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Exhibit 2.1
PURCHASE AND SALE AGREEMENT
FOR
▇▇▇ ENTERPRISES, INCORPORATED,
NEW MEXICO BROADCASTING CO.,
AND
EMMIS COMMUNICATIONS CORPORATION
May 7, 2000
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PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is made and entered
into as of May 7, 2000 by and among ▇▇▇ Enterprises, Incorporated, a Delaware
corporation ("▇▇▇"), and New Mexico Broadcasting Co., a New Mexico corporation
("NMBC", and ▇▇▇ and NMBC sometimes referred to in this Agreement, individually
and collectively, as "▇▇▇-NMBC"), and Emmis Communications Corporation, an
Indiana corporation (the "Purchaser").
WITNESSETH:
WHEREAS, ▇▇▇ owns and operates television stations WSAZ-TV ("Station
WSAZ") in Charleston-Huntington, West Virginia; KGMB-TV ("Station KGMB") in
Honolulu, Hawaii, and television station satellites KGMD ("Station KGMD") in
Hilo, Hawaii, and KGMV ("Station KGMV") in Wailuku, Hawaii; KGUN-TV ("Station
KGUN") in Tucson, Arizona and KMTV-TV ("Station KMTV") in Omaha, Nebraska.
WHEREAS, ▇▇▇ owns all of the outstanding capital stock of KOIN-TV,
Inc., a Delaware corporation ("KOIN"), and KOIN owns and operates television
station KOIN-TV and an operating division, MIRA MOBILE TELEVISION (KOIN-TV and
MIRA MOBILE are collectively, "Station KOIN") in Portland, Oregon.
WHEREAS, ▇▇▇ owns all of the outstanding capital stock of NMBC and NMBC
owns and operates television station KRQE-TV ("Station KRQE") in Albuquerque,
New Mexico and television station satellites KBIM ("Station KBIM") in Roswell,
New Mexico, and KREZ-TV in Durango, Colorado-Farmington, New Mexico ("Station
KREZ" and together with Station WSAZ, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇ KGUN, Station KMTV, Station KRQE and Station KBIM, the "▇▇▇-NMBC
Stations," and individually a "▇▇▇-NMBC Station").
WHEREAS, ▇▇▇ owns all of the outstanding capital stock of SJL of Kansas
Corp., a Kansas corporation ("SJL-Kansas"), and SJL-Kansas owns and operates
television station KSNW-TV ("Station KSNW") in Wichita, Kansas, and television
station satellites KSNG-TV ("Station KSNG") in Garden City, Kansas, KSNC-TV
("Station KSNC") in Great Bend, Kansas, and KSNK-TV ("Station KSNK") in Oberlin,
Kansas-McCook, Nebraska; SJL-Kansas owns all of the outstanding shares of
capital stock of Wichita License Subsidiary Corp., a Delaware corporation
("Wichita License Sub"), and all of the outstanding capital stock of Topeka
Television Corporation, a Missouri corporation ("Topeka"); Topeka owns all of
the outstanding shares of capital stock of Topeka License Subsidiary Corp., a
Delaware corporation ("Topeka License Sub" and together with KOIN, SJL-Kansas,
Wichita License Sub and Topeka, the "Acquired Companies," and individually an
"Acquired Company"), and Topeka owns and operates television station KSNT-TV in
Topeka, Kansas ("Station KSNT" and together with
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Station KOIN, Station KSNW, Station KSNG, Station KSNC, Station KSNK, the
"Acquired Companies' Stations," and individually an "Acquired Company Station").
WHEREAS, the Purchaser desires to purchase from ▇▇▇-NMBC, and ▇▇▇-NMBC
desires to sell to the Purchaser, substantially all of the assets of ▇▇▇-NMBC
owned, used or held for use by ▇▇▇-NMBC primarily to conduct the operations of
the ▇▇▇-NMBC Stations, and in connection therewith, the Purchaser has agreed to
assume certain Liabilities of ▇▇▇-NMBC relating to the ▇▇▇-NMBC Stations, all
upon the terms and subject to the conditions set forth herein (the "Asset
Purchase").
WHEREAS, the Purchaser desires to purchase from ▇▇▇, and ▇▇▇ desires to
sell to the Purchaser, all of the issued and outstanding capital stock of the
Acquired Companies, all upon the terms and are subject to the conditions set
forth herein (the "Stock Purchase").
WHEREAS, ▇▇▇-NMBC and ▇▇▇, on behalf of each Acquired Company, and the
Purchaser desire to make certain representations, warranties, covenants and
agreements in connection with the Asset Purchase and Stock Purchase, all as more
fully set forth herein.
AGREEMENT
NOW THEREFORE, in consideration of the foregoing premises, the mutual
covenants, promises and agreements hereinafter set forth, the mutual benefits to
be gained by the performance of such covenants, promises and agreements, and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged and accepted, the parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Certain Definitions. For all purposes of and under this Agreement,
the following terms shall have the respective meanings set forth below:
(a) "Action" means any claim, demand, action, suit or
proceeding, arbitral action, governmental inquiry or criminal prosecution.
(b) "Affiliate" means any "affiliate" as defined in Rule
144(a)(1) promulgated under the Securities Act.
(c) "Business Day" means any weekday (Monday through Friday)
on which commercial banks in Chicago, Illinois are open for business.
(d) "Code" means the Internal Revenue Code of 1986, as
amended, any successor statute thereto, and the rules and regulations
promulgated thereunder.
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(e) "Communications Act" means the Communications Act of 1934,
as amended, any successor statute thereto, and the rules, regulations and
written policies of the FCC promulgated thereunder.
(f) "Confidentiality Agreement" means the letter agreement
between ▇▇▇ and the Purchaser, dated as of March 6, 2000.
(g) "Contract" means any contract, agreement, indenture, note,
bond, instrument, lease, conditional sales contract, mortgage, license,
franchise agreement, concession agreement, insurance policy, security interest,
guaranty, binding commitment or other agreement or arrangement, whether written
or oral.
(h) "Encumbrance" means any security interest, pledge,
mortgage, lien, charge, adverse claim of ownership or use, restriction on
transfer (such as a right of first refusal or other similar right), defect of
title, or other encumbrance of any kind or character.
(i) "Environmental Law" means any Law pertaining to land use,
air, soil, surface water, groundwater (including the protection, cleanup,
removal, remediation or damage thereof), public or employee health or safety or
any other environmental matter, including the following laws as in effect on the
Closing Date: (i) Clean Air Act (42 U.S.C. Section 7401, et seq.); (ii) Clean
Water Act (33 U.S.C. Section 1251, et seq.); (iii) Resource Conservation and
Recovery Act (42 U.S.C. Section 6901, et seq.); (iv) Comprehensive Environmental
Resource Compensation and Liability Act (42 U.S.C. Section 9601, et seq.); (v)
Safe Drinking Water Act (42 U.S.C. Section 300f, et seq.); (vi) Toxic Substances
Control Act (15 U.S.C. Section 2601, et seq.); (vii) Rivers and Harbors Act (33
U.S.C. Section 401, et seq.); (viii) Endangered Species Act (16 U.S.C. Section
1531, et seq.); (ix) Occupational Safety and Health Act (29 U.S.C. Section 651,
et seq.); and (x) any other Laws relating to Hazardous Materials or Hazardous
Materials Activities.
(j) "ERISA" means the Employee Retirement Income Security Act
of 1974, as amended, any successor statute thereto, and the rules and
regulations promulgated thereunder.
(k) "Exchange Act" means the Securities Exchange Act of 1934,
as amended, any successor statute thereto, and the rules and regulations
promulgated thereunder.
(l) "FCC" means the United States Federal Communications
Commission, and any successor agency thereto.
(m) "FCC Licenses" means all licenses, authorizations, permits
and other authorizations issued by the FCC for the operation of the ▇▇▇-NMBC
Stations and the Acquired Companies' Stations, as the case may be, all of which
are set forth in SCHEDULE 4.8(B) hereto.
(n) "FCC Transfer Application" means the written application
to be filed with the FCC requiring its written consent to the assignment or the
transfer of control of each of the FCC Licenses to Purchaser or any of its
Subsidiaries, as the case may be, or each of their permitted assignees or
designees.
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(o) "Final Determination" means the final resolution of
liability for any Tax for a Taxable Period, including any related interest or
penalties, that is final and nonappealable, including by reason of the
expiration of the applicable statute of limitations.
(p) "Final Order" means an order or action by the FCC, that by
reason of expiration of time or exhaustion of remedies, is no longer subject to
administrative or judicial reconsideration, or review or rehearing.
(q) "Funded Debt" means all indebtedness for borrowed money,
all obligations under leases which in accordance with GAAP constitute capital
leases, all notes payable and drafts accepted representing extensions of credit
and any guarantee obligation with respect to any of the foregoing, as applied to
the ▇▇▇-NMBC Stations or any Acquired Company.
(r) "GAAP" means generally accepted accounting principles in
the United States on the date of this Agreement.
(s) "Governmental Authority" means any government, any
governmental entity, department, commission, board, agency or instrumentality,
and any court, tribunal, or judicial body, in each case whether federal, state,
county, provincial, local or foreign.
(t) "Governmental Order" means any statute, rule, regulation,
order, judgment, injunction, decree, stipulation or determination issued,
promulgated or entered by or with any Governmental Authority of competent
jurisdiction.
(u) "Hazardous Material" means any material or substance that
is prohibited or regulated by any Environmental Law or that has been designated
by any Governmental Authority to be radioactive, toxic, hazardous or otherwise a
danger to health, reproduction or the environment, including asbestos,
petroleum, radon gas and radioactive matter.
(v) "Hazardous Materials Activity" means the handling,
transportation, transfer, recycling, storage, use, treatment, manufacture,
investigation, removal, remediation, release, exposure of others to, sale or
other distribution of any Hazardous Material or any product containing a
Hazardous Material.
(w) "HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended, any successor statute thereto, and the
rules and regulations promulgated thereunder.
(x) "Income Tax" means any federal, state, county, provincial,
local or foreign income, franchise, business profits or other similar Tax, any
estimated Tax related thereto, any interest and penalties (civil or criminal)
thereon or additions thereto.
(y) "Intellectual Property" means any (i) United States and
foreign patents, patent applications, patent disclosures and improvements
thereto, (ii) United States, state or
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foreign trademarks, service marks, trade dress, logos, trade names and corporate
names, the goodwill associated therewith, and the registrations and applications
for registration thereof, (iii) United States and foreign copyrights, and the
registrations and applications for registration thereof, and (iv) websites and
domain names.
(z) "IRS" means the United States Internal Revenue Service,
and any successor agency thereto.
(aa) "Knowledge of" "known to" and phrases of similar import
mean the actual knowledge of each executive officer of ▇▇▇-NMBC and each
Acquired Company or Purchaser, as the case may be, together with each General
Manager and Chief Engineer of the ▇▇▇-NMBC Stations and Acquired Companies'
Stations, without obligation of inquiry.
(bb) "Law" means any federal, state, county, provincial, local
or foreign statute, law, ordinance, regulation, rule, code or rule of common
law.
(cc) "▇▇▇ Documents" means, collectively, the (i) the Grant
Deeds, (ii) the ▇▇▇▇ of Sale, (iii) the Assignment and Assumption, (iv) the
Assignment of Proprietary Rights, (v) the Stock Certificates, and (vi) any other
document executed and delivered at the Closing under or in connection with this
Agreement by or on behalf of ▇▇▇-NMBC or any of the Acquired Companies.
(dd) "Liability" means any direct or indirect debt, obligation
or liability of any kind or nature, whether accrued or fixed, absolute or
contingent, determined or determinable, matured or unmatured, and whether due or
to become due, asserted or unasserted, or known or unknown, and regardless of
whether required by GAAP to be reflected in a balance sheet or disclosed in the
related notes.
(ee) "License" means any franchise, approval, permit, order,
authorization, consent, license, registration or filing, certificate, variance
and any other similar right obtained from or filed with any Governmental
Authority.
(ff) "Lien" means any adverse claim, restriction on voting or
transfer or pledge, lien, charge, Encumbrance or security interest of any kind.
(gg) "Loss or Losses" means any claims, demands, Liabilities,
losses, damages, deficiencies, assessments, judgments, remediations and costs or
expenses (including reasonable attorneys', consultants' and experts' fees and
expenses but excluding punitive damages for breach of this Agreement or any ▇▇▇
Document).
(hh) "Material Adverse Effect" means any change or effect that
is materially adverse to the assets, properties, operations, business, financial
condition or results of operations of the ▇▇▇-NMBC Stations and the Acquired
Companies' Stations, taken as a whole, except for any such change or effect
resulting directly or indirectly from (i) the transactions contemplated by this
Agreement, (ii) the announcement or other disclosure of the transactions
contemplated by
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this Agreement, (iii) regulatory changes, (iv) changes in conditions generally
applicable to the television broadcasting industry, or in general economic
conditions in the geographic regions in which such stations are operated; or (v)
circumstances that are not likely to recur and have been substantially restored
or will be substantially restored in the near future.
(ii) "Permitted Encumbrances" means (i) Encumbrances for
inchoate mechanics' and materialmen's liens for construction in progress and
workmen's, repairmen's, warehousemen's and carriers' liens arising in the
ordinary course of business securing amounts not in default; (ii) Encumbrances
for Taxes and other Liabilities not yet due and payable, and for Taxes and other
Liabilities being contested in good faith, (iii) Encumbrances securing
liabilities shown on the Financial Statements, (iv) Encumbrances and
imperfections of title (including but not limited to those contained in a
standard pre-printed ALTA exception) the existence of which do not, and would
not reasonably be expected as of the date hereof to, materially detract from the
value of, interfere with, or otherwise affect the use and enjoyment of the
property subject thereto or affected thereby, consistent with past practice, and
(v) solely with respect to Owned Real Property, provided that the following are
not violated by existing improvements in any material respect and do not
prohibit or materially restrict the continued use and operation of such Owned
Real Property for the same uses and operations as currently conducted, or grant
any third party any option or right to acquire or lease a material portion
thereof, (A) easements, rights of way and other similar restrictions which would
be shown by a current title report, (B) conditions that may be shown by a
current survey, title report or visual site inspection, and (C) zoning, building
and other similar restrictions imposed by applicable Law.
(jj) "Person" means any individual, general or limited
partnership, firm, corporation, limited liability company, association, trust,
unincorporated organization or other entity.
(kk) "Proprietary Rights" means (i) Intellectual Property,
(ii) trade secrets and confidential business information (including ideas,
formulas, compositions, inventions (whether patentable or unpatentable and
whether or not reduced to practice), knowhow, research and development
information, software, drawings, specifications, designs, plans, proposals,
technical data, copyrightable works, financial, marketing and business data,
pricing and cost information, business and marketing plans and customer and
supplier lists and information), (iii) other proprietary rights, (iv) copies and
tangible embodiments thereof (in whatever form or medium), and (v) licenses
granting any rights with respect to any of the foregoing.
(ll) "Securities Act" means the Securities Act of 1933, as
amended, any successor statute thereto, and the rules and regulations
promulgated thereunder.
(mm) "Subsidiary" means, unless otherwise indicated with
respect to a Person, any other Person in which such Person has a direct or
indirect equity interest or other ownership interest in excess of fifty percent
(50%).
(nn) "Tax" means any federal, state, county, provincial, local
or foreign income, gross receipts, sales, use, ad valorem, employment,
severance, transfer, gains, profits,
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excise, franchise, property, capital stock, premium, minimum and alternative
minimum or other taxes, fees, levies, duties, assessments or charges of any kind
or nature whatsoever imposed by any Governmental Authority (whether payable
directly or by withholding), together with any interest, penalties (civil or
criminal), additions to, or additional amounts imposed by, any Governmental
Authority with respect thereto, and any expenses incurred in connection with the
determination, settlement or litigation of any Liability therefor.
(oo) "Tax Benefit" means, with respect to any Taxable Period,
the amount of the actual reduction in an indemnified party's liability for Taxes
payable for the Taxable Period as a result of the payment or accrual of any Loss
indemnifiable under this Agreement. The amount, if any, of a Tax Benefit with
respect to a Taxable Period arising from the payment or accrual of any Loss
indemnifiable under this Agreement shall be determined after first reducing
Taxes for the Taxable Period by taking into account all other applicable credits
and items of loss, deduction and similar items.
(pp) "Tax Cost" means, with respect to any Taxable Period, the
amount of the actual increase in an indemnified party's liability for Taxes
payable for the Taxable Period (including as a result of any decrease in a Tax
refund or credit) as a result of the accrual or receipt of payment for any Loss
for which the indemnified party is entitled to indemnification under this
Agreement.
(qq) "Tax Return" means a report, return or other information
required to be supplied to a Governmental Authority with respect to any Tax.
(rr) "Taxable Period" means any taxable year or any other
period that is treated as a taxable year with respect to which any Tax may be
imposed under any applicable statute, rule or regulation.
1.2 Certain Additional Definitions. For all purposes of and under this
Agreement, the following terms shall have the respective meanings ascribed
thereto in the respective sections of this Agreement set forth opposite each
such term below:
TERM SECTION
Acquired Companies Recitals
Acquired Companies' Closing Liabilities 2.7(b)(i)
Acquired Companies' Common Stock 2.6
Acquired Companies' Stations Recitals
Acquired Company Recitals
Acquired Company Station Recitals
Agreement Preamble
Asset Purchase Recitals
Asset Purchase Cash Payment 2.3(a)
Asset Purchase Notice of Disagreement 2.3(b)(v)
Asset Purchase Price 2.3(a)
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Assignment and Assumption 3.2(a)(iii)
Assignment of Proprietary Rights 3.2(a)(iv)
Assumed Liabilities of the ▇▇▇-NMBC Stations 2.2(b)
Benefit Plan(s) 4.10(a)
▇▇▇▇ of Sale 3.2(a)(ii)
Cash Payment 2.9
Claimant 8.3(a)
Closing 3.1
Closing Date 3.1
Closing Adjusted Net Worth of the Acquired Companies 2.7(b)(ii)
COBRA 4.10(a)
Contract of the ▇▇▇-NMBC Stations 2.1(b)(ii)
Contracts of the ▇▇▇-NMBC Stations 2.1(b)(ii)
CST 3.1
Employee 4.9
Employees 4.9
Excluded Assets of the ▇▇▇-NMBC Stations 2.1(c)
Excluded Liabilities of the ▇▇▇-NMBC Stations 2.2(c)
Financial Statements 4.12
Grant Deeds 3.2(a)(i)
Indemnitor 8.3(a)
Independent Accountant 2.3(b)(v)
Insurance Policies 4.17(a)
Interest Rate 2.3(b)(iv)
KOIN Recitals
KOIN Common Stock 4.3(a)
Leased Assets 4.5(a)
Leased Real Property 4.5(a)
▇▇▇ Preamble & 9.1(a)
▇▇▇-NMBC Preamble
▇▇▇-NMBC Hawaii Stations 6.4(c)
▇▇▇-NMBC Station Recitals
▇▇▇-NMBC Stations Recitals
License of the ▇▇▇-NMBC Stations 2.1(b)(iii)
Licenses of the ▇▇▇-NMBC Stations 2.1(b)(iii)
Material Contract 4.7(a)
Material Contracts 4.7(a)
Material License 4.8(a)
Material Licenses 4.8(a)
NMBC Preamble
Owned Real Property 4.5(a)
Preliminary Statement of Closing Adjusted Net Worth of 2.7(c)(i)
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the Acquired Companies
Preliminary Statement of Working Capital of the ▇▇▇-NMBC Stations 2.3(b)(ii)
Purchased Assets of the ▇▇▇-NMBC Stations 2.1(b)
Purchaser Preamble
Purchaser's Hawaii Stations 6.4(c)
Purchaser's Plans 6.9(a)
Schedules 6.11
Short Term Agreement 4.7(a)
SJL-Kansas Recitals
SJL-Kansas Common Stock 4.3(b)
Spin-Off Applications 6.4(c)
Statement of Closing Adjusted Net Worth of the Acquired Companies 2.7(c)(ii)
Statement of Working Capital of the ▇▇▇-NMBC Stations 2.3(b)(iii)
Station KBIM 2.3(b)
Station KGMB Recitals
Station KGUN Recitals
Station KMTV Recitals
Station KOIN Recitals
Station KREZ Recitals
Station KRQE Recitals
Station KSNC Recitals
Station KSNG Recitals
Station KSNK Recitals
Station KSNT Recitals
Station KSNW Recitals
Station WSAZ Recitals
Stock Certificates 3.2(a)(vii)
Stock Purchase Recitals
Stock Purchase Cash Payment 2.7(a)
Stock Purchase Notice of Disagreement 2.7(c)(iv)
Stock Purchase Price 2.7(a)
Termination Date 9.1(b)
Topeka Recitals
Topeka License Sub Recitals
Transferred Employees 6.9(a)
Transferred Non-Union Employees 6.9(a)
Transferred Union Employees 6.9(a)
Violation 8.5(e)
Wichita License Sub Recitals
Working Capital of the ▇▇▇-NMBC Stations 2.3(b)(i)
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ARTICLE 2
PURCHASE AND SALE
2.1 Purchase and Sale of Purchased Assets of the ▇▇▇-NMBC Stations.
(a) Purchase and Sale of Purchased Assets of ▇▇▇-NMBC
Stations. Upon the terms and subject to the conditions set forth herein, at the
Closing, the Purchaser shall purchase from ▇▇▇-NMBC, and ▇▇▇-NMBC shall
irrevocably sell, convey, transfer, assign and deliver to the Purchaser, free
and clear of all Liens other than Permitted Encumbrances, all right, title and
interest in and to the Purchased Assets of the ▇▇▇-NMBC Stations (as defined
below).
(b) Definition of Purchased Assets of the ▇▇▇-NMBC Stations.
For all purposes of and under this Agreement, the term "Purchased Assets of the
▇▇▇-NMBC Stations" shall mean, refer to and include all of ▇▇▇'▇ and NMBC's
right, title and interest in and to all tangible and intangible assets,
properties and rights which are owned, used or held for use by ▇▇▇-NMBC
primarily to conduct the operations of the ▇▇▇-NMBC Stations, including, except
for the Excluded Assets of the ▇▇▇-NMBC Stations, all right, title and interest
of ▇▇▇ and NMBC in and to all real property (including the Owned Real Property
of the ▇▇▇-NMBC Stations set forth in SCHEDULE 4.5(a) hereto), and any
leaseholds and sub-leaseholds therein (including leases for the Leased Real
Property of the ▇▇▇-NMBC Stations set forth in SCHEDULE 4.5(a) hereto),
buildings, structures, improvements, fixtures, furnishings and other fittings
thereon, and easements, rights-of-way, and other appurtenances thereto, all
tangible personal property (whether or not located on any of the premises of the
▇▇▇-NMBC Stations and including the tangible personal property set forth in
SCHEDULE 4.5(a) hereto) including all machinery, equipment and tools, furniture
and furnishings, computers and computer supplies, office materials and supplies,
automobiles, trucks and other vehicles, inventories of any kind or nature,
materials and supplies, purchased goods, all accounts, notes and other
receivables, all prepaid assets and expenses, and all books, records (other than
records relating to Income Taxes), ledgers, files, documents, correspondence,
customer, supplier, advertiser, and other lists, invoices and sales data,
creative, advertising and other promotional materials, studies, reports, and
other printed or written materials or data, and specifically including the
following:
(i) Proprietary Rights (including the Intellectual
Property of the ▇▇▇-NMBC Stations set forth in SCHEDULE 4.6(a) hereto), goodwill
associated therewith, licenses and sublicenses granted and obtained with respect
thereto, rights thereunder, remedies against infringements thereof, and rights
to protection of interests therein under the applicable Laws of all
jurisdictions;
(ii) Contracts to which ▇▇▇-NMBC is a party or by
which its assets or properties are bound which primarily relate to the
operations of the ▇▇▇-NMBC Stations (each, a "Contract of the ▇▇▇-NMBC Stations"
and, collectively, "Contracts of the ▇▇▇-NMBC Stations") (including the Material
Contracts of the ▇▇▇-NMBC Stations set forth in SCHEDULE 4.7(a) hereto), and all
rights thereunder;
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(iii) Licenses owned or possessed by ▇▇▇-NMBC (each,
a "License of the ▇▇▇-NMBC Stations" and, collectively, "Licenses of the
▇▇▇-NMBC Stations") (including the FCC Licenses of the ▇▇▇-NMBC Stations and the
Material Licenses of the ▇▇▇-NMBC Stations), and all rights thereunder;
(iv) rights in or to all Assumed Plans of the
▇▇▇-NMBC Stations, and any and all assets associated with or allocated to the
Employees of the ▇▇▇-NMBC Stations thereunder;
(v) any and all refunds of Taxes relating primarily
to the ▇▇▇-NMBC Stations other than refunds of Income Taxes;
(vi) Actions, deposits, prepayments, refunds, causes
of action, chooses in action, rights of recovery, rights of set off, and rights
of recoupment of any kind or nature (including any such item relating to Taxes
other than Income Taxes) relating to the Purchased Assets of the ▇▇▇-NMBC
Stations or the Assumed Liabilities; and.
(vii) Upon reimbursement at the closing for all
amounts paid by or due from iBlast, Inc. to ▇▇▇, either as a capital
contribution or loan or other form of indebtedness (such reimbursement not to
exceed, however, $750,000 in the aggregate), all capital stock of or other
equity interests in iBlast, Inc.
(c) Definition of Excluded Assets of the ▇▇▇-NMBC Stations.
Notwithstanding anything to the contrary set forth in this Section 2.1 or
elsewhere in this Agreement, the term "Purchased Assets of the ▇▇▇-NMBC
Stations" shall not mean, refer to or include the following (collectively, the
"Excluded Assets of the ▇▇▇-NMBC Stations"):
(i) the corporate charter and bylaws, qualifications
to transact business as a foreign corporation, arrangements with registered
agents relating to foreign qualifications, taxpayer and other identification
numbers, seals, minute books, stock transfer books, blank stock certificates,
and other documents relating to the organization, maintenance, and existence of
▇▇▇ and NMBC as a corporation;
(ii) all assets, whether real or personal, tangible
or intangible, which are owned, used or held for use by ▇▇▇-NMBC which do not
primarily relate to the ▇▇▇-NMBC Stations, including such assets set forth in
SCHEDULE 2.1(c) hereto;
(iii) Contracts of the ▇▇▇-NMBC Stations described in
Section 2.5 that, in accordance with Section 2.5, are not assigned to the
Purchaser;
(iv) Nontransferable Licenses, other than FCC
Licenses, of the ▇▇▇-NMBC Stations described in Section 2.5 that, in accordance
with Section 2.5, are not assigned to the Purchaser;
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(v) rights in or to all Benefit Plans (other than
Assumed Plans of the ▇▇▇-NMBC Stations and employment agreements included in the
Contracts of the ▇▇▇-NMBC Stations), and all assets associated with or allocated
to the Employees of the ▇▇▇-NMBC Stations thereunder;
(vi) cash and cash equivalents;
(vii) any and all refunds of Income Taxes;
(viii) Actions, deposits, prepayments, refunds,
causes of action, chooses in action, rights of recovery, rights of set off, and
rights of recoupment of any kind or nature (including any such item relating to
Income Taxes) relating to the Excluded Assets of the ▇▇▇-NMBC Stations or the
Excluded Liabilities of the ▇▇▇-NMBC Stations;
(ix) refunds paid or payable in connection with the
cancellation or discontinuance of any insurance policies applicable to the
▇▇▇-NMBC Stations (including the Insurance Policies of the ▇▇▇-NMBC Stations set
forth in SCHEDULE 4.17 hereto) following the Closing;
(x) all rights of ▇▇▇-NMBC under this Agreement, any
agreement, certificate, instrument or other document executed and delivered by
▇▇▇-NMBC in connection with the transactions contemplated hereby, or any side
agreement between ▇▇▇-NMBC and the Purchaser entered into on or after the date
of this Agreement related primarily to the ▇▇▇-NMBC Stations; and
2.2 Assumption of Liabilities.
(a) Assumption. Upon the terms and subject to the conditions
set forth herein, at the Closing the Purchaser shall assume from ▇▇▇-NMBC (and
therefore pay, perform and discharge), and ▇▇▇-NMBC shall irrevocably convey,
transfer and assign to the Purchaser, all of the Assumed Liabilities of the
▇▇▇-NMBC Stations (as defined below).
(b) Definition of Assumed Liabilities of the ▇▇▇-NMBC
Stations. For all purposes of and under this Agreement, the term "Assumed
Liabilities of the ▇▇▇-NMBC Stations" shall mean (i) the liabilities of the
▇▇▇-NMBC Stations included in the determination of the Working Capital of the
▇▇▇-NMBC Stations pursuant to Section 2.3(b), (ii) the obligations of ▇▇▇-NMBC
arising during and attributable to any period after the Closing under the
Contracts, Licenses and Assumed Plans of the ▇▇▇-NMBC Stations that are assigned
to Purchaser at Closing in accordance with this Agreement (excluding (A) any
obligations or liabilities of ▇▇▇-NMBC under any such Contract, License or
Assumed Plan resulting from the failure to obtain any consent required in
connection with the transactions contemplated by this Agreement, (B) any default
under any such Contract, License or Assumed Plan prior to or as a result of the
Closing, and (C) any bonus or other payment or benefit conditioned upon or
payable in connection with or as a result of the Closing under any employment
agreement, or calculated
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with reference to the financial terms, of the transactions contemplated by this
Agreement), and (iii) the obligations of ▇▇▇-NMBC arising during and
attributable to any period after the Closing under any other Contracts of the
▇▇▇-NMBC Stations not assigned to Purchaser in accordance with this Agreement
but only as and to the extent provided in Section 2.5 hereof.
(c) Definition of Excluded Liabilities of the ▇▇▇-NMBC
Stations. The term "Excluded Liabilities of the ▇▇▇-NMBC Stations" shall mean
all Liabilities of ▇▇▇-NMBC other than the Assumed Liabilities of the ▇▇▇-NMBC
Stations. Purchaser shall not assume any of the Excluded Liabilities of the
▇▇▇-NMBC Stations.
2.3 Consideration for Purchased Assets of the ▇▇▇-NMBC Stations.
(a) Consideration. Subject to Section 2.3(b) hereof, the
purchase price (the "Asset Purchase Price") for the Purchased Assets of the
▇▇▇-NMBC Stations shall be (i) the portion of the Cash Payment (as defined in
Section 2.9) allocated to the Purchased Assets of the ▇▇▇-NMBC Stations pursuant
to Section 2.9, which shall be paid in cash at the Closing (the "Asset Purchase
Cash Payment"), and (ii) the assumption by the Purchaser of the Assumed
Liabilities of the ▇▇▇-NMBC Stations pursuant to Section 2.2 hereof.
(b) Working Capital Adjustment of the ▇▇▇-NMBC Stations.
(i) For all purposes of and under this Agreement, the
term "Working Capital of the ▇▇▇-NMBC Stations" shall mean the current assets of
the ▇▇▇-NMBC Stations included within the Purchased Assets of the ▇▇▇-NMBC
Stations, minus the current liabilities of the ▇▇▇-NMBC Stations as of the close
of business on the date immediately preceding the Closing Date (the "Adjustment
Date"), each determined in accordance with GAAP applied in a manner consistent
with the preparation of the Financial Statements, and adjusted to exclude (1)
from current assets the current portion of program rights and (2) from current
liabilities the current portion of program liabilities and any reserve or
accrual for loss contingencies required by GAAP related to the matters disclosed
in SCHEDULE 4.14 hereto; provided, however, that current liabilities shall
include the amount or value of both cash and noncash consideration that has not
been paid or provided prior to the Closing Date for programming run by any of
the ▇▇▇-NMBC Stations prior to the Closing Date.
(ii) Three Business Days prior to the Closing Date,
▇▇▇ shall provide Purchaser with a reasonably detailed statement (the
"Preliminary Statement of Working Capital of the ▇▇▇-NMBC Stations") setting
forth ▇▇▇'▇ reasonable and good faith estimate of the Working Capital of the
▇▇▇-NMBC Stations. The Asset Purchase Cash Payment payable on the Closing Date
shall be decreased by the amount of any negative Working Capital of the ▇▇▇-NMBC
Stations shown on the Preliminary Statement of Working Capital of the ▇▇▇-NMBC
Stations or increased by the amount of any positive Working Capital of the
▇▇▇-NMBC Stations shown on the Preliminary Statement of Working Capital of the
▇▇▇-NMBC Stations.
(iii) As promptly as practicable, but in any event
within sixty (60) calendar days following the Closing, ▇▇▇ shall cause to be
prepared and delivered to the
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Purchaser a further determination and statement (the "Statement of Working
Capital of the ▇▇▇-NMBC Stations") setting forth the Working Capital of the
▇▇▇-NMBC Stations.
(iv) Within thirty (30) calendar days following
delivery of the Statement of Working Capital of the ▇▇▇-NMBC Stations pursuant
to Section 2.3(b)(iii) hereof or, if applicable, such later date determined in
accordance with Section 2.3(b)(v) hereof, ▇▇▇ shall pay the Purchaser the
amount, if any, by which the Working Capital of the ▇▇▇-NMBC Stations shown on
the Statement of Working Capital of the ▇▇▇-NMBC Stations is less than the
amount thereof shown on the Preliminary Statement of Working Capital of the
▇▇▇-NMBC Stations or (B) the Purchaser shall pay to ▇▇▇ the amount, if any, by
which the Working Capital of the ▇▇▇-NMBC Stations shown on the Statement of
Working Capital of the ▇▇▇-NMBC Stations is more than the amount thereof shown
on the Preliminary Statement of Working Capital of the ▇▇▇-NMBC Stations. Any
and all payments made pursuant to this Section 2.3(b)(iv) shall bear interest at
the three (3) month London Inter-Bank Offered Rate published in the Wall Street
Journal on the Closing Date (the "Interest Rate") for the period commencing on
the Closing Date and to but not including the date of payment, and shall be made
by wire transfer of immediately available funds to an account designated in
writing by the party to receive such payment. Any payment made pursuant to this
Section 2.3(b)(iv) shall be deemed to be an adjustment to the Asset Purchase
Price.
(v) If the Purchaser disagrees in good faith with the
Statement of Working Capital of the ▇▇▇-NMBC Stations, then the Purchaser shall
notify ▇▇▇ in writing (the "Asset Purchase Notice of Disagreement") of such
disagreement within thirty (30) calendar days following delivery of the
Statement of Working Capital of the ▇▇▇-NMBC Stations. The Asset Purchase Notice
of Disagreement shall set forth in reasonable detail the basis for the
disagreement described therein. Thereafter, ▇▇▇ and the Purchaser shall attempt
in good faith to resolve and finally determine the amount of the Closing Working
Capital of the ▇▇▇-NMBC Stations. If ▇▇▇ and the Purchaser are unable to resolve
the disagreement within thirty (30) calendar days following delivery of the
Asset Purchase Notice of Disagreement, then ▇▇▇ and the Purchaser shall retain
the services of KPMG Peat Marwick LLP (the "Independent Accountant"), to resolve
the disagreement and make a determination with respect thereto. The
determination by the Independent Accountant will be made, and written notice
thereof given to ▇▇▇ and the Purchaser, within thirty (30) calendar days after
the Independent Accountant's retention. The determination by the Independent
Accountant shall be final, binding and conclusive upon ▇▇▇-NMBC and the
Purchaser. The scope of the Independent Accountant's engagement (which will not
be an audit) shall be limited to the resolution of the disputed items described
in the Asset Purchase Notice of Disagreement, and the recalculation, if any, of
the Statement of Working Capital of the ▇▇▇-NMBC Stations in light of such
resolution. If an Independent Accountant is engaged pursuant to this Section
2.3(b)(v), the fees and expenses of the Independent Accountant shall be borne
equally by ▇▇▇ and the Purchaser. Any payment required by Section 2.3(b)(iv)
hereof shall bear interest at the Interest Rate for the period commencing on the
Closing Date and to but not including the date of payment, and shall be made
based on such determination within ten (10) calendar days after delivery of a
notice of determination by the Independent Accountant as described above,
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(c) A11ocation of Asset Purchase Price. The Asset Purchase
Price shall be allocated among the Purchased Assets of the ▇▇▇-NMBC Stations for
all purposes (including Tax and financial accounting purposes) on the basis of a
customary appraisal report prepared by an independent appraisal firm which shall
be selected and whose report shall be approved by the Purchaser, or as agreed by
the parties. The Purchaser shall pay all fees, costs and expenses of the
appraisal firm. The appraisal report and allocation will be consistent with
Section 1060 of the Internal Revenue Code. The Purchaser and ▇▇▇-NMBC shall (i)
execute and file all Tax Returns and prepare all financial statements, returns
and other instruments in a manner consistent with the allocation determined
pursuant to this Section 2.3(c), (ii) not take any position before any
Governmental Authority or in any judicial proceeding that is inconsistent with
such allocation, and (iii) cooperate with each other in a timely filing,
consistent with such allocation, of Form 8594 with the IRS.
2.4 Further Assurances. At and after the Closing, and without further
consideration therefor, (i) ▇▇▇-NMBC shall execute and deliver to the Purchaser
such further instruments and certificates of conveyance and transfer as the
Purchaser may reasonably request in order to more effectively convey and
transfer the Purchased Assets of the ▇▇▇-NMBC Stations to the Purchaser and to
put the Purchaser in operational control of the ▇▇▇-NMBC Stations, or for
aiding, assisting, collecting and reducing to possession any of the Purchased
Assets of the ▇▇▇-NMBC Stations and exercising rights with respect thereto, and
(ii) the Purchaser shall execute and deliver to ▇▇▇ such further instruments and
certificates of assumption, novation and release as ▇▇▇ may reasonably request
in order to effectively make the Purchaser responsible for all Assumed
Liabilities of the ▇▇▇-NMBC Stations and release ▇▇▇-NMBC therefrom to the
fullest extent permitted under applicable Law.
2.5 Nontransferable Contracts and Licenses. To the extent that transfer
or assignment hereunder by ▇▇▇-NMBC to the Purchaser of any Contracts of the
▇▇▇-NMBC Stations or Licenses (other than the FCC Licenses) of the ▇▇▇-NMBC
Stations is not permitted or is not permitted without the consent of another
Person, this Agreement shall not be deemed to constitute an undertaking to
assign the same if such consent is not given or if such an undertaking otherwise
would constitute a breach thereof or cause a loss of benefits thereunder.
▇▇▇-NMBC shall use all commercially reasonable efforts to obtain any and all
such third party consents under all Material Contracts of the ▇▇▇-NMBC Stations
and Material Licenses of the ▇▇▇-NMBC Stations; provided, however, that ▇▇▇-NMBC
shall not be required to pay or incur any cost or expense to obtain any third
party consent that ▇▇▇-NMBC is not otherwise required to pay or incur in
accordance with the terms of the applicable Material Contract of the ▇▇▇-NMBC
Stations or Material License of the ▇▇▇-NMBC Stations. Purchaser shall cooperate
with ▇▇▇-NMBC in obtaining such third party consents, provided, however, that
Purchaser shall not be required to agree to any change in the terms of any such
Contract or to pay any fee or other consideration to a third party in order to
obtain any such third party consent. Purchaser's cooperation shall include,
without limitation, signing and delivering consent forms which may be provided
by third parties to such Contracts pursuant to which Purchaser shall agree to
assume and perform the obligations of ▇▇▇-NMBC under such Contracts arising
during and relating to the period on and after the Closing Date. If any such
third party consent is not obtained before the Closing, ▇▇▇-NMBC shall cooperate
with the Purchaser in any reasonable arrangement
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designed to provide to the Purchaser on and after the Closing with the benefits
under the applicable Contract of the ▇▇▇-NMBC Stations or License of the
▇▇▇-NMBC Stations, and Purchaser shall perform on and after the Closing Date the
applicable Contract and License and the financial obligations thereunder, as the
case may be, to the extent commensurate with the benefits actually received by
Purchaser thereunder. After the Closing Date, ▇▇▇-NMBC and Purchaser shall
continue to cooperate with one another and use commercially reasonable efforts
to obtain any such third party consents, and any such Contracts and Licenses
shall be deemed transferred or assigned upon Purchaser's receipt of any
necessary third party consent thereto. Notwithstanding anything contained above
in this Section 2.5 to the contrary, this Section 2.5 shall not apply to any FCC
License.
2.6 The Stock Purchase. Upon the terms and subject to the conditions
set forth herein, at the Closing ▇▇▇ shall transfer, assign and deliver to
Purchaser, and Purchaser shall purchase from ▇▇▇, the KOIN Common Stock and the
SJL-Kansas Common Stock (as defined in Section 4.3) (together, the "Acquired
Companies' Common Stock"), representing all issued and outstanding shares of the
Acquired Companies' Common Stock, solely in exchange for the Stock Purchase
Price (as defined below).
2.7 Consideration for Acquired Companies' Stock.
(a) Consideration. Subject to Section 2.7(c) hereof, the
purchase price (the "Stock Purchase Price") for the Acquired Companies' Common
Stock shall be the portion of the Cash Payment allocated to the Acquired
Companies' Common Stock pursuant to Section 2.9, which shall be paid in cash at
the Closing (the "Stock Purchase Cash Payment").
(b) Additional Definitions. For all purposes of and under this
Agreement, the following terms shall have the meanings indicated below:
(i) "Acquired Companies Closing Liabilities" means
all Liabilities that would be included on a consolidated balance sheet of the
Acquired Companies as of the Adjustment Date prepared in accordance with GAAP
applied in a manner consistent with the preparation of the Financial Statements,
including but not limited to, all indebtedness for borrowed money and all
bonuses, severance payments or other benefits for employees of the Acquired
Companies conditioned upon or payable in connection with or as a result of the
Closing, or calculated with reference to the financial terms, of the
transactions contemplated by this Agreement which any of the Acquired Companies
is obligated to make or provide as a result of the transactions contemplated by
this Agreement.
(ii) "Closing Adjusted Net Worth of the Acquired
Companies" means the current assets of the Acquired Companies as of the
Adjustment Date (excluding any such current assets (or portion thereof) to the
extent not relating to and usable in the operation of the Acquired Companies'
Stations after the Closing Date), minus the Acquired Companies Closing
Liabilities, as determined on a consolidated basis in accordance with GAAP
applied in a manner consistent with the preparation of the Financial Statements,
adjusted to exclude (A) from current assets the current portion of program
rights and (B) from Acquired Companies Closing
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Liabilities (1) the current and long-term portion of program liabilities, (2)
any amount related to unearned income under the Station KOIN Sylvan lease
agreement, and (3) any reserve or accrual for loss contingencies required by
GAAP related to the matters disclosed in SCHEDULE 4.14 hereto; provided,
however, that Acquired Companies Closing Liabilities shall include the amount or
value of both cash and noncash consideration that has not been paid or provided
prior to the Closing Date for programming run by any of the Acquired Companies'
Stations prior to the Closing Date.
(iii) "Acquired Companies Assumed Liabilities" means
(A) the Acquired Companies Closing Liabilities, and (B) the obligations of the
Acquired Companies arising during and attributable to any period after the
Closing under the Contracts and Licenses of the Acquired Companies, excluding,
however, (1) any obligations or liabilities arising under (aa) any such
Contracts or Licenses that do not relate primarily to the operation of the
Acquired Companies' Stations, (bb) any Contracts or Licenses required by this
Agreement to be terminated at or prior to Closing, (cc) any Benefit Plans of the
Acquired Companies other than (I) liabilities thereunder included as Acquired
Company Closing Liabilities and (II) employment contracts of the Acquired
Companies and (dd) any bonus or other payment or benefit conditioned upon or
payable in connection with or as a result of the Closing under any employment
agreement, or calculated with reference to the financial terms, of the
transactions contemplated by this Agreement, and (2) any obligations or
liabilities of the Acquired Companies resulting from the failure to obtain any
consent required in connection with the transactions contemplated by this
Agreement or resulting from any default under any Contract or License prior to
or as a result of the Closing.
(iv) "Acquired Companies Excluded Liabilities" means
all Liabilities of the Acquired Companies as of the Closing Date, other than the
Acquired Companies Assumed Liabilities.
(c) Adjusted Net Worth Adjustment of the Acquired Companies.
(i) Three (3) Business Days prior to the Closing
Date, ▇▇▇ shall provide Purchaser with a reasonably detailed statement (the
"Preliminary Statement of Closing Adjusted Net Worth of the Acquired Companies")
setting forth ▇▇▇'▇ reasonable and good faith estimate of the Closing Adjusted
Net Worth of the Acquired Companies. The Stock Purchase Cash Payment payable on
the Closing Date shall be decreased by the amount of any negative Closing
Adjusted Net Worth of the Acquired Companies shown on the Preliminary Statement
of Closing Adjusted Net Worth of the Acquired Companies or increased by the
amount of any positive Closing Adjusted Net Worth of the Acquired Companies
shown on the Preliminary Statement of Closing Adjusted Net Worth of the Acquired
Companies.
(ii) As promptly as practicable, but in any event
within sixty (60) calendar days following the Closing, ▇▇▇ shall cause to be
prepared and delivered to the Purchaser a further determination and statement
(the "Statement of Closing Adjusted Net Worth
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of the Acquired Companies") setting forth the Closing Adjusted Net Worth of the
Acquired Companies.
(iii) Within thirty (30) calendar days following
delivery of the Statement of Closing Adjusted Net Worth of the Acquired
Companies pursuant to Section 2.7(c)(ii) hereof or, if applicable, such later
date determined in accordance with Section 2.7(c)(iv), (1) ▇▇▇ shall pay to
Purchaser the amount, if any, by which the Closing Adjusted Net Worth of the
Acquired Companies shown on the Statement of Closing Adjusted Net Worth of the
Acquired Companies is less than the amount thereof shown on the Preliminary
Statement of Closing Adjusted Net Worth of the Acquired Companies, or (2) the
Purchaser shall pay to ▇▇▇ the amount, if any, by which the Closing Adjusted Net
Worth of the Acquired Companies shown on the Statement of Closing Adjusted Net
Worth of the Acquired Companies is more than the amount thereof shown on the
Preliminary Statement of Closing Adjusted Net Worth of the Acquired Companies.
Any and all payments made pursuant to this Section 2.7(c)(iii) shall bear
interest at the Interest Rate for the period commencing on the Closing Date and
to but not including the date of payment, and shall be made by wire transfer of
immediately available funds to an account designated in writing by the party to
receive such payment. Any payment made pursuant to this Section 2.7(c)(iii)
shall be deemed to be an adjustment to the Stock Purchase Price.
(iv) If the Purchaser disagrees in good faith with
the Statement of Closing Adjusted Net Worth of the Acquired Companies, then the
Purchaser shall notify ▇▇▇ in writing (the "Stock Purchase Notice of
Disagreement") of such disagreement within thirty (30) calendar days following
delivery of the Statement of Closing Adjusted Net Worth of the Acquired
Companies. The Stock Purchase Notice of Disagreement shall set forth in
reasonable detail the basis for the disagreement described therein. Thereafter,
▇▇▇ and the Purchaser shall attempt in good faith to resolve and finally
determine the amount of the Closing Adjusted Net Worth of the Acquired
Companies. If ▇▇▇ and the Purchaser are unable to resolve the disagreement
within thirty (30) calendar days following delivery of the Stock Purchase Notice
of Disagreement, then the Independent Accountant shall resolve the disagreement
and make a determination with respect thereto. Such determination will be made,
and written notice thereof given to ▇▇▇ and the Purchaser, within thirty (30)
calendar days after such selection. The determination by the Independent
Accountant shall be final, binding and conclusive upon ▇▇▇ and the Purchaser.
The scope of the Independent Accountant's engagement (which will not be an
audit) shall be limited to the resolution of the disputed items described in the
Stock Purchase Notice of Disagreement, and the recalculation, if any, of the
Statement of Closing Adjusted Net Worth of the Acquired Companies in light of
such resolution. If an Independent Accountant is engaged pursuant to this
Section 2.7(c)(iv), the fees and expenses of the Independent Accountant shall be
borne equally by ▇▇▇ and the Purchaser. Within ten (10) calendar days after
delivery of a notice of determination by the Independent Accountant as described
above, any payment required by Section 2.7(c)(iii) hereof shall be paid based
upon such determination, together with interest at the Interest Rate for the
period commencing on the Closing Date and to but not including the date of
payment.
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(d) Allocation of Modified Aggregate Deemed Sales Price
("MADSP") and Adjusted Grossed-Up Basis ("AGUB") to KOIN Assets. If a Section
338(h)(10) election is made with respect to KOIN, the "MADSP" and "AGUB" shall
be determined and allocated among the assets of KOIN in accordance with the
applicable Treasury Regulations under Section 338 for all purposes. The Stock
Purchase Price attributed to KOIN in Section 2.7(a) shall be allocated among the
assets of KOIN for all purposes (including Tax and financial accounting
purposes) on the basis of a customary appraisal report prepared by an
independent appraisal firm which shall be selected and whose report shall be
approved by the Purchaser, or as agreed by the parties. The Purchaser shall pay
all fees, costs and expenses of the appraisal firm. The appraisal report and
allocation will be consistent with Section 338 of the Internal Revenue Code. The
Purchaser and ▇▇▇ shall (i) execute and file all Tax Returns and prepare all
financial statements, returns and other instruments in a manner consistent with
the allocation determined pursuant to this Section 2.3(d), (ii) not take any
position before any Governmental Authority or in any judicial proceeding that is
inconsistent with such allocation, and (iii) cooperate with each other in a
timely filing, consistent with such allocation, of Form 8023 with the IRS.
2.8 Further Assurances. At and after the Closing, subject to the terms
and conditions herein provided, each of the Purchaser and ▇▇▇ covenants and
agrees to use reasonable efforts to take, or cause to be taken, all action, or
do, or cause to be done, all things, necessary, proper or advisable under
applicable Laws to consummate and make effective the transactions contemplated
by the Stock Purchase.
2.9 Allocation of Cash Payment. Subject to Sections 2.3(b) and 2.7(c),
the total purchase price payable in cash at the Closing for the Purchased Assets
of the ▇▇▇-NMBC Stations and the Acquired Companies' Common Stock shall be Five
Hundred Sixty-Two Million Five Hundred Thousand Dollars ($562,500,000) (the
"Cash Payment"). Purchaser shall be entitled to specify (i) the allocation of
the Cash Payment between the Asset Purchase Cash Payment and the Stock Purchase
Cash Payment and (ii) the allocation of the Stock Purchase Cash Payment between
the KOIN Common Stock and the SJL-Kansas Common Stock, provided that (A)
Purchaser delivers such allocations to ▇▇▇ at least ten (10) days prior to
Closing and (B) ▇▇▇ approves such allocations, which approval shall not be
unreasonably withheld or delayed.
ARTICLE 3
THE CLOSING
3.1 The Closing. The consummation of the transactions contemplated
hereby shall take place at a closing (the "Closing") to be held at 10:00 a.m.,
Central Standard Time ("CST"), on a date to be designated by ▇▇▇ and the
Purchaser, which date shall be no later than the second (2nd) Business Day after
satisfaction and fulfillment of the last to occur of the conditions set forth in
Sections 7.1(c) or (d) and Sections 7.2(c) or (d), subject to the conditions
set forth in Section 7.1(e) and Section 7.2(e) (the "Closing Date"), at the
offices of Lane & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇,
unless another time, date or place is mutually agreed upon in writing by ▇▇▇ and
the Purchaser.
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3.2 Closing Deliveries of ▇▇▇-NMBC and the Acquired Companies. At the
Closing, ▇▇▇ shall deliver, or cause to be delivered, to the Purchaser the
following instruments, certificates and other documents, dated as of the Closing
Date and executed on behalf of ▇▇▇-NMBC or an Acquired Company by a duly
authorized officer thereof, in order to effect the transfer of the Purchased
Assets of the ▇▇▇-NMBC Stations to the Purchaser pursuant to Section 2.1 hereof
and effect the transfer of the Acquired Companies' Common Stock to the Purchaser
pursuant to Section 2.6 hereof:
(a) Instruments of Transfer and Assignment.
(i) A grant deed or deeds, as the case may be, in a
customary and usual form acceptable to the parties (the "Grant Deeds"),
conveying fee simple title to all of the Owned Real Property of the ▇▇▇-NMBC
Stations;
(ii) a ▇▇▇▇ of Sale with respect to the Purchased
Assets of the ▇▇▇-NMBC Stations in a customary and usual form acceptable to the
parties (the "▇▇▇▇ of Sale");
(iii) an Instrument of Assignment and Assumption with
respect to the Purchased Assets of the ▇▇▇-NMBC Stations and Assumed Liabilities
of the ▇▇▇-NMBC Stations in a customary and usual form acceptable to the parties
(the "Assignment and Assumption");
(iv) an Assignment of Proprietary Rights with respect
to the ▇▇▇-NMBC Stations substantially in a customary and usual form acceptable
to the parties (the "Assignment of Proprietary Rights");
(v) copies of all instruments, certificates,
documents and other filings (if applicable) necessary to release the Purchased
Assets of the ▇▇▇-NMBC Stations from all Encumbrances other than Permitted
Encumbrances and those Encumbrances set forth in SCHEDULE 4.5(b) hereto, all in
a form reasonably satisfactory to counsel for the Purchaser;
(vi) copies of all requisite Licenses, waivers,
consents, approvals, authorizations, qualifications and other orders of any
Governmental Authority with competent jurisdiction over the transactions
contemplated hereby, and all requisite consents, approvals or waivers from third
parties, which are necessary to effect the valid transfer and assignment of the
Purchased Assets of the ▇▇▇-NMBC Stations to the Purchaser pursuant to this
Agreement and to otherwise consummate the Asset Purchase, Stock Purchase and as
otherwise contemplated by this Agreement;
(vii) stock certificates representing all of the
outstanding shares of KOIN and SJL-Kansas duly endorsed or accompanied by duly
executed stock powers in blank (the "Stock Certificates");
(viii) all other documents, instruments and
certificates required to be delivered by ▇▇▇-NMBC or the Acquired Companies
pursuant to this Agreement or otherwise
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required or reasonably requested by Purchaser, including of conveyance and
transfer, as the Purchaser may reasonably request in order to more effectively
convey and transfer the Purchased Assets of the ▇▇▇-NMBC Stations to the
Purchaser and to put the Purchaser in operational control of the ▇▇▇-NMBC
Stations, or for aiding, assisting, collecting and reducing to possession any of
the Purchased Assets of the ▇▇▇-NMBC Stations and exercising rights with respect
thereto and to otherwise consummate the Asset Purchase, the Stock Purchase and
as otherwise contemplated by this Agreement;
(ix) resignations of all directors and officers of
the Acquired Companies which have been previously requested in writing by
Purchaser shall have been delivered to Purchaser, effective upon the Closing;
and
(x) the stock book, stock ledger, and minute book of
each of the Acquired Companies.
(b) Closing Certificates.
(i) an officer's certificate in a form reasonably
acceptable to the parties;
(ii) a secretary's certificate substantially in a
form reasonably acceptable to the parties; and
(iii) a certificate of ▇▇▇-NMBC and each Acquired
Company certifying as to its non-foreign status which complies with the
requirements of Section 1445 of the Internal Revenue Code.
(c) Legal Opinions.
(i) A legal opinion of Lane & ▇▇▇▇▇▇▇▇, outside
counsel for ▇▇▇-NMBC and the Acquired Companies, substantially in the form
attached hereto as EXHIBIT A; and
(ii) a legal opinion of Wiley, Rein & Fielding, FCC
counsel of ▇▇▇-NMBC and the Acquired Companies, substantially in the form
attached hereto as EXHIBIT B.
3.3 Closing Deliveries of the Purchaser. At the Closing, the Purchaser
shall deliver, or cause to be delivered, to ▇▇▇ the following instruments,
certificates and other documents, dated as of the Closing Date and executed or
acknowledged (as applicable) on behalf of the Purchaser by a duly authorized
officer thereof, in order to pay for the Acquired Companies' Common Stock and
the Purchased Assets of the ▇▇▇-NMBC Stations and effect the assumption of all
Assumed Liabilities of the ▇▇▇-NMBC Stations pursuant to Section 2.2 hereof.
(a) Cash Payment. An amount in cash equal to the Cash Payment,
payable by wire transfer of immediately available funds to an account designated
in writing by ▇▇▇ at least two (2) Business Days prior to the Closing Date.
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(b) Instruments of Assumption.
(i) the ▇▇▇▇ of Sale;
(ii) the Assignment and Assumption;
(iii) the Assignment of Proprietary Rights; and
(iv) all other documents, instruments and
certificates required to be delivered by Purchaser pursuant to this Agreement or
otherwise secured and reasonably requested by ▇▇▇ including instruments and
certificates of assumption, novation and release as ▇▇▇ may reasonably request
in order to effectively make the Purchaser responsible for all Assumed
Liabilities of the ▇▇▇-NMBC Stations and release ▇▇▇-NMBC therefrom to the
fullest extent permitted under applicable Law but without any additional
obligation incurred on the part of Purchaser.
(c) Closing Certificates.
(i) an officer's certificate substantially in a form
reasonably acceptable to the parties; and
(ii) a secretary's certificate substantially in a
form reasonably acceptable to the parties.
(d) Legal Opinion. A legal opinion of outside counsel for the
Purchaser, substantially in the form attached hereto as EXHIBIT C.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF ▇▇▇-NMBC
OR EACH ACQUIRED COMPANY
▇▇▇ and NMBC jointly and severally represent and warrant to the
Purchaser as follows:
4.1 Organization. ▇▇▇-NMBC and each Acquired Company is a corporation
duly organized, validly existing and in good standing under the Laws of the
state of such company's incorporation, and have all requisite corporate power
and authority to own, operate or lease the assets and properties now owned,
operated or leased by it, and to conduct the operation of the ▇▇▇-NMBC Stations
and each Acquired Company as presently conducted by such company. ▇▇▇-NMBC, with
respect to the ▇▇▇-NMBC Stations, and the Acquired Companies are duly
authorized, qualified or licensed to do business as a foreign corporation, and
are in good standing, under the Laws of each state or other jurisdiction in
which the character of such company's properties owned, operated or leased, or
the nature of such company's activities, makes such qualification necessary,
except in those states and jurisdictions where the failure to be so qualified or
in good standing would not reasonably be expected, as of the date hereof, to
have a Material Adverse Effect. Corporate minutes of each Acquired Company for
the past five
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years, and the stock records of each Acquired Company have been made available
to Purchaser. For the past five years, all corporate action which has previously
been taken by the shareholders of the Acquired Companies, by the board of
directors of each Acquired Company, or by any committee of any board of the type
customarily recorded in the minutes or proceedings of shareholders, board of
directors and committees of the board is properly and accurately recorded in the
corporate minutes of each Acquired Company. Complete and accurate records with
respect to the issuance, transfer, redemption and cancellation of shares of
capital stock of each Acquired Company are contained in each Acquired Company's
stock records.
4.2 Authority and No Violation.
(a) ▇▇▇-NMBC and each Acquired Company have all requisite
corporate power and authority to enter into this Agreement and the ▇▇▇
Documents, to perform such company's obligations hereunder and thereunder, and
to consummate the transactions contemplated hereby and thereby. The execution
and delivery by ▇▇▇-NMBC and each Acquired Company of this Agreement and ▇▇▇
Documents, the performance by ▇▇▇-NMBC and each Acquired Company of its
obligations hereunder and thereunder, and the consummation by ▇▇▇-NMBC and each
Acquired Company of the transactions contemplated hereby and thereby, have been
duly authorized by all necessary corporate action on the part of ▇▇▇-NMBC and
each Acquired Company. This Agreement has been duly executed and delivered by
▇▇▇-NMBC and, assuming the due authorization, execution and delivery of this
Agreement by the Purchaser, this Agreement constitutes a legally valid and
binding obligation of ▇▇▇-NMBC, enforceable against ▇▇▇-NMBC in accordance with
its terms, except as such enforceability may be limited by principles of public
policy, and subject to (i) the effect of any applicable Laws of general
application relating to bankruptcy, reorganization, insolvency, moratorium or
similar Laws affecting creditors' rights and relief of debtors generally, and
(ii) the effect of rules of Law and general principles of equity, including
rules of Law and general principles of equity governing specific performance,
injunctive relief and other equitable remedies (regardless of whether such
enforceability is considered in a proceeding in equity or at law). Upon the
execution and delivery of the ▇▇▇ Documents by ▇▇▇-NMBC and each Acquired
Company, at the Closing and, assuming the due authorization, execution and
delivery of the Assignment and Assumption by the Purchaser, each of the ▇▇▇
Documents will constitute a legally valid and binding obligation of ▇▇▇-NMBC and
each Acquired Company, enforceable against ▇▇▇-NMBC and each Acquired Company,
in accordance with its respective terms, except as such enforceability may be
limited by principles of public policy, and subject to (i) the effect of any
applicable Laws of general application relating to bankruptcy, reorganization,
insolvency, moratorium or similar Laws affecting creditors' rights and relief of
debtors generally, and (ii) the effect of rules of Law and general principles of
equity, including rules of Law and general principles of equity governing
specific performance, injunctive relief and other equitable remedies (regardless
of whether such enforceability is considered in a proceeding in equity or at
law).
(b) Assuming that all consents, waivers, approvals, orders and
authorizations set forth in SCHEDULE 4.4 hereto have been obtained and all
registrations, qualifications, designations, declarations or filings with any
Governmental Authorities set forth in SCHEDULE 4.4 hereto have been made, and
except as set forth in SCHEDULE 4.2 hereto, the execution and delivery
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by ▇▇▇-NMBC and each Acquired Company of the ▇▇▇ Documents, the performance by
▇▇▇-NMBC and each Acquired Company of its obligations hereunder and thereunder,
and the consummation by such company of the transactions contemplated hereby and
thereby, will not conflict with or violate in any material respect, constitute a
material default (or event which with the giving of notice or lapse of time, or
both, would become a material default) under, give rise to any right of
termination, amendment, modification, acceleration or cancellation of any
material obligation or loss of any material benefit under, result in the
creation of any material Encumbrance pursuant to, or require such company to
obtain any consent, waiver, approval or Action of, make any filing with, or give
any notice to any Person as a result or under, the terms and provisions of (i)
the respective charter or the respective bylaws of such company, (ii) any
material Contract to which such company is a party or by which any of the
Purchased Assets of the ▇▇▇-NMBC Stations is bound, or (iii) any material Law
applicable to such company, any of the Purchased Assets, assets of the Acquired
Companies or the Acquired Companies' Common Stock, or any Governmental Order
issued by a Governmental Authority by which ▇▇▇-NMBC or any Acquired Company or
any of the Purchased Assets of the ▇▇▇-NMBC Stations is in any way bound or
obligated.
4.3 Capitalization, Subsidiaries and Charter.
(a) The authorized capital stock of KOIN consists of thirty
thousand (30,000) shares of common stock, par value of $10.00 per share (the
"KOIN Common Stock"). There are thirty thousand (30,000) shares of KOIN Common
Stock issued and outstanding. No shares of KOIN Common Stock are held by KOIN in
its treasury. All of the issued and outstanding shares of KOIN Common Stock are
validly issued, fully paid and nonassessable. ▇▇▇ is the legal and beneficial
owner of record of the KOIN Common Stock, and the KOIN Common Stock is free and
clear of all liens, pledges and other Encumbrances. There are no securities of
KOIN presently outstanding, nor at the Closing will there be, which are
convertible into or exchangeable or exercisable for any shares of KOIN Common
Stock, and there are no outstanding or authorized subscriptions, options,
warrants, calls, rights, commitments or any other agreements of any character
obligating KOIN to issue, sell or transfer any additional shares of KOIN Common
Stock or any securities convertible into or evidencing the right to subscribe
for any shares of KOIN Common Stock.
(b) The authorized capital stock of SJL-Kansas consists of one
million nine hundred fifty thousand shares (1,950,000) shares of Class A common
stock with a par value of .01 per share; nine hundred fifty thousand (950,000)
shares of Class B common stock with a par value of .01 per share; one hundred
thousand (100,000) shares of Class C common stock with a par value of .01 per
share and fifty thousand (50,000) shares of Class D 6% preferred stock (the
"SJL-Kansas Common Stock"). There are one thousand (1,000) Class A shares of
SJL-Kansas Common Stock issued and outstanding. No shares of SJL-Kansas Common
Stock are held by SJL-Kansas in its treasury. All of the issued and outstanding
shares of SJL-Kansas Common Stock are validly issued, fully paid and
nonassessable. ▇▇▇ is the legal and beneficial owner of record of the SJL-Kansas
Common Stock, free and clear of all Liens. There are no securities of SJL-Kansas
outstanding which are convertible into or exchangeable or exercisable for any
shares of SJL-Kansas Common Stock, there are not now, nor at the Closing will
there be, any
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outstanding or authorized subscriptions, options, warrants, calls, rights,
commitments or any other agreements of any character obligating SJL-Kansas to
issue, sell or transfer any additional shares of SJL-Kansas Common Stock or any
securities convertible into or evidencing the right to subscribe for any shares
of SJL-Kansas Common Stock.
(c) SCHEDULE 4.3 hereto sets forth the name, date and
jurisdiction of incorporation, and the outstanding shares of capital stock of
Topeka, Wichita License Sub, Topeka License Sub and any Subsidiary of an
Acquired Company. Each company listed on SCHEDULE 4.3 hereto is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation and has the corporate power and lawful authority
to own, lease and operate its assets, properties and business and to carry on
its business as now being and as heretofore conducted. Each company listed on
SCHEDULE 4.3 hereto is duly qualified or otherwise authorized as a foreign
corporation to transact business and is in good standing in all jurisdictions in
which the nature of the activities conducted by it or the character of the
assets owned or leased by it makes such licensing or qualification necessary,
except where the failure to be so licensed or qualified would not, in any
individual case, reasonably be expected as of the date hereof to have a Material
Adverse Effect. No shares of any company listed on SCHEDULE 4.3 hereto are held
by such company in its treasury. All of the issued and outstanding shares of
such company are validly issued, fully paid and nonassessable. All shares of
Topeka, Topeka License Sub and Wichita License Sub are owned beneficially and of
record by the corporation specified as the owner in the Recitals to this
Agreement, free and clear of all Liens. There are no securities of any company
listed in SCHEDULE 4.3 hereto presently outstanding, nor at the Closing will
there be, which are convertible into or exchangeable or exercisable for any
shares of such company, and there are no outstanding or authorized
subscriptions, options, warrants, calls, rights, commitments or any other
agreements of any character obligating such company to issue, sell or transfer
any additional shares or any securities convertible into or evidencing the right
to subscribe for any shares of such company except as set forth in SCHEDULE 4.3
hereto with respect to IBS-▇▇▇ Partners LLC.
(d) Except as set forth in SCHEDULE 4.3 hereto, neither
▇▇▇-NMBC nor any Acquired Company has any Subsidiaries, and does not own any
direct or indirect equity or debt interest in any other Person, including any
interest in a corporation, partnership or joint venture, and is not obligated or
committed to acquire any such interest, in any case in which the Subsidiary,
interest or other Person relates primarily to the ▇▇▇-NMBC Stations or the
Acquired Companies.
(e) Each Acquired Company and each company listed on SCHEDULE
4.3 hereto has heretofore delivered to Purchaser true and complete copies of its
respective charter documents and by-laws or comparable instruments of such
company as in effect on the date hereof.
4.4 Government Consents. No material consent, waiver, approval, order
or authorization of, or registration, qualification, designation, declaration or
filing with, any Governmental Authority is required on the part of ▇▇▇-NMBC in
connection with the execution and delivery by such company of this Agreement and
by ▇▇▇-NMBC and each Acquired
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Company of the ▇▇▇ Documents, the performance by ▇▇▇-NMBC and any Acquired
Company of its respective obligations hereunder and thereunder, or the
consummation by ▇▇▇-NMBC and each Acquired Company of the transactions
contemplated hereby and thereby, including the sale and transfer of the Acquired
Companies' Common Stock and Purchased Assets of the ▇▇▇-NMBC Stations and
transfer of the FCC Licenses of the ▇▇▇-NMBC Stations to the Purchaser or
connection with the Acquired Companies' Common Stock, except as set forth in
SCHEDULE 4.4 hereto.
4.5 Tangible Property.
(a) Except for the shared property or assets identified in
SCHEDULES 2.1(c) and 6.10, SCHEDULE 4.5(a) hereto contains a true, correct and
complete list of the following to the extent owned, used or held for use by
▇▇▇-NMBC or any Acquired Company in the operation of the ▇▇▇-NMBC Stations and
the operation of each Acquired Company, as the case may be: (i) each parcel of
real property owned, as of the date hereof, by such company ("Owned Real
Property"), (ii) each parcel of material real property leased from or to a third
party, as of the date hereof, by such company ("Leased Real Property"), the name
of the third party lessor(s) or lessee(s) thereof, as the case may be, the date
of the lease contract relating thereto and all amendments thereof, and (iii) a
list of all material fixed assets owned by such company as set forth in each
company's depreciation schedule attached thereto, (excluding therefrom such
fixed assets with an original cost of less than $5,000 or which have been fully
depreciated) and prepared in the ordinary course of business as of the date set
forth therein. Except as set forth in SCHEDULE 4.5(a) hereto, the ▇▇▇-NMBC
Stations and each Acquired Company does not own, or have a contractual
obligation to purchase or otherwise acquire any material interest in, any parcel
of real property which would be used or held for use primarily in the operation
of the ▇▇▇-NMBC Stations or by the Acquired Company. All of the tangible assets
and properties used by ▇▇▇-NMBC Stations or the Acquired Companies pursuant to a
lease or license included among the Purchased Assets of the ▇▇▇-NMBC Stations or
to which an Acquired Company is a party shall be referred to herein,
collectively, as "Leased Assets."
(b) ▇▇▇-NMBC and each Acquired Company have fee simple title
to all of the Owned Real Property of the ▇▇▇-NMBC Stations and the Owned Real
Property of the Acquired Companies, free and clear of Liens except Permitted
Encumbrances.
(c) Within twenty-one (21) days after the date of this
Agreement, ▇▇▇-NMBC and each Acquired Company shall, with respect to each tract
of Owned Real Property owned by such company, procure at its expense (except as
provided below) and deliver to Purchaser (i) commitments for either (x)
endorsements to existing owner's policies of title insurance committing to date
the existing policies down to the Closing, subject to all matters listed on said
policies and such other matters of record since the date of the policies or (y)
ALTA owner's policies of title insurance in the amounts ascribed to the
applicable tract of Owned Real Property, issued by Chicago Title Insurance
Company or an affiliate or agent thereof, subject to all matters of record as of
the date of the commitments, the pre-printed jacket exclusions and the standard
pre-printed exceptions, (ii) copies of all matters listed as exceptions on the
policies and commitments, as the case may be, and (iii) if requested by
Purchaser and at Purchaser's expense,
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surveys accompanied by certifications by surveyors registered and licensed in
the jurisdiction where each tract is located stating that the surveys have been
prepared as of a recent date in accordance with the current ALTA minimum
standard detail requirements, or accompanied by a recertification updating to a
current date a prior certification regarding preparation in accordance with such
requirements.
4.6 Intellectual Property and Proprietary Rights.
(a) SCHEDULE 4.6(a) hereto contains a true, correct and
complete list of all material Intellectual Property owned by ▇▇▇-NMBC and each
Acquired Company, as the case may be, as of the date hereof, to the extent such
Intellectual Property is related primarily to the ▇▇▇-NMBC Stations and the
operation of each Acquired Company. A true and complete copy of all material
documentation relating to each item of Intellectual Property set forth in
SCHEDULE 4.6(a) hereto has been made available to the Purchaser and its agents
and representatives.
(b) ▇▇▇-NMBC and each Acquired Company, as the case may be,
own or have a valid right to use all Proprietary Rights used by such company to
conduct the ▇▇▇-NMBC Stations and the Acquired Companies' operations as
currently conducted by such company, without, to their Knowledge, materially
infringing upon the material rights of any other Person. To the Knowledge of
▇▇▇-NMBC and each Acquired Company, as the case may be, no other Person is
materially infringing upon the material rights of such company in or to any of
the Intellectual Property set forth in SCHEDULE 4.6(a) hereto.
4.7 ▇▇▇-NMBC Stations and the Acquired Companies' Contracts.
(a) SCHEDULE 4.7(a) hereto contains a list of each of the
▇▇▇-NMBC Stations or the Acquired Companies' Contracts (including all amendments
thereto) to which ▇▇▇-NMBC and each Acquired Company, as the case may be, is a
party or by which ▇▇▇-NMBC and each Acquired Company, as the case may be, or any
of the Purchased Assets of the ▇▇▇-NMBC Stations or any of the assets of the
Acquired Companies is bound as of the date hereof, which involves an executory
obligation of more than $25,000 or is otherwise material to the ▇▇▇-NMBC
Stations or the Acquired Companies, the Purchased Assets of the ▇▇▇-NMBC
Stations or the Assumed Liabilities of the ▇▇▇-NMBC Stations (each, a "Material
Contract" and, collectively, the "Material Contracts"), except (i) contracts for
the sale of advertising time entered into in the ordinary course of business;
and (ii) contracts which are Short Term Agreements. The Material Contracts
include, except as noted above, the following: (i) leases relating to all Leased
Real Property of the ▇▇▇-NMBC Stations or the Acquired Companies; (ii) capital
or operating leases or conditional sales agreements relating to any Purchased
Assets of the ▇▇▇-NMBC Stations or to which an Acquired Company is a party
(other than Short Term Agreements), in each case involving monthly payments in
excess of $10,000, (iii) noncompetition or other agreements restricting the
ability of ▇▇▇-NMBC or any Acquired Company, as the case may be, to engage in
the television broadcasting business in any location; (iv) employment,
consulting, separation, collective bargaining or other labor agreements; (v)
agreements under which ▇▇▇-NMBC or any Acquired Company, as the case may be, is
obligated to indemnify, or entitled to indemnification from, any other Person
primarily related to the ▇▇▇-
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NMBC Stations and the Acquired Companies, other than any agreement that requires
indemnification solely in connection with or as a result of a breach of such
agreement; and (vi) the network affiliation agreements of ▇▇▇-NMBC and each
Acquired Company. For all purposes of and under this Agreement, the term "Short
Term Agreement" shall mean an agreement entered into in the ordinary course of
business that is terminable by ▇▇▇-NMBC or any Acquired Company upon ninety (90)
days or less notice without penalty or cancellation fee or charge. Accurate and
complete copies of all Material Contracts have been made available for
inspection by Purchaser.
(b) ▇▇▇-NMBC and each Acquired Company, as the case may be,
has made available to the Purchaser and its agents and representatives a copy or
summary of each written Material Contract and a written summary of each oral
Material Contract. Except as set forth in SCHEDULE 4.7(b) hereto, (i) each
Material Contract is in full force and effect and represents a valid, binding
and enforceable obligation of such company in accordance with the respective
terms thereof and, to the knowledge of ▇▇▇-NMBC and each Acquired Company, as
the case may be, represents a valid, binding and enforceable obligation of each
of the other parties thereto; and (ii) there exists no material breach or
material default (or event that with notice or the lapse of time, or both, would
constitute a material breach or material default) on the part of ▇▇▇-NMBC or any
Acquired Company, as the case may be, or, to the knowledge of ▇▇▇-NMBC and each
Acquired Company, as the case may be, on the part of any other party under any
Material Contract, in any individual case which has had or could reasonably be
expected, as of the date hereof, to have a Material Adverse Effect.
4.8 Licenses and FCC Licenses.
(a) ▇▇▇-NMBC and each Acquired Company, as the case may be,
owns or possesses all right, title and interest in and to all the FCC Licenses
and all other material Licenses under its respective name which are necessary to
conduct the business of the ▇▇▇-NMBC Stations and each Acquired Company as
conducted by each of ▇▇▇-NMBC or any Acquired Company, as the case may be, as of
the date hereof (each, a "Material License" and, collectively, the "Material
Licenses"). No loss or expiration of any Material License is pending or, to the
knowledge of ▇▇▇-NMBC and each Acquired Company, as the case may be, threatened,
other than the expiration of any Material License in accordance with the terms
thereof. Any action of the FCC with respect to each FCC License is a Final
Action with the exception of the FCC's grant of its consent to the FCC Transfer
Application. Each of the ▇▇▇-NMBC Stations and Acquired Companies' Stations is
being operated in all material respects in accordance with the Communications
Act.
(b) ▇▇▇-NMBC and each Acquired Company, as the case may be, is
the holder of all rights in and to the FCC Licenses listed under its respective
name on SCHEDULE 4.8(b) hereto. The FCC Licenses listed in SCHEDULE 4.8(b)
hereto constitute all of the FCC Licenses used or necessary to lawfully operate
the ▇▇▇-NMBC Stations and the Acquired Companies' Stations in the manner now
operated. The FCC Licenses, including extensions or renewals thereof, are in
full force and effect and are unimpaired by any acts or omissions of ▇▇▇-NMBC,
any Acquired Company or their respective shareholders, employees or agents.
Without limiting
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the generality of the foregoing, the FCC Licenses are valid for the balance of
the current license term applicable to television stations licensed to
communities in the states where the ▇▇▇-NMBC Stations and the Acquired
Companies' Stations are located and are subject to no restrictions or conditions
outside of the ordinary course.
(c) There is not, to the knowledge of ▇▇▇-NMBC and each
Acquired Company, any FCC investigation, notice of apparent liability or order
of forfeiture pending or outstanding against any of the ▇▇▇-NMBC Stations and
the Acquired Companies' Stations respecting any violation, or allegation
thereof, of any FCC rule, regulation or written policy, or, to the knowledge of
▇▇▇-NMBC and each Acquired Company, any complaint before the FCC as a result of
which an investigation, notice of apparent liability, or order of forfeiture may
issue from the FCC relating to any of the ▇▇▇-NMBC Stations and the Acquired
Companies' Stations.
4.9 Employees. SCHEDULE 4.9 hereto contains a true, correct and
complete list of all employees of ▇▇▇-NMBC or any Acquired Company who, as of
the date of this Agreement, have duties principally related to the ▇▇▇-NMBC
Stations and each Acquired Company, as the case may be, including (and
designating as such) any such employee who is an inactive employee on paid or
unpaid leave of absence, and indicating date of employment, current title,
currently accrued and unused vacation (including both the number of days and
dollar value), compensation (including bonus arrangements), and arrangements
(including amounts) for termination or severance payments or benefits. Each
employee set forth in SCHEDULE 4.9 hereto who remains employed by ▇▇▇-NMBC and
each Acquired Company immediately prior to the Closing (whether actively or
inactively), and each additional employee who is hired to work in the ▇▇▇-NMBC
Stations and by each Acquired Company following the date hereof and prior to the
Closing who remains employed by such respective company immediately prior to the
Closing (whether actively or inactively), shall be referred to herein
individually as an "Employee" and, collectively, as the "Employees".
4.10 Employee Benefit Plans.
(a) SCHEDULE 4.10(a) hereto lists all bonus, deferred
compensation, pension, retirement, profit-sharing, thrift, savings, employee
stock ownership, stock bonus, stock purchase, restricted stock and stock option
plans, all employment, completion, change of control or severance contracts,
health, medical, vision, and dental insurance plans, life insurance and accident
and disability insurance plans, leave of absence, layoff, vacation, day or
dependent care, legal services, education assistance, cafeteria (within the
meaning of Code Section 125), flexible spending and other employee benefit
plans, policy contracts, agreements or arrangements (including any collective
bargaining agreement), whether written or if material, oral, which cover
Employees or former employees of the ▇▇▇-NMBC Stations and each Acquired Company
or with respect to which the ▇▇▇-NMBC Stations and each Acquired Company has any
material actual or potential liability, including "employee benefit plans"
within the meaning of Section 3(3) of ERISA (the "Benefit Plans"). Except as set
forth in SCHEDULE 4.10(a) hereto, no Benefit Plan is a multiemployer plan (as
defined in Section 4001(a)(3) of ERISA), and, except as set forth in SCHEDULE
4.10(A) hereto, no Benefit Plan provides health or other welfare benefits to
former employees other than in compliance with Part 6 of Title I of ERISA or
Section 4980B of
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the Code or similar state Law ("COBRA"). True and complete copies of the Benefit
Plans have been made available to Purchaser.
(b) Each Benefit Plan has been maintained and administered in
compliance in all material respects with the applicable provisions of ERISA, the
Code and any other Laws (including compliance with all reporting and disclosure
obligations). Each Benefit Plan (other than any multiemployer plan) which is
intended to be qualified under Section 401(a) of the Code has received a
favorable determination letter that it is so qualified; to the extent that there
have been any amendments to such Benefit Plan after the most recent favorable
determination letter, the remedial amendment period under Section 401(b) of the
Code has not expired as of the date of this Agreement with respect to such
amendments.
(c) ▇▇▇-NMBC, with respect to the Employees, and each Acquired
Company does not have any Liability under Title IV of ERISA (other than for the
payment of premiums, none of which are overdue). ▇▇▇-NMBC, with respect to the
Employees, and each Acquired Company or any ERISA Affiliates thereof, have not
incurred or expect to incur Liability in connection with an "accumulated funding
deficiency" within the meaning of Section 412 of the Code, whether or not
waived. ▇▇▇-NMBC, with respect to the Employees, and each Acquired Company, have
not incurred, nor expect to incur, any withdrawal liability with respect to a
"multiemployer plan" under Title IV of ERISA. ▇▇▇-NMBC, with respect to the
Employees, and each Acquired Company have not incurred any material Liability or
penalty under Section 4975 of the Code or Section 502(i) of ERISA with respect
to any Benefit Plan. Each Benefit Plan has been maintained and administered in
all material respects in compliance with its terms. There is no pending, nor has
▇▇▇-NMBC or any Acquired Company received notice of any threatened, material
claims against or otherwise involving any of the Benefit Plans. All material
contributions required to be made as of the date of this Agreement to the
Benefit Plans have been made or provided for.
(d) ▇▇▇-NMBC and each Acquired Company has complied with the
requirements of COBRA.
4.11 Sufficiency of Assets.
(a) The Purchased Assets of the ▇▇▇-NMBC Stations and the
assets and properties (including tangible, intangible, personal, real or mixed)
of the Acquired Companies, including but not limited to the assets listed on
SCHEDULE 4.5(A) hereto, together with such fixed assets of the ▇▇▇-NMBC Stations
and the Acquired Companies with an original cost of less than $5,000 or which
have been fully depreciated, as the case may be (including the licenses or
leasehold interests in or relating to the Leased Assets), constitute all of the
assets, properties and rights necessary for the conduct of the operations of the
▇▇▇-NMBC Stations and for the conduct by each Acquired Company of each of its
Acquired Companies' Stations, in each case in the manner consistent with past
practice. Each of ▇▇▇-NMBC or the Acquired Companies which owns the ▇▇▇-NMBC
Station or Acquired Company Station in which any of such assets, properties or
rights are used in the operation of such station owns all of such assets,
properties
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and rights, free and clear of all Liens, except for Permitted Encumbrances, and
those Encumbrances set forth in SCHEDULE 4.5(b) hereto.
(b) The tangible personal property included in the Purchased
Assets of the ▇▇▇-NMBC Stations and the assets of the Acquired Companies listed
on the depreciation schedules set forth in SCHEDULE 4.5(a) hereto or the Leased
Assets are in good condition and repair (ordinary wear and tear excepted) for
property of comparable type, age and usage, except for tangible personal
property that is obsolete, depleted or worn out and no longer used in the
operation of the ▇▇▇-NMBC Stations and each Acquired Company.
4.12 Financial Statements. Attached as SCHEDULE 4.12 hereto are true
and complete copies of the consolidated unaudited balance sheets of the ▇▇▇-NMBC
Stations and each Acquired Company, and the unaudited balance sheet of each
▇▇▇-NMBC Station and Acquired Company Station individually, as of, and the
consolidated unaudited statements of income of the ▇▇▇-NMBC Stations and each
Acquired Company, and the unaudited statement of income for each ▇▇▇-NMBC
Station and Acquired Company Station individually, for the fiscal year ended
September 30, 1999, (the aforementioned financial statements referred to as the
"Financial Statements"). The Financial Statements have been prepared from the
books and records of the ▇▇▇-NMBC Stations and each Acquired Company in a manner
consistent with the audited financial statements of ▇▇▇ and present fairly the
financial position and results of operations of the ▇▇▇-NMBC Stations and each
Acquired Company as of the date and for the period indicated, in each case in
conformity with GAAP, except that the Financial Statements are summary in nature
and do not include the statement of stockholders' equity and cash flows or notes
and related disclosures required by GAAP.
4.13 No Undisclosed Liabilities. ▇▇▇-NMBC, with respect to the ▇▇▇-NMBC
Stations, and each Acquired Company have no liabilities other than (i) the
liabilities reflected on the Financial Statements, (ii) liabilities incurred in
the ordinary course of business after the date of the Financial Statements, none
of which is material to the assets, properties, business, results of operations
or condition (financial or otherwise) of the ▇▇▇-NMBC Stations and each Acquired
Company, (iii) liabilities set forth in SCHEDULE 4.13 hereto, and (iv)
liabilities that individually or in the aggregate are not material to any
▇▇▇-NMBC Station or Acquired Company Station.
4.14 Litigation; Governmental Orders.
(a) Except as set forth in SCHEDULE 4.14 hereto, as of the
date hereof, there are no pending or, to the knowledge of ▇▇▇-NMBC and each
Acquired Company, as the case may be, threatened material Actions by any Person
or Governmental Authority against or relating to such company with respect to
the ▇▇▇-NMBC Stations or their assets or properties or any Acquired Company or
its assets or properties.
(b) ▇▇▇-NMBC and each Acquired Company are not subject to or
bound by any materially adverse Governmental Order affecting any of the ▇▇▇-NMBC
Stations, any Acquired Company or any Acquired Company Station.
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4.15 Compliance with Laws. Except as set forth in SCHEDULE 4.15 hereto,
to the knowledge of ▇▇▇-NMBC and each Acquired Company as the case may be, each
is in compliance in all material respects with, and such company has never
received any claim or notice that it is in material noncompliance with, any
material Law or Governmental Order applicable to the ▇▇▇-NMBC Stations and each
Acquired Company.
4.16 Environmental Matters. Except as disclosed in the environmental
site assessments identified in SCHEDULE 4.16 hereto, all of which have been made
available to Purchaser:
(a) to the knowledge of ▇▇▇-NMBC and each Acquired Company, as
the case may be, there has not been any release of any Hazardous Material in
violation of Environmental Law into the environment on the Owned Real Property.
(b) neither ▇▇▇-NMBC, with respect to the ▇▇▇-NMBC Stations,
nor any Acquired Company have operated in or is in violation of any
Environmental Law in any material respect.
(c) ▇▇▇-NMBC and each Acquired Company have not received any
directive, order or notice from any Governmental Authority alleging any
violation of or failure to comply with any Environmental Law at the Owned Real
Property, nor have any of ▇▇▇-NMBC and each Acquired Company received any
directive, order or notice from any Government Authority or any other Person
alleging that such company is actually or potentially liable under Environmental
Laws for the costs of environmental investigation or remediation of the Owned
Real Property.
(d) With respect to the Owned Real Property, a copy of all
environmental inspections, studies, audits, tests, reviews or analysis by
▇▇▇-NMBC and each Acquired Company or any consultant engaged by such company
within the last five (5) years, has been previously provided to the Purchaser.
4.17 Insurance.
(a) ▇▇▇-NMBC, with respect to the ▇▇▇-NMBC Stations, and each
Acquired Company or Affiliates thereof, directly or through ▇▇▇, maintain
adequate insurance coverage or self-insure with adequate reserves with respect
to its assets, properties and operations to insure against commercially
reasonable risks of Loss, damage or Liability.
(b) All of the insurance policies listed on SCHEDULE 4.17
hereto in the name of ▇▇▇-NMBC, with respect to the ▇▇▇-NMBC Stations, and each
Acquired Company with respect to libel shall be in full force and effect and
enforceable by the Purchaser following the consummation of the transactions
contemplated by this Agreement in respect of all reported or unreported libel
claims arising out of occurrences prior to the consummation of this Agreement.
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(c) SCHEDULE 4.17 hereto lists and briefly describes each insurance
policy maintained by ▇▇▇-NMBC with respect to the ▇▇▇-NMBC Stations and by or on
behalf of the Acquired Companies, and an insurance claims history for each
▇▇▇-NMBC Station and Acquired Company Station for the preceding five (5) years.
4.18 Transactions with Affiliates. Except as set forth in SCHEDULE 4.18
hereto, no shareholder, officer, director or employee of ▇▇▇-NMBC or any
Acquired Company or any of its Affiliates has (a) an outstanding loan from, or
an outstanding loan to, the ▇▇▇-NMBC Stations and the Acquired Companies which
will remain outstanding as of the Closing, (b) except as set forth in SCHEDULE
4.14 hereto, any material contractual or other claim, express or implied, of any
kind whatsoever which has been asserted or, to the knowledge of the ▇▇▇-NMBC
Stations and the Acquired Companies, threatened, (c) any interest in any of the
Purchased Assets of the ▇▇▇-NMBC Stations or the Acquired Companies' Common
Stock, or (d) engaged in any other transaction with the ▇▇▇-NMBC Stations and
the Acquired Companies other than in such person's capacity as an employee,
officer or director of such respective company.
4.19 Taxes. Except as set forth in SCHEDULE 4.19 hereto:
(a) ▇▇▇-NMBC and each Acquired Company (i) have filed (or caused to
be filed) all Tax Returns required to be filed by such company prior to the date
of this Agreement, except for those Tax Returns for which requests for
extensions have been timely filed, and all such Tax Returns are accurate and
complete in all material respects, (ii) have paid all Taxes shown to be due and
payable on such Tax Returns and (iii) have accrued on the Financial Statements
(or caused to be accrued) all unpaid Taxes for all periods ending on or prior to
the date of the Financial Statements of such company. ▇▇▇-NMBC and each Acquired
Company and its Subsidiaries have not incurred any liability for Taxes
subsequent to the date of the Financial Statements of such company other than in
the ordinary course of such company's business.
(b) There are no Liens for Taxes on the Purchased Assets of the
▇▇▇-NMBC Stations or the assets of any Acquired Company except for Permitted
Encumbrances, and there is no pending Tax audit, examination, refund, litigation
or adjustment in controversy with respect to the Purchased Assets or income of
the ▇▇▇-NMBC Stations or the assets or income of any Acquired Company.
4.20 Labor Controversies. Except as set forth on SCHEDULE 4.20 hereto,
with respect to the ▇▇▇-NMBC Stations and the Acquired Companies, as the case
may be, no such company is a party to, or bound by, any collective bargaining
agreement, contract or other agreement or understanding with a labor union or
labor union organization. There is no material unfair labor practice or labor
arbitration proceeding pending or, to the knowledge of ▇▇▇-NMBC and each
Acquired Company, threatened against any such company.
4.21 Cable Television Transmission. SCHEDULE 4.21 lists (i) to the best
knowledge of ▇▇▇-NMBC each cable television system on which the signal of any
▇▇▇-NMBC Station or any Acquired Company Station is currently being carried
(each, a "Carrying System"), (ii) the cable
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channel on which any ▇▇▇-NMBC Station or any Acquired Company Station is
currently carried on each Carrying System, and (iii) as to each Carrying System,
whether carriage of the signal of such station is pursuant to a "must-carry"
election, a retransmission consent agreement, or otherwise. Except as set forth
in SCHEDULE 4.21, at the date hereof and extending, to the extent applicable, to
the Closing, (i) each ▇▇▇-NMBC Station or each Acquired Company Station is
carried on each applicable Carrying System pursuant to a valid and timely
must-carry election or a valid and enforceable retransmission consent agreement,
as the case may be, (ii) none of ▇▇▇-NMBC or the Acquired Companies is a party
to an agreement to reimburse any cable television system for any copyright
royalties in respect of carriage of the signal of any ▇▇▇-NMBC Station or any
Acquired Company Station, (iii) no cable system has advised any of ▇▇▇-NMBC, the
Acquired Companies, the ▇▇▇-NMBC Stations, or the Acquired Companies' Stations
of any signal quality or copyright indemnity or other prerequisite to cable
carriage of the applicable station's signal, (iv) no cable system has declined
or threatened to decline such carriage or failed to respond to a request for
carriage or sought any form of relief from carriage from the FCC, and (v) there
are no pending or decided requests to modify any ▇▇▇-NMBC Station's or any
Acquired Company's Station's market for signal carriage purposes.
4.22 Digital Television Authorizations. Except as set forth in SCHEDULE
4.22 hereto, ▇▇▇-NMBC and the Acquired Companies have timely filed, and shall
use their commercially reasonable efforts to prosecute, applications for digital
television authorizations for the ▇▇▇-NMBC Stations and the Acquired Companies'
Stations including, without limitation, any applications necessary or
appropriate to "maximize" each such station's digital television facilities in
order that such facilities shall be protected from interference by Class A Low
Power Television stations.
4.23 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by ▇▇▇ directly with the
Purchaser without the intervention of any Person on behalf of ▇▇▇-NMBC and any
Acquired Company, in such manner as to give rise to any valid claim by any
Person against the Purchaser for a finder's fee, brokerage commission or similar
payment, other than Credit Suisse First Boston Corporation and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Co., L.L.C., whose fees and expenses shall be borne by ▇▇▇.
4.24 Full Disclosure. None of the representations and warranties made by
▇▇▇-NMBC and each Acquired Company in this Agreement, the Schedules or Exhibits
hereto or any document, instrument, written statement or other information
furnished by or on behalf of such company in connection with the negotiations
and transactions set forth herein, contains any untrue statement of a material
fact or omits a material fact necessary to make the statements contained therein
or herein not misleading.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to ▇▇▇-NMBC as follows:
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5.1 Organization. The Purchaser is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation.
5.2 Authority. The Purchaser has all requisite corporate power and
authority to enter into this Agreement and the Assignment and Assumption, to
perform its obligations hereunder and thereunder, and to consummate the
transactions contemplated hereby and thereby. The execution and delivery by the
Purchaser of this Agreement and the Assignment and Assumption, the performance
by the Purchaser of its obligations hereunder and thereunder, and the
consummation by the Purchaser of the transactions contemplated hereby and
thereby, have been duly authorized by all necessary corporate action on the part
of the Purchaser. This Agreement has been duly executed and delivered by the
Purchaser and, assuming the due authorization, execution and delivery of this
Agreement by ▇▇▇-NMBC and any Acquired Company, as the case may be, this
Agreement constitutes a legally valid and binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms, except as such
enforceability may be limited by principles of public policy, and subject to (i)
the effect of any applicable Laws of general application relating to bankruptcy,
reorganization, insolvency, moratorium or similar Laws affecting creditors'
rights and relief of debtors generally, and (ii) the effect of rules of law and
general principles of equity, including rules of law and general principles of
equity governing specific performance, injunctive relief and other equitable
remedies (regardless of whether such enforceability is considered in a
proceeding in equity or at law). Upon the execution and delivery of the
Assignment and Assumption by the Purchaser at the Closing and, assuming the due
authorization, execution and delivery thereof by ▇▇▇-NMBC, the Assignment and
Assumption will constitute a legally valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its terms,
except as such enforceability may be limited by principles of public policy, and
subject to (i) the effect of any applicable Laws of general application relating
to bankruptcy, reorganization, insolvency, moratorium or similar Laws affecting
creditors' rights and relief of debtors generally, and (ii) the effect of rules
of law and general principles of equity, including rules of law and general
principles of equity governing specific performance, injunctive relief and other
equitable remedies (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
5.3 No Violation. Assuming that all consents, waivers, approvals, orders
and authorizations set forth in SCHEDULE 5.4 hereto have been obtained and all
registrations, qualifications, designations, declarations or filings with any
Governmental Authorities set forth in SCHEDULE 5.4 hereto have been made, and
except as set forth in SCHEDULE 5.3 hereto, the execution and delivery by the
Purchaser of this Agreement and the Assignment and Assumption, the performance
by the Purchaser of its obligations hereunder and thereunder, and the
consummation by the Purchaser of the transactions contemplated hereby and
thereby, will not conflict with or violate in any material respect, constitute a
material default (or event which with the giving of notice or lapse of time, or
both, would become a material default) under, give rise to any right of
termination, amendment, modification, acceleration or cancellation of any
material obligation or loss of any material benefit under, result in the
creation of any Encumbrance other than a Permitted Encumbrance on any of assets
or properties of the Purchaser pursuant to, or require the Purchaser to obtain
any consent, waiver, approval or Action of, make any filing with, or give any
notice to any Person as a result or under, the terms or provisions of
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(i) the organizational documents of the Purchaser, (ii) any Contract to which
the Purchaser is a party or is bound, or (iii) any Law applicable to the
Purchaser, or any Governmental Order issued by a Governmental Authority by which
the Purchaser is in any way bound or obligated, except, in the case of clauses
(ii) and (iii) of this Section 5.3, as would not, in any individual case, have a
material adverse effect on the ability of the Purchaser to perform its
obligations under this Agreement and the Assignment and Assumption or to
consummate the transactions contemplated hereby or thereby.
5.4 Governmental Consents. No consent, waiver, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any Governmental Authority is required on the part of the Purchaser
in connection with the execution and delivery by the Purchaser of this Agreement
and the Assignment and Assumption, the performance by the Purchaser of its
obligations hereunder and thereunder, and the consummation by the Purchaser of
the transactions contemplated hereby and thereby, including the assumption of
the Assumed Liabilities of the ▇▇▇-NMBC Stations, except (i) as set forth in
SCHEDULE 5.4 hereto, and (ii) where the failure to obtain such consent, waiver,
approval, order or authorization, or to make such registration, qualification,
designation, declaration or filing, would not have a material adverse effect on
the ability of the Purchaser to perform its obligations under this Agreement and
the Assignment and Assumption or to consummate the transactions contemplated
hereby or thereby.
5.5 Brokers. All negotiations relative to this Agreement and the
transactions contemplated hereby have been carried out by the Purchaser directly
with ▇▇▇ without the intervention of any Person on behalf of the Purchaser in
such manner as to give rise to any valid claim by any Person against ▇▇▇-NMBC
and any Acquired Company for a finder's fee, brokerage commission or similar
payment.
5.6 Funding. Purchaser has cash available or has existing borrowing
facilities which, together with its available cash, are sufficient to enable it
to consummate the transactions contemplated by this Agreement and pay all
related fees and expenses for which Purchaser will be responsible and will, from
time to time, provide assurances and information to ▇▇▇ as shall reasonably be
requested by ▇▇▇ that it will have such financial capability at the Closing.
5.7 Investment Representation; Business Investigation. Purchaser is
acquiring the Acquired Companies' Common Stock for its own account or investment
purposes only and not with a view to the distribution of the shares of such
common stock. Purchaser acknowledges that none of the Acquired Companies' Common
Stock has been registered under the Securities Act or any state securities Law
in reliance upon an exemption therefrom for non-public offerings, that shares of
common stock must be held indefinitely unless the sale thereof is registered
under the Securities Act or such state securities law, or an exemption therefrom
for such registration is available under Rule 144, promulgated under the
Securities Act, or otherwise. Purchaser (a) has such knowledge, sophistication
and experience in business and financial matters that it is capable of valuing
an investment in the shares of the Acquired Companies' Common Stock, (b) has
conducted an examination of available reports and other materials relating to
each Acquired Company, (c) fully understands the nature, scope and duration of
the limitations on transfer
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applicable to the shares of the Acquired Companies' Common Stock and (d) can
bear the economic risk of an investment in the shares of the Acquired Companies'
Common Stock and can afford a complete loss of such investment.
5.8 FCC Matters. Except as set forth on SCHEDULE 5.4, Purchaser is
legally and financially qualified under the Communications Act to enter into
this Agreement and to consummate the transactions contemplated hereby. Except as
set forth on SCHEDULE 5.4, it is not necessary for Purchaser or any Affiliate of
Purchaser (or any Person in which Purchaser or any Affiliate of Purchaser has an
attributable interest under the Communications Act) to seek or obtain any waiver
from the FCC, dispose of any interest in any media or communications property or
interest (including the ▇▇▇-NMBC Stations or the Acquired Companies' Stations),
terminate any venture or arrangement, or effectuate any changes or restructuring
of their ownership, including the withdrawal or removal of officers or directors
or the conversion or repurchase of equity securities of Purchaser or any
Affiliate of Purchaser (or any Person in which Purchaser or any Affiliate of
Purchaser has any attributable interest under the Communications Act). Purchaser
is able to certify on FCC Forms 314 and 315 that it is financially qualified.
ARTICLE 6
COVENANTS AND AGREEMENTS
6.1 Conduct of Business.
(a) At all times during the period commencing upon the execution and
delivery hereof by each of the parties hereto and terminating upon the earlier
to occur of the Closing or the termination of this Agreement pursuant to and in
accordance with the terms of Section 9.1 hereof, unless the Purchaser shall
otherwise consent in writing (which consent shall not be unreasonably withheld
or delayed), and except as otherwise set forth in SCHEDULE 6.1 hereto, ▇▇▇-NMBC
shall, and shall cause each Acquired Company, as the case may be, to (i) conduct
the operations of the ▇▇▇-NMBC Stations and the Acquired Companies' Stations in
the ordinary course of business and consistent with past practices, (ii) use
commercially reasonable efforts to preserve intact the goodwill of the ▇▇▇-NMBC
Stations and the Acquired Companies' Stations and the current relationships of
the ▇▇▇-NMBC Stations and each Acquired Company with its officers, employees,
customers, suppliers and others with significant and recurring business dealings
with the ▇▇▇-NMBC Stations and each Acquired Company, (iii) use commercially
reasonable efforts to maintain all of the Insurance Policies and all of the
Licenses and FCC Licenses that are necessary for ▇▇▇-NMBC and each Acquired
Company to carry on the ▇▇▇-NMBC Stations and Acquired Companies' Stations in
the manner conducted by such company as of the date hereof, (iv) maintain the
books of account and records of the ▇▇▇-NMBC Stations and each Acquired Company
in the usual, regular and ordinary manner and consistent with past practices,
and (v) not take any action that would result in a breach of any of the
representations and warranties of ▇▇▇-NMBC and each Acquired Company contained
in Article 4 hereof.
(b) At all times during the period commencing upon the execution
and delivery hereof by each of the parties hereto and terminating upon the
earlier to occur of the Closing or the termination of this Agreement pursuant
to and in accordance with the terms of
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Section 9.1 hereof, unless the Purchaser shall otherwise consent in writing
(which consent shall not be unreasonably withheld or delayed), and except as
otherwise set forth in SCHEDULE 6.1 hereto, ▇▇▇-NMBC shall not, and shall cause
each of the Acquired Companies not to, take, or cause to be taken, any of the
following actions to the extent such actions relate to any of the ▇▇▇-NMBC
Stations, any Acquired Company or any of the Acquired Companies' Stations:
(i) merge with or into, or consolidate with, any other Person;
provided, however, that nothing in this Section 6.1(b)(i) shall prohibit or
otherwise restrain ▇▇▇-NMBC from entering into an agreement with another Person
which is an Affiliate of ▇▇▇ to merge with or into, or consolidate with, such
Person, provided that, if ▇▇▇ and NMBC do not survive the consummation of such
merger or consolidation, such Affiliate shall assume and agree to perform all of
the obligations of ▇▇▇-NMBC under this Agreement pursuant to an assumption
agreement satisfactory to Purchaser within its reasonable judgment.
(ii) change or agree to rearrange in any material respect the
character of any Acquired Company;
(iii) adopt, enter into or amend any arrangement which is, or
would be, an Assumed Plan of the ▇▇▇-NMBC Stations or Benefit Plan of any
Acquired Company except for any amendment to any Benefit Plan offered to all
employees of ▇▇▇ or unless otherwise required by applicable Law or this
Agreement;
(iv) knowingly waive any right of material value;
(v) make any change in the accounting methods or practices of
such company, or make any changes in depreciation or amortization policies or
rates adopted by such company;
(vi) make any material write-down of inventory or material
write off as uncollectible of accounts receivable;
(vii) increase any wage, salary, bonus or other direct or
indirect compensation payable or to become payable to any of the Employees, or
make any accrual for or commitment or agreement to make or pay the same, other
than increases in wages, salary, bonuses or other direct or indirect
compensation made in the ordinary course of business consistent with past
practice, and those required by any existing Contract or Law;
(viii) enter into any transactions with any of its
shareholders, officers, directors or employees, or any Affiliate of any of the
foregoing, other than employment arrangements made in the ordinary course of
business consistent with past practice;
(ix) except as required by the Additional Compensation
Agreements disclosed in SCHEDULE 4.10 hereto, make any payment or commitment to
pay any severance or termination pay to any Employee or any independent
contractor, consultant, agent or other representative of the ▇▇▇-NMBC Stations
and each Acquired Company, other than payments or
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commitments to pay such Employees in the ordinary course of business consistent
with past practice;
(x) (1) other than office leases entered into in the ordinary
course of business, enter into any real property lease (as lessor or lessee);
(2) sell, abandon or make any other disposition of any of the assets or
properties of such company other than in the ordinary course of business
consistent with past practice; or (3) grant or incur any Encumbrance on any of
the assets or properties of such company other than Permitted Encumbrances;
(xi) except in the ordinary course of business and except for
Excluded Liabilities of the ▇▇▇-NMBC Stations, incur or assume any debt,
obligation or Liability pursuant to a Material Contract;
(xii) make any acquisition of all or any part of the capital
stock or all or substantially all of the assets, properties or business of any
other Person;
(xiii) pay, directly or indirectly, any of its Liabilities
before the same become due in accordance with its terms or otherwise than in the
ordinary course of business;
(xiv) enter into any commitments to make capital expenditures
in an aggregate amount materially exceeding its approved capital expenditure
budget for the current fiscal year or, with respect to any period subsequent to
the current fiscal year, the capital expenditure budget approved by ▇▇▇-NMBC in
good faith and consistent with past practice;
(xv) amend in any material respect the charter or the bylaws
of any Acquired Company;
(xvi) issue, transfer, sell or dispose of, authorize or agree
to the issuance, transfer, sale or disposition of (whether through the issuance
or granting of options, rights, warrants, or otherwise), any shares of capital
stock or any voting securities of any Acquired Company or any options, rights,
warrants or other securities convertible into or exchangeable or exercisable for
any such shares of capital stock or voting securities of such Acquired Company
or amend any of the terms of any securities or agreements relating to such
capital stock or voting securities outstanding on the date hereof;
(xvii) acquire or agree to acquire, by merging or
consolidating with, or by purchasing a substantial equity interest in or
substantial portion of the assets of, any business or any Person or otherwise
acquire or agree to acquire any materials assets, in any such case, except in
the ordinary course of business;
(xviii) sell, lease, license, encumber or otherwise dispose of
or agree to sell, license, encumber or otherwise dispose of, any of such
Acquired Company's material assets other than in the ordinary course of business
consistent with past practice or pursuant to existing contractual relationships
disclosed on SCHEDULE 6.1(B)(xviii) hereto;
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(xix) enter into or renew any contract or agreement to provide
or grant any party with a non-terminable exclusive right to develop, host,
service, provide or operate any ▇▇▇-NMBC Station's or Acquired Company Station's
e-mail or internet site or portion thereof;
(xx) terminate without cause any employee of a ▇▇▇-NMBC
Station or an Acquired Company Station who is a party to an employment contract
with ▇▇▇ as disclosed in SCHEDULE 4.10(A) hereto; or
(xxi) voluntarily enter into any collective bargaining
agreement applicable to any employees of the ▇▇▇-NMBC Stations or of the
Acquired Companies or otherwise voluntarily recognize any union as the
bargaining representative of any such employees; or
(xxii) amend, enter into, renew or extend any network
affiliation agreement, Scripps-▇▇▇▇▇▇-HGTV Contract, CNN Contract, AP Contract,
programming Contract with a duration exceeding one (1) year, national media
advertising representation contract, talent agreement (unless for a term of not
more than one (1) year and total compensation of not more than One Hundred
Thousand Dollars ($100,000)), employment agreement (other than nonsolicitation,
noncompetition or nondisclosure agreement), antenna or transmitter lease, or any
agreement involving payments or other consideration having a value of more than
Twenty-Five Thousand Dollars ($25,000) that requires any of the ▇▇▇-NMBC
Stations or the Acquired Companies to acquire goods or services exclusively from
a single supplier or provider or prohibiting any of the ▇▇▇-NMBC Stations or
Acquired Companies from providing certain goods or services to any Person other
than a specified Person unless terminable on thirty (30) days notice without
further obligation or penalty.
(c) Notwithstanding anything to the contrary set forth in this Section 6.1
or elsewhere in this Agreement, (i) ▇▇▇-NMBC shall be permitted, without
obtaining the consent or other approval of the Purchaser, to enter into, perform
its obligations under, and consummate the transactions contemplated by, any
existing or new agreements or other arrangements pursuant to which such company
shall sell, transfer or otherwise dispose of any of its assets other than the
Purchased Assets of the ▇▇▇-NMBC Stations or shares of the stock or assets or
properties of any Acquired Company, it being expressly acknowledged and agreed
by each of the parties hereto that the foregoing shall include the right to
distribute the proceeds from any such sale, transfer or other disposition to the
shareholders of ▇▇▇ or NMBC without obtaining the consent or other approval of
the Purchaser, (ii) each Acquired Company shall be permitted, without obtaining
the consent or other approval of the Purchaser, to declare, issue, make or pay
any cash dividend or other cash distribution to its stockholders prior to the
Closing or make a dividend or distribution to its stockholders of any
intercompany receivables between ▇▇▇, on the one hand, and any of the Acquired
Companies on the other, prior to the Closing, (iii) ▇▇▇-NMBC and each Acquired
Company shall be permitted prior to the Closing, without obtaining the consent
or other approval of the Purchaser, the right to transfer any of the Purchased
Assets of the ▇▇▇-NMBC Stations and the Assumed Liabilities of the ▇▇▇-NMBC
Stations or any of the Acquired Companies' Common Stock, to any Affiliate
thereof and substitute such Affiliate as a party to this Agreement, provided
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that (A) any such Affiliate shall assume and agree to perform all of the
obligations of ▇▇▇-NMBC under this Agreement pursuant to an assumption agreement
satisfactory to Purchaser within its reasonable judgment, and (B) ▇▇▇ and NMBC
shall remain primarily and jointly and severally liable for the performance and
observance of all such obligations, and (iv) ▇▇▇ shall not be otherwise
prohibited from taking any action relating to the newspaper or online
information business or any activity related thereto.
6.2 Access and Information.
(a) Subject to the terms of the Confidentiality Agreement, at all
times during the period commencing upon the execution and delivery hereof by
each of the parties hereto and terminating upon the earlier to occur of the
Closing or the termination of this Agreement pursuant to and in accordance with
the terms of Section 9.1 hereof, ▇▇▇-NMBC and each Acquired Company shall permit
the Purchaser and its authorized agents and representatives to have reasonable
access, upon reasonable notice and during normal business hours, to all of the
Employees, assets and properties and all relevant books, records and documents
of or relating primarily to the ▇▇▇-NMBC Stations and each Acquired Company and
the Purchased Assets of the ▇▇▇-NMBC Stations and the assets of the Acquired
Companies, and shall furnish to the Purchaser such information and data,
financial records and other documents relating thereto as the Purchaser may
reasonably request. ▇▇▇-NMBC and each Acquired Company shall permit the
Purchaser and its agents and representatives reasonable access to such company's
accountants, auditors and suppliers for reasonable consultation or verification
of any information obtained by the Purchaser during the course of any
investigation conducted pursuant to this Section 6.2 relating primarily to the
▇▇▇-NMBC Stations and each Acquired Company, and shall use reasonable efforts to
cause such Persons to cooperate with the Purchaser and its agents and
representatives in such consultations and in verifying such information.
(b) The transactions contemplated hereby are expressly conditioned
upon each FCC Transfer Application becoming a Final Order, and nothing contained
in this Agreement shall give Purchaser the right to control the programming,
equipment, personnel or operations of the ▇▇▇-NMBC Stations and the Acquired
Companies' Stations prior to the Closing.
6.3 Confidentiality. The terms of the Confidentiality Agreement are
hereby incorporated herein by reference and shall continue in full force and
effect from and after the Closing in accordance with the terms thereof, such
that the information obtained by any party hereto, or its officers, employees,
agents or representatives, during any investigation conducted pursuant to
Section 6.2 hereof, in connection with the negotiation, execution and
performance of this Agreement, the consummation of the transactions contemplated
hereby, or otherwise, shall be governed by the terms set forth in the
Confidentiality Agreement.
6.4 Further Actions.
(a) Upon the terms and subject to the conditions set forth in this
Agreement (including the terms of Section 6.4(b) hereof), ▇▇▇-NMBC and each
Acquired Company and the Purchaser shall each use their respective commercially
reasonable best efforts to take, or cause to
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be taken, all appropriate action, and to do, or cause to be done, and to assist
and cooperate with the other party hereto in doing, all things necessary, proper
or advisable under applicable Laws to consummate the transactions contemplated
hereby, including, without limitation:
(i) obtaining all necessary Material Licenses, including the
FCC Licenses, actions or nonactions, waivers, consents, approvals,
authorizations, qualifications and other orders of any Governmental Authorities
with competent jurisdiction over the transactions contemplated hereby;
(ii) obtaining all necessary consents, approvals or waivers
from third parties;
(iii) defending any lawsuits or other Actions, challenging
this Agreement or the consummation of the transactions contemplated hereby,
including seeking to have vacated or reversed any stay or temporary restraining
order entered by any Governmental Authority prohibiting or otherwise restraining
the consummation of the transactions contemplated hereby; and
(iv) executing and delivering any additional instruments,
certificates and other documents necessary or advisable to consummate the
transactions contemplated hereby and to fully carry out the purposes of this
Agreement.
(b) Without limiting the generality of the foregoing, ▇▇▇-NMBC and
each Acquired Company, and the Purchaser hereby agree to proceed diligently to
prepare and file, no later than ten (10) days after the date of this Agreement
(or as soon as practicable thereafter if additional time is necessary to
negotiate the spin-off described in Section 6.4(c)), as follows:
(i) any notification, transfer application and report form and
related material required under the HSR Act and to provide promptly to
Governmental Authorities with regulatory jurisdiction over enforcement of any
applicable antitrust Laws all information and documents requested by any such
Governmental Authorities or necessary, proper or advisable to permit
consummation of the transactions contemplated hereby;
(ii) the FCC Transfer Application, and, thereafter, to
cooperate with each other and use reasonable, diligent and good faith efforts to
obtain the FCC Final Order and the parties hereto shall make good faith efforts
to answer FCC inquiries and third-party objections, if any, with respect to the
FCC Transfer Application, and to avoid designation for hearing; and
(iii) any notification, transfer application and report form
and related material required under applicable Law and to provide promptly to
Governmental Authorities with regulatory jurisdiction over enforcement of any
applicable Laws all information and documents requested by any such Governmental
Authorities or necessary, proper or advisable to permit consummation of the
transactions contemplated hereby.
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(c) Purchaser shall use its commercially reasonable efforts to
obtain a temporary waiver of the FCC "Local Television Multiple Ownership" rule
to permit, for a period following consummation of the transactions contemplated
by this Agreement, common ownership of (i) the television stations in the
Honolulu television market currently owned by Purchaser ("Purchaser's Hawaii
Stations") and (ii) the television stations in the Honolulu television market
that are the subject of this Agreement ("▇▇▇-NMBC's Hawaii Stations") . In the
event that, as of the date which is sixty (60) days following the date of filing
of the FCC Transfer Application, communications counsel for ▇▇▇-NMBC, after due
evaluation, determines in such counsel's reasonable and good faith judgment that
such waiver is not likely to be granted or that FCC consent to the FCC Transfer
Application will be significantly delayed due to the pending waiver request,
Purchaser (i) shall, within fifteen (15) days after receipt of a written request
by ▇▇▇-NMBC, file one or more applications (the "Spin-off Applications") with
the FCC to assign the licenses of either Purchaser's Hawaii Stations or
▇▇▇-NMBC's Hawaii Stations, at Purchaser's election, to either (A) a qualified
trustee under a trust which will permit FCC approval of the FCC Transfer
Application or (B) a legally and financially qualified third-party purchaser
with which Purchaser shall have entered into a definitive agreement for the
purchase and sale of either Purchaser's Hawaii Stations or the ▇▇▇-NMBC Hawaii
Stations; and (ii) in either case, shall prosecute such application with due
diligence. Purchaser shall be solely responsible for all costs and expenses
related to the Spin-off Applications. ▇▇▇-NMBC shall, when and as reasonably
requested by Purchaser, cooperate in the preparation, filing, and prosecution of
the Spin-off Applications. No assignment of licenses to a trustee or to any
other third party shall reduce or modify Purchaser's obligation to pay the full
amount of the Cash Payment pursuant to this Agreement.
Purchaser and ▇▇▇-NMBC and each Acquired Company, hereby further agree to use
their respective commercially reasonable best efforts to (1) respond to any
request of any Governmental Authority for information, (2) contest and resist
any Action, including any legislative, administrative or judicial Action, and
have vacated, lifted, reversed or overturned, any Governmental Order (whether
temporary, preliminary or permanent) that restricts, prevents or prohibits the
consummation of the transactions contemplated hereby, including by using all
legal efforts to vigorously pursue all available avenues of administrative and
judicial appeal and all available legislative action, and (3) in the event that
any permanent or preliminary injunction or other Governmental Order is entered
or becomes reasonably foreseeable to be entered in any proceeding that would
make consummation of the transactions contemplated hereby in accordance with the
terms of this Agreement unlawful or that would prohibit, prevent, delay or
otherwise restrain the consummation of the transactions contemplated hereby, to
cause the relevant Governmental Authorities to vacate, modify or suspend such
injunction or order so as to permit the consummation of the transactions
contemplated hereby prior to the Termination Date.
6.5 Fulfillment of Conditions by ▇▇▇-NMBC and the Acquired Companies.
▇▇▇-NMBC and each Acquired Company shall not knowingly take or cause to be
taken, or fail to take or cause to be taken, any action that would cause the
conditions to the obligations of such company or the Purchaser to consummate the
transactions contemplated hereby to fail to be satisfied or fulfilled at or
prior to the Closing, including by taking or causing to be taken, or failing to
take or cause to be taken, any action that would cause the representations and
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warranties made by each company in Article 4 hereof to fail to be true and
correct as of the Closing in all material respects. ▇▇▇-NMBC and each Acquired
Company shall take, or cause to be taken, all commercially reasonable actions
within its power to cause to be satisfied or fulfilled, at or prior to the
Closing, the conditions precedent to the Purchaser's obligations to consummate
the transactions contemplated hereby as set forth in Section 7.1 hereof.
6.6 Fulfillment of Conditions by the Purchaser. The Purchaser shall not
knowingly take or cause to be taken, or fail to take or cause to be taken, any
action that would cause the conditions to the obligations of ▇▇▇-NMBC and each
Acquired Company or the Purchaser to consummate the transactions contemplated
hereby to fail to be satisfied or fulfilled, including by taking or causing to
be taken, or failing to take or cause to be taken, any action that would cause
the representations and warranties made by the Purchaser in Article 5 hereof to
fail to be true and correct as of the Closing in all material respects. The
Purchaser shall take, or cause to be taken, all commercially reasonable actions
within its power to cause to be satisfied or fulfilled, at or prior to the
Closing, the conditions precedent to the obligations of such company to
consummate the transactions contemplated hereby as set forth in Section 7.2
hereof. Purchaser will not cause any Acquired Company to take any action on the
Closing Date that is not in the ordinary course of business of such company.
6.7 Publicity. ▇▇▇-NMBC and any Acquired Company and the Purchaser shall
cooperate with each other in the development and distribution of all news
releases and other public disclosures relating to the transactions contemplated
by this Agreement. Neither ▇▇▇-NMBC or each Acquired Company nor the Purchaser
shall issue or make, or allow to have issued or made, any press release or
public announcement concerning the transactions contemplated by this Agreement
without the consent of the other party hereto, except as otherwise required by
applicable Law or stock exchange rules, but in any event only after giving the
other party hereto a reasonable opportunity to comment on such release or
announcement in advance, consistent with such applicable legal requirements.
6.8 Transaction Costs. The Purchaser shall pay all transaction costs and
expenses (including legal, accounting and other professional fees and expenses
and other fees described in Section 5.5 hereof) that it incurs in connection
with the negotiation, execution and performance of this Agreement and the
consummation of the transactions contemplated hereby, including, without
limitation, any and all costs and expenses incurred in connection with the
spin-off of one of the Honolulu television stations pursuant to Section 6.4(c).
▇▇▇-NMBC and each Acquired Company shall pay all transaction costs and expenses
(including legal, accounting and other professional fees and expenses and other
fees described in Section 4.21 hereof) that it incurs in connection with the
negotiation, execution and performance of this Agreement and the consummation of
the transactions contemplated hereby. Notwithstanding the foregoing and anything
to the contrary contained in this Agreement, ▇▇▇ and the Purchaser shall share
equally any filing fees in connection with the HSR Act or FCC Transfer
Application and any real estate transfer, sales, use and deed Taxes, or refunds
thereof, and the fees and costs of recording or filing all applicable
conveyancing instruments associated with the transfer of the Purchased Assets of
the ▇▇▇-NMBC Stations from ▇▇▇-NMBC to the Purchaser pursuant to this Agreement
or the Acquired Companies' Common Stock from ▇▇▇ to Purchaser pursuant to this
Agreement.
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▇▇▇-NMBC and the Purchaser shall cooperate in the preparation, execution and
filing of all Tax Returns regarding any real estate transfer Taxes, which become
payable as a result of the transfer of the Purchased Assets of the ▇▇▇-NMBC
Stations from such company to the Purchaser pursuant to this Agreement or the
Acquired Companies' Common Stock from ▇▇▇ to Purchaser pursuant to this
Agreement.
6.9 Employees and Employee Benefit Matters.
(a) The Purchaser shall offer employment as of the Closing Date to
all of the Employees. As of the Closing Date, the Purchaser shall employ each of
the Employees whose employment is not covered by a collective bargaining
agreement and who accepts the Purchaser's offer of employment ("Transferred
Non-Union Employees"). Purchaser shall cause all Transferred Non-Union Employees
as of the Closing Date to be eligible to participate in its "employee welfare
benefit plans" and "employee pension benefit plans" (as defined in Section 3(1)
and 3(2) of ERISA (respectively) of Purchaser in which similarly situated
employees of Purchaser are generally eligible to participate from time to time
("Purchaser's Plans"), and all Transferred Non-Union Employees shall be eligible
for coverage immediately after the Closing Date (and shall not be excluded from
coverage on account of any pre-existing condition) under Purchaser's Plans
constituting employee welfare benefit plans to the extent permitted under such
plans with respect to the Transferred Non-Union Employees. Following the Closing
Date, Purchaser shall cause the Purchaser's Plans to recognize any prior accrued
service credit, credit towards satisfying deductible expense requirements and
out-of-pocket expense limits of Transferred Non-Union Employees for purposes of
Purchaser's Plans to the extent such prior service credits and limits are
recognized by Purchaser or the Purchaser's Plans for similarly situated
employees of Purchaser (including, but not limited to, eligibility to
participate and vesting, but excluding benefit accruals). As soon as practicable
following the Closing Date, Purchaser shall make available to the Transferred
Non-Union Employees Purchaser's 401(k) Plan in accordance with the terms and
provisions of such plan. ▇▇▇-NMBC shall cause to be transferred to Purchaser's
401(k) Plan, in cash, all of the individual account balances of the Transferred
Non-Union Employees under the 401(k) plan in which the Employees now
participate. Notwithstanding any other provision of this Agreement, Employees
who become employed by the Purchaser as of the Closing who are covered by a
collective bargaining agreement on and after the Closing (the "Transferred Union
Employees" and, collectively with the Transferred Non-Union Employees, the
"Transferred Employees") shall receive benefits in accordance with the terms of
such agreement. Except for the employment contracts listed in SCHEDULE 4.10,
nothing in this Agreement is intended to nor shall guarantee employment for any
Transferred Non-Union Employees or Transferred Union Employees for any length of
time after the Closing Date.
(b) Immediately prior to the Closing Date, ▇▇▇-NMBC shall cause each
of the Acquired Companies to cease to be a participating employer under, and
terminate its sponsorship of, each Benefit Plan. Except as otherwise provided in
Section 6.9(c), ▇▇▇-NMBC shall pay, discharge and be solely responsible for all
Liabilities which arise or become payable under any Benefit Plan as a result of,
or in connection with, the termination of any Employee before, upon or after
Closing, including, without limitation, all severance or termination pay and all
accrued
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vacation, salary, wages and other compensation payments or benefits, if any,
which arise or become payable under any Benefit Plan as a result of or in
connection with such termination, except to the extent any such Liabilities are
included as Assumed Liabilities of the ▇▇▇-NMBC Stations or Acquired Companies
Assumed Liabilities. Purchaser shall pay, discharge and be solely responsible
for all Liabilities which arise or become payable as a result of or in
connection with Purchaser's employment of any Transferred Employees upon Closing
or Purchaser's termination of any Transferred Employees after Closing,
including, without limitation, all severance or termination pay and all accrued
vacation, salary, wages and other compensation payments or benefits under or
pursuant to any employee benefit plan of Purchaser. Purchaser shall not,
however, assume or be obligated to pay or perform any Liabilities under any
Benefit Plans (including, but not limited to, any stay bonus or severance
policy, plan, arrangement or benefit), except that (i) Purchaser shall provide
vacations to Transferred Employees to the extent such vacations are accrued and
included as either (A) liabilities of the ▇▇▇-NMBC Stations in the determination
of the Working Capital of the ▇▇▇-NMBC Stations or (B) the Acquired Companies
Closing Liabilities, and (ii) Purchaser shall assume and agree to perform the
employer's obligations under the employment contracts included in the Contracts
of the ▇▇▇-NMBC Stations or the Acquired Companies and listed in SCHEDULE
4.10(a) hereto to the extent such obligations arise during and are attributable
to any period after Closing.
(c) Notwithstanding any other provisions of this Section 6.9, upon
consummation of the Closing, Purchaser shall (i) recognize the union which is a
party to the collective bargaining agreement set forth in SCHEDULE 4.20 hereto,
and (ii) assume and be responsible for the obligations of ▇▇▇-NMBC under such
collective bargaining agreement to the extent such obligations arise during and
are attributable to any period after Closing.
(d) Purchaser acknowledges and agrees that Purchaser's obligations
pursuant to this Section 6.9 are in addition to, and not in limitation of,
Purchaser's assumption of the employer's obligations under the employment
agreements included in the Contracts of the ▇▇▇-NMBC Stations or the Acquired
Companies' Stations and listed in SCHEDULE 4.10(a) hereto to the extent such
obligations arise during and are attributable to any period after Closing.
(e) The covenants and agreements set forth in this Section 6.9 shall
be solely for the benefit of, and shall only be enforceable by, the parties to
this Agreement and their permitted assigns. Without limiting the generality of
the foregoing, nothing in this Agreement shall provide or be construed to
provide any Employees with any rights under this Agreement, and no Person, other
than the parties to this Agreement, is or shall be entitled to bring any action
to enforce any provision of this Agreement.
(f) Notwithstanding anything to the contrary contained to this
Agreement, in the event that after Closing, (i) Purchaser or an Affiliate of
Purchaser terminates any employee specified on SCHEDULE 6.9(f) (or any such
employee terminates his or her employment) and Purchaser or its Affiliate pays
such terminated employee severance in connection with such termination in
accordance with the employee's employment agreement in effect as of the Closing,
and (ii) ▇▇▇ or any Affiliate of ▇▇▇ ▇▇▇▇▇ such terminated employee within two
(2) years
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after such termination, ▇▇▇ shall promptly reimburse Purchaser or its Affiliate
for the amount of such severance paid by Purchaser or its Affiliate.
6.10 Interdivisional Agreements. Unless otherwise requested by the
Purchaser in writing, prior to Closing, ▇▇▇-NMBC and any Acquired Company shall
terminate, without any continuing Liability to the ▇▇▇-NMBC Stations and the
Acquired Companies resulting therefrom, all agreements between any division,
Affiliate or Subsidiary of such company not related to the ▇▇▇-NMBC Stations and
the Acquired Companies, on the one hand, and the division, Affiliate or
Subsidiary of the ▇▇▇-NMBC Stations and each Acquired Company, all of which are
described in SCHEDULE 6.10 hereto.
6.11 Schedules. ▇▇▇-NMBC and each Acquired Company shall have the right
from time to time after the date hereof to deliver written updates of the
Schedules attached hereto (the "Schedules") to reflect changes in the business
condition of the ▇▇▇-NMBC Stations and each Acquired Company that occur or arise
after the date hereof until the date of the Closing; provided, however, that
such updates to the Schedules shall reflect matters consistent with the
covenants applicable to ▇▇▇-NMBC and each Acquired Company pursuant to the terms
hereof. Such updated Schedules shall be promptly furnished to Purchaser.
Purchaser shall have ten (10) days after receipt of each updated Schedule within
which to accept or object to such updated Schedule. In the event ▇▇▇-NMBC or any
Acquired Company delivers an updated Schedule to Purchaser prior to the Closing
and Purchaser does not object within ten (10) days after receipt of such update,
the disclosure in such updated Schedule shall be deemed to amend and supplement
the representations and warranties of ▇▇▇-NMBC and the Acquired Companies and
the applicable Schedule hereto, and in such event Purchaser shall not have the
right to be indemnified for any matter contained in such updated Schedule. If
Purchaser objects to any updated or revised Schedule, ▇▇▇-NMBC or the Acquired
Company shall have thirty (30) days in which to satisfy Purchaser's objection.
If the objection cannot reasonably be cured within thirty (30) days despite good
faith efforts to do so, ▇▇▇-NMBC or the Acquired Company shall have a reasonable
period of time necessary to cure the objection. If ▇▇▇-NMBC or the Acquired
Company does not cure an objection of Purchaser to a revised or updated
Schedule, and the objection is material to the assets, business, operations,
results of operations or financial condition of any ▇▇▇-NMBC Station or Acquired
Company Station, Purchaser may elect to close and pursue the remedies, if any,
under Article 8 of this Agreement or pursue its remedies under Article 9 hereof;
provided that if such objection is not material to the assets, business,
operations, results of operations or a financial condition of any ▇▇▇-NMBC
Station or Acquired Company Station, such objection shall not relieve Purchaser
of the obligation to close under this Agreement, but Purchaser shall retain its
rights under Article 8 with respect to such objection if such objection
constitutes a breach of this Agreement by ▇▇▇-NMBC. Nothing contained in this
Section 6.11 shall be construed as limiting any party's right to terminate this
Agreement.
6.12 Retention of and Access to Records. From and after the Closing, the
Purchaser shall preserve, in accordance with the normal document retention
policy of the ▇▇▇-NMBC Stations and each Acquired Company, all books and records
transferred by ▇▇▇-NMBC and each Acquired Company to the Purchaser pursuant to
this Agreement. As soon as practicable following the Closing, the Purchaser
shall deliver a copy of all books and records of ▇▇▇-NMBC
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relating to the ▇▇▇-NMBC Stations and each Acquired Company in the possession of
Purchaser pursuant hereto to ▇▇▇ in sufficient detail to enable ▇▇▇ to prepare
▇▇▇'▇ financial statements, the Statement of Closing Adjusted Net Worth of the
Acquired Companies, the Statement of Working Capital of the ▇▇▇-NMBC Stations
and all Tax Returns of ▇▇▇-NMBC and each Acquired Company relating to periods
ending on or prior to the Closing Date. In addition to the foregoing, from and
after the Closing, the Purchaser shall afford to ▇▇▇, and its counsel,
accountants and other authorized agents and representatives, during normal
business hours, reasonable access to the employees, books, records and other
data relating to the ▇▇▇-NMBC Stations and each Acquired Company with respect to
periods prior to the Closing, and the right to make copies and extracts
therefrom, to the extent that such access may be reasonably required by the
requesting party (a) to facilitate the investigation, litigation and final
disposition of any claims which may have been or may be made against any such
party or Person, or its Affiliates, (b) for the preparation of Tax Returns and
audits, and (c) for any other reasonable business purpose.
6.13 Tax Matters.
(a) ▇▇▇-NMBC will include the income of the ▇▇▇-NMBC Stations and
each Acquired Company (pursuant to Section 1502 of the Code ) on ▇▇▇'▇
consolidated federal income Tax Returns for all periods through the Closing Date
and pay any federal income Taxes attributable to such income. The Purchaser
shall cause each Acquired Company to furnish Tax information to ▇▇▇ for
inclusion in ▇▇▇'▇ federal consolidated income Tax Return for the period which
includes the Closing Date in accordance with the ▇▇▇-NMBC Stations and each
Acquired Company's past custom and practice. ▇▇▇ will take no position on such
returns that relate to the ▇▇▇-NMBC Stations and each Acquired Company that
would adversely affect the ▇▇▇-NMBC Stations, and each Acquired Company after
the Closing Date except to the extent allowable by Law and consistent with past
custom and practice. The income and any Tax credits of the ▇▇▇-NMBC Stations and
each Acquired Company will be apportioned to the period up to and including the
Closing Date and the period after the Closing Date by closing the books of the
▇▇▇-NMBC Stations and each Acquired Company as of the end of the Closing Date.
(b) All refunds of Taxes (including interest thereon) with respect
to taxable periods of each Acquired Company for which ▇▇▇ is responsible for the
payment of liabilities for Taxes which are received by each Acquired Company or
credited against liabilities for Taxes of any such Acquired Company for periods
for which ▇▇▇ is not so responsible (or against any other Liability for which
▇▇▇ is not responsible) shall be paid in cash by wire transfer of immediately
available funds by Purchaser or each Acquired Company (as determined by
Purchaser) to ▇▇▇ promptly after receipt. Amounts paid pursuant to this Section
6.13(b) shall be treated as additional Stock Purchase Price for the shares of
the Acquired Companies' Common Stock.
(c) The Purchaser agrees that (i) on the Closing Date, all of the
shares of the Acquired Companies' Common Stock shall be acquired by a domestic
corporation, (ii) such corporation shall not make an election for any Acquired
Company pursuant to Section 338(g) of the Code, (iii) Purchaser, not ▇▇▇, shall
be responsible for all Taxes arising from any sale or disposition of the assets
of each Acquired Company in any transaction (other than a deemed sale as a
result of the Section 338(h)(10) election referred to in the following clause
(iv)) that is
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consummated after the Closing, and (iv) at the Purchaser's request and within
the time required under Section 338(h)(10) of the Code and applicable IRS
regulations, ▇▇▇ shall make a joint election solely as to KOIN on IRS Form 8023
to enable the Purchaser to receive the benefits afforded under said Section
338(h)(10), provided that the contents of such election shall be reasonably
satisfactory to ▇▇▇ and Purchaser.
6.14 Interim Financial Statements. During the period commencing on October
1, 1999 and ending on the Closing Date, ▇▇▇ shall deliver to the Purchaser, as
soon as practicable after the end of each month in such period, an unaudited
interim consolidated balance sheet of the ▇▇▇-NMBC Stations and each Acquired
Company, and an unaudited interim balance sheet of each ▇▇▇-NMBC Station and
each Acquired Company Station, as of the end of such month, and the related
consolidated statement of income for the ▇▇▇-NMBC Stations and the Acquired
Companies' Stations, and the related statement of income of each ▇▇▇-NMBC
Station and each Acquired Company Station, in each case for the portion of the
fiscal year ended as of the end of such month. All such statements shall be
prepared in a manner consistent with the Financial Statements.
6.15 Audited Financial Statements. ▇▇▇-NMBC recognizes that Purchaser is a
publicly reporting company and agrees that Purchaser shall be entitled at
Purchaser's expense to cause audited and unaudited financial statements of the
▇▇▇-NMBC Stations and the Acquired Companies to be prepared for such periods and
filed with the Securities and Exchange Commission, and included in a prospectus
distributed to prospective investors, as required by Law applicable to Purchaser
as a publicly reporting company or registrant. ▇▇▇-NMBC agrees to cooperate with
Purchaser and the auditing accountants as reasonably requested by Purchaser in
connection with the preparation and filing of such financial statements,
including providing a customary management representation letter in the form
prescribed by generally accepted auditing standards and shall make a reasonable
request to obtain the consent of ▇▇▇-NMBC's independent accounting firm to
permit Purchaser and Purchaser's auditors to have access to such firm's
workpapers.
6.16 Assignments of Network Affiliation Agreements. Promptly following the
execution of this Agreement, ▇▇▇ and the Purchaser shall jointly request and use
their respective commercially reasonable efforts to obtain the written consent,
in form and substance satisfactory to Purchaser within its reasonable judgment,
of each broadcast network with which ▇▇▇-NMBC or the Acquired Companies has an
Affiliation Agreement to the assignment or transfer of control of such
Affiliation Agreement to the Purchaser, provided that neither ▇▇▇ nor Purchaser
shall be required to pay or provide material consideration to obtain such
consent. If such written consent from each such broadcast network is not
obtained within sixty (60) days after application therefor, then Purchaser may,
prior to the expiration of such sixty-day period, give notice of election to
terminate this Agreement without further obligation by either party to the
other. If each such consent is not obtained and this Agreement is not
terminated, Purchaser shall be deemed to have waived the requirement to secure
any such consent of a broadcast network as a condition precedent to the closing
of the transactions contemplated by this Agreement.
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ARTICLE 7
CLOSING CONDITIONS
7.1 Conditions to Obligations of the Purchaser. The obligations of the
Purchaser to consummate the transactions contemplated by this Agreement are
subject to the satisfaction or fulfillment at or prior to the Closing of the
following conditions, any of which may be waived in whole or in part by the
Purchaser in writing:
(a) All representations and warranties of ▇▇▇-NMBC and any Acquired
Company contained in this Agreement shall be true and correct in all material
respects at and as of the Closing with the same effect as though such
representations and warranties were made at and as of the Closing (except for
changes permitted or contemplated by this Agreement and except for any
representation or warranty that is expressly made as of a specified date, which
shall be true and correct in all material respects as of such specified date
only).
(b) ▇▇▇-NMBC and each Acquired Company shall have performed and
complied in all material respects with all the covenants and agreements required
by this Agreement to be performed or complied with by it at or prior to the
Closing.
(c) All applicable waiting periods (and any extensions thereof)
under the HSR Act shall have expired or otherwise been terminated.
(d) The FCC shall have granted its consent to the FCC Transfer
Application, such consent shall have become a Final Order, and any conditions
set forth in such consent shall have been satisfied.
(e) There shall be in effect no Law or injunction issued by a court
of competent jurisdiction making illegal or otherwise prohibiting or restraining
the consummation of the transactions contemplated by this Agreement.
(f) ▇▇▇-NMBC and each Acquired Company shall have delivered to the
Purchaser all of the certificates, instruments and other documents required to
be delivered by such company at or prior to the Closing pursuant to Section 3.2
hereof.
(g) ▇▇▇-NMBC shall have obtained prior to Closing the written
consents or waivers to the transactions contemplated by this Agreement, in form
reasonably satisfactory to Purchaser's counsel and without any modification or
condition materially adverse to Purchaser or any of the ▇▇▇-NMBC Stations or
Acquired Companies' Stations, which are required under (i) each Material
Contract for each transmitter, antenna (including each satellite and translator
antenna or transmitter), office and studio site, (ii) unless waived under or by
reason of the provisions of Section 6.16, the network affiliation agreement for
each of the ▇▇▇-NMBC Stations and each of the Acquired Companies' Stations, and
(iii) the programming agreements identified on SCHEDULE 7.1(g).
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7.2 Conditions to Obligations of ▇▇▇-NMBC and Acquired Companies. The
obligations of ▇▇▇-NMBC and each Acquired Company to consummate the
transactions contemplated by this Agreement are subject to the satisfaction or
fulfillment at or prior to the Closing of the following conditions, any of
which may be waived in whole or in part by ▇▇▇ in writing:
(a) All representations and warranties of the Purchaser contained
in this Agreement shall be true and correct in all material respects at and as
of the Closing with the same effect as though such representations and
warranties were made at and as of the Closing (except for changes permitted or
contemplated by this Agreement and except for any representation or warranty
that is expressly made as of a specified date, which shall be true and correct
in all material respects as of such specified date only).
(b) The Purchaser shall have performed and complied in all material
respects with the covenants and agreements required by this Agreement to be
performed or complied with by it at or prior to the Closing.
(c) All applicable waiting periods (and any extensions thereof)
under the HSR Act shall have expired or otherwise been terminated.
(d) The FCC shall have granted its consent to the FCC Transfer
Application.
(e) There shall be in effect no Law or injunction issued by a court
of competent jurisdiction making illegal or otherwise prohibiting or restraining
the consummation of the transactions contemplated by this Agreement.
(f) The Purchaser shall have delivered to ▇▇▇ the Cash Payment and
all of the certificates, instruments and other documents required to be
delivered by the Purchaser at or prior to the Closing pursuant to Section 3.3
hereof.
ARTICLE 8
INDEMNIFICATION
8.1 Obligations of ▇▇▇ and NMBC. Subject to the limitations set forth
herein, ▇▇▇ agrees to and shall indemnify and hold Purchaser, and its directors,
officers, employees, Affiliates (including the Acquired Companies if Closing
occurs), agents and assigns harmless from and against any and all Losses
resulting from, based upon or arising out of, directly or indirectly:
(a) Any breach of any representation or warranty made by ▇▇▇ or
NMBC in or pursuant to this Agreement or any ▇▇▇ Document; or
(b) Any nonfulfillment or breach of any covenant or agreement of
▇▇▇ or NMBC under this Agreement or any ▇▇▇ Document; or
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(c) All Benefit Plans, including but not limited to (i) any claim
arising under any Benefit Plan in connection with termination of any Employee
before, upon or after Closing; (ii) termination of any Benefit Plan, (iii)
termination of any Employee's participation in any Benefit Plan, (iv) withdrawal
of any Acquired Companies from any Benefit Plan, or (v) the obligation under any
Benefit Plan to pay or provide any Employee a bonus, severance, or any other
benefit as a result of or in connection with the transactions under this
Agreement; except in each case to the extent included as Acquired Companies
Closing Liabilities, or as liabilities of the ▇▇▇-NMBC Stations in the
determination of the Working Capital of the ▇▇▇-NMBC Stations pursuant to
Section 2.3(b); or
(d) All other Excluded Liabilities of the ▇▇▇-NMBC Stations and all
other Acquired Companies Excluded Liabilities.
8.2 Obligations of Purchaser. Subject to the limitations set forth
herein, Purchaser agrees to indemnify and hold ▇▇▇ and NMBC and their respective
directors, officers, employees, Affiliates, agents and assigns harmless (after
the Closing) from and against any and all Losses of ▇▇▇ and NMBC, resulting
from, based upon or arising out of, directly or indirectly:
(a) Any breach of any representation or warranty made by Purchaser
in or pursuant to this Agreement;
(b) Any non-fulfillment or breach of any covenant or agreement of
Purchaser in this Agreement or other document delivered pursuant to this
Agreement;
(c) Any Assumed Liabilities of the ▇▇▇-NMBC Stations and any
Acquired Companies Assumed Liabilities; or
(d) Any Liability to the extent relating to and arising out of the
operation of the ▇▇▇-NMBC Stations or any Acquired Company following the
Closing, excluding, however, all Excluded Liabilities of the ▇▇▇-NMBC Stations
and all Acquired Companies Excluded Liabilities.
8.3 Procedure for Indemnification. The procedure for indemnification shall
be as follows:
(a) The party or parties claiming indemnification (the "Claimant")
shall give written notice to the party from which indemnification is sought (the
"Indemnitor") reasonably promptly after the Claimant learns of any claim or
proceeding covered by the foregoing agreements to indemnify and hold harmless,
but failure to provide prompt notice shall not be deemed to jeopardize
Claimant's right to demand indemnification if Indemnitor is not materially
prejudiced by the delay in receiving notice. If Indemnitor is materially
prejudiced, the Claimant's right to indemnification shall be reduced according
to the extent of the actual Loss or prejudice which Indemnitor can demonstrate
was caused by the delay. Purchaser shall not be deemed to have notice of any
claim or proceeding by reason of any knowledge acquired on or
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before the Closing Date by an Employee, independent contractor or other agent of
any ▇▇▇-NMBC Station or Acquired Company.
(b) With respect to claims between the parties, following receipt of
notice from the Claimant of a claim, the Indemnitor shall have 15 days to make
any investigation of the claim that the Indemnitor deems necessary or desirable,
or such lesser time if a 15 day period would jeopardize any rights of Claimant
to oppose or protest the claim. For the purpose of this investigation, the
Claimant agrees to make available to the Indemnitor and its authorized
representatives the information relied upon by the Claimant to substantiate the
claim. If the Claimant and the Indemnitor cannot agree as to the validity and
amount of the claim within the 15-day period, or lesser period if required by
this Section (or any mutually agreed upon extension hereof) the Claimant may
seek appropriate legal remedies.
(c) The Indemnitor shall have the right to undertake, by counsel or
other representatives of its own choosing, the defense of such claim. In the
event that the Indemnitor shall elect not to undertake such defense, or within
15 days after notice of such claim from the Claimant shall fail to defend, the
Claimant shall have the right to undertake the defense, compromise or settlement
of such claim, by counsel or other representatives of its own choosing, on
behalf of and for the account and risk of the Indemnitor. Anything in this
Section 8.3 to the contrary notwithstanding, (i) if there is a reasonable
probability that a claim may materially and adversely affect the Claimant other
than as a result of money damages or other money payments, the Claimant shall
have the right, at the reasonable cost and expense of the Indemnitor, to
participate in the defense, compromise or settlement of the claim, (ii) the
Indemnitor shall not, without the Claimant's written consent (such consent not
to be unreasonably withheld), settle or compromise any claim or consent to entry
of any judgment which does not include as an unconditional term thereof the
giving by the plaintiff to the Claimant of a release from all Liability in
respect of such claim, and (iii) in the event that the Indemnitor undertakes
defense of any claim consistent with this Section, the Claimant, by counsel or
other representative of its own choosing and at the reasonable cost and expense
of the Indemnitor, shall have the right to consult with the Indemnitor and its
counsel or other representatives concerning such claim and the Indemnitor and
the Claimant and their respective counsel or other representatives shall
cooperate with respect to such claim. If any disagreement arises in the handling
of the claim, the Indemnitor shall have the right to make the final
determination consistent with the requirements of this Section.
(d) The Indemnitor and its duly appointed representatives shall have
the sole right to negotiate, resolve, settle or contest any claim for Tax made
by a Tax authority with respect to which the Indemnitor is bound to indemnify
Claimant under Section 8.1 or Section 8.2. If the Indemnitor does not assume the
defense of a claim for the Tax made by a Tax authority with respect to which the
Indemnitor is bound to indemnify a Claimant under Section 8.1 or Section 8.2,
the Claimant may defend the same at the reasonable expense of the Indemnitor (in
accordance with the provisions of Article 8) in such manner as it may deem
appropriate, including, but not limited to, settling such audit or proceeding
with the consent of the Indemnitor, which consent shall not be unreasonably
withheld
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(e) ▇▇▇ and NMBC waive and release, effective as of the Closing
Date, all claims against any of the Acquired Companies for any Liabilities as of
the Closing not included as Acquired Companies Closing Liabilities, including
any right to contribution or indemnification for any indemnity payments made by
▇▇▇ or NMBC after the Closing Date pursuant to this Agreement.
8.4 Sole Remedy. Each party agrees that the sole Liability and obligations
of the other party and the sole right, remedy and entitlement of each party for
recovery of any monetary claim with respect to or in connection with this
Agreement or any of the transactions contemplated by this Agreement shall be
limited to indemnification under this Article 8, and all such parties hereby
waive any and all other statutory and common law rights and remedies (including
without limitation rights of indemnification and contribution) which it has or
may hereafter have, provided such waiver shall in no event be construed to
prevent Purchaser from seeking specific performance or other equitable relief or
remedies.
8.5 Limitations on Indemnification; Exclusive Remedy.
(a) No claim for indemnification under Section 8.1(a) or Section
8.2(a) for breach of any representation or warranty shall be valid unless made
within the applicable Survival Period as defined in Section 8.6.
(b) No party shall be obligated to indemnify any other party or
parties under Section 8.1(a) or Section 8.2(a) unless the Claimant's aggregate
amount of Losses as to which a right of indemnification is provided under
Section 8.1(a) or Section 8.2(a) shall exceed $2,500,000, in which event
$1,250,000 plus all of such Losses above $2,500,000 shall be indemnifiable;
provided that Purchaser's right to recover under Section 8.1(a) for breach of
any representation or warranty contained in Section 4.1, 4.2 or 4.3 shall not be
subject to such limitation.
(c) In no event shall the aggregate liability (i) of ▇▇▇ pursuant to
Section 8.1(a), on the one hand, or of the Purchaser pursuant to Section 8.2(a),
on the other hand, exceed $75,000,000 (provided that ▇▇▇'▇ liability for breach
of any representation or warranty contained in Sections 4.1, 4.2 or 4.3 shall
not be subject to such limitation); or (ii) of ▇▇▇ pursuant to Section 8.1(a)
for breach of any representation or warranty contained in Section 4.1, 4.2 or
4.3 and pursuant to Section 8.1(b), (c) and (d), on the one hand, or of the
Purchaser pursuant to Section 8.2(b), (c) or (d), on the other hand, exceed the
sum of the Asset Purchase Price plus the Stock Purchase Price.
(d) Any Loss relating to any of the Acquired Companies for which
indemnification is provided under this Agreement shall be (i) increased by any
Tax Cost and (ii) reduced by any Tax Benefit which the Claimant incurs or
receives prior to or during the Taxable Period in which the corresponding
indemnification payment is received by the Claimant. In addition, if
indemnification under this Agreement results in an increase in the basis of any
asset (other than stock) or increase in the amount of any net operating loss of
the Claimant, the Claimant shall pay the Indemnitor, within ninety (90) days
after the end of each Tax Period, the
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Tax Benefit, if any, realized for such Tax Period by the Claimant that is
attributable to such increase in basis or net operating loss. In the event any
indemnification paid by an Indemnitor is reduced by a Tax Benefit, or the
Claimant pays the Indemnitor the amount of any Tax Benefit, and there is a
subsequent Final Determination denying the Tax Benefit, the Indemnitor shall
promptly reimburse the Claimant for the amount of the Tax Benefit that was
denied. In the event any indemnification paid by an Indemnitor is increased by a
Tax Cost, or the Claimant receives payment for any Tax Cost, and there is a
subsequent Final Determination reducing the Tax Cost, the Indemnitor shall
promptly be reimbursed by the Claimant for the amount of the Tax Cost that was
reduced. To the extent permitted by law, any indemnity payments made under this
Agreement relating to any of the Acquired Companies shall be treated as an
adjustment to the Stock Purchase Price.
(e) If any remediation or other work or action is required in order
to correct or cure a violation of any Environmental Law or of any demand (a
"Violation"), Purchaser shall promptly notify ▇▇▇-NMBC after acquiring knowledge
of such requirement and shall present a remediation plan to ▇▇▇-NMBC at least
twenty (20) days prior to performing such remediation. The remediation plan
shall be designed to minimize the remediation cost to the extent feasible while
providing for a reasonable and customary level of clean-up in compliance with
applicable Law. ▇▇▇ shall have ten (10) days to review and approve the
remediation plan, the approval of which cannot be unreasonably withheld.
(f) If Purchaser acquires knowledge prior to Closing that any
representation, warranty, covenant or agreement of ▇▇▇-NMBC contained in this
Agreement or any of the Schedules attached hereto has been materially breached,
is materially false or requires material modification or amendment to be
correct, Purchaser shall notify ▇▇▇-NMBC within ten (10) days after acquiring
such knowledge. ▇▇▇-NMBC shall have up to thirty (30) days to take corrective
action to cure such breach. If ▇▇▇-NMBC cannot reasonably cure such breach
within thirty (30) days, despite its good faith efforts, ▇▇▇-NMBC shall have
such additional time as may be reasonably necessary to effectuate a cure if such
breach is capable of being cured, but in no event more than an additional sixty
(60) days. If ▇▇▇-NMBC fails to cure such a breach, and the breach is material
to the assets, business, operations, results of operations or financial
condition of any ▇▇▇-NMBC Station or Acquired Company Station, Purchaser may
close the transactions contemplated by this Agreement and pursue its rights to
indemnification under Article 8 or terminate this Agreement under Article 9.
8.6 Survival. Subject to the provisions of Section 8.5(f), all
representations, warranties, covenants and agreements of the parties made in
this Agreement or any of the ▇▇▇ Documents shall survive the Closing regardless
of any investigation or inquiry on the part of any party, and the Closing shall
not be deemed a waiver by any party of the representations, warranties,
covenants or agreements of any other party in this Agreement or any of the ▇▇▇
Documents; provided, however, that the period of survival shall (i) with respect
to the representations and warranties in Sections 4.1, 4.2, 4.3, 5.1, 5.2 and
5.3, continue indefinitely; and (ii) in the case of any other representation and
warranty, end one (1) year after the Closing Date (in each case, the "Survival
Period"). No claim for breach of any representation or warranty may be brought
under this Agreement or any of the ▇▇▇ Documents unless written notice
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describing in reasonable detail the nature and basis of such claim is given on
or prior to the last day of the applicable Survival Period. In the event such
notice of such a claim is so given, the right to indemnification with respect to
such claim shall survive the applicable Survival Period until the claim is
finally resolved and any obligations with respect to the claim are fully
satisfied. All covenants and agreements under this Agreement or any of the ▇▇▇
Documents shall survive the Closing for the applicable statutory limitation
period.
ARTICLE 9
TERMINATION
9.1 Termination. This Agreement may be terminated:
(a) By either ▇▇▇, acting in its own right or on behalf of NMBC or
each Acquired Company (▇▇▇, together with NMBC and each Acquired Company, "▇▇▇"
for purposes of this Article 9), or the Purchaser at any time prior to the
Closing with the mutual written consent of the other party hereto;
(b) Unless the Closing has not occurred as a result of a material
breach of this Agreement by the party seeking such termination, by either ▇▇▇ or
the Purchaser if the Closing has not occurred on or prior to 5:00 p.m. CST on
the date which is nine (9) months following the date of this Agreement (the
"Termination Date"); provided, however, that either ▇▇▇ or Purchaser in its sole
discretion may elect to extend the Termination Date until 5:00 p.m. (CST time)
on the date which is one (1) year following the date of this Agreement by
written notice to the other at least ten (10) calendar days prior to the initial
Termination Date; or
(c) By either ▇▇▇ or the Purchaser if any Governmental Authority
with jurisdiction over such matters shall have issued a final and nonappealable
Governmental Order permanently restraining, enjoining or otherwise prohibiting
the consummation of the transactions contemplated by this Agreement; provided,
however, that neither ▇▇▇ nor the Purchaser may terminate this Agreement
pursuant to this Section 9.1(c) unless the party seeking to so terminate this
Agreement has used all commercially reasonable best efforts to oppose any such
Governmental Order or to have such Governmental Order vacated or made
inapplicable to the transactions contemplated by this Agreement, but nothing
contained in this Section 9.1(c) shall prevent a party that is otherwise
entitled to terminate this Agreement pursuant to Section 9.1(b) or 9.1(d) from
doing so;
(d) If the Closing has not occurred, by either ▇▇▇ or the
Purchaser, if not then in material breach of this Agreement, if the other party
has continued in material breach of this Agreement for thirty (30) days after
receipt of written notice of such breach from the terminating party, and such
breach is not cured within such thirty (30) day period provided, however, that
if a party has undertaken but is not able to cure such breach within thirty (30)
days, despite its good faith efforts, the party shall have such additional time
as may be reasonably necessary to effectuate a cure if such breach is capable of
being cured, but in no event more than an additional sixty (60) days; or
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(e) By Purchaser if entitled to do so under Section 6.11, 6.16 or
8.5(f).
9.2 Effect of Termination. If this Agreement is terminated pursuant to
Section 9.1 hereof, neither party hereto shall have any further Liability
hereunder except that (i) the provisions of Sections 6.7 and 6.8, and Articles 8
and 9 shall remain in full force and effect, and (ii) each party hereto shall
remain liable to each other party hereto for any breach of its obligations under
this Agreement prior to such termination.
ARTICLE 10
MISCELLANEOUS
10.1 Notices. All notices that are required or may be given pursuant to
this Agreement must be in writing and delivered personally, by a recognized
courier service, by a recognized overnight delivery service, by telecopy or by
registered or certified mail, postage prepaid, to the parties at the following
addresses (or to the attention of such other person or such other address as any
party may provide to the other parties by notice in accordance with this Section
10.1):
if to the Purchaser, to: with copies to:
----------------------- --------------
Emmis Communications Corporation Emmis Communications Corporation
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chairman Attn: ▇▇▇▇ ▇▇▇▇▇▇, Esq.
Attn: J. ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Bose ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇
if to ▇▇▇-NMBC, to: with copies to:
------------------- ---------------
▇▇▇ Enterprises, Incorporated Lane & ▇▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chairman and CEO Attn: C. ▇▇▇▇ ▇▇▇▇▇▇▇▇ III
Any such notice or other communication will be deemed to have been given and
received (whether actually received or not) on the day it is personally
delivered or delivered by courier or overnight delivery service or sent by
telecopy (receipt confirmed) or, if mailed, when actually received.
10.2 Attorneys' Fees and Costs. If any judicial action at law or in
equity, including an action for specific enforcement or declaratory relief, is
brought to enforce or interpret any provision of this Agreement, the prevailing
party shall be entitled to recover reasonable
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attorneys' fees and expenses from the other party, which shall be in addition to
any other relief which may be awarded. For purposes of this section, the
prevailing party shall be the claimant if the claimant is successful in
obtaining substantially all of the relief sought, and shall be the defendant or
respondent if the defendant or respondent is successful in denying substantially
all the relief sought by the claimant.
10.3 Amendments and Waiver. This Agreement may not be modified or amended
except in writing signed by the party against whom enforcement is sought. The
terms of this Agreement may be waived only by a written instrument signed by the
party waiving compliance. No waiver of any provision of this Agreement shall be
deemed or shall constitute a waiver of any other provision hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver unless
otherwise provided. No delay on the part of any party hereto in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder. Unless otherwise provided in this
Agreement, the rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies which the parties hereto may otherwise have
at law or in equity. Whenever this Agreement requires or permits consent by or
on behalf of a party, such consent shall be given in writing in a manner
consistent with the requirements for a waiver of compliance as set forth in this
Section 10.3.
10.4 Assignment. Except as provided in Section 6.1(c), neither this
Agreement nor any of the rights, interests or obligations hereunder may be
assigned or delegated by ▇▇▇-NMBC or the Purchaser without the prior written
consent of the other party and any purported assignment or delegation in
violation hereof shall be null and void. Notwithstanding the foregoing, (a)
▇▇▇-NMBC shall be entitled after the Closing Date to assign its obligations
under this Agreement to another entity which succeeds to all or substantially
all of such company's assets and properties, whether by sale, merger,
consolidation, liquidation or otherwise, provided that (i) such successor
assumes and agrees to perform all of ▇▇▇-NMBC's obligations under this Agreement
pursuant to an assumption agreement satisfactory to Purchaser within its
reasonable judgment, and (ii) the successor to ▇▇▇ or NMBC shall remain liable
for the performance and observance of all such obligations; (b) Purchaser may
assign its rights under this Agreement as collateral security to any lender
providing financing to Purchaser or any of its Affiliates; provided that no such
assignment shall relieve Purchaser of its obligations hereunder; (c) Purchaser
may assign all of its rights under this Agreement to a direct or indirect
wholly-owned subsidiary of Purchaser or to an entity in which Purchaser holds at
least a twenty-five percent (25%) equity interest, provided that (i) the
representations and warranties of Purchaser hereunder shall be true and correct
in all respects as applied to the assignee, (ii) both Purchaser and the assignee
shall execute and deliver to ▇▇▇-NMBC a written instrument in form and substance
satisfactory to ▇▇▇-NMBC within their reasonable judgment in which both
Purchaser and the assignee agree to be jointly and severally liable for
performance of all Purchaser's obligations under this Agreement, (iii) such
assignment shall not materially delay issuance by the FCC of its consent to the
FCC Transfer Application, expiration or termination of the waiting period under
the HSR Act, or the Closing, and (iv) Purchaser and the assignee shall deliver
such other documents and instruments as reasonably requested by ▇▇▇-NMBC,
including appropriate certified resolutions of the boards of directors of
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Purchaser and the assignee, and (d) Purchaser may assign all of its rights, but
not its obligations, under this Agreement to a purchaser of Station KGMB in
order to accomplish the spin-off of a Honolulu television station as provided in
Section 6.4(c).
10.5 Entire Agreement. This Agreement, the Confidentiality Agreement and
the related documents contained as Exhibits and Schedules hereto or expressly
contemplated hereby (including ▇▇▇ Documents) contain the entire understanding
of the parties relating to the subject matter hereof and supersede all prior
written or oral and all contemporaneous oral agreements and understandings
relating to the subject matter hereof. The Exhibits and Schedules to this
Agreement are hereby incorporated by reference into and made a part of this
Agreement for all purposes.
10.6 Representations and Warranties Complete. The representations,
warranties, covenants and agreements set forth in this Agreement, the ▇▇▇
Documents and the Confidentiality Agreement constitute all the representations,
warranties, covenants and agreements of the parties hereto and their respective
shareholders, directors, officers, employees, Affiliates, advisors (including
financial, legal and accounting), agents and representatives and upon which the
parties have relied.
10.7 Third Party Beneficiaries. This Agreement is made for the sole
benefit of the parties hereto, their respective successors and permitted
assigns, and nothing contained herein, express or implied, is intended to or
shall confer upon any other Person any third party beneficiary right or any
other legal or equitable rights, benefits or remedies of any nature whatsoever
under or by reason of this Agreement.
10.8 Governing Law. This Agreement will be governed by and construed and
interpreted in accordance with the substantive laws of the State of Illinois,
without giving effect to any conflicts of law rule or principle that might
require the application of the Laws of another jurisdiction.
10.9 Neutral Construction. The parties to this Agreement agree that this
Agreement was negotiated fairly between them at arms' length and that the final
terms of this Agreement are the product of the parties' negotiations. Each party
represents and warrants that it has sought and received legal counsel of its own
choosing with regard to the contents of this Agreement and the rights and
obligations affected hereby. The parties agree that this Agreement shall be
deemed to have been jointly and equally drafted by them, and that the provisions
of this Agreement therefore should not be construed against a party or parties
on the grounds that the party or parties drafted or was more responsible for
drafting the provision(s).
10.10 Severability. In the event that any one or more of the provisions or
parts of a provision contained in this Agreement shall for any reason be held to
be invalid, illegal or unenforceable in any respect in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
or part of a provision of this Agreement or any other jurisdiction, but this
Agreement shall be reformed and construed in any such jurisdiction as if such
invalid or illegal or unenforceable provision or part of a provision had never
been contained
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herein and such provision or part shall be reformed so that it would be valid,
legal and enforceable to the maximum extent permitted in such jurisdiction.
10.11 Bulk Sales Laws. The parties hereby waive compliance with the bulk
sales or transfer Laws of any state in which the Purchased Assets of the
▇▇▇-NMBC Stations are located or in which operations relating to the ▇▇▇-NMBC
Stations or Acquired Stations are conducted.
10.12 Headings; Interpretation; Schedules and Exhibits.
(a) The descriptive headings of the several Articles and Sections of
this Agreement are inserted for convenience only and do not constitute a part of
this Agreement. References to Sections or Articles, unless otherwise indicated,
are references to Sections and Articles of this Agreement. The word "including"
means including without limitation. Words (including defined terms) in the
singular shall be held to include the plural and vice versa and words of one
gender shall be held to include the other gender as the context requires. The
terms " hereof," "herein" and "herewith" and words of similar import shall,
unless otherwise stated, be construed to refer to this Agreement as a whole
(including all of the Schedules and Exhibits hereto) and not to any particular
provision of this Agreement unless otherwise specified. It is understood and
agreed that neither the specifications of any dollar amount in this Agreement
nor the inclusion of any specific item in the Schedules or Exhibits is intended
to imply that such amounts or higher or lower amounts, or the items so included
or other items, are or are not material, and no party shall use the fact of
setting of such amounts or the fact of the inclusion of such item in the
Schedules or Exhibits in any dispute or controversy between the parties as to
whether any obligation, item or matter is or is not material for purposes
hereof.
(b) Whenever ▇▇▇-NMBC or each Acquired Company is called upon to
list any contracts or agreements, there shall be deemed excluded from the
applicable representation or warranty any agreement where the primary
obligations of all the parties thereto have been performed or will be performed
before the Closing Date.
(c) Certain matters and items disclosed in any Schedule or Exhibit
may not be required to be disclosed therein, but may be disclosed therein for
informational purposes only, and no such disclosure shall constitute an
indication or admission of the materiality thereof or create a standard of
disclosure.
(d) If any fact or item is included on a Schedule referenced by a
particular section in this Agreement and the existence of the fact or item or
its contents is relevant to any other section in this Agreement, the fact or
item shall be deemed to be disclosed with respect to such other section whether
or not an explicit cross-reference appears in the Schedules if such relevance is
readily apparent from examination of the Schedules.
10.13 Counterparts. This Agreement may be executed in one or more
counterparts for the convenience of the parties hereto each of which shall be
deemed an original and all of which together will constitute one and the same
instrument. Signatures to faxed copies of this
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Agreement shall be binding so long as original counterparts thereof are provided
to the other party via overnight delivery service received within three (3)
business days thereafter.
10.14 Cooperation. From and after the Closing, Purchaser will cooperate
with ▇▇▇-NMBC in the investigation defense or prosecution of any Action which is
pending or threatened against such company or any of its Affiliates and which
relates to the ▇▇▇-NMBC Stations and each Acquired Company, whether or not any
party has notified the other of a claim for indemnity with respect to such
matter. Without limiting the generality of the foregoing, Purchaser will make
available its employees employed by the ▇▇▇-NMBC Stations and each Acquired
Company to give depositions or testimony and will furnish all documentary or
other evidence in each case as ▇▇▇ may reasonably request. ▇▇▇-NMBC shall
reimburse Purchaser for all reasonable and necessary out-of-pocket expenses
incurred in connection with the performance of its obligations under this
Section 10.14.
10.15 Insurance. Purchaser acknowledges that all insurance policies
maintained by ▇▇▇-NMBC and each Acquired Company and its Affiliates with respect
to the ▇▇▇-NMBC Stations and each Acquired Company and Purchased Assets of
▇▇▇-NMBC Stations will be terminated effective on the Closing Date.
10.16 Joint and Several Liability. ▇▇▇ and NMBC shall be jointly and
severally liable for each representation, warranty, covenant, agreement,
liability or obligation of both or either of them under this Agreement or any of
the ▇▇▇ Documents whether or not so indicated in any other provision of this
Agreement or in any of the ▇▇▇ Documents.
10.17 Specific Performance. ▇▇▇ and NMBC acknowledge that each of the
▇▇▇-NMBC Stations and the Acquired Companies' Stations is of a special, unique
and extraordinary character, and that damages alone are an inadequate remedy for
a breach of this Agreement by ▇▇▇-NMBC. Accordingly, as an alternative to
termination of this Agreement under Section 9.1, if Purchaser is not then in
material default hereunder, Purchaser shall be entitled, in the event of
▇▇▇-NMBC's breach, to enforcement of this Agreement (subject to obtaining any
required approval of the FCC or under the HSR Act) by a decree of specific
performance or injunctive relief requiring ▇▇▇-NMBC to fulfill its obligations
under this Agreement. Such right of specific performance or injunctive relief
shall be in addition to, and not in lieu of, Purchaser's right to recover
damages and to pursue any other remedies available to Purchaser for ▇▇▇-NMBC's
breach. In any action to specifically enforce ▇▇▇-NMBC's obligation to close the
transactions contemplated by this Agreement, ▇▇▇-NMBC shall waive the defense
that there is an adequate remedy at law or in equity and agrees that Purchaser
shall be entitled to obtain specific performance of ▇▇▇-NMBC's obligation to
close without being required to prove actual damages. As a condition to seeking
specific performance, Purchaser shall not be required to tender the Cash Payment
but shall be required to demonstrate that Purchaser is ready, willing and able
to tender the Cash Payment as prescribed in this Agreement.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by a duly authorized officer as of the date first above written.
▇▇▇ ENTERPRISES, INCORPORATED NEW MEXICO BROADCASTING CO.
By:_____________________________ By:____________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman and CEO Title: President
EMMIS COMMUNICATIONS CORPORATION
By:_____________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman
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