS
SCHEDULE 4.9(b) - PERSONS RECEIVING FREE OR REDUCED PRICE
CABLE TELEVISION SERVICE
SCHEDULE 6.1 - DISCLOSURE SCHEDULE
SCHEDULE 6.2(b) - TCI CONSENTS
IIAO ?NIVNORRIM90500515U:O1.l1Mll1A.1XX17'ClSlll'PL.A(15
SUPPLEMENTAL AGREEMENT
SUPPLEMENTAL AGREEMENT(the "Agreement"), dated as of June 20, 1995, by
and among Columbia Associates, L.P., a Delaware limited partnership (the "Partnership"), Columbia
International, Inc., a Delaware corporation and the.managing general partner of the Partnership
("CI"), Columbia Cable of Oregon, a Delaware general partnership ("CCO"), Willamette Cable TV,
Inc., an Oregon corporation ("Willamette"), Liberty of Greenwich, Inc., a Colorado corporation
("LGI"), TCI West, Inc., a Delaware corporation ("TCI"), TCI/CI Merger Sub Corp., a Delaware
corporation ("Cl Acquisition Sub"), TCI/CA Merger Sub Corp., a Delaware corporation ("CA
Merger Sub").
WITNESETH:
WHEREAS, the Partnership is a Delaware limited partnership which is organized and
existing pursuant to the terms of that certain Amended and Restated Agreement of Limited
Partnership, dated as of June 2, 1992, among CI, LGI, and the limited partners named therein'(as such
agreement may hereinafter be amended or modified, the "Partnership Agreement"), all terms used
herein, and not otherwise defined herein, shall have the same meaning that such terms have in the
Partnership Agreement;
WHEREAS, LGI is the- holder of approximately 240 Units (as defined in the
Partnership Agreement)of the Partnership(the"LGI Units"), representing approximately 40% of the
outstanding Units of the Partnership;
I1:\(I.IF.N7VNORRIS190500515\COI.1)MIIIA.I)WI'CISUPYI..A05
WHEREAS, CI and LGI are the general partners of the Partnership (collectively, the
V
"General Partners") and, pursuant to Subsection 11.7 of the Partnership Agreement, LGI is entitled
to I%of all Distributions and allocations of Net Income and Net Loss to the General Partners under
the Partnership Agreement(the"LGI GeneralPartnership Interest"), with the balance of 99% of such
Distributions and allocations to be paid and allocated to CI;
WHEREAS, the Partnership is currently the owner of. (i) certain cable television
systems located in Prince William County, Virginia(collectively, the "Virginia System"), (ii) certain
cable television systems located in the vicinity of Ann Arbor, Brighton and Ypsilanti, Michigan
(collectively, the "Michigan System"), (iii) certain cable television systems located in the vicinity,of
Carson City, Nevada,(collectively, the "Nevada System"), (iv) 99% of the partnership interests of
Columbia Cable of Washington("CCW"), with 1% of such.partnership interests being owned by CI,
and(v)79.9423%of the outstanding partnership interests of CCO,with 14.2857% of the.outstanding
partnership interests of CCO being owned by LGI and 5.7720% of the outstanding partnership
interests of CCO being owned by Columbia/JH Oregon Cable, L.P., a Delaware limited partnership
("JH Oregon"), which is, in turn, owned I%by the Partnership and 99%by John Hancock Mutual
Life Insurance Company ("John Hancock");
WHEREAS, CCO is currently the owner of 100% of the outstanding common stock
of Willamette(the common stock of Willamette being herein referred to as "Willamette Stock");
WHEREAS, Willamette is the owner of cable television systems located in the vicinity
of Beaverton, Oregon (collectively, the "Oregon System");
WHEREAS, CCW is the owner of certain cable television systems located in the
vicinity of Vancouver, Washington (collectively, the "Washington System");
Il:\CI.W.NNNORRIS\90500515\COIAJMIIIA.IX)Cn'1'CISUI'I'1_AOS - 2
WHEREAS, the parties hereto desire to effect certain transactions with respect to the
Partnership and CCO, including the distribution of certain shares of Willamette Stock to LGI in
redemption of its interests in the Partnership and the other transactions more particularly described
herein,to wit: (i)the Michigan System shall be sold to a third party, (ii)the Partnership shall assume
certain indebtedness of CCO to Willamette, such assumption to be deemed a capital contribution by
the Partnership to CCO in the amount of the indebtedness so assumed, and to result in an increase
in the Partnership's capital account balance in CCO, (iii) the Partnership shall assume certain
indebtedness owed by Willamette under the Credit Agreement (as hereinafter defined) in
consideration of the cancellation of the indebtedness owed by CCO to Willamette assumed by the
Partnership and the issuance to the Partnership of additional shares of Willamette Stock, (iv) the
Partnership shall purchase the limited partnership interest of John Hancock in JH Oregon, (v) CCO
shall be liquidated, and simultaneously therewith CCO will pay or provide for its remaining liabilities
and obligations and the assets of CCO, consisting of shares of Willamette Stock, shall be distributed
to the partners of CCO in accordance with their respective capital account balances, (vi) the
Partnership shall redeem the LGI Units and the LGI General Partnership Interest, and LGI shall be
distributed in respect of such redemption of the LGI Units and the LGI General Partnership Interest,
such number of shares of Willamette Stock held by the Partnership which shall have an aggregate
value equal to the LGI Redemption Value (as hereinafter defined), (vii)the Virginia System shall be
sold to a third party, (viii) Cl Acquisition Sub shall purchase the CI Partnership Interest (as defined
herein)for the Cl Purchase Consideration (as defined herein)and the CI/CCW Partnership Interest
(as defined herein) for the CCW Minority Interest Amount(as defined herein), and (ix)the holders
of Units in the Partnership remaining after the redemption of LGI shall transfer their interests in the
HACIMMUNORIM9050051 s%oI.uMIIIA.Ixxx,risuiqI..ncs - 3 -
Partnership,. in exchange for certain consideration and TCI shall acquire all of the Units in the
Partnership other than those previously held by LGI;
WHEREAS, in order to effect certain of such transactions, the Partnership, TCI, and
CA Merger Sub are entering into a Merger Agreement, dated as of the date hereof(the"CA Merger
Agreement"), pursuant to which CA Merger Sub will be merged with and into the Partnership and
the holders of Units will receive for their Units the CA Merger Consideration; and
WHEREAS, the Partnership, TCI, and CA Merger Sub desire to enter into this
Agreement to effect the transactions described above and to set forth certain provisions with respect
to the computation of the CA Merger Consideration and the adjustments thereto, to make certain
representations, warranties, covenants and agreements in connection with the.CA Merger, to fix the
closing date for and to prescribe various conditions.to the consummation of the CA Merger, and to
provide for certain indemnities in connection therewith.
NOW, THEREFORE, in consideration of the representations, warranties, covenants,
agreements and indemnities contained in this Agreement, the parties agree as follows:
ARTICLE l
GLOSSARY OF DEFINED TERMS
1.1 Definitions. As used herein, the following terms shall have the following meanings
(terms defined in the singular to have the same meanings when used in the plural and vice versa):
"Accounts Receivable" shall mean all amounts owed as of the close of business on the Merger
Closing Date from subscribers to the Systems for services rendered to such subscribers through the
H:\CI,W.NIVNORRIS\90500515\COI.UMIIIA.IX)C\'1'CISUI'17..AGS - 4
Merger Closing Date but shall not include any portion of a subscriber account which is in dispute as
of the close of business on the Merger Closing Date.
"Additional CA Amount" shall mean the sum of$217,000.
"Additional CI Amount" shall mean the sum of$10,000.
"Affiliate" shall mean, as to any Person, any other Person that directly, or indirectly through
one or more intermediaries controls, or is controlled by, or is under common control with, such
Person.
"Agreement" shall have the meaning set forth in the introductory paragraph hereto.
"Annualized Operating Income Amount" shall mean the Operating Income Amount for the
last three complete calendar months most recently completed as of the Merger Closing Date,
multiplied by four.
"Approved Additional Capital Expenditures" shall mean all expenditures in respect of any one
or more of the Systems, other than Ordinary Course Capital Expenditures, made or committed to be
made by the System Owners during the,period from the date of this Agreement through the Merger
Closing Date (and expenditures in respect of the capital projects described in Part XVI. I. of the
Disclosure Schedule) in respect of capital assets or which, under generally accepted accounting
principles, would be classified as capital expenditures, provided however, that an expenditure in
respect of any of the Systems shall not be treated as an Approved Additional Capital Expenditure for
purposes of this Agreement unless TCI shall have approved in writing at any time prior to the Merger
Closing Date,the acquisition of the capital assets or the general capital program in respect of which
such capital expenditure was incurred, and the aggregate amount of any Additional Approved Capital
Expenditures shall not exceed the aggregate amount so approved by TCI in respect of such assets or
HACIRMIMORRISM50051S\COI.l7M111A.1X)M'ICISUYI9..AGS - 5
program(or set forth in Part XVI. I. of the Disclosure Schedule, in the case of the projects described
therein).
"Assets" shall mean the Nevada Assets, the CCW Assets, and the Willamette Assets.
"Assumed Liabilities" shall have the meaning set forth in Section 4.9.
"Bank Debt Amount" shall mean the sum of the CA Bank Debt Amount and the Willamette
Bank Debt Amount.
"Billing Period" shall mean, as to any System or portion thereof, the period of one month
ending on the last day(or "cut-off date"), covered by the monthly accounts receivable aging report
with respect to such System or portion thereof regularly prepared for the System Owners by Cable
Data(a/k/a U.S. Computer Systems).
"Business Day" shall mean any day (other than a day which is a Saturday, Sunday or legal
holiday in the City of New York) on which commercial banks and securities..-exchanges are open for
business in the City of New York.
"CA Bank Debt Amount" shall mean, as of any date of determination, the aggregate
outstanding borrowings made by the Partnership under the Credit Agreement,.together with accrued
and unpaid interest thereon and any other sums or amounts owing in respect thereof. In addition, if
there shall be due and owing any other amount under the Credit Agreement or with respect to the
termination thereof or any interest rate exchange or "swap" agreements entered into with respect to
the indebtedness thereunder, then there shall be included in each of the Willamette Bank Debt
Amount and the CA Bank Debt Amount, a pro rata portion of such amounts(computed based on the
outstanding principal amounts of the Willamette Bank Debt Amount and the CA Bank Debt Amount).
11AC1J0 MMNORRIM9030031S\COI.IIMIIIA.IXX'\'I'C13111'1'l..A(i3 - 6 -
"CA Escrow Portion" shall mean the respective portions of the Indemnification Escrow
Amount and Dispute Escrow Amount to be funded out of the CA Merger Consideration.
"CA Liquidation Value" shall be calculated as of the Merger Closing Date and shall equal: (i)
the sum of(a) $300,000,000, (b) the Virginia Closing Date Proceeds and (c) the net value of the
assets of the System Owners and CCO, described in and computed pursuant to Section 4.4 below;
minus (ii) the sum of(a) the Bank Debt Amount, as of the Merger Closing Date, (b) the LGI
Willamette Value, (c) the CCW 'Minority Interest Amount, (d) the greater of the Subscriber
Adjustment Amount and the Operating Income Adjustment Amount, (e) any remaining amount
payable by the Partnership to John Hancock in respect of the purchase by the Partnership of John
Hancock's interest in JH Oregon and (f) the Reserve Amount; and plus or minus (iii) the Net
Proration Amount.
"CA Merger" shall mean the merger of CA Merger Sub with and into the Partnership pursuant
to the CA Merger Agreement.
"CA Merger Agreement" shall have the meaning set forth in the recitals to this Agreement.
"CA Merger Consideration" shall have the meaning set forth in Section 4.1 below.
"Cable Act of 1992" shall mean the Cable Television Consumer Protection and Competition
Act of 1992.
"Calculation Date" shall mean, as to any System or portion thereof, the last day of the Billing
Period most recently completed prior to the Merger Closing Date.
"Casualty Adjournment" shall have the meaning set forth in Section 5.1.
"CCM" shall have the meaning set forth in Section 2.1(b).
"CCO" shall have the meaning set forth in the introductory paragraph hereto.
11pct.n:xtvHowzts9050051SWOLUM)In.IXX MISUTI_nas - 7 -
TCO Debt Amount" shall have the meaning set forth in Section 2.l(c)(i).
TCO Partnership Amendment" shall have the meaning set forth in Section 2.l(c)(i).
"CCW" shall have the meaning set forth in the recitals hereto.
"CCW Assets" .shall mean the assets, rights and properties of CCW which are used in
connection with the ownership and operation of the Washington System, as more particularly
described in Section 3.1 below.
"CCW Minority Interest Amount" shall mean the sum of$1,137,000, which shall represent
the agreed value of the CI/CCW Partnership Interest.
"CCW Partnership Interests" shall mean the CI/CCW Partnership Interest and the 99%
general partnership interest of the Partnership in CCW.
"Cl" shall have the meaning set forth in the recitals hereto.
"CI/CCW Partnership Interest" shall mean the 1% general partnership interest of CI in CCW.
"CI Common Stock" shall mean the common stock, par value $0.01 per share, of CI.
"CI Escrow Portion" shall mean the respective portions of the Indemnification Escrow
Amount and Dispute Escrow Amount to be funded out of the CI Purchase Consideration.
"CI Purchase Consideration" shall mean the sum of(i) the CI Share of the CA Liquidation
Value, and (ii)the Additional CI Amount.
"CI Partnership Interest" shall mean the general partnership interest of CI in the Partnership.
"CI Purchase and Merger Transactions" shall have the meaning set forth in Section 2.4.
"Cl Share" shall mean the percentage computed pursuant to Section 4.5 below.
"CI Stockholders" shall mean the holders of record of the CI Common Stock.
"Closing Escrow Agent" shall have the meaning set forth in Section 4.2(a).
11ACIMMUNORRIS\9050051S\COI.I)Ml)IA.1XX'\'I'CISIII'YI..ACS - 8
"Closing Escrow Agreement" shall have the meaning set forth in Section 4.2(a).
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Cole Raywid" shall mean Cole, Raywid & Braverman, communications counsel to the
Partnership.
"Communications Act" shall have the meaning set forth in Section 6.1(o).
"Consideration Certificates" shall have the meaning set forth in Section 4.7(b).
"Continental" shall have the meaning set forth in Section 2.1(b).
"Continuing Employees" shall mean those Employees who continue to be employed by a
System Owner or CCO or TCI or any affiliate of TCI after the Merger Closing Date, or who are
given the opportunity tobe employed after the Merger Closing Date by any of the foregoing in the
same general geographic location in which they were employed prior to the Merger Closing Date.
"Credit Agreement" shall mean the Second Amended and Restated Credit Agreement, dated
as of June 2, 1992, among the Partnership and Willamette, as borrowers, and the banks party thereto,
together with any amendments thereto described on Annex D to the Disclosure Schedule or entered
into after the date hereof in accordance with the provisions of Section 7.1(h).
"Delinquent Account" shall mean, as of any date of determination thereof, an account which
has failed to pay an amount billed for cable service within two months of the first day of the period
covered by such bill, or, with respect to the accounts listed on Schedule 1.1, within the time periods
specified therein, and which amount remains unpaid as of such date of determination. An account
will not be deemed a Delinquent Account merely due to accrued and unpaid interest or late or service
charges or due to amounts which are in dispute.
"Designated Accountant" shall have the meaning set forth in Section 4.8(c).
II:1CIRNTUNORRISMS00515\C01.11MIIIA.1XXAIr-1SU1T1..A05 - 9
"DGCL" shall mean the Delaware General Corporation Law.
"Disclosure Schedule" shall have the meaning set forth in Section 6.1(a).
"Dispute Escrow Amount" shall have the meaning set forth in Section 4.2(a).
"Employees" shall mean all employees of any System Owner, CCO or CI.
"Environmental Law" shall mean any Legal Requirement relating to pollution or protection
of public health and safety or the environment, including those relating to emissions, discharges,
releases or threatened releases of Hazardous Substances into the environment (including ambient air,
surface water, ground water or land), or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of Hazardous Substances.
"Equivalent Subscriber Number" shall mean the number of Equivalent Subscribers to the
Systems on the Calculation.Date.
"Equivalent Subscribers" shall mean, as at any date of determination thereof and as to any
System, the total number of equivalent households served by such System (including individual
households as well as subscribers.served on a bulk-billing or commercial account basis), which shall
be deemed to be equal to the quotient obtained by dividing (a) the total fees and charges for
"broadcast" and/or "expanded" basic service billed by the System for the Billing Period ending on the
Calculation Date in respect of such System, excluding installation and other non-recurring charges,
additional or secondary outlet or connection charges; pay service charges, and pass-through charges
for sales tax, line-itemized franchise fees and the like (collectively, "Excluded Charges"), by(b)the
standard monthly charge for "expanded" basic service (without discount of any kind and excluding
Excluded Charges)that individual residential subscribers to such System were billed in respect of such
Billing Period. In calculating Equivalent Subscribers no sums shall be included in clause(a) above
11ACLIErnvNoxws\9050051MCO.uMu ADOOMISUM..nas _ 10 -
with respect to any account: (i)which constitutes a "Delinquent Account" as of the Calculation Date
for such System, (ii) of a subscriber that has received less than one month's "broadcast" or
"expanded" basic service as of the Calculation Date for such System and has not paid for at least one
month's service as of the Calculation Date for such. System, (iii) of a customer who, as of the
Calculation Date for such System, is a "pending disconnect," or (iv) of a customer who became a
subscriber to the System within the period of 60 days prior to the Calculation Date for such System
as a result of extraordinary marketing techniques, it being agreed that the marketing techniques and
programs described in Part XV of the Disclosure.Schedule attached hereto shall not be considered
"extraordinary marketing techniques" for purposes of this clause(iv).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as the same may
be amended from time to time, and the regulations promulgated thereunder.
"Excluded Assets shall mean the assets described in Section 3.2 hereof.
"Excluded Michigan Agreements" shall have the meaning set forth in Section 5.2(a)(xix):
"Excluded Vir►in€, is Agreements" shall have the meaning set forth in Section 5.2(a)(xviii).
"Excluded Liabilities" shall have the meaning set forth in Section 4.9.
"Extension Franchises" shall have the meaning set forth in Section 7.1(f).
"FAA" shall mean the Federal Aviation Administration.
"FCC" shall mean the Federal Communications Commission.
"FCC Licenses" shall mean all licenses, permits, and authorizations issued by the FCC in
connection with and.used in the operation of any System.
"Final Order" shall mean an order of a governmental authority (i) as to which the time for
filing a request for administrative or judicial relief, or for instituting administrative review sua sponte,
II:\CIAi91VNORRIS\90500515\COId)MIIIA.IX)C\'1'CISill'1'1_AG3 - I I
shall have expired without any such filing having been made or notice of such review having been
issued; or(ii)in the event of such filing, or review sua sponte as to which such filing or review shall
have been denied, dismissed, withdrawn or abandoned and the time for seeking further relief or for
instituting further administrative review sua sponte with respect thereto shall have expired without
any request for such further relief having been filed or notice.of such review having been issued.
"Financial Statements" shall initially mean the Partnership's audited consolidated financial
statements for the year ended December 31, 1994, and the Partnership's unaudited consolidated
financial statements for the three months ended March 31, 1995, including balance sheets and related
statements of income, partners' equity and cash flows; provided, that for purposes of the
representations and warranties•of the Partnership in Section 6.1(1)to be made as of the Redemption
Closing Date, Financial' Statements shall also include all other financial statements required to be
delivered by the Partnership pursuant to Section 7.l(i).
"Franchises" shall mean the ordinances, resolutions, certificates of approval. and other
governmental approvals issued by state and local governmental authorities authorizing construction
and operation of any System.
"General Partners" shall have the meaning set forth in the recitals hereto.
"Governmental Authority" shall mean (i) The United States of America, (ii) any state,
commonwealth,territory or possession of the United States of America and any political subdivision
.thereof(including cities, counties,,provinces, municipalities and the like), or(iii) any agency, authority
or instrumentality of any of the foregoing, including any court, tribunal, department, bureau,
commission, or board or any regulator of public utilities.
11ACIIHNNNORRIM9050051510,OI.11MIIIA.IX)CNI'CI5111'1'i_ACIS - 12 -
"Hart-Scott Act" shall mean the Hart-Scott Rodino Antitrust Improvements Act of 1976, as
amended.
"Hazardous Substances" shall mean any pollutant, contaminant or chemical, or any industrial,
toxic, hazardous or noxious substance or waste which is regulated by any Governmental Authority
pursuant to any Environmental Law, including (a) any petroleum or petroleum compounds(refined
or crude), flammable substances,explosives, radioactive materials or any other materials or pollutants
which pose a hazard or potential hazard to any Real Property or to Persons in or about the Real
Property or cause the Real Property to be in violation,of any Environmental Laws, (b) asbestos or
any asbestos-containing material, (c) polychlorinated biphenyls ("PCBs"), as regulated by the Toxic
Substances Control Act, 15 U.S.C.§ 2601 et sem.., (d) any materials or substances designated as
"hazardous substances" pursuant to the Clean Water Act, 33 U.S.C.§ 1251.et Se___1c .., (e) "economic
poison," as defined in the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C.§ 135 et seM .,
M "chemical substance," "new chemical substance" or "hazardous chemical substance or mixture"
pursuant to the Toxic Substances Control Act, 15 U.S.C.§ 2601 et meq._, (g) "hazardous substances
pursuant to the Comprehensive Environmental Response; Compensation, and Liability Act, 42
U.S.C.§ 9601 et mg. and (h) "hazardous waste" pursuant to the Resources Conservation and
Recovery Act, 42 U.S.C.§ 6901 et seq.
"Holder Share" shall mean the percentage computed pursuant to Section 4.5 below.
"Holders" shall mean the holders of Units (as defined in the Partnership Agreement) of the
Partnership.
"Indemnification Escrow Amount" shall have the meaning set forth in Section 4.2(a).
"Intermediate Transaction" shall have the meaning set forth in Section 2.3.
II:\CID.NIVNORR1S190500515\CO1.l1MIIIA.1XX1'l'CISlll'17_A(;S - 13 -
"JH Oregon" shall have the meaning set forth in the recitals hereto.
"JH Payment Amount" shall mean the amount to be agreed.upon by the Partnership and TCI
as the purchase price of the partnership interest of John Hancock in JH Oregon.
"John Hancock" shall have the meaning set forth in the recitals hereto.
"John Hancock Agreement" shall mean an agreement duly executed by John Hancock and in
form and substance reasonably satisfactory to TCI pursuant to which (i)John Hancock agrees to sell
to the Partnership on the Merger Closing Date its interest in JH Oregon free and clear of all liens, for
the purchase price specified therein, and (ii) John Hancock consents to the execution of the CCO
Partnership Amendment by JH Oregon.
"Jones" shall have the meaning set forth in Section 2.3 hereof.
"knowledge of the Partnership and/or CI" and variations thereon, shall be limited to the
knowledge of Cl and its officers and the knowledge of the respective System managers; and
representations and warranties made with respect to action taken or not taken by the Partnership, CI,
CCO and/or any System Owner shall be limited to action taken or not taken by CI and its officers as
the manager of the Systems and action taken by or not taken by the respective System managers.
"Leases" shall mean all leases and subleases, licenses, easements, grants, pole attachment and
conduit or trench agreements and other attachment rights and similar instruments under which the
applicable System Owner, CCO or CI has the right to use any real or personal property or rights of
way in connection with the ownership or operation of the Systems, and all leases, easements and
similar instruments pursuant to which a System Owner, CCO or CI has granted (i) any third party the
right to use any towers owned by-the System Owners and constituting a part of the Assets, or(ii) any
N:\CIAiNTUNORRIS\9050031StCOI.I'',b1111A.IXX71'1'CISIIPI'I..AO5 - 14 -
Governmental Authority the right to use any Real Property or material personal property constituting
a part of the Assets (except for such rights of use as may be set forth in the Franchises).
Teizal Requirement" shall mean any statute, ordinance, code, law, rule, regulation, order or
other requirement of any Governmental Authority which is applicable to the business, operations or
ownership of any of the Systems, System Owners, CCO or CI, including judicial decisions
interpreting or applying the same.
"LGI" shall have the meaning set forth in the introductory paragraph hereto.
"LGI General Partnership Interest" shall have the meaning set forth in the recitals hereto.
"LGI Redemption Value" shall equal the LGI Share of the CA Liquidation Value.
"LGI Share" shall mean the percentage computed pursuant to Section 4.5 below.
"LGI Units" shall have the meaning set forth in the recitals hereto.
"LGI Willamette Redemption Shares" shall mean the number of shares of Willamette Stock
held by the Partnership which are to be distributed to LGI pursuant to Section 2.2, and which shall
be determined by dividing the LGI Redemption Value by the Willamette Per Share Value.
"LGI Willamette,Value" shall mean the product of(i) the number of shares of Willamette
Stock to be distributed to LGI in connection with the liquidation of CCO and (ii) the Willamette Per
Share Value.
"Lien" shall mean any mortgage,lien, security interest, conditional sale or other title retention
agreement, pledge, option, charge, encumbrance, or any exception to or defect in title or other
ownership interest.
"Losses" shall have the meaning set forth in Section 9.1 and Section 9.2.
11ACL& tUNORRIM9osoosis\a)1d1MBIAD CNIVISUM..A05
"Material Adverse Effect" shall mean any matter which will materially and adversely affect
the business, Assets, condition(financial or otherwise)or results of operations.of the Oregon System,
taken as a whole, the Washington System,taken as a whole,.or the Nevada,System, taken as a whole.
"Material Agreements" shall have the meaning set forth in Section 6.l(f).
"Media Ventures Valuation Amount shall mean the sum of$1,300,000 minus the amount of
all distributions made by Media Ventures, L.P. to the Partnership during the period from the date
hereof through the date of the Partnership Consideration Certificate in respect of the Partnership's
interest in Media Ventures, L.P.
"Merger Closing" shall have the meaning set forth in Section 5.1.
"Merger Closing Date" shall have the meaning set forth in Section 5.1.
"Michigan Agreement" shall'have the meaning set forth in Section 2.1(b).
"Michigan n Dispute Escrow Amount" shall mean the amount held in any escrow established
and funded pursuant to Section 3.3(a) of the Michigan Agreement in respect of any dispute with
Continental thereunder, including all interest accrued thereon.
"Michigan Escrow Amounts" shall mean the Michigan Dispute Escrow Amount and the
Michigan Indemnification Escrow Amount.
"Michigan Indemnification Escrow Amount" shall mean the amount of up to $7,500,000
deposited in the escrow established and funded pursuant to Section 3.2(b)of the Michigan Agreement
in respect of possible claims of indemnification by Continental thereunder, including all interest
accrued thereon.
"Michigan System" shall have the same meaning set forth in the recitals hereto.
11AC11EN'IVN0RR13\90500515\COI.I)MIlIA.IXn'1'C1SlJPY1.Acs - 16 -
"Multiemplo ey r Plan" shall mean a plan defined as such in Section 3(37) of ERISA to which
contributions have been made by any System Owner, CCO or CI and which is covered by Title IV
of ERISA.
"Net Proration Amount" shall mean the amount computed pursuant to Section 4.3(c) below.
"Nevada Assets" shall mean the assets; rights and properties of the Partnership which are used
in connection with the ownership and operation of the Nevada System, as more particularly described
in Section 3.1 below.
"Nevada System" shall have the meaning set forth in the recitals hereto.
1984 Cable Act" shall mean the Cable Communications Policy Act of 1984.
"Noncompetition Agreement" means an agreement in the form attached hereto as Exhibit
5.2(b)(viii).
"Operating Income Adjustment Amount" shall mean the amount, if any, computed pursuant
to Section 4.3(b) below.
"Operating Income Amount" shall mean, for any particular period,the gross revenues from
operations of the System Owners in respect of the Systems, minus the:operating expenses of the
System Owners in respect of the Systems, all computed in accordance with generally accepted
accounting principles applied on a basis consistent with the Partnership's consolidated Financial
Statements and the Partnership's internal financial reports, but without deduction for interest charges
(including payments under interest rate swap or similar agreements), management fees and expenses,
federal or state income.taxes, depreciation, amortization, provision for minority interests or any other
non-cash charges and computed without taking into account (i)items of income or expense related
11:\Ci11:NiVNOKKIS\90500515\COI.))MMA.IXXXIVISUITLAUS - 17 -
to the Transactions, including Transaction Expenses, (ii)revenues or charges which are non-recurring
in nature, or(iii) interest income.
"Ordinary Course Capital Expenditures" shall mean any and all expenditures in connection
with the acquisition of a capital asset or expenditures which, under generally accepted accounting
principles, would be classified as capital expenditures, and which are necessary for the operation of
the Systems in the ordinary course:
"Oregon System" shall have the meaning set forth in the recitals hereto.
"Other Material Agreements" shall have the meaning set forth in Section 6.1(b).
"Other Permits" shall mean all approvals, authorizations, permits (including all permits issued
by the FAA("FAA Permits")to any System Owner, CCO or CI with respect to any towers included
within the Assets), licenses, easements, registrations, qualifications, variances.and similar rights
obtained from any Governmental Authority, other than the Franchises and the FCC Licenses, which
are material to the ownership and operation of any of the Oregon System, the Washington System,
or the Nevada System, taken as a whole.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity succeeding to
any or all of its functions under ERISA.
"Partners" shall have the meaning ascribed thereto in the Partnership Agreement.
"Partnership" shall have the meaning set forth in the introductory paragraph hereto.
"Partnership Agreement" shall have the meaning set forth in the recitals hereto.
"Partnership Amendment" shall mean an amendment' to the Partnership Agreement,
substantially in the form of Exhibit 2.1(a) hereto.
"Partnership Consideration Certificate" shall have the meaning set forth in Section 4.7(a).
tl:1CI1FiNlVNORR13190500515K:U1.UMI11A.1XX1'1'C1SU1'1'LACS 18
"Partnership Entities" shall have the meaning set forth in Section 9.2.
"Permitted Liens" shall mean`. (i) Liens imposed by law, such as carriers', warehousemen's,
materialmen's and mechanics' liens, that arise notwithstanding the belief of the applicable.System
Owner that it has complied with and fulfilled its obligations with respect to the matters or transactions
giving rise to such Liens, or Liens arising out of judlmlents or awards against any System Owner with
respect to which such System Owner shall currently be prosecuting an appeal or proceedings for
review or the time for doing so has not yet expired ("Judgment Liens"); (ii)Liens for taxes not yet
due and payable and Liens for taxes the payment of which is being contested or the time for doing
so has not yet expired ("Tax Liens"); (iii)to the extent reflected in the public records or to the extent
such wouldbe revealed by an accurate survey, the following: survey exceptions, minor encumbrances,
easements or reservations of, or rights of others for, rights of way, highway:and railroad crossings,
sewers, electric lines, telegraph and telephone lines and other similar purposes, or zoning or other
restrictions as to the use of real properties, or other defects in title, to the extent that such do not in
the aggregate materially detract from the value of a particular parcel of property or materially impair
its use in the operation of the affected System taken as a whole or(in the case of property owned in
fee simple) materially interfere with the ability of the relevant System Owner to convey good,
marketable and indefeasible fee simple title to such property; (iv)Liens incidental to the operation of
the Systems or to the ownership of property of a System which were not incurred in connection with
indebtedness of a System Owner, which Liens do not in the aggregate materially detract from the
value of said properties or materially impair their use in the operation of the affected System taken
as a whole ("Incidental Liens"); (v) rights of the franchisors under the Franchises to the extent the
same are set forth in the Franchises(except for rights of any franchisor under a Franchise to purchase
HACIRMUNORRIM90300515\C:0I.IIMBIA.1XXXI*CIS11PP1_AO5 - 19 -
any System or portion thereof as a consequence of the Transactions); and (vi) security interests,
mortgages and deeds of trust in or with respect to the Assets, or the CCW Partnership Interests, the
shares of Willamette Stock or partnership interests in the Partnership, CCO or JH Oregon, held by
the Partnership's bank lenders pursuant to the Credit Agreement, provided, that such security
interests, mortgages and deeds of trust will be released or terminated on the Merger Closing Date so
long as TCI shall pay or cause the Partnership to pay the Bank Debt Amount in full on such date, and
shall not(if such Bank Debt Amount is so paid)be a "Permitted Lien" for any purpose other than the
representations and warranties made in Section 6.1 as of the date of this Agreement.
Notwithstanding the foregoing, classification of any item as a Permitted Lien pursuant to clauses (i),
(ii), (iv)or(vi)of this definition will not affect the computation of any Net Proration Amount under
this Agreement or limit the liabilities relating to the period prior to the Merger Closing as to which
the TCI Parties are entitled to indemnification hereunder.
"Person" shall mean any human being, corporation, partnership, .trust, unincorporated
organization, association, limited liability company, Governmental Authority or other entity.
"Plan" shall mean any bonus, deferred compensation, profit sharing, pension or retirement,
stock'bonus, stock option, stock purchase, stock appreciation right, performance shares, bonus,
savings, severance, death benefit, disability, medical, hospitalization, life or other insurance and any
other incentive or fringe benefit plan or program,including,but not limited to, any "employee welfare
benefit plan" (as defined in Section 3(l) of ERISA) and any "employee pension benefit plan" (as
defined in Section 3(2) of ERISA).
Il,\CIM.MIVNORRIS\90500514\COI.IIMIIIA.IXX7\'I'CISUI'I'I_A(iS - 20 -
"Pole Rental Leases" shall mean permits and Leases under which any System Owner or CCO
has the right to use municipal or utility company, telephone or other poles, conduits or trenches for
the purpose of supporting or housing cables comprising an element of a System.
"Pre-Closing Tax Periods" shall mean any taxable period ending on or before the Merger
Closing Date (determined in accordance with Treasury Regulation § 1.1502-76(b), as amended by
Treasury Decision 8560), including the portion up to the Merger Closing Date of a period that begins
before and ends after the Merger Closing Date.
"Preliminary Transactions" shall have the meaning set forth in Section 2.1.
"Pro Forma Consideration Certificate" shall have.the meaning set forth in Section 7.1(n).
"Proportionate Share" shall have the meaning set forth in Section 9.l(c).
"PUC" shall mean the Public Utility Commission of Oregon.
"Rate Reduction Order" shall mean an order duly issued by the FCC or a local franchising
authority prior to the Merger Closing Date which requires a reduction in the aggregate rates,charged
to subscribers to any of the Systems for basic and expanded basic cable television service from the
j
average aggregate rates charged by the System Owners for such services during the period used to
calculate the Annualized Operating Income Amount and which reduction, if it were in effect for the j
period used to calculate the Annualized Operating Income Amount would cause such amount to be
greater than zero.
"Rate Regulatory Matters" shall mean any matter or any effect on any System Owner or
System, or the past, current or prospective business or operations thereof, arising out of or related
to(i)the provisions of the Cable Act of 1992 which deal with, limit or affect-the rates which may be.
charged by, and/or the service offerings or configurations which may be offered by, cable television
H:1CIE.NIVNORRIS\90500S1S\COI.UMIIIA.IXX'\TC1SiA'I'I..ACS - 21 -
i
systems to their subscribers(whether for programming, equipment, installation, service or otherwise),
or(ii) any regulations heretofore or hereafter adopted thereunder, or under any other federal, state
or local law, or regulation which so deals with, limits or affects rates, service offerings or
configurations.
"Real Property" shall mean all Assets consisting of a fee simple or leasehold interest in real
property, including the fee interests listed on Part VI of the Disclosure Schedule and the Leases of
real property listed on Part VI of the Disclosure Schedule.
"Redemption Closing" shall have the meaning set forth in Section 5.1.
"Redemption Closing Date" shall have the meaning set forth in Section 5.1.
"Redemption Transaction" shall have the meaning set forth in Section 2.2.
"Representative" shall mean Cl acting as the Representative hereunder and under the CA
Merger Agreement and the Closing Escrow Agreement.
"Representative Closing Certificate" shall have the meaning set forth in Section 4.8(a).
"Required Consents" shall mean the Required Franchise Consents, the Required FCC
Consents, the Required Other-Permit Consents, the Required Pole Rental .Lease Consents, the
Required Retransmission Consent Agreement Consents and the Required Other Consents.
"Required FCC Consents" shall have the meaning set forth in Section 6.1(b).
"Required Franchise Consents" shall have the meaning set forth in Section 6.l(b).
"Required Other Consents" shall have the meaning set forth in Section 6.1(b).
"Required_Other Permit Consents" shall have the meaning set forth in Section 6.I(b).
"Required Pole Rental Consents" shall have the meaning set forth in Section 6.L(b)..
nActn:rn ORRIs9050051scor.NIIIA.IX)CAUsurnt_ncs - 22 -
"Required Retransmission Consent Agreement Consents" shall have the meaning set forth in
Section 6.1(b).
"Reserve Account" shall mean a trust account in the name of the Representative, established
for the benefit of LGI, the Holders and CI, at Citibank,N.A. or such other bank as the Representative
shall designate in writing; at least three (3) days prior to the Redemption Closing Date, the funds in
which shall be used by the Representative for the purposes set forth in Section 12.9. The
Representative shall have the duties and obligations in respect of the Reserve Account, and shall
dispose of any excess funds remaining therein, as set forth in Section 12.9 below.
"Reserve Amount" shall mean the amount of $2,000,000 (or such other amount as the
Representative and TO shall agree on), which is to be deposited by TCI on the Merger Closing Date
in the Reserve Account on behalf of the Partnership.
"Retention Period" shall mean the period commencing on the Merger Closing Date and
ending on (i) the date which is two years from the Merger Closing Date or(ii) in the event a claim
or claims.shall be pending under this Agreement or the Closing Escrow Agreement on the date which
is two years from the Merger Closing Date, the earlier to occur of(x)the date on which such claim
or claims are finally resolved or(y) the date which is three years from the Merger Closing Date.
"Retransmission Consent Agreements" shall mean the agreements or consents executed or
delivered as contemplated pursuant to Section 6 of the Cable Act of 1992 permitting the
retransmission of signals of certain broadcasting,stations over the Systems.
"Rubin Baum" shall mean Rubin Baum Levin Constant & Friedman, counsel to the
Partnership, CI and the Representative.
"RULPA" shall mean the Delaware Revised Uniform Limited Partnership Act.
11 SCIRNIVNORRIM9050051 S COI.l1M1AA.MCNI ISIA'YI..AGS - 23 -
"Securities Act" shall have the meaning set forth in Section 6.1(d).
"Selling Group" shall have the meaning set forth in Section 9.4(b).
"Selling,Party" shall mean CI, the Representative and any Holder other than LGI that agrees
or is deemed to have agreed, by its vote in favor of the CA Merger, to the provisions of Section 9.4
hereof or otherwise authorizes the Representative to deliver on its behalf an instrument, reasonably
satisfactory to TCI, pursuant to which such Holder agrees to the provisions of Section 9.4 hereof.
"Severance and Incentive Payments" shall mean discretionary bonuses as CI may determine
the Partnership shall pay.to Employees and severance payments as CI may determine to cause the
Partnership to pay to System Employees that are not Continuing Employees for a period of six
months after the Merger Closing Date (or are not otherwise given the opportunity to remain
Continuing Employees for at least such period), as set forth in or readily:determinable pursuant to the
provisions of an instrument to be delivered by CI to TCI at or prior to the Redemption Closing;
provided, however, that no Severance or Incentive Payment shall be made to any person who is a CI
Stockholder and the aggregate amount of the Severance and Incentive Payments shall not exceed the
sum of$2,000,000, unless TCI shall consent thereto.
"Subscriber Adjustment Amount" shall mean the amount, if any, computed pursuant to
Section 4.3(a) below.
"System" shall mean the Nevada System taken as.a whole, the Washington System taken as
a whole, or the Oregon System taken as a whole, all as more particularly described on Schedule A
attached,hereto, and any subsequent extensions thereof and additions thereto. References herein to
a System shall include all business conducted by such System in the geographic areas identified on
Schedule A and all facilities related to such System, including any separate networks for the provision
ll'\CIIFNNNORRIS140500515\CO1.UM111A.IXX t'IY7SUYYI..AG5 - 24 -
of telephone services, data transmission services or other non-cable television telecommunications
services.
"System Employees" shall mean all Employees primarily engaged in the conduct of the
business and operations of one or more of the Systems.
'.'System Owners" shall mean the Partnership, as the owner of the Nevada.System, CCW, as
the owner of the Washington System, and Willamette, as the owner of the Oregon System.
"System Plan" shall mean any Plan which the Partnership, CI, CCW, CCO or Willamette
sponsors or maintains for the benefit of or under which any of them has liability to make contributions
or to pay benefits with respect to, or which covers, any.Employees or former Employees of any of
them, including those Plans listed in Part XIII of the Disclosure Schedule.
"System tems" shall mean the Nevada System, the Washington System and the Oregon System,
collectively taken as a whole.
"TCI".shall have the meaning set forth in the introductory paragraph hereof.
"TCI Consideration Certificate" shall have the meaning set forth in Section 4.7(b).
"TCI Discrepancy Certificate" shall have the meaning set forth in Section 4.8(b).
"TCI Group" shall have the meaning set forth in Section 9.4(b)(ii).
"TCI Material Adverse Effect" shall mean any matter which will materially and adversely
affect the business, assets, condition(financial or otherwise) or results of operations of TCI and its
subsidiaries, taken as a whole.
"TCI Partv" or"TCI Parties" shall mean any and all of TCI, LGI, CI Acquisition Sub and CA
Merger Sub, and any permitted assignee thereof.
"TCI Party Closing Notice" shall have the meaning set forth in Section 5.1(a).
IIACIMMMORRISMSM51SXCOIAIMIIIn.IXX\'I'CISUPPI_nGS - 25 .
"Telephony Business" shall mean the provision of telecommunications services other than one-
way video as currently engaged in by the Partnership, CCO, Willamette and CCW; provided, that the
provision of telecommunications services over the "Public Communications Network" constructed
pursuant to and as required 'by the Franchise with the Metropolitan Area Communications
Commission, or any other network constructed in response to a.Franchise Requirement, shall not be
included in the definition of Telephony Business.
"Total Subscriber Number" shall mean the sum of(i)the Equivalent Subscriber Number, (ii)
the number of cable television subscribers to the Michigan System as of the closing date under the
Michigan Agreement, as computed in the same manner as set forth herein with respect to the
calculation of the number of Equivalent Subscribers, and (iii) the number of cable television
subscribers to the Virginia System as of the Calculation Date therefor, as.computed in the same
manner as set forth herein with respect to the calculation of the number of Equivalent Subscribers.
"Transaction Documents" shall mean this Agreement, the CA Merger Agreement and any
separate letter agreement executed among the Partnership, CI and TCI concurrently with the
execution of this Agreement.
"Transaction Expenses" shall mean all expenses and other amounts that are or are estimated
to be due and payable by the Partnership,CI, the Systems Owners, CCO or JH Oregon in connection
with.the Transactions and/or the termination, for federal income tax purposes, of the Partnership,.
CCO and/or JH Oregon, including, without limitation, the fees and other amounts payable to Waller
Capital Corporation, the Severance and Incentive Payments, reasonable legaland/or accounting fees
and expenses, and the reasonable compensation and expenses of the Representative and any persons
retained by the Representative to assist the Representative with respect to the completion of the post-
11:SCIENNNORRIM9050051S\CO1.t1MIII&I)M'I'CISUIIIII-AOS - 26 -
closing adjustments in respect of the Transactions and the preparation and review of final financial
statements, reports, tax returns and the like and resolution of any disputes in respect thereof or
otherwise arising under any Transaction Document or under the Closing Escrow Agreement or the
escrow agreements entered into pursuant to the Michigan Agreement and the Virginia Agreement
(including, without limitation, employees, consultants, attorneys and accountants), the taxes, fees,
transfer fees and other charges payable by the Partnership pursuant to Section 12.1 and all other
expenses payable by the Partnership, the Representative, Cl, the System Owners or CCO pursuant
to any Transaction Document; provided, that Transaction Expenses shall not include any
indemnification payment made by any party to a Transaction Document pursuant to the
indemnification provisions of a Transaction Document or any indemnification payment made pursuant
to the Michigan Agreement or the Virginia Agreement.
"Transactions" shall mean any or all of the Preliminary Transactions, the Redemption
Transaction, the Intermediate Transaction or the CI Purchase and Merger Transactions.
"Unapplied Michigan Proceeds" shall have the meaning set forth in Section 2.1(b).
"Unapplied Virginia Closing Date Proceeds" shall have the meaning set forth in Section 2.3.
"Virginia A reg ement" shall mean an agreement hereafter entered into by the Partnership and
Jones providing for the transfer of the assets and liabilities of the Partnership relating to the Virginia
System to Jones.
"Virginia Closing Date" shall have the meaning set forth in Section 2.3.
"Virginia Closing Date Proceeds" shall have the meaning set forth in Section 4.3(d).
"Virginia Dispute Escrow Amount" shall mean any amount (other than the Virginia
Indemnification Escrow. Amount) held in any escrow established and funded under the Virginia
HACURNIVNOMM9050051W01.IIMIUA.W011CIRM..AC5 - 27 -
Agreement, including amounts held in respect of any dispute with Jones regarding calculation of(or
post closing adjustments in respect of) the Virginia Purchase Price, and all interest accrued thereon.
"Virginia Escrow Amounts" shall mean the Virginia Dispute Escrow Amount and the Virginia
Indemnification Escrow Amount.
"Virginia Indemnification Escrow Amount" shall mean the amount of up to $6,000,000
deposited in the escrow established and funded pursuant to the Virginia Agreement in respect of
possible claims of indemnification by Jones thereunder, and all interest accrued thereon.
"Virginia Purchase Price" shall mean the purchase price payable by Jones for the Virginia
System, as adjusted pursuant to the Virginia Agreement.
"Virginia System" shall have the meaning set forth in the recitalshereto.
"Waiver Agreement" shall have the meaning set forth in Section 7.3(c).
"Washington System" shall have the meaning set forth in the recitals hereto.
"Willamette" shall have the meaning set forth in the recitals hereto.
"Willamette Assets" shall mean the assets, rights and properties of Willamette and CCO which
are used in connection with the ownership and operation of the Oregon System, as more particularly
described in Section 3.1 below.
"Willamette Assumption Shares" shall have the meaning set forth in Section 2.1(c)(ii).
"Willamette Bank Debt Amount" shall mean, as of any date of determination, the aggregate
outstanding borrowings made by Willamette under the Credit Agreement, together with accrued and
unpaid interest thereon and any other sums or amounts owing in respect thereof. In addition, if there
shall be due and owing any other amount under the Credit Agreement or with respect to the
termination thereof or any interest rate exchange or "swap" agreements entered into with respect to
11:\CI.U:NIVNORRIS\90500515\COI.I)MlllA.1X)C\'1'CISUYYI..AaS - 28 -
the indebtedness thereunder, then there shall be included in each of the Willamette Bank Debt
Amount and the CA Bank Debt Amount, a pro rata portion of such amounts (computed based on the
outstanding principal amounts of the Willamette Bank Amount and the CA Bank Debt Amount).
"Willamette Expense Amount" shall mean the amount of the Transaction Expenses times a
fraction, the numerator of which is the number of Equivalent Subscribers to the Oregon System on
the Calculation Date and the denominator of which is the Total Subscriber Number.
"Willamette Fraction" shall mean a fraction, the numerator of which is the number of
Equivalent Subscribers to the Oregon System on the Calculation Date and the denominator of which
is the Equivalent Subscriber Number.
"Willamette Per Share Value" shall mean the amount computed pursuant to the provisions of
Section 4.6 below.
"Willamette Stock" shall have the meaning set forth in the recitals hereto.
"Willamette Value" shall mean the amount computed pursuant to the provisions of Section
4.6 below.
ARTICLE 2
DESCRIPTION OF TRANSACTIONS
2.1 Preliminary Transactions. At the time specified below, but in any event prior to the
Redemption Transaction, the following transactions shall occur(the "Preliminary Transactions"):
(a) (intentionally Omitted.]
(b) Prior to the Redemption Closing Date, the Michigan System shall be sold by
the Partnership. The parties hereto acknowledge that they have been provided with a copy of(arid
have consented to and approved)an agreement(the"Michigan Agreement")between the Partnership,
II:\C1d1:NIVNORRiS\90500515\(:Oi.UMBIA.)xX'\XISUI'YI-AGS - 29 -
Columbia Cable of Michigan, Inc., a Delaware corporation and a wholly-owned subsidiary of the
Partnership("CCM"), and Continental Cablevision of Manchester, Inc. ("Continental"), providing for
the transfer of the assets and liabilities of the Partnership relating to the Michigan System to CCM,
and, simultaneously therewith, the sale of all of the outstanding stock of CCM to Continental or an
affiliate thereof. Immediately following the sale of the Michigan System, the net cash proceeds from
the sale of the Michigan System shall be used by the Partnership to repay outstanding indebtedness
under the Credit Agreement, except for an amount of net cash proceeds up to the Required Cash
Distribution Amount (as such term is defined in the Partnership Agreement) which may, in the
discretion of Cl, be retained by the Partnership until the Redemption Closing Date (any proceeds so
retained being referred to herein as the "Unapplied Michigan Proceeds"); provided, that so long as
this Agreement has not been terminated, no distributions shall'.be made to the Partners of the
Partnership which would be prohibited by the Partnership Amendment (assuming it was executed and
in full effect). Prior to the Redemption Transaction,the Partnership shall use the Unapplied Michigan
Proceeds to repay outstanding indebtedness under the Credit Agreement.
(c) Immediately prior to the closing of the Redemption Transaction:
(i) The Partnership shall assume and itself agree to pay to Willamette all
of the indebtedness of CCO to Willamette outstanding on the date of such assumption (the "CCO
Debt Amount"). The Partnership shall, as a consequence of such assumption, be deemed to have
made a capital contribution to CCO in the amount of the CCO Debt Amount and its capital account
balance shall be increased accordingly. On or prior to the date of such assumption, the partnership
agreement of CCO shall be amended to provide for(x) such capital contribution, (y) distribution of
Willamette Stock to the partners of CCO in liquidation of CCO to be made first to the Partnership
tI.\QMiNNNORRIS\90500515\COI.UM131A.I)On'I'CISUI'I'1_AG5 - 30-
in the amount of the CCO Debt Amount and (z) the Partnership to control the liquidation of CCO
instead of the liquidation committee currently provided for in the partnership agreement of CCO,
which amendment shall be substantially in the form of Exhibit 2.1(c) attached hereto (the "CCO
Partnership Amendment"). Each of the Partnership and LGI hereby agrees to execute and deliver the
CCO Partnership Amendment at or prior to the Redemption Closing, and in any event prior to the
date of such assumption.
(ii) The Partnership shall assume and itself agree to pay the Willamette
Bank Debt Amount as of the date of such assumption, and, in consideration for such assumption, the.
CCO Debt Amount shall be deemed repaid and Willamette shall issue.to the Partnership, no later than
the Redemption Closing Date, a number of validly issued, fully paid and non-assessable shares of
Willamette Stock which, if valued at the Willamette Per Share Value, as computed after giving effect
to the transactions contemplated pursuant to this Section 2.'1(c) and the final determination of the CI
Purchase Consideration and the CA Merger Consideration, would have an aggregate value equal to
the Willamette Bank Debt Amount minus the CCO Debt Amount (the "Willamette Assumption
Shares"). As of April 30, 1995,the aggregate principal amount of the Willamette.Bank Debt Amount
was$74,946,420 and the aggregate amount of the CCO Debt Amount was $11,264,408. From and
after the date of such assumption, Willamette shall not borrow any further amounts under the Credit
Agreement and from and after April 30, 1995, Willamette will not make any further loans or advances.
to CCO except for the continued accrual of interest on the outstanding CCO Debt Amount.
(d) Immediately prior to closing of the Redemption Transaction, CCO shall be
liquidated and all of its liabilities and obligations shall be paid or provided for and all of its remaining
11ACIRNIVNORRIS\90500515\COLUMNIA IXX'\'1'C1Slll9'I_AGS - 31 - l
assets shall be distributed to its partners in accordance with the provisions of the partnership
agreement for CCO, as amended by the CCO Partnership Amendment.
2.2 Redemption Transaction. On the Redemption Closing Date, the Partnership shall
redeem(the "Redemption Transaction")the LGI Units and the LGI General Partnership Interest and,
in connection with such redemption, the Partnership shall distribute to LGI the LGI Willamette
Redemption Shares, free and clear of all Liens.
2.3 Intermediate Transaction. On,the day following the Redemption Closing Date(the
"Virginia Closing Date"), the Virginia System shall be sold (the "Intermediate Transaction")by the
Partnership to Jones Intercable, Inc. or an affiliate thereof ("Jones") pursuant to the Virginia
Agreement. On the Virginia Closing Date, the Partnership shall repay any outstanding indebtedness
under the Credit Agreement with the Virginia Closing Date Proceeds. The.portion of the Virginia
Closing Date Proceeds not so applied to indebtedness under the Credit Agreement is referred to
herein as the "Unapplied Virginia Closing Date Proceeds:"
2.4 CI Purchase and Merger Transactions. On the Merger Closing Date, the following
transactions (the "CI Purchase and Merger Transactions") shall occur:
(a) After the Redemption Transaction but prior to the transactions described
below in Sections 2.4(b) through (d), the Partnership shall either: (i) have assigned and conveyed
(pursuant to an instrument in form and substance reasonably satisfactory to TCI) to the
Representative (and the Representative shall assume) all rights and obligations of the Partnership
under the Michigan.Agreement and, if the Intermediate Transaction has been consummated, the
Virginia Agreement(and the escrow.agreements entered into thereunder) in respect of actions to be
taken or decisions to be made thereunder during the period from and after the closing date under the
II:\CI 11;N7UNORRIS190500515\COI.I]MI11A.1)O(\7'CISlJ1'1'I_AOS
- 32 -
Michigan Agreement and the closing date under the Virginia Agreement, including full right and
authority to effect all post-closing adjustments and claims for indemnification thereunder(including
the adjudication and/or settlement of all disputes with respect to such adjustments or claims) and the
right to retain and receive 75.6%of any and all amounts paid or payable by Continental or the escrow
agent under the Michigan Agreement or by Jones or the escrow agent under the Virginia Agreement,
with the balance of 24.4% thereof to be paid to oras directed by TCI; or (ii) if such an assignment
is not permitted under the Michigan Agreement or such escrow agreement or the Virginia Agreement
or such escrow agreement, appoint the Representative as its true and lawful attorney-in-fact with
power and authority to take the actions referred to in clause(i) above, with the same economic effect
as if such assignment had been permitted. Such assignments or powers of attorney shall be in form
and substance reasonably satisfactory to TCI. Any liabilities or expenses incurred by or on behalf of
the Representative in connection with the foregoing shall be deemed Transaction Expenses, and shall,
to the extent incurred from and after the Merger Closing Date, be paid out of the Reserve Account.
(b) The Partnership shall purchase the partnership interest of John Hancock in JH
Oregon. Unless TCI shall consent thereto, the purchase price for such interest shall not exceed the
JH Payment Amount, and shall be paid in full on or prior to the Merger Closing Date.
(c) Immediately prior to the CA Merger, Cl Acquisition Sub shall purchase the
CI Partnership Interest, free and clear of all Liens, for the Cl Purchase Consideration.
(d) Immediately prior to the CA Merger, CI Acquisition Sub shall.purchase the
CI/CCW Partnership Interest, free and clear of all Liens, for the CCW Minority Interest Amount.
(e) The CA Merger shall occur and the CA Merger Consideration shall be paid
to or as directed by the Representative, as agent for the Holders other than LGI
nActn:rnvriORRIS 5005is\coI.uMmn.ixxarcIsimrq-AGS - 33 -
ARTICLE 3
ASSETS; EXCLUDED ASSETS
3.1 Assets. The Nevada Assets to be held by the Partnership on the Merger Closing Date,
the CCW Assets to be held by CCW on the Merger Closing Date, and the Willamette Assets to be
held by Willamette on the Merger Closing Date, shall consist of all properties, privileges,rights,
interests and claims, real and personal, tangible and intangible, of every type and description, used
by the System Owners or CCO in connection with the Systems, all as the same shall exist on the
Merger Closing Date, including the following:
(a) All plant, equipment, and other operating and related facilities of the System
Owners or CCO used or held for use in connection with the.Systems, including all motor vehicles,
tools,test equipment,underground pipes.and conduits, all coaxial and:optical fiber cables, strand, and
wires, all subscriber house:drops, all poles, amplifiers, receptacles and outlets, all cable hardware, all
electronic devices, power supplies, vaults and pedestals, grounding and pole hardware, subscriber's
devices (including converters, encoders, transformers behind television sets and fittings) owned by
any System Owner or CCO, headend hardware(including origination equipment, earth stations and
transmission and distribution system),and other tangible personal property used in connection with
the Systems, and all towers, tower facilities, headends, antennas, land, buildings and satellite earth
receiving stations used or maintained by the System Owners or CCO in connection with the Systems
and the right, title and interest of the System Owners and.CCO in and to the operating and other
facilities used or held for use in connection with the origination, broadcasting and reception of
television signals and the transmission thereof(collectively, the "Equipment"). Certain items of
11AC1.niN1VN0RR18\905W515TU1.UM111A.IXnTC1SU1'Yl_ncs - 34 -
Equipment, including all towers and their locations, are described on Part XVI. C. of the Disclosure
Schedule.
(b) All inventories (including, without being limited to, inventories of materials,
spare parts and other supplies)used or maintained by the System Owners or CCO in connection with
the Systems, as well as all office supplies used or maintained by the System Owners or CCO directly
in connection with the Systems, and on hand at the Merger Closing.
(c) The Franchises, FCC Licenses, Leases, Pole Rental Leases, Retransmission
Consent Agreements, Real Property, Other Permits, Other Material Agreements and all other
agreements, consents, permits, licenses and instruments which relate.to the operation of the Systems,
whether in the name of a System Owner, CCO or CI.
(d) All engineering records, files, data, schematics, reports, lists, drawings,
blueprints, plans and processes, including System maps, developed or acquired by the System
Owners, CCO or Cl in connection with the Systems and in the possession of any System Owner,
CCO or Cl.
(e) All files of correspondence, lists, reports and records of any System Owner,
CCO, JH Oregon or Cl (in the case of Cl, only to the extent related to the Systems), including any
documents, records or files: (i) concerning past, present and prospective customers of the Systems,
(ii) concerning television stations whose transmissions are or may be carried by the Systems, (iii) filed
with or constituting correspondence with all Governmental Authorities, relating to the Systems, and
(iv)constituting accounting, bank or tax records, including Financial Statements, tax returns, records-
relating
ecordsrelating to receivables,.payables or deposits or the like. All of the foregoing files, lists and'records
reasonably required by the Representative or any of the Holders other than LGI for the preparation
H:ICID:N7VNORRIS%90500515\C(N.UMIIIA.IXX17'CiSUYI'I..AGS - 35 -
of tax returns and the like, the determination of the final CI Purchase Consideration or the CA Merger
Consideration hereunder or the resolution of any dispute between the parties hereto or with the
Representative, the determination of the final purchase price under the Michigan Agreement or the
Virginia Agreement, or otherwise in connection with the exercise or performance by the
Representative of any of its rights, duties or obligations hereunder, shall, on reasonable notice, be
made available to the Representative or any agent or designee thereof, during normal business hours,
by any TCI Party, for examination and duplication(the expense of which shall be deemed Transaction
Expenses payable out of the Reserve Amount) after the Merger Closing. TCI agrees not to destroy
any of such files or documents, until the final determination of the CI Purchase Consideration and the
CA Merger Consideration and the preparation of the tax returns for all Pre-Closing Tax Periods.
From and after the expiration of the period provided in the preceding sentence, TCI shall.have the
right to destroy any of such files, lists or records; provided, however, if TCI wishes to destroy any
of such files, lists or records prior to the expiration of the Retention Period,'it shall first comply with
the following provisions of this subsection. At least 45 days prior to destroying any of said files, lists
and records during the Retention Period, TCI shall give notice of its intention to do soo to Rubin
Baum. If such counsel shall notify TCI within such 45 day period that the Representative wishes to
retain any of the files, lists or records which TCI intends to destroy, TCI shall deliver such files, lists
or records to a location designated.by such counsel in said notification(the expense of which shall
be deemed Transaction Expenses payable out of the Reserve Account).
(f) all intangible assets and rights held by the System Owners in connection with
the ownership and operation of the Systems (it being understood, however, that insofar as the name
"Columbia" is concerned, the Assets only include a non-exclusive license to use such name for a
H:SCIIENNNORRIM90500515\C0111M111A.IX"WISUPPi_AG5 - 36 -
reasonable period following the Closing and all other right, title and interest in and to the name
"Columbia" shall be deemed an Excluded Asset).
3.2 Excluded Assets. Except as specified in Section 3.1 and except with respect to any
agreements which were entered into by CI as manager or for the benefit of a System, there shall be
excluded from the term "Assets" as used herein all properties, privileges, rights, interests and claims,
real and personal, tangible and intangible of Cl, including without limitation, the lease to which CI
is a party with respect to the premises at 9 Greenwich Office Park, Greenwich, CT, as well as the
leases of office space in San Angelo, Texas and Phoenix, Arizona and all furniture, fixtures and office
and computer equipment located on any such premises. Anything in the foregoing to the contrary
notwithstanding, there shall be excluded from the term "Assets" as used herein, all right, title and
interest to the, name "Columbia" (other than the rights referred to in :Section 3.1(f) above)
(collectively, the "Excluded Assets").
ARTICLE 4
CONSIDERATION. ADJUSTMENTS AND ALLOCATIONS
4.1 CA Merger Consideration. The aggregate consideration payable by the TCI Parties
in connection with the CA Merger (the "CA Merger Consideration"), shall be the sum of(a) the
Holder Share of the CA Liquidation Value and (b)the.Additional CA Amount.
4.2 Composition and Payment of CCW Minority Interest Amount. CI Purchase .
Consideration CA Merger Consideration and Escrow Deposits.
(a) (i) At the Merger Closing, the TCI Parties, the Partnership, CI and the
Representative shall deliver or cause to.be delivered, out of the CI Purchase Consideration and the
CA Merger Consideration, cash (in the proportions specified in Section 4.2(a)(ii) below) in.an
B:\CI.IF.KIXINORRIS%90500515\IX)I.IJMIIIA.1XX1'1'CISIJI'1'1_A(IS - 37 -
aggregate amount of $12,500,000 (the "Indemnification Escrow Amount"), plus any additional
amounts required pursuant to Section 4.7(c)arising out of a dispute over the Partnership's calculation
of the CA Liquidation Value, any component thereof, the LGI Redemption Value, the CI Purchase
Consideration or the CA Merger Consideration (the "Dispute Escrow Amount"), to Citibank, N.A.
(the"Closing Escrow Agent")to be held separately in escrow by the Closing Escrow Agent pursuant
to an escrow agreement(the"Closing Escrow Agreement")substantially in the form of Exhibit 4.2(a)
hereto.
(ii) The portion of the Indemnification Escrow Amount and Dispute
Escrow Amount to be paid out of the CI Purchase Consideration(the"CI Escrow Portion") shall be
equal to 52.381%of the amount to be deposited in escrow, and the portion to be paid.out of the CA
Merger Consideration (the "CA Escrow Portion") shall be equal to 47.619% of the amount to be
deposited in escrow.
(b) At the Merger Closing, the TCI Parties shall:
(i) pay to Cl, the,CCW Minority Interest Amount;
(ii) pay to CI, the CI Purchase Consideration, less the CI Escrow Portion
to the extent paid by TO to the Closing Escrow.A ent;
(iii) pay to the Representative for the benefit of the Holders other than LGI,
the CA Merger Consideration, less the CA Escrow Portion to the extent paid by TCI to the Closing
Escrow Agent;
(iv) if the Intermediate Transaction has not been consummated, pay or
provide the Partnership with sufficient funds to pay any outstanding,balance of the Bank Debt
Amount;
u - 38 -
:pct.n:rnvNo►ex�s��osoos�s�coi.uMii�n.�xxareasin>�,t_ncs i
(v) pay to John Hancock the amount referred to in clause (ii)(e) of the
definition of the term "CA Liquidation Value;"
(vi) pay to the Representative for disbursement thereby to the intended
recipients thereof, such of the unpaid Transaction Expenses taken into account in the computation
of the Net Proration Amount as the Representative shall request be paid on the Merger Closing Date
(and the Representative shall promptly provide TCI with proof of the use of such funds to pay such
Transaction Expenses); and
(vii) pay to the Representative the Reserve Amount for deposit in the
Reserve Account.
The:payments provided for in this Section 4.2(b) shall be made by wire transfer of immediately
available funds to the payee thereof to such account at such bank as the payee-thereof shall designate
by notice to TCI given at least three days prior to the Merger Closing Date; provided, that (A)the
Representative may designate up to five separate bank accounts to which the CA Merger
Consideration shall be wire transferred, and(B)the Representative may designate up to three separate
bank accounts to which the payments to the Representative other than the CA Merger Consideration
shall be wire transferred.
4.3 Computation of CA Liquidation Value. In connection with the computation of the
CA Liquidation Value it shall be necessary for the following amounts to be computed:
(a) The Subscriber Adjustment Amount, which shall be deemed to be equal to zero
unless the Equivalent Subscriber Number is less than 139,392, in which case the Subscriber
Adjustment Amount shall be equal to(i)$2,131 multiplied by(ii)the amount by which the.Equivalent
Subscriber Number is less than 140,800.
I1XII dNIUNORRI8V0500511\COIAWBIA.IXnIUSUI1I11_AG5 - 39 -
(b) The Operating Income Adjustment Amount, which shall be deemed to be equal
to zero unless the Annualized Operating Income Amount, shall be less than $26,807,000, in which
case the Operating Income Adjustment Amount shall equal (i) the amount by which the Annualized
Operating Income Amount is less than $27,078,000, multiplied by(ii) l 1.079. The parties agree that
in calculating the Operating Income Adjustment Amount, no Rate Reduction Order shall be given pro
forma effect in respect of any period prior to the date that the reduction in rates required thereby is
to go into effect.
(c) (i) The Net Proration Amount shall be computed as of the close of
business on the Merger Closing Date, as set forth in clause (ii)below, in accordance with the general
principle that all items of income, liability and expense shall be prorated as of the close of business
on the Merger Closing Date. If the Net Proration Amount is positive, the amount thereof shall be
added in the calculation of the CA Liquidation Value, and if the amount thereof is negative, the
amount thereof shall be deducted in the calculation of the CA Liquidation Value.
(ii) In connection with the computation of the Net Proration Amount, any
items which relate to both a period of time prior.to the Merger Closing Date anda, period of time
after the Merger Closing Date shall be prorated on the basis of a 365/366 day year and for actual days
elapsed. In addition, amounts included in the calculation of the Net Proration Amount shall be
included without duplication and without taking into account any item otherwise taken into account
in the calculation of the CA Liquidation Value (such as the Bank Debt Amount), any component
thereof,the LGI Redemption Value,the Cl Purchase Consideration or the CA Merger Consideration.
Subject to the above general principles, the Net Proration Amount shall equal the amount by which
the sum of.
I1:CINNIVNORRIM90500515UY)I.I1MIIMIXXXIVISlIPPLACS -40 -
(A) the amount of all Accounts Receivable and other accrued
revenues and receivables, including but not limited to, advertising revenue or receivables (other than
advertising or other receivables which are unpaid for more than 120 days from the date due) of the
Systems attributable or relating to the period through the Merger Closing Date, the amount of all cash
and cash equivalents held by the Partnership, CCO, CCW,Willamette or JH Oregon as of the Merger
Closing Date (other than the Unapplied Virginia Closing Date Proceeds as to which no adjustment
shall be made and other than the Michigan Escrow Amounts and the'Virginia Escrow Amounts which
shall be taken into account as provided in Section 4.4), any amounts actually expended by the System
Owners prior to or as of the Merger Closing Date in respect of Approved Additional Capital
Expenditures and any amounts paid by the System Owners prior to or as of the Merger Closing Date
in respect of any expenses, liabilities or obligations which are expressly provided.in any Transaction
Document to be paid or borne by any TCI Party,.and
(B) the amount of all prepaid expenses, costs and liabilities and all
deposits, loans or advances, including,without limitation, deposits, loans or advances under the
Material Agreements (including the Franchises, Leases and Pole Rental Leases), and subscriber
prepayments or deposits and prepayments and deposits in respect of taxes or other items, which are
attributable or related to, or secure performance by a System Owner, CCO or JH Oregon in respect
of, any period after the Merger Closing Date(other than (l) any prepaid expenses, costs or liabilities
or deposits, loans or advances in respect of Excluded Assets, (2) any prepayments or deposits the
benefit of which will not be available to the TCI Parties, the System Owners, or CCO after the
Merger Closing, it being agreed that any such prepayment or deposit arising under any agreement
set forth on the Disclosure Schedule or entered into pursuant to Section 7.l(b), or any prepayment
1LURNMORIUSM50051SC:O1.l1MBIA.IMNIUSIII'III-A6S -41 -
or deposit required by law will not be regarded as falling within this clause (2), and (3) any
prepayment in respect of management fees or insurance policies to be terminated as of the Merger
Closing Date, which in any case will not result in refunds to CCO or a System Owner); shall exceed
the amount of
(C) all accrued expenses, liabilities, costs and accounts payable of
the Systems attributable and relating to the period prior to the Merger Closing Date, including
copyright fees, taxes, power and utility fees and deposits, liabilities in respect of subscriber
prepayments and deposits, all liabilities in respect of Transaction Expenses(other than any such to
be paid out of the Reserve Amount), all other indebtedness and accounts payable of the Partnership,
CCW, Willamette, CCO.and JH Oregon.relating to,the period prior to the Merger Closing Date, other
than(x)accrued expenses, liabilities or amounts payable in respect of ApprovedAdditional Capital
Expenditures(except to the extent included in(A)above or otherwise paid for by TCI), (y)the Bank
Debt Amount, and(z)obligations or indebtedness of any such entities to'each other, and the amount
of any expenses, liabilities and obligations paid prior to the Merger Closing Date by a TCI Party but
which are expressly provided in any Transaction Document to be paid or borne by any System
Owner, CI or CCO.
(iii) Anything in this Section 4.3(c)to the contrary notwithstanding, there
shall not betaken into account in the computation of the Net Proration Amount: (A)the portion of
any unpaid expenses, liabilities or obligations which are expressly provided in any Transaction
Document to be paid or borne by any TCI Party or are to be paid by the Representative out of the
Reserve Account; (B) any Accounts Receivable owed from a Person who is a Delinquent Account
as of the Merger Closing Date; (C) any accrued and unpaid interest or late or service charges in
IIACIJEN1UNORRIS\9050051STOLUMBIA.IX)C IVISUI1111_AC5 -42 -
respect of subscribers to any System which have been billed and unpaid for two months or more as
of the Merger Closing Date; (D) any item of income or expense in respect of any Excluded Asset
relating to the period after the Merger Closing Date; and (E) deferred loan costs, deferred tax assets
or leasehold improvements.
(d) The Virginia Closing Date Proceeds,which shall be equal to the portion of the
Virginia Purchase Price to be paid to the Partnership on the closing date of the Virginia.Agreement,
as set forth in the Jones Purchase Price Certificate (as defined in the Virginia Agreement) or, if no
Jones Purchase Price Certificate is delivered, as set forth in the Partnership Purchase Price Certificate
(as defined in the Virginia Agreement). The Virginia Closing Date Proceeds.shall not include the
Virginia Indemnification Escrow Amount or the Virginia Dispute Escrow Amount.
4.4 ' Computation of Value of Non.System Assets. In connection with the computation ,
of the CA Liquidation Value it shall be necessary to compute the value of the following assets which
are not taken into account in the computation of the Net Proration Amount: (i) the Partnership's
interest in Media Ventures, L.P. (which shall be valued at the Media Ventures Valuation Amount);
and (ii) any marketable securities held by the System Owners; CCO or JH Oregon, which shall be
valued at their then fair market value, as reasonably determined by CI and TCI.
4.5 Computation of CI,Holder and LGI Shares. The CI Share, the Holder Share and the
LGI Share shall be computed based on the CA Liquidation Value as follows:
(a) the CI Share shall equal a fraction(x)the numerator of which shall equal the
aggregate value of cash and other property that would be distributed to CI in respect of the CI
Partnership Interest pursuant to the terms of the Partnership Agreement (without taking into account
the provisions of the Partnership Amendment) in connection with the liquidation of the Partnership
11SCIXMVN0RR1S190500515U'0I.l1MI11A.IXX7%TC1SU1'11.AG5 -43 -
and the related distribution to the Partners in liquidation of an aggregate amount equal to the CA
Liquidation Value, and (y) the denominator of which is equal to the CA Liquidation Value.
(b) the Holder Share shall equal a fraction:(x) the numerator of which shall equal
the aggregate value of cash and other property that would be distributed to the Holders other than
LGI in respect of their Units pursuant to the terms of the Partnership Agreement (without taking into
account the provisions of the Partnership Amendment) in connection with the liquidation of the
Partnership and the related.distribution to the Partners in liquidation of an aggregate amount equal
to the CA Liquidation Value, and(y)the denominator of which is equal to the CA Liquidation Value.
(c) the LGI Share shall equal a fraction; (x)the numerator of which shall equal
_ the aggregate value of cash and other property that would be distributed to LGI in.respect of the LGI
Units and the LGI General Partnership Interest pursuant to the terms of the,Partnership Agreement
(without taking into.account the provisions of the Partnership Amendment) in connection with the
liquidation of the Partnership and the related distribution to the Partners in liquidation of an aggregate
amount equal to the CA Liquidation Value, and (y) the denominator of which is equal to the CA
Liquidation Value.
4.6 Computation of Willamette Value and Willamette Per Share Value. The Willamette
Value shall be computed as of the Merger Closing Date, and shall be equal to the sum of(i) the
product of$300,000,000 times the Willamette Fraction,minus(ii)the product of the amount of the
Subscriber Adjustment Amount or the Operating Income Adjustment Amount (if any) times.the
Willamette Fraction, plus or minus (iii) the net prorations described in Section 4.3(c)to the extent
such relate to the Oregon System, Willamette or CCO and not to the Nevada System, the Washington
System or CCW, minus(ii)any intercompany balances owed by Willamette or CCO, on the one hand,
n:+CID.NI\MOKxIs\90SO0513\('OI uMIIIA.ix)CVrcIstmrt_ncs - 44 -
to the Partnership, Cl or CCW, on the other hand, and plus (v) any intercompany balances owed by
the Partnership, Cl or CCW, on the one hand, to Willamette or CCO, on the other hand. For
purposes of computing such prorations, there shall be included therein (without duplication) the
Willamette Expense Amount. If, as of the Merger Closing Date, there is any dispute as to the
calculation of the Willamette Bank Debt Amount, the number of Equivalent Subscribers to the
Oregon System and/or the Systems, or the calculation of the prorations described in Section 4.3(c),
then there shall be used, for purposes of computing the Willamette Value as of the Merger Closing
Date, only the undisputed amount of the Willamette Bank Debt Amount and the undisputed number
of Equivalent Subscribers and the prorations as computed by the Partnership, and upon the resolution
of all such disputes and the final determination thereof, the Willamette Value(and the calculations
related to the determination thereof)shall be deemed adjusted accordingly. The Willamette Per Share
Value shall equal the quotient obtained by dividing the Willamette Value by the aggregate number
of outstanding shares of Willamette Stock(after giving effect to the transactions referred to in Section
2.1(c) above).
4.7 Consideration Certificates.
(a) At least 10 days prior to the Redemption Closing Date, the Partnership shall
provide to TCI, as agent for the TCI Parties, a certificate of the Partnership executed by an
authorized officer of Cl (the "Partnership Consideration Certificate"), which shall set forth in
reasonable detail the Partnership's estimated calculation of the LGI Redemption Value, the CI
Purchase Consideration,the CA Merger Consideration and the following amounts and items and shall
be accompanied by reasonably detailed documentation supporting the calculation of such amounts
and items:
IWENIVNORR18\ 0500515\C0I.UMRIA.IXXXIUSUITL.ACS - 45 -
(i) the Subscriber Adjustment Amount;
(ii) the Operating Income Adjustment Amount;
(iii) the Net Proration Amount;
(iv) the Bank Debt Amount, the Willamette Bank Debt Amount and the
CA Bank Debt Amount;
(v) the Willamette Value,the Willamette Per Share Value, the Willamette
Expense Amount and the LGI Willamette Value;
(vi) the CA Liquidation Value (and the components thereof) and the CI
Share, the Holder Share and the LGI Share;
(vii) the CCO Debt Amount,the number of Willamette Assumption Shares
and the number of shares of Willamette Stock to the distributed to the partners of CCO upon the
liquidation thereof; and
(viii) the LGI Redemption Value and the number of LGI Willamette
Redemption Shares.
(b) TCI, as agent for the TCI Parties, shall have the right to review the Partnership
Consideration Certificate, and shall be provided with any additional supporting documentation as it
shall reasonably request: If TCI, as agent for the'TCI Parties, shall dispute the Partnership's
calculation of the LGI Redemption Value, the CI Purchase Consideration, the CA Merger
Consideration or any other amount or item.set forth in the Partnership Consideration Certificate, then,
on the Redemption Closing Date, TCI shall deliver to the Partnership a certificate executed by an
authorized officer thereof(the"TCI Consideration Certificate"), which shall set forth in reasonable
detail the exact nature of the dispute and the calculation of the LGI Redemption Value, CI Purchase
HACLIIBNNNORR19\90500515\C01AN111A.IXXXIUSUITLAOS -46-
Consideration, CA Merger Consideration by TCI, as agent for the TCI Parties, and, to the extent of
any difference from the amounts calculated in the Partnership Consideration Certificate, the amount
of the other items described in Section 4.7(a) (the Partnership Consideration Certificate and the TCI
Consideration Certificate are sometimes collectively referred to herein as the "Consideration
Certificates").
(c) Notwithstanding any discrepancy between the Consideration Certificates, the
Redemption Closing and the Merger Closing shall occur pursuant to Section 5.1 hereof, with the
amount of the Cl Purchase Consideration and the CA Merger Consideration (minus the
Indemnification Escrow Amount, which shall be paid to the Closing Escrow Agent), as determined
pursuant to the TO Consideration Certificate (or, if none is given, pursuant to the Partnership
Consideration Certificate), to be paid by the TCI Parties as specified in Section 4.2 on,the Merger
Closing Date, and the portion of the CI Purchase Consideration and/or CA Merger Consideration
disputed pursuant to the TCI Consideration Certificate (if any), to constitute the Dispute Escrow
Amount and to be paid or delivered by the TCI Parties to the Closing Escrow Agent in accordance
with Section 4.2(a), and held in escrow until the final determination of the CI Purchase Consideration
and the CA Merger Consideration and related adjustments pursuant to Section 4.8 below, in
accordance with the terms of the Closing Escrow Agreement.
4.8 Final Determination of Consideration.
(a) Within 90 days after the Merger Closing Date, the Representative shall deliver
to TCI,as agent for the TO Parties, a certificate(the "Representative Closing'Certificate"), signed
by an appropriate officer or officialof the Representative, setting forth any proposed changes in the
LGI Redemption Value,the CI Purchase Consideration, the CA Merger Consideration or the other
11:\CIIFNNNO}t1t1S\90500515\CO1.l1MIf1A.1)OC'\T(1SU1'1'L AGS
-47 -
items described in Section 4.7(a) calculated by the Partnership and set forth in the Partnership
Consideration Certificate, and setting forth, in reasonable detail, the reason for such changes, both.
in the LGI Redemption Value, the Cl Purchase Consideration, the CA Merger Consideration and
each other item described in Section 4.7(a), together with a copy of any working papers or other
documents relating to such Representative Closing Certificate and such other supporting evidence
as TO may reasonably request.
(b) If TCI, as agent for the TCI Parties, shall conclude that the Representative
Closing Certificate does not accurately reflect the LGI Redemption Value, the CI Purchase
Consideration, the CA Merger Consideration or any of the elements thereof, including any of the
calculations provided for in Section 4.7(a), then TCI shall, within thirty(30) days after receipt of the
Representative Closing Certificate, furnish to the Representative a written statement of any
discrepancy or discrepancies believed by the TCI Parties to exist(the "TCI Discrepancy Certificate").
(c) The Representative and TCI, as agent for the TCI Parties, shall attempt jointly
to resolve any discrepancy set forth in the TCI Discrepancy Certificate within thirty(30) days after
receipt thereof,which resolution, if achieved, shall be binding upon all parties to this Agreement (and
the Holders)and not subject to dispute or review. If the Representative and TCI cannot resolve the
discrepancy to their mutual satisfaction within such thirty (30) day period, the Representative or TCI
may,within the following ten (10) days, request the New York City office of Deloitte and Touche,
or such other independent certified public accounting firm in New York City of national standing
agreed to by them (the "Designated Accountant") (provided that no accounting firm may serve as
Designated Accountant if it has regularly rendered accounting or auditing services to the Partnership,
CI, any TCI Party or any affiliate thereof within the prior three years) to review and,resolve the
ItACLW.MVNOKR13\W50051S1C:OI.IJMIIIA.IX)CNI'CISUI'1'I_AOS -48 -
matters raised in the TCI Discrepancy Certificate. If Deloitte and Touche decline to act in such
capacity and the Representative and TO are unable to agree upon another firm to act as Designated
Accountant within such 10 day period, then either the Representative or TCI may provide a written
notice to the other (the "Selection Notice") setting forth the name of a firm of certified public
accountants designated by the party giving the Selection Notice. The other party shall designate a .
second firm of certified public accountants by notice("Response Notice'')given within ten days of
the giving of the Selection Notice. The two firms designated as aforesaid shall promptly select a third
firm of certified public accountants to resolve the dispute, provided, however, that if the parties fail
to designate two firms of certified public accountants as aforesaid within the period during which a
Response Notice may be given, or if the firms so designated are unable to agree upon a third firm,
within ten days after the giving of the Response Notice, then the third firm of certified public
accountants shall be a firm of certified public accountants designated by the American Arbitration
Association at the request of any party participating in the resolution of such dispute; however, no
accounting firm who has, in the prior three years, regularly rendered accounting or audit services to
any of the parties hereto or their respective affiliates shall be designated. The cost of retaining the
Designated Accountant and such firm of certified public accountants shall be borne one-half by the
TCI Parties, on the one hand, and one-half by the Representative, on the other hand. The Designated
Accountant or such firm shall report its conclusions as to the determination of the LGI Redemption
Value, the CI Purchase Consideration and the CA Merger Consideration and each element thereof
and such report shall be conclusive and binding on all parties to this Agreement (and on the Holders)
and not subject to dispute or review, and judgment thereon may be entered in any court of competent
jurisdiction.
11AC[1 MIMORRISM500515\COLIIMIIIA.IXX 1'I'CIStll'l'I_A(15 - 49 -
(d) If the final CI Purchase Consideration or CA Merger Consideration, either as
agreed to by the Representative and TCI, or determined pursuant to the provisions of Section 4.8(c)
above, shall be less than the aggregate amount of the respective CI Purchase Consideration or CA
Merger Consideration set forth in the Partnership Consideration Certificate, the Representative shall
instruct the Closing Escrow Agent to pay to TCI iin cash, as agent for the TCI Parties, out of the CI
Escrow Portion of the Dispute Escrow Amount, the amount of such difference in respect of the CI
Purchase Consideration, and out of the CA Escrow Portion of the Dispute Escrow Amount, the
amount of such difference in respect of the CA Merger Consideration, and if the amount of the
appropriate portion of the Dispute Escrow Amount shall be insufficient therefor, the Representative
shall cause to be paid to TCI in cash from the Reserve Account an amount equal to the amount of
such deficiency; provided, that to the extent such difference in.respect of the CI Purchase
Consideration or the CA Merger Consideration is attributable to a dispute with respect to the
Subscriber Adjustment Amount or the Operating Income Adjustment Amount and the amount to be
paid to TCI in respect thereof shall exceed the remaining balance of the Dispute Escrow Amount
(after resolution and payment in respect of all other disputes), then the sole source of payment to TCI
in respect of such deficiency shall be the Indemnification Escrow Amount and the Representative shall
instruct the Closing Escrow Agent to pay such difference to TCI out of the CI Escrow Portion or the
CA Escrow Portion of the Indemnification Escrow Amount, as applicable. If the final CI Purchase
Consideration or CA Merger Consideration shall be greater than the sum of (i) the respective
aggregate amounts of the Cl Purchase Consideration or CA Merger Consideration paid to or as
directed by the Representative as of the Merger Closing pursuant to Section 4.7(c), and (ii) the
appropriate portion of the Indemnification Escrow Amount, the TCI Parties shall instruct the Closing
t�:�ctaernvrtokws��osoos�s�cot.t��n�n.ixx�rctscnmi_nc�s
- 50 -
Escrow Agent to pay in cash, to or as directed by the Representative, out of the appropriate portion
of the Dispute Escrow Amount, or if the principal amount of the appropriate portion of the Dispute
Escrow Amount is insufficient therefor, to pay in cash directly to as directed by the Representative,
the difference between the final CI Purchase Consideration or CA Merger Consideration, as the case
may be, and the sum of'(i) and (ii).
4.9 Payment and Performance of Liabilities,and Obligations. On the Merger Closing Date,
TCI shall cause any outstanding Bank Debt Amount to be repaid in full. From and after the Merger
Closing Date, the TCI Parties shall perform the obligations described in subsection (e) below and shall
cause CCW,with respect to the Washington System, Willamette, with respect to the Oregon System,
and.the Partnership, with respect to the Nevada System,to be severally obligated to pay, perform and
discharge only the following liabilities, obligations and commitments relating to the Systems, or to
the Partnership, CCO, CI; CCW or Willamette, whether contingent or otherwise, asserted or
unasserted, mature or unmatured (the "Assumed Liabilities"):
(a) All obligations relating to the period after the Merger Closing Date and arising
under the Franchises, FCC Licenses, Other Permits, Leases, Pole Rental Leases, Retransmission
Consent Agreements, Other Material Agreements, and other agreements, consents, permits, licenses
and.other instruments included in the Assets and either listed or described in any of the Schedules to
this Agreement (including the Disclosure Schedule) or.of the type or character not required to be
listed or described on such Schedules, and all obligations and commitments relating to the period after
the Merger Closing Date and arising under any agreements, consents, permits and other instruments
entered into from and after the date hereof in accordance with,the provisions of Section 7.1(b).
11XIMNIVNORRIM9050051SK:OLIIMIIIA.1XX717'CISU19'1.A(iS S1
(b) The obligation of the System Owners to provide cable television and other
services to subscribers and customers after the Merger Closing Date, including the obligation to
provide free or reduced price cable service to the categories of persons identified on Schedule 4.9(b)
attached hereto.
(c) All obligations arising out of subscriber prepayments and converter deposits
and all other accrued and unpaid expenses, obligations and liabilities taken into account in the
computation of the Net Proration Amount.
(d) All obligations in respect of Transaction Expenses and all other obligations in
respect of Continuing Employees(including obligations in respect of accrued vacation), in each case
only to the extent taken into account in the computation of the Net Proration Amount.
(e) The one-half('/z)of the liabilities and obligations referred to in Section 12.T(b)
below which are to be paid by the TCI Parties, which shall be promptly paid by the TCI Parties.
All liabilities, obligations and commitments relating to the Systems or to the
Partnership, CCW, CCO or Willamette, and which are based on agreements entered into or actions
taken by such entities prior to the Merger Closing Date, other than the Assumed Liabilities, are
defined herein as "Excluded Liabilities." Without limiting the foregoing, "Excluded Liabilities"
includes all liabilities, obligations and commitments with respect to the Excluded Assets.
4.10 Additional Provisions With Respect to Intermediate Transaction.
(a) If the.Intermediate Transaction is not consummated on the Virginia Closing
Date, the Virginia Purchase Price shall nonetheless be calculated in accordance with the Virginia
Agreement, including the relevant dispute mechanism. In such event, the TCI Parties shall exercise
the rights of Jones under the Virginia Agreement with respect to calculation of the Virginia Purchase
IJACIJENNNOMM9050051MC01AIMBIA.]MVI ISUPPLAGS - 52 -
Price and the Representative shall exercise the rights of the Partnership and CI with respect thereto.
Upon final calculation of the Virginia Purchase Price, the amount owed by the Representative to the
TCI Parties or by the TCI Parties to the Representative in accordance with the terms of the Virginia
Agreement and, after taking into account the Virginia Dispute Escrow Amount, shall be promptly
paid to the responsible party.
(b) At the expiration of the indemnification period provided for in Section 9.4(a),
75.6% of the Virginia Indemnification Escrow Amount after subtracting (i) the amount of any
indemnification claims under Section 9.1(d) previously allowed by the Representative and (ii) an
amount equal to any indemnification claims under Section 9.1(d)which have been made and are in
dispute at the expiration of the indemnification period (the "Virginia Disputed Claims"), shall be:
distributed by-the TCI Parties to the Representative for distribution by the Representative 47.619%
to the Holders other than LGI in proportion to their respective ownership of Units and 52.381%to
Cl. - Any Virginia Disputed Claims shall be settled in the manner provided in the Closing Escrow
Agreement with respect to Disputed Claims thereunder, and upon final resolution of all Virginia
Disputed Claims, 75.6% of the remaining Virginia Indemnification Escrow Amount shall be
distributed by TO to the Representative for distribution by the Representative as described in the.
preceding sentence.
ARTICLE 5
CLOSING TRANSACTIONS
5.1 Closing Date.
(a) The closing of the Redemption Transaction(the "Redemption Closing")will
be held on a date acceptable to both TCI and the Partnership (the date on which the Redemption
II:U7.i MUNORRIM90500515\CO1.11M11MIX)LUCISUPYLAC5 - 53
Closing occurs being referred to herein as the "Redemption Closing Date") that is within 15 days after
all conditions to the Redemption Closing set forth in this Agreement (other than those based on acts
to be performed at the Redemption Closing if such acts can then be performed) have been satisfied
or waived in writing by TCI, with respect to the conditions in Section 8.1, or by the Partnership with
respect to the conditions in Section 8.3; provided, however, that
(i) the Redemption Closing Date shall be no earlier than September 1,
1995 and no later than December 27, 1995; and
(ii) if, after the date of execution and delivery of this Agreement, but prior
to a date scheduled for the Redemption Closing, a casualty or unforeseen event beyond the control
of the System Owners occurs which results in the Subscriber Adjustment Amount or the Operating
Income Adjustment Amount being greater than zero(based on the Partnership's good faith calculation
of either thereof), then the Partnership may, by prompt notice to TCI setting forth in reasonable detail
the nature of the casualty or unforeseen event, postpone the Redemption Closing for a period of up
to 60 days following such date scheduled for the Redemption Closing(a "Casualty Adjournment");
however if such Casualty Adjournment would cause the Redemption Closing Date to be adjourned
to after December 27, 1995 the Transaction Documents may be terminated by either the-Partnership
or TCI, except that TCI shall have the right,by written notice to the Partnership given within 15 days
after the date of the notice of the Casualty Adjournment (the "TCI Party Closing Notice"), to require
the Closing to be held on the fifteenth Business Day following the TCI Party Closing Notice, but no
later than December 27, 1995, so long as the TCI Parties agree'that the Subscriber Adjustment
Amount shall be computed using the number of Equivalent Subscribers to each System existing as
of the last day of the Billing Period for such System ended immediately preceding the calendar month
11ACIIIMUNORRIM9050051STCOI.UMIiIA.IX)M'1'CISUI'1'I..A(i5 - 54 -
during which such casualty or unforeseen event occurred and the Operating Income Adjustment
Amount, if any, shall be computed using the Operating Income Amount for the three calendar months
immediately preceding the calendar month during which such casualty or unforeseen event occurred.
(b) The Closing of the CI Purchase and Merger Transactions (the "Merger
Closing")will be held on the second calendar day following the Redemption Closing Date(the date
on which the Merger Closing occurs being referred to.herein as the "Merger Closing Date");
provided that at such time all conditions to the Merger Closing set forth in this Agreement and the
CA Merger Agreement(other than those based on acts to be performed at the Merger Closing if such
acts can then be performed)shall have been satisfied or waived in writing by TCI, with respect to the
conditions in Section 8.2 or by the Partnership with respect to the conditions in Section 8.4.
(c) The Redemption Closing and the Merger Closing shallaake place at the offices
of Rubin Baum at 10:00 a.m. local time on the applicable closing date.
(d) If all of the conditions to the obligations of the parties to consummate the
Redemption Closing set forth in this Agreement (other than those based on acts to be performed'at
the Redemption Closing if such acts can then be performed)have not been satisfied or waived (or the
Redemption Closing shall not have occurred)by December 27,, 1995, then either the Partnership or
TCI may terminate this Agreement and the other Transaction Documents by notice to the-other.
(e) . If a Waiver Agreement is not delivered by TCI within the time period specified
in accordance with the provisions of Section 7.3(c),.the Partnership may terminate this Agreement
by written notice to TCI given within 10 days after the expiration of the time period specified in
Section 7.3(c) during which TCI was permitted to deliver a Waiver Agreement.
IlAdIENIVNORRIS\90500513\C0I.IIMIIIA.IXXXIVISU11N..A05 - 55 -
(f) In order to be effective, any notice of termination given under subparagraph
(a) or (d) above must be given by a party who is not in default of its obligations hereunder which
default is the reason for the Redemption Closing or the Merger Closing not having occurred or the
basis of the condition which is the subject of the notice of termination not having been satisfied. The
Redemption Closing shall be effective as of the close of business on the Redemption Closing Date.
The Merger Closing shall be effective as of the close of business on the Merger Closing Date.
5.2 Closing`Documents.
(a) At the Redemption Closing, CI shall cause the Partnership to deliver to the
TCI Parties the following documents:
(i) a copy of the Partnership Amendment, executed by or on behalf of all
of the Partners of the Partnership (other than LGI) and certified as true and correct by an officer of
CI;
(ii) a certificate of CI in form and substance reasonably satisfactory to.TCI
certifying(x)that the consent of the Partners required under the Partnership Agreement with respect
to the sale of the Michigan System was obtained; (y) that the sale of the Michigan'System has-been
consummated; and (z)that all proceeds from the sale of the Michigan System have been used by the
Partnership to repay indebtedness under the Credit Agreement;
(iii) a certificate of CI in form and substance reasonably satisfactory to TCI
certifying that attached.thereto is a true and correct copy of(x)the.respective instruments executed
by the Partnership pursuant to which the Partnership separately assumed the CCO Debt Amount,and
the Willamette Debt Amount; (y)the stock certificate issued by Willamette evidencing the Willamette
TIACH:xtvrrORRIM9osoosi sk OI.uMnIn.ixx�lrisunri..ncs - 56 -
Assumption Shares, registered in the name of the Partnership; and (z) the CCO Partnership
Amendment; executed by or on behalf of the partners of CCO;
(iv) a certificate representing the shares of Willamette Stock owned by
CCO and distributed to LGI in connection with the liquidation of CCO duly registered in the name
of LGI;
(v) an instrument in form and substance reasonably satisfactory to LGI,
duly executed on behalfof the Partnership, assigning to LGI the LGI Willamette Redemption Shares,
free and clear of all Liens, accompanied by the certificate representing such shares and stock powers
duly endorsed in blank by the Partnership;
(vi) separate certificates in form and substance reasonably satisfactory-to
TCI, dated the Redemption Closing Date, of the Partnership and CI to.the effect that (x) the
representations and warranties of the party providing the certificate contained in the Transaction
Documents were true and correct in all material respects when made and continue to be true and
correct in all material respects(except as to such representations and warranties which are expressly
subject to a materiality qualification contained in the text thereof, which shall be true and correct in
all respects); (y) all agreements, covenants and conditions required by the Transaction Documents
to be performed or complied with by the party providing the certificate prior to or at the Redemption
Closing have been performed or complied with in all material respects; and (z) all agreements, -
covenants and conditions required by the Transaction Documents to be performed or complied with
by the party providing the certificate prior to or at the Merger Closing have been performed or
complied with in all material respects, other than the transactions described in Section 2.3,
Section 2.4, Section 4.2, and the delivery of the documents described in Section 5.2(d);
H:\CI.AiN1UNORRIS\90500515U:OLUMIIIA.IX)C\'1'CISU177..AOS - 57 -
(vii) an opinion, dated the Redemption Closing Date and addressed to the
TCI Parties from Rubin Baum substantially in the form of Exhibit 5.2 (a) (vii) attached hereto;
(viii) an opinion, dated the Redemption Closing Date and addressed to the
TCI Parties from Cole Raywid, substantially in the form of Exhibit 5.2(a)(viii) attached hereto;
(ix) the Partnership Consideration.Certificate, duly executed on behalf of
the Partnership;
(x) an instrument executed by the Representative on behalf of all Holders
(other than LGI) who voted in favor of the CA Merger pursuant to which each such Holder
acknowledges such Holder's status as a Selling Party,and agrees to be bound by the provisions of
Section 9.4;
(A) an amendment to the certificate of limited partnership of the
Partnership, in form and substance reasonably satisfactory to LGI, to be filed with the Delaware
Secretary of State reflecting the withdrawal of LGI as a general partner of the Partnership;
(xii) copies of the Required Consents and copies of the:Extension Franchises
satisfying the provisions of Section 7.1(f), in form and substance reasonably satisfactory to TCI;
(xiii) evidence reasonably satisfactory to TCI that all Liens (other than the
Permitted Liens and Liens which secure liabilities which have been taken into account in the
computation of the Net Proration Amount) affecting or encumbering any Assets, any shares of
Willamette Stock, the Cl Partnership Interest, the CCW Partnership Interests, the CCO partnership
interests, or the Units have been.(or upon repayment in full of the Bank Debt Amount specified in a
bank pay-off letter will have been, without further action on the part of any party to the Credit
Agreement) terminated, released or waived, as appropriate, and, terminations of all Liens, security
11ACIIHNIVNORRIM90500515\C01 - 58 -
agreements, mortgages, deeds of trust and UCC financing statements granted or executed in
connection with the Credit Agreement, such documents to be deemed delivered without further action
on the part of any party to the Credit Agreement upon repayment in full of the Bank Debt Amount
specified in the pay-off letter;
(xiv) a certificate of the Secretary of CI certifying that (A) attached thereto
is a true and correct copy of the Partnership Agreement, including all amendments thereto, (B)
attached there is a true and correct list of the Holders as of the Merger Closing Date and the number
of Units held thereby, (C)the Partners of the Partnership have duly approved or consented to the CA
Merger as required under the DGCL and the RULPA and that attached thereto is a true and correct
copy of the documents evidencing such approval, and (D) attached thereto is a true and correct copy
of the resolutions adopted by the board of directors and stockholders of-CI duly approving the
performance by Cl and the Representative of their obligations under the Transaction Documents and
the Closing Escrow Agreement;
(xv) evidence reasonably satisfactory to TCI that upon payment of the Bank
Debt Amount specified in the bank pay-off letter, without further action on the part of any party to
the Credit Agreement, all obligations of the Partnership and Willamette under the Credit Agreement
will be deemed satisfied in full and that the Credit Agreement will be of no further force and effect,
except for obligations which the Credit Agreement provides survive the repayment of the
indebtedness and the termination of the commitments to lend thereunder (such as indemnity
obligations, obligations to pay or reimburse expenses and the like);
.(xvi) copies of franchise renewal letters timely delivered by CCW to the
Camas and Washougal franchise authorities pursuant to Section 626 of the 1984 Cable Act;
nactn:rnvr�oxK�s�9osoos�sco�.uMmn.�x�c�rc7stmt�.ncs
- 59 -
(xvii) evidence, reasonably satisfactory to TCI, that control of all bank
accounts, cash equivalents and marketable securities of the System Owners and CCO has been
transferred to TCI, effective as of the Merger Closing Date;
(xviii) evidence, reasonably satisfactory.to.TCI, that all agreements which
relate to the Virginia System which are not assigned to and assumed by Jones pursuant to the Virginia
Agreement(the "Excluded Virginia Agreements") have been terminated prior to or as of the Merger
Closing Date, and that either the Partnership has no liability with respect to the Excluded Virginia
Agreements from and after the Merger Closing Date or that the Reserve Amount is sufficient to
satisfy any such remaining liability; and
(xix) evidence, reasonably satisfactory to TCI,that the agreements described
in Section XVI 11.E of the Disclosure Schedule to the Michigan Agreement which are,not assigned
to and assumed by CCM at the closing .of the Michigan Agreement (the "Excluded Michigan
Agreements") have been terminated prior to or as of the Merger Closing Date and that either the
Partnership has no liability with respect to the Excluded Michigan Agreements from and after the
Merger Closing Date or that the Reserve Amount is sufficient to satisfy any such remaining liability.
(b) At the Merger Closing, CI shall deliver or cause the Partnership to deliver to
the TCI Parties the following documents:
(i) if the Intermediate Transaction is consummated on the Virginia Closing
Date, a certificate of CI in form and substance reasonably satisfactory to TCI certifying that (x)the
consent of the Partners required under the Partnership Agreement with respect to the sale of the
Virginia System was obtained;(y)the sale of the Virginia System has been consummated; and (z) any
HACIJRNIVNORRIM9050051MC01.l)MBIA.IX)MIUSUITI_ACl5 - 60 -
outstanding indebtedness under the Credit Agreement has been repaid with the Virginia Closing Date
Proceeds;
(ii) a copy of the assignments, instruments or powers of attorney referred
to in Section 2.4(a), datedas of the'Merger Closing Date;
(iii) a certificate representing the shares of Willamette Stock owned by
CCO and distributed to the Partnership in connection with the liquidation of.000 duly registered in
the name of the Partnership;
(iv) an instrument in form and substance reasonably satisfactory to TCI,
duly executed by Cl, assigning the Cl Partnership Interest and the CI/CCW Partnership Interest to
CI Acquisition Sub, in each case free and clear of all Liens;
(v) separate certificates in form and substance reasonably satisfactory to
TCI, dated the Merger Closing Date, of the Partnership and CI to the effect that its obligations under
Section 2.4, Section 4.2, and if a Waiver Agreement has not been delivered, under Section 2.3, have
been performed or complied with in all material respects;
(vi) a counterpart of the Closing Escrow Agreement, duly executed on
behalf of the Representative;
(vii) resignations duly executed by all of the directors and officers of
Willamette, effective as of the Merger Closing Date;
(viii) the Noncompetition Agreement, duly executed by each of Robert M.-
Rosencrans, Scott N. Ledbetter, Richard H. Rosencrans and Cal Broussard;
(ix) an instrument in form and substance reasonably satisfactory to TCI,
duly executed by CI and the Partnership, to the effect that the existing management agreements
11ACWN1VNOKKIS\90S0051S\C(N.IJM111AJX"'1'C1S1J1'1'1_AGS - 61 -
among Cl, CCW and the Partnership and among Cl, CCO and Willamette have been terminated in
their entirety;
(x) a copy certified by the Secretary of State of Oregon of the Articles of
Incorporation of Willamette, including all amendments thereto;
(xi) acertificate.of the Secretary of Willamette certifying that attached
thereto is a complete and correct copy of the Bylaws of Willamette, including all amendments thereto;
(xii) a certificate of a General Partner of each of CCW and CCO certifying
that attached thereto is a complete and correct copy of the partnership agreement of each of CCW
and CCO, including all amendments thereto;
(xiii) evidence reasonably satisfactory to TCI that the'Excluded Assets have
been assigned or conveyed in accordance with the provisions of Section 3.2;
(xiv) evidence, reasonably satisfactory to TCI,that those of the casualty and
liability insurance policies of the.System Owners or CCO which TCI shall, by written notice to CI,
given at least 30 days prior to the Merger Closing Date, request be terminated or cancelled as of or
reasonably promptly following the Merger Closing Date, shall'have been so terminated or cancelled;.
(xv) the list referred to in Section 6.1(b) and copies of the agreements
referred to in Section 6.1(b); and
(xvi) an instrument duly executed by CI and in form and substance
reasonably satisfactory to TCI assigning to TCI or its designees all rights of.CI to receive the return
of any prepayment or deposit relating to the Assets and containing an agreement by CI that it will
promptly remit to TCI any prepayment or deposit assigned to TCI which is returned to CL.
li:SCI.DBMrJNORRIS\90SMS1S\COI.UMIIIA.IXx'%'1'CISIn'1'I_AGS - 62 -
(c) At the Redemption Closing, the TCI Parties will deliver the following
documents to CI and to the Representative, as agent for the Holders other than LGI:
(i) a certificate in form and substance reasonably satisfactory to the
Partnership, dated the Redemption Closing Date, of each TCI Party to the effect that (x) the
representations and warranties of such TCI Party contained in the Transaction Documents were true
and correct in all material respects when made and continue to be true and correct in all material
respects(except as to such representations and warranties which are expressly subject to a materiality
qualification contained in the text thereof, which shall be true and correct in all respects); (y) all
agreements, covenants and conditions required by the Transaction Documents to be performed or
complied with by such TO Party prior to or at the Redemption Closing have been performed or
complied with in all material respects; and (z) all agreements, covenants ando,conditions required by
the Transaction Documents to be performed or complied with by such TCI Party prior to or at the
Merger Closing, other than the transactions described in Section 4.2 and the delivery of the
documents described in Section 5.2(d)have been performed or complied with in all material.respects;
(ii) an opinion dated the Redemption Closing Date and addressed to CI
and the Holders other than LGI, from general counsel to Tele-Communications and the TCI Parties
("TCI Counsel"), substantially in the form of Exhibit 5.2(c)(ii) attached hereto;
(iii) the TCI Consideration Certificate, duly executed by TCI on behalf of
the TCI Parties, unless the TO Parties do not dispute the calculation of the LGI Redemption Value,
the CIPurchase Consideration or the CA Merger Consideration(including the preliminary calculation
of the Net Proration Amount) set forth in the Partnership Consideration Certificate;
11ACI 1iNIVNORRISU0S00SISWOLUMBIA.IX)MUSUITI_AGS - 63 -
(d) At the Merger Closing, the TCI Parties will make the payments required under
Section 4.2 and will deliver the following documents to Cl and to the Representative, as agent for
the Holders other than LGI:
(i) a certificate in form and substance reasonably satisfactory to the
Partnership, dated the Merger Closing Date, of each'TCI Party to the effect that its obligations under
Section 4.2 have been performed or complied with in all material respects;
(ii) except with respect to agreements terminated.prior to the Merger
Closing, TCI shall have delivered(or cause to be delivered)assumption instruments required pursuant
to the provisions of the agreements listed in Part XI. F. of the Disclosure Schedule upon a change of
control of the Partnership, such instruments to be in form and substance reasonably satisfactory to
counsel to the Partnership and to counsel to TCI, and to relate to the liabilities, obligations and
commitments of the Partnership under such agreements; '
(iii) a counterpart of the Partnership Amendment, duly executed by or on
behalf of LGI;
(iv) a counterpart of the Closing Escrow Agreement, duly executed by or
on behalf of the TCI Parties;
(v) an instrument, in form and substance reasonably satisfactory to the
Partnership, duly executed by Satellite Services, Inc. ("SSI"), confirming that upon the sale of the
Michigan System, the programming agreement between SSI and the Partnership shall be of no further
force or effect as to such System and confirming that upon the sale of the Virginia System, the
programming agreement between SSI and the Partnership shall be of no further force or effect as to
such System;
11:\CURNMORRIM90300515\COLUMIl1A.11OC\TCISUI'1'L.ACS - 64 -
(vi) a copy certified by the Secretary of the State of Delaware of the
Articles of Incorporation of each of TCI, CI Acquisition Sub and CA Merger Sub, including all
amendments thereto;
(vii) a certificate of the Secretary of TCT certifying that attached thereto is
a complete and correct copy of the Bylaws of TCI, including all amendments thereto, and true and
correct copies of the Resolutions of the Board of Directors of TCI approving the Transactions to
which it is a party; and
(viii) certificates of the Secretary of each of CI Acquisition Sub and CA
Merger Sub certifying that attached thereto is a complete and correct copy of the Bylaws thereof,
including all amendments thereto, and true and correct copies of the Resolutions of their respective
Board of Directors.approving the Transactions to which they are a party, including, in the case of CA
Merger Sub,the CA Merger Agreement, and certifying that the CA Merger has been duly approved
or consented to by the TCI Parties and their stockholders as required under the DGCL and the
RULPA.
5.3 Further Assurances. From time to time, at the request of the Representative or any
TCI Party, and without further consideration, any party hereto will duly execute, acknowledge,
deliver and perform all such further acts, deeds, assignments, transfers and conveyances as may be
reasonably required to consummate the Transactions, and will take such other action and execute
such other instruments as any party hereto may reasonably request to more effectively carryout the
intent of the Transaction Documents. Any expenses incurred in connection with the foregoing shall
be paid one-half by the TO Parties and one-half by the Representative:
11AMENNNORRIM9050051S\C0I.11MI11A.1XX VFC1S1J1`J'1_ACS - 65 -
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
6.1 Representations and Warranties of the Partnership and CI. CI hereby makes the
representations and warranties to the TCI Parties regarding Cl set forth below in Section 6.1, and the
Partnership hereby makes the remaining representations and warranties to the TCI Parties set.forth
in this Section 6.l; provided, however, that (i) except as set forth in Section 6.1(o) below, no
representation or warranty is given in respect of any Rate Regulatory Matter, (ii) except as set forth
in Section 6.1(w)below, no representation or warranty is given in respect of the Telephony Business,
and (iii) where(and only where) specified, certain representations and warranties are made subject
to and limited by matters disclosed or referred to in the disclosure schedule attached hereto as
Schedule 6.1 (the "Disclosure Schedule"):
(a) Each of the Partnership and JH Oregon is a limited partnership duly organized
and validly existing under the.laws of the State of Delaware. Each of CI and the Representative is
a corporation duly organized, validly existing and in good standing under the laws of the State of
Delaware. Each of CCW and CCO are validly existing general partnerships. Willamette is a
corporation duly organized, validly existing and in good standing under the laws of the State of
Oregon. Each of the System Owners, CCO, CI, the Representative and JH Oregon: (i) has all
requisite corporate or partnership power necessary to own its assets and carry on its business
substantially as now being conducted and to execute, deliver and perform its obligations under each
Transaction Document to which it is a party (and, in the case of the Representative, the.Closing
Escrow Agreement) and to consummate each Transaction to which it is a.party; and (ii)'is.qualified
or registered to do business in, and is in good standing in, all jurisdictions in which the nature of the
11AC11HNNNORRISMS00515\C 01 AN111A.]XXXIVISUPP1..AUS - 66 -
business conducted by it makes such qualification necessary and where failure to do so would have
a Material Adverse Effect.
(b) The Disclosure Schedule sets forth, as of the date hereof, a true and complete
list of all of the following(complete and correct, except as noted on the Disclosure Schedule, copies
of which as currently in effect, have been Iprovided, or, in the case of agreements granting easements
or rights of way or agreements with multiple dwelling units or hoteWmotels referred to in Part VIII
of the Disclosure Schedule, made available to TCI): the Franchises, the Pole Rental Leases, the
Leases,the FCC Licenses, the Other Permits(including all FAA Permits),the Retransmission Consent
Agreements, and all other material contracts and agreements to which CI is a party as agent for any
System Owner or CCO or to which any System Owner or CCO is a party and which are.material to
the ownership or operation of any System or the Assets of such System, taken.,as a whole(the "Other
Material Agreements"). Without limitation, the following contracts and agreements which relate to
any System or System Owner shall be deemed to be material for purposes of the definition of Other
Material Agreements:
(i) all multiple dwelling unit agreements and bulk-billed agreements which
covered more than 50 Equivalent Subscribers as of March 31, 1995, or such later date as may be
specified.in the Disclosure Schedule (which shall be listed in the Disclosure Schedule by name of
housing complex or hotel or motel covered thereby);
(ii) any partnership or joint venture agreement between any System Owner
or CCO, on the one hand, and any other Person or Persons, on the other;
(iii) all programming agreements;
11MIJENIUNORK18\9050051WXXA1MB1A.IX)MIXI5111'19_AGS - 67 -
(iv) all construction and development agreements (other than agreements
with installers, or agreements where the remaining amount payable thereunder will be less than
$100,000 as of the Closing);
(v) any agreement (or group of related agreements) under which any
System Owner or CCO has created, incurred, assumed or guaranteed indebtedness for borrowed
money or under which any Lien securing such indebtedness has been imposed (or may be imposed)
on any Asset;
(vi) any restrictive covenant or noncompetition agreement which materially
restricts the ability of CCO or any System Owner to conduct the business of and operate the Systems
or any such agreement which would materially restrict the ability of CCO or any System Owner to
conduct any other business;
(vii) any agreement among CI, Robert M. Rosencrans, Scott Ledbetter,
Richard H. Rosencrans, Cal Broussard, JH Oregon or John Hancock, on the one hand, and any
System Owner or'CCO on the other;
(viii) any agreement with any Employee in the nature of a collective
bargaining agreement, employment agreement or severance agreement which would be binding on
a TCI Party, the Partnership, CCO, Willamette or CCW following the Merger Closing Date;
(ix) any agreement not made in the ordinary course and which would have
a remaining amount payable thereunder as of the Merger Closing Date in excess of$100,000; and
(x) any agreementhaving,a remaining term of more-than one year after the
date of this Agreement and involving a remaining amount payable thereunder as of the Merger
Closing Date of more than $100,000 and any agreement with respect to the provision of
11ACIENNNORIUM9050051STOI.UMIAA.IXX7VTC15UVYL.AGS - 68 -
telecommunications services over the "Public Communications Network" constructed pursuant to and
as required by the Franchise with the Metropolitan Area Communications Commission or over any
other network constructed pursuant to the requirements of a Franchise, except any such agreement
which is terminable without material penalty by the applicable System Owner or CCO by the giving
of not more than 90 days' prior notice.
On the Merger Closing Date, the Partnership shall provide to TCI a list identifying all
agreements entered into subsequent to the date hereof and prior to the Merger Closing Date by the
System Owners of the type set forth on Parts I, II, IV, V, VI (real property leases only) and IX of the
Disclosure Schedule and shall deliver to TCI at or prior to the Merger Closing correct and complete
copies of such agreements.
Also set forth on Part XI of the Disclosure Schedule is a.list of the consents and
approvals which are required to be obtained in connection with the execution, delivery and
performance by the System Owners, CCO, JH Oregon and Cl of each Transaction Document (and
any agreement entered into thereunder or pursuant thereto) to which it is a party and the
consummation of the transactions contemplated hereunder and thereunder(1)under the Franchises
(the "Required Franchise Consents"), (2) under the FCC Licenses (the "Required FCC Consents"),
(3)under the Pole Rental Leases(the"Required Pole Rental Consents"), (4)under the Retransmission
Consent Agreements (the "Required Retransmission Consent Agreement Consents"), (5) under the
Other Permits (the "Required Other Permit Consents"), (6) under the Leases and Other Material
Agreements or under the agreements relating to the Telephony Business-listed in Part IX of the
Disclosure Schedule (the 'Required Other Consents"). Part IX of the Disclosure Schedule also
specifies which of such consents and approvals the parties hereto have agreed are not conditions to
IIA ENIVNORRIM90500515K 01.UMBIA.IXK7VI'CISUP14..AG5 - 69 -
the obligations of the TCI Parties hereunder. Subject to obtaining the consents and approvals
referred to in Section 8.1(g)below,the Required Consents, any consents or approvals required under
any of the other agreements, licenses, permits and instruments referred to in Section 3.1 and the
expiration or termination of all applicable waiting; periods under the Hart-Scott Act, the making and
performance by the Partnership, Cl and the Representative of each Transaction Document (and any
agreement entered into thereunder or pursuant thereto) to which it is a party and the consummation
of the transactions contemplated hereby and thereby, have been duly authorized by all necessary
corporate or partnership action on the part of each of the foregoing Persons(including in the case of
CI by the requisite vote of the stockholders of CI) and do not and will not violate any Legal
Requirement, or conflict with or result in a breach of, or constitute a default under, the charter or
bylaws or partnership agreement, as applicable of any System Owner, CCO, JH Oregon, CI or-the
Representative or any indenture or other agreement or instrument by which any of them or any of
their respective properties may be bound or affected, or result in, or require, the creation or
imposition of any Lien upon or with respect to any properties of-any System Owner or CCO, or
require the consent, approval or authorization of, or filing of any certificate(other than the certificates
of merger referred to in the CA Merger Agreement), notice, application, report, or other document
with, any Governmental Authority or any other Person; except for such violations, conflicts,
breaches, defaults, creations or impositions of liens or failures to obtain consent or make filings as
would not individually or in the aggregate, have a Material Adverse Effect.
(c) Except as otherwise described in Part XII of the Disclosure Schedule, to the
knowledge of the Partnership and/or Cl, there are no lawsuits or other proceedings pending or
threatened against or affecting any System Owner, CCO or CI or any of its properties or assets,
ll:\C3II:NIUNUR1tIS\90500515\CU1.l1MIIIA.IXX\'I'C.ISUI'I'I..A(i5 - 70 -
before any arbitrator or by or before any Governmental Authority. Neither any System Owner, CCO
nor Cl.is in default under or in violation of or with respect to any order, writ, injunction or decree of
any arbitrator or Governmental Authority (other than the FCC or any state or local franchising
authority, as to which the representations in Section 6.l(n)shall apply).
(d) The System Owners will at the-Redemption Closing have good title to (or in -
the case of Assets that are leased, valid leasehold interests in) the Assets (other than Real Property,
as to which the representation and warranties in Section 6.l(t) shall apply), free and clear of all Liens
other than Permitted Liens. Set forth on Part XVI. K. of the Disclosure Schedule is a list of any
Judgment Liens, Tax Liens or Incidental Liens of which the Partnership or CI has knowledge as of
the date of this Agreement. Set forth in Part XVII of the Disclosure Schedule,is a list, as of May 31,
1995, of the Holders and the number of outstanding Units held of record byeach such Holder. All
of the Units outstanding on the Merger Closing Date will, on the Merger Closing Date,.be held by
the Holders thereof free and clear of all Liens or other restrictions on transfer, other than restrictions
arising under the Securities Act of 1933, as amended (the "Securities Act"), and applicable state
securities laws. CCO is the owner of all of the issued and outstanding capital stock of Willamette,
free and clear of all Liens. There are no outstanding options,warrants, rights or convertible securities
providing for the issuance of capital stock of Willamette. The outstanding shares of CI Common
Stock are duly authorized and validly issued, fully paid and non-assessable, and are not subject to any
preemptive rights. There exists no instrument or agreement,written or oral, which restricts or affects
in any way the ability of CCO to transfer the Willamette Stock other than the CCO Partnership
Agreement), except for restrictive legends and the like calling attention to restrictions imposed under
applicable securities laws. The CCW Partnership Interests are and will be the only outstanding
i1: I.M.N1VNORRIS\9050051ST01.11MBIA.]XVVI ISU1/1'1_AQ5 - 71 -
partnership interests in CCW. There are no outstanding options, warrants or other rights to acquire
any interests in the Partnership, Cl, CCO or CCW. The Partnership and Cl are the legal, record and
beneficial owners of the CCW Partnership Interests, free and clear of all Liens.
(e) Each System Owner and CCO has each filed all returns with respect to all
income, franchise, sales, use, property, excise, payroll and other taxes which are material in amount
which are required to be filed under any law applicable thereto on or before the date such filing is
required (taking into account any extensions with respect thereto), and has paid, or made provisions
for the payment of, all taxes, fees and assessments due and payable by any of them to any
Governmental Authority, except such taxes, if any, as are being contested in good faith and by proper .
proceedings(there being no such proceedings currently pending;as of the date hereof) and as to which
adequate reserves have been provided or such taxes which are not material in amount and the
nonpayment of which could not have a Material Adverse Effect. As of the date hereof, there are no
outstanding agreements or waivers extending the statutory period of limitations applicable to any
federal,.state, local or foreign tax which any System Owner or CCO have executed or granted and
there are no tax audits or investigations pending as of the date hereof by or before any Governmental
Authority with respect to any taxes owed by any System Owner or CCO.
(f) Except for such agreements that, as indicated in Part XVI. F. of the Disclosure
Schedule, have expired and are in the process of renewal, each of the Franchises, Pole Rental Leases,
Leases, Retransmission Consent Agreements and the Other Material Agreements(collectively, the
"Material Agreements") is a valid binding and subsisting,agreement and is in full force and effect,
except where the failure of such to be valid, binding, subsisting and in full force and effect would not
reasonably be expected to have a Material Adverse Effect. No System Owner, CI or CCO is in
II:S01I N'IVNORIUM9050051Su UAJMI11A.]XX1'1Y71SUI'19..AC35 - 72 -
default in the payment or performance or observance of any obligation, covenant or condition in any
Material Agreement, which individually or together with all other such defaults, would have a
Material Adverse Effect.
(g) Subject to obtaining the consents described in Section 8.1{g) below, each
Transaction Document has been duly executed and delivered by, and constitutes, the legal, valid and
binding obligation of (to the extent party thereto), the Partnership, CI and the Representative,
enforceable against each of them in accordance with its terms, except insofar as such enforceability
hereof may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditors rights generally and by general principles of equity.
(h) The Partnership Agreement is in full force and effect and no material default
by any party thereto of any of the material provisions thereof is, to the best of the Partnership's
knowledge, in existence on the date hereof.
(i) The Disclosure Schedule sets forth a list of the System Employees, as of the
dates indicated therein, together with their then current rates.of compensation, and the name of the
entity employing each such System Employee. The System Owners and CCO and, with respect to
Employees employed by it(if any), CI, have complied with all applicable Legal Requirements relating
to the employment of labor, including ERISA, continuation coverage requirements with respect to
group health plans and requirements relating to wages, hours, collective bargaining, unemployment
compensation, worker's compensation, equal employment opportunity, age and disability
discrimination, immigration control and the payment and withholding of taxes, except for such
noncompliance as would not reasonably be expected to have a Material Adverse Effect. Neither any
System Owner, CC nor Cl is a party to any contract with any labor organization, and no System
I1ACIANNNORR18\9050051 SWO131M131A.IXX'\TC715U1'PL.ACS - 73 -
Owner, CCO nor Cl has recognized or has agreed to recognize any union or other collective
bargaining unit. No union or other collective bargaining unit has been certified as representing any
of the Employees nor has any System Owner, CCO nor CI, received, since January 1, 1994, any
written request from any party for recognition as a representative of such Employees for collective
bargaining purposes.
(j) The Assets and Excluded Assets constitute all of the material rights and
property necessary for the operations of the Systems substantially as currently conducted by the
System Owners, except for those Material Agreements which Part XVI. F. of the Disclosure Schedule
indicates have expired or will expire prior to the Merger Closing Date, by their terms. The
Equipment included in the Assets and material to the operation of the Systems in the ordinary course
are, taken as a whole, in good operating condition, reasonable wear and tear excepted.
(k) Except for the matters described on Part XVI of the Disclosure Schedule, since
March 31, 1995, there has not been any event which has had a Material Adverse Effect, other than
as a result of changes in laws or regulations of general applicability or any changes resulting from
general economic, financial or market conditions affecting the cable television industry generally. For
purposes of this Section 6.1(k), the parties agree that it shall, without limitation, constitute a Material
Adverse Effect if the FCC or a local franchising authority has entered a Rate Reduction Order with
respect to the Systems.
(1) Complete copies of the Financial Statements have heretofore been delivered
to the TCI Parties. The Financial Statements were prepared in accordance withl generally accepted
accounting principles applied on a consistent basis throughout the periods covered thereby and fairly
present the System Owners financial position, results of operations and changes in financial position .
I1ACI1HNIVNORRIM 0500515\('01.UMIIIA.IXX:1'1'CISUYYI..ACS - 74 -
as of the dates and for the periods indicated, subject in the case of the unaudited Financial Statements
only to normal year-end adjustments and the omission of footnotes. Except as disclosed by, or
reserved against in, the Financial Statements, no System Owner or CCO had as of the date of such
balance sheet any material liability or obligation, whether accrued, absolute, fixed or contingent
(including liabilities for taxes or unusual forward or long-term commitments), which is required under
generally accepted accounting principles to be disclosed or reserved against in the Financial
Statements relating thereto, which was not so disclosed or reserved against. Since the date of the
most recent balance sheet included in the Financial.Statements (i) the Systems have been operated
substantially in the ordinary course consistent with past practices, (ii) no System Owner has sold or
disposed or any material assets other than in the ordinary course of business and (iii) no event has
occurred which has had, or reasonably could be expected to result in, a Material Adverse Effect.
(m) Each Franchise is, to the knowledge of the Partnership and/or CI, in full force
and effect. A System Owner is the franchisee under each such Franchise and the rights of such
System Owner under each Franchise will, on the Redemption Closing Date; be held by it free and
clear of all Liens other than Permitted Liens. No Franchise gives the Governmental Authority
granting such Franchise to the applicable System Owner a right of first refusal to purchase the portion
of the applicable System subject to such Franchise as a result of the transactions contemplated
hereunder. As of the date hereof,there is no notice outstanding from the granting body or any other
Governmental Authority with respect to any material breach of any covenant under, or any default
with respect to, any Franchise.
(n) The Franchises, FCC Licenses, Other Permits and other agreements or
documents listed in the Disclosure Schedule constitute all of the approvals, authorizations, permits,
II:UIENIUNORIUM 050051 S\COI.IIMIIIA.IXX:�'I'CISUI'1'I..AOS - 75 -
licenses, easements, registrations, qualifications, leases, variances and similar rights obtained from any
Governmental Authority which.are required in connection with the ownership of the Assets and the
operation of the Systems, except for such of the foregoing the failure of which to hold or have
obtained does not and would not have a Material Adverse Effect. Except as described on Part XII
of the Disclosure Schedule, there is no legal action, governmental proceeding or investigation,
pending or, to the knowledge of the Partnership and/or Cl, threatened, to terminate, suspend or
modify any FCC License or Other Permit and each System Owner is in compliance with the terms of
the FCC Licenses and Other Permits, except for such actions, proceedings, investigations or failures
to comply as would not individually or in the aggregate have a Material Adverse Effect. Each of the
FCC Licenses and Other Permits is currently in full force and effect and is valid under applicable
Legal Requirements according to its terms, except for such failure to be in full force or effect or be
valid as would not, individually or in the aggregate, have a'Material Adverse Effect. Except as
disclosed in Part XII of the Disclosure Schedule,the ownership, leasing and use of the Assets as they
are currently owned, leased and used and the conduct of the business of the Systems as it is currently
conducted do not violate any Legal Requirement, which violation, individually or in the aggregate,
would have a Material Adverse Effect. Neither any System Owner, CCO nor CI has received any
notice from a Governmental Authority claiming a violation of any Franchise or other Legal
Requirement, which violation would have a Material Adverse Effect. To the knowledge of the
Partnership and/or Cl, they have filed all material reports, applications, documents, instruments and
information required to be filed by them pursuant to applicable rules and regulations or requests of
every regulatory body having jurisdiction over the Franchises or other material licenses, permits and
authorizations currently held by them.
I1:�CIJISNlVNORRIS\90500515\COLUMI11A.1xK C1'C1SUl'1'1 A(i5 - 76 -
(o) Except as disclosed in Part XII of the Disclosure Schedule, there have been
duly filed with or sent to the FCC, other Governmental Authorities and other.Persons, all notices,
filings, reports, applications, documents,,instruments and information which are required to be filed
or sent with respect to the Systems under the,Communications Act of 1934, as.amended (the
"Communications Act"), the Cable Communications Policy Act of 1984 (the "1984 Cable Act") and
the Cable Act of 1992, except for such failures to file or send as would not have a Material Adverse
Effect. The Partnership has made available to TCI complete and correct copies of reports and filings
in the possession of any System Owner or CI which were made or filed by any System Owner or
CCO pursuant to the Communications Act, the 1984 Cable Act or the Cable Act of 1992 or FCC
rules and regulations promulgated thereunder within the last five years. The Systems Owners and the
Systems are in compliance with the applicable provisions of the Communications Act, the 1984 Cable
Act and the Cable Act of 1992, including, without limitation, the rules and regulations of the FCC
relating to the carriage of television signals, except for such noncompliance as would not have a
Material Adverse Effect and except that with respect to Rate Regulatory Matters the only
representation or warranty that is made by any party to this Agreement is that each System Owner
has used reasonable good faith efforts to establish rates charged to subscribers of the Systems
(whether for programming, equipment, installation, service or otherwise) and a la carte packages and
other service offerings and configurations provided to subscribers of the Systems, that would be
allowable under rules and regulations promulgated by the FCC under the Cable Act of 1992, any
authoritative interpretation thereof, and any other federal, state or local regulation dealing with
limiting or affecting the rates which may be charged by and the service offerings or configurations
which may be offered by, cable television systems to their subscribers, as in effect on the date hereof.
ll.%CIJHNIMNORRI%\90500515U'UI.lIMI11A.1XX'VI'C'I$UI'1'I..ACiS - 77 -
As of the Redemption Closing Date, a request for renewal will have been timely filed under Section
626 of the 1984 Cable Act with the proper Governmental Authority with respect to all Franchises
held by any System Owner or CCO in connection with the Systems expiring within 30 months after
the Redemption Closing Date. There have been timely recorded or deposited with and paid to the
United States Copyright Office, the Register of Copyrights and the Copyright Royalty Tribunal all
notices, statements of account, royalty fees and other documents and instruments required with
respect to the Systems under the Copyright Act of 1976, as amended, except for such failures to
record, deposit or pay as would not have a Material Adverse Effect. The Partnership has delivered
or made available to TCI complete and correct copies of all current reports and filings, and all reports
and filings for the past three years in its possession, made or filed with the United States Copyright
Office pursuant to copyright rules and regulations with respect to-the Systems. Neither any System
Owner nor CCO possesses any material patent, patent right, trademark or copyright or is a party to
any material license or royalty agreement with respect to any patent, trademark or copyright, except
for licenses relating to program material and obligations under the Copyright Act of 1976 applicable
to cable television systems generally or except as set forth in the Disclosure Schedule. To the
knowledge of the Partnership and/or CI, the current operation of the Systems does not in any material
respect violate or infringe on the rights of any Person in any copyright, trademark, service mark,
patent, license or trade secret.
(p) As of May 31, 1995, the Systems served an aggregate of at least 138,500
.Equivalent Subscribers.
(q) Set forth in Part XIII of the Disclosure Schedule is a complete list of each
System Plan. Each System Plan has been administered in material compliance with the terms.of such
11ACUPININ)W)RRI8\90500515\Cbl.I1M1IIA.IX)C\TCISUI7'I..A(iS - 78 -
System Plan and applicable Legal Requirements. No System Plan is a (i) Plan under which more than
one employer makes contributions as described in Sections 4063 and 4064 of ERISA, or (ii) a
Multiemployer Plan. Neither any System Owner nor CCO or CI maintains or contributes to, or has
ever maintained or contributed to or been required to contribute to, and no System Employee is
covered by or is eligible to be covered by, any Plan providing health or medical benefits for retired
or terminated employees;their spouses, or dependents (other than in accordance with Code Section
4980B.
(r) The System Owners and/or CI carry property damage and general liability
insurance and other insurance with respect to the Assets and the Systems in amounts which are
reasonable in relation to the character and location thereof and the nature of the business thereof and
as required pursuant to the Franchises.
(s) Except for Waller Capital Corporation, the fee of which will be paid by the
Partnership on the Merger Closing Date(and,be deemed part of the Transaction Expenses), neither
any System Owner, Cl or CCO nor anyone on its behalf has retained any broker, finder or agent or
agreed to pay any brokerage fee, finder's fee or commission with respect to the transactions with the
TCI Parties contemplated by this Agreement.
(t) All of the material Assets consisting of Real Property are described on Parts
VI and VIII of the Disclosure Schedule. The System Owners own good and marketable fee simple
indefeasible title to the Real Property shown as being owned by the System Owners on.Part VI of the
Disclosure Schedule and the valid and enforceable right to use and possess such Real Property,
subject only to Permitted Liens, and to such defects in title or lack of rights to use and possess as to
which any adjustment has been or is to be made under Section 4.3(c) above. The System Owners
IIACIJENNNORRIM90500515U:Q1.11MI11A.1XXXIVISUPPI..AG5 - 79 -
i
have valid leasehold interests in Real Property leased by the System Owners pursuant to written
leases described on Part VI of the Disclosure Schedule, correct and complete copies of which have
been delivered to TCI (except as otherwise noted on Part VI of the Disclosure Schedule), except
where the failure to have such a leasehold interest would not have a Material Adverse Effect. With
respect to any Real Property that is not owned or leased by the System Owners and that is material
to the conduct of the business of the Systems as it is currently conducted, the System Owners have
the valid and enforceable right to use such Real Property pursuant to Other Permits described on Part
VIII of the Disclosure Schedule and easements, licenses, rights-of-way or other rights described on
Part VIII of the Disclosure Schedule, subject only to Permitted Liens, except for such easements,
rights-of-way, licenses and Other Permits the absence of which would not have a Material Adverse
Effect.
(u) Neither Willamette nor CCW owns any capital stock or any partnership or
other equity or ownership interest in any other Person, nor does Willamette or CCW have any right
or obligation to acquire any such stock or interest. CCO does not own or have any interest in any
material assets other than the shares of Willamette Stock owned by it.
(v) Each System Owner, CI and CCO is in compliance with all Environmental
Laws, except for such noncompliance as would not have a Material Adverse Effect. Except as could
not reasonably be expected to result in material liability under any Environmental Law, neither any
System Owner, CI with respect to the Systems, nor CCO has generated, released, stored, used,
treated, handled,discharged or disposed of any Hazardous Substances at, on, under, in or about, or
in any other manner affecting, any Real Property, transported any Hazardous Substances to or from
any Real Property or discharged any Hazardous Substances from any Real Property into any body
11ACIANNNORRIS\90500515\C0I.UMI11A.1X)01*CISLII'I'I-AGS - 80 -
of water, directly or indirectly, and, to the knowledge of the Partnership and/or CI, no other present
owner, tenant, occupant or user of any Real Property owned or leased by any System Owner, CI with
respect to the Systems, or CCO or any other Person has committed or suffered any of the foregoing.
To the knowledge of the Partnership and/or CI, no release of Hazardous Substances outside any Real
Property owned or leased by any System Owner, CI with respect to the Systems, or CCO has entered
or threatens to enter any such Real Property, nor is there any pending or threatened claim based on
Environmental Laws which arises from any condition of the land surrounding any such Real Property,
in either case which would have a Material Adverse Effect. No claim or investigation by an
Governmental Authority based on Environmental Laws which relates to any Real Property(a) has
been asserted or is currently pending against or with respect to any System Owner, CI with respect
to the Systems, or CCO or any System or, to the knowledge of the Partnership and/or CI, and only
with respect to Real Property owned or leased by any System Owner, CI with respect to the Systems,
or CCO, any other Person, or (b) to the knowledge of the Partnership and/or CI, and only with
respect to Real Property owned or leased by a System Owner, CI with respect to the Systems, and
CCO, has been threatened in writing. To the knowledge of the Partnership and/or CI (a) except as
set forth on Part XVI of the Disclosure Schedule, no underground storage tank is currently located
on any Real Property owned or leased by any System Owner, CI with respect to the Systems, or CCO
or been removed by a System Owner, CI or CCO, (b) no Real Property owned or leased by any
System Owner, CI.with respect to the Systems, or CCO has been or is being used as a gasoline
service station or any other facility for storing, pumping, dispensing or producing gasoline or any
other petroleum products or wastes, (c) no building or other structure on any Real Property owned
or leased by any System Owner, CI with respect to the Systems, or CCO contains friable asbestos and
Il:\CIJ1:NIVNORRIS\90500515\COIAIMIl1A.IXXI.\'1'CISlll'1'i.ACi5 - 81
(d)there are no incinerators, septic tanks or cesspools on any Real Property owned or leased by any
System Owner, CI with respect to the Systems, or CCO and all waste generated thereon is discharged
into a public sanitary sewer system or otherwise in accordance with applicable Legal Requirements;
except, in any case, for such matters as would not have a Material Adverse Effect. The Partnership
has provided to TCI copies in.its possession of(a) all studies, reports or surveys relating to the
presence or alleged presence of Hazardous Substances at or on any Real Property, (b) all notices or
other written materials that were received from any Governmental Authority having power to
administer or enforce any Environmental Laws relating to any violations of Environmental Laws in
respect of any Real Property or activities at any Real Property and (c) all notices of any claim by any
private party of any violation under any Environmental Law with respect to any Real Property.
(w) Set forth in Part IX of the Disclosure Schedule is a list of all agreements
entered into as of the date hereof by the System Owners, CI or CCO in connection with the operation
of the Telephony Business. With respect to each such agreement: (i) such agreement is, to the
knowledge of the Partnership and/or Cl, in full force and effect, (ii) to the knowledge of the
Partnership and/or CI, the System Owner or CCO party thereto has performed its material obligations
under such agreements in accordance with the terms of the agreements, and.(iii) none of the System
Owners, CI or CCO is in material breach or default, and no event has occurred which with notice or
lapse of time would constitute a material breach or default, under such agreements. Set forth in Part
IX of the Disclosure Schedule are all permits and governmental approvals which the System Owners,
CI or CCO have obtained as of the date hereof in connection with the operation of the Telephony
Business. To the knowledge of the Partnership and/or CI (i) such permits and governmental
approvals are the only permits and governmental approvals required to. operate the Telephony
I1ACI.IIiN1VNORNIM90500515\CU1ANIIIA.IXXXIVISUPPI_AG5 - 82 -
Business as heretofore operated, and (ii) the operation of the Telephony Business as heretofore
operated has been in compliance with all applicable Legal Requirements, except where failure to so
comply would not have a Material Adverse Effect.
6.2 Representations and Warranties of the TCI Parties. The TCI Parties hereby jointly
and severally make the following representations and warranties to the.Partnership:
(a) Each TO Party is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation. Each TCI Party (i) has all requisite
corporate power necessary to own its assets and carry on its business as now being or as proposed
to be conducted and to execute, deliver and perform its obligations under each Transaction Document
to which it is a party (and, in the case of TCI, the Closing Escrow Agreement) and to consummate
each Transaction.to which it is a party; and (ii) is qualified or registered to do business in, and is in
good standing, all jurisdictions in which the nature-of the business conducted by it makes such
qualification necessary and where failure to do so would have a material adverse effect on its ability
to consummate the Transactions to which it is a party.
(b) The making and performance by each TCI Party of each Transaction
Document to which it is a party (and, in the case of TCI, the Closing Escrow Agreement) and the
consummation of the transactions contemplated thereby have been duly authorized by all necessary
corporate action and do not and,will not in any respect: (i) violate any provision of law, rules,
regulations decrees or orders(including, without limitation, any FCC rule or regulations with respect
to cross-ownership of media properties), other than any such violations which, individually or in the
aggregate, would not have a TCI Material Adverse Effect or prevent or interfere with the
consummation of the Transactions and subject to the matters referred to in clauses (w) through(y)
11:CIIEN NNORRIM9050031 - 83 -
j
of this sentence; (ii)conflict with or result in a breach of, or constitute a default under, any indenture
or other agreement or instrument by which such TO Party or any of its respective properties may be
bound or affected, other than any such conflicts, breaches or defaults which, individually or in the
aggregate, would not have a. TO Material Adverse Effect or prevent or interfere with the
consummation of the Transactions to which it is a party and subject to the matters referred to in
clauses (w) through (y) of this sentence; or (iii) require the consent or approval of any third party,
except(w)the Required Consents, (x) the expiration outermination of all applicable waiting periods
under the Hart-Scott Act, (y) those consents described on Schedule 6.2(b) (which consents TCI
represents will be obtained prior to the Redemption Closing Date), and (z)where the failure to obtain
such consents or approvals will not have a TCI Material Adverse Effect or prevent or interfere with
the consummation of the Transactions to which itis party.
(c) Each Transaction Document has been duly executed and delivered by, and
constitutes the legal, valid and binding obligation of, each TCI Party thereto, enforceable against such
party in accordance with its terms, except insofar as the enforceability hereof may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of
creditors rights generally and by general principles of equity.
(d) No TCI Party nor anyone acting on behalf of any thereof has retained any
broker, finder or agent or agreed to pay any brokerage fee, finder's fee or commission with respect
to the transactions contemplated by this Agreement.
(e) As of the date of this Agreement, the authorized capital stock of CA Merger
Sub consists of 10,000 shares of common stock, par value$l.00 per share, all of which have been
validly issued, are fully paid and non-assessable and are owned by TCI free and clear of any Liens.
11XI]HN'111NORRIM90500515\('0I.1)MI)IA.IXX'CI'('181)1'1'1-A(i5 - 84 -
(f) TCI is acquiring the capital stock or the partnership interests, as applicable,
of the Partnership for investment and is not acquiring such capital stock or partnership interests with
a view to or for sale in connection with any distribution thereof within the meaning of the Securities
Act.
(g) As of the Merger Closing Date, the TCI Parties will have sufficient cash on
hand and availability under loan facilities to pay the Cl Purchase Consideration and the CA Merger
Consideration and to make the other payments required to be made on the Merger Closing Date
under Section 4.2. The necessary loan facilities will, at the Closing, be in full force and effect and the
TCI Parties will have the right to borrow thereunder to the extent necessary to perform their
obligations hereunder. Without limitation, the TCI Parties expressly acknowledge and agree the
availability of financing is not a condition to their obligations under this Agreement and the other
Transaction Documents and that if they are unable to consummate the transactions contemplated
hereunder and thereunder because they do not have sufficient funds therefore(whether pursuant to
the above referred to loan facilities or otherwise) the Partnership and/or CI shall be entitled to
terminate this Agreement and the other Transaction Documents and seek damages or suchother relief
in respect thereof as a court may determine to be just and proper in the circumstances.
ARTICLE 7
ACTIVITIES PRIOR TO CLOSING
7.1 Covenants of the Partnership and Cl. CI will cause the Partnership to comply with
the covenants set forth in this Article 7. The Partnership and Cl each jointly and severally covenant
and agree, with respect to each System, that from and after the execution and delivery of this
Agreement to and including the Merger Closing Date:
HAO-11iNIVNORRIM 0500515N:0Id1MBIA.IXXXIVISUPP1..AGS - 85 -
(a) It will give to the TCI Parties and their representatives reasonable access
(during normal business hours and on reasonable advance notice) to all of the premises, properties,
books, contracts, documents and records pertaining to the Systems and the Assets and shall furnish
the TCI Parties with all such information concerning the affairs of the System Owners pertaining to
the Systems and the Assets as the TCI Parties may reasonably request.
(b) It shall operate the Systems, in all material respects, in the ordinary course
consistent with past practices and in accordance with the terms of the Franchises, FCC Licenses and
the Other Permits and in material compliance with all Legal Requirements, subject to the restrictions
contained in this Agreement. Without limiting the generality of the foregoing, each System Owner
will, in all material respects, maintain the Assets in good condition and repair, will maintain adequate
inventories of spare Equipment substantially consistent with past practice, and collect Accounts
Receivable substantially in accordance with past practices, will (to the extent available without
material increase in cost)maintain insurance as in effect on the date of this Agreement and will keep
all its books, records and files in the ordinary course of business substantially in accordance with its .
past practices. Except as disclosed on Part XV of the Disclosure Schedule or as part of any
marketing program described therein,each System Owner will continue to implement its procedures
for disconnection and discontinuance of service to subscribers whose. account& are delinquent
substantially in accordance with past practices. It is expressly agreed that operation of the Systems
in the ordinary course shall include the marketing programs described on Part XV of the Disclosure
Schedule, which may be implemented by the System Owners in their sole discretion: In addition,
notwithstanding anything contained in this Agreement to the contrary, the System Owners shall not
be obligated to make any expenditures, or incur any liability in respect of any expenditure, in respect
f[:pct.u:rrrvNoxws\90SW515\c6i.uMnIn.Ixx'•rctsuImI_ncs - 86 .
of a capital asset or which would, under generally accepted accounting principles, be classified as a
capital expenditure except for Ordinary Course Capital Expenditures and except to the extent of
contractual obligations existing as of the date of this Agreement, which may be fulfilled. In addition,
neither the Partnership nor Willamette shall make further borrowings under the Credit Agreement if,
as a result thereof, the aggregate principal amount of the indebtedness under the Credit Agreement
shall exceed $235,000,000 or the aggregate principal amount of the outstanding borrowings by
Willamette thereunder shall exceed $85,000,000, unless TCI shall consent thereto, which consent
shall not be unreasonably withheld or delayed and in no event shall any borrowings under the Credit
Agreement be made on or ager the Redemption Closing Date.
(c) It shall use commercially reasonable efforts to cause the consummation of the
Transactions to which it is a party.
(d) Except to the extent taken into account in the computation of the. Net
Proration Amount or the Reserve Amount, the Partnership or CI, as the case may be, will, on or prior
to the Merger Closing Date, pay or cause to be paid to.System Employees all compensation, including
salaries, commissions, bonuses, deferred compensation, severance and all benefits under the System
Plans, to which they are entitled for any periods prior to the Merger Closing. The Partnership will
not, without the prior consent of TCI (which shall not be unreasonably withheld or delayed), change
or permit to be changed in any material respect the compensation or benefits of any System
Employees, other than annual adjustments consistent with past practice, adjustments related to
promotions or changes in job responsibilities or description, adjustments tied to performance and
adjustments necessary to comply with applicable Legal Requirements or existing employment
agreements, and other than the Severance and Incentive Payments. .Except as set forth in Part XIII
11:CIIENNNORKIS\90500515\Co1.l1MI11A.IXX%'1'CI81I14I.A(i5 - 87 -
of the Disclosure Schedule, no arrangement shall be made for any new, profit sharing, pension or
retirement plan, relating to employees or agents who render services in connection with the Systems,
and no material change shall be effected in management, personnel policies or employee benefits
without the prior consent of TCI (which shall not be unreasonably withheld or delayed).
(e) Except as otherwise requested by the.TCI Parties, it will use reasonable efforts
to preserve intact its business, to keep available to the TCI Parties the services of its present
employees rendering services in connection with the Systems (except for those employees that are
also CI Stockholders or are listed in Part XVI. G. of the Disclosure Schedule) and to preserve for the
TCI Parties the goodwill of the programming suppliers, advertisers, subscribers, and others having
business relations with the Systems.
(f) It will use its best efforts to obtain the Required Consents prior to the
Redemption Closing, and will use its best efforts to obtain the approvals described in Section 8.1(g)
as promptly as practicable following the date of this Agreement. In addition, the Partnership_and
CCW shall use their respective best efforts to obtain, prior to the Closing, an extension (each, an
"Extension Franchise") of the Franchises issued to CCW by the City of Camas, Washington and the
City of Washougal, Washington until at least February 1998. TCI will be afforded the opportunity
to review and approve (such approval not to be unreasonably withheld or delayed) each form of
Required Consent prior to delivery to the party whose consent is sought, and the opportunity to
review and approve (such approval not to be unreasonably withheld or .delayed) each transfer
resolution to be adopted by any Governmental Authority prior to, adoption thereof. No System
Owner shall accept or agree .to any modification or amendment to (including the Extension
Franchises), or any.condition to the transfer of, any of the Franchises, the FCC Licenses, the Other
11ACIIhNAINORRIM90500515W01AJM111AJMUC181311111_AG5 - 88 -
Permits, the Pole Rental Leases, Leases, Retransmission Consent Agreements or the Other Material
Agreements which shall impose obligations on a TCI Party, any System Owner, or CCO which would
have to be performed after the Merger Closing Date, unless TCI shall consent thereto, which consent
will not be unreasonably withheld if the obligations imposed or sought to beimposed are not
materially more-burdensome than currently contained in the existing agreements: Each System Owner
shall consult with, and permit TCI to participate in, all material proceedings for or material
negotiations with respect to any Extension Franchise or obtaining the consent of any Governmental
Authority with respect to the Transactions, and TCI agrees it shall be reasonably available to do so,
as and when requested to do so.
(g) Each System Owner shall afford TCI the opportunity to review and approve,
such approval not to be unreasonably withheld or delayed, each material filing to be made with any
Governmental Authority after the date of this Agreement, including, without limitation, any forms
filed with respect to rate regulation and any affirmative election with respect to any cost of service
proceeding conducted in accordance with Part 76.922 of Title 47 of the Code of Federal Regulations.
(h) Except as described on Part XV of the Disclosure Schedule or as approved
by TCI, which approval shall not be unreasonably withheld or delayed, no System Owner will: (a)
change the rate charged for any tier of basic or expanded basic programming or make any material
change in its programming tiers of service (the addition or deletion of signals carried not being
deemed to be a material change); (b) sell, transfer or assign any of the Assets other than in the
ordinary course of business consistent with past practice and other than the sale or disposition of
obsolete or excess inventory or Equipment, or (d) permit the amendment or cancellation of any of
the Franchises, FCC Licenses, Other Permits, or Material Agreements except for amendments to or
IL•UAKIVNORRIS\9050051SXCOIAIMIIIA.IXXXIOSUPPI..A05 - 89 -
cancellations of Material Agreements other than Franchises in the ordinary course of business
consistent with past practices which, either individually or in.the aggregate, will not have a Material
Adverse Effect. Except with the consent of TCI (which consent shall not be unreasonably withheld
or delayed), no System Owner, CCO or Cl as agent or manager for any System.Owner or CCO will
enter into any of the following agreements the term of which is to extend beyond the Merger Closing
Date: (i)any Franchise(other than an Extension Franchise), (ii) any Material Agreement (other than
Pole Rental Leases, easements, right-of-way agreements, multiple dwelling unit agreements and bulk-
billed agreements, agreements in respect of the purchase of converters, cable hardware or other
equipment, agreements with installers and marketing firms, and amendments to the Credit Agreement
and related security and guaranty documents, in each case entered into in the ordinary course of
business consistent with past practice, or in the case of amendments to ,the Credit Agreement,
amendments which will not have any material effect beyond the Merger Closing Date or which, if not
made, could result in a Material Adverse Effector otherwise interfere with or jeopardize the ability
of the Partnership and Cl to consummate the transactions contemplated thereunder) or (iii) any
contracts relating to the Telephony Business.
(i) The Partnership will deliver to TCI correct and complete copies of the
Partnership's unaudited consolidated quarterly financial statements for each quarter of 1995 ending
at least 45 days prior to the Merger Closing Date, including balance sheets and related statements of
income, partner's equity and cash flow, and to the extent available, unaudited Financial Statements
for such periods for CCW and Willamette, any other Financial Statements of the Partnership or any
System Owner for any period subsequent to the latest period covered by the Financial Statements
referred to in Section 6.l(1)that are prepared by or for the Partnership at any time before the Closing
11-TIIHNIVN01111I8\90500515\O(HJIMIIIA.IXX\'I'CISU1'1'1.A(i5 _ 90 -
and any material reports with respect to the operations of a System. All financial statements so
delivered will be prepared in accordance with generally accepted accounting principles on a basis
consistent with the Financial Statements referred to in Section 6.l(1).
(j) The Partnership will reasonably cooperate with TCI if TCI determines to
obtain, for its own benefit commitments for owner's.title insurance polices on and surveys of all Real
Property constituting part of the Assets (the cost of any such surveys, commitment for such title
insurance and any title policy issued pursuant thereto shall be borne one-half by the Partnership and
one-half by TCI).
(k) Neither any System Owner nor CCO or CI will, during the period commencing
on the date of this Agreement and ending with the earliest to occur of the Merger Closing, the date
of termination of this Agreement or the date of any breach or default by any TCI Party permitting the
Partnership to terminate this.Agreement and the other Transaction Documents, solicit or initiate the
submission of proposals or offers from any Person for, the direct or indirect acquisition or purchase
of any System or all or substantially all of the outstanding shares of Willamette Stock or stock of CI
or the outstanding partnership interests in the Partnership, CCO or CCW, or any merger or
consolidation with CI and/or the Partnership. If the Partnership or CI begins to solicit or initiate the
.submission of such proposals or offers following such a breach by a TCI Party, it will promptly
thereafter notify TCI in writing that it has commenced such activities.
(l) The Partnership or CI will promptly notify.TCI of any fact,event, circumstance
known to it which would cause any representation or warranty of any party other than a TCI Party
under this Agreement or any other Transaction Document not to be true and complete in any material
respect as of the Redemption Closing Date.
11:\O1 JIiNIVNC)I1111S\9050(IS15K:OL1JMIl1A.1XK7\'1'ClSlll'1'1..AC5 - 9I -
(m) At the Merger Closing, each of Robert M. Rosencrans, Scott N. Ledbetter,
Richard H. Rosencrans and Cal Broussard will execute and deliver to TCI the Noncompetition
Agreement.
(n) No later than 45 days after the end of any complete calendar month within the
period from the date hereof through September 30, 1995 the Partnership shall prepare and deliver to
TCI an instrument which shall be an example of the form of the Partnership Consideration Certificate
which the Partnership intends to deliver pursuant to Section 4.7 (the "Pro Forma Consideration
Certificate"). The Pro Forma Consideration Certificate shall set forth a calculation of the items set
forth in Section 4.7 as of the respective Calculation Date (and, in the case of the Operating Income
Adjustment Amount, three month period) covered by such certificate, and shall set forth examples
of the manner in which the Partnership intends to compute and present the Net Proration Amount and
other items to be set forth in the Partnership Consideration Certificate. The purpose of this clause
is to allow TCI the opportunity to review the format which the.Partnership intends to use in the
preparation and presentation of the information in the Partnership Consideration Certificate.
However, unless TCI and the Partnership otherwise expressly agree in writing, neither the manner
in which the Pro Forma Consideration Certificate is prepared, nor the computations of the various
items set forth therein, shall be binding upon the Partnership in connection with the preparation of
the Partnership Consideration Certificate, which may be prepared in such form and in such manner
as the Partnership shall at the time deem proper and correct.
(o) None of any System Owner, CI, CCO and JH Oregon will, without the prior
consent of TCI, make any announcement to the public concerning the transactions contemplated by
the Transaction Documents, except as any of them may in good faith conclude is required bylaw.
11ACUEN1VNORRIM905005151('0I.11M13IA.IXX1'I'C181ll'17..A(i5 - 92 -
(p) No Employee shall be paid severance, unless such Employee shall have
delivered a release to CCO and the System Owners, in form and substance reasonably satisfactory
to TCI.
(q) The Partnership shall also use commercially reasonable efforts to obtain
estoppel certificates in form reasonably satisfactory to TCI executed by the lessor of each Lease set
forth on Part VI of the Disclosure Schedule where the consent of such lessor to the any of the
transactions contemplated by this Agreement or the CA Merger Agreement is a Required Consent,
certifying as to the current identity of the lessee under such Lease, the expiration of such Lease, that
the lessee is not in default thereunder and that such Lease is in full force and effect.
(r) Prior to the Redemption Closing, the Partnership shall use commercially
reasonable efforts to bring the underground storage tanks described in Part XVI. D. of the Disclosure
Schedule into material compliance with all applicable Environmental Laws(including registration
requirements) and shall use commercially reasonable efforts to convert such underground storage
tanks to (or replace such with) aboveground storage tanks, the cost of such conversion (or
replacement) to be shared one-half by the Partnership and one-half by the TCI Parties.
(s) The Partnership agrees that it will not exercise any termination right it may
have under the Virginia Agreement on or after the Redemption Closing Date.
7.2 Hart-Scott Act. As promptly as practicable, but in no event later than the later of
June 30, 1995 or five days after the date hereof, the parties shall, file or cause their respective
affiliates to file all necessary premerger notification forms with the Federal Trade Commission and
the Department of Justice together with any necessary Exhibits thereto. Thereafter, each party shall
use(or cause its respective affiliates to use) its respective best efforts to cause the waiting period(s)
11:1CI]1{NIUNORRIS%90500515XC01 UMBIA.I WIVISIMILAOS - 93 -
under the Ilart-Scott Act to expire as promptly as possible, including promptly furnishing such
additional materials or information as shall be requested in connection therewith, promptly responding
to all inquiries and using all commercially reasonable efforts to overcome any objections which may
be raised by the Federal Trade Commission, the Department of Justice or any other Governmental
Authority,whether or not such party is deemed to.be an acquiror or acquired person with respect to
the Transactions.
7.3 Regulatory and Other Matters; Cooperation.
(a) The parties shall cooperate in the timely and expeditious preparation and
prosecution of applications and requests for consent to federal, state or local authorities (including,
without limitation, the FCC) and other parties for the obtaining, as of or prior to the Redemption
Closing, of all of the Required Consents. Each party hereto will use commercially reasonable efforts,
and'will cooperatewith each other party, to satisfy or to cause to be satisfied, those of the conditions
to the obligations of each other party to consummate the Transactions to which it is a party that are
dependent upon such party's actions, and to execute and deliver, and to take such other reasonable
actions as may be necessary or appropriate to carry out theintent of, and to consummate the
Transactions to which it is party.
(b) CI,and the.Partnership acknowledge that there are certain programming and
retransmission consent agreements which the TO Parties may request the Partnership and CI to
terminate prior to the Merger Closing. The Partnership and Cl shall use reasonable commercial
efforts to obtain the termination of all such agreements prior to the Merger Closing.
(c) The Partnership shall provide a draft of the Virginia Agreement to TCI as soon
as reasonably possible following the date of this Agreement and shall give TCI an opportunity to
II:WJ.II:NIVNORRIS\90500515\COI.I/. IIIA.1)OCAT IISUITI..AC15 - 94 -1
review and make comments with respect to the Virginia Agreement prior to execution of such
agreement. If the Virginia Agreement as executed by the Partnership and Jones (the "Final Virginia
Agreement")is not satisfactory in form and substance to TCI in its sole discretion, TCI may terminate
this Agreement within 5 Business Days after its receipt from the Partnership of the Final Virginia
Agreement. If the Final Virginia Agreement is satisfactory to TCI in its sole discretion, TCI shall
deliver to the Partnership within 5 Business Days after its receipt of the Final Virginia Agreement,
a written waiver(a "Waiver Agreement")of the condition specified in Section 8.2(a) to the obligation
of the TCI Parties to consummate the Cl Purchase and Merger Transactions that the Intermediate
Transaction shall have occurred. Without the prior written consent of TCI, which consent may be
withheld by TCI in its sole direction, no amendments shall be made to either the Virginia Agreement
or the Michigan Agreement and no side agreements shall be entered into:by the Partnership and Jones
or in respect of the Michigan System (i) which would provide for any assets of the Partnership with
respect to the Virginia System to be excluded from the sale to Jones or any assets of the Partnership
with respect to the Michigan System to be excluded from the sale to Continental; (ii)which would
cause the terms of the Virginia Agreement or the Michigan Agreement to be inconsistent with this
Agreement, (iii) which would provide for any System Owner or CCO to have any liability to Jones
or Continental after the Merger Closing Date other than liabilities which are to be satisfied only out
of the Virginia Escrow Amounts or the Michigan Escrow Amounts, (iv) which, in the case,of the
Virginia Agreement, would amend the conditions to Jones'obligations to close or which would give
Jones any additional termination rights, or(v)which would materially and adversely affect any System
Owner or CCO following the Merger Closing Date. TCI's consent to any,such amendment shall be
deemed to have been given if TCI does not notify the Partnership in.writing of its disapproval of such
ll.%MJI:NIVNORRIH%90500515U'OL11MIIIA.IXX'\'1'CISl11'1'I..A(:5 - 95 - .
amendment within 4 Business Days after its receipt of such amendment from the Partnership. If TCI
does so notify the Partnership in writing of its disapproval of such amendment, the Partnership may
terminate this Agreement within 5 Business Days after its receipt from TCI of such notice of
disapproval.
(d) On or prior to the Redemption Closing Date,the Partnership Amendment shall
be executed by all of the Partners of the Partnership, and thedistribution referred to in paragraph 3(a)
of the Partnership Amendment shall be made. CI and LGI hereby consent, each in their capacities
as Partners of the Partnership, to the execution, delivery and performance by the Partnership of this
Agreement, the CA Merger Agreement and the other agreements contemplated by this Agreement
or the CA Merger Agreement to which the Partnership is a party, and to the form of Partnership
Amendment attached hereto as Exhibit 2.1(a). CI and LGI shall execute the Partnership Amendment
no later than immediately after it has been executed by all other Partners of the Partnership, and shall
execute a separate written consent of Partners consenting to and approving the CA Merger.
7.4 TCI Parties' Covenants.
(a) The TCI Parties shall cooperate with the Partnership in obtaining, and use
commercially reasonable efforts to help the Partnership obtain, all of the Required Consents and the
Extension Franchises, which cooperation shall include the posting of performance bonds, letters of
credit and the like, making any reasonable deposits required by the applicable governmental or third
party, meeting with and promptly furnishing information to appropriate governmental and third
parties and otherwise rendering such other assistance as may be reasonable or appropriate in the
circumstances.
HACUENIVNORWS'W50051 - 96 -
(b) Each TCI Party will keep and hold as confidential all information obtained
from Cl, any System Owner or any of their respective agents or representatives with respect to CI,
any System Owner or their respective business, operations, liabilities or finances, or the Assets or the
Systems, and will not disclose any of such information to any other person or entity except to its
officers, directors, shareholders, professional advisors and lenders involved in the transactions
contemplated by this Agreement and the other Transaction Documents, and to the extent required
by law. Should the transactions contemplated herein and therein not be consummated for any reason,
the TCI Parties shall destroy all documents, work papers and other materials obtained from (or
derived from documents, work papers and other materials obtained from) CI, the Partnership, any
other System Owner or any of their respective agents or representatives, whether hereunder or
otherwise in connection with its investigations of CI, the Systems Owners, the Assets and the
Systems, together with all copies thereof and extracts therefrom, and shall keep confidential all such
information and not disclose any such information to any other person or entity, except as otherwise
required by law.
(c) The TCI Parties will not, without the prior consent of the Partnership, make
any announcement to the public concerning the transactions contemplated by this Agreement and the
other Transaction Documents, except as the TCI Parties may conclude in good faith is required by
law.
(d) TCI will, at least 30 days prior to the Merger Closing Date, advise CI and the
Partnership which of the then Employees will be given the opportunity to be Continuing Employees.
TCI will, for at least one year after the Merger Closing Date, either maintain the employee benefit
plans of the System Owners in effect on the date of this Agreement (or plans providing generally
IIACIIHNNNORIUM90500515\COIAIM111A.IX)(\'I'C:13U1'YL.A(i5 - 97 -
comparable benefits) or include Continuing Employees in the employee benefit plans of TCI and its
subsidiaries in which similarly situated employees participate (in which case TCI will give credit for
prior service for all purposes other than benefit accrual under such plans to such Employees).
(e) Effective as of the Merger Closing Date, TCI shall cause the System Owners
to provide health coverage to all Continuing Employees who were entitled to health coverage under,
one or more of the health care plans of the System Owners immediately prior to the Merger Closing
Date, and their eligible dependents, subject to paragraph (d) of this Section 7.4, without the
application of any minimum eligibility period of employment for coverage and without any restriction
for pre-existing conditions. Any deductible requirements under the health care plans of the System
Owners that have been satisfied by a Continuing Employee with respect to the coverage year in which
the Merger Closing Date occurs shall be credited thereto under TCI's health care plans after the
Merger Closing Date. As of the Merger Closing Date, TCI also will offer coverage under the health
care plans covering the Continuing Employees after the Merger Closing to any former employees
(together with their eligible dependents) who have been previously employed in any capacity by the
Partnership, CCW or Willamette and who as of the Merger Closing Date, either (i) already had
elected health care continuation coverage under the provisions of Section 4980B of the Code or (ii)
are in an election period to elect such coverage, in accordance with Section 498013(f)(5) of the Code,
as of the Merger Closing Date.
(f) TCI agrees that the Representative shall have full power and authority to cause
Arthur Andersen&Co. to prepare and file all tax returns for the Partnership for all Pre-Closing.Tax
Periods for which returns have not been filed prior to the Merger Closing, and the related K-I forms.
Such tax returns-shall be filed no later than April 15, 1996 (or as soon thereafter as reasonably
ll-%CI.lliNIVNORR1S\90500515%CULI1M1)1A.IXX)\'I'CISUPI'I»A(i5 - 98 -
possible) and shall be prepared in accordance with the Partnership's past custom and practice and
allocations(including as between Pre-Closing Tax Periods and periods thereafter) of items of income
and gain and loss and deduction shall be made using the closing of the:books method. In preparing
such tax returns, the Representative shall consult with TCI and shall provide TCI with drafts of such
tax returns.(together with the relevant back-up information upon request) for review no later than
February 28, 1996(or, if later, 30 days after final determination of the CI Purchase Consideration and
the CA Merger Consideration pursuant to Section 4.8 above), and in any event at least 30 days prior
to filing. If requested by the Representative TCI shall cause the Partnership to sign such tax returns,
provided that such tax returns (and the related K-I forms) are in form and substance reasonably
acceptable to TCI. If the-Representative and TO cannot agree on the treatment of any item in any
such return or the related K-I forms, and as a result such are not reasonably acceptable to TCI, then
either of them may refer such dispute to Arthur Andersen& Co., who shall resolve such dispute and
whose determination shall be final and binding.. Any expenses of or incurred by the Representative
in connection with the foregoing (including the fees and expenses of Arthur Andersen& Co.) shall
be deemed Transaction Expenses payable out of the Reserve Account.
(g) TCI agrees that during the period following the Merger Closing Date it and
its affiliates shall cooperate with the Representative and its agents and employees in the preparation
by the Representative of the Representative Closing Certificate and the resolution of any disputes
with respect thereto, including reasonably making available the accounting, bank, tax and similar
books and records of the,Systern Owners, as well as copies of the computer discs or other media on
which such information is stored or which are used in the preparation of monthly or other financial
or operating reports by the System Owners, and causing its accounting personnel, including any
II:LClMNNNORRIS170500515W01.11M111A.IXHITCM11Pl'l_AGS - 99 -
accounting personnel currently employed by the System Owners who become Continuing Employees
to be reasonably available to provide information, data and reports to the Representative as the
Representative may reasonably request. The above provisions of this Section 7.4(g) shall not have
any force or effect from and after the final determination of the CI Purchase Consideration and the
CA Merger Consideration pursuant to Section 4.8'(including the resolution of all disputes pursuant
thereto). Any reasonable out-of-pocket expenses incurred by TCI or the System Owners as a result
of the foregoing provision of this Section 7.4(g) shall be deemed Transaction Expenses, and the
Representative shall promptly reimburse TCI and/or the System Owners for an amount equal to
75.6% of the amount thereof upon receipt of written demand therefor from TCI, accompanied by
reasonably detailed supporting documentation.
ARTICLE 8
CONDITIONS PRECEDENT
8.1 Conditions to the Oblintions of the TCI Parties to Consummate the Redemption
Transaction. The obligation of the TCI Parties to consummate the Redemption Transaction and to
perform or fulfill or carry out its agreements, undertakings and obligations herein made or expressed
to be performed, fulfilled or carried out prior to, on or after the Redemption Closing Date is and shall
be subject to fulfillment of or compliance with, on or before the: Redemption Closing Date, the
following conditions precedent, any of which may be waived in writing by TCI, on behalf of the.TCI
Parties:
(a) The Preliminary Transactions shall have occurred.and the sale of the Virginia
System shall not have been consummated.
I1ACI]BNNNORI(IS\90500515\COLI)M111A.IXX7\T(:IS(11'1'L.A05 - 100 -
(b) The TCT Parties shall be satisfied in their sole discretion that the consummation
of the sale of the Virginia System will occur on the day following the Redemption Closing Date.
(c) The TO Parties shall be satisfied in their sole discretion that all conditions to
the obligation of the TO Parties to consummate the CI Purchase and Merger Transactions will be
satisfied on the Merger Closing Date.
(d) The representations and warranties of the Partnership and CI contained in this
Agreement or in the other Transaction Documents shall be deemed to have been-made again at and
as of the Redemption Closing Date and shall then be true in all material respects(except as to such
representations and warranties which are expressly subject to a materiality qualification contained in
the text thereof, which shall be true and correct in all respects); the Partnership and CI shall have
performed and complied with all agreements, covenants and conditions required by this Agreement
or the other Transaction Documents to.be performed or complied with by it prior to or at the
Redemption Closing; and, the Partnership and CI shall have performed and complied with all
agreements, covenants and conditions required by. this Agreement or the other Transaction
Documents to be performed or complied with by it prior to or at the Merger Closing, other than the
transactions described in Section 2.3, Section 2.4, Section 4.2, and the delivery of the documents
described in Section 5.2(b).
(e) No action, suit or proceeding shall be pending by or before, or threatened in
writing by any Governmental Authority, and no Legal Requirement shall have been enacted,
promulgated, issued or deemed applicable to any of the Transactions by any Governmental Authority,
(i) which, in the opinion of counsel for the TCI Parties, makes unlawful the closing of any of the
Transactions; (ii) which would prohibit the ownership and operation of all or a material portion of
11AC31F.MUNoxx18\9050051s\COIAJMNIn.ixX1•r(AsuPYLnCS
the Oregon System by Willamette, the Washington System by CCW or the Nevada System by the
Partnership; or (iii) which would compel the Partnership, Willamette or CCW to dispose of(to an
unaffiliated party) all or a material portion of any System following the Redemption Closing Date;
and there shall not have been suffered any casualty or loss, whether or not covered by insurance,
which either alone or in the aggregate has had a Material Adverse Effect (unless the TCI Parties shall
have given a TCI Party Closing Notice in respect of such casualty or loss).
(f) All necessary pre-merger notification filings required under the Hart-Scott Act
with respect to the Redemption Transaction and the CI Purchase and Merger Trans actions shall have
been made with the Fcdcral Tradc Commission and the United States Department of Justice and the
prescribed waiting periods (and any extensions thereof)will have expired or been terminated.
(g) (i) The Partnership Amendment shall have been consented to or approved by
the Partners of the Partnership (other than LGI) in accordance with the terms of the Partnership
Agreement, (ii)the Holders of 95% of the Units shall have duly consented to and approved the CA
Merger and adopted the CA Merger Agreement as required pursuant to the DGCL and the RULPA.
(h) All documents, agreements, certificates and instruments required to be
delivered to the TCI Parties pursuant to Section 5.2(a) shall have been delivered to the TCI Parties
by the parties responsible therefor.
(i) The Partnership shall have delivered to the TCI Parties an instrument in form
and substance reasonably satisfactory to TCI, duly executed by John Hancock, assigning the
partnership interest of John Hancock in JH Oregon to the Partnership, free and clear of all Liens, such
assignment to be effective on the Merger Closing Date.upon the payment by TCI of the amount
specified in the John Hancock Agreement.
II:\G7 UiN1VNURRIS\90500515\CC)1.UMIlIA.1X)C\'fCISUI'19..ACiS - 102 -
(j) The Partnership shall have delivered to the TCI Parties a copy of the John
Hancock Agreement authorizing JH Oregon to execute the CCO Partnership Amendment, duly
executed by'John Hancock.
8.2 Conditions to the Obligations of the TCI Parties to Consummate the CI Purchase and
Merger Transactions. The obligation of the TCI Parties to consummate the CI Purchase and Merger
Transactions and to perform or fulfill or carry out its agreements, undertakings and obligations herein
made or expressed to be performed, fulfilled or carried out prior to, on or after the Merger Closing
Date is and shall be subject to fulfillment of or compliance with, on or before the Merger Closing
Date,the following conditions precedent, any of which may be waived in writing by TCI, on behalf
of the TCI Parties:
(a) 'The Redemption Transaction and the Intermediate Transaction shall have
occurred; provided, that if the Waiver Agreement is delivered by TCI, the consummation of the
Intermediate Transaction,shall not be a condition to the obligation of the TCI Parties to consummate
the CI Purchase and Merger Transactions.
(b) The Partnership and CI shall have performed and complied with all agreements,
covenants and conditions under Sections 2.3, 2.4, and 4.2; provided,that if the Waiver Agreement
is delivered by TCI, the consummation of the transactions described in Section 2.3 shall not be a
condition to the obligation of the TCI Parties to consummate the CI Purchase and- Merger
Transactions.
(c) No injunction or ruling shall have been issued or made by any Governmental
Authority, and no Legal Requirement shall have been enacted, promulgated, issued or deemed
applicable to any of the Transactions by any Governmental Authority, (i) which, in the opinion of
11AC1]NNIS)NORRIS\7QSOOSIS\CO1.11MUTA.IX VIVISUPPI..AUS - 103 -
counsel for the TCI Parties, makes unlawful the closing of the CI Purchase and Merger Transactions;
(ii) which would prohibit the ownership and operation of all or a material portion of the Oregon
System by Willamette, the Washington System by CCW or the Nevada System by the Partnership;
or (iii) which would compel the Partnership, Willamette or CCW to dispose of(to an unaffiliated
party) all or a,material portion of any System following the Merger Closing Date.
(d) All documents, agreements, certificates and instruments required to be
delivered to the TCI Parties pursuant to Section 5.2(b) shall have been delivered to the TCI Parties
by the parties responsible therefor.
8.3 Conditions to Obligations of the Partnership and CI to Consummate the Redemption
Transaction. The obligation of the Partnership and CI to consummate the Redemption Transaction
and to perform or fulfill.or carryout its respective agreements, undertakings and obligations herein
made or expressed to be performed, fulfilled or carried out prior to, on or after the Redemption
Closing Date is and shall be subject to fulfillment of or compliance with, on or before the Redemption
Closing Date, the following conditions precedent, any of which may be waived by the Partnership and
CI:
(a) The Preliminary Transactions shall have occurred.
(b) The Partnership and CI shall be satisfied in their sole discretion that all
conditions to the obligations of the.Partnership and CI to consummate the CI Purchase and Merger
Transactions will be satisfied on the Merger Closing Date.
(c) The representations and warranties of the TCI Parties contained in this
Agreement or the other Transaction Documents shall be deemed to have been made again.at and as
of the time of the Redemption Closing and shall then be true in all material respects (except as to such
ll:\CllENI'1NORRIS\90500515V'01.I)MIIIA.IXX\'1'(:ISUI'Yl_AGS - 104 -
representations and warranties which are expressly subject to a materiality qualification contained in
the text thereof, which shall be true and correct in all respects); each TCI Party shall have performed
and complied in all material respects with all agreements, covenants and conditions required by this
Agreement or the other Transaction Documents to be performed or complied with by it prior to or
at the Redemption Closing; and, each TCI Party shall have performed and complied with all
agreements, covenants and conditions required by this Agreement or the other Transaction
Documents to be performed or complied with by it prior to or at the Merger Closing, other than the
transactions described in Section 4.2 and the delivery of the documents described in Section 5.2(d).
(d) No action, suit or proceeding shall be pending by or before, or threatened.in
writing by, any Governmental Authority, and no Legal Requirement shall have been enacted,
promulgated, issued or deemed applicable to any of the Transactions by any Governmental Authority,
(i) which, in the opinion of counsel for the Partnership or CI, makes unlawful the closing of any of
the Transactions; (ii) which would prohibit the ownership and operation of all or a material portion
of the Oregon System by Willamette, the Washington System by CCW or the Nevada System or the
Virginia System by the Partnership; or (iii) unless the.condition contained in Section 8.1(e)(iii) is
waived in writing by TCI, which would compel the Partnership, Willamette or CCW to dispose of
(to an unaffiliated party) all or a material portion of any System following the Redemption Closing
Date; and there shall not have been suffered any casualty or loss, whether or not covered by
insurance,which either alone or in the aggregate results in the Subscriber Adjustment Amount or the
Operating Income.Adjustment Amount being greater than zero (based on the'Partnership's good faith
calculation of either thereof) (unless the TCI Parties shall have given a TCI Party Closing Notice in
respect of such casualty or loss, or the TCI Parties shall otherwise agree, by written notice to the
11ACl.l@NIUNORRI8\90500515\C0L UBIA.MNIVISUPY1_AG5 - 105 -
Partnership given within 5 days after TCI is advised of such casualty or loss, that the number of
Equivalent Subscribers and the Operating; Income Amount shall be computed in the same manner as
if a TCI Party Closing Notice had been given).
(e) All necessary pre-merger'notification filings required under the Hart-Scott Act
with respect to the Redemption Transactiomand,the Cl Purchase and Merger Transactions shall have
been made with the Federal Trade Commission and the United States Department of Justice and the
prescribed waiting periods (and any extensions thereof) will have expired or been terminated.
(f) (i)The Partnership Amendment shall have been consented to or approved by
the Partners of the Partnership (including LGI) in accordance with the terms of the Partnership
Agreement, and (ii) the Holders shall have duly consented to and approved the CA Merger and
adopted the CA Merger Agreement as required pursuant to the DGCL and the RULPA.
(g) All documents, agreements, certificates and instruments required to be
delivered to CI and the Partnership pursuant to Section 5.2(c) shall have been delivered to CI and the
Partnership by the parties responsible therefor.
(h) John Hancock shall have duly executed and delivered the John Hancock
Agreement.
8.4 Conditions to Obligations of the Partnership and CI to Consummate the CI Purchase
and Merger Transactions. The obligation of the Partnership and CI to consummate the CI Purchase
and,Merger Transactions and to perform or fulfill or carry out its respective agreements, undertakings
and obligations herein made or expressed to be performed,fulfilled or carried out prior to, on or after
the Merger Closing Date is and shall be subject to fulfillment of or compliance with, on or before the
11:CUE NININORRIM90500515\C'01.CJMIIIA.IXX.M'('ISCJI'1'I..AG3 - 106 -
Merger Closing Date, the following conditions precedent, any of which may be waived by the
Partnership and CI:
(a) The Redemption Transaction shall have occurred.
(b) Each TCI Party shall have performed and complied in all material respects with
its obligations under Section 4.2.
(c) No injunction or ruling shall have been issued or made by any Governmental
Authority, and no Legal Requirement shall have been enacted, promulgated, issued or deemed
applicable to any of the Transactions by any Governmental Authority, (i) which, in the opinion of
counsel for the Partnership or Cl, makes unlawful the closing of the Cl Purchase and Merger
Transactions; (ii) which would prohibit the ownership and operation of all or a material portion of
the Oregon System by Willamette, the Washington System by CCW or the Nevada System or the
Virginia System by the Partnership; or(iii) unless the condition contained in Section 8.2(c)(iii) is
waived in writing by TCI, which would compel the Partnership, Willamette or CCW to dispose of
(to an unaffiliated party)all or a material portion of any System following the Merger Closing Date.
(d) All documents, agreements, certificates and instruments required to be
delivered to CI and the Partnership pursuant to Section 5.2(d) shall have been delivered to CI and the
Partnership by the parties responsible therefor.
ARTICLE 9
INDEMNIFICATION
9.1 Indemnification by CI and the Holders. Subject to the limitations, conditions and
provisions set forth herein, CI agrees,'and by their approval of the CA Merger Agreement, the
Holders other than LGI agree,to indemnify and to hold harmless(up to their respective Proportionate
IL'\CL1I MMORRIM905(N)513\COId1M1)IA.1XX\'1'(:ISUI'1'L.A(i5 - 107 -
Share and, in the case of Cl, out of the Cl Escrow Portion, and in the case of the Holders, out of the
CA Escrow Portion), the TCI Parties and the Partnership Entities from and against and in respect of
any loss, damage or expense, including reasonable attorneys' fees and expenses incurred by the TCI
Parties in connection with any action, suit, proceeding, demand, assessment or judgment incident to
any of the matters they are indemnified against in this Agreement(collectively, "Losses") incurred by
any TCI Party from:
(a) Any and all liabilities and obligations of, or claims against CI, a System Owner
or CCO or relating to the management, ownership or operation of the Assets or the Systems (or the
Michigan System or the Virginia System, except to the extent that any such Loss is paid out of the
escrows held under the Michigan Agreement or the Virginia Agreement or by Continental or any
i
affiliate thereof in the case of the Michigan System or by Jones or any affiliate thereof in the case of
i
the Virginia System), to the extent,such arose by reason of any act or omission of CI, a System
i
Owner or CCO occurring on or before the Merger Closing Date or otherwise relating to the period
prior to the Merger Closing Date, unless there has been an adjustment to the CI Purchase
Consideration or the CA Merger Consideration in respect thereof or such liabilities, obligations or
claims constitute Assumed Liabilities.
(b) Any damage or deficiency for which there has not been an adjustment to the
CI Purchase Consideration or the CA Merger Consideration resulting from any misrepresentation,
breach of warranty, or non-fulfillment of any agreement or covenant on the part of any Selling Party
under any Transaction Document, or on the part of the Partnership, CI, Willamette, CCO or the
Representative under any Transaction Document or the Closing Escrow Agreement,.or from any
li:\CIJI:NIUNORItIS%90500515\('OLI)MIiIA.IXX\'1'(7ti111'PI..A(i5 108
misrepresentation in or omission from any schedule, certificate or other instrument furnished by the
Partnership, Cl, Willamette, CCO or the Representative to the TCI Parties thereunder.
(c) Any liability to any Holder other than LGI or to any CI Stockholder.arising
out of any action taken prior to the Closing by Cl, the Partnership or the Representative under the
Transaction Documents, including a claim relating;to the calculation and allocation of the CI Purchase
.Consideration and the CA Merger Consideration, or in respect of.a claim of breach of fiduciary duty,
either by Cl prior to the Merger.Closing Date or by the Representative after the Merger Closing Date.
(d) If the Intermediate Transaction is not consummated on the Virginia Closing
Date, any damage or deficiency resulting from any breach of warranty or non-fulfillment of.any
agreement or covenant on the part of the Partnership or CI under the Virginia Agreement or any
agreement entered into in connection with the Virginia Agreement, or fromany misrepresentation in
or omission from any schedule, certificate or other instrument furnished by.the Partnership or CI to
Jones thereunder, it being deemed for purposes of this Section 9.l(d)that the warranties, covenants
and agreements of the Partnership and Cl set forth in the Virginia Agreement were made directly to
and for the benefit of the TO Parties. Notwithstanding the foregoing, with respect to required
consents from Governmental Authorities and third parties, the TCI Parties and_the Partnership
Entities shall only be entitled to indemnification from CI and the Holders other than LGI with respect
to any Losses arising out of the failure of the Partnership to have obtained the consents of the
Governmental Authorities listed on Part XVIII of the Disclosure Schedule to the change in control
of the Virginia System which may be deemed to have occurred upon the.Merger Closing.
(e) Proportionate Share shall mean in the case of any Loss for which the:TCI
Parties are entitled to indemnification under Section 9.1, the following-
- 109 -
(i) in the case of any such Loss other than a Loss falling within the
provisions of(ii) or (iii) below, 39.6% for Cl and 36% for the Holders other than LGI (it being
acknowledged and agreed that the TCI Parties are not indemnified for 24.4% of such Loss due to
LGI's prior interest in the Partnership);
(ii) in the.case.of any such Loss relating to or in respect of the Oregon
System,the Willamette Assets, Willamette or CCO, 33.94%for Cl and 30.86% for the Holders other
than LGI (it being acknowledged and agreed that the TCI Parties are not indemnified for 35.20% of
such Loss due to LGI's prior ownership of CCO and the Partnership); and
(iii) in the case of any such Loss relating to CI (and not attributable to any
System or arising out of its general partnership interests in the Partnership or CCW), or within
Section 9.1(c)above(but only to the extent that such Loss is not one with respect to which CI would,
as of the date hereof, be entitled to indemnification under the Partnership Agreement if it were acting
in its capacity as managing general partner of the Partnership,or as to which CI is not otherwise
entitled to indemnification under any Transaction Document or under applicable law), 1001/6 for CI.
9.2 Indemnification by the TCI Parties. TCI (in the case of Section 9.2(b)below only)
and each of the TCI Parties(other than TCI), and each of the System Owners, CCO and JH Oregon
(the"Partnership Entities")(in the case of Sections 9.2(a)and(b)below),jointly and severally, agrees
to indemnify and hold each Selling Party harmless from and against and in respect of any loss, damage
or expense, including reasonable attorneys' fees and expenses incurred by any Selling Party in
connection with any action, suit, proceeding, demand, assessment or judgment incident to any of the
matters any Selling Party is indemnified against by a TCI Party in this Agreement (collectively,
"Losses"), incurred by any Selling Party from:
ll:\ClMtNIVNORRIS\9050515\COI.l)MIl1A.1XX'\TC1Sl)1'1'1..ACiS 11O
(a) 'Any and all liabilities and obligations (other than Excluded Liabilities) of,
relating to or arising out of the ownership of the CI Partnership Interest, the Units, the Willamette
Stock or the.CCW Partnership Interests, or the management, ownership and/or operation of the
Assetsl or the Systems, which is based on or arises out of any act or omission occurring,from and"after
the Merger Closing; Date, which was taken into account in the computation of or adjustment to the
CI Purchase Consideration or the CA Merger Consideration or which constitutes an Assumed
Liability.
(b) Any damage or deficiency resulting from any misrepresentation, breach of
warranty, or non-fulfillment of any agreement or covenant on the part of a TCI Party under any
Transaction Document, or the Closing Escrow Agreement or from any misrepresentation in or
omission from any exhibit, certificate or other instrument furnished or:to be furnished to the
Partnership or to a Selling;Party thereunder.
9.3 Defense of Claims. The TCI Parties and the Partnership Entities on the one hand, and
the Selling Parties, on the other, shall each give,prompt notice to TCI (on behalf of the TCI Parties
.and the Partnership Entities) or the Representative (on behalf of the Selling Parties) of any claim
against the party giving notice(the"indemnified party") which might give rise to a claim by it against
any other party (the "indemnifying party")based upon any indemnity contained herein. The notice
shall set forth in reasonable detail the nature and basis of the claim and the actual or estimated amount
thereof. In the event any action, suit or proceeding is brought against any TCI Party and/or
Partnership Entity or Selling Party with respect to which any other party hereto may have liability
under-any indemnity contained herein, TO (if the indemnifying party is a TCI Party or a.Partnership
Entity)or the Representative (if the indemnifying party is a Selling Party) shall have the right, at the
I1:1NOIENNNORRI \905005151(701AJMI11A.)XXXIVISUPPLAcs
sole cost and expense of the indemnifying parties, to defend such action in the name and on behalf
of the indemnified party and in connection with any such action, suit or proceeding the parties hereto
agree to render to each other such assistance as may reasonably be required in order to insure the
proper and adequate defense of any such action, suit or proceeding. The indemnified party shall have
the right to participate, at its own expense and with counsel of its choosing, in the defense of any
claim against which it is indemnifiedhereunder and it shall be kept fully informed with respect thereto.
The indemnified party shall not make any settlement of any claim which might give rise to liability of
the indemnifying party under any indemnity contained herein without the prior written consent of the
indemnifying party, which consent shall not be unreasonably withheld.
9.4 Limitation of Liability. Notwithstanding any provision of this Agreement or the CA
Merger Agreement to the contrary or any right or remedy any TO Party, Partnership Entity or
Selling Party may otherwise have or possess at law or in equity, each TO Party and Partnership
Entity hereby agrees that from and after the Merger Closing, its right to make any claims or obtain
any recourse or redress against any Selling Party or any other member of the Selling Group (as
hereinafter defined), and each Selling Party hereby agrees that its right to make any claims or obtain
any recourse or redress against any member of the TCI Group (as hereinafter defined) is and shall be
subject to all of the following limitations:
(a) The TCI Parties and the Partnership Entities shall only be entitled to indemnity
from the Selling Parties, and the Selling Parties shall only be entitled to indemnity from the TCI
Parties and the Partnership Entities, for those claims made under Section 9.1 or 9.2 as to which the
TCI Parties and Partnership Entities, or Selling Parties, as the case may be, have,given written notice
thereof to the other within one year after the Merger Closing Date hereunder(except for claims made
11ACII iNNNOKWS\90500515\COIAIM1IIA.IXX 1'1'CISIII'I'I..A(15 1 12
pursuant to and as permitted by Section 4.8 above in connection with the computation of the final
LGI Redemption Value, Cl Purchase Consideration and CA Merger Consideration which shall not
constitute indemnification claims and except for claims of gross negligence or willful misconduct of
the Representative under Section 12.9, and claims arising under the Noncompetition Agreements).
Any written notice delivered pursuant to this Section 9.4(a) shall set forth with reasonable specificity
the basis of the claim for indemnity and a reasonable estimate of the amount thereof.
(b) (i) Anything in this Agreement or applicable law to the contrary
notwithstanding, it is understood and agreed by each TCI Party and Partnership Entity, that, other
than as expressly provided for in Section 9.1, from and after the Merger Closing Date no Selling Party
shall have any obligation or liability to any TO Party or Partnership Entity and each of them hereby
waives and releases(on behalf of itself and eachof its successors, assigns, partners, shareholders and
affiliates), and shall have no recourse or claim against, each and every Selling Party and any of their
respective partners, officers, directors, employees, agents, affiliates and such partner's and affiliate's
respective officers, directors, shareholders, partners, employees, agents or affiliates (each, a "member
of the Selling Group"), as a result of the breach of any representation, warranty, covenant or
agreement of the Partnership or any Selling Party contained herein or in any schedule hereto or
document or instrument at any time delivered hereunder or in connection herewith, or otherwise
arising out of or in connection with the transactions contemplated hereby or thereby, or the operation
of,any of the Systems, or the status of or any act or omission of any member of the Selling Group as
an officer, director, partner, manager or agent of any Partnership Entity, it being understood that the
remedies provided for in Section 9.l shall be the sole and exclusive remedy for any such claims by
any TCI Party or Partnership Entity for any such matters, whether such claims are framed in contract,
11XIM-NI'MORR18\9050051SWO1AIMIl1A.IXXXIVIS11ITI..AUS - 113 -
tort or otherwise (except in respect of the computation of the final LGI Redemption Value, CI
Purchase Consideration and CA Merger Consideration pursuant to Section 4.8 above which shall not
constitute claims for indemnification and except for claims of gross negligence or willful misconduct
of the Representative under Section 12.9, and claims arising under the Closing Escrow Agreement
or the Noncompetition Agreements).
(ii) Anything in this Agreement 'or applicable law to the contrary
notwithstanding, it is understood'and -agreed by each Selling Party, that, other than as expressly
provided for in Section 9.2, from and ager the Merger Closing Date no TCI Party or Partnership
Entity shall have any obligation or liability to any Selling Party and each of them hereby waives and
releases(on behalf of itself and each of its successors, assigns, partners, shareholders and affiliates),
and shall have:no recourse or claim against, each and every TCI Party and Partnership Entity and any
of their respective partners, officers, directors, employees, agents, affiliates and such partner's and
affiliate's respective officers, directors, shareholders, partners, employees, agents or affiliates (each,
a "member of the TCI Group"), as a result of the breach of any representation, warranty, covenant
or agreement of any TO Party contained herein or in any schedule hereto or document or instrument
at any time delivered hereunder or in connection herewith, or otherwise arising out of or in
connection with the transactions contemplated hereby or thereby, or the operation of any of the
Systems, or the status of or any act or omission of any member of the TCI Group as an officer,
director, partner, manager or agent of any TO Party, it being understood that the remedies provided
for in Section 9.2 shall be the sole and exclusive remedy for any such claims by any Selling Party for
any such matters, whether such claims are framed in contract, tort or otherwise (except in respect of
the computation of the final LGI Redemption Value, CI Purchase Consideration and CA Merger
11:K:IJIiN'lVNU111tIS\90500515\COLUMIilA.1Xx:1'1'ClSlll'1'L.A(i5 - 114
Consideration which shall not constitute claims for indemnification pursuant to Section 4.8 above,
and claims arising under the Closing Escrow Agreement or the Noncompetition Agreements).
(c) (i) Except with respect to claims,arising under Section 9.1(d), in no event
shall the right to indemnity of the TCI Parties from the Selling Parties arising hereunder exceed the
remaining amount of the Indemnification Escrow Amount held in the Closing Escrow Fund (or, in
the aggregate for all claims for indemnification from any or all of the Selling Parties, the sum of
$12,500,000), and such Indemnification Escrow Amount shall be the sole source of indemnification
payments from the Selling Parties to the TCI Parties, it being agreed, however, that claims in respect
of the calculation of the final L.GI Redemption Value, the CI Purchase Consideration and the CA
Merger Consideration pursuant to Section 4.8 or claims of gross negligence or willful misconduct of
the Representative under Section 12.9 shall not be deemed claims for indemnification under this
Article 9. With respect to claims arising under Section.9.l(d), in no event shall the right to indemnity
of the TCI Parties from the Selling Parties arising thereunder exceed in the aggregate for all claims
for indemnification from any or all of the Selling Parties, the sum of$6,000,000. In addition, the
Selling Parties shall not have any liability to any TCI Party or Partnership Entity with respect to any
matter for which any Selling Party has the obligation to indemnify any TCI Party or Partnership Entity
under Section 9.1 until the amount of Losses for which the TCI Parties or Partnership Entities would
otherwise have been entitled to indemnification pursuant to Section 9.1 shall exceed $500,000, and
then the Selling Parties shall only be liable for the excess of Losses over $250,000(other than the
matters specified in Section 9.1(c), as to which this deductible shall not apply).
(ii) In no.event shall the right to indemnity of the Selling Parties from the
TCI Parties and the Partnership Entities arising hereunder exceed, in respect of all Losses,the
I1ACI]RNNNORR1S\90500515\:0I.11h1111A.IXXITUSIIPPI_AGS - 115
aggregate amount of$12,500,000, it being agreed that claims in respect of the calculation of the final
LGI Redemption Value, the Cl Purchase Consideration and the CA Merger Consideration pursuant
to Section 4.8 shall not be deemed claims for indemnification under this Article 9. In addition, the
TCI Parties and the Partnership Entities shall not have any liability to any Selling Party with respect
to any matter for which any TC) Party or Partnership Entity has the obligation to indemnify any
Selling Party under Section 9.2 until the amount of Losses for which the Selling Parties would
otherwise have been entitled to indemnification pursuant to Section 9.2 shall exceed $500,000, and
then TCI Parties and the Partnership Entities shall only be liable for the excess of Losses over
$250,000.
(iii) The provisions of this Section 9.4(c)shall not apply to claims in respect
of the failure of TCI to make or to cause the Partnership to make any payments required under
Section 4.2 or otherwise taken into account in the computation of the final CI.Purchase Consideration
and CA Merger Consideration.
ARTICLE 10
CASUALTY OR LOSS
In the event that there shall have been suffered lbetween the date hereof and the Merger
Closing Date any casualty or loss relating to a System which has not, as of the time of the Merger
Closing, had a Material Adverse Effect on such System (or such Material Adverse Effect is not a
condition to the obligations of the parties to consummate the transactions hereunder.), then at the
Merger Closing, in addition to all other closing transactions, all insurance proceeds previously paid
to the System Owners and not used to repair and restore the damaged property (as well as all claims
to insurance proceeds or other rights of the Partnership against third parties arising from such
HACI1HNNNOR14I8\90500515\C:01.11M111A.D(XX1*C1N111'1'1..Aos - 116
casualty or loss and not yet paid over to the insured), shall be retained thereby and not otherwise
adjusted for in the computation of the Net Proration Amount.
ARTICLE l 1
CI WAIVER
By its execution hereof, CI does hereby waive any right of first refusal or purchase it may,
have pursuant to Subsection 19.2 of the Partnership Agreement or pursuant to Subsection 14.2 of
the Partnership Agreement for CCO, in respect of the Redemption Transaction and the CI Purchase
and Merger Transactions pursuant to this Agreement and the CA Merger Agreement, as originally
executed or as amended with the consent of CI. However, such waiver shall not apply to any
different or subsequent sale of any or all of the Systems, whether to TCI or any other person, or in
respect of any material amendment to this Agreement and the CA Merger Agreement, not agreed to
by CI or the Representative, except an amendment which does not reduce or effect a reduction in the
CI Purchase Consideration or the CA Merger Consideration and is otherwise materially favorable to
the Partnership.
ARTICLE 12
MISCELLANEOUS
12.1 Expenses.
(a) Except as otherwise expressly provided in this Agreement, the TCI Parties,
on the one hand, and the Partnership, on the other, shall each pay their own expenses in connection
with the preparation and negotiation of the Transaction Documents and the Closing Escrow
Agreement, the performance of its obligations under the Transaction Documents and the Closing
Escrow Agreement, and the consummation of the transactions contemplated by the Transaction
11ACUENNNORRIs190500515\COI.UMIilA.1RX7\TC7YUl'1'L.A(;5
Documents and the Closing Escrow Agreement, except that in the event that the transactions
contemplated by the Transaction Documents shall not be consummated for any reason other than a
breach by the Partnership or Cl hereunder, then all out-of-pocket expenses incurred in connection
with securing any.Required Consents will'be shared equally by the TCI Parties, on the one hand, and
the Partnership, on the other.
(b) The Partnership, on the one hand, and the TCI Parties, on the other, each will
be responsible for the payment of one-half of any state or local sales, use, transfer, excise,
documentary taxes or fees or any other charges (including filing fees payable under the Hart-Scott
Act) imposed by any Governmental Authority with respect to the Redemption Transaction and the
Cl Purchase and Merger Transactions, including any such taxes, fees or other charges as may be
payable with respect to the change in ownership of the Partnership, Willamette and CCW, and any
amounts payable in connection with obtaining any Required Consents.
12.2 Survival of 'Warranties. Each party hereto covenants and agrees that its
representations and'warranties contained in this Agreement or the CA Merger Agreement and in any
instrument of sale, assignment, conveyance and transfer executed and delivered pursuant to this
Agreement or the CA Merger Agreement shall survive the Merger Closing Date hereunder and such
representations and warranties contained herein and therein shall be of no further force and effect
from and after the expiration of one year from the Merger Closing Date, except as to claims
theretofore made and claims.
12.3 Assi >n, ment. No party hereto may assign or transfer its rights or obligations arising
under this Agreement or the CA Merger :Agreement without the consent of the other parties;
provided that CA Merger Sub shall have the right in its sole discretion to assign its rights hereunder
11ACIIENNNORRIM9050051Sk(*01.11MIIIA.1XXNI'C,ISUI'1'1.:A(i5 -
and under the CA Merger Agreement, to an affiliate of TCI if such assignment will not serve to delay
either the Redemption Closing or the Merger Closing, it being understood and agreed that no such
assignment shall relieve any TCI Party of any of its obligations hereunder.
12.4 Notices. All notices, claims and other communications provided for herein shall be
in writing and shall be deemed to have been.duly given if personally delivered, sent by facsimile
transmission(if receipt is confirmed), mailed, via overnight delivery or via registered or certified mail,
return receipt requested, postage prepaid (a) if to the Partnership before or on the Merger Closing
Date, or if to CI or the Representative, to it at 9 Greenwich Office Park, Greenwich, Connecticut
06830, Attention: Mr. Robert Rosencrans, President, telephone number(203) 661-1509, telecopier
number (203) 661-7651, with a copy (which shall not constitute notice) to Rubin Baum, 30
Rockefeller Plaza, New York, New York 10 112, Attention: Paul A. Gajer, Esq., telephone number
(212)698-7700, telecopier number (212) 698-7825, or(b)if to a TCI Party, or if to the Partnership
after the Merger Closing Date, to it, care of Tele-Communications, Inc., Terrace Tower II, 5619
DTC Parkway, Englewood, CO 80111-3000, telephone number(303) 267-5500, telecopier number
(303)779-1228, with a copy(which shall not constitute notice)to the same address, Attention: Legal
Department, telephone number (303) 267-5500 telecopier number (303) 488-3217; or, as to any
party, at such other address as shall be designated by such party in a notice to the other parties hereto
by a notice given in accordance with the provisions of this Section 12.4. All notices and other
communications hereunder shall be deemed to have been duly given when addressed as aforesaid,
transmitted by telecopier(if receipt is confirmed), or personally delivered.or, in the case of a mailed
notice, when mailed by overnight delivery or by certified mail, return receipt requested.
I1ACIRNMORRIS\9050051SWOLUMIl1A.]XXNIVISUPPLAU5
12.5 Entire Agreement. This Agreement, together with the Schedules and Exhibits attached
hereto and the CA Merger Agreement, contains the entire understanding between the parties hereto
concerning the subject matter hereof and supersedes any and all prior representations, warranties,
undertakings, covenants and agreements between the parties with respect to the subject matter hereof.
Without limiting the generality of the foregoing it is expressly-understood and agreed that neither the
Partnership nor Cl (or any Cl Stockholder or Holder other than LGI) makes any representation or
warranty with respect to, and, as between the Partnership and Cl (or any CI Stockholder or Holder
other than LGI) and the TCI Parties, there has been no action taken in reliance upon, the accuracy
or completeness of that certain Confidential Memorandum with respect to the Systems prepared by
Waller Capital Corporation. The Transaction Documents may not be changed, modified, altered or
terminated except by an agreement in writing executed by the parties hereto. Any waiver by any
party of any of its rights under this Agreement or of any breach of this Agreement must be in writing
and shall not constitute a waiver of-any other rights or of any other future breach.
12.6 Remedies Cumulative: Except as provided by Article 4 or 9, each and all of the rights
and remedies in this Agreement provided, and each and all of the rights and remedies allowed at law
and in equity in like case, shall be cumulative, and the exercise of one right or remedy shall not be
exclusive of the right to exercise or resort to any and all other rights or remedies provided in this
Agreement or at law or in equity.
12.7 Third Party Beneficiaries. This Agreement shall inure to the benefit of the parties
hereto only and to the benefit of the Holders. Notwithstanding any provision herein to the contrary,
the parties hereto agree that nothing in this Agreement will be construed as giving any other person,
IIACI11-NIVNQRRIS\90500515\COl.11MI11A.1XXXIVINUITI_A i5 - 120 -
firm, corporation or other entity, other than the parties hereto and the Holders, and their successors
and permitted assigns, any right, remedy or claim under or with respect to this Agreement.
12.8 Captions. Captions and descriptive headings are for convenience of reference only.
and shall not control or affect the meaning or construction of any provisions of this Agreement.
12.9 Certain Additional Obligations of the Representative: Representative Liability.
(a) The Representative, by its execution hereof, hereby agrees to perform the
obligations with respect to the Michigan Agreement and the Virginia Agreement described in Section
2.4(a) and agrees to use commercially reasonable efforts to cause the preparation, before the due
dates therefor, of the tax returns referred to in Section 7.4(o above. The Representative, by its
execution hereof, hereby agrees to maintain the Reserve Account as an interest bearing account,
invested in Certificates of Deposit, U.S. Treasury Notes.or Bills, money market accounts or other
similar instruments as to which there is appropriate safety of principal. The funds contained in the
Reserve Account shall be used by the Representative for the payment of liabilities of the Partnership
under any Excluded Virginia Agreements or Excluded Michigan Agreements and for the payment of
Transaction Expenses approved by the Representative (or by the Partnership prior to the Merger
Closing)which become due and payable from and after the Merger Closing Date or which were not
otherwise taken into account in the computation of the Net Proration Amount, or which arise or are
related to services performed for or at the request of the Representative by employees, agents or
consultants in connection with the final computation of the Cl Purchase Consideration and the CA
Merger Consideration, the computation of the purchase price payable under the Michigan Agreement, .
the computation of the purchase price payable under the Virginia Agreement, the resolution of any
dispute with respect thereto, the defense and/or settlement of claims for indemnification made under
11ACURNI"NORM8\7050051SWOI.UMIHADOC YCISUP111-AGS - 121 -
any of the Transaction Documents, the Michigan Agreement or the Virginia Agreement and the
preparation and review of financial statements, tax returns; filings reports and the like with respect
to or arising out of the consummation of the Transactions and the resolution and/or adjudication of
any disputes in respect thereof or otherwise arising under any of the Transaction Documents, the
Closing Escrow Agreement, the Michigan Agreement or Virginia Agreement or the escrow
agreements entered into thereunder (including reasonable fees and expenses of Rubin Baum and
Arthur Anderson&Co). These Transaction Expenses shall include the rent payable under the lease
for the office space at 9 Greenwich Park, which is designated an Excluded Asset, for a period up to
six months from the Merger Closing Date. Transaction Expenses shall not include any compensation
payable to Messrs. Robert M. Rosencrans, Kenneth Gunter or Scott Ledbetter with respect to any
period from and after the Merger Closing Date, except in respect of reimbursement for reasonable
travel and other out-of-pocket expenses incurred by those individuals. In addition, the funds in the
Reserve Account shall be used to pay any amount payable to TCI from the Reserve Account pursuant
to Section 4.8(d) of this Agreement.
(b) The Representative will utilize the funds in the Reserve Account only for the
above referenced purposes and such funds will be maintained in a separate bank account and will not
be co-mingled with any other funds of the Representative. The Representative will use commercially
reasonable efforts to pay amounts due and payable out of the Reserve Account promptly after bills
therefor are presented to the Representative for payment. The Representative will provide TCI with
quarterly reports, within 45 days of the end of each calendar quarter, with respect to all disbursements
made from the Reserve Account during such period.
I1AC1JUNNNORRIM9050051MC01.I1MI11A.IX>C' V181111111_AW - 122 -
(c) Any interest earned on the funds in the Reserve Account, as well as any excess
funds in the Reserve Account, shall be distributed by the Representative (at such time as the
Representative shall dccm appropriate (but in no event later.than 18 months following the Merger
Closing Date, unless TCI shall consent thereto in writing, which consent shall not be unreasonably
withheld) as follows:
(i) first, an amount equal to 31.80% of any amount previously paid out
of the Reserve Account to TO.pursuant to. Section 4.8(d), and not recouped by TCI pursuant to
prior distributions under this clause (i), shall be distributed to TCI; and
(ii) then, the balance of such distribution as follows:
(x) 24.4% of the amount.thereof to TCI on behalf of the TCI
Parties; and
(y) the balance of such distribution as follows:
(1) to CI the amount obtained by multiplying such balance
by 52.381%; and
(2) to the Holders other than LGI, in proportion to their
respective ownership of Units, the amount obtained by
multiplying such balance by 47.619%.
(d) In the event that the remaining funds in the Reserve Account shall be
insufficient to pay all remaining; Transaction Expenses not otherwise paid by the Partnership or any
amount payable to TO from the Reserve Account pursuant to Section 4.8(d), then such amount not
so paid shall, as provided in and subject to the provisions of Article 9 above, be deemed a Loss
payable out of the Indemnification Escrow Amount pursuant to Section 9.1(b)(i) above, and (i) in the
11ACHENINMORRIMIX)SM51SCOI.l1MIilA.IXK 1'I'(:ISUI'1'I.A(i5 123
case of Transaction Expenses, the Proportionate Shares of such Loss shall be 39.6% for Cl and 36%
for the Holders other than LGI, (ii) in the case of an amount payable to TCI pursuant to Section
4.8(d), the Proportionate Shares of such Loss shall be 52.381% for CI and 47.619% for the Holders
other than LGI.
(e) Each of the parties hereto expressly agrees that all representations, warranties
and agreements made by the Representative in its capacity as such in any Transaction Document and
all actions taken or omitted to be taken by the Representative in its capacity as such thereunder or
pursuant thereto shall be deemed representations, warranties, agreements, acts or omissions,of and
on behalf of the Partnership, and the Representative(and its officers, directors, employees and agents)
shall have no personal liability in respect thereof and all liability in respect thereof shall be solely a
liability of the Partnership, which is to be satisfied, if the Redemption Closing or the Merger Closing
does not occur, out of the assets of the Partnership, or, if they do occur, out of the Indemnification
Escrow Amount and/or the Reserve Account, except for claims of gross negligence or willful
misconduct by the Representative with respect to the use by the Representative of the funds in the
Reserve Account or the disbursement of any portion of the CA Merger Consideration.
12.10 Counterparts. This Agreement may be executed in any number of separate
counterpart copies, each of which shall be deemed an original but which together shall constitute a
single instrument.
12.11 Choice of Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts executed in and to be wholly
performed within that State, except insofar as the laws of the State of Delaware apply to the CA
Merger.
11ACURNMORRIM9050051SWO1-I)MDlA.I)(X:X'1'CI81)1911..A(i5 - 124 -
12,12 Severability. Any term or provision of this Agreement which is invalid or
unenforceable will be ineffective to the extent of such invalidity or enforceability without rendering
invalid or unenforceable the remaining rights of the Person intend to be benefitted by such provision
or any other provisions of this Agreement.
12.13 Construction. This Agreement has been negotiated by the parties hereto 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 will not
apply in any construction or interpretation of this Agreement.
lI:\(:RNNNORRI'MOSM51SKOIAIMIIIA.IXX1'1'CI8131'1'1-ACTS 125
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the
day and year first above written.
COLUMBIA ASSOCIATCS, L.P.
By: Columbia international, Inc.,
m ggeneral partner
BY
Name; Roben M. Rosencrans
Title: President
COLUMBIA I. RNATIONAL, INC.
By:
S
Name: Robert M. Rosencrans
Title: President
COLUMBIA INTERNATIONAL, INC.,,
as Represent '
By:
Name: Robert M. Rosencrans
Title: . President
COLUMBIA CABLE OF OREGON
By: Columbia Associates, L.P.,
managing partner
By: ;Columbia International, Inc.,
managing general partner
Bv" `s
Name: Robert M. Rosencrans
Title: President
I� . H�C1.1t'N'IVNUItktVolfSooSiS 11,UtvfI1TA.P�CITC:9[IPPL.ACIS 12C
I
06. 12/95 16:24 RUBIN BALM LEUIN -► 2036617651 NO 185 D02
WIL`LAMETTEcF4BLE TV, Inc.: .
By:
Name: Robert M. Rdsencrans
Title: President
TCI WEST, INC.
By,
Name:
Title:
LIBERTY OF GREENWICH, INC.
By:
Name:
Title:
TCI/CI MERGER SUB CORP.
By
Name.
Title:
TCI/CA MERGER SUB CORP.
By:
Names
Title:
►r'iaNaxttir�osuasIIMI-I)MINAA)Wr'USIMPLAM - 127 -
WILLAMETTE CABLE TV, Inc.:
By:
Name:
Title:
TCIWEST,
By:
Name: Stephen M. Brett
Title: Vice President
LIBERTY OF GREENWI , INC.i.'
By:
N e: GS. Howard
Title: V e President ,
TCl/CI MERGER SUB CO
By:
N,aine: G S. Howard
Title: Vice President
Sy
TCl/CA MERGER SUB CO
By: /va" �L
N e: GS. Howard
Title: V ce President
H:%CLI.N7VNORMS190500515%COLUMHIA.DCOTCISUPPL.AGS - 127 -
AGREEMENT AND PLAN OF MERGER
Dated as of June 20, 1995
By .and Among
COLUMBIA ASSOCIATES, L.P. ,
TCI WEST, INC.
And
TCI/CA MERGER SUB CORP.
a AMACOLUMBIMCOL17 018.AcT
TABLE OF CONTENTS
Pacre
ARTICLE I. . Definitions and Interpretation . . . . , 2
ARTICLE II. The 'Merger . . . . . . . . . . . . . . 2
SECTION 2. 01. TheMerger . . . . . . . . . . . . . . 2
SECTION 2 . 02 . Effective Time . . . . . . . . . . . . 2
SECTION 2 .03 . Effects of the Merger . . . . . . . . . . . . 2
SECTION 2 . 04 . Subsequent Actions . . . . . . . . 2
ARTICLE III. The Surviving Partnership . . . . . . . 3
SECTION 3 . 01. Certificate and Partnership Agreement 3
ARTICLE IV. Effect of the CA Merger on the Units, Etc. 3
SECTION 4 . 01. Effect on Units and Capital Stock . . . . . . 3
SECTION 4.02 . Delivery of CA Merger Consideration 4
SECTION 4. 03 . Escrow Arrangements . . . . . . 4
SECTION 4 . 04 . The Representative . . . . . . . . . 5
ARTICLE VI. Conditions Precedent . . . . . . . . . . 7
ARTICLE VII. Termination., Amendment and Waiver . . . . 8
ARTICLE VIII. Governing Law . . . . . . . . . 8
ARTICLE IX. Miscellaneous . . . . . . . . . . . . . . . 8
Gz\JDD\C0LUMBIA\C0L17018.AGT '1'
AGREEMENT AND PLAN OF MERGER (the "Merger Agreement") , dated
as of June 20 1995, by and among COLUMBIA ASSOCIATES, L.P. , a
Delaware limited partnership ("Columbia Associates") , TCI WEST,
INC. , a Delaware corporation ( "TCI") , and TCI/CA Merger Sub Corp.
a Delaware corporation and a wholly-owned subsidiary of TCI (the
"CA Merger Sub") .
NINE S 5EXH:
WHEREAS, the respective Boards of Directors of Columbia Inter-
national, Inc. , a Delaware corporation and one of the general part-
ners of Columbia Associates ("CI'") , TCI, CA Merger Sub and LGI have
approved the merger of the CA Merger Sub with and into Columbia
Associates (the "CA Merger") , pursuant to which, upon the terms and
subject to the conditions set forth in this Merger Agreement, the
holders of Units in Columbia Associates, other than Liberty Of
Greenwich, Inc. , a Colorado corporation which. is an affiliate of
TCI ( "LGI") , will receive for their Units in Columbia Associates
the CA Merger Consideration;
WHEREAS, concurrently with the execution and delivery of this
Merger Agreement CI, Columbia Associates, TCI, LGI, CA Merger Sub
and TCI/CI Merger Sub Corp.. ("CI Acquisition Sub.") are entering
into the Supplemental Agreement, dated as of the date hereof (the
"Supplemental Agreement") , in order to, among other things, provide
for the purchase by CI Acquisition Sub of the partnership interest
of CI in Columbia Associates (the "CI Partnership Interest") and
the purchase by CI Acquisition Sub of the partnership interest of
CI in Columbia Cable. of Washington (the . "CI/CCW Partnership
Interest") , and to set forth certain provisions with respect to the
computation of the CA Merger Consideration and the CI Purchase
Consideration and the adjustments thereto, to make certain
representations, warranties, covenants and agreements in connection
With the CA Merger contemplated by this Merger Agreement and the
purchase of the CI Partnership Interest and the CI/CCW Partnership
Interest contemplated by . the Supplemental Agreement (the "CI
Purchase Transactions") , to fix the closing date (the "Merger
Closing Date") for and to prescribe various conditions precedent to
the consummation of the CA Merger and the CI Purchase Transactions,
and to provide for certain indemnities in connection therewith,
which Supplemental Agreement is hereby incorporated herein by
reference.
NOW, THEREFORE, in consideration of the. representations, -war-
ranties, covenants and agreements of the parties hereto contained
in this Merger Agreement and the documents contemplated hereby and
executed in connection herewith, the parties hereto hereby agree as
follows:
G:\JDD\C0LUMBIA\C0L17018.AGT
ARTICLE I.
Definitions and Interpretation
Capitalized terms used herein and not defined herein shall
have the meanings ascribed to such terms in Article I to the Sup-
plemental Agreement.
ARTICLE II.
The Merger
SECTION 2 .01. The Merger. Upon the terms and subject to the
conditions set forth in this Merger Agreement, and in accordance
with the provisions of the Delaware General Corporation Law (the
"DGCL") and the Delaware Revised Uniform Limited Partnership Act
(the "DRULPA") , the CA Merger Sub shall be merged with and into
Columbia Associates at the Effective Time (as hereinafter defined) .
Following the CA.Merger, the separate corporate existence of the CA
Merger Sub shall cease and Columbia Associates shall continue as
the surviving partnership (the "Surviving Partnership" ) and shall
succeed to and assume. all of the rights and obligations of the CA
Merger Sub in accordance with the DGCL and the DRULPA.
SECTION 2 .02. Effective Time. On the Merger Closing Date,
the Surviving Partnership shall file with the Secretary of State of
the State of ,Delaware a certificate of merger or other appropriate
documents (in any such case, the "Certificate of Merger") executed
in accordance with the relevant provisions of the DGCL and the
DRULPA (the time on the Merger Closing Date specified in such
filing to be the "Effective Time") and shall make all other filings
or recordings required under the DGCL or DRULPA, including filing
a certified duplicate copy of the Certificate of Merger in the
office of the recorder of the counties in Delaware in which the
registered offices of CA Merger Sub and Columbia Associates are
located. The CA Merger shall become effective at, the Effective
Time.
SECTION 2.03 . Effects of the Merger. The CA Merger shall
have the effects set forth in Section 259 of the DGCL and Section
211 (h) of the DRULPA. TCI shall be admitted as a limited partner
in the Partnership simultaneously with the Effective, Time without
further action on the part of TCI, any other Partner or the Part-
nership.
SECTION 2 .04. Subsequent Actions. If, at any time after the
Effective Time, the Surviving Partnership shall consider or be
advised that any deeds, bills of sale, assignments, assurances or
any other actions or things are necessary or desirable to vest,
perfect or confirm of record or otherwise in the Surviving Partner-
ship its right, title or interest in, to or under any of the
G3\JDD\C0LUMBIA\C0L17018.AW -2-
rights, properties or assets of either of the constituent parties
acquired or to be acquired by the. Surviving Partnership as a result.
of, or in connection with, the CA Merger or otherwise to carry out
the terms and conditions of this Merger Agreement, the officers and
directors of CI, as managing general partner of the Surviving Part-
nership shall be authorized to execute and deliver, in the name and
on behalf of each of the constituent corporations or-otherwse, all
such deeds, bills of sale, assignments and assurances and to take
and do, in, the name and on behalf .of each of: the constituent corpo-
rations or otherwise, all such other actions and things as may be
reasonably necessary or desirable to vest, perfect or confirm any
and all right, title and interest in, to and under such rights,
properties or assets in the: Surviving Partnership or otherwise to
carry out the terms and conditions of this Merger Agreement.
ARTICLE III.
The Surviving PartnershiR
SECTION 3 . 01. certificate and Partnership Agreement.
(a) The certificate of limited partnership of Columbia
Associates as in effect immediately prior to the ..Effective Time
shall become the. certificate of limited partnership of the Surviv-
ing Partnership at the Effective Time (except that such certificate
of limited partnership may be amended at the Effective Time to
change the name of the Surviving Partnership) , until thereafter
changed or amended as provided therein or by applicable law.
(b) The Partnership Agreement, as amended by the Part-
nership Amendment, as in effect immediately prior to the Effective
Time shall become the limited partnership agreement of the Surviv-
ing Partnership at the Effective Time, until thereafter changed or
amended as provided therein or by applicable law'.
ARTICLE IV.
Effect of the: CA Merger on the Units Etc
SECTION 4.01. Effect on Units and Capital Stock. As of the
Effective Time, by virtue of the CA Merger and without any action
on the part of the holder of any Units in Columbia Associates or
any -shares of the capital stock of the CA Merger Sub:
(a) Capital Stock of CA Merger Sub. Each ;share of the
capital stock of CA Merger Sub issued and outstanding immediately
prior to the Effective Time shall be converted into and become 1
Unit in the Surviving Partnership.
G:\JDD\COLUMBIA\COL17016.AW -3-
(b) LGI Units: General Partnership Interests. As a
result of the Redemption Transaction, all of the Units in Columbia
Associates held by LGI and the general partnership interest of LGI
in the Partnership (which term, as used in this Merger Agreement,
shall -in'clude any affiliate thereof which is a Holder) shall. have
been redemed prior to the Effective Time, and shall not be issued
and outstanding immediately prior to the Effective Time for
purposes of this Merger Agreement or affected by the Merger. The
general. partnership interest of CI in the Partnership shall remain
outstanding, and not be affected by the Merger.
(c) `Conversion of Units. Each Unit in Columbia
Associates issued and outstanding. immediately prior to the
Effective Time shall be converted into the right to receive an
amount of cash equal to the CA Merger Consideration as determined
and adjusted pursuant to the Supplemental Agreement, divided by the
total number of Units in Columbia Associates outstanding
immediately prior to the Effective Time (the "Associates Unit
Number") .
(i) As of the Effective Time, all of the Units in
Columbia Associates issued and outstanding prior thereto shall no
longer be outstanding and shall automatically be cancelled and
retired and shall cease to exist, and each holder of any such Unit
shall cease to have any rights with respect thereto, except the
right to receive his or its pro rata portion of the CA Merger
Consideration.
SECTION 4 .02 . Delivery of CA Merger Consideration. (a) At
the Merger Closing, TCI shall issue and deliver to, or in
accordance with directions. provided to it by, the Representative,
for the benefit of the then holders of Units in Columbia Associates
the CA Merger Consideration (and the CA Merger Consideration so
delivered shall be deemed to have been delivered to such holders of
Units in Columbia Associates) . For purposes of this Section 4.02,
the cash deposited into escrow pursuant to Section 4 .03 hereof and
held in escrow pursuant to the terms of the Closing Escrow
Agreement shall be deemed to have been delivered to the
Representative.
(b) Neither TCI nor Columbia Associates shall be liable
to any Person in respect of any CA Merger Consideration delivered
to .a public official pursuant to any applicable abandoned property,
escheat or similar law.
SECTION 4 .0.3 . Escrow Arrangements. At the Merger Closing,
the Representative shall, on behalf of the then holders of Units in .
Columbia Associates, separately deposit into escrow with the
Closing Escrow Agent in accordance with the terms of the Closing
Escrow Agreement, an amount of cash equal to the CA Escrow Portion
of the Indemnification Escrow Amount and the CA Escrow Portion of
the Dispute Escrow Amount, if any.
Gs\JDD\C0LUM8IA\C0L17018.AGT -4—
•
SECTION 4 . 04. The Representative.
(a) Columbia Associates and each holder of Units in
Columbia Associates (other than LGI) , by and upon the approval of
the CA Merger by the. requisite vote of the holders of Units in
Columbia Associates (other than LGI) , designates CI to be the rep-
resentative of iColumbia Associates and each such holder of Units in
Columbia Associates (the "Representative"p for the purposes .of this
Merger Agreement, the Supplemental Agreement and the Closing Escrow
Agreement, with full and complete power and authority to exercise
all of the duties, rights, power, authority and responsibilities of
the Representative set forth therein or in any agreement,
instrument or document executed in connection therewith or herewith
or delivered pursuant thereto or hereto, including, without
limitation, the power: (i) to negotiate, execute and deliver any
amendment to the Documents (as defined below) or any waiver of a
right under any Document that the Representative may deem necessary
or appropriate, provided that no such amendment or waiver may
reduce the consideration payable to such Holder pursuant to this
Merger Agreement (except as provided in clause (ii) below) ; (ii) to
agree prior to, at or after the Closing, to adjustments in the CA
Merger Consideration pursuant to the Supplemental Agreement or any
other adjustment so long as the effect of such reduction is borne
pro rata by all , persons who are Holders immediately prior to the
Effective Time and CI (in respect of its sale of the CI Partnership
Interest) ; (iv) to receive any notice required or permitted to be
given to the Holders under the Documents; and (v) to settle and
compromise claims for indemnification under the Documents and take
any other action permitted to be taken by the Holders thereunder
(including without limitation the defense of any claim or action
covered by Article 9 of the Supplemental Agreement) .
(b) TCI shall be entitled to rely conclusively on direc-
tions from the Representative as to the identity of the Holders to
whom the CA Merger Consideration shall be paid and the amount of
the CA Merger Consideration to be paid to each Holder and may, if
directed by the Representative to do so, pay all or any portion of
the CA Merger Consideration directly to the Representative for the
benefit of one or more Holders. To the extent the CA Merger Con-
sideration or any portion thereof is paid directly to the Represen-
tative, the Representative will, subject to the establishment of
reasonable reserves, promptly deliver such CA Merger Consideration
to the Holders. who are entitled to such CA Merger ,Consideration.
Without limiting the generality of the foregoing, upon the delivery
by TCI of the CA Escrow Portion to the Closing Escrow Agent, and
the remainder of the CA Merger Consideration in accordance with
instructions received by it from the Representative, TCI shall be
released from all liability with respect to payment of .the CA
Merger Consideration and will have no liability to any individual
Holder with respect to payment of 'such Holder's portion of the CA
Merger Consideration.
G:\JDD\C0LUMBIA\C0L17018.AGT -5-
•
•
(c) Each Holder (other than LGI) that votes in favor of
the CA Merger agrees by its vote in favor of the CA Merger, for the
benefit of the Representative and the TCI Parties, all without
further action on the part of such Holder, that:
(i) such Holder has reviewed this Merger Agreement,
the Supplemental Agreement and the Closing Escrow Agreement (the
"Documents") and approves of the terms of each Document;
i(ii) such Holder appoints the Representative as
such Holder's true and lawful attorney and agent, for and on behalf
of such Holder and in zuch 'Holder's name, place and stead: (x) to
exercise all rights, powers and privileges granted to the Represen-
tative under any of the Documents and to execute, acknowledge and
deliver any certificate, instrument, notice or other document
required or permitted to be delivered by or on behalf of such
Holder under the Documents; (y) to execute on behalf of such
Holders such other documents and instruments and take such other
actions as the Representative may deem necessary or appropriate to
carry out the purposes of the Documents and to consummate the
transactions contemplated thereby; and (z) to execute and deliver
such instruments as shall be necessary for such Holder to
constitute a "Selling Party" for purposes of Section 9 of the
Supplemental Agreement, including delivery of an instrument
providing that such Holder shall be bound by the provisions of
Section 9 .4 thereof;
(iii) such Holder ratifies and confirms any action
which the Representative may take pursuant to the foregoing power
of attorney and declares that this power of attorney constitutes a
power coupled with an interest and is irrevocable. The Representa-
tive will have sole and exclusive authority to act for such Holder
in connection with the matters covered by the foregoing power of
attorney, and to exercise all of the powers, rights and privileges
granted to the Representative pursuant to the Documents;
(iv) each Holder and each TCI Party will be enti-
tled to rely conclusively upon the foregoing grant of authority to
the Representative and upon any actions taken by the Representative
in reliance upon such grant of authority;
(v) the Representative shall be entitled to the
benefits of the indemnification provided in Article V of this
Merger Agreement, and the exculpation provided in Section 12 .9 of
the Supplemental. Agreement;
(vi) all expenses incurred by the Representative in
performing its duties or exercising its rights or powers under the
Documents will be deemed Transaction Expenses and, to the extent
not paid as of the Closing Date, will be paid out of the Reserve
Account; and
GAJDD\COLUNBIA\CCL17018.MM -6-
(vii) Part XVII to the Disclosure Schedule sets
forth, as of the date hereof, the number of Units owned by such
Holder, and as of the Merger Closing Date all Units owned by such
Holder will be free and clear of all Liens.
ARTICLE V.
Indemnification of Representative ..
Each holder of Units in Columbia Associates (other than LGI) ,
shall indemnify, defend and hold harmless, in an amount not to
exceed his or its respective proportionate share of the CA Merger
Consideration, the Representative (when acting in its capacity as
such) and each of the officers, directors, stockholders, employees,
representatives, agents or affiliates of the Representative (each
such indemnified person being hereinafter referred to as an
"indemnitee" and all such indemnified persons being hereinafter
collectively referred to as the "Indemnitees 11 ) , from any liability,
loss or damage incurred by any indemnitee by reason of any act
performed or omitted to be performed by such indemnitee in
connection with the transactions contemplated by this Merger
Agreement, the Supplemental Agreement, the Closing Escrow Agreement
and the documents, instruments and agreements executed in
connection herewith and therewith, including, without limitation,
costs and attorneys, fees (which attorneys, fees shall be paid as
incurred) and any amounts expended in the settlement of any claims
of liability, loss or damage, provided that, if the liability, loss
or damage arises out of any action or inaction of such Indemnitee,
(a) such Indemnitee must have determined, in good faith, that his
or its course of conduct was in the best interests of the holders
of Units in Columbia Associates (other than LGI) and (b) the action
or inaction did not constitute fraud, gross negligence, breach of
fiduciary duty or willful misconduct by such Indemnitee.
ARTICLE VI.
Conditions Precedent
The respective obligation of each party hereto to effect the
CA Merger and the other transactions contemplated hereby is subject
to the satisfaction or waiver (by the parties for whose benefit the
condition is imposed) on or prior to the Merger Closing Date of .the
conditions set forth in Sections 8.2 and 8,.4 of the Supplemental
Agreement and to the satisfaction of the following additional
conditions:
(i) this Merger Agreement and the CA Merger shall have
been approved, ratified and adopted by the requisite vote of the
Partners of Columbia Associates in accordance with applicable law
Gs\JDD\COLUMBIA\COL17018.AGT —7—
•
and the Partnership Agreement as amended by the Partnership Amend-
ment; and
(ii) the purchase of the CI Partnership Interest and the
CI/CCW Partnership Interest by CI Acquisition Sub pursuant to the
Supplemental Agreement shall have been approved, ratified and
adopted by the requisite vote of the stockholders of CI in
accordance with applicable law.
ARTICLE VII.
Termination Amendment and Waiver
The Merger Agreement may be .terminated or amended or the par-
ties may extend the time for the performance of any of the obliga-
tions or other acts of. the.other parties, waive any inaccuracies in
the representations and warranties contained in any document deliv-
ered pursuant to this Merger Agreement or waive compliance with any
of the agreements or conditions contained in this Merger Agreement,
in each case as provided in the Supplemental Agreement, except that
this Merger Agreement may not be amended' at any time subsequent to
the adoption hereof by the Holders in any manner which would
violate the applicable provisions of the DGCL or the RULPA.
ARTICLE VIII.
Governing Law
This Merger -Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware, regardless of
the laws that might otherwise govern under applicable principles of
conflict of laws thereof.
ARTICLE IX.
Miscellaneous
(a) Captions and descriptive headings used herein are
for convenience of reference only and shall not control or affect
the meaning or construction of any provisions of this Merger Agree-
ment
(b) This Merger Agreement may be executed in any number
of separate counterpart copies, each of which shall be •deemed an
original but all of which. taken together shall constitute a single
instrument..
Gs\JDD\COLUMBIA\COL17018.AGT —8—
c:
a
IN WITNESS WHEREOF, Columbia Associates, TCI, CA Merger Sub,
and L3I have caused this Agreement and Plan of Merger to be signed
by their respective duly authorized officers, all as of the date
first written above.
COLUMBIA ASSOCIATES, L.P.
By: Columbi at®ruat'ioaal, Inc. ,
ra1.4artner
Nam Robert M. Rosencrans
Title: President
TCI WEST, INC.
By:
Name:
Title:
TCI/CA, MERGER SUB CORP.
By:
Name:
Title:
0:\JDb\CMXNZZK%C0L17 018.AM .9-
4
IN WITNESS WHEREOF, Columbia Associates, TCI, CA Merger Sub,
and LGI have caused this Agreement and Plan of Merger to be signed
by their respective duly authorized officers, all as of the date
first written above.
COLUNIDIA ASSOCIATES, L.P.
. Bys Columbia International, Inc. ,
Managing General. Partner
By:
Name: Robert M. Rosencrans
Title: President
TCI WES C.
By:
Name: Stephen M. Bre et
Title: Vice President
TCI/CA MERGER SUB CORP.
By:
Name,J Gary S. oward
Title: Vice Pr, ident
G3\JDD\C0LUNBIA\C0L17018.AGT -9-
i'
}
I hereby certify that the written consent of all the outstanding
stock of TCI/CA Merger Sub Corp. entitled to vote thereon was given
to the adoption of the Agreement and Plan of Merger on June
1995 in accordance with the provisions of Section 228 of the Gen-
eral Corporation Law of 'the State of Delaware.
TCI/CA Merger Sub Corp.
ATTEST:
By:
Secretary
I hereby certify that the General Partners and the holders of a
majority of the outstanding limited partnership units of Columbia
Associates, L.P. entitled to vote thereon voted for adoption of the
Agreement and Plan of Merger on June 1995.
COLUMBIA ASSOCIATES, L.P.
By: Columbia International, Inc. ,
general partner
ATTEST:
By:
Secretary
THE ABOVE AGREEMENT AND PLAN OF MERGER, having been executed
on behalf of each corporate or partnership party thereto, and hav-
ing been adopted separately by TCI/CA Merger Sub Corp. and Columbia
Associates, L.P. (the constituent parties) , in accordance with the
provisions of the General Corporation Law of the State of Delaware
and the Delaware Revised Uniform Limited Partnership Act, and the
fact having been certified on the Agreement and Plan of Merger by
the Secretary of TCI/CA Merger Sub Corp. and the Secretary of
Columbia International, Inc. , a General Partner of Columbia Associ-
ates, L.P. , each constituent party does now hereby execute the
Agreement and Plan of Merger and the of each
constituent party does now hereby attest the Agreement and Plan of
Merges, as the act, deed and agreement of such corporation or part-
nership, on this day of 1995.
G:\JDD\C0LUMB1A\C0L17018.AW _10-
PROPOSE® ORGANIZATIONAL CHART
Willamette Cable TV, Inc.
TCI WEST, INC.
(100%)
TCI CABLEVISION
OF OREGON, INC.
(100%)
WILLAMETTE (Name is expected to be changed .
CABLE TV,< to "TCI of Tualatin Valley, Inc."
INC. upon consummation of the.Transaction)
Exhibit No. 3
Additional Person who should be contacted:
David M. Reynolds
TCI West, Inc.
P.'O. Box 91220
Bellevue, WA 98009-9220
(206)462-2798
Exhibit No. 4
Transferee does.not currently have any plans to change the service and operations of
the system as a consequence of this transaction. However, Transferee may, after it has had an
opportunity to familiarize itself with the system's operations; determine that such changes are
desirable or necessary.
Exhibit No. 5
Transferee, an Oregon corporation, currently owns and operates additional cable
systems in the State of Oregon and is in good standing and qualified to transact business in Oregon.
Exhibit No. 6
Transferee's Financial Qualifications
Attached are audited consolidated financial statements of Transferee's direct parent,
TCI West, Inc. for the years ended December 31, 1993 and December 31, 1994. These financial
statements are not public documents and have'been stamped"confidential." Transferee requests that
these financial statements be:beld in confidentiality by the Franchise Authority.
6 The Global Leader
it
L; Lib ! I1��
TCI West, Inc ,
.and Subsidiaries
(An Indirect Wholly-Owned Subsidiary
of Tele-Communications, Inc.)
Consolidated Financial Statements
December 31, 1994' and 1993
(With Independent Auditors' Report Thereon)
Peat Marwick LLP
707 Seventeenth Street
Suite 2300
Denver, CO 80202
Independent Auditors' Rel2ort..
The Board -of Directors
TCI West, Inc.:
We have audited the accompanying consolidated balance sheets of TCI West, Inc. and subsidiaries
(an indirect wholly-owned subsidiary of Tele-Communications, Inc.) as of December 31, 1994
and 1993, and the related consolidated statements of operations and retained earnings and cash
flows for the years then ended. These consolidated financial statements are the responsibility of
the Company's management. Our responsibility.is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits 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 audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referted.to ab.o,,•e•presenr.:air v.,,in.all materia!
respects. the financial position of TCI West, Inc. and subsidiaries as of December 31, 1994 and
1993, and the results of their operations and their cash flowsror the years then. ended in-
conformity with generally accepted accounting principles.
? C_=, L
Denver, Colorado
March 27, 1995
1
®®.g Kti„YfwPON MW-ft GowWW .
TCI WEST, INC.
AND SUBSIDIARIES
(An Indirect Wholly-Owned Subsidiary of Tele-Communications, Inc.)
Consolidated Balance Sheets
December. 31, 1994 and 1993
Assets 1994 193
amounts in thousands
Trade and other receivables, net $ 17,076 19,673
Property and equipment, at cost:
Land 5 5, ,416
117 5
Distribution systems 93 , 111 315, 664
Support equipment,and buildings 76.420 _ 66,949
'9
Less accumulated depreciation 1,019, 259 888, 629
331. 142 315.475
688. 117 573, 154
Franchise costs 800, 715 796, 270
Less accumulated amortization 138. 584 118,461
Investment in affiliates (note 3) 662, 131 677. 849
`TCIC`' 66,658
Due from TCI Communications,Inc.
( ' ) (notes 5 and 6) 356,449 277,034
Other assets, at cost, net of amortization 7. 729 13. 834
S 1, 731., 502
Liabilities and Stockholder's Equity 1, 628. l67--67
Cash overdraft S 1, 162 2,039
Accounts payable .� 420 9, 289
Accrued expenses 28, 382 22, 606
Debt (note ) 1,2i8, 388 1, 135, 180
Deferred income taxes (note 5) '23. ��0 '.10, 338
Other liabilities 1. 248 r 1. 332
Total liabilities 1,476. 47 l. 390, 784
Stockholder's equity:
Common stock, $I par value. Authorized 50,000 shares;
issued and outstanding 1,005 shares 1 1
Additional paid-in capital 58 58
Retained earnings 308,465 256, 183
308, 524 . 25.6, 242
Investment in Tele-Communications, Inc. ("TCI") (note 3) (53,492`)
Investment in TCIC (note 3) — ( 18 .859)
Total stockholder's equity 255, 032 237, 383
Commitments and contingencies (note 7)
S 1,731, 502 1, 628, 167
See accompanying notes to consolidated Financial statements.
2
TCI WEST, INC.
AND SUBSIDIARIES
(An Indirect Wholly-Owned Subsidiary of Tele-Communications, Inc.)
Consolidated Statements of Operations and Retained Earnings
Years ended December 31, 19.94 and 1'993
1994 1993
amounts in thousands
Revenue S 552. 025 508, 7ci9
Operating costs and expenses:
Operating (note 6) 150, 665 137, 695
Selling, general, and administrative 152, 537 127, 01")
Management fees, net (note 6)
16, 216 16,412
Depreciation 73,079 58,402
Amortization 27, 30 28, 29
4,19., 806 367, 815
Operating income 132,219 140,954
Other income (expense):
Interest expense (67,237) (64, 616)
Interest and'dividend income, principally
from related parties (note 6) 1,6, 657 18,444 .
Loss on early extinguishment of debt (note 4) (728) (2,064,)
Other, net (309) 716
(L1. 617) 147. 520)
Earnings before income tax expense
80, 602 93,43>4
Income tax expense (note 5) ('?8. 320) (40, 328)
Net earnings 52, 282 53, 106
Retained earnings:
Beginning of year 256, 183 203, 07
End of year S 308,465 256. 183
See accompanying notes to consolidated financial statements.
3
TCI WEST, INC.
AND SUBSIDIARIES
(An Indirect Wholly-Owned Subsidiary of Tele-Communications, Inc.)
Consolidated Statements of Cash Flows
Years ended December 31, 1994 and 1993
19911+ 1993
amounts in thousands
(see note 2)
Cash flows from operating activities.,
Net earnings S 52, 282 53, 106
Adjustments to reconcile net earnings to net cash provided
by operating activities:
Depreciation and amortization 100, 388 86, 695
Deferred income tax expense 8, 515 29, 268
Other noncash credits — (999)
Changes in operating assets and liabilities:
Change in receivables 21, 602 (4, 504)
Change in accruals and payables r (93) 1. 307
Net cash provided by operating activities 163. 694
164, 873
Cash flows from investing activities:
Capital expended for property, and equipment (187, 670) ( 160,207)
Cash paid for acquisitions (2, 867) (94,481)
Change in amounts due from TCIC, net (53, 831) 187, 685
Other investing activities, net ( 1, 65 3 175)
Net cash used in invertin; activities (246. 025) "7l 0. 178)
Cash flows from financing activities:
Borrowings of debt
785, 313 60:, 500
Repayments of debt (202, 105) (692. 302)
Change in cash overdraft (877) (3, 893)
Net cash provided(used) by financing activities 82, 331 (94. 69
5
Net change in cash _
Cash at beginning of year
Cash at end of year
See accompanying notes to consolidated financial statements.
4
TCI WEST, INC.
AND SUBSIDIARIES
(An Indirect Wholly-Owned Subsidiary of Tele-Communications, Inc.)
Notes to Consolidated Financial Statements
December 31, 1994 and 1993
(1) Summary of Significant Accounting Policies
Organization and Consolidation
The consolidated financial statements include the accounts of TCI West, Inc. and its
subsidiaries ("TCIW"or the "Company"). All significant intercompany accounts and
transactions have been eliminated in consolidation.
TCIW was organized to acquire. develop, and operate cable tel systems. TCIW
is an indirect. wholly-owned subsidiary of TCI.
Receivables
Receivables are reflected net of an allowance for doubtful accounts. Such allowance at
December 31, 1994 and 1993 was not material.
Property and Equipment
Property and equipment is stated at cost which includes acquisition costs allocated to
tangible assets of cable television, systems acquired. Construction costs, including
interest during construction and applicable overhead, are capitalized. Interest
capitalized for the years ended December 31, 1994 and 1993 was not material.
Depreciation is computed using the straight-line method over the estimated useful lives
of the assets which range from 3 to 15 years for cable distribution systems and 3 to
40 years for support equipment and buildings..
Repairs and maintenance are charged to operations, and renewals and additions are
capitalized. At the time of ordinary retirements, sales or other dispositions of property,
the original cost and cost of removal of such property are charged to accumulated
depreciation, and salvage, if any, is credited thereto. Gains or losses are only
recognized,in connection with the sale of properties in their entirety.
Franchise Costs
Franchise costs include the difference between the cost of acquiring cable television
systems and amounts assigned to their tangible assets. Such amounts are generally
amortized using the straight-line method over 40 years. Costs incurred by TCIW in
obtaining franchises are being amortized using the straight-line method over the life of
the franchise, generally 10 to 20 years.
(continued)
5
TCI WEST, INC.
AND SUBSIDIARIES
(An Indirect Wholly-Owned Subsidiary of Tele-Communications, Inc.)
Notes to Consolidated Financial Statements
Reclassifications
Certain amounts have been reclassified for comparability with the 1994 presentation.
(2) Supplemental Disclosure to Consolidated Statements. of Cash Flows
Cash paid for interest was 568.529,000 and 565,990.000 for 1994 and 1993, respectively.
During these years, cash paid for income taxes wa;; not material.
Significant noncash investing and financing activities are as follows:
Year ended December 31
1994 1993
amounts in thousands
Exchange of assets, net of amounts due to TCIC
and deferred tax liabilities, for TCI preferred
stock S 34, 633 _
Exchange of common stock investment for
investment in affiliate S — 54, 284
Deferred tax liability recorded in acquisition
Transfer of assets, net of liabilities (including
deferred tax liabilities of$1.166.000 in 1994),
from TCI S 2. 624 74
(3) Investment in TCI and TCIC
As of January 27, 1994, TCIC (formerly Tele-Communication, Inc.) and.Liberty Media
Corporation ("Liberty") entered into a definitive agreement to combine the two companies
(the "Mergers"). The transaction was consummated on August 4, 1994 and was structured
as a tax free exchange of Class A and Class B shares of both companies and preferred stock
of Liberty for like shares of a newly formed holding company, TCl/Liberty Holding
Company. In connection with the Mergers, TCIC changed its name to TCI
Communications, Inc. and TCl/Liberty Holding Company changed its name to Tele-
Communications, Inc. TCIC shareholders received one share of TCI for each of their
shares. Liberty common shareholders received 0.975 of a share of TCI for each of their
common shares.
TCIW previously had received TCIC Class A common stock in exchange for a certain cost
investment pursuant to a tax-free merger in 1991 between TCIC and another subsidiary. of
TCIC: In connection with the Mergers, TCIW received one share of TCI Class A common
stock for each of its shares of TCIC stock. Such investment in TCI common stock, carried at
S 18,859,000, has been recorded as a reduction of stockholder's equity in the accompanying
consolidated financial statements.
(continued)
6
TCI WEST, INC.
AND SUBSIDIARIES
(An Indirect Wholly-Owned Subsidiary of Tele-Communications, Inc.)
Notes to Consolidated Financial Statements
During the fourth quarter of 1994, TCI was reorganized based upon four lines of business
(the "Reorganization"). In connection with the Reorganization, TCIW transferred its
investments in affiliates, net of amounts due to TCIC and deferred tax liabilities, to another
operating unit. As'consideration for such, transfer,.TCIW received 1.5,052 shares of TCI
Redeemable Convertible Preferred Stock. Series E ("Series .E Preferred 'Stock"). TCIW
recorded the Series 'E Preferred Stock at 534,633.000, the :book value of the net assets that
were transferred. Such investment in the- Series F Preferred Stock has been recorded as a
reduction of stockholder's equity.in the accompanying consolidated financial statements.
(4) Debt a
Debt is summarized as follows:
Weighted average
interest rates at December 31.
December 31. 1994 1994, 1993.
amounts in thousands
Serial notes (a) 11. lao 5 100,000 152,000
Credit agreement(b) 6.6%, 186, 300 216,000
Revolving credit agreement (c) 7.2% 370,000 115,000
Eurodollar agreement (d) 6.6'0 340,000 430,000
Credit agreement(e) 7.0% 222, 000 222,000
Other debt 88 180
S ,218. 388 1. 135. i80
(a) Durin- the first quarter of 1994, 33'_,000,000 of.the serial.notes were redeemed (the
"1994 Redemption"). TCIW paid accrued interest of S151,000 and prepayment
penalties of $640,000 in connection with the 1994 Redemption. During the second
quarter of 1993, $30,500,000 of these serial notes were redeemed with funds available
pursuant to the credit agreement described below (the "1993 Redemption"). TCIW
paid accrued interest of $312,000 and prepayment penalties of $1,895,000 in
connection with the 1993 Redemption.
The remaining serial notes contain restrictive covenants regarding additional
indebtedness, investments, guarantees, liens, dispositions, acquisitions and dividend
payments, and require, among other things, the maintenance of certain ratios of cash
flow to debt service, as defined. Final payment is due December 15, 1999.
(b) This credit agreement has.a reducing revolving credit feature through March 31, 1998.
The agreement provides for interest at varying rates based upon optional measures
which approximate the prime rate. The agreement contains restrictive covenants
regarding additional indebtedness, acquisitions, investments, dispositions, and liens,
and requires the maintenance of certain ratios of cash flow to total debt and cash flow to
debt service, as defined.
(continued)
7
f:
TCI WEST, INC.
AND SUBSIDIARIES
(An Indirect Wholly-Owned Subsidiary of Tele-Communications, Inc.)
Notes to Consolidated Financial Statements
(c) This revolving credit a_reement provides for borrowings of up to 5450;000;000. The
amount of available .credit is reduced quarterly beginning. March 31, 1997 through
September 30, 2002: The agreement provides for interest at varving-rates based upon
optional measures which approxiniate the prime rate: The agreement contains
restrictive covenants regarding addiriunal indehtedn'ess,.liens. mervers, dividends, and
dispositions of assets, and requires the maintenance. or certain ratio: of cash flow to
total debt and cash flow to pro forma debt service and to pro forma interest expense,
as defined.
(d) The eurodollar agreement, as amended, provides for borrowings up to 5565,000,000.
The amount of available credit is reduced quarterly beginning March 31, 1998 through
March 31. 2004. The agreement provides for interest at varying rates based upon
optional measures which approximate the prime rate. The agreement contains
restrictive covenants regarding additional indebtedness, liens, and sale of assets, and
requires the maintenance of certain ratios of cash flow to total debt and cash flow to
debt service, as defined.
(e) This credit agreement provides for borrowings up to $232,000,000 through
November 29, 1996, which date may be extended for.up to seven years. The
agreement provides for interest.at�varying rates based upon optional measures which
approximate the prime rate. The agreement contains restrictive covenants regarding
additional indebtedness, liens, and sale of assets, and requires the maintenance of
certain ratios of cash flow to total debt and cash flow to debt service. as defined.
In order to provide interest rate protection on a portion of its variable rate indebtedness
TCIW has entered into an interest rate exchange a;Treemcnr oursuant to which it pays a fixed
interest rate of 8.71% on a notional amount of 5t00,000,000 through December 1.1, t997.
TCIW has also entered into an interest rate hedge agreement on a notionai amount of
$75,000,000 which fixes the maximum variable interest rate at 11 Flo through October 27,
1995. During the years ended December 31, 1994. and 1993, TCIW's .net payments
pursuant to the interest rate exchange agreement were $4.579,000 and $5,409,000,
respectively. TCIW is exposed to credit losses for the periodic settlements of amounts due
under the interest rate exchange agreement in the event of'nonperformance by the other
parties to the agreement. However, TCIW does not anticipate nonperformance by the
counterparties and, in any event, such amounts were not material at December 31, 1994.
The fair value of TCIW's debt is estimated based on the quoted market prices for the same or
similar issues or on the current rates offered to TCIW for debt of the same remaining
maturities. At December 31, 1994, the fair value of TCIW's debt approximates its carrying
value.
The fair value of the interest rate exchange agreement is the estimated amount that TCIW
would pay to terminate the agreement at December 31, 1994, taking into consideration
current interest rates and the current creditworthiness of the counterparties. TCIW would be
required to pay S 1,399,000 at December 31, 1994 to terminate the agreement.
(continued)
8
•
TCI WEST, INC.
AND SUBSIDIARIES
(An Indirect. Wholly-Owned Subsidiary of Tele-Communications, Inc.)
Notes to Consolidated Financial Statements
Annual maturities of debt for each of the next five years are as follows: 1995 —$60,527;000;
1996 $309, 27,000:; 1997 — 560,534,000; 1998 — 579,050,000; and 1999' -
'
5114,500.000. '
(5) Income Taxes
TC1W is included in the consolidated Federal incom- tax return Of TCI. hicome tax expense
for TCIW is based on those items in the consolidated calculation applicable to TCIW.
Intercompany tax allocation represents an apportionment of tax expense or benefit(other than
deferred taxes) among subsidiaries of TCI in relation to their respective amounts of taxable
earnings or losses. The payable or receivable arising from the intercompany tax allocation is
recorded as an increase or decrease in amounts due from TCI.
The Financial Accounting Standards Board Statement No. 109, "Accounting for Income
Taxes" (Statement No. 109), requires the use of the asset and liability method of accounting
for income taxes. Under the asset and liability method of Statement No. 109, deferred tax
assets and liabilities are recognized for the estimated future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets and liabilities
and their respective tax bases. Deferred tax assets and liabilities are measured using enacted
tax rates in effect for the year in which those temporary differences are expected to be
recovered or settled. Under Statement No. 109, the effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that includes the
enactment date.
Income tax expense attributable to earnings for the vears, ended December 31, !994 and
1993 consists of: '
Current rrent e erred �t
amounts in thousanris
Year ended December 31, 1994:
Intercompany allocation $ 19, 564 7, 609 27, 173
State and local 241 906 1, 14
5
19, 805 8, 515 28, 320
Year ended December 31, 1993:
Intercompany allocation S 11, 060 26, 721 37, 781
State and local — 2,547 2, 547
S 11, 060 29,268 40. 328
(continued)
9
TCI WEST, INC.
AND SUBSIDIARIES
(An Indirect Wholly-Owned Subsidiary of Tele-Communications, Inc.)
Notes to Consolidated Financial Statements
Income tax expense attributable to earnings differs from the amounts computed by applying
the Federal income tax rate of 35% primarily as a result of an adjustment to deferred tax
assets.and liabilities for the enacted change in Federal.income tax rate in 1993. amortization
not deductible for income Ltax purposes,,the exclusion, of dividends for Income tax purposes
and state and local income taxes net of Federal income tar benetu.
New tax leaslation was enacted in the third quarter of 1993 which, among other matters,
increased the corporate Federal income tax rate from 34% to 35%. The Company reflected
the tax rate change in its consolidated statements of, operations in accordance with the
treatment prescribed by Statement No. 109. Such tax rate change resulted in an increase of
56,277,000.to income tax expense and deferred income tax liability in 1993.
The primary components of the deferred tax liabilities at December 31, 1994 and .1993
represent property and equipment (principally due to differences in depreciation) and
franchise costs (principally due to cost basis differences). The primary component of the
deferred tax assets represents net operating loss carryforwards. The following components
of the net deferred tax liability are presented below:
December 31.
1994 1223_
amounts in thousands
Deferred tax liabilities S 269,097 269, 982
Deferred,tax assets (before valuation allowance) (45,227) (49, 644)
Valuation allowance recognized for
deferred tax assets
Net deferred tax liability S 223, 870 ?20. 338
At December 31, 1994, TCIW had available investment. tax credits of approximately
$99647,000 which, 'if not utilized to offset future Federal income taxes payable, expire at
various dates through 2005. In addition, at December 31, 1994, TCIW had available
alternative minimum tax credits of approximately$8,137,000 to offset future Federal income
taxes payable.
At December 31, 1994, TCIW had a net operating loss carryforward for income tax
purposes of approximately $69,348,000 which, if not utilized to reduce taxable income in
future periods, will expire at various dates through 2005.
(6) Transactions with Affiliates
The amounts due from TCIC consist of an intercompany note receivable (bearing interest at
the,prime rate) net of various non-interest-bearing payables to TCIC for operations. The
intercompany note is for external borrowings by TCIW which were transferred to-TCIC.
Intercompany interest income aggregated S 16,649,000 and 518,048,000 for 1994 and 1993,
respectively.
(continued)
10
r
d TCI WEST, INC.
AND SUBSIDIARIES
(An Indirect Wholly-Owned Subsidiary of Tele-Communications, Inc.)
Notes to Consolidated Financial Statements
TCIW purchases, at TCI's cost, certain pay television and other programming, through a
Subsidiary of TCI. Charges for such programmins were $90,293.,000 and $80,3,93.000,for
1994 and 1993, respectively. In February 1994. TCI.Starz. Inc., a subsidiary of TCI,
launched a new premium programming service ("Starz!') and provided Starz! to.atfiliates of
TCI (including TCIW) at no charge. "ncc accompanying:1994 consolidated statement of
operations includes revenue of S8,716.000 fmir, St;trz'. subscribers. Fffective January 1,
1995, TCIW anticipates that it will be char_ed a month!y-per-subscriber.prograirrnins fee by
TCI Starz. Inc. `
TCIW has a management agreement- with another subsidiary of TCI whereby such
subsidiary's management is providing administrative services and has assumed managerial
responsibility for cable television operations and construction. As compensation for these
services, TCIW pays a monthly fee calculated on a per-subscriber basis.
(7) Commitments and Contingencies
On October 5, 1992, Congress enacted the Cable Television Consumer Protection and
Competition Act of 1992 (the "1992 Cable Act"). In 1993 and 1994, the Federal
Communications Commission ("FCC") adopted certain rate regulations required by the 1992
Cable Act.and`imposed a moratorium on certain rate increases. As a result of such actions,
TCIW's basic and tier service rates and its equipment and installation charges (the "Regulated
Services") are subject to the jurisdiction of local franchising authorities and the FCC. Basic
and tier service rates are evaluated against competitive benchmark rates as published by the
FCC, and equipment and installation charges are based on.actual costs. Any rates for
Regulated Services that exceeded the benchmarks were reduced as.required by the 1993 and
1994 rate regulations. The rate regulations do'not-apply to the relatively few systems which
are subject to "effective competition" or to services offered on an individual service basis,
such as premium movie and pay-per-view services..
TCIW believes that it has complied in all material respects with the provisions of the 1992
Cable Act, including its rate setting provisions. However, TCIW's rates for Regulated
Services are subject to review by the FCC, if a complaint has been filed,or the appropriate
franchise authority, if such authority has been certified. If, as a result of the review process,
a system cannot substantiate its rates, it could be required to retroactively reduce its rates to
the appropriate benchmark and refund the excess portion,of rates received. Any refunds of
the excess portion of tier service rates would be retroactive to the date of complaint. Any
refunds of the excess portion of all other Regulated Service rates would be retroactive to the
later of September 1, 1993 or one year prior to the certification date of the applicable
franchise authority. The amount of refunds, if any, which could be payable by TCIW in the
event that systems' rates are successfully challenged by franchising authorities is not
considered to be material.
TCIW leases business offices, has entered into pole rental agreements, and uses certain
equipment under lease arrangements. Rental expense under such arrangements amounted to
$8,891,000 and $7,759,000 for 1994 and 1993, respectively.
(continued)
11
r
TCI WEST, INC.
AND SUBSIDIARIES
(An Indirect Wholly-Owned. Subsidiary of Tele-Communications, Inc.)
Notes to Consolidated Financial Statements
Future minimum lease payments under noncancelable operating leases for each of the next
five years are summarized as follows (amounts in thousands):
Years ending December 31:
1995 S 3,8 16
[996 �.-$6
1997 3.302
199& 3,074
1999 2,629
It is expected that in the normal course of business, leases that expire will be renewed or.
replaced by leases on other properties, thus, it is anticipated that future minimum lease
commitments will not be less than the amounts shown for 1995.
12
Exhibit No. 7
Narrative of Transferee's Technical Qualifications, Experience,
and Expertise Regarding Cable Television Systems
Transferee is under the operational structure of TCI West-North which is a cable
operating division. There are a total of six affiliated cable operating divisions.
Each cable operating division has a Vice President of Operations and Engineering or
a Director of Engineering whose job it is to ensure customer satisfaction, manage engineering
functions and budgets, and oversee technical business operations. The Vice President or Director
coordinates engineering practices and production programs, directs decisions regarding types of
equipment and their specifications, selects outside contractors for the laying. of cable or other
construction projects within the division, reviews capital project proposals and provides technical
information regarding construction and equipment requirements,preventive maintenance, and ensures
that technical and safety standards are met. These Vice Presidents or Directors are required to have
a Bachelor's degree in engineering or equivalent work experience, a proven ability to motivate,
supervise, and administer engineering plans and programs, a thorough knowledge of all technical
aspects of the cable television business(including FCC rules and regulations), and at least five years
experience in cable television or a related industry. These Vice Presidents and Directors report to
their respective Division Vice Presidents.
Each of the cable operating divisions, including TCI West-North, has a Corporate
Construction Coordinator who directs all phases of construction and is responsible for the safety and
progress of construction personnel. They conduct safety inspections and briefings, and inspect the
progress and quality of construction projects. These Coordinators are required to have, at a
minimum, a high school diploma or equivalent and knowledge of construction, electrical codes, and
safety precautions, and two to three years of cable construction experience. Corporate Construction
Coordinators report to their respective division Vice President of Operations and Engineering.
Cable systems within the TCI West-North division have Technical Operations
Managers who plan, organize, and direct the technical operations of the systems and function as the
system's technical expert concerning cable plant construction,design, operating specifications, and
maintenance standards. They' also ensure compliance with technical specifications for cable,
electronics, and picture quality through the area of operations as regulated by governmental or
franchise requirements, including CLI, and provide supervision of technical staff. These positions
require an Associate Degree in electronics or related technical field or the equivalent, three years in
cable technical operations and management, and knowledge of safety and electrical codes and FCC
regulations. Technical Operations Managers report to the General Manager of the system.
Construction Managers in large cable systems where new building or rebuilding is
occurring are responsible for complete project management of new build and rebuild construction
projects and expenditures. They manage the construction and design departments. These Managers
must have a Bachelor's Degree in electronics and construction, or the equivalent, and qualitative
experience, and five years experience in. cable television with construction and electronics
backgrounds, including knowledge of electrical, safety, and related state and local codes, as well as
familiarity with all construction requirements and practices of states and local governments in the
areas served. Construction Managers report to their respective General Managers.
Construction Supervisors also work in areas of new building or rebuilding of cable
systems, direct all phases of construction„ and are responsible for the safety and progress of
construction personnel. Construction Supervisors must have, at.a minimum,:a high school diploma
or equivalent,with knowledge of construction, electrical, and safety codes and related,state and local
codes is required, as well as two to three years cable construction experience. Construction
Supervisors report to their respective Technical Manager or Plant Manager.
TCI West and TCI West-North divisions employ Assistant Engineers to assist the
respective Division or State Engineers in maintaining quality service to cable television customers and
ensuring cable system compliance with applicable cable regulations: Assistant Engineers are required
to have an Associate's Degree in electronics or the equivalent experience, with a minimum of five
years of technical/cable television operations management experience and familiarity with all FAA,
FCC, NEC, NESC policies and procedures in addition to standard construction practices and
requirements in accordance with state and local governments in areas served. Assistant Engineers
report to their respective Division Engineer or State Engineer.
Other technical and engineering duties are performed by Technical Operations
Managers, Managers of Corporate Technical Support, Managers of Access and' Fiber Services,
Corporate Technical Auditors, Field Audit Administrators, Technical Supervisors, Technical Trainers,
Repair Supervisors; Creative Services Specialist, Advanced Technicians, Bench Technicians, Design
Supervisors, Designers, Digital Compression Engineers, Fiber Specialists, Production Technicians,
StudioNideo Engineers, construction Technicians, Field Auditors, Service Technicians, System
Locaters, System Technicians, Advance Installers, Converter Repairpersons and Installers.
Depending on the size and complexity of each system, the number of engineers and technicians varies,
but generally systems have one Technician for every 1,500 subscribers. These Technicians are the
front line employees responsible for the daily maintenance, reliability, and performance of all or part
of the cable system.
- 2 -
CITY OF TIGARD, OREGON
Resolution No.
A RESOLUTION CONSENTING TO THE
TRANSFER OF CONTROL OF THE
CABLE TELEVISION FRANCHISE HELD
BY WILLAMETTE CABLE TV, INC.
DB/A/ COLUMBIA CABLE OF OREGON
WHEREAS,the City of Tigard, is a member of the Metropolitan Area Communications Commission
("MACC"); and
WHEREAS, Willamette Cable TV, Inc. ("Franchisee") owns, operates and maintains the cable
television system(the "System")in the City of Tigard, Oregon(the "Franchise Authority") and is the
current authorized franchise holder for the System pursuant to the Cable Communications System
Franchise Agreement dated January 26, 1982, as amended by the documents listed on Attachment
1, entered into by MACC on behalf of the Franchise Authority and other member jurisdictions of
MACC (the "Franchise"); and
WHEREAS,Franchisee is currently solely owned by Columbia Cable of Oregon, an Oregon general
partnership("CCO"), which is currently controlled by Columbia Associates, L.P. ("Columbia")- and
WHEREAS, CCO has entered into a Supplemental Agreement (the "Agreement")with Franchisee,
Columbia, Columbia International, Inc. ("Columbia International"), Liberty of Greenwich, Inc.
("Liberty"), TCI West, Inc. ("TCI West"), TCI/CI Merger Sub Corp. ("TCVCI") and TCl/CA Merger
Sub Corp. ("TCl/CA"); and
WHEREAS, Columbia has entered into an Agreement and Plan of Merger(the "Merger Agreement")
with TCI West and TCI/CA; and
WHEREAS, pursuant to the Agreement and the Merger Agreement and additional transactions that
will occur immediately subsequent to the respective closings of the Agreement and the Merger
Agreement,the following will occur: (1) CCO will be dissolved, and the shares of Franchisee owned
by CCO will be distributed proportionately to Liberty and Columbia, CCO's partners at thetime of
dissolution; (2)Liberty's interest in Columbia will be redeemed by Columbia for stock of equal value
in Franchisee; (3) TCI West will acquire all of the limited partnership interests in Columbia; (4)
TCI/CI, a wholly owned subsidiary of TCI West, will purchase the general partnership interest of
Columbia International in Columbia; (S) Columbia will distribute its remaining interest in Franchisee
to TCI/CI and TCl/CA Acquisition Sub Corp., a wholly owned subsidiary of TCI West, which
entities will immediately thereafter transfer their interest in Franchisee to TCI-Oregon, a wholly
owned subsidiary of TCI West; and (6) through a series of stock exchanges and capital contributions
between Liberty and various other TCI entities, the stock of Franchisee held by Liberty will be
transferred,to TCI-Oregon; and
WHEREAS, upon the consummation (the "Effective Date") of the respective closings of the
Agreement and the Merger Agreement and the transactions that will occur immediately thereafter
(collectively, the "Transaction"), TCI-Oreton will wholly own Franchisee; and
WHEREAS, immediately subsequent to the Effective Date of the Transaction, (1) Franchisee expects
to amend its corporate documents and cause required filings, if any, to be made with governmental
agencies to effect a name change of Franchisee to TCI of Tualatin Valley, Inc.; and (2)the partners
of Columbia expect to amend the Partnership Agreement of Columbia and cause required filings, if
any,to be made with governmental agencies to effect,a name change of Columbia to TCI Washington
Associates, L.P.; and
WHEREAS, the Transaction may require the consent of the Franchise Authority, and Franchisee and
TCI-Oregon have requested .such consent by filing the required Forms 394 with the Franchise
Authority and with MACC; and
WHEREAS, MACC has acknowledged that TCI-Oregon has shown sufficient legal, technical and
financial qualifications of Franchisee in connection with the Transaction; and
WHEREAS,MACC has approved the Transaction and has recommended to the Franchise Authority
that it approves of, and consents to, the Transaction.
NOW, THEREFORE, be it resolved by the City of Tigard as follows:
SECTION 1. The Franchise Authority hereby approves oC and consents to, the Transaction relating
to the period from and after the Effective Date, subject to applicable federal and state law.
SECTION 2. The Franchise Authority hereby acknowledges the sufficiency and form of the notice
provided by the Franchisee and TCI-Oregon regarding the Transaction.
SECTION 3. Franchisee may transfer the Franchise, or control related thereto, to any entity
controlling, controlled by, or under common control with Franchisee upon notice to MACC of any
such transfer to an affiliated entity.
SECTION 4. The Transaction shall be contingent upon and take effect only on and after the
Effective Date of the Transaction, subject to applicable federal and state law.
SECTION 5. Pursuant to Sections 9.2, 9.3 and 9.5 of the Franchise, Franchisee will, subsequent to
the Effective Date of the Transaction, promptly file with the Franchise.Authority the appropriate
instruments evidencing the security fund, performance bond, and liability insurance, respectively, or
alternatives thereto, provided for by such Sections.
SECTION 6. Subsequent to the Effective Date of the Transaction, Franchisee will provide its
written acceptance to comply with all the provisions, terns and conditions of the Franchise with
respect to the period from and after the Effective Date of the Transaction and will agree to remain
fully obligated and liable under the provisions, terms and conditions of the Franchise with respect to
the period from and after the Effective Date of the Transaction, as required by Section 3.7 of the
Franchise.
-2 -
SECTION 7. The Franchise Authority confirms that, as of the date of this Resolution: (a) the
Franchise was properly granted; (b) the Franchise is valid and remains in full force and effect and
expires on February 10, 1999; (c) Franchisee is recognized as the present holder and owner of the
Franchise;(d)no actions or proceedings will be instituted against`Franchisee or TCI-Oregon arising
out of any acts.or omissions of Franchisee,,Columbia or Columbia International prior to the Effective
Date of the Transaction, and TCI-Oregon and its affiliates shall have no obligations or liabilities with
respect to the Franchise that relate to periods prior to the Effective:Date of the Transaction; (e) the
Franchise supersedes all other agreements between Franchisee and the Franchise Authority; (fl the
Franchise represents the entire understanding of the-parties and Franchisee has made no commitments .
and owes no obligations to any of the Franchise Authorities other than those specifically stated in the
Franchise and any obligations of Franchisee and the agreements listed on Attachment 2; (g)
Franchisee is materially in compliance with the provisions of the Franchise and the agreements listed
on Attachment 2;and(h)there exists no known fact or.circumstance which constitutes or which, with
the passage of time or the giving of notice or both, would constitute a default or breach under the
Franchise, or would allow any of the Franchise Authorities to cancet or terminate the rights
thereunder except upon the expiration of the full term thereof.
Duly and lawfully PASSED, ADOPTED AND APPROVED by the governing body
of this day of , 1995.
CITY OF TIGARD, OREGON
By:
Its:
ATTEST:
I, the undersigned, being the duly appointed, qualified and acting of
hereby certify that the foregoing Resolution No. is a true,
correct and accurate copy as duly and lawfully passed and adopted by on the day
of , 1995.
- 3 -
Attachment 1
Documents Amending Metropolitan Area Communications Commission Franchise Agreement
1. Memorandum of Understanding ("MOU"), dated 2/10/92, between MACC and
Columbia Cable of Oregon, regarding agreement by franchisee to maintain an account
into which franchisee shall deposit on yearly.basis a payment equivalent to the cost
of the return modules that franchisee would otherwise have been required to
warehouse in that calendar,year pursuant.to an earlier MOU dated 4/29/88.
2. Memorandum ofUnderstanding with Columbia Cable of Oregon, Inc., signed 10/1/90
and 10/8/90, re joint operations of the Public Communications Network through the
term of the franchise and addressing cost issues.
3. Resolution No. 90-16 extending the franchise expiration date to 2/10/99.
4. Resolution No. 89-07 dated 9/20/89 amending both the Intergovernmental Agreement
and the Franchise Agreement to permit the City of Gaston to become a member of
MACC and a party to the Franchise.
5. Resolution No. 88-11 extending the franchise expiration date to 2/10/98.
6. Agreement to Amend the Cable Communications System Franchise Agreement
between MACC and Willamette Cable TV, Inc. dated 4/29/88.
7. Resolution No. 88-03 passed April 20, 1988 by the MACC reciting that the
conditions to the consent of MACC and its members to the transfer of franchise from
Tidel to Willamette, and the change in control of Willamette whereby it becomes
wholly owned by Columbia have been met (approving change in control).
8. Resolutions, passed in March 1988 by each of the MACC member jurisdictions
consenting to the 5 actions recommended by MACC in Resolution No. 88-02.
9. Resolution No. 86-07 dated 11/19/86 of MACC stating that Tidel formally accepted
the franchise terms and that all of the member jurisdictions approved the transfer
(approving transfer).
10. Resolution No. 86-01 dated 2/19/86 of MACC Approving Changes in the Access
Requirements of the Franchise Agreement.
11. Resolution No. 85-04 dated 10/15/85 of MACC Approving the Change of Ownership
of Storer Communications, Inc.
12. Amendment to the Franchise Agreement, dated 10/8/85.
13. Resolution No. 84-3 dated 3/7/84 of MACC amending the Intergovernmental
Agreement and the.Cable Communications,System Franchise Agreement to permit
North.Plains to become a member of MACC and a party to the Franchise Agreement.
14. Resolution No. 84-2 dated 3/9/84 of MACC amending the Intergovernmental
Agreement and the Cable Communications System Franchise Agreement to permit
Wilsonville to become a member of MAC.0 and.a party to the Franchise Agreement.
15: Resolution No: 82-4 dated 7/7/82 of MACC'approving the amendment of Section
4.16, Undergrounding, of the Franchise Agreement.
16. Resolution No. 82-1 dated 2/10/82 approving the Construction Schedule of Storer
Metro Communications, Inc. and Establishing the Effective Date of the Franchise.
Attachment 2
Additional Documents/Agreements between MACC and Franchisee
I. Agreement among MACC, Tigard Police Department, and Columbia Cable of Oregon
to provide Public Communications Network Data Services for Tigard Police
Department for-the period from 1111194 to 6/30/97.
2. Agreement among MACC,Washington County, and Columbia Cable of Oregon, Inc.
regarding Public Communications Network Voice Services for Washington County
for the period from 7/1/94 to 6/30/97 (relating to voice services).
3. Agreement among,MACC, Washington County, and Columbia Cable of Oregon, Inc.
regarding Public Communications Network Voice Services for Washington County
for the period from 7/1/94 to 6/30/97 (relating to high speed data services).
4. Community Access Television Agreement, executed 10/13/92 by MACC and 10/6/92
by Columbia Cable of Oregon(as amended by a letter agreement dated 1/22/93 which
was executed by the parties on 2/8/93 and 2/2/93), setting forth terms established by
the Access Evaluation Committee pursuant to the Franchise Agreement.
5. Letter dated 5/21/92 from MACC, concurring that the sale of MONY's interests in
Columbia Associates, L.P. to Liberty of Greenwich, Inc. does not constitute a change
of control.
6. Memorandum of Understanding between MACC and Willamette dated 4/29/88 re:
construction, interactive services, etc.
7. Agreement dated 4/28/88 between MACC and Columbia Cable of Oregon to establish
evaluation criteria to be used in determining Willamette's access and local origination
programming support commencing 7/1/92.
8. Agreement between MACC, Tidel Communications, Inc. and Willamette�Cable TV,
Inc. dated 4/26/88 regarding payment of $36,000 to MACC in satisfaction of
Franchise obligations in connection with access and local origination.
9. Agreement between MACC and Columbia Cable of Oregon dated 4/20/88 regarding
documents to be delivered and,payments to be made to MACC to be held in escrow
until completion of acquisition of Willamette.
10. Report by MACC, dated March 1988, regarding transfer of the franchise and change
of control of Willamette Cable TV, Inc. (Tidel Communications, Inc.) to Columbia
Cable of Oregon, Incorporated.
11. Resolution No. 88-02 passed 2/24/88 by MACC, recommending that its member
jurisdictions consent to: (1)the transfer of franchise from Tidel to Willamette; (2) the
change in control of Willamette; (3).amendment of the franchise agreement; (4) a
memorandum of understanding with Willamette; and (5) amendment. of the
intergovernmental cooperation agreement between MACC and its member
jurisdictions.
12. Resolution No. 86-02 dated 6/25/86 of MACC recommending to the member
jurisdictions that.they approve the sale from Storer to Tidel, contingent upon filing
of acceptance by Tidel..,
HATEMPONIHISEM905005I S\MACC-RES.ATT
6/21/95 9:04 am
COLUMBIA
of Washington.
6916 N.E. 40th Street a Vancouver, WA 98661
(206)254-0771 a FAX(206).892=8744
CALVIN D. BROUSSARD June 23, 1995
Vice President/General Partner
HAND DELIVERY
Mr. Bruce Crest
Metropolitan Area Communications Commission
1815 NW 1169th Avenue
Suite 6020
Beaverton, Oregon 97006
Dear Mr. Crest:
As you are aware, under the Cable Communications System Franchise Agreement
dated January 26, 1982, as amended(the "MACC Franchise"), the local cable operator of the cable
television systems (the "Systems") serving the member jurisdictions listed on Attachment Ito this
letter (the "Franchise Authorities") of the Metropolitan Area Communications Commission
("MACC")is Willamette Cable TV, Inc., an Oregon corporation, d/b/a Columbia Cable,of Oregon
("Willamette" and the "Franchise Holder"). The Franchise Holder is currently solely owned by
Columbia Cable of Oregon, an Oregon general partnership ("CCO") in which Columbia Associates,
L.P. ("Columbia") is the majority general partner.
Columbia has recently entered into a Supplemental Agreement(the"Agreement") with
Willamette, Columbia International, Inc. ("Columbia International"), Liberty of Greenwich, Inc:
("Liberty"),TCI West,Inc. ("TCI West"), TCI/CI Merger Sub Corp. ("TCUCI") and TCVCA Merger
Sub Corp. ("TCUCA") and an Agreement and Plan of Merger(the "Merger Agreement") with TCI
West and!TCl/CA. A change in ownership of the Franchise Holder to TCICablevision of'Oregon;
Inc. ("TCI-Oregon") will'occur upon the consummation of the Agreement, the Merger Agreement
and the transactions that will occur immediately thereafter (collectively, the "Transaction").
More specifically, the following events will occur as part of the Transaction: (1)CCO.
will be dissolved, and the shares of the Franchise Holder owned by CCO will be distributed
proportionately to Liberty and Columbia; the partners of CCO at the time of.dissolution; (2)Liberty's
interest in Columbia will be redeemed by Columbia for stock of equal value in Willamette; (3) TCI
West will acquire all of the limited partnership interests in Columbia-, (4) TCUCI, a wholly owned
subsidiary of TCI West, will'purchase the general partnership interest of Columbia International'in
Columbia; (5) Columbia will distribute its remaining shares of Willamette stock to TCUCI and
TCI/CA Acquisition Sub Corp., a wholly owned subsidiary of TCI West, which entities will
immediately thereafter transfer such stock to TCI-Oregon, a wholly owned subsidiary of TCI West;
and (6) through a series of stock exchanges and capital contributions between Liberty and,various
other TCI entities; the stock of Willamette held by Liberty will be transferred' to TCI-Oregon.
Although the above-described change in ownership of the Franchise,Holder to TCI-Oregon will occur
upon the consummation of the Transaction,.the Franchise Holder will'continueto own and operate
the systems under its new name "TCI of Tualatin Valley, Inc," The attached materials contain a
detailed description of the transactions that will constitute this change in ownership.
Mr. Bruce Crest
June 23, 1995
Page 2
Section 617 of the Cable Television Consumer Protection and Competition Act of
1992(the"Act")provides that Form 394 shall be provided to the Franchise Authorities in connection
with obtaining the consent of the Franchise Authorities to a change in ownership that constitutes a
transfer of control of the MACC Franchise if such consent is required under such franchise. The
consent of the Franchise Authorities-may be required under the MACC Franchise in connection with
the Transaction, and as specified in the applicable franchise'notice provisions, we are delivering one
original and two copies of the enclosed Form 394 and Exhibits to MACC for review(the original and
each copy contain a separate page one for each of the Franchise Authorities), and we are also
delivering under copy of this letter one original and two copies of the appropriate Form 394 and
Exhibits to each of the Franchise Authorities.
MACC has also requested completion of a Request for Qualifications("RFQ"). TCI-
Oregon has advised us that it is in the process of completing responses to such RFQ and that it will
deliver its completed document to you within two weeks of your receipt of this letter; however, we
have been advised by counsel that under FCC rules delivery of the Form 394 and Exhibits to MACC
and the Franchise Authorities begins the 120 day review period provided for by Section 617 of the
Act. TCI-Oregon has assured us of its intent to cooperate with MACC to provide responses to
reasonably requested information in the RFQ in order for MACC to assess the Transferee's legal,
technical and financial qualifications with respect to the change in ownership resulting from the'
above-described transaction. However, the MACC Franchise does not require that specific
information beyond that which is requested in the Form 394 be provided in connection with the
Transaction, and therefore, TCI-Oregon believes that the delivery of the RFQ response does not
affect the 120 day review period under current FCC guidelines.
We appreciate your prompt review of the Form 394 and additional information that
we and TCI-Oregon will be providing in response to the RFQ. The consummation of the proposed
transactions is expected to occur in October, 1995, or sooner if all regulatory approvals have been
obtained. For your convenience, draft resolutions for MACC and each of the Franchise Authorities
are included for your review and use.
This letter and delivery of the Form 394 shall also serve as Willamette's certification
(also required by Section 617) to the Franchise :Authorities that it has owned each of the the Systems
for more than three years.
Becausegovernmental regulations require the delivery of the Form 394 to the
Franchise Authorities, please countersign on behalf of the Franchise Authorities, date and return one
of the duplicate copies of this letter in the enclosed pre-addressed envelope to document such
delivery.
Columbia and CI have greatly appreciated the opportunity to be associated with
Willamette; however, we believe that Willamette's subscribers will benefit from the contemplated
change in ownership of Willamette to TCI-Oregon. We think you will find the attached materials
helpful and impressive. TCI-Oregon is committed to delivering to its customers the benefits of
Mr. Bruce Crest
June 23, 1995
Page 3
evolving technologies, and because of its.size, TCI-Oregon and its parent have resources that may
make possible improvements and possibilities in service to subscribers that are not always practical
for smaller organizations.
At your convenience, I would welcome the opportunity to introduce you to a TCI-
Oregon representative so that'he and I together can respond to any questions:that you may have.
Sincerely yours,
Willamette Cable TV, Inc.
B
ts. - vice President
Receipt of this letter and the FCC
Form 394, including attachments,
is hereby acknowledged on behalf of
the Franchise Authorities:
Dated:
By:
Name:
cc: Franchise Authorities listed on
Attachment 1 (w/enc.) (via certified mail)
or hand delivered
H:\TEMP\DNIHISER\90500515\NIACC-394.Cf.
6/21/95 4:21 pm
JUN-23-1995 13:31 MACC-METRO COM COMMISSION 503+6450999 P.01i01
METROPOLITAN AREA
MA,CC COMMUNICATIONS COMMISSION
June 23, 1995 J�
TO: City Recorders/Managers
FR: Fred Christ \D0
RE: Columbia Cable Sale to TCI
TCI Cable announced today their intention to purchase the Columbia Cable
Systems for all of the MACC franchise area.
We have anticipated this sale for some time, and your MACC representative(s)
have been alerted.
Today, a representative of Columbia Cable will likely deliver to you a rather
large packet of information related to the sale. The packet will contain the
federal form (FCC 394) and other information upon which the MACC Commission
and your jurisdiction will base its decision on whether to.approve the transfer to
TCI.
PLEASE RETAIN THIS INFORMATION FOR YOUR USE LATER THIS YEAR!
MACC has received copies of this information for our use. Please contact your
jurisdiction's MACC representative to determine how they would like to get one of
the cop'i'es you receive today.
MACC will hold a public hearing, make a recommendation and your jurisdiction
will make a decision on whether to transfer the system later this year.
Thanks. If you have any questions, please call me at 645.7365 x206.
PR00PING f(RVIC.'F SINt:F 1980
1815 NW 169TH PLACE, SUITE 6020 BEAVERTON, OREGON 97006.4886 •(503)645-7365 • FAX (503) 645-0999
TOTAL P.01
i1
Tigard
Attachment 1
MACC Member Jurisdictions/Franchise Authorities
COMMUNITY SERVED COMMUNITY UNIT NO.
BANKS OR0325
BEAVERTON OR0283
CORNELIUS OR0318
DURHAM OR0326
FOREST GROVE OR0289
GASTON OR0442
HILLSBORO OR0290
KING CITY OR0317
LAKE OSWEGO OR0064 (In Clackamas County)
OR0304 (In Washington County)
NORTH PLAINS OR0341
RIVER GROVE OR0330
SHERWOOD OR0327
TIGARD OR0288
TUALATIN OR0328
UNINCORP.
WASHINGTON COUNTY OR0333
OR0242 (Aloha-Reedville)
WILSONVILLE OR0331 (Clackamas County)
OR0332 (In Washington County)
Federal Communications Commission Approved by OMB
Washington,D.C.20554 3060-0573
FCC 394 Expires OW11/96
APPLICATION FOR FRANCHISE AUTHORITY
CONSENT TO ASSIGNMENT OR TRANSFER OF CONTROL
OF CABLE TELEVISION FRANCHISE
FOR FRANCHISE AUTHORITY USE ONLY
SECTION I. GENERAL INFORMATION "
DATE June 23, 1995 1. Community Unit Identification Number: OR 0288
2. Application for: Assignment of Franchise ® Transfer of Control
3. Franchising authority: City of Tigard, Oregon
4. Identify community where the system/franchise that is the subject of the assignment or transfer of control is located:
Tigard, Oregon
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: April 29, 1988
6. Proposed effective date of closing of the transaction assigning or transferring ownership of the
system to transferee/assignee: October, 1995
7. Attach as an Exhibit a schedule of any and all additional information ormaterial filed with this Exhibit No.
application that is identified in the franchise as required to be provided to the franchising 1
authority 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)
Willamette Cable TV, Inc.",an Oregon corporation
Assumed name used for doing business(if any) Columbia Cable of Oregon"
Mailing street address or P.O. Box 14200 SW Brigadoon Ct.
City State ZIP Code Telephone No. (include area code)
Beaverton Oregon 97005 (503)644-3188
2.(a) Attach as an Exhibit a copy of the contract or agreement that provides for the assignment or transfer Exhibit No—].
of control (including any exhibits or schedules thereto necessary in order to understand the terms 2
thereof). If there is 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 ® Yes ❑ No
between the transferor/assignor and the transferee/assignee?
If No, explain in an Exhibit. Exhibit No.
N/A
"Immediately subsequent to the transfer of control of Transferor to Transferee,the
Transferor expects to amend Its incorporation documents and make any required filings
with governmental agencies to reflect°a name change to TCI of Tualatin Valley, Inc.
FCC 394
October 1993
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, listlast name first)
TCI Cablevision of Oregon,Inc.",an Oregon corporation
Assumed name used for doing business(if any) NIA
Mailing street address or P.O. Box 3500 SW Bond,Avenue
City Portland State OR ZIP Code 97201 Telephone No.(include area code)
(503)243-7426
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)
Tierney,William
Firm or company name(if any) TCI Cablevision of Oregon, Inc.
Mailing street address or P.O. Box 3500 SW Bond Avenue
CityState ZIP Code Telephone No. (include area code)
Portland OR 97201 (503)243-7426
(c) Attach as an Exhibit the name, mailing address, and telephone number of each additional person who Exhibit No.
should be contacted, if any. 3
d Indicate the address where the system's financial records will be maintained."
Street address c/o TCI West, Inc., P.O. Box 91220
City Bellevue State WA ZIP Code 98009-9220
2. Indicate on an attached exhibit any plans to change the current terms and conditions of service and Exhibit No.
-operations of the system as a consequence of the transaction for which approval is sought. 4
"Transferor will remain the franchisee and will continue to own and operate the system; however, Transferee will wholly own
the franchisee subsequent to the consummation of the Transaction (defined and described on Exhibit 2).
"Thesystem's customer records will be maintained at: c/o TCI of Tualatin Valley, Inc., 14200 SW Brigadoon, Beaverton,
Oregon 97005.
FCC 394(Page 2)
October 1993
SECTION I. TRANSFEREE'S/ASSIGNEE'S LEGAL QUALIFICATIONS
1. Transferee/Assignee is:
■ Corporation a. Jurisdiction of incorporation` Oregon d. Name and address of registered agent in
jurisdiction:
b. Date of incorporation: 3119157 The Prentice-Hall Corporation System,
Inc.
144 Chemawa Road N.
Salem,OR 97303
c. For profit or not-for-profit: For profit
❑ Limited Partnership a. Jurisdiction in which formed: c. Name and address of registered agent in
jurisdiction:
b. Date of formation:
❑ General Partnership a: Jurisdiction whose laws govern formation: b. Date of formation:
❑ Individual
❑ 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
beneficial) 'holding more than 5% of the outstanding voting shares, general partners; and limited partners holding an equity
interest of y 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.
Q Percentage of votes.
(a)TCI Cablevision of Oregon, Inc. TCI West,Inc. David M. Reynolds
6950 SW Hampton St.,Suite 300 P.O. Box 91220 P.O.Box 91220
Portland,OR 97223-8332 Bellevue,WA 98009-9220 Bellevue,WA 98009-9220
Operator of Cable Systems Investor in Cable System Operators Corporate Officer
(b) Oregon Delaware United States
(c) Transferee Sole Stockholder of Transferee Director; officer(President)
(d) N/A 1,000 Shares None
(e) N/A 1,000 Votes None
(f) N/A 100% None
"Additional information provided on attachment.
FCC 394(Page 3)
Oet°ber1993
Section I.2(Continued)
(The following list constitutes the directors and principal officers of Transferee)
(a) Guenthner, Madonna (a), Marshall, Barry P.
5619 DTC Parkway 5619 DTC'Parkway
Englewood, CO 80111 Englewood, CO 80111
Corporate Officer Corporate Officer
(b) United States (b) United States
(c). Officer(Vice President) (c) Director
(d) None (d) None
(e) None (e) None
(f) None (f) None
(a) Brett, Stephen
5619 DTC Parkway
Englewood, CO 80111 (a) Schotters, Bernard., H
Corporate.Officer 5619 DTC Parkway
(b) United States Englewood, CO80111
(c) Officer(Vice President/ Corporate Officer
Assistant Secretary) (b)' United States
(d) None (c) Officer(Vice President)
(e) None (d) None
(f) None (e) None
(f) None
(a) Fulwood, S. Leigh
5619 DTC Parkway
Englewood, CO 80111 (a) Sokol, Gerald, Jr.
Corporate Officer 561'9 DTC Parkway
(b) United States Englewood, CO 80111
(c) Officer(Secretary) Corporate Officer
(d) None (b) United States
(e) None (c) Officer(Vice President/Asst. Treasurer)
(f) None (d) None
(e) None
(a) Downing, Jim (f) None
5619 DTC Parkway
Englewood, CO 80111
(b) United States
(c) Officer (Treasurer)
(d) None
(e) None
(f) None
3. If the applicant is a corporation or a limited partnership, is the transferee/assignee formed under the L , Yes ❑ No
laws off, or duly qualified to transact business in, the State or other jurisdiction in which the system
operates?
If the answer is No, explain in an Exhibit. Exhibit No.5
4. Has the transferee/assignee had any interest in or in connection with an application which has been ❑ Yes ® No
dismissed or denied by any franchise authority?
If the answer is Yes, describe circumstances in an Exhibit. Exhibit No.
N/A
5. Has an adverse finding been made or an adverse final action been taken by any court or ❑ Yes ® No
administrative body with respect to the transferee/assignee in a civil, criminal or administrative
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) involved, Exhibit No.
including an identification of any court or administrative body and any proceeding (by dates and file N/A
numbers, if applicable), and the disposition of such proceeding.
6. Are there any documents, instruments, contracts or understandings relating to ownership or future ❑ Yes 0 No
ownership rights with respect to any attributable interest as described in Question 2(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 ❑ Yes ■ No
transferee/assignee, as security for loans or contractual performance, provide that: (a)voting 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 t 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. No.documents, instruments,agreements or Exhibit No.
understandings for the pledge of stock of the Transferee exist. N/A
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 0 Yes ❑ No
committed resources to consummate the transaction and operate the facilities for three months.
2. Attach as an Exhibit the most recent financial statements, prepared in accordance withgenerally Exhibit No.
accepted accounting principles, including a balance sheet and income statement for at least one full 6
year, for the tranfseree/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. Because audited
financial statements for Transferee do,not;exist,audited financial statements for Transferee's
direct parent,TCI,West, Inc.are provided.
SECTION IV-TRANSFEREE'S/ASSIGNEE'S TECHNICAL QUALIFICATIONS
Set forth in an Exhibit a narrative account of the transferee's/assignee's technical qualifications, experience Exhibit No.
and expertise regarding cable television systems, including but not limited to, summary information about 7
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(Pale 4)
October 199
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 Willamette Cable TV,Inc.,an 0 gon corporation
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 B
good faith. is iceITIN-slaent-
WILLFUL FALSE STATEMENTS MADE ON THISFORMIARE Date June 23, 1995
PUNISHABLE BY FINE AND/OR IMPRISONMENT: U.S:CODE,
TITLE 18,SECTION 1001.
Print full name
Calvin D. Broussard
Check appropriate classification:
❑ Individual ❑ General Partner 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) Hasa 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 TCI Cablevision'of Oregon,Inc.,an Oregon corporation
I CERTIFY that the statements in this application are true,complete Q/
and correct to the best of my knowledge and belief and are made in By:
good faith. Its:Vice President
WILLFUL FALSE STATEMENTS MADE ON THIS FORM ARE Date June 23, 1995
PUNISHABLE BY FINE AND/OR IMPRISONMENT. U.S.CODE,
TITLE 18, SECTION 1001.
Print full name Madonna Guenthner
Check appropriate classification:
❑
® Corporate Officer ❑ Other, Explain:Individual ❑ General Partner (Indicate Title)
FCC 394(Pape 5)
October 1993
Exhibit No. 1
The franchise agreement does not contain specific informational requirements when .
the approval of the franchising authority is requested for the type of transaction that is the subject of
this application.
Exhibit No. 2
Attached is the Supplemental Agreement dated as of June 20, 1995 (the
"Agreement"),by and among Columbia Associates, L.P. ("Columbia"), Columbia International, Inc.
("Columbia International"), Columbia Cable of Oregon ("CCO"), Willamette Cable TV, Inc.
("Willamette" and Transferor under this application), Liberty of Greenwich, Inc: ("Liberty"), TCI
West, Inc. ("TCI West"), TCI/CI Merger Sub Corp. ("TCI/CI") and TCI/CA Merger Sub Corp.
("TCI/CA'') Also attached is-the Agreement and Plan of Merger dated as of June 20, 1995 (the
"Merger Agreement"), by and among Columbia, TCIWest and TCI/CA. Exhibits and schedules are
not attached because Transferor and Transferee do not believe they are necessary in order to
understand the terms of the Agreement.
The Transferor (Willamette) is currently solely owned by CCO, an Oregon general
partnership. The transfer of control of the Transferor to TCI Cablevision of Oregon, Inc. ("TCI-
Oregon" and Transferee underthis application)that is the subject of this application will be the result
of the consummation of the various transactions contemplated by the attached Agreement and Merger
Agreement and additional transactions that will occur immediately subsequent to the respective
closings(collectively, the "Transaction"). The Transaction contemplates that CCO will be dissolved
and the shares.of Transferor owned by CCO will be distributed proportionately to CCO's partners at
the time of dissolution, Liberty and Columbia. Liberty's interest in Columbia will be redeemed by
Columbia for stock of equal value in the Transferor. Columbia will distribute its remaining interest
in the Transferor to TCI/CI and TCI/CA Acquisition Sub Corp., wholly owned subsidiaries of TCI
West, which.entities will immediately thereafter transfer their interests in the Transferor to TCI-
Oregon(Transferee), also a wholly owned subsidiary of TCI West. In addition, through a series of
stock exchanges and capital contributions between Liberty and various other TCI entities, the stock
of Transferor held by Liberty will be transfetred.to TCI-Oregon (Transferee), and the Transferor will.
be wholly owned by the Transferee. See attached chart showing the ownership of the Transferor
subsequent to the consummation of the Transaction. .
Immediately upon the consummation of the Transaction, it is contemplated.that
(1)Columbia's partnership agreement will be amended in accordance with its terms and any required
filings with governmental agencies will be made to effect a name change from Columbia to TCI
Washington Associates, L.P. and (2) Transferor's incorporation documents will be amended in
accordance with their terms and any required filings with governmental agencies will be made to
effect a name change from Willamette Cable TV, Inc. to TCI of Tualatin Valley, Inc.