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EXHIBIT 10.194
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
▇▇▇▇▇▇ COMMUNICATIONS OF ATLANTA-14, INC.
AS SELLER
AND
SKMD BROADCASTING PARTNERSHIP
AND
USA STATION GROUP OF MARYLAND, INC.
AS BUYER
Dated as of March 19, 1998
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TABLE OF CONTENTS
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ARTICLE 1. DEFINITIONS AND REFERENCES.............................................................................2
ARTICLE 2. SALE AND PURCHASE OF ASSETS; EXERCISE OF OPTION; PURCHASE PRICE;
ADJUSTMENTS; ASSUMPTION OF LIABILITIES.................................................................2
2.1 Asset Sale and Purchase of Assets......................................................................2
2.1.1 FCC Licenses...........................................................................................2
2.1.2 Tangible Personal Property.............................................................................2
2.1.3 Intellectual Property..................................................................................3
2.1.4 Station Contract.......................................................................................3
2.1.5 Files and Records......................................................................................3
2.1.6 Third-Party Claims.....................................................................................3
2.1.7 Permits and Licenses...................................................................................3
2.2 Excluded Assets........................................................................................4
2.2.1 Cash...................................................................................................4
2.2.2 Accounts Receivable....................................................................................4
2.2.3 Personal Property Disposed Of..........................................................................4
2.2.4 Insurance..............................................................................................4
2.2.5 Employee Plans and Assets..............................................................................5
2.2.6 Right to Tax Refunds...................................................................................5
2.2.7 Certain Books and Records..............................................................................5
2.2.8 Rights Under This Agreement............................................................................5
2.2.9 Certain Contracts and Unrelated Assets.................................................................5
2.2.10 Name...................................................................................................5
2.2.11 Other Assets...........................................................................................5
2.2.12 WPXA Assets............................................................................................5
2.3 Exercise of Option.....................................................................................6
2.4 Purchase Price.........................................................................................6
2.5 Payment of Purchase Price..............................................................................6
2.6 Adjustments to Purchase Price..........................................................................6
2.6.1 Adjustments............................................................................................6
2.6.2 Schedule of Adjustments................................................................................6
2.7 Assumption of Liabilities..............................................................................7
ARTICLE 3. REPRESENTATIONS AND WARRANTIES BY SELLER...............................................................9
3.1 Organization and Standing..............................................................................9
3.2 Authorization.........................................................................................10
3.3 Compliance with Laws..................................................................................10
3.4 Required Consents; No Conflicts.......................................................................10
3.5 Option Documents......................................................................................11
3.6 Intentionally Omitted.................................................................................11
3.7 Absence of Litigation.................................................................................11
3.8 Totality of Assets; Encumbrances......................................................................12
3.9 FCC Matters...........................................................................................12
3.10 Real Property.........................................................................................13
3.11 Condition of Tangible Assets..........................................................................14
3.12 Intellectual Property.................................................................................14
3.13 Reports and Records...................................................................................15
3.14 Station Contract......................................................................................15
3.15 Taxes.................................................................................................16
3.16 Employee Benefit Plans................................................................................17
3.17 Labor Relations.......................................................................................18
3.18 Environmental Matters.................................................................................19
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TABLE OF CONTENTS (continued)
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3.19 Insurance.............................................................................................20
3.20 Cable Systems.........................................................................................20
ARTICLE 4. REPRESENTATIONS AND WARRANTIES BY BUYER...............................................................20
4.1 Organization and Standing.............................................................................20
4.2 Authorization.........................................................................................21
4.3 Compliance with Laws..................................................................................21
4.4 No Conflicts..........................................................................................21
4.5 Qualification as Licensee.............................................................................21
4.6 Blackstar Agreement...................................................................................21
ARTICLE 5. PRE-CLOSING FILINGS...................................................................................21
5.1 Applications for FCC Consent..........................................................................21
5.2 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇.....................................................................................22
ARTICLE 6. COVENANTS AND AGREEMENTS OF SELLER....................................................................22
6.1 Negative Covenants....................................................................................22
6.1.1 Dispositions; Mergers.................................................................................22
6.1.2 Additional Agreements.................................................................................22
6.1.3 Breaches..............................................................................................23
6.1.4 Employee Matters......................................................................................23
6.1.5 Actions Affecting FCC Licenses or Contracts...........................................................23
6.1.6 Representations and Warranties........................................................................23
6.2 Affirmative Covenants.................................................................................23
6.2.1 Preserve Existence....................................................................................23
6.2.2 Normal Operations.....................................................................................23
6.2.3 Maintain FCC Licenses.................................................................................24
6.2.4 Notices Under ▇▇▇▇▇▇▇▇▇ Purchase Agreement............................................................24
6.2.5 Performance Under Contracts...........................................................................24
6.2.6 Compliance With ▇▇▇▇▇▇▇▇▇ Purchase Agreement..........................................................24
6.2.7 Taxes.................................................................................................24
6.2.8 Corporate Action......................................................................................24
6.2.9 Transfer Tax; Bulk Sales..............................................................................25
6.2.10 Access................................................................................................25
6.2.11 Other Information.....................................................................................25
6.2.12 Engineering Inspections...............................................................................25
6.2.13 Insurance.............................................................................................25
6.2.14 Violations............................................................................................26
6.2.15 Interruption in Broadcast Operations................................................................. 26
6.2.16 Consents..............................................................................................26
6.3 Confidentiality...................................................................................... 26
6.4 Cable Carriage....................................................................................... 26
ARTICLE 7. COVENANTS AND AGREEMENTS OF BUYER.................................................................... 26
7.1 Confidentiality...................................................................................... 26
7.2 Corporate Action..................................................................................... 27
7.3 Negative Covenants................................................................................... 27
ARTICLE 8. MUTUAL COVENANTS AND UNDERSTANDINGS OF SELLER AND BUYER...............................................27
8.1 Possession and Control............................................................................... 27
8.2 Risk of Loss......................................................................................... 28
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TABLE OF CONTENTS (continued)
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8.3 Allocation of Purchase Price......................................................................... 28
8.3.1 Allocation Schedule.................................................................................. 28
8.3.2 Appraised Allocation of Purchase Price............................................................... 28
8.4 Public Announcements................................................................................. 29
8.5 Employee Matters..................................................................................... 29
8.6 Services Agreement................................................................................... 29
ARTICLE 9. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE.................................................. 29
9.1 Representations and Covenants........................................................................ 29
9.2 Consents............................................................................................. 30
9.3 Delivery of Documents................................................................................ 30
9.4 FCC Order............................................................................................ 30
9.5 Legal Proceedings.................................................................................... 30
9.6 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇.................................................................................... 30
9.7 Absence of Material Change........................................................................... 30
9.8 Acquisition of KBSP.................................................................................. 31
9.9 Cable Carriage Entitlement........................................................................... 31
9.10 ▇▇▇▇▇▇▇▇▇ Closing.................................................................................... 31
9.11 Blackstar Acquisition................................................................................ 31
ARTICLE 10. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE................................................. 31
10.1 Representations and Covenants........................................................................ 31
10.2 Delivery by Buyer.................................................................................... 31
10.3 FCC Order............................................................................................ 32
10.4 Legal Proceedings.................................................................................... 32
10.5 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇.................................................................................... 32
10.6 KBSP Acquisition..................................................................................... 32
10.7 Consents............................................................................................. 32
ARTICLE 11. THE CLOSING.......................................................................................... 32
11.1 Closing.............................................................................................. 32
11.2 Delivery by Seller................................................................................... 33
11.2.1 Agreements and Instruments........................................................................... 33
11.2.2 Consents............................................................................................. 34
11.2.3 Cable Carriage Entitlement........................................................................... 34
11.2.4 UCC Report........................................................................................... 34
11.2.5 Certified Resolutions................................................................................ 34
11.2.6 Officers' Certificate................................................................................ 34
11.2.7 Seller's IRS Form 8594............................................................................... 35
11.2.8 Opinion of Counsel................................................................................... 35
11.3 Delivery by Buyer, the Exchange Agent................................................................ 35
11.3.1 Purchase Price Payment............................................................................... 35
11.3.2 Agreements and Instruments........................................................................... 35
11.3.3 Certified Resolutions................................................................................ 36
11.3.4 Officers' Certificate................................................................................ 36
11.3.5 Buyer's IRS Form 8594................................................................................ 36
11.3.6 Opinion of Counsel................................................................................... 36
11.3.7 Consents..............................................................................................36
11.4 Frustration of Closing Conditions.................................................................... 36
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TABLE OF CONTENTS (continued)
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ARTICLE 12. SURVIVAL; INDEMNIFICATION............................................................................ 37
12.1 Survival of Representations.......................................................................... 37
12.2 Indemnification by Seller............................................................................ 37
12.3 Indemnification by Buyer............................................................................. 38
12.4 Limitation on Indemnification........................................................................ 38
12.5 Conditions of Indemnification........................................................................ 39
12.6 Bulk Sales Indemnity................................................................................. 40
ARTICLE 13. TERMINATION.......................................................................................... 40
13.1 Termination.......................................................................................... 40
13.2 Effect of Termination................................................................................ 41
ARTICLE 14. REMEDIES............................................................................................. 41
14.1 Default by Buyer..................................................................................... 41
14.2 Default by Seller.................................................................................... 41
14.3 Specific Performance................................................................................. 42
ARTICLE 15. GENERAL PROVISIONS................................................................................... 42
15.1 Additional Actions, Documents and Information........................................................ 42
15.2 Brokers.............................................................................................. 43
15.3 Expenses and Taxes................................................................................... 43
15.4 Mail................................................................................................. 43
15.5 Notices.............................................................................................. 43
15.6 Waiver............................................................................................... 45
15.7 Benefit and Assignment............................................................................... 45
15.8 Entire Agreement; Amendment.......................................................................... 46
15.9 Severability......................................................................................... 46
15.10 Headings............................................................................................. 46
15.11 Governing Law........................................................................................ 46
15.12 Liquidated Damages................................................................................... 46
15.13 Signature in Counterparts............................................................................ 46
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SCHEDULES
Schedule 2.1.1 FCC Licenses
Schedule 2.1.2 Tangible Personal Property
Schedule 2.1.3 Intellectual Property
Schedule 2.1.4 Station Contract
Schedule 2.2.11 Other Excluded Assets
Schedule 3.1 Equity Interests of Seller
Schedule 3.4.1 Consents
Schedule 3.7 Litigation
Schedule 3.8.2 Encumbrances
Schedule 3.18 Environmental Matters
Schedule 3.19 Insurance
Schedule 3.20(a) Cable Television Systems
Schedule 3.20(b) Market Cable Systems
Schedule 3.20(c) Retransmission Consent Agreements
Schedule 3.20(d) Retransmission Consent Elections
Schedule 3.20(e) Notifications from Market Cable Systems Regarding Deletion from Carriage
Schedule 3.20(f) Notifications from Market Cable Systems Regarding Quality of Station's Signal
Schedule 3.20(g) Must Carry Petitions
Schedule 3.20(h) Must Carry Complaints
Schedule 8.5 List of Excluded Employees
Schedule 11.2.4 Jurisdictions for UCC Reports
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EXHIBITS
EXHIBIT A Form of Assignment of Contracts
EXHIBIT B Form of ▇▇▇▇ of Sale and Assignment of Assets
EXHIBIT C Form of Assignment of FCC Licenses
EXHIBIT D Form of Assumption Agreement
EXHIBIT E Form of Option Exercise Notice
EXHIBIT F Form of Services Agreement
EXHIBIT G Form of Escrow Agreement
EXHIBIT H Form of Assignment of Time Brokerage Agreement
EXHIBIT I Opinion Matters/Seller's Counsel
EXHIBIT J Opinion Matters/Buyer's Counsel
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT is entered into as of this 19th
day of March, 1998, by and among SKMD Broadcasting Partnership, a Delaware
general partnership ("SKMD"), USA Station Group of Maryland, Inc., a Delaware
corporation ("USA of Maryland", and together with SKMD, "Buyer"), and ▇▇▇▇▇▇
Communications of Atlanta-14, Inc., a Florida corporation ("Seller").
WHEREAS, pursuant to the Option Documents Seller holds that
certain exclusive and irrevocable Option to purchase substantially all assets
used or useful in connection with the business and operations of Television
Station WNGM(TV), Channel 34, Athens, Georgia (the "Station");
WHEREAS, following the exercise by Seller of the Option, Seller
has the right to purchase substantially all assets used or useful in connection
with the business and operations of the Station in accordance with the terms and
conditions of a pre-negotiated Asset Purchase Agreement in the form specified by
the Option Documents (the "▇▇▇▇▇▇▇▇▇ Purchase Agreement");
WHEREAS, Seller desires (i) to exercise its Option on the date
hereof to purchase the assets to be acquired by Seller pursuant to the ▇▇▇▇▇▇▇▇▇
Purchase Agreement; (ii) to enter into the ▇▇▇▇▇▇▇▇▇ Purchase Agreement within
ten (10) days of the date hereof; and (iii) immediately after acquiring such
assets pursuant to the ▇▇▇▇▇▇▇▇▇ Purchase Agreement, to sell, assign and
transfer all of Seller's right, title and interest in and to the FCC Licenses to
SKMD and certain of such other assets to USA of Maryland, all in accordance with
and subject to the terms and conditions hereinafter set forth;
WHEREAS, Seller owns certain other assets that consist of
broadcast equipment used or useful in the operation of the Station; and
WHEREAS, SKMD desires to purchase from Seller all of Seller's
right, title and interest in and to the FCC Licenses, and USA of Maryland
desires to purchase from Seller all of Seller's right, title and interest in and
to all of the Assets (other than the FCC Licenses), all in accordance with and
subject to the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants and agreements hereinafter set forth, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
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ARTICLE 1.
DEFINITIONS AND REFERENCES
Capitalized terms used herein without definition shall have the
respective meanings assigned thereto in ANNEX I attached hereto and incorporated
herein for all purposes of this Agreement (such definitions to be equally
applicable to both the singular and plural forms of the terms defined). Unless
otherwise specified, all references herein to "Articles" or "Sections" are to
Articles or Sections of this Agreement.
ARTICLE 2.
SALE AND PURCHASE OF ASSETS; EXERCISE OF OPTION; PURCHASE PRICE;
ADJUSTMENTS; ASSUMPTION OF LIABILITIES
2.1 ASSET SALE AND PURCHASE OF ASSETS.
Subject to the terms and conditions hereof and in reliance
upon the representations, warranties, covenants and agreements contained herein,
upon the Closing (following the ▇▇▇▇▇▇▇▇▇ Closing), Seller shall sell, assign,
transfer, convey and deliver (i) to SKMD, and SKMD agrees to purchase from
Seller, the FCC Licenses described in Section 2.1.1 and (ii) to USA of Maryland,
and USA of Maryland agrees to purchase from Seller, the assets, rights, benefits
and privileges, both tangible and intangible, listed in Sections 2.1.2 through
2.1.7, wheresoever situated or located, owned, leased, used, held for use or
otherwise held by Seller in connection with the business and operations of the
Station (collectively, the "Assets"); but excluding the Excluded Assets
described in Section 2.2. Subject to the provisions of Section 2.2, the Assets
shall include all such assets existing on the date hereof and all such assets
acquired (pursuant to the ▇▇▇▇▇▇▇▇▇ Purchase Agreement or otherwise) between the
date hereof and the Closing Date. The Assets are the following:
2.1.1 FCC LICENSES.
All currently existing licenses, permits and other
authorizations issued by the FCC for the operation of the Station (the "FCC
Licenses"), including without limitation those listed in SCHEDULE 2.1.1, and all
applications therefor, together with any renewals, extensions or modifications
thereof and additions thereto;
2.1.2 TANGIBLE PERSONAL PROPERTY.
The equipment, inventory, supplies, antenna installations, and
other tangible property set forth and described in SCHEDULE 2.1.2;
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2.1.3 INTELLECTUAL PROPERTY.
All of the service marks, copyrights, franchises, software,
licenses (other than the FCC Licenses), trademarks, trade names, jingles, and
slogans, if any, and other similar intangible assets maintained, owned, used,
held for use or otherwise held by Seller or ▇▇▇▇▇▇▇▇▇ in connection with the
business and operations of the Station (including any and all applications,
registrations, extensions and renewals relating thereto) (the "Intellectual
Property"), and all of the rights, benefits and privileges associated therewith
including, without limitation, those set forth and described in SCHEDULE 2.1.3
and the right to use the call letters for the Station;
2.1.4 STATION CONTRACT.
The Contract listed on SCHEDULE 2.1.4 (the "Station Contract")
(and any and all Real Property rights or interests granted to ▇▇▇▇▇▇▇▇▇-Georgia
thereunder) and the Additional Agreements;
2.1.5 FILES AND RECORDS.
All engineering, business and other books, papers, logs, files
and records in the possession of Seller or ▇▇▇▇▇▇▇▇▇ pertaining to the business
and operations of the Station, but not the books, records and other documents
described in Section 2.2.7;
2.1.6 THIRD-PARTY CLAIMS.
All rights and claims of Seller whether mature, contingent or
otherwise, against third parties relating to the Assets and attributable to the
operation of the Station following the Closing, whether in tort, contract, or
otherwise, including, without limitation, causes of action, unliquidated rights
and claims under or pursuant to all warranties, representations and guarantees
made by manufacturers, suppliers or vendors; and
2.1.7 PERMITS AND LICENSES.
All permits, approvals, orders, authorizations, consents,
licenses, certificates, franchises, exemptions of, or filings or registrations
with, any court or Governmental Authority (other than the FCC) in any
jurisdiction, which have been issued or granted to or are owned or used by
Seller with respect to the Station and all pending applications therefor.
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2.2 EXCLUDED ASSETS.
Notwithstanding anything to the contrary in this Agreement,
there shall be excluded from the Assets and retained by Seller, to the extent in
existence at midnight (Atlanta local time) on the date immediately preceding the
Closing Date, the following assets (collectively, the "Excluded Assets");
2.2.1 CASH.
All cash and cash equivalents and cash held by Seller, bank
balances and rights in and to bank accounts, marketable and other securities of
Seller.
2.2.2 ACCOUNTS RECEIVABLE.
All Accounts Receivable.
2.2.3 PERSONAL PROPERTY DISPOSED OF.
All tangible personal property disposed of or consumed in the
Ordinary Course of Business as permitted by this Agreement.
2.2.4 INSURANCE.
All Contracts of insurance and all insurance plans and the
assets thereof listed on SCHEDULE 3.19.
2.2.5 EMPLOYEE PLANS AND ASSETS.
All Plans, Benefit Arrangements, Qualified Plans and Welfare
Plans and the assets thereof.
2.2.6 RIGHT TO TAX REFUNDS.
Any and all claims of Seller with respect to any Tax refunds.
2.2.7 CERTAIN BOOKS AND RECORDS.
All of (a) Seller's or ▇▇▇▇▇▇▇▇▇'▇ corporate minute books,
stock transfer books, corporate records relating to Seller's or ▇▇▇▇▇▇▇▇▇'▇
incorporation, and corporate seals, and originals of account books of original
entry; (b) duplicated copies of any books, records, accounts, checks, payment
records, Tax records (including payroll, unemployment, real estate and other Tax
records) and
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other similar books, records and information of Seller or ▇▇▇▇▇▇▇▇▇ relating to
Seller's or ▇▇▇▇▇▇▇▇▇'▇ operation of the business of the Station prior to the
Closing; (c) all records prepared by or on behalf of Seller or ▇▇▇▇▇▇▇▇▇ in
connection with the sale of the Station; and (d) all records and documents
relating to any Excluded Assets.
2.2.8 RIGHTS UNDER THIS AGREEMENT.
All of Seller's rights under or pursuant to this Agreement or
any other rights in favor of Seller pursuant to the other agreements
contemplated hereby.
2.2.9 CERTAIN CONTRACTS.
Any Contract other than the Station Contract.
2.2.10 NAME.
All rights to the name "▇▇▇▇▇▇" or any logo or variation
thereof and the goodwill associated therewith.
2.2.11 OTHER ASSETS.
Those assets set forth and described on SCHEDULE 2.2.11.
2.2.12 WPXA ASSETS.
All real, personal and mixed assets, rights, benefits and
privileges, both tangible and intangible, wheresoever situated or located,
owned, leased, used, held for use or otherwise held by Seller in connection with
the business and operations of Television Station WPXA(TV) (formerly WTLK(TV)),
Rome, Georgia (collectively, the "WPXA Assets"). Notwithstanding any provision
in this Agreement to the contrary, Buyer acknowledges and agrees that Seller
shall have no obligation to assign, transfer, convey or deliver to Buyer any of
the WPXA Assets notwithstanding the fact that certain of the WPXA Assets may be
used or useful in connection with the operation of the Station.
2.3 EXERCISE OF OPTION.
Simultaneously with the execution and delivery of this
Agreement, Seller is providing written notice, in the form attached hereto as
EXHIBIT E, of Seller's exercise of the Option in accordance with the terms of
the Option Documents, and, except as set forth in the following sentence, Seller
shall execute and deliver the ▇▇▇▇▇▇▇▇▇ Purchase Agreement in accordance with
the
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terms of the Option Documents within ten (10) days of the date of such written
notice by Seller. Notwithstanding the terms of this Section 2.3 or any other
provision in this Agreement to the contrary, Seller shall be permitted to modify
any provision in the Option Documents or the ▇▇▇▇▇▇▇▇▇ Purchase Agreement as may
be required to (a) obtain ▇▇▇▇▇▇▇▇▇'▇ consent to amend the ▇▇▇▇▇▇▇▇▇ Time
Brokerage Agreement to delete Section 6.1(e) thereof giving either party the
right to terminate upon six months prior notice to the other party and to insert
a provision that the ▇▇▇▇▇▇▇▇▇ Time Brokerage Agreement automatically shall
terminate upon the ▇▇▇▇▇▇▇▇▇ Closing, (b) obtain ▇▇▇▇▇▇▇▇▇'▇ consent to the
assignment of the ▇▇▇▇▇▇▇▇▇ Time Brokerage Agreement, as amended, to SKMD as
contemplated by Section 11.1.2.1, (c) extend the upset date contained in the
▇▇▇▇▇▇▇▇▇ Purchase Agreement, or (d) otherwise conform the provisions of the
Option Documents or the ▇▇▇▇▇▇▇▇▇ Purchase Agreement to the requirements of
Article 11 hereof, so long as such modification does not materially adversely
affect Buyer.
2.4 PURCHASE PRICE.
For and in consideration of the conveyances and assignments
described herein and in addition to the assumption of liabilities as set forth
in the Assumption Agreement, Buyer agrees to pay to Seller, and Seller agrees to
accept from Buyer, a purchase price equal to Fifty Million Dollars
($50,000,000), payable in cash at the Closing, as adjusted by the net amount of
the adjustments provided in Section 2.6 (the "Purchase Price"). SKMD shall cause
the Exchange Agent to pay, on behalf of SKMD, the portion of the Purchase Price
allocable to the FCC Licenses as determined by Section 8.3, and USA of Maryland
shall pay the remainder of the Purchase Price. The Purchase Price shall be
payable as described in Section 2.5. The Purchase Price shall be allocated among
the Assets in accordance with Section 8.3.
2.5 PAYMENT OF PURCHASE PRICE.
The Purchase Price shall be payable to Seller on the Closing
Date by federal wire transfer of immediately available funds to an account which
will be identified by Seller not less than three (3) days prior to the Closing
Date.
2.6 ADJUSTMENTS TO PURCHASE PRICE.
2.6.1 ADJUSTMENTS.
All revenues and expenses arising from the business and
operations of the Station shall be prorated or allocated in cash between Buyer
and Seller as of the end of the broadcast day immediately preceding the Closing
Date. Such expenses shall include, without limitation, all assessments, taxes
and other similar charges, general and special, ordinary and extraordinary,
whether the same
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are then due or are payable thereafter (in installments or otherwise), or which
have been confirmed by any public authority at the Closing Date; and all
business and license fees, prepaid expenses, taxes and utility expenses arising
from the business and operations of the Assets, lease rental agreements,
insurance, rents payable or receivable, and all other items normally prorated in
the sale of the assets of a business and of a television broadcast station in
particular.
2.6.2 SCHEDULE OF ADJUSTMENTS.
On the Closing Date, Seller shall deliver to Buyer an
estimated schedule of adjustments (the "Estimated Schedule of Adjustments"). To
the extent that Buyer and Seller agree on the Estimated Schedule of Adjustments,
any payment required thereunder by Buyer or Seller, as the case may be, shall be
made on the Closing Date. Within thirty (30) days following the Closing Date,
Buyer shall deliver to Seller a final schedule of adjustments (the "Final
Schedule of Adjustments") that shall set forth the adjustments contemplated by
Section 2.6.1, taking into effect any payment made pursuant to the Estimated
Schedule of Adjustments. Seller shall have thirty (30) days following receipt of
the Final Schedule of Adjustments to notify Buyer either that it accepts or
rejects the Final Schedule of Adjustments. If Seller provides notice of
objection to the Final Schedule of Adjustments, the parties shall endeavor for a
period of thirty (30) days to resolve such dispute in a mutually satisfactory
manner. If Buyer and Seller are unable to reach agreement within such thirty
(30) day period, Buyer and Seller shall request a mutually acceptable nationally
recognized independent public accounting firm to resolve the dispute and
determine the Final Schedule of Adjustments. Such accounting firm shall, within
thirty (30) days of such submission, deliver to Seller and Buyer a written
report resolving the disputed matters, and its determination shall be final,
conclusive and binding upon Buyer and Seller. Any payment required under the
Final Schedule of Adjustments shall be made by federal wire transfer of
immediately available funds to the bank account designated by Buyer or Seller,
as the case may be, within three (3) days of the final determination of the
Final Schedule of Adjustments. The parties shall cooperate with each other and
such public accounting firm in order to facilitate the determination of the
Final Schedule of Adjustments.
2.7 ASSUMPTION OF LIABILITIES.
2.7.1 At the Closing, Buyer shall assume and become liable
for the following: (a) the Liabilities of Seller to be performed on and after
the Closing Date under the Station Contract listed on SCHEDULE 2.1.4; (b) the
Liabilities of Seller to be performed on and after the Closing Date under the
Additional Agreements, if any; and (c) the Liabilities of Seller to be performed
on and after the Closing Date under the FCC Licenses (collectively, the "Assumed
Liabilities"). Buyer is assuming Liabilities of Seller only to the extent such
Liabilities are not overdue or delinquent
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on the Closing Date without regard to any grace period and without the
incurrence of any increase in amounts due.
2.7.2 Except for those Liabilities expressly assumed by Buyer
pursuant to Section 2.7.1 hereof, Buyer assumes no other Liabilities of any kind
or description whether connected with the business and operations of the
Station, Seller or otherwise, including, without limitation, all claims,
Liabilities, obligations, requirements, penalties, fines or costs (including
costs of environmental remediation or removal) arising from the ownership or
operation of any of the Assets or the business and operations of the Station,
Seller or ▇▇▇▇▇▇▇▇▇ prior to the Closing Date (the Liabilities of the Station,
Seller or ▇▇▇▇▇▇▇▇▇ which are not assumed by Buyer are hereinafter collectively
referred to as the "Non-Assumed Liabilities"). Except for those Liabilities
expressly assumed by Buyer pursuant to Section 2.7.1, Seller shall indemnify and
hold Buyer harmless from all Non-Assumed Liabilities in accordance with Section
12.2 hereof.
2.7.3 Without limiting the generality of Section 2.7.1 and
Section 2.7.2 and notwithstanding any other provision hereof, each of the
following is a Non-Assumed Liability of Seller which Buyer does not assume:
(a) any Liabilities of Seller hereunder;
(b) any Liability of Seller arising from indebtedness of
Seller;
(c) any liability of Seller or ▇▇▇▇▇▇▇▇▇ arising under
the ▇▇▇▇▇▇▇▇▇ Purchase Agreement;
(d) any Liability of Seller arising from, or in
connection with, the business and operations of the Station or the ownership of
the Station or the Assets prior to the Closing Date, including, without
limitation, any such Liabilities arising by reason of any violation or claimed
violation by Seller of any Law;
(e) any Liability of Seller for Taxes owed, due or
payable to any Governmental Authority;
(f) any Liability of Seller arising out of, resulting
from or related to past, present or future litigation involving Seller or Seller
as an owner or operator of the Station, whether the relevant cause of action
accrues before or after the Closing;
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(g) any Liability in respect of any Contract to which
Seller is a party or a beneficiary which is not a contract identified in the
Assumption Agreement;
(h) any Liability under any Station Employee Benefit
Plan;
(i) any Liability arising out of the employment or
termination of employment, in either case prior to the Closing, of any current
(active or non-active), former or retired employee of Seller;
(j) any Liability that represents any amounts past due
or contractually due prior to the Closing Date on any Contract identified in the
Assumption Agreement;
(k) any Liability of Seller or any present or former
director or officer of Seller arising from any claim, action or proceeding,
including, without limitation, any derivative action, brought by or on behalf of
any present or former holder of any debt or equity security of Seller or by any
lender to Seller, including, without limitation, any Liability arising from any
indemnification, reimbursement or advance in connection therewith; and,
(l) any Liability of Seller which is not an Assumed
Liability under Section 2.7.1.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES BY SELLER
Seller represents and warrants to Buyer as follows:
3.1 ORGANIZATION AND STANDING.
Seller is a corporation duly organized, validly existing and
in good standing under the laws of Florida and is duly qualified to do business
as a foreign corporation and is in good standing under the laws of the State of
Georgia. ▇▇▇▇▇▇ is a corporation duly organized, validly existing and in good
standing under the laws of Delaware. Neither the nature of the business
conducted by Seller, nor the character of the properties owned, leased or
otherwise held by Seller makes any such qualification necessary in any other
state, country, territory or jurisdiction. Seller has the full and unrestricted
power and authority, corporate and otherwise, to own, lease and otherwise to
hold and operate the Assets (other than the FCC Licenses), to carry on the
business of the Station as now conducted by Seller under the ▇▇▇▇▇▇▇▇▇ Time
Brokerage Agreement, and Seller and ▇▇▇▇▇▇ each has the full
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and unrestricted power and authority, corporate and otherwise to enter into and
perform the terms of this Agreement, the other Seller Documents to which each is
a party and the transactions contemplated hereby and thereby. Copies of the
articles of incorporation and bylaws of Seller have been delivered to Buyer, are
complete and correct, and no amendments have been made thereto or have been
authorized since the date thereof. Except as set forth on SCHEDULE 3.1, Seller
does not own any capital stock of or other equity interest in any corporation,
partnership or other Person.
3.2 AUTHORIZATION.
The execution, delivery and performance of this Agreement and
of the other Seller Documents, and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
necessary action of the board of directors of Seller and ▇▇▇▇▇▇ and by any other
necessary corporate or shareholder actions of Seller and ▇▇▇▇▇▇ (none of which
actions has been modified or rescinded and all of which actions are in full
force and effect). This Agreement constitutes, and upon execution and delivery
each other Seller Document will constitute, valid and binding agreements and
obligations of Seller and ▇▇▇▇▇▇, enforceable against Seller and ▇▇▇▇▇▇, as
applicable, in accordance with their respective terms, except as the same may be
limited by bankruptcy, insolvency, reorganization, moratorium and other similar
laws of general applicability relating to or affecting creditors' rights
generally and by the application of general principles of equity.
3.3 COMPLIANCE WITH LAWS.
Seller is in compliance in all material respects with Laws
applicable to the Assets owned or held by Seller, and the Station's business and
operations as now conducted by Seller under the ▇▇▇▇▇▇▇▇▇ Time Brokerage
Agreement, and to Seller's knowledge, ▇▇▇▇▇▇▇▇▇ is in compliance in all material
respects with the Communications Act and all other material Laws applicable to
the Assets owned or held by ▇▇▇▇▇▇▇▇▇, the Station and the Station's business
and operations. Subject to consummation of the ▇▇▇▇▇▇▇▇▇ Closing and Seller's
obligation to immediately thereafter transfer to SKMD the FCC Licenses, Seller
has obtained (or will obtain) and holds (or will hold) all Licenses (none of
which has been rescinded and all of which are in full force and effect) from the
FCC and all other material Licenses from all other Governmental Authorities
necessary in order to conduct the operations of the Station as presently
conducted and to own, use and maintain the Assets.
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3.4 REQUIRED CONSENTS; NO CONFLICTS.
3.4.1 Except as set forth on SCHEDULE 3.4.1, the execution
and delivery of this Agreement, and the performance of the transactions
contemplated herein by Seller, will not require any consent, approval,
authorization or permit of or filing with, or notification to any person, entity
or Governmental Authority. All of the Assets to be sold hereunder are
transferable by Seller by Seller's sole act and deed, and no consent on the part
of any other person is necessary to validate the transfer to Buyer, except as
follows: (a) the FCC Licenses described in SCHEDULE 2.1.1 are not assignable
without the consent of the FCC as provided by law; (b) the Station Contract may
be assigned only with the consent of the licensor identified therein, as
specified in SCHEDULE 3.4.1; (c) certain of the Assets may be transferred only
after the consummation of the ▇▇▇▇▇▇▇▇▇ Closing; (d) the requirement of filing
pre-merger notification reports under ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇; and (e) those consents
that may be required solely by reason of Buyer's (as opposed to any other third
party's) participation in the transactions contemplated hereby.
3.4.2 Subject to the consummation of the ▇▇▇▇▇▇▇▇▇ Closing,
obtaining the FCC Order and the consent identified on SCHEDULE 3.4.1, and the
satisfaction of the requirements of ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇, the execution and
delivery of this Agreement and the other Seller Documents, the fulfillment of
and the compliance with the respective terms and provisions of each, and the
consummation of the transactions described in each, do not and will not (a)
conflict with or violate any Law, order, award, judgment, injunction or decree
applicable to Seller or ▇▇▇▇▇▇, the Assets or the Station or by which any of the
Assets or the Station is subject or affected that would prevent Seller or ▇▇▇▇▇▇
from performing their respective obligations hereunder or otherwise materially
interfere with the ownership or operation of the Assets; (b) conflict with or
result in any breach of or constitute a default (or an event which with notice
or lapse of time or both would become a default) of any Contract to which Seller
or ▇▇▇▇▇▇ is a party or by which Seller or ▇▇▇▇▇▇ is bound or to which any of
the Assets or the Station is subject or affected that would prevent Seller or
▇▇▇▇▇▇ from performing their respective obligations hereunder or otherwise
materially interfere with the ownership or operation of the Assets, or result in
the creation of any Encumbrance upon the Assets; or (c) conflict with or violate
the articles of incorporation or bylaws of Seller or ▇▇▇▇▇▇.
3.5 OPTION DOCUMENTS; KBSP AGREEMENT.
Seller has delivered to Buyer full, correct and complete
copies of the Option Documents, and the Option Documents consist of the only
agreements, instruments or documents executed by Seller or ▇▇▇▇▇▇ in connection
with the Option. Seller is the sole and exclusive legal and equitable owner of
all right, title and interest in and to the Option, free and clear of any
Encumbrances, except for
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and subject only to those Encumbrances that shall be removed prior to or
contemporaneously with the Closing. All amounts payable to ▇▇▇▇▇▇▇▇▇ under the
▇▇▇▇▇▇▇▇▇ Time Brokerage Agreement are specified in Section 1.5 of the ▇▇▇▇▇▇▇▇▇
Time Brokerage Agreement and Attachments I and II thereto. ▇▇▇▇▇▇ Communications
of Oregon-22, Inc. and ▇▇▇▇▇▇ Oregon License, Inc. (collectively, the "▇▇▇▇▇▇
Entities") are in negotiations to enter into the KBSP Agreement with the other
parties thereto with respect to the purchase by the ▇▇▇▇▇▇ Entities of KBSP.
Upon execution and delivery of the KBSP Agreement by all of the parties thereto,
the KBSP Agreement will be a valid and binding agreement. Seller promptly will
deliver to Buyer a correct and complete copy of the KBSP Agreement. Seller will
cause the ▇▇▇▇▇▇ Entities to (i) comply in all material respects with the terms
of the KBSP Agreement applicable to the ▇▇▇▇▇▇ Entities; (ii) enforce their
rights thereunder; (iii) as soon as practicable after the time of receipt or
delivery by the ▇▇▇▇▇▇ Entities, deliver to Buyer copies of all notices and
other documents received or delivered by the ▇▇▇▇▇▇ Entities under the KBSP
Agreement, and (iv) subject to any rights to terminate contained herein or in
the KBSP Agreement, consummate the closing under the KBSP Agreement on the
earliest date permitted hereunder and thereunder.
3.6 INTENTIONALLY OMITTED.
3.7 ABSENCE OF LITIGATION.
Except for any proceedings generally affecting the
broadcasting industry and not particular to Seller and except as set forth and
described in SCHEDULE 3.20 or SCHEDULE 3.7, as of the date hereof, there is no
action, suit, investigation, arbitration or litigation pending or, to Seller's
knowledge, threatened against Seller that affects the Assets, the Station or the
Station's business and operations, or the transactions contemplated by this
Agreement or any other Seller Document, at law or in equity, or before or by any
court, arbitrator or Governmental Authority, and neither Seller nor the Station
is operating under or subject to any order, award, judgment, writ, decree,
determination or injunction of any court or arbitrator. No Governmental
Authority has at any time challenged, questioned, or commenced, or given notice
of intention to commence any investigation relating to, the legal right of
Seller to conduct the operations of the Station as now or heretofore conducted
by Seller.
3.8 TOTALITY OF ASSETS; ENCUMBRANCES.
3.8.1 The Assets include all of the transmission equipment
necessary to broadcast programming from the Station's transmitter facilities as
currently broadcast.
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3.8.2 Except for the Licenses and subject to the consummation
of the ▇▇▇▇▇▇▇▇▇ Closing, Seller is or will be the sole and exclusive legal and
equitable owner of, and has good title to, the Assets free and clear of any
Encumbrances, except for and subject only to those Encumbrances listed in
SCHEDULE 3.8.2, which shall be discharged and removed by the Closing Date, and
Permitted Encumbrances.
3.8.3 At the Closing, Buyer shall acquire good title to, and
all of Seller's right, title and interest in and to the Assets, free and clear
of all Encumbrances other than the Permitted Encumbrances, and at the Closing,
Buyer shall acquire all of ▇▇▇▇▇▇▇▇▇'▇ right, title and interest in and to the
FCC Licenses. For the purpose of this Section 3.8.3, the terms "Closing" and
"Closing Date" shall not be deemed to refer to any Closing or Closing Date that
occurs pursuant to Section 11.1.2.1.
3.9 FCC MATTERS.
3.9.1 Following the ▇▇▇▇▇▇▇▇▇ Closing, Seller will hold the
FCC Licenses set forth and described on SCHEDULE 2.1.1. The FCC Licenses
constitute all of the licenses, permits and authorizations issued by the FCC
that are necessary or required for the lawful conduct of and/or used in the
business and operations of the Station as currently conducted. The FCC Licenses
are valid and in full force and effect and expire on the dates set forth on
SCHEDULE 2.1.1, unimpaired by any condition, other than the conditions set forth
on the authorizations for the FCC Licenses or in the rules, regulations or
policies of the FCC. No application, action or proceeding is pending for the
renewal or modification of any of the FCC Licenses. Except for actions or
proceedings affecting broadcast stations generally, including, without
limitation, the FCC rulemaking identified as IN THE MATTER OF ADVANCED
TELEVISION SYSTEMS, MM Docket No. 87-268, any and all collateral and subsequent
FCC or court proceedings relating thereto (the "DTV Rulemaking"), to Seller's
knowledge, no application, complaint, notice of violation, action or proceeding
is pending or threatened by or before the FCC against Seller or the Station that
could reasonably be expected to result in the (a) denial of an application for
renewal of any FCC License; (b) the revocation, adverse modification,
non-renewal or suspension of any of the FCC Licenses; (c) the issuance of a
cease-and-desist order by the FCC against the Station; or (d) the imposition of
any material administrative or judicial sanction with respect to the Station.
3.9.2 As of the date hereof, no person has notified any
officer of Seller of his or her intention to contest the renewal of the current
term of any FCC License for the Station.
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3.9.3 The Station's transmitting equipment is being and has
been operated in compliance in all material respects with the Communications
Act, and the rules and regulations of the FCC. To Seller's knowledge, ▇▇▇▇▇▇▇▇▇
has complied in all material respects with all requirements of the FCC and the
Federal Aviation Administration applicable to ▇▇▇▇▇▇▇▇▇ with respect to the
construction and/or alteration of the Station's antenna structures.
3.9.4 To Seller's knowledge, there are no facts, conditions
or events relating to Seller, ▇▇▇▇▇▇ or the Station that could reasonably be
expected to cause the FCC to deny the assignment of the FCC Licenses as provided
for in this Agreement.
3.10 REAL PROPERTY.
3.10.1 Seller does not own (and after the ▇▇▇▇▇▇▇▇▇ Closing
will not own) any real property in connection with the business and operation of
the Station.
3.10.2 Except for Excluded Assets, SCHEDULE 2.1.4 lists all
licenses, leases and subleases pursuant to which any Real Property is occupied
or used by Seller or ▇▇▇▇▇▇▇▇▇ with respect to the business or operations of the
Station. Following the ▇▇▇▇▇▇▇▇▇ Closing, Seller will be the holder of the
license purported to be granted to ▇▇▇▇▇▇▇▇▇-Georgia pursuant to the Station
Contract identified in SCHEDULE 2.1.4 free and clear of all Encumbrances, other
than the Permitted Encumbrances and those Encumbrances set forth in the Station
Contract. The license granted under the Station Contract is in full force and
effect and constitutes a legal, valid and binding obligation of, and is legally
enforceable against, ▇▇▇▇▇▇▇▇▇-Georgia, and to the knowledge of Seller, the
licensor named therein. ▇▇▇▇▇▇▇▇▇-Georgia and, to Seller's knowledge, such
licensor have complied with all of the material provisions of the Station
Contract and are not in default thereunder in any material respect, and, to
Seller's knowledge, there has not occurred any event which (whether with or
without notice, lapse of time or the happening or occurrence of any other event)
would constitute such a default.
3.10.3 All buildings, structures, fixtures and other
improvements that are occupied or used by ▇▇▇▇▇▇▇▇▇-Georgia pursuant to the
Station Contract are in good repair (ordinary wear and tear excepted). To the
knowledge of Seller, all such buildings, structures, fixtures and improvements
conform in all material respects with all applicable building, zoning,
subdivision, environmental, land-use, fire and other Laws pertaining to or
affecting such buildings, structures, fixtures and other improvements.
3.10.4 To Seller's knowledge, no portion of any building,
structure, fixture or improvement used by ▇▇▇▇▇▇▇▇▇-Georgia pursuant to the
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Station Contract is the subject of, or affected by, any condemnation, eminent
domain or inverse condemnation proceeding currently instituted or pending.
3.11 CONDITION OF TANGIBLE ASSETS.
All tangible Assets are in good operating condition and
repair, (ordinary wear and tear excepted), and are appropriate for the uses for
which they are being used; and such Assets and the present use thereof do not
violate in any material respect any applicable licenses, statutes, building,
fire, zoning, health and safety or any other Laws or generally accepted
engineering standards.
3.12 INTELLECTUAL PROPERTY.
SCHEDULE 2.1.3 contains a true, correct and complete listing
of all Intellectual Property owned or licensed by or registered in the name of
Seller with respect to the business and operations of the Station, all of which
are transferable to Buyer (following the consummation of the ▇▇▇▇▇▇▇▇▇ Closing)
by the sole act and deed of Seller, subject to obtaining the FCC Order; and no
consent on the part of any other person, other than the FCC Order, is necessary
to validate the transfer to Buyer of such Intellectual Property. Seller pays no
royalty to anyone with respect to the Intellectual Property and, after the
consummation of the ▇▇▇▇▇▇▇▇▇ Closing, will have the right to bring action for
the infringement thereof. Subject to the consummation of the ▇▇▇▇▇▇▇▇▇ Closing,
Seller owns or possesses all rights to use all such Intellectual Property
necessary to the conduct of the business of the Station as currently conducted.
Seller does not have any knowledge and Seller has not received any notice to the
effect that any service rendered by Seller relating to the business of the
Station may infringe on any Intellectual Property right or other legally
protectable right of another. Seller will have following the consummation of the
▇▇▇▇▇▇▇▇▇ Closing the right to the use of the call letters "WNGM-TV" pursuant to
the rules and regulations of the FCC.
3.13 Reports and Records.
All returns, reports and statements relating to the Station
currently required to be filed by Seller (or, to Seller's knowledge, by
▇▇▇▇▇▇▇▇▇) with the FCC or any other Governmental Authority have been filed and
complied with except for such returns, reports and statements, the failure to
file or comply with which could not reasonably be expected to have a material
adverse effect on the business or operations of the Station and are true,
correct and complete in all material respects. All such reports, returns and
statements shall continue to be filed in all material respects on a current
basis until the Closing Date, and will be true, correct, and complete in all
material respects. To the knowledge of Seller, the Station's public file has
been maintained in all material respects in accordance with the rules and
regulations of the FCC and all logs and business records relating to
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the business and operations of the Station that are required to be maintained by
the FCC, including without limitation, political and public files, program,
operating and maintenance logs, equipment performance measurements, have been
maintained in all material respects in accordance with the rules and regulations
of the FCC and are in the possession of Seller at the Station's transmitter or
studio location.
3.14 STATION CONTRACT.
The Station Contract set forth and described in SCHEDULE 2.1.4
is the only Contract relating to the Assets. Neither Seller nor ▇▇▇▇▇▇▇▇▇ has
entered into any Contract or any amendment or modification which waives any of
its respective rights under the Station Contract. Seller has delivered a true
and complete copy of such Station Contract (and all amendments and modifications
thereto) to Buyer prior to the execution of this Agreement. The Station Contract
is in full force and effect, and constitutes a legal, valid and binding
obligation of, and is legally enforceable against ▇▇▇▇▇▇▇▇▇-Georgia and to
Seller's knowledge against the licensor thereunder. Except as specified on
SCHEDULE 3.18, ▇▇▇▇▇▇▇▇▇-Georgia has complied in all material respects with the
Station Contract and is not in default thereunder in any material respect, and
to Seller's knowledge, there has not occurred any event which (whether with or
without notice, lapse of time, or the happening or occurrence of any other
event) would constitute such a default. To Seller's knowledge, there has not
been (i) any threatened cancellation of the Station Contract or (ii) any
outstanding dispute regarding a matter that would constitute a default
thereunder.
3.15 TAXES.
3.15.1 Except where the failure to file, pay or accrue any
Taxes does not result in an Encumbrance on the Assets or in the imposition of
transferee or other liability on Buyer for the payment of Taxes, (a) Seller has
(or, in the case of Seller Tax Returns becoming due after the date hereof and on
or before the Closing Date, will have prior to the Closing Date) filed all
Seller Tax Returns required to be filed by Seller on or before the Closing Date
with respect to all applicable Taxes, (b) all Seller Tax Returns are (or, in the
case of Seller Tax Returns becoming due after the date hereof and on or before
the Closing Date, will be) true and complete in all material respects, and (c)
Seller has paid or properly accrued all Taxes due or claimed to be due by any
Governmental Authority in connection with any of Seller Tax Returns (without
regard to whether or not such Taxes are shown as due on such Seller Tax
Returns).
3.15.2 There is no action, suit, proceeding, audit,
investigation or claim pending or, to the knowledge of Seller, threatened in
respect of any Taxes that could result in an Encumbrance on the Assets or in the
imposition of transferee or other liability on Buyer for the payment of Taxes.
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3.15.3 Seller does not hold and is not required to hold a
retail sales tax permit (or the equivalent) and has not taken any actions that
would prevent the parties from relying on applicable casual or occasional sales
tax exemptions under relevant sales tax statutes in connection with this
transaction.
3.16 EMPLOYEE BENEFIT PLANS.
Seller has not incurred and will not incur as a result of the
consummation of the transactions contemplated under this Agreement any material
liability with respect to any Plan or any Benefit Arrangement which could give
rise to any material liability of Buyer.
3.17 LABOR RELATIONS.
There are no strikes, work stoppages, or grievance
proceedings, or other material controversies pending, or to the knowledge of
Seller, threatened between Seller and (a) any of the Station's current or former
employees, or (b) any union or collective bargaining unit representing such
employees. Seller has complied and is in compliance in all material respects
with all Laws applicable to Seller's employees and relating to employment or the
workplace, including, without limitation, provisions relating to wages, hours,
collective bargaining, safety and health, work authorization, equal employment
opportunity, immigration and the withholding of income taxes, unemployment
compensation, worker's compensation, employee privacy and right to know and
social security contributions. There are no collective bargaining agreements,
employment agreements, or professional service Contracts to which Seller is a
party (or to which Seller will become a party after the ▇▇▇▇▇▇▇▇▇ Closing)not
terminable at will relating to the Station or the business and operations
thereof. The consummation of the transactions contemplated hereby will not cause
Buyer to incur or suffer any Liability relating to, or obligation to pay,
severance, termination, or other payments to any existing or former employee of
Seller or ▇▇▇▇▇▇▇▇▇. Except as set forth in SCHEDULE 3.17.1 hereto, no employee
of the Station has any contractual right to continued employment by Buyer
following consummation of the transactions contemplated by this Agreement. To
the knowledge of Seller, there is no union campaign being conducted to represent
employees of the Station.
3.18 ENVIRONMENTAL MATTERS.
3.18.1 Except as specified on SCHEDULE 3.18, Seller's (and,
to Seller's knowledge, ▇▇▇▇▇▇▇▇▇'▇) operations at the Station's transmitter site
have complied and are in compliance in all material respects with all
Environmental Laws.
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3.18.2 Except as specified on SCHEDULE 3.18, there are no
pending or, to the Knowledge of Seller, threatened actions, suits, claims, legal
proceedings or other proceedings based on, and neither Seller nor any officer,
director or stockholder thereof has received any notice of any complaint, order,
directive, citation, notice of responsibility, notice of potential
responsibility, or information request from any Governmental Authority or any
other person or entity or knows any fact(s) which could reasonably be expected
to form the basis for any such actions or notices arising out of or attributable
to: (a) the current or past release or threatened release into the environment
from the Real Property (including, without limitation, into any storm drain,
sewer, septic system or publicly owned treatment works) of any Hazardous
Materials or any substances that pose a hazard to human health or an impediment
to working conditions; (b) the off-site disposal of Hazardous Materials
originating on or from the Real Property or the business or Assets of Seller
located on the Real Property; (c) any facility operations or procedures of
Seller (or to Seller's knowledge, of ▇▇▇▇▇▇▇▇▇) at the Real Property which do
not conform in any material respect to requirements of the Environmental Laws;
or (d) any violation of Environmental Laws at any part of the Real Property or
otherwise arising from Seller's activities at the Real Property involving
Hazardous Materials.
3.18.3 Except as disclosed on SCHEDULE 3.18, to Seller's
knowledge based solely on inquiry to the Licensor identified in the Station
Contract and to ▇▇▇▇▇▇▇▇▇, the Real Property contains no underground storage
tanks, or underground piping associated with such tanks, used currently for
Hazardous Materials. Seller makes no representation or warranty whatsoever
regarding the condition, operation or use of such storage tanks.
3.18.4 Seller, has furnished to Buyer accurate and complete
copies of all environmental assessments performed by Seller or in Seller's
possession with respect to the Real Property.
3.18.5 The operation of the Station does not cause or result
in exposure of workers or the general public to levels of radio frequency
radiation in excess of the "Radio Frequency Protection Guides" recommended in
"American National Standard Safety Levels with Respect to Human Exposure to
Radio Frequency Electromagnetic Fields 300 kHz to 100 gHz" (ANSI C95.1-1982),
issued by the American National Standards Institute, and renewal of the FCC
Licenses on the date hereof would not constitute a "major action" within the
meaning of Section 1.1301, ET SEQ., of the FCC's rules.
3.19 INSURANCE.
SCHEDULE 3.19 contains a list and brief summary of all
policies of title, property, fire, casualty, liability, life, workmen's
compensation, libel and
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slander, and other forms of insurance of any kind relating to the Assets or the
business and operations of the Station and owned or held by Seller or ▇▇▇▇▇▇▇▇▇.
All such policies: (a) are in full force and effect and (b) are valid,
outstanding, and enforceable policies.
3.20 CABLE SYSTEMS.
(a) SCHEDULE 3.20(a) hereto contains a complete and accurate
list of all cable television systems carrying the Station's signal;
(b) SCHEDULE 3.20(b) hereto contains a complete and accurate
list of all Market Cable Systems on which the Station made a must-carry election
for the current must-carry election period (by default or otherwise) and on
which the Station is not currently carried;
(c) SCHEDULE 3.20(c) hereto contains a complete and accurate
list of all retransmission consent agreements and/or copyright indemnification
agreements, if any, entered into on behalf of the Station;
(d) SCHEDULE 3.20(d) hereto contains a complete and accurate
list of all retransmission consent elections made by the Station;
(e) SCHEDULE 3.20(e) hereto contains a complete and accurate
list of all Market Cable Systems, if any, which are carrying the Station and
which have notified Seller or the Station of such Market Cable System's
intention to delete the Station from carriage or to change the Station's channel
position on such cable system, other than pursuant to any agreement described in
clause (c) above;
(f) SCHEDULE 3.20(f) hereto contains copies of each notice, if
any, received by the Station from any Market Cable System alleging that the
Station does not deliver an adequate quality signal, as defined in Section
76.55(c)(3) of the FCC Regulations, to such Market Cable System's principal
headend (other than any such notice as to which such failure has been remedied
or been determined not to exist), and all further correspondence between the
Station and any such Market Cable System relating to such notice;
(g) SCHEDULE 3.20(g) hereto contains a complete and accurate
list of all pending petitions for special relief to modify the area in which the
Station is entitled to demand must-carriage pursuant to Sections 76.55(c) and
(e) of the FCC Regulations;
(h) SCHEDULE 3.20(h) hereto contains a complete and accurate
list of must- carry complaints, if any, filed on behalf of the Station;
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ARTICLE 4.
REPRESENTATIONS AND WARRANTIES BY BUYER
Buyer represents, warrants and covenants to Seller as follows:
4.1 ORGANIZATION AND STANDING.
SKMD is a general partnership duly organized, validly existing
and in good standing under the laws of the State of Delaware, and USA of
Maryland is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. By the Closing Date USA of Maryland
will be duly qualified to do business as a foreign corporation in Georgia. Buyer
has the full and unrestricted power and authority, corporate or otherwise, to
enter into and perform the terms of this Agreement and the other Buyer Documents
to which Buyer is a party and to carry out the transactions contemplated hereby
and thereby.
4.2 AUTHORIZATION.
The execution, delivery and performance of this Agreement and
of the other Buyer Documents, and the consummation of the transactions
contemplated hereby and thereby, have been duly and validly authorized by all
necessary actions of Buyer and by any other necessary corporate or shareholder
action of Buyer (none of which actions has been modified or rescinded and all of
which actions are in full force and effect). This Agreement constitutes, and
upon execution and delivery each other Buyer Document will constitute, valid and
binding agreements and obligations of Buyer, enforceable against Buyer in
accordance with their respective terms, except as the same may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws of
general applicability relating to or affecting creditors' rights generally and
by the application of general principles of equity.
4.3 COMPLIANCE WITH LAWS.
As of the Closing Date, Buyer shall have obtained and shall
hold all permits, licenses and approvals (none of which will have been modified
or rescinded and all of which shall be in full force and effect) from all
Governmental Authorities necessary in order to conduct the operations of the
Station as presently conducted and to own, use and maintain the Assets.
4.4 NO CONFLICTS.
Subject to obtaining the FCC Order and the consents identified
on Schedule 3.4.1, and satisfaction of the requirements of ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇,
the
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execution and delivery of this Agreement and the other Buyer Documents, the
fulfillment of and the compliance with the respective terms and provisions of
this Agreement and the other Buyer Documents, and the consummation of the
transactions described herein and therein, do not and will not (a) conflict with
or violate any Law, order, award, judgment, injunction or decree applicable to
Buyer that would prevent Buyer from performing its obligations hereunder or
thereunder; (b) conflict with or result in any breach of or constitute a default
(or an event which, with notice or lapse of time or both, would become a
default) of any Contract to which Buyer is a party or by which Buyer is bound,
that would prevent Buyer from performing its obligations hereunder or
thereunder; or (c) conflict with or violate the Articles of Incorporation or
Bylaws of Buyer.
4.5 QUALIFICATION AS LICENSEE.
To Buyer's Knowledge, Buyer is legally, financially and
otherwise qualified to enter into and perform its obligations hereunder and to
be the licensee of and operate the Station under the Communications Act and the
rules, regulations and policies of the FCC. To Buyer's Knowledge, there are no
facts, conditions or events relating to Buyer or USA that could reasonably be
expected to cause the FCC to deny the assignment of the FCC Licenses as provided
for in this Agreement. Chicago Deferred Exchange Corporation currently is
holding on behalf of Buyer approximately $80,000,000 in proceeds from the sale
by Buyer of other broadcast station assets and, as of the Closing, Chicago
Deferred Exchange Corporation will hold on behalf of Buyer no less than
$50,000,000 to enable it to consummate the transactions contemplated by this
Agreement.
4.6 BLACKSTAR AGREEMENT.
USA is in negotiations to enter into the Blackstar Agreement
with all of the members of Blackstar L.L.C. with respect to the purchase by USA
of all of the membership interests of such members. Upon execution and delivery
of the Blackstar Agreement by all of the parties thereto, the Blackstar
Agreement will be a valid and binding agreement. USA promptly will deliver to
Buyer a correct and complete copy of the Blackstar Agreement. USA will (i)
comply in all material respects with the terms of the Blackstar Agreement
applicable to it; (ii) enforce USA's rights thereunder; (iii) as soon as
practicable after the time of receipt or delivery by USA, deliver to Seller
copies of all notices and other documents received or delivered by USA under the
Blackstar Agreement, and (iv) subject to any rights to terminate contained
herein or in the Blackstar Agreement, consummate the closing under the Blackstar
Agreement on the earliest date permitted hereunder and thereunder.
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ARTICLE 5.
PRE-CLOSING FILINGS
5.1 APPLICATIONS FOR FCC CONSENT.
▇▇▇▇▇▇▇▇▇-Georgia and Buyer have jointly filed an application
for the Station with the FCC requesting its consent to the assignment of the FCC
Licenses for the Station from ▇▇▇▇▇▇▇▇▇-Georgia to SKMD. Seller and Buyer will
diligently take, or fully cooperate in the taking of, all necessary and proper
steps, and provide any additional information reasonably requested in order to
obtain promptly the requested consents and approvals of the applications by the
FCC; provided, however, that none of the parties hereto shall have any
obligation to take any unreasonable steps to satisfy complainants, if any, or to
participate in any evidentiary hearing. Each party agrees to comply with any
condition imposed on it by the FCC Order unless such condition (a) would have a
materially adverse effect on such party's rights or interests hereunder and (b)
does not result from events or circumstances that constitute a breach of the
representations, warranties and covenants of such party hereunder. Buyer and
Seller shall oppose any request for reconsideration or judicial review of the
FCC Order. If the Closing shall not have occurred for any reason within the
original effective period of the FCC Order, and neither party shall have
terminated this Agreement under Section 13.1, the parties shall jointly request
an extension of the effective period of the FCC Order. No extension of the FCC
Order shall limit the exercise by either party of its rights under Section 13.1.
5.2 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇.
As promptly as practicable and no later than fifteen (15) days
following the execution of this Agreement, Seller and Buyer shall complete any
filing that may be required pursuant to ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ (each an "HSR
Filing"). Seller and Buyer shall diligently take, or fully cooperate in the
taking of, all necessary and proper steps, and provide any additional
information requested by the Department of Justice or the Federal Trade
Commission in order to comply with, the requirements of such Act.
ARTICLE 6.
COVENANTS AND AGREEMENTS OF SELLER
Seller covenants and agrees with Buyer as follows:
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6.1 NEGATIVE COVENANTS.
Pending and prior to the Closing, Seller will not, without the
prior written approval of Buyer, do or agree to do any of the following:
6.1.1 DISPOSITIONS; MERGERS.
Sell, assign, lease or otherwise transfer or dispose of any of
the Assets, the Option or the ▇▇▇▇▇▇▇▇▇ Purchase Agreement; or merge or
consolidate with or into any other entity or enter into any Contracts relating
thereto; PROVIDED, HOWEVER, that Seller may sell, assign, lease or otherwise
transfer or dispose of any tangible Asset if such tangible Asset is expended in
the Ordinary Course of Business.
6.1.2 ADDITIONAL AGREEMENTS.
Acquire or enter into any new contract (or authorize ▇▇▇▇▇▇▇▇▇
under the terms of the ▇▇▇▇▇▇▇▇▇ Purchase Agreement to acquire or enter into any
new Contract which is not terminable on 90-days notice), including without
limitation, any program contracts, affiliation agreements, local marketing
arrangements, joint operating agreements, time brokerage agreements or other
similar contracts, or renew, extend, amend, alter, modify or otherwise change
(or authorize ▇▇▇▇▇▇▇▇▇ under the terms of the ▇▇▇▇▇▇▇▇▇ Purchase Agreement to
renew, extend, amend, alter, modify or otherwise change) the Station Contract;
provided, however, that nothing contained herein shall be deemed to prevent
Seller from entering into any Contract that does not relate to the Assets or the
Station; provided further, however, that Buyer shall not be obligated to assume
any such Contract. Notwithstanding the terms of this Section 6.1.2 or any other
provision in this Agreement to the contrary, Seller shall be permitted to enter
into an affiliation or other similar agreement with respect to the programming
to be broadcast on the Station prior to the Closing Date (which programming may
be different than the programming broadcast on the Station on the date hereof),
provided that Buyer shall not be obligated to assume any such agreement and
provided further that the operation of the Station under such agreement shall
comply in all material respects with all requirements of the FCC Licenses and
the rules and regulations of the FCC.
6.1.3 BREACHES.
Do or omit to do any act (or permit such action or omission)
which will cause a material breach of the Station Contract by Seller, the Option
Documents, the ▇▇▇▇▇▇▇▇▇ Purchase Agreement or any other Contract to which
Seller is a party or by which Seller is bound which would have a material
adverse effect on the Station or the Assets.
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6.1.4 EMPLOYEE MATTERS.
Enter into (or authorize ▇▇▇▇▇▇▇▇▇ under the terms of the
▇▇▇▇▇▇▇▇▇ Purchase Agreement to enter into or become subject to) any employment,
labor, union, or professional service Contract for any employee of the Station
that is not terminable at will, or any bonus, pension, insurance, profit
sharing, incentive, deferred compensation, severance pay, retirement,
hospitalization, employee benefit, or other similar plan covering any such
employee of the Station other than in the Ordinary Course of Business; or
authorize ▇▇▇▇▇▇▇▇▇ under the terms of the ▇▇▇▇▇▇▇▇▇ Purchase Agreement to
increase the compensation payable or to become payable to any employee of the
Station other than in the Ordinary Course of Business.
6.1.5 ACTIONS AFFECTING FCC LICENSES OR CONTRACTS.
Take any action (and use its commercially reasonable efforts
to prohibit ▇▇▇▇▇▇▇▇▇ from taking any action) which may jeopardize the validity
or enforceability of or rights under the FCC Licenses, the Option, the Option
Documents, the ▇▇▇▇▇▇▇▇▇ Purchase Agreement, or which may prevent the
satisfaction or fulfillment of a condition precedent hereunder.
6.1.6 REPRESENTATIONS AND WARRANTIES.
Take any action or fail to take any action which would cause
any of Seller's representations or warranties contained herein to be untrue in
any material respect or Seller's covenants contained herein to be incapable of
being performed or satisfied in any material respect on the Closing Date.
6.2 AFFIRMATIVE COVENANTS.
Pending and prior to the Closing Date, Seller will:
6.2.1 PRESERVE EXISTENCE.
Preserve its corporate existence and its business organization
with respect to the Station intact, and keep all Assets in good working order
and repair, ordinary wear and tear excepted.
6.2.2 NORMAL OPERATIONS.
Subject to the terms and conditions of this Agreement
(including, without limitation, Section 6.1), (a) carry on the business and
activities of the Station in the usual and Ordinary Course of Business in
accordance with and subject to the ▇▇▇▇▇▇▇▇▇ Time Brokerage Agreement; (b) pay
or otherwise satisfy in
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all material respects all obligations of Seller (cash and barter) with respect
to the Station as they come due and payable; and (c) maintain its books of
account, records, and files relating to the Station in substantially the same
manner as heretofore.
6.2.3 MAINTAIN FCC LICENSES.
Maintain (or use its commercially reasonable efforts to cause
▇▇▇▇▇▇▇▇▇ to maintain) the FCC Licenses in full force and effect, and comply (or
use its commercially reasonable efforts to cause ▇▇▇▇▇▇▇▇▇ to comply) in all
material respects with all requirements of the FCC Licenses and the rules and
regulations of the FCC.
6.2.4 NOTICES UNDER ▇▇▇▇▇▇▇▇▇ PURCHASE AGREEMENT.
Deliver to Buyer any notices, demands, requests,
correspondence or other documents delivered by Seller under the Option
Documents, including, without limitation, the documents contemplated under
Section 2.3, simultaneously with such delivery by Seller, and deliver to Buyer
any notices, demands, requests, correspondence or other documents received by
Seller under the Option Documents within two (2) days of the date received by
Seller.
6.2.5 PERFORMANCE UNDER CONTRACTS.
Pay and perform in all material respects its obligations under
the Option Documents, and the ▇▇▇▇▇▇▇▇▇ Purchase Agreement, the Station
Contract, and any Additional Agreements that shall be entered into between the
date hereof and the Closing by Seller pursuant to Section 6.1.2, in accordance
with the respective terms and conditions of such Contracts.
6.2.6 COMPLIANCE WITH ▇▇▇▇▇▇▇▇▇ PURCHASE AGREEMENT.
Use its commercially reasonable efforts to cause ▇▇▇▇▇▇▇▇▇ to
perform its obligations under the ▇▇▇▇▇▇▇▇▇ Purchase Agreement, including,
without limitation, ▇▇▇▇▇▇▇▇▇'▇ obligations to comply with its covenants under
Section 5 of the ▇▇▇▇▇▇▇▇▇ Purchase Agreement, and use its commercially
reasonable efforts to cause ▇▇▇▇▇▇▇▇▇ to close under the ▇▇▇▇▇▇▇▇▇ Purchase
Agreement notwithstanding the absence of a Final Order. Notwithstanding any
provision in this Agreement to the contrary, Seller shall not be deemed to be in
breach of its obligations hereunder if ▇▇▇▇▇▇▇▇▇ fails to perform its
obligations under the Option Documents unless Seller has failed to use its
commercially reasonable efforts to cause ▇▇▇▇▇▇▇▇▇ to perform thereunder.
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6.2.7 TAXES.
Pay or discharge when due and payable all Taxes, except where
the failure to pay Taxes would not result in an Encumbrance on the Assets or the
imposition of transferee or other liability on Buyer for the payment of Taxes.
6.2.8 CORPORATE ACTION.
Take all corporate action under the Laws of the State of
Florida necessary to effectuate the transactions contemplated by this Agreement
and by the other Seller Documents.
6.2.9 TRANSFER TAX; BULK SALES.
Notwithstanding any other provision of this Agreement, Buyer
hereby waives compliance by Seller with the provisions of any so-called "bulk
transfer law" of any jurisdiction in connection with the transactions
contemplated hereby. Seller shall indemnify and hold harmless Buyer, without
regard to the Basket Amount, against any and all liabilities which may be
asserted by third parties against Buyer as a result of noncompliance with any
"bulk transfer law."
6.2.10 ACCESS.
Seller will give (and will use its commercially reasonable
efforts to cause ▇▇▇▇▇▇▇▇▇ to give) Buyer, and Buyer's accountants, counsel,
consultants, employees and agents, full and complete access during normal
business hours and upon reasonable prior notice to Seller to, and furnish (or
use its commercially reasonable efforts to cause ▇▇▇▇▇▇▇▇▇ to furnish) them with
all documents, records, work papers and information with respect to, all of the
properties, assets, books, contracts, commitments, reports and records relating
to the Station, as the Buyer shall from time to time reasonably request. In
addition, Seller will permit (or use its commercially reasonable efforts to
cause ▇▇▇▇▇▇▇▇▇ to permit) the Buyer, and its accountants, counsel, consultants,
employees and agents, reasonable access to such personnel during normal business
hours as may be necessary or useful to the Buyer in its review of the
properties, assets and business affairs of the Station.
6.2.11 OTHER INFORMATION.
Provide to Buyer (or use its commercially reasonable efforts
to cause ▇▇▇▇▇▇▇▇▇ to provide to Buyer) all such other information and copies of
documents, at Buyer's expense, concerning Seller, the operation of the Station
and the Assets, the Option, and the Station's customers and suppliers, as Buyer
may reasonably request.
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6.2.12 ENGINEERING INSPECTIONS.
Prior to the Closing, permit (or use its commercially
reasonable efforts to cause ▇▇▇▇▇▇▇▇▇ to permit) Buyer and Buyer's consulting
engineers and other representatives, agents, employees and independent
contractors, at Buyer's expense, to conduct engineering and other inspections of
the Station and the Assets during normal business hours and upon reasonable
prior notice to Seller; PROVIDED, HOWEVER, that any such inspection shall be
conducted in a manner that does not unreasonably interfere with the business or
operations of the Station and the Assets.
6.2.13 INSURANCE.
Maintain in full force and effect all of its existing
casualty, liability, and other insurance with respect to the Assets and the
business and operations of the Station through the day following the Closing
Date in amounts not less than those in effect on the date hereof.
6.2.14 VIOLATIONS.
Upon receiving notice or otherwise becoming aware of any
material violation relating to the FCC Licenses, any material violation by
Seller, ▇▇▇▇▇▇▇▇▇ or the Station of any rules and regulations of the FCC, or any
material violations under any other applicable Laws, promptly notify Buyer and,
at Seller's expense, cure (or use its commercially reasonable efforts to cause
▇▇▇▇▇▇▇▇▇ to cure) all such violations prior to the Closing Date.
6.2.15 INTERRUPTION IN BROADCAST OPERATIONS.
Promptly notify Buyer in writing if the Station ceases to
broadcast at its authorized power for more than 48 consecutive hours. Such
notice shall specify the reason or reasons for such cessation and the corrective
measures taken or to be taken by Seller.
6.2.16 CONSENTS.
Seller shall use commercially reasonable efforts to obtain the
third party consent required to assign to Buyer the Station Contract listed on
SCHEDULE 3.4.1. Buyer, upon request of Seller, shall cooperate with Seller in
any commercially reasonable manner requested by Seller in connection with
obtaining such consent, including, without limitation, providing such guarantees
as may be required to release ▇▇▇▇▇▇ from its guarantee set forth in the Station
Contract insofar as such guarantee applies to the period following the Closing
Date. Notwithstanding any provision in this Agreement to the contrary, Buyer
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acknowledges that Seller shall have no liability whatsoever to Buyer arising out
of or relating to the failure to obtain any such consent if the licensor refuses
to release such guarantee.
6.3 CONFIDENTIALITY.
Seller shall, at all times, maintain strict confidentiality
with respect to all documents and information furnished to Seller by or on
behalf of Buyer. Nothing shall be deemed to be confidential information that:
(a) is known to Seller at the time of its disclosure to Seller; (b) becomes
publicly known or available other than through disclosure by Seller; (c) is
received by Seller from a third party not actually known by Seller to be bound
by a confidentiality agreement with or obligation to Buyer; or (d) is
independently developed by Seller. Notwithstanding the foregoing provisions of
this Section 6.3, Seller may disclose such confidential information (a) to the
extent required or deemed advisable to comply with applicable Laws, (b) to its
officers, directors, employees, representatives, financial advisors, attorneys,
accountants, agents and ▇▇▇▇▇▇▇▇▇ with respect to the transactions contemplated
hereby (so long as such parties agree to maintain the confidentiality of such
information), and (c) to any Governmental Authority in connection with the
transactions contemplated hereby. In the event this Agreement is terminated,
Seller will return to Buyer all documents and other material prepared or
furnished by Buyer relating to the transactions contemplated hereunder, whether
obtained before or after the execution of this Agreement.
6.4 CABLE CARRIAGE.
Seller shall use its commercially reasonable efforts, prior to
and following the Closing Date, to cause ▇▇▇▇▇▇▇▇▇ to file with the FCC within
the time periods specified by the rules and regulations of the FCC all necessary
and desirable petitions, responses and other information relating to ▇▇▇▇▇▇▇▇▇'▇
petitions for carriage under applicable must carry regulations by cable
operators serving subscribers in the Atlanta, Georgia Area of Dominant
Influence, and Seller will diligently take (and it will use its commercially
reasonable efforts to cause ▇▇▇▇▇▇▇▇▇ to take), all necessary, desirable and
proper steps, and provide any additional information reasonably requested, in
order to obtain promptly such cable carriage by cable operators serving at least
900,000 subscribers in the Atlanta, Georgia Area of Dominant Influence;
provided, however, Seller shall not be required to pay any consideration to such
cable operators to obtain such carriage. Seller shall indemnify Buyer pursuant
to Section 12.2 for any Losses incurred by Buyer as a result of ▇▇▇▇▇▇▇▇▇'▇
failure to file a complaint with the FCC on or before April 10, 1998, regarding
MediaOne's refusal to carry the Station, which date is sixty days after the date
the Station received a letter from MediaOne that effectively denied carriage to
the Station.
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ARTICLE 7.
COVENANTS AND AGREEMENTS OF BUYER
Buyer covenants and agrees with Seller as follows:
7.1 CONFIDENTIALITY.
Buyer shall, at all times prior to the Closing, maintain
strict confidentiality with respect to all documents and information furnished
to Buyer by or on behalf of Seller. Nothing shall be deemed to be confidential
information that: (a) is known to Buyer at the time of its disclosure to Buyer;
(b) becomes publicly known or available other than through disclosure by Buyer;
(c) is received by Buyer from a third party not actually known by Buyer to be
bound by a confidentiality agreement with or obligation to Seller; or (d) is
independently developed by Buyer. Notwithstanding the foregoing provisions of
this Section 7.1, Buyer may disclose such confidential information (a) to the
extent required or deemed advisable to comply with applicable Laws, (b) to its
officers, directors, employees, representatives, financial advisors, attorneys,
accountants, agents, and underwriters, with respect to the transactions
contemplated hereby (so long as such parties agree to maintain the
confidentiality of such information), and (c) to any Governmental Authority in
connection with the transactions contemplated hereby. In the event this
Agreement is terminated, Buyer will return to Seller all documents and other
material prepared or furnished by Seller relating to the transactions
contemplated by this Agreement, whether obtained before or after the execution
of this Agreement.
7.2 CORPORATE ACTION.
Prior to the Closing, Buyer shall take all partnership and
corporate action, as the case may be, under the Laws of the State of Delaware
necessary to effectuate the transactions contemplated by this Agreement and the
other Buyer Documents.
7.3 NEGATIVE COVENANTS.
Prior to the Closing, Buyer will not, without the prior
written approval of Seller, do or agree to do any of the following: (a) take any
action which may prevent the satisfaction or fulfillment of a condition
precedent hereunder or (b) take any action or fail to take any action which
would cause any of Buyer's representations and warranties to be untrue in any
material respect or Buyer's covenants contained herein to be incapable of being
performed or satisfied in any material respect on the Closing Date.
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ARTICLE 8.
MUTUAL COVENANTS AND UNDERSTANDINGS
OF SELLER AND BUYER
8.1 POSSESSION AND CONTROL.
Between the date hereof and the Closing Date, Buyer shall not
directly or indirectly control, supervise or direct, or attempt to control,
supervise or direct, the business and operations of the Station, and such
operation, including complete control and supervision of all programming, shall
be the ultimate responsibility of the licensee of the Station; PROVIDED,
HOWEVER, that Buyer shall be entitled to inspect the Assets as provided in
Section 6.2.10 so that an uninterrupted and efficient transfer of ownership may
be effected. On and after the Closing Date, Seller shall have no control over,
or right to intervene, supervise, direct or participate in, the business and
operations of the Station.
8.2 RISK OF LOSS.
8.2.1 Until the Closing, any loss of or damage to the Assets
from fire or other casualty or cause (other than any loss or damage resulting
from any act or omission of Buyer or any of Buyer's employees or
representatives) shall be the responsibility of Seller. In the event of such
loss or damage prior to the Closing Date, Seller shall use commercially
reasonable efforts to promptly restore, replace or repair the damaged Assets, at
Seller's sole cost and expense, to their condition prior to such loss or damage.
8.2.2 If, prior to the Closing, any loss to or damage of the
Assets occurs (other than any loss or damage resulting from any act or omission
of Buyer or any of Buyer's employees or agents) that causes the Station to cease
broadcasting operations for a period of seven (7) consecutive days, or prevents
in any material respect signal transmission by the Station in the normal and
usual manner for a period of fourteen (14) consecutive days, Buyer may, in its
sole discretion, upon written notice to Seller delivered within five (5) days
following either such period, (a) postpone the Closing until the Assets have
been restored or replaced such that normal and usual transmission of the
Station's signal is resumed (in which event the Closing shall be held within ten
(10) business days following such resumption), (b) proceed to consummate the
transactions contemplated by this Agreement and complete the restoration and
replacement of the Assets after the Closing Date (in which event Seller shall
deliver to Buyer all insurance and other proceeds received in connection with
such loss or damage), or (c) terminate this Agreement pursuant to Article XIII
hereunder.
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8.3 ALLOCATION OF PURCHASE PRICE.
8.3.1 ALLOCATION SCHEDULE.
Seller and Buyer shall attempt to agree to allocate the
Purchase Price among classes of Assets for the Station in accordance with an
allocation schedule to be agreed to by the parties (the "Allocation Schedule");
provided, however, in the event that Seller and Buyer are unable to agree on the
Allocation Schedule within sixty (60) days following execution of this
Agreement, the parties will proceed under Section 8.3.2.
8.3.2 APPRAISED ALLOCATION OF PURCHASE PRICE.
If Buyer and Seller are unable to agree on the Allocation
Schedule within such sixty (60) day period as contemplated under Section 8.3.1,
Seller and Buyer agree to retain Bond & ▇▇▇▇▇▇ to appraise the classes of Assets
of the Station. Bond & ▇▇▇▇▇▇ shall be instructed to perform an appraisal of the
classes of Assets of the Station and deliver a report to Seller and Buyer as
soon as reasonably practicable (the "Appraisal Report"). Seller and Buyer shall
share equally the fees, costs and expenses of the Bond & ▇▇▇▇▇▇ whether or not
the transactions contemplated hereby are consummated. Seller and Buyer each
represent, warrant, covenant, and agree with each other that the Purchase Price
shall be allocated among the classes of Assets for the Station as set forth in
the Appraisal Report. Seller and Buyer agree, pursuant to Section 1060 of the
Code that the Purchase Price shall be allocated in accordance with this Section
8.3.2, and that all Tax returns and reports shall be filed consistent with such
allocation. Notwithstanding any other provision of this Agreement, the
provisions of this Section 8.3.2 shall survive the Closing Date without
limitation.
8.4 PUBLIC ANNOUNCEMENTS.
Seller and Buyer shall consult with each other before issuing
any press release or otherwise making any public statements with respect to this
Agreement or the transactions contemplated herein and shall not issue any such
press release or make any such public statement without the prior consent of the
other party, which shall not be unreasonably withheld; provided, however, that a
party may, without the prior written consent of the other party, issue such
press release or make such public statement as may be required by Law or any
listing agreement with a national securities exchange to which Seller or Buyer
is a party if it has used all reasonable efforts to consult with the other party
and to obtain such party's consent but has been unable to do so in a timely
manner.
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8.5 EMPLOYEE MATTERS.
Buyer shall have the right but not the obligation to offer
employment to the employees of the Station listed on SCHEDULE 8.5 hereto on
terms and conditions determined by Buyer. No later than five (5) days prior to
Closing, Buyer shall provide Seller a written notice listing any such employees
of Seller that Buyer, upon Closing, desires to retain as employees.
8.6 SERVICES AGREEMENT.
Pending Buyer's search for alternative studio space and studio
equipment following the Closing, Seller and Buyer shall enter into the Services
Agreement in the form attached hereto as EXHIBIT F whereby Seller shall lease to
Buyer for a period of not longer than eighteen (18) months following the Closing
certain studio space and studio equipment; provided that such Services Agreement
may be terminated by Buyer upon sixty (60) days' notice which may be given at
any time after the date hereof, as more fully set forth in the Services
Agreement.
ARTICLE 9.
CONDITIONS PRECEDENT TO
BUYER'S OBLIGATION TO CLOSE
The obligations of Buyer to purchase the Assets and to proceed
with the Closing are subject to the satisfaction (or waiver in writing by Buyer)
at or prior to the Closing of each of the following conditions:
9.1 REPRESENTATIONS AND COVENANTS.
(a) The representations and warranties of Seller made in this
Agreement or in any other Seller Document shall have been true and correct when
made, and shall be true and correct on the Closing Date as though such
representations and warranties were made on and as of the Closing Date, except
to the extent any such representation or warranty is expressly stated only as of
a specified ▇▇▇▇'ier date or dates, in which case such representation and
warranty shall be true and correct in all material respects as of such earlier
specified date or dates; and (b) Seller shall have performed and complied in all
material respects with all covenants and agreements contained in this Agreement
or any other Seller Document required to be performed or complied with by Seller
prior to the Closing.
9.2 CONSENTS.
Seller shall have obtained prior to the Closing Date all
consents, authorizations or approvals necessary to effect the valid assignment
to Buyer of the
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Station Contract, and all other consents necessary to consummate the
transactions contemplated hereby (except for the FCC Order, which shall be
governed by Section 9.4, and except for any HSR Filing, which shall be governed
by Section 9.6), each of which consents, authorizations and approvals shall be
in form and substance reasonably satisfactory to Buyer.
9.3 DELIVERY OF DOCUMENTS.
Seller shall have delivered to Buyer (or to the Escrow Agent,
as applicable) all Contracts, agreements, instruments, and documents required to
be delivered by Seller pursuant to Section 11.2.
9.4 FCC ORDER.
The FCC Order consenting to the assignment by
▇▇▇▇▇▇▇▇▇-Georgia to SKMD shall have been issued; provided, however, in the
event that any opposition has been filed with respect to the grant of such FCC
Order and the parties agree, in their reasonable judgment, that such opposition
is reasonably likely to preclude such FCC Order from becoming a Final Order,
then the parties agree that the foregoing condition shall not have been
satisfied.
9.5 LEGAL PROCEEDINGS.
Other than the DTV Rulemaking and any action or proceeding
relating to the FCC Order (which action or proceeding shall be governed by
SECTION 9.4), no action or proceeding by or before any Governmental Authority
shall be pending (and not subsequently dismissed, settled or otherwise
terminated) which could reasonably be expected to restrain, prohibit or
invalidate the transactions contemplated by this Agreement or any other Seller
Document or prevent, restrict or impair in any material respect the ownership or
use of the Assets or the operation of the Station (as currently used or
operated) by Buyer, other than an action or proceeding instituted or threatened
by Buyer.
9.6 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇.
All applicable waiting periods under ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ shall
have expired or terminated.
9.7 ABSENCE OF MATERIAL CHANGE.
Since the date of this Agreement, there shall not have been a
material adverse change in the Assets or a material increase in the Liabilities
of the Station (regardless of whether or not such events or changes are
consistent with the representations and warranties given herein by Seller).
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9.8 ACQUISITION OF KBSP.
The KBSP Acquisition shall have been consummated or shall be
consummated concurrently with the Closing.
9.9 CABLE CARRIAGE ENTITLEMENT.
Buyer shall have received reasonable assurance that following
the Closing the Station will be entitled to carriage under applicable must carry
regulations by cable operators serving at least 900,000 subscribers in the
Atlanta, Georgia Area of Dominant Influence.
9.10 ▇▇▇▇▇▇▇▇▇ CLOSING.
The ▇▇▇▇▇▇▇▇▇ Closing shall have been consummated or shall be
consummated concurrently with the Closing consistent with the terms of the
▇▇▇▇▇▇▇▇▇ Asset Purchase Agreement without any waivers by Seller of the
conditions precedent set forth in Section 7 of the ▇▇▇▇▇▇▇▇▇ Purchase Agreement
(except for waivers that would not have a material adverse effect on Buyer, the
Assets or the Station); provided, however, this Section 9.10 shall not be a
condition precedent to a Closing pursuant to Section 11.1.2.
9.11 BLACKSTAR ACQUISITION.
The acquisition by USA or one of its affiliates of all of the
membership interests outstanding of Blackstar L.L.C. shall have been consummated
or shall be consummated concurrently with the Closing.
9.12 WAIVER OF KBSP CLOSING CONDITION.
Notwithstanding Section 9.8, in the event that on or before
July 16, 1998 all conditions precedent in this Article 9 have been satisfied (or
waived by Buyer) except for the condition set forth in Section 9.8 and provided
that the failure of such condition to be satisfied shall not be due to a breach
by ▇▇▇▇▇▇ Communications of Oregon-22, Inc. or ▇▇▇▇▇▇ Oregon License, Inc. under
the KBSP Agreement, then, in such event, Seller may require Buyer to waive such
Section 9.8 and close under Section 11.1.1.
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ARTICLE 10.
CONDITIONS PRECEDENT TO
SELLER'S OBLIGATION TO CLOSE
The obligations of Seller to sell, transfer, convey and deliver
the Assets and to proceed with the Closing are subject to the satisfaction (or
waiver in writing by Seller) at or prior to the Closing of each of the following
conditions:
10.1 REPRESENTATIONS AND COVENANTS.
(a) The representations and warranties of Buyer made in this
Agreement or in any other Buyer Document shall have been true and correct when
made, and shall be true and correct on the Closing Date as though such
representations and warranties were made on and as of the Closing Date, except
to the extent any such representation or warranty is expressly stated only as of
a specified earlier date or dates, in which case such representation and
warranty shall be true and correct in all material respects as of such earlier
specified date or dates; and (b) Buyer shall have performed and complied in all
material respects with all covenants and agreements contained in this Agreement
or any other Buyer Document required to be performed or complied with by Buyer
prior to the Closing.
10.2 DELIVERY BY BUYER.
Buyer or the Exchange Agent, as the case may be, shall have
delivered to Seller (or the Escrow Agent, as applicable), on Buyer's behalf,
the Purchase Price and all Contracts, agreements, instruments and documents
required to be delivered by Buyer to Seller pursuant to Section 11.3.
10.3 FCC ORDER.
The FCC Order consenting to the assignment by
▇▇▇▇▇▇▇▇▇-Georgia to SKMD shall have been issued; provided, however, in the
event that any opposition has been filed with respect to the grant of such FCC
Order and the parties agree, in their reasonable judgment, that such opposition
is reasonably likely to preclude such FCC Order from becoming a Final Order,
then the parties agree that the foregoing condition shall not have been
satisfied.
10.4 LEGAL PROCEEDINGS.
Other than any action or proceeding relating to the FCC Order
(which action or proceeding shall be governed by SECTION 10.3), no action or
proceeding by or before any Governmental Authority shall be pending (and not
subsequently dismissed, settled, or otherwise terminated) that could reasonably
be expected to restrain, prohibit, or invalidate the transactions contemplated
by this
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Agreement or any other Buyer Document, other than an action or proceeding
instituted or threatened by Seller.
10.5 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇.
All applicable waiting periods under ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ shall
have expired or terminated.
10.6 CONSENTS.
Prior to the Closing Date all consents, authorizations or
approvals necessary to effect the valid assignment to Buyer of the Station
Contract shall have been obtained, and all other consents necessary to
consummate the transactions contemplated hereby (except for the FCC Order, which
shall be governed by Section 10.3, and except for any HSR Filing, which shall be
governed by Section 10.5), each of which consents, authorizations and approvals
shall be in form and substance reasonably satisfactory to Seller; provided,
however, obtaining the ▇▇▇▇▇▇▇▇▇ Consent shall be governed by Section 15.14.2.
ARTICLE 11.
THE CLOSING
11.1 CLOSING.
11.1.1 Subject to Section 11.1.2, the Closing hereunder shall
be held on a date specified by Buyer on no less than five (5) days notice to
Seller (which notice may be waived in whole or in part by Seller) (the "Closing
Date"), and in any event not later than ten (10) days following the date that
the FCC Order has been issued; subject to satisfaction or waiver of all other
conditions precedent to the holding of the Closing; provided, however, under no
circumstance shall the Closing Date be later than July 16, 1998, if the FCC
Order is issued on or before such date and all other conditions precedent to the
holding of the Closing shall have been satisfied or waived. If Buyer fails to
specify the date for Closing prior to the fifth day after the date the FCC Order
is issued, the Closing shall take place on the tenth day after such date.
11.1.2 Notwithstanding Section 11.1.1. hereof, in the event
that the FCC Order has not been issued to permit the Closing to occur by July
10, 1998, SKMD shall have the option, in its sole discretion by delivering
written notice to Seller between July 10, 1998 and July 14, 1998, to require
Seller to proceed with the Closing under this Section 11.1.2 on July 16, 1998,
subject to satisfaction or waiver of all other conditions precedent to the
holding of the Closing other than the issuance of the FCC Order, or to terminate
this Agreement pursuant to Section
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13.1.6 and pay Seller liquidated damages in the amount of $5,000,000 (the
"Liquidated Damages"). The parties agree that the option to terminate and pay
the Liquidated Damages is for the benefit of SKMD, not Seller, and may be
exercised only by SKMD.
11.1.2.1 In the event that the Closing proceeds pursuant to
Section 11.1.2, the deliveries to be made under Section 11.2 and under Section
11.3 (the "Closing Deliveries") shall be delivered to the Escrow Agent. Prior to
the disbursement of the Purchase Price by the Escrow Agent, all interest earned
on the Purchase Price shall be paid each month by the Escrow Agent to Seller.
The Escrow Agent shall hold the Closing Deliveries in accordance with the terms
and conditions of the Escrow Agreement substantially in the form attached hereto
as EXHIBIT G (with such changes requested by the Escrow Agent which are
agreeable to Buyer and Seller), which shall be entered into by Buyer, Seller and
the Escrow Agent. On the first business day immediately following the date of
the FCC Order, and without the need for the satisfaction of any other terms or
conditions, Buyer and Seller shall notify the Escrow Agent in writing to, no
later than three (3) days following the parties' notification to the Escrow
Agent of the issuance of the FCC Order, transfer the Closing Deliveries to the
appropriate parties as contemplated by this Agreement and the Escrow Agreement
and the interest accrued and unpaid with respect to the Purchase Price to
Seller. In the event that the Closing proceeds pursuant to this Section 11.1.2,
Seller and SKMD also shall enter into an agreement, in the form attached hereto
as EXHIBIT H, to assign to SKMD all of Seller's rights under the ▇▇▇▇▇▇▇▇▇ Time
Brokerage Agreement (the "Time Brokerage Agreement") and Buyer shall assume all
of Seller's obligations under the ▇▇▇▇▇▇▇▇▇ Time Brokerage Agreement to be
performed following the Closing Date, except Seller's obligations under Section
1.5 thereof and Attachments I and II thereto and except for obligations arising
under Section 4.1 thereof which relate to the time period prior to the Closing
Date, which shall remain the responsibility of Seller. Pursuant to the Time
Brokerage Agreement, SKMD shall provide programming for broadcast on the Station
commencing on the Closing Date under this Section 11.1.2 and continuing until
the date on which the escrow arrangement contemplated hereunder is terminated
and Seller shall be liable for paying all amounts payable to ▇▇▇▇▇▇▇▇▇ under
Section 1.5 of the ▇▇▇▇▇▇▇▇▇ Time Brokerage Agreement and Attachments I and II
thereto. In the event of a Closing under this Section 11.1.2, until such time as
the escrow arrangement contemplated hereunder is terminated (but not to exceed
sixty (60) days from the Closing Date under this Section 11.1.2), upon the
termination of the Escrow Agreement, Seller shall pay a consulting fee to Buyer
equal to $7,275.00 per day for providing consulting services during such sixty
(60) day period relating to Seller's other television station in the Atlanta,
Georgia market pursuant to a consulting agreement in form and substance
reasonably acceptable to Buyer and Seller. From and after a Closing pursuant to
this Section 11.1.2.1, all operating and other income or loss of the Station
shall be for the account of Buyer, and all interest accruing on the Purchase
Price shall be for
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the account of Seller, subject to disbursement at the times and in the manner
provided in the Escrow Agreement and the Closing shall be deemed to have
occurred for all purposes under this Agreement. Accordingly, for all federal,
state and local income or franchise Tax purposes, (i) Buyer and Seller shall
treat the Closing pursuant to Section 11.1.2 as a "sale or other disposition" of
the Station (within the meaning of Section 1001(a) of the Code) by Seller on the
date of such Closing, (ii) Buyer and Seller shall treat SKMD as having
"received" the FCC Licenses on the date of such Closing, within the meaning of
Section 1031(a)(3)(B) and Treasury Regulation Section 1.1031(k)-1(b)(1)(ii),
(iii) Seller shall include all interest accrued on the Purchase Price in its
income for the year in which such interest accrues, without regard to whether
such interest is disbursed to Seller in such year in accordance with the terms
of the Escrow Agreement.
11.1.2.2 In the event that Buyer exercises its option under
Section 11.1.2 to terminate this Agreement and to pay the Liquidated Damages
(the "Termination Option"), upon payment of the Liquidated Damages by Buyer,
Buyer shall be discharged from all further liability under this Agreement except
as provided in Sections 6.3, 7.1 and 15.3. Buyer shall notify Seller in writing
of its exercise of the Termination Option within the period specified in Section
11.1.2 (the date of such notification hereinafter being referred to as the
"Termination Date"). Buyer shall pay the Liquidated Damages on the date and in
the manner specified in the Letter Agreement.
11.1.3 In the event that the Closing has occurred pursuant to
Section 11.1.2,, SKMD shall have the option, in its sole discretion, so long as
the FCC Order has not been issued, of (i) assigning and transferring its rights
under this Agreement, the Escrow Agreement, the Services Agreement and the
▇▇▇▇▇▇▇▇▇ Time Brokerage Agreement to Seller (a "Sale to Seller") or (ii)
assigning and transferring its rights under this Agreement, the Escrow
Agreement, the Services Agreement and the ▇▇▇▇▇▇▇▇▇ Time Brokerage Agreement to
a third party (a "Sale to a Third Party"), which assignment and transfer will be
subject to the approval of the FCC, but shall not require the consent of Seller
so long as such third party is legally, financially and otherwise qualified to
hold the FCC Licenses. If SKMD fails to notify Seller in writing of its
intention to exercise its option hereunder to make a Sale to Seller or a Sale to
a Third Party on or prior to the first anniversary date of the Closing under
Section 11.1.2, Seller shall have the right to require SKMD to make a Sale to
Seller under Section 11.1.4, and if Seller exercises such right SKMD shall have
no further right to make a Sale to a Third Party; provided, however, that any
Sale to Seller under this sentence shall not be subject to the $50,000,000
limitation referenced in Section 11.1.4. Upon notifying Seller of its exercise
of its option to make a Sale to a Third Party, Buyer shall authorize the Escrow
Agent to release from escrow the amount of $5,000,000 to Seller (the "Sale to
Third Party Payment"). If SKMD fails to close any Sale to a Third Party on or
before the date which is nine (9) months following the date of Buyer's notice
regarding a Sale to a
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Third Party, such sale to a Third Party shall have no force or effect, and Buyer
shall be required to immediately make a Sale to Seller. Upon the release of the
Closing Deliveries to Buyer under Section 2.04 of the Escrow Agreement pursuant
to a Sale to a Third Party or under Section 2.05 of the Escrow Agreement
pursuant to a Sale to Seller, Buyer shall return to Seller all originals of the
Assignment of FCC Licenses. Upon the release of the Closing Deliveries to Seller
under Section 2.04 of the Escrow Agreement pursuant to the Sale to a Third
Party, Seller shall (i) revise the Closing Deliveries set forth and described in
EXHIBIT B and EXHIBIT C attached to the Escrow Agreement to reflect the transfer
by Seller to the Third Party, and Seller and Buyer shall make no other revisions
to such Closing Deliveries unless Buyer and Seller mutually agree to additional
revisions and (ii) deliver to Buyer originals, executed in quadruplicate, of
such Closing Deliveries for Buyer's delivery pursuant to the closing of the Sale
to a Third Party. Notwithstanding any provision in this Agreement to the
contrary, Seller shall have no obligation or liability to the Third Party as a
result of events occurring after the Closing Date.
11.1.4 In the event that SKMD elects to make a Sale to Seller
under Section 11.1.3(i), Seller shall be obligated to purchase, or designate a
third party to purchase, the Assets and the Station in accordance with this
Section 11.1.4 and Section 11.1.5. The purchase price for a Sale to Seller shall
be equal to the fair market value, as of the date of the notice of a Sale to
Seller, of the Station and the Assets (which shall include any assets acquired
after the date hereof), as determined by an appraisal based on events occurring
subsequent to the Closing Date and performed by the Appraiser selected pursuant
to the provisions of Section 11.1.5 ("Fair Market Value"). Notwithstanding the
foregoing, if Fair Market Value is more than $50,000,000, the amount Seller
shall be obligated to pay to SKMD shall be limited to $50,000,000. The
representations, warranties, covenants and conditions relating to a Sale to
Seller shall be, to the extent applicable, similar to those set forth herein and
in the Seller Documents and the Buyer Documents.
11.1.5 In the event that SKMD elects to make a Sale to Seller
under Section 11.1.3(i), within five (5) business days of notifying Seller of
such election, SKMD shall provide Seller with a list of three independent
appraisers, who are qualified and experienced in appraising the value of
television stations. Within five (5) business days of receiving such list of
appraisers, Seller shall select one appraiser from such list to perform the
appraisal contemplated under Section 11.1.4; provided, however, if Seller fails
to make such selection during such five-day period, SKMD shall have the right to
select the appraiser (the "Appraiser"). The determination by the Appraiser of
Fair Market Value shall be final, conclusive and binding upon the parties.
Seller and Buyer shall share equally the fees, costs and expenses of the
Appraiser. In the event that SKMD elects to make a Sale to Seller under Section
11.1.3(i), the Purchase Price (and the interest accrued thereon and unpaid)
owing to Seller under the Escrow Agreement shall be disbursed to
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Seller by the Escrow Agent at the closing of a Sale to Seller in accordance with
the terms of the Escrow Agreement, and immediately thereafter Seller shall pay
to SKMD an amount equal to the Fair Market Value of the Assets and the Station
(subject to the limitation that Seller shall not be required to pay more than
$50,000,000) in accordance with the instructions signed by Buyer and Seller and
delivered to the Escrow Agent under Section 2.05 of the Escrow Agreement. The
instructions to the Escrow Agent delivered under Section 2.05 of the Escrow
Agreement shall include a provision that the Purchase Price (and the interest
accrued thereon and unpaid) owing to Seller ("Seller's Funds") shall not be
released to Seller by the Escrow Agent unless the Escrow Agent confirms in
writing to Buyer that Seller has delivered to the bank receiving the Purchase
Price irrevocable wire instructions requiring the bank, immediately upon receipt
of Seller's Funds, to wire the amount owing to SKMD under this Section 11.1.5 in
accordance with SKMD's wire instructions.
11.1.6 In the event that SKMD elects to make a Sale to a
Third Party under Section 11.1.3(ii), SKMD shall be entitled to any gain
recognized from such sale and shall bear the risk of any loss recognized from
such sale, and the Purchase Price and the interest accrued thereon owing to
Seller under the Escrow Agreement shall be disbursed to Seller by the Escrow
Agent at the closing of a Sale to a Third Party in accordance with the terms of
the Escrow Agreement.
11.1.7 Buyer and Seller, promptly when due, shall execute and
deliver to the Escrow Agent all instructions, notifications and other documents
required to be executed and delivered to the Escrow Agent under Section 2 of the
Escrow Agreement, and Buyer and Seller each agrees that it will (and Seller will
use its commercially reasonable efforts to cause ▇▇▇▇▇▇▇▇▇), at any time, prior
to, at or after the Closing Date, take or cause to be taken such further
actions, and execute, deliver and file or cause to be executed, delivered and
filed such further documents and instruments and obtain such consents, as may be
necessary or reasonably requested by the other party in connection with a Sale
to a Third Party, a Sale to Seller or in order to fully effectuate the purposes,
terms and conditions set forth in this Article 11.
11.1.8 The Closing shall be held at 10:00 A.M. local time at
the offices of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇.
or at such other time and place as the parties may agree.
11.2 DELIVERY BY SELLER.
At or before the Closing, Seller shall deliver to Buyer (or in
the case of a Closing pursuant to Section 11.1.2, to the Escrow Agent) the
following:
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11.2.1 AGREEMENTS AND INSTRUMENTS.
The following bills of sale, statements, assignments and other
instruments of transfer, dated as of the Closing Date and duly executed by
Seller:
(a) the ▇▇▇▇ of Sale;
(b) the Assignment of FCC Licenses;
(c) the Assignment of Contracts;
(d) the Assumption Agreement;
(e) the Services Agreement; and
(f) such other certificates, opinions, instruments or
documents as Buyer may reasonably request in order to
effect and document the transactions contemplated hereby.
11.2.2 CONSENTS.
Originals of all consents necessary to effect the valid
assignment to Buyer of the Station Contract and any other consents Seller is
required to obtain.
11.2.3 CABLE CARRIAGE ENTITLEMENT.
Evidence reasonably satisfactory to Buyer with respect to the
Station's cable carriage entitlement as contemplated by Section 9.9.
11.2.4 UCC REPORT.
A report dated not more than ten (10) days prior to the
Closing Date of the appropriate filing officers in the jurisdictions specified
in SCHEDULE 11.2.4 evidencing no judgments, financing statements, tax liens,
mechanics, materialmen or other statutory liens on file with respect to the
Assets, and, if such report evidences that judgments, financing statements, tax
liens, mechanic's, materialmen's or other statutory liens are on file with
respect to any of the Assets, a termination statement or other appropriate
document signed by the secured party or lienholder evidencing the release or
termination of such financing statement or such lien and, if applicable, a
pay-off letter from such secured party or lienholder; provided, however, in the
event of a Closing pursuant to Section
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11.1.2.1, Seller shall not be required to deliver any termination statement,
pay-off letter or other release document until the date the Purchase Price is
released to Seller by the Escrow Agent under the Escrow Agreement.
Notwithstanding anything in this Agreement to the contrary, Seller agrees that
Buyer shall not authorize (or be required to authorize) the Escrow Agent to
release the Purchase Price under the Escrow Agreement unless and until Seller
delivers to Buyer all pay-off letters and termination statements or releases
evidencing the release or termination of any financing statements or other liens
on file with respect to the Assets; provided, however, that the foregoing
restriction shall not apply to any release of the Sale to Third Party Payment.
11.2.5 CERTIFIED RESOLUTIONS.
A copy of (a) the resolutions of directors and shareholders of
Seller, certified as being correct and complete and then in full force and
effect, authorizing the execution, delivery and performance of this Agreement,
and of the other Seller Documents, and the consummation of the transactions
contemplated hereby and thereby (b) a copy of the by-laws of Seller, and (c) a
copy of the certificate of incorporation of Seller, all certified by the
Secretary of Seller as being true, correct and complete as of the Closing Date.
11.2.6 OFFICERS' CERTIFICATE.
A certificate of Seller signed by any authorized officer of
Seller certifying that the representations and warranties of Seller made herein
and in the other Seller Documents were true and correct in all material respects
as of the date of this Agreement and are true and correct in all material
respects as of the Closing Date, except to the extent any such representation or
warranty is expressly stated only as of a specified earlier date or dates, in
which case such representation and warranty shall be true and correct in all
material respects as of such earlier specified date or dates, and that Seller
has performed and complied in all material respects with all covenants and
agreements contained in this Agreement or any other Seller Document required to
be performed or complied with by Seller on or prior to the Closing.
11.2.7 SELLER'S IRS FORM 8594.
Internal Revenue Service Form 8594 completed by Seller in
connection with the acquisition of the Assets by Buyer prepared in a manner
consistent with Section 8.3.
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11.2.8 OPINION OF COUNSEL.
An opinion of Dow, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, PLLC, counsel to
Seller, dated the Closing Date, addressed to Buyer, containing the opinions set
forth in EXHIBIT I hereto and such limitations and qualifications that are
reasonably satisfactory to Buyer and Buyer's counsel.
11.3 DELIVERY BY BUYER, THE EXCHANGE AGENT.
At or before the Closing, USA of Maryland, SKMD or the
Exchange Agent, as applicable, shall deliver to Seller (or in the case of a
Closing pursuant to Section 11.1.2, to the Escrow Agent) the following:
11.3.1 PURCHASE PRICE PAYMENT.
The Purchase Price in the amount and manner set forth in
Section 2.
11.3.2 AGREEMENTS AND INSTRUMENTS.
The following Contracts, agreements and instruments:
(a) the Assumption Agreement;
(b) the Assignment of Purchase Agreement and any other
necessary documents or instruments necessary in order to effect Buyer's deferred
like kind exchange in accordance with applicable requirements of the Code and
the regulations of the Department of Treasury thereunder in form and substance
reasonably satisfactory to Seller;
(c) the Services Agreement; and
(d) such other certificates, opinions, instruments or
documents as Seller may reasonably request in order to effect and document the
transactions contemplated hereby.
11.3.3 CERTIFIED RESOLUTIONS.
Copies of (a) the resolutions of the directors of USA of
Maryland, certified as being correct and complete and then in full force and
effect, authorizing the execution, delivery and performance of this Agreement
and of the other Buyer Documents, and the consummation of the transactions
contemplated hereby and thereby; (b) a copy of the by-laws of USA of Maryland;
(c) the articles of incorporation of USA of Maryland; and (d) the Partnership
Agreement of SKMD, all
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certified by the Secretary of USA of Maryland as being true, correct and
complete as of the Closing Date.
11.3.4 OFFICERS' CERTIFICATE.
A certificate of Buyer signed by any authorized officer of USA
of Maryland certifying that the representations and warranties of Buyer made
herein were true and correct as of the date of this Agreement and are true and
correct as of the Closing Date, except to the extent any such representation or
warranty is expressly stated only as of a specified earlier date or dates, in
which case such representation and warranty shall be true and correct in all
material respects as of such earlier specified date or dates, and that Buyer has
performed and complied with all covenants and agreements contained in this
Agreement or any Buyer Document required to be performed or complied with by
Buyer prior to the Closing.
11.3.5 BUYER'S IRS FORM 8594.
Internal Revenue Service Form 8594 completed by Buyer in
connection with the acquisition of the Assets by Buyer prepared in a manner
consistent with Section 8.3.
11.3.6 OPINION OF COUNSEL.
An opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel to Buyer, dated the
Closing Date, addressed to Seller, containing the opinions set forth in EXHIBIT
J hereto and such limitations and qualifications that are reasonably
satisfactory to Seller and Seller's counsel.
11.3.7 CONSENTS.
Originals of any consents that Buyer is required to obtain.
11.4 FRUSTRATION OF CLOSING CONDITIONS.
Buyer may not rely on the failure of any condition set forth
in Article IX to be satisfied if such failure was caused by Buyer's failure to
act in good faith or to comply with its obligations hereunder. Seller may not
rely on the failure of any condition set forth in Article X to be satisfied if
such failure was caused by Seller's failure to act in good faith or to comply
with its obligations hereunder.
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11.5 LIQUIDATED DAMAGES.
In the event that Buyer fails to give Seller notice on or
prior to the first anniversary date of the Closing as required by the second
sentence of Section 11.1.3 and Seller exercises its right to demand a Sale to
Seller thereunder, Buyer shall pay Seller liquidated damages equal to the amount
(if any) by which the Fair Market Value as determined pursuant to Section 11.1.4
exceeds $50,000,000. Such liquidated damages shall be paid by Buyer to Seller
(by wire transfer of immediately available funds) simultaneously with the
payment by Seller to Buyer (by wire transfer of immediately available funds) of
the payment required by Seller under the second sentence of Section 11.1.4.
ARTICLE 12.
SURVIVAL; INDEMNIFICATION
12.1 SURVIVAL OF REPRESENTATIONS.
Unless otherwise set forth herein, all representations and
warranties, covenants and agreements of Seller and Buyer contained in or made
pursuant to this Agreement or in any certificate furnished pursuant hereto shall
survive the Closing Date and shall remain in full force and effect as follows:
(a) representations and warranties shall survive for a period of twelve (12)
months after the Closing Date; (b) Seller's obligations with respect to all
obligations and liabilities not assumed by Buyer shall survive until such
obligations and liabilities have been paid, performed or discharged in full; (c)
Buyer's obligation with respect to all obligations and liabilities assumed by
Buyer hereunder shall survive until such obligations and liabilities have been
paid, performed or discharged in full; (d) the covenants and agreements in this
ARTICLE 12 shall continue in full force and effect until fully discharged; and
(e) any representation, warranty, covenant or agreement that is the subject of a
claim which is asserted in a reasonably detailed writing prior to the expiration
of the applicable period set forth above shall survive with respect to such
claim or dispute until the final resolution thereof. All such representations
and warranties, covenants, and agreements shall also survive and be unaffected
by (and shall not be deemed waived by) any investigation, audit, appraisal, or
inspection at any time made by or on behalf of any party hereto.
12.2 INDEMNIFICATION BY SELLER.
Subject to the conditions and provisions of Section 12.4 and
Section 12.5, Seller agrees to indemnify, defend and hold harmless Buyer,
Buyer's Affiliates, each of their respective directors, officers, employees and
agents and each of the successors and assigns of any of the foregoing ("Buyer
Indemnified Parties") from and against and in any respect of, on a net after-tax
basis, all Losses, asserted
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against, resulting to, imposed upon or incurred by the Buyer Indemnified
Parties, directly or indirectly, by reason of or resulting from (a) any
liability or obligation of or claim against Buyer (whether absolute, accrued,
contingent or otherwise and whether a contractual, Tax or any other type of
liability or obligation or claim) not expressly assumed by Buyer pursuant to
Section 2.7, arising out of, relating to or resulting from the businesses of
Seller, or relating to or resulting from the Assets or the business and
operations of the Station during the period prior to the Closing Date; (b) any
breach of the representations and warranties of Seller contained in this
Agreement (including the Schedules hereto) or any other Seller Document; (c) any
breach by Seller of any covenants, agreements or undertakings of Seller
contained in this Agreement or any other Seller Document; or (d) any employment
related practices, policies, Contracts, decisions, actions or omissions by
Seller for the period ending on the Closing Date with respect to any of Seller's
employees or former employees.
12.3 INDEMNIFICATION BY BUYER.
Subject to the conditions and provisions of Section 12.4 and
Section 12.5, Buyer hereby agrees to indemnify, defend and hold harmless Seller,
Seller's Affiliates, each of their respective directors, officers, employees and
agents and each of the successors and assigns of any of the foregoing ("Seller
Indemnified Parties") from, against and with respect of, on a net after-tax
basis, any and all Losses, asserted against, resulting to, imposed upon or
incurred by Seller Indemnified Parties, directly or indirectly, by reason of or
resulting from (a) any liability or obligation of or claims against Seller
Indemnified Parties (whether absolute, accrued, contingent or otherwise and
whether contractual, Tax or any other type of liability or obligation or claim)
expressly assumed by Buyer pursuant to Section 2.7; (b) any breach of the
representations and warranties of Buyer contained in this Agreement or any other
Buyer Document; (c) any breach by Buyer of any covenants, agreements or
undertakings of Buyer contained in this Agreement or any other Buyer Document;
(d) any litigation, proceeding or claim arising from the business or operations
of the Assets or the Station on or after the Closing Date; or (e) in the event
of a Closing pursuant to Section 11.1.2, any liability or obligation of or
claims against Seller Indemnified Parties (whether absolute, accrued, contingent
or otherwise and whether contractual or any other type of liability or
obligation or claim) arising under or relating to the ▇▇▇▇▇▇▇▇▇ Time Brokerage
Agreement with respect to the period after the Closing Date (other than any
liability or obligation for the payments to ▇▇▇▇▇▇▇▇▇ required by the terms of
Section 1.5 and Attachments I and II of the ▇▇▇▇▇▇▇▇▇ Time Brokerage Agreement).
12.4 LIMITATION ON INDEMNIFICATION.
Neither Seller nor Buyer shall be liable to the other in
respect of any indemnification hereunder (a) except to the extent that the
aggregate Losses of
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the party to be indemnified under this Agreement exceed Fifty Thousand Dollars
($50,000) (the "Basket Amount"), whereupon the party to be indemnified shall be
entitled to indemnification from the other party hereunder for all Losses
suffered or incurred by the party to be indemnified; provided, however, any
Losses of Buyer in respect of (i) Seller's Taxes, (ii) Seller's failure to
comply with any bulk transfer law in accordance with Section 6.2.9, or (iii)
Buyer's compliance with its indemnification obligation set forth in clause (iii)
in the proviso of the third sentence of Section 15.7 shall not be subject to the
Basket Amount; and (b) for any Losses which exceed in the aggregate One Million
Dollars ($1,000,000) (the "Cap"). The parties further agree that any Losses
received by the Indemnified Party hereunder shall be net of any insurance
proceeds received by the Indemnified Party with respect to the event giving rise
to the Losses. The parties hereto acknowledge and agree that it is their
intention that no standard of materiality or reasonableness shall be implied (by
law, in equity or otherwise) in any representation, warranty, covenant or other
agreement of Seller or Buyer contained in this Agreement or the other agreements
executed by or on behalf of Seller or Buyer in connection herewith, unless such
a standard is expressly set forth in such representation, warranty, covenant or
agreement. Following the Closing, the sole and exclusive remedy for Buyer or
Seller for any claim arising out of a breach of any representation, warranty,
covenant or other agreement contained herein or the other Buyer Documents or
Seller Documents or otherwise arising out of or in connection with the
transactions contemplated by this Agreement or the other Buyer Documents or
Seller Documents, whether such claim is framed in tort, contract or otherwise,
shall be a claim for indemnification pursuant to this Section 12.
12.5 CONDITIONS OF INDEMNIFICATION.
The obligations and liabilities of Seller and of Buyer
hereunder with respect to their respective indemnities pursuant to this Section
12, resulting from any Losses, shall be subject to the following terms and
conditions:
12.5.1 The party seeking indemnification (the "Indemnified
Party") must give the other party or parties, as the case may be (the
"Indemnifying Party"), notice of any such Losses promptly after the Indemnified
Party receives notice thereof; provided that the failure to give such notice
shall not affect the rights of the Indemnified Party hereunder except to the
extent that the Indemnifying Party shall have suffered actual damage by reason
of such failure.
12.5.2 The Indemnifying Party shall have the right to
undertake, by counsel or other representatives of its own choosing, the defense
of such Losses at the Indemnifying Party's risk and expense.
12.5.3 In the event that the Indemnifying Party shall elect
not to undertake such defense, or, within a reasonable time after notice from
the
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Indemnified Party of any such Losses, shall fail to defend, the Indemnified
Party (upon further written notice to the Indemnifying Party) shall have the
right to undertake the defense, compromise or settlement of such Losses, by
counsel or other representatives of its own choosing, on behalf of and for the
account and risk of the Indemnifying Party (subject to the right of the
Indemnifying Party to assume defense of such Losses at any time prior to
settlement, compromise or final determination thereof). In such event, the
Indemnifying Party shall pay to the Indemnified Party, in addition to the other
sums required to be paid hereunder, the costs and expenses incurred by the
Indemnified Party in connection with such defense, compromise or settlement as
and when such costs and expenses are so incurred.
12.5.4 Anything in this Section 12.5 to the contrary
notwithstanding, (i) if there is a reasonable probability that Losses may
materially and adversely affect the Indemnified Party other than as a result of
money damages or other money payments, the Indemnified Party shall have the
right, at its own cost and expense, to participate in the defense, compromise or
settlement of the Losses, (ii) the Indemnifying Party shall not, without the
Indemnified Party's written consent, settle or compromise any Losses or consent
to entry of any judgment which does not include as an unconditional term thereof
the giving by the claimant or the plaintiff to the Indemnified Party of a
release from all liability in respect of such Losses in form and substance
satisfactory to the Indemnified Party, and (iii) in the event that the
Indemnifying Party undertakes defense of any Losses, the Indemnified Party, by
counsel or other representative of its own choosing and at its sole cost and
expense, shall have the right to consult with the Indemnifying Party and its
counsel or other representatives concerning such Losses and the Indemnifying
Party and the Indemnified Party and their respective counsel or other
representatives shall cooperate with respect to such Losses and (iv) in the
event that the Indemnifying Party undertakes defense of any Losses, the
Indemnifying Party shall have an obligation to keep the Indemnified Party
informed of the status of the defense of such Losses and furnish the Indemnified
Party with all documents, instruments and information that the Indemnified party
shall reasonably request in connection therewith.
12.6 BULK SALES INDEMNITY.
Seller further agrees to indemnify, defend and hold harmless
the Buyer Indemnified Parties from and against and in respect of any and all
Losses, including without limitation any claims made by creditors, with respect
to non-compliance with any bulk transfer law.
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ARTICLE 13.
TERMINATION
13.1 TERMINATION.
This Agreement may be terminated at any time prior to the
Closing by:
13.1.1 the mutual written consent of Seller and Buyer;
13.1.2 Buyer or Seller, upon written notice of termination
delivered to the other, if the Closing does not occur on or prior to March 15,
1999;
13.1.3 Buyer, pursuant to Section 8.2.2(c) hereof, upon
written notice of termination delivered to Seller;
13.1.4 Buyer or Seller, upon written notice of termination
delivered to the other, if the FCC Order contains any condition that is
materially adverse to the party seeking to terminate pursuant to this Section
13.1.4 and such condition does not result from events or circumstances that
constitute a breach by the terminating party of its respective representations,
warranties or covenants set forth herein;
13.1.5 Buyer, upon written notice of termination delivered to
Seller, if the KBSP Agreement or the Blackstar Agreement is terminated in
accordance with their respective terms; and
13.1.6 Buyer, upon written notice to Seller of its election to
exercise the Termination Option and the payment to Seller of the Liquidated
Damages;
provided, however, that the party seeking termination pursuant to Sections
13.1.2 through 13.1.6 is not in breach in any material respect of any of its
representations, warranties, covenants or agreements contained in this Agreement
13.2 EFFECT OF TERMINATION.
In the event this Agreement is terminated as provided in this
ARTICLE 13, this Agreement shall be deemed null, void and of no further force or
effect, and the parties hereto shall be released from all future obligations
hereunder; PROVIDED, HOWEVER, that the obligations of Buyer and Seller set forth
in Sections 6.3, 7.1, and 15.3, shall survive such termination and the parties
hereto shall have any and all remedies to enforce such obligations provided at
law or in equity or otherwise (including, without limitation, specific
performance).
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ARTICLE 14.
REMEDIES
14.1 DEFAULT BY BUYER.
If Buyer shall default in the performance of its obligations
under this Agreement or if, as a result of Buyer's action or failure to act, the
conditions precedent to Seller's obligation to close specified in Section 10 are
not satisfied, and for such reason or reasons this Agreement is not consummated,
and provided that Seller shall not then be in default in the performance of
Seller's obligations hereunder, Seller shall be entitled by written notice to
Buyer, at Seller's sole option:
(a) to require Buyer (i) to consummate and specifically
enforce its rights and perform its obligations under the Definitive Agreements
governing the Blackstar Acquisition and (ii) to consummate and specifically
perform its obligations in accordance with the terms of this Agreement and the
other Buyer Documents, if necessary, in each case, through injunction or other
court order or process; or
(b) by written notice to Buyer, to terminate this Agreement
and to pursue any other remedies Seller has at law or in equity or otherwise.
14.2 DEFAULT BY SELLER.
If Seller shall default in the performance of Seller's
obligations under this Agreement, or if, as a result of Seller's action or
failure to act, the conditions precedent to Buyer's obligation to close
specified in Section 9 are not satisfied and for such reason or reasons this
Agreement is not consummated, and provided that Buyer shall not then be in
default in the performance of Buyer's obligations hereunder, Buyer shall be
entitled by written notice to Seller, at Buyer's sole option:
(a) to require Seller (i) to consummate and specifically
enforce its rights and perform its obligations under the ▇▇▇▇▇▇▇▇▇ Purchase
Agreement and the KBSP Acquisition and (ii) to consummate and specifically
perform its obligations in accordance with the terms of this Agreement and the
other Seller Documents, if necessary, in each case, through injunction or other
court order or process; or
(b) by written notice to Seller, to terminate this Agreement
and to pursue any other remedies Buyer has at law or in equity or otherwise.
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14.3 SPECIFIC PERFORMANCE.
Seller and Buyer acknowledge that the transactions
contemplated by this Agreement are unique and that neither party has an adequate
remedy at law if the other party shall fail to perform any of its obligations
hereunder, and Seller and Buyer therefore confirm and agree that the right to
specific performance is essential to protect the rights and interests of Buyer
and Seller. Accordingly, in addition to any other remedies which Buyer or Seller
may have hereunder or at law or in equity or otherwise, Seller and Buyer hereby
agree that Seller and Buyer each shall have the right to have all obligations,
undertakings, agreements and other provisions of this Agreement specifically
performed by the other party and that Seller and Buyer shall have the right to
obtain an order or decree of such specific performance in any of the courts of
the United States or of any state or other political subdivision thereof.
ARTICLE 15.
GENERAL PROVISIONS
15.1 Additional Actions, Documents and Information.
Buyer hereto agrees that it will, at any time, prior to, at or
after the Closing Date, take or cause to be taken such further actions, and
execute, deliver and file or cause to be executed, delivered and filed such
further documents and instruments and obtain such consents, as may be necessary
or reasonably requested by Seller in connection with the consummation of the
purchase and sale contemplated by this Agreement or in order to fully effectuate
the purposes, terms and conditions of this Agreement. Seller hereto agrees that
it will, at any time, prior to, at or after the Closing Date, take or cause to
be taken such further actions, and execute, deliver and file or cause to be
executed, delivered and filed such further documents and instruments and obtain
such consents, as may be necessary or reasonably requested by Buyer in
connection with the consummation of the purchase and sale contemplated by this
Agreement or in order to fully effectuate the purposes, terms and conditions of
this Agreement. Prior to the Closing Date, Seller shall provide to Buyer and
Buyer's counsel, accountants and other representatives, at Buyer's expense, all
information concerning the Assets and the Station reasonably requested thereby
in connection with the preparation by Buyer of any disclosure document or
registration statement to be filed with the Securities and Exchange Commission.
15.2 BROKERS.
Seller represents to Buyer that Seller has not engaged, or
incurred any unpaid liability (for any brokerage fees, finders' fees,
commissions or
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otherwise) to, any broker, finder or agent in connection with the transactions
contemplated by this Agreement; Buyer represents to Seller that Buyer has not
engaged, or incurred any unpaid liability (for any brokerage fees, finders'
fees, commissions or otherwise) to, any broker, finder or agent in connection
with the transactions contemplated by this Agreement; and Seller agrees to
indemnify Buyer, and Buyer agrees to indemnify Seller, against any claims
asserted against the other parties for any such fees or commissions by any
person purporting to act or to have acted for or on behalf of the indemnifying
party. Notwithstanding any other provision of this Agreement, this
representation and warranty shall survive the Closing without limitation and
shall not be subject to the Basket Amount contained in Section 12.4.
15.3 EXPENSES AND TAXES.
Each party hereto shall pay its own expenses incurred in
connection with this Agreement and in the preparation for and consummation of
the transactions provided for herein. Notwithstanding the foregoing, Seller and
Buyer shall each pay one-half of (i) any sales (including, without limitation,
bulk sales), use, documentary, stamp, gross receipts, registration, transfer,
conveyance, excise, recording, license and other similar Taxes and fees
("Transfer Taxes") applicable to, imposed upon or arising out of the
transactions contemplated hereby whether now in effect or hereinafter adopted
and regardless of which party such Tax or fee is imposed upon; provided that
Buyer shall not be required to pay any portion of Transfer Taxes relating to the
transfer by ▇▇▇▇▇▇▇▇▇ of the Assets to Seller, (ii) any filing fees incurred in
connection with the assignment of the FCC Licenses, and (iii) any filing fees
incurred in connection with any HSR Filings.
15.4 MAIL.
Seller hereby authorize and empower Buyer from and after the
Closing Date (a) to receive and open mail addressed to Seller and (b) to deal
with the contents thereof in any commercially reasonable manner, provided such
mail and the contents thereof relate to the Assets or to any of the Assumed
Liabilities hereunder. Seller agrees to deliver to Buyer any mail, checks or
other documents received by it pertaining to the Assets or any of the Assumed
Liabilities hereunder. Buyer agrees to deliver to Seller any mail which it
receives that does not pertain to the Assets or the Assumed Liabilities.
15.5 NOTICES.
All notices, demands, requests, or other communications which
may be or are required to be given or made by any party to any other party
pursuant to this Agreement shall be in writing and shall be hand delivered,
mailed by first-class registered or certified mail, return receipt requested,
postage prepaid,
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delivered by overnight air courier, or transmitted by telegram or facsimile
transmission addressed as follows:
(i) If to Buyer:
USA Networks, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President/Chief Executive Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with copies (which shall not constitute notice) to:
USA Networks, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
General Counsel/Senior Vice President
of Corporate Development
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to Seller:
▇▇▇▇▇▇ Communications, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy (which shall not constitute notice) to:
Dow, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, PLLC
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn.: ▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address as the addressee may indicate by written notice to the
other parties.
Each notice, demand, request, or communication which shall be
given or made in the manner described above shall be deemed sufficiently given
or made for all purposes at such time as it is delivered to the addressee (with
the return receipt, the delivery receipt, the affidavit of messenger or the
answerback being deemed conclusive but not exclusive evidence of such delivery)
or at such time as delivery is refused by the addressee upon presentation.
15.6 WAIVER.
No delay or failure on the part of any party hereto in
exercising any right, power or privilege under this Agreement or under any other
instrument or document given in connection with or pursuant to this Agreement
shall impair any such right, power or privilege or be construed as a waiver of
any default or any acquiescence therein. No single or partial exercise of any
such right, power or privilege shall preclude the further exercise of such
right, power or privilege, or the exercise of any other right, power or
privilege. No waiver shall be valid against any party hereto unless made in
writing and signed by the party against whom enforcement of such waiver is
sought and then only to the extent expressly specified therein.
15.7 BENEFIT AND ASSIGNMENT.
Except as hereinafter specifically provided in this Section
15.7 or in Section 11.1.3, no party hereto shall assign this Agreement, in whole
or in part, whether by operation of law or otherwise, without the prior written
consent of Seller (if the assignor is Buyer) or Buyer (if the assignor is
Seller); and any purported assignment contrary to the terms hereof shall be
null, void and of no force and effect. In no event shall any assignment by any
party of its rights and obligations under this Agreement, whether before or
after the Closing, release such party from its liabilities hereunder.
Notwithstanding the foregoing, Buyer or any permitted assignee of Buyer may
assign all or any portion of its rights and interest herein, (i) to any
subsidiary of Buyer or to one or more entities controlling,
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controlled by, or under common control with Buyer and/or to the Exchange Agent
in order to effect Buyer's deferred like-kind exchange in accordance with
applicable requirements of the Code and the regulations of theDepartment of
Treasury thereunder; provided, however, that such assignment shall not deprive
Seller of any material rights or benefits or relieve Buyer of any obligations or
liabilities under this Agreement or the other Buyer Documents, (ii) Seller shall
not be obligated to expend funds or incur obligations or liabilities in
connection therewith, (iii) Buyer shall indemnify and hold harmless Seller from
and against any and all Losses arising or resulting from such like-kind exchange
transaction, and (iv) such assignment shall not delay the grant of the FCC
Order.
This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns as
permitted hereunder. No person or entity other than the parties hereto is or
shall be entitled to bring any action to enforce any provision of this Agreement
against any of the parties hereto, and the covenants and agreements set forth in
this Agreement shall be solely for the benefit of, and shall be enforceable only
by, the parties hereto or their respective successors and assigns as permitted
hereunder.
15.8 ENTIRE AGREEMENT; AMENDMENT.
This Agreement, including the Schedules and Exhibits hereto,
and the other instruments and documents referred to herein or delivered pursuant
hereto (including the Letter Agreement), contain the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior oral
or written agreements, commitments or understandings with respect to such
matters. No amendment, modification or discharge of this Agreement shall be
valid or binding unless set forth in writing and duly executed by the party or
parties against whom enforcement of the amendment, modification or discharge is
sought.
15.9 SEVERABILITY.
If any part of any provision of this Agreement or any other
Contract, agreement, document or writing given pursuant to or in connection with
this Agreement shall be invalid or unenforceable under applicable law, such part
shall be ineffective to the extent of such invalidity or unenforceability only,
without in any way affecting the remaining parts of such provisions or the
remaining provisions of said Contract, agreement, document or writing.
15.10 HEADINGS.
The headings of the sections and subsections contained in this
Agreement are inserted for convenience only and do not form a part or affect the
meaning, construction or scope thereof.
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15.11 GOVERNING LAW.
This Agreement, the rights and obligations of the parties
hereto, and any claims or disputes relating thereto, shall be governed by and
construed under and in accordance with the laws of the State of New York,
excluding the choice of law rules thereof.
15.12 LIQUIDATED DAMAGES.
Seller and Buyer have provided for liquidated damages as a
remedy for Seller under Section 11.1.2 after having considered carefully the
anticipated and actual ▇▇▇▇▇ and losses that would be incurred if Buyer
exercises its Termination Option and thus fails to perform its obligations to
close, the difficulty of ascertaining at this time the actual amount of damages,
special and general, that Seller will suffer in such event, and the
inconvenience or non-feasibility of otherwise obtaining an adequate remedy in
such event.
15.13 SIGNATURE IN COUNTERPARTS.
This Agreement may be executed in separate counterparts, none
of which need contain the signatures of all parties, each of which shall be
deemed to be an original, and all of which taken together constitute one and the
same instrument. It shall not be necessary in making proof of this Agreement to
produce or account for more than the number of counterparts containing the
respective signatures of, or on behalf of, all of the parties hereto.
15.14 EARLY TERMINATION RIGHTS
15.14.1 EXECUTION OF AGREEMENT WITH BLACKSTAR L.L.C.;
▇▇▇▇▇▇▇▇▇ CONSENT. Notwithstanding anything herein to the contrary, in the
event that USA and Blackstar L.L.C. fail to enter into a Definitive Agreement
within thirty (30) days of the date hereof with respect to the Blackstar
Acquisition, Buyer shall have the right to terminate this Agreement by providing
written notice of such termination to Seller no later than thirty (30) days
following the date hereof. In addition, Buyer shall have the right to terminate
this Agreement by providing written notice of such termination to Seller no
later than five (5) days after Seller has notified Buyer that it has been unable
to obtain the ▇▇▇▇▇▇▇▇▇ Consent (including, without limitation the amendment
described in Section 2.3(a)). Upon any such termination, neither Buyer nor
Seller shall have any obligations hereunder except as set forth in Section 6.3,
Section 7.1 and Section 15.3. If Buyer fails to deliver a termination notice in
accordance with the requirements of this Section 15.14.1, then Buyer shall be
deemed to have waived its termination rights under this Section 15.14.1.
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15.14.2 ▇▇▇▇▇▇▇▇▇ CONSENT. Notwithstanding anything herein to
the contrary, Seller shall use its commercially reasonable efforts to obtain as
soon as possible ▇▇▇▇▇▇▇▇▇'▇ consent to the transactions contemplated hereby as
set forth in Section 2.3, but shall not be required to pay or deliver any
consideration to ▇▇▇▇▇▇▇▇▇ other than as set forth in the Option Documents (the
"▇▇▇▇▇▇▇▇▇ Consent"); provided, however, in the event that Seller has failed to
obtain the ▇▇▇▇▇▇▇▇▇ Consent within thirty (30) days of the date hereof, Seller
shall have the right to terminate this Agreement by providing written notice of
such termination to Buyer no later than thirty (30) days following the date
hereof. Upon such termination, neither Buyer nor Seller shall have any
obligations hereunder except as set forth in Section 6.3, Section 7.1 and
Section 15.3. If Seller fails to deliver a termination notice in accordance with
the requirements of this Section 15.14.2, then Seller shall be deemed to have
waived its termination right under this Section 15.14.
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IN WITNESS WHEREOF, each of the parties hereto has executed
this Asset Purchase Agreement, or has caused this Asset Purchase Agreement to be
duly executed and delivered in its name on its behalf, all as of the day and
year first above written.
BUYER:
SKMD BROADCASTING
PARTNERSHIP
By USA Station Group of
Maryland, Inc., General Partner
By
---------------------------------
USA STATION GROUP OF
MARYLAND, INC.
By
---------------------------------
SELLER:
▇▇▇▇▇▇ COMMUNICATIONS OF
ATLANTA-14, INC.
By
---------------------------------
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