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EXHIBIT 2.2
ASSET PURCHASE AGREEMENT
BY AND AMONG
▇▇▇▇▇ TELEVISION-WTOV, L.P.,
AND
▇▇▇▇▇ TELEVISION-WTOV LICENSE, L.P.,
AS SELLERS
AND
▇▇▇▇▇ ACQUISITION COMPANY
AS BUYER
DATED AS OF NOVEMBER 4, 1996
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TABLE OF CONTENTS
Page
ARTICLE 1. DEFINITIONS AND REFERENCES .................... 1
ARTICLE 2 SALE AND PURCHASE OF ASSETS; ESCROW DEPOSIT;
PURCHASE PRICE; AMOUNTS; ASSUMPTION OF LIABILITIES
2.1. Asset Sale and Purchase of Assets. ................ 1
2.1.1. FCC Licenses. .............................. 2
2.1.2. Real and Leased Property Interests. ........ 2
2.1.3. Tangible Personal Property. ................ 2
2.1.4. Intellectual Property. ..................... 3
2.1.5. Program Contracts. ......................... 3
2.1.6. Trade-out Agreements. ...................... 3
2.1.7. Broadcast Time Sales Agreement. ............ 3
2.1.8. Operating Contracts. ....................... 3
2.1.9. Prepaid Items. ............................. 4
2.1.10. Vehicles. ................................. 4
2.1.11. Files and Records. ........................ 4
2.1.12. Auxiliary Facilities. ..................... 4
2.1.13. Permits and Licenses. ..................... 4
2.1.14. Accounts Receivable. ...................... 4
2.1.15. Goodwill. ................................. 4
2.2. Excluded Assets. .................................. 4
2.2.1. Cash. ...................................... 5
2.2.2. Personal Property Disposed Of. ............. 5
2.2.3. Insurance. ................................. 5
2.2.4. Employee Plans and Assets. ................. 5
2.2.5. Right to Tax Refunds. ...................... 5
2.2.6. Certain Books and Records. ................. 5
2.2.7. Third-Party Claims. ........................ 6
2.2.8. Rights Under this Agreement. ............... 6
2.2.9. Interests in Licensees. .................... 6
2.2.10. Name. ..................................... 6
2.2.11. Excluded Contracts and Unrelated Assets. .. 6
2.3. Escrow Deposit. ................................... 6
2.4. Purchase Price. ................................... 7
2.5. Payment of Purchase Price. ........................ 7
2.6. Net Working Capital Amount. ....................... 7
2.7. Assumption of Liabilities. ........................ 9
ARTICLE 3. REPRESENTATIONS AND WARRANTIES BY SELLER ...... 9
3.1. Organization and Standing. ........................ 9
3.2. Authorization. .................................... 10
3.3. Compliance with Laws. ............................. 10
3.4. Consents and Approvals; No Conflicts. ............. 10
3.5. Financial Statements; Undisclosed Liabilities. .... 11
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TABLE OF CONTENTS (continued)
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3.6. Absence of Certain Changes or Events. ............. 12
3.7. Absence of Litigation. ............................ 12
3.8. Assets. ........................................... 12
3.9. FCC Matters. ...................................... 13
3.10. Real Property. ................................... 13
3.11. Condition of Tangible Assets. .................... 14
3.12. Intellectual Property. ........................... 14
3.13. Reports and Records. ............................. 15
3.14. Station Contracts. ............................... 15
3.15. Taxes. ........................................... 15
3.16. Employee Benefit Plans. .......................... 16
3.17. Labor Relations. ................................. 17
3.18. Environmental Matters. ........................... 17
3.19. Transactions With Affiliates ..................... 18
3.20. Insurance. ....................................... 18
3.21. Interpretation of Certain Provisions. ............ 19
ARTICLE 4. REPRESENTATIONS AND WARRANTIES BY BUYER ....... 19
4.1. Organization and Standing. ........................ 19
4.2. Authorization. .................................... 19
4.3. Compliance with Laws. ............................. 20
4.4. Consents and Approvals; No Conflicts. ............. 20
4.5. Availability of Funds. ............................ 20
4.6. Qualification of Buyer. ........................... 20
4.7. No Outside Reliance. .............................. 21
4.8. Interpretation of Certain Provisions. ............. 21
ARTICLE 5. PRE-CLOSING FILINGS ........................... 21
5.1. Application for FCC Consent. ...................... 21
5.2. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. ................................ 22
ARTICLE 6. COVENANTS AND AGREEMENTS OF SELLER ............ 22
6.1. Negative Covenants. ............................... 22
6.1.1. Dispositions; Mergers. ..................... 22
6.1.2. Accounting Principles and Practices. ....... 22
6.1.3. Trade-out Agreements. ...................... 22
6.1.4. Broadcast Time Sales Agreements. ........... 22
6.1.5. Network Affiliation Agreements and
Local Marketing Arrangements................ 23
6.1.6. Additional Agreements. ..................... 23
6.1.7. Breaches. .................................. 23
6.1.8. Employee Matters. .......................... 23
6.1.9. Actions Affecting FCC Licenses. ............ 23
6.1.10. Programming. .............................. 23
6.1.11. Affiliated Transactions. .................. 23
6.2. Affirmative Covenants. ............................ 24
6.2.1. Preserve Existence. ........................ 24
6.2.2. Normal Operations. ......................... 24
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TABLE OF CONTENTS (continued)
Page
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6.2.3. Maintain FCC Licenses. .................... 24
6.2.4. Network Affiliation. ...................... 24
6.2.5. Station Contracts. ........................ 25
6.2.6. Taxes. .................................... 25
6.2.7. Partnership Action. ....................... 25
6.2.8. Access. ................................... 25
6.2.9. Insurance. ................................ 25
6.2.10. Financial Statements. .................... 26
6.3. Consents. ........................................ 26
6.4. Confidentiality. ................................. 26
ARTICLE 7. COVENANTS AND AGREEMENTS OF BUYER ............ 27
7.1. Confidentiality. ................................. 27
7.2. Corporate Action. ................................ 28
7.3. Access. .......................................... 28
ARTICLE 8. MUTUAL COVENANTS AND UNDERSTANDINGS
OF SELLER AND BUYER ................................... 28
8.1. Possession and Control. .......................... 28
8.2. Risk of Loss. .................................... 29
8.3. Public Announcements. ............................ 29
8.4. Employee Matters. ................................ 30
8.4.1. Transferred Employees. .................... 30
8.4.2 Vacation and Sick Leave. ................... 30
8.4.3 Severance Benefits. ........................ 31
8.4.4 Represented Employees. ..................... 31
8.4.5. COBRA Obligations. ........................ 32
8.4.6. Seller Benefits Plans. .................... 32
8.4.7. 401(k) Plans. ............................. 33
8.4.8. Employment Contracts. ..................... 33
8.5. Allocation of Purchase Price. .................... 33
8.6. Disclosure Schedules. ............................ 33
8.7. Bulk Sales Laws. ................................. 34
ARTICLE 9. CONDITIONS PRECEDENT TO BUYER'S
OBLIGATION TO CLOSE ................................... 34
9.1. Representations and Covenants. ................... 34
9.2. Required Consents. ............................... 34
9.3. Delivery of Documents. ........................... 35
9.4. FCC Order. ....................................... 35
9.5. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. ............................... 35
9.6 Legal Proceedings. ................................ 35
9.7 Three-Station Agreement. .......................... 35
ARTICLE 10. CONDITIONS PRECEDENT TO SELLER'S
OBLIGATION TO CLOSE.................................... 35
10.1. Representations and Covenants. .................. 35
10.2. Delivery by Buyer. .............................. 36
10.3. FCC Order. ...................................... 36
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TABLE OF CONTENTS (continued)
Page
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10.4. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. .............................. 36
10.5. Legal Proceedings. .............................. 36
10.6. Three-Station Agreement. ........................ 36
ARTICLE 11. THE CLOSING ................................. 36
11.1. Closing. ........................................ 36
11.2. Delivery by Seller. ............................. 37
11.2.1. Agreements and Instruments ............... 37
11.2.2. Consents. ................................ 37
11.2.3. Certified Resolutions. ................... 37
11.2.4. Officers' Certificates. .................. 37
11.2.5. Organizational Documents. ................ 38
11.2.6. Deposit .................................. 38
11.3. Delivery by Buyer. .............................. 38
11.3.1. Purchase Price Payment. .................. 38
11.3.2. Agreements and Instruments. .............. 38
11.3.3. Certified Resolutions. ................... 38
11.3.4. Officers' Certificate. ................... 38
ARTICLE 12. SURVIVAL; INDEMNIFICATION ................... 39
12.1. Survival of Representations. .................... 39
12.2. Indemnification by Seller. ...................... 39
12.3. Indemnification by Buyer. ....................... 40
12.4. Limitations on Indemnification .................. 40
12.5. Conditions of Indemnification. .................. 41
12.6. Cure of Breach .................................. 43
ARTICLE 13. TERMINATION ................................. 43
13.1. Termination ..................................... 43
13.2. Effect of Termination ........................... 44
ARTICLE 14. REMEDIES .................................... 45
14.1. Default by Buyer. ............................... 45
14.2. Final Order Delay by Buyer. ..................... 46
14.3. Default by Seller. .............................. 46
14.4. Liquidated Damages. ............................. 46
14.5. Specific Performance. ........................... 47
ARTICLE 15. GENERAL PROVISIONS .......................... 47
15.1. Additional Actions, Documents and Information. .. 47
15.2. Brokers. ........................................ 47
15.3. Expenses and Taxes. ............................. 48
15.4. Notices. ........................................ 48
15.5. Waiver. ......................................... 50
15.6. Benefit and Assignment. ......................... 50
15.7. Entire Agreement; Amendment. .................... 52
15.8. Severability. ................................... 52
15.9. Headings. ....................................... 52
15.10. Governing Law; Jurisdiction. ................... 52
15.11. Signature in Counterparts. ..................... 53
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SCHEDULES
Schedule 2.1.1 FCC Licenses
Schedule 2.1.2 Real Property Interests
Schedule 2.1.3 Tangible Personal Property
Schedule 2.1.4 Intellectual Property
Schedule 2.1.5 Program Contracts
Schedule 2.1.6 Trade-out Agreements
Schedule 2.1.8 Operating Contracts
Schedule 2.1.9 Deposits; Prepaid Expenses
Schedule 2.1.10 Vehicles
Schedule 2.2.11 Excluded Contracts and Unrelated Assets
Schedule 2.6.2 Pro Forma Calculation of Net Working Capital Amount
Schedule 3.4.1 Consents
Schedule 3.6 Absence of Certain Changes or Events
Schedule 3.7 Litigation
Schedule 3.8 Encumbrances on Assets
Schedule 3.9 FCC Matters
Schedule 3.10 Encumbrances on Real Property and Leasehold Interests
Schedule 3.11 Condition of Tangible Assets
Schedule 3.12.1 Consents for Intellectual Property Transfer
Schedule 3.16 Employee Benefit Plans
Schedule 3.17.1 Collective Bargaining Agreements
Schedule 3.18 Environmental Matters
Schedule 3.19 Transactions with Affiliates
Schedule 3.20 Insurance
Schedule 6.1.8 Employee Matters
Schedule 9.2 Required Consents and Approvals
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EXHIBITS
EXHIBIT A Form of Deposit Escrow Agreement
EXHIBIT B Form of Indemnity Escrow Agreement
EXHIBIT D Form of ▇▇▇▇ of Sale and Assignment of Assets
EXHIBIT D Form of Assignment of FCC Licenses
EXHIBIT E Form of Assignment of Contracts and Leases
EXHIBIT F Form of Assumption Agreement
EXHIBIT G Forms of Special or Limited Warranty Deeds
EXHIBIT H Form of Transfer Tax Documents
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is entered into
as of this 4th day of November, 1996 by and among ▇▇▇▇▇ TELEVISION-WTOV, L.P.,
a Delaware limited partnership ("▇▇▇▇▇-WTOV"), ▇▇▇▇▇ TELEVISION-WTOV LICENSE,
L.P., a Delaware limited partnership ("WTOV Licensee", and together with
▇▇▇▇▇-WTOV, the "Seller") and ▇▇▇▇▇ ACQUISITION COMPANY, a Delaware corporation
("Buyer").
WHEREAS, WTOV Licensee is the licensee of television broadcast
station WTOV-TV, Channel 9, Steubenville, Ohio ("WTOV") pursuant to certain
authorizations issued by the FCC and ▇▇▇▇▇-WTOV operates WTOV and owns or
leases certain assets used in connection with the operation of WTOV;
WHEREAS, Seller desires to sell, assign and transfer the FCC
authorizations for WTOV (the "Station"), and the assets and businesses of the
Station as described below, and Buyer desires to acquire the Station, the FCC
authorizations for the Station, and the assets and business of the Station as
described below, all on the terms described in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants and agreements hereinafter set forth, the parties hereto
hereby agree as follows:
ARTICLE 1.
DEFINITIONS AND REFERENCES
Capitalized terms used herein without definition shall have the
respective meanings assigned thereto in Annex I attached hereto and
incorporated herein for all purposes of this Agreement (such definitions to be
equally applicable to both the singular and plural forms of the terms defined).
Unless otherwise specified, all references herein to "Articles" or "Sections"
are to Articles or Sections of this Agreement.
ARTICLE 2.
SALE AND PURCHASE OF ASSETS; ESCROW DEPOSIT;
PURCHASE PRICE; AMOUNTS; ASSUMPTION OF LIABILITIES
2.1. ASSET SALE AND PURCHASE OF ASSETS.
Subject to the terms and conditions hereof and in reliance upon
the representations, warranties and agreements contained herein, upon the
Closing,
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Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer
shall purchase, acquire, pay for and accept from Seller, all of Seller's right,
title and interest in, to and under all real, personal and mixed assets,
rights, benefits and privileges, both tangible and intangible, wheresoever
located, owned, leased or used by Seller in connection with the business and
operations of the Station (collectively, the "Assets"); but excluding the
Excluded Assets described in Section 2.2.
The Assets shall include, without limitation, all of Seller's
right, title and interest in, to and under the following:
2.1.1. FCC LICENSES.
All licenses, permits and other authorizations issued
by the FCC to WTOV Licensee for the operation of the Station (the "FCC
Licenses"), including without limitation those listed in Schedule 2.1.1, and
all applications therefor, together with any renewals, extensions or
modifications thereof and additions thereto.
2.1.2. REAL AND LEASED PROPERTY INTERESTS.
(a) All the real property owned by Seller including,
without limitation, all land, fee interests, easements and other interests of
every kind and description in real property, buildings, structures, fixtures,
appurtenances, towers and antennae, and other improvements thereon owned by
Seller ("Real Property"), all of which are listed or described in Schedule
2.1.2.
(b) All the real property leasehold interests of Seller
including, without limitation, leases and subleases of any land, easements and
other real property leasehold interests of every kind and description in real
property, buildings, structures, fixtures, appurtenances, towers and antennae,
and other improvements thereon leased by Seller in connection with the business
and operations of the Station ("Leased Property"), all of which are listed or
described in Schedule 2.1.2.
2.1.3. TANGIBLE PERSONAL PROPERTY.
All of the furniture, fixtures, furnishings, machinery,
computers, equipment, inventory, spare parts, supplies, office materials and
other tangible property of every kind and description maintained, owned, leased
or used by Seller in connection with the business and operations of the
Station, together with any replacements thereof and additions thereto made
before the Closing, and less any retirements or dispositions thereof made
before the Closing in the Ordinary Course of Business, including, without
limitation, those items which have a book value in excess of $10,000 and which
are set forth and identified in Schedule 2.1.3.
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2.1.4. INTELLECTUAL PROPERTY.
All of the service marks, copyrights, franchises,
trademarks, trade names, jingles, slogans, logotypes and other intangible
assets maintained, owned or used by Seller in connection with the business and
operations of the Station (including any and all applications, registrations,
extensions and renewals relating thereto) (the "Intellectual Property"), and
all of the rights, benefits and privileges associated therewith including,
without limitation, those set forth and identified in Schedule 2.1.4 and the
right to use the call letters for the Station and the right to ▇▇▇ for past
infringement of Intellectual Property to the extent necessary to enforce
Buyer's rights to such Intellectual Property.
2.1.5. PROGRAM CONTRACTS.
The program licenses and contracts under which Seller
is authorized to broadcast programs on the Station, all of which are listed on
Schedule 2.1.5, including without limitation, (a) all program (cash and
non-cash) licenses and contracts, and (b) any other such program contracts that
are entered into between the date of this Agreement and the Closing Date in
accordance with the terms of this Agreement (collectively the "Program
Contracts").
2.1.6. TRADE-OUT AGREEMENTS.
All contracts and agreements (excluding Program
Contracts) pursuant to which any Seller has sold, traded or bartered commercial
air time on the Station in consideration for any property or services in lieu
of or in addition to cash, which are set forth and described in Schedule 2.1.6
(collectively, the "Trade-out Agreements").
2.1.7. BROADCAST TIME SALES AGREEMENT.
All contracts and agreements pursuant to which Seller
has sold commercial air time on the Station for cash (collectively the "Time
Sales Agreements").
2.1.8. OPERATING CONTRACTS.
The other contracts and agreements listed on Schedule
2.1.8 (including, without limitation, employment agreements and talent
contracts, collective bargaining agreements, network affiliation agreements and
national and local advertising representation agreements for the Station),
together with all contracts and agreements that will be entered into between
the date of this Agreement and the Closing Date in accordance with the terms of
this Agreement (collectively, the "Operating Contracts" and together with the
Program Contracts, and the Trade-out Agreements and the Time Sales Agreements,
the "Station Contracts").
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2.1.9. PREPAID ITEMS.
All deposits and prepaid expenses of the Station,
including, without limitation, those set forth and described in Schedule 2.1.9.
2.1.10. VEHICLES.
All automotive equipment and motor vehicles maintained,
owned, leased or otherwise used by Seller in connection with the business and
operations of the Station, including, without limitation, those set forth and
described in Schedule 2.1.10.
2.1.11. FILES AND RECORDS.
All engineering, business and other books, papers,
logs, files and records pertaining to the business and operations of the
Station, but not the organizational documents and records or other partnership
records of Seller.
2.1.12. AUXILIARY FACILITIES.
All translators, earth stations, and other auxiliary
facilities, and all applications therefor owned, leased or otherwise used by
Seller in connection with the business and operations of the Station.
2.1.13. PERMITS AND LICENSES.
All permits, approvals, orders, authorizations,
consents, licenses, certificates, franchises, exemptions of, or filings or
registrations with, any court or Governmental Authority (other than the FCC) in
any jurisdiction, which have been issued or granted to or are owned or used by
Seller in connection with the business and operations of the Station and all
pending applications therefor.
2.1.14. ACCOUNTS RECEIVABLE.
All Accounts Receivable arising out of the business and
operations of the Station.
2.1.15. GOODWILL.
The business of the Station as a "going concern,"
customer relationships and goodwill.
2.2. EXCLUDED ASSETS.
Notwithstanding anything to the contrary in this Agreement,
there shall be excluded from the Assets and retained by Seller, to the extent
in existence as of the Closing Date, the following assets (collectively, the
"Excluded Assets"):
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2.2.1. CASH.
All cash and cash equivalents held by Seller, all
interest receivable in connection with any such cash, cash equivalents or short
term investments, bank balances and rights in and to bank accounts, marketable
and other securities of Seller.
2.2.2. PERSONAL PROPERTY DISPOSED OF.
All tangible personal property disposed of or consumed
in the Ordinary Course of Business as permitted by this Agreement.
2.2.3. INSURANCE.
All contracts of insurance and all insurance plans and
the assets thereof; provided, however, in the event of any loss or damage by
fire or other casualty or other cause occurring prior to the Closing Date,
insurance proceeds received by Seller with respect to such loss or damage shall
belong to and be paid over to the Buyer to the extent that such proceeds have
not been used to restore, replace or repair such damaged Assets, provided,
further, upon the receipt by Buyer of such insurance proceeds, Seller shall
have no further liability to Buyer to the extent of the insurance proceeds
received by Buyer for any such loss or damage (pursuant to the indemnification
provisions of this Agreement or otherwise).
2.2.4. EMPLOYEE PLANS AND ASSETS.
All Plans, Benefit Arrangements, Qualified Plans and
Welfare Plans and the assets thereof.
2.2.5. RIGHT TO TAX REFUNDS.
Any and all claims of Seller with respect to any Tax
refunds.
2.2.6. CERTAIN BOOKS AND RECORDS.
All (a) Seller's organizational documents and other
partnership records, and originals of account books of original entry, (b)
duplicated copies of any books, records, accounts, checks, payment records, Tax
records (including payroll, unemployment, real estate and other Tax records)
and other similar books, records and information of Seller relating to Seller's
operation of the business of the Station prior to the Closing, (c) all records
prepared by or on behalf of Seller in connection with the sale of the Station,
and (d) all records and documents relating to any Excluded Assets.
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2.2.7. THIRD-PARTY CLAIMS.
All rights and claims of Seller whether mature,
contingent or otherwise, against third parties relating to the business and
operations of the Station during the period prior to the Closing, whether in
tort, contract, or otherwise, except for rights and claims relating to past
infringement of Intellectual Property to the extent necessary to enforce
Buyer's rights to such Intellectual Property.
2.2.8. RIGHTS UNDER THIS AGREEMENT.
All of Seller's rights under or pursuant to this
Agreement or any other rights in favor of Seller pursuant to the other
agreements contemplated hereby.
2.2.9. INTERESTS IN LICENSEES.
The general partnership interest of ▇▇▇▇▇-WTOV in WTOV
Licensee.
2.2.10. NAME.
All rights to the name "▇▇▇▇▇ Television," "▇▇▇▇▇
Broadcasting" or "Jupiter/▇▇▇▇▇" or any logo or variation thereof and the
goodwill associated therewith.
2.2.11. EXCLUDED CONTRACTS AND UNRELATED ASSETS.
The contracts, agreements and any other assets listed
on Schedule 2.2.11.
2.3. ESCROW DEPOSIT.
For and in partial consideration of the execution and delivery
of this Agreement, simultaneously with the execution and delivery of this
Agreement and the Three-Station Agreement, the Three-Station Buyer and the
Buyer are jointly depositing in escrow with the Deposit Escrow Agent an
original, irrevocable letter of credit (the "Letter of Credit") issued for the
joint benefit of Seller and the Three-Station Sellers by Chase Manhattan Bank,
N.A. for an amount equal to Seven Million Eight Hundred Fifty Thousand Dollars
($7,850,000), such Letter of Credit to be held as an ▇▇▇▇▇▇▇ money deposit (the
"Deposit"), in accordance with the terms and conditions of the Deposit Escrow
Agreement.
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2.4. PURCHASE PRICE.
For and in consideration of the conveyances and assignments described herein
and in addition to the assumption of Liabilities as set forth in Section 2.7,
Buyer agrees to pay to Seller, and Seller agree to accept from Buyer, an amount
equal to TWENTY-EIGHT MILLION FIVE HUNDRED THOUSAND DOLLARS ($28,500,000) (the
"Base Purchase Price"), plus or minus (as the case may be) the Net Working
Capital Amount as provided for in Section 2.6 (collectively, the "Purchase
Price"). The Purchase Price shall be payable as described in Section 2.5. The
Purchase Price shall be allocated among the Assets in accordance with Section
8.5.
2.5. PAYMENT OF PURCHASE PRICE.
The Purchase Price shall be payable to Seller at the Closing as
follows:
2.5.1. Buyer shall deliver an amount equal to Five Hundred
Thousand Dollars ($500,000) (the "WTOV Indemnity Escrow Amount") to the
Indemnity Escrow Agent by wire transfer of immediately available federal funds
to an account identified in writing by the Indemnity Escrow Agent. The WTOV
Indemnity Escrow Amount, together with the Three-Station Indemnity Escrow
Amount delivered pursuant to the Three-Station Agreement (collectively, the
"Indemnity Escrow Amount"), shall be held by the Indemnity Escrow Agent in
accordance with the terms and conditions of the Indemnity Escrow Agreement.
After the Closing Date, in the event that Buyer has any Losses pursuant to
Section 12 hereof, such Losses shall be paid from the Indemnity Escrow Amount.
On the date that is one year after the Closing Date, the Indemnity Escrow Agent
shall deliver to the Seller and the Three-Station Sellers any remaining
Indemnity Escrow Amount (to the extent not subject to any pending claims)
pursuant to the terms of the Indemnity Escrow Agreement.
2.5.2. Buyer shall deliver the balance of the Purchase Price
by wire transfer of immediately available federal funds to an account which
will be identified by Seller not less than two (2) days prior to the Closing
Date.
2.6. NET WORKING CAPITAL AMOUNT.
2.6.1. ESTIMATED NET WORKING CAPITAL AMOUNT. At least three
(3) days prior to the Closing Date, Seller shall deliver to Buyer in writing
and in reasonable detail a good faith estimate of the Net Working Capital (the
"Estimated Net Working Capital") as of the Closing Date. The Purchase Price
shall be (a) increased by the amount, if any, by which the Estimated Net
Working Capital exceeds zero dollars ($0), or (b) decreased by the amount, if
any, by which the Estimated Net Working Capital is less than zero dollars ($0)
(such increase or
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decrease, as the case may be, is referred to herein as the "Estimated Net
Working Capital Amount").
2.6.2. FINAL NET WORKING CAPITAL AMOUNT. Within forty-five
(45) days after the Closing Date, Buyer shall deliver to Seller in writing and
in reasonable detail a good faith determination of the Net Working Capital as
of the Closing Date ("Final Net Working Capital Amount"). Seller shall assist
Buyer in making such determination and Buyer shall provide Seller with
reasonable access to the properties, books and records relating to the Station
for the purpose of determining the Final Net Working Capital Amount. Seller
shall have the right to review the computations and workpapers used in
connection with Buyer's calculation of the Final Net Working Capital Amount. If
Seller disagrees with the amount of the Final Net Working Capital Amount
determined by Buyer, Seller shall so notify Buyer in writing within twenty-five
(25) days after the date of receipt of Buyer's Final Net Working Capital
Amount, specifying in detail any point of disagreement; provided, however, if
Seller fails to notify Buyer in writing of Seller's disagreement within such
twenty-five (25) day period, Buyer's determination of the Final Net Working
Capital Amount shall be final, conclusive and binding on Seller and Buyer.
After the receipt of any notice of disagreement, Buyer and Seller shall
negotiate in good faith to resolve any disagreements regarding the Final Net
Working Capital Amount. If any such disagreement cannot be resolved by Seller
and Buyer within twenty-five (25) days after Buyer has received notice from
Seller of the existence of such disagreement, Buyer and Seller shall jointly
retain the accounting firm of Ernst & Young LLP or another nationally
recognized public accounting firm (the "Accounting Firm") to review the Buyer's
determination of the Final Net Working Capital Amount and to resolve as soon as
possible all points of disagreement raised by Seller. All determinations made
by the Accounting Firm with respect to the Final Net Working Capital Amount
shall be final, conclusive and binding on Buyer and Seller. The fees and
expenses of the Accounting Firm incurred in connection with any such
determination shall be shared one-half by Buyer and one-half by Seller.
Subject to the ultimate resolution of any disagreement
with respect to the calculation of the Final Net Working Capital Amount, if the
Final Net Working Capital Amount is such that Buyer's payment of the Estimated
Net Working Capital Amount is an underpayment to Seller for the actual Net
Working Capital, then Buyer shall pay Seller in cash an amount equal to such
underpayment within two (2) business days following the final determination of
the Final Net Working Capital Amount. Subject to the ultimate resolution of
any disagreement with respect to the calculation of the Final Net Working
Capital Amount, if the Final Net Working Capital Amount is such that Buyer's
payment of the Estimated Net Working Capital Amount is an overpayment to Seller
for the actual Net Working Capital, then Seller shall pay Buyer in cash an
amount equal to such overpayment within two (2) business days following the
determination of the Final Net Working Capital Amount. Any amounts paid
pursuant to this
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Section 2.6.2 shall be by wire transfer of immediately available funds for
credit to the recipient at a bank account identified by such recipient in
writing.
Buyer and Seller agree that prior to the date of the final
determination of the Final Net Working Capital Amount pursuant to this Section
2.6.2 (by the Accounting Firm or otherwise), neither party will destroy any
records pertaining to, or necessary for, the final determination of the Final
Net Working Capital Amount.
Schedule 2.6.2 contains a pro forma calculation of the Net
Working Capital Amount for the Jupiter/▇▇▇▇▇ Stations based on financial
statements referred to in Section 3.5.1 hereof as if the Closing occurred as of
September 30, 1996. Schedule 2.6.2 is attached hereto solely for the purpose of
demonstrating by example the manner in which the Net Working Capital Amount for
the Jupiter/▇▇▇▇▇ Stations shall be calculated as of the Closing Date.
2.7. ASSUMPTION OF LIABILITIES.
2.7.1. At the Closing, the Buyer shall assume, and shall agree
to pay, perform and discharge and shall agree to indemnify and hold Seller
harmless from (a) all Liabilities arising after and relating to the period
after the Closing Date under the Station Contracts and the FCC Licenses, (b)
all Liabilities arising out of events occurring after the Closing Date related
to the businesses or operations of the Station or Buyer's ownership of the
Assets, (c) all Liabilities for which Buyer receives an adjustment to the Base
Purchase Price in connection with the calculation of the Final Net Working
Capital Amount to the extent of the amount of such adjustment as reflected in
the Final Net Working Capital Amount, and (d) all Liabilities of Seller to
employees of the Station to be assumed by Buyer in accordance with Section 8.4
hereof.
2.7.2. Except for the Liabilities expressly assumed by Buyer
as set forth in Section 2.7.1 hereof, Buyer assumes no other Liabilities of any
kind or description.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES BY SELLER
Seller represents and warrants to Buyer as follows:
3.1. ORGANIZATION AND STANDING.
Each of ▇▇▇▇▇-WTOV and WTOV Licensee is a limited partnership
duly organized, validly existing and in good standing under the laws of the
State of
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Delaware and is duly qualified to do business as a foreign limited partnership
and is in good standing in each jurisdiction where such qualification is
necessary, except for those jurisdictions where the failure to be so qualified
would not, individually or in the aggregate, have a Material Adverse Effect.
Each of ▇▇▇▇▇-WTOV and WTOV Licensee has the full partnership power and
authority to own, lease and otherwise to hold and operate the Assets, to carry
on the business of the Station as now conducted, and to enter into and perform
the terms of this Agreement, the other Seller Documents and the transactions
contemplated hereby and thereby.
3.2. AUTHORIZATION.
The execution, delivery and performance of this Agreement and
of the other Seller Documents, and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
necessary action of the partners of Seller and by any other necessary limited
partnership actions of Seller (none of which actions has been modified or
rescinded and all of which actions are in full force and effect). This
Agreement and the Deposit Escrow Agreement constitute, and upon execution and
delivery each other Seller Document will constitute, valid and binding
agreements and obligations of Seller, enforceable against Seller in accordance
with their respective terms, except as the same may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws of general
applicability relating to or affecting creditors' rights generally and by the
application of general principles of equity.
3.3. COMPLIANCE WITH LAWS.
Seller is in compliance in all material respects with all Laws
applicable to Seller, to the Assets, to the Station and to its respective
businesses and operations. Seller has obtained and holds all permits, licenses
and approvals (none of which has been modified or rescinded and all of which
are in full force and effect) from all Governmental Authorities necessary in
order to conduct the operations of the Station as presently conducted, except
for such permits, licenses and approvals for which the failure to obtain would
not, individually or in the aggregate, have a Material Adverse Effect.
3.4. CONSENTS AND APPROVALS; NO CONFLICTS.
3.4.1. The execution and delivery of this Agreement, and the
performance of the transactions contemplated herein by Seller, will not require
any consent, approval, authorization or other action by, or filing with or
notification to, any Person in connection with any material Station Contract,
except that certain of the Station Contracts may be assigned only with the
consent of third parties, as specified in Schedule 3.4.1.
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3.4.2 The execution and delivery of this Agreement, and the
performance of the transactions contemplated herein by Seller, will not require
any consent, approval, authorization or other action by, or filing with or
notification to, any Governmental Authority where the failure to make such
filing or obtain such consent will have a Material Adverse Effect, except as
follows: (a) filings required under ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇, (b) consents to the
assignment of the FCC Licenses to Buyer by the FCC, and (c) filings, if any,
with respect to real estate transfer taxes.
3.4.3. Assuming all consents, approvals, authorizations and
other actions described in Section 3.4.1 and Section 3.4.2 have been obtained
and all filings and notifications described in Section 3.4.1 and Section 3.4.2
have been made, the execution, delivery and performance of this Agreement and
the other Seller Documents by Seller do not and will not (a) conflict with or
violate any Law applicable to Seller, the Assets or the Station or by which any
of the Assets or the Station is subject or affected, (b) conflict with or
result in any breach of or constitute a default (or an event which with notice
or lapse of time or both would become a default) under any contract or
agreement to which Seller is a party or by which Seller is bound or to which
any of the Assets or the Station is subject or affected, (c) result in the
creation of any Encumbrance upon the Assets, or (d) conflict with or violate
the organizational documents of Seller; except where any such conflict,
violation or breach would not, individually or in the aggregate, have a
Material Adverse Effect.
3.5. FINANCIAL STATEMENTS; UNDISCLOSED LIABILITIES.
3.5.1. Seller has provided to Buyer unaudited balance sheets
of the Jupiter/▇▇▇▇▇ Stations as of September 30, 1996 and the unaudited
statements of income and cash flow for the nine month period ended September
30, 1996. The financial statements referred to in this Section 3.5.1 (a)
present fairly in all material respects the financial condition of the
Jupiter/▇▇▇▇▇ Stations as of the respective dates and the results of operations
and cash flows for the respective periods indicated, and (b) have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis (except that the financial statements referred to in this
Section 3.5.1 (x) do not contain all footnotes required under generally
accepted accounting principles and (y) are subject to (i) normal year-end audit
adjustments and (ii) adjustments in connection with the resolution of
outstanding working capital matters with previous owners of the Jupiter/▇▇▇▇▇
Stations, none of which, individually or in the aggregate, is material).
3.5.2. There exist no Liabilities of the Station relating to,
or arising out of, the business or operations of the Station, contingent or
absolute, matured or unmatured, known or unknown, except (a) as reflected on
the unaudited balance sheets as of September 30, 1996 (the "Current Balance
Sheet
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Date") referred to in Section 3.5.1 and (b) for Liabilities that were incurred
after the Current Balance Sheet Date in the Ordinary Course of Business.
3.6. ABSENCE OF CERTAIN CHANGES OR EVENTS.
Except as set forth and described in Schedule 3.6, since the
Current Balance Sheet Date, there has been no Material Adverse Effect (or event
that reasonably could be expected to have a Material Adverse Effect). Since
the Current Balance Sheet Date, Seller has conducted the business of the
Station in the Ordinary Course of Business, and Seller has not (a) incurred
loss of, or injury to, any of the Assets as the result of any fire, explosion,
flood, windstorm, earthquake, labor trouble, riot, accident, act of God or
public enemy or armed forces, or other casualty, except for such losses or
injuries which have been cured in accordance with Section 8.2; (b) incurred, or
become subject to, any Liability, except current Liabilities incurred in the
Ordinary Course of Business; (c) discharged or satisfied any Encumbrance or
paid any Liability other than current Liabilities shown in the balance sheets
furnished pursuant to Section 3.5, current Liabilities incurred since the
Current Balance Sheet Date in the Ordinary Course of Business, and Liabilities
(including, without limitation, partial and complete prepayments) arising under
any credit or loan agreement between Seller and its lenders; (d) mortgaged,
pledged or subjected to any Encumbrance any of its Assets other than
Encumbrances in connection with Liabilities arising under any credit or loan
agreement between Seller and its lenders; (e) sold, exchanged, transferred or
otherwise disposed of any of its Assets, or canceled any debts or claims; (f)
written down the value of any Assets or written off as uncollectible any
Accounts Receivable, except write-downs and write-offs in the Ordinary Course
of Business; (g) entered into any transactions other than in the Ordinary
Course of Business; (h) made any material change in any method of accounting or
accounting practice; or (i) made any agreement to do any of the foregoing.
3.7. ABSENCE OF LITIGATION.
Except as set forth on Schedule 3.7 as of the date hereof,
there is no action, suit, investigation, claim, arbitration or litigation
pending or, to Seller's knowledge, threatened against Seller, the Assets, or
the Station by or before any Governmental Authority that, individually or in
the aggregate, would be reasonably likely to (a) have a Material Adverse
Effect, or (b) challenge or seek to prevent, enjoin, alter or materially delay
the transaction contemplated hereby.
3.8. ASSETS.
Except for the Excluded Assets, the Assets include all of the
assets or property used in the business of the Station as presently operated.
Except for leased or licensed Assets, Seller is the owner of, and has good
title to, the Assets
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free and clear of any Encumbrances, except for and subject only to (a) the
Permitted Encumbrances, and (b) those Encumbrances listed in Schedule 3.8 which
shall be discharged and removed on or prior to the Closing Date. At the
Closing, Buyer shall acquire good title to, and all right, title and interest
in and to the Assets, free and clear of all Encumbrances, except for the
Permitted Encumbrances.
3.9. FCC MATTERS.
WTOV Licensee holds the FCC Licenses listed on Schedule 2.1.1.
The FCC Licenses constitute all of the licenses, permits and authorizations
from the FCC that are required for the business and operations of the Station.
The FCC Licenses are valid and in full force and effect through the dates set
forth on Schedule 2.1.1, unimpaired by any condition which would reasonably be
likely to have, individually or in the aggregate, a Material Adverse Effect.
The Station has been operated by Seller in all material respects in accordance
with the terms of the FCC Licenses. Except as set forth on Schedule 3.9, no
application, action or proceeding is pending for the renewal or modification of
any of the FCC Licenses, and, except for actions or proceedings affecting
television broadcast stations generally, no application, complaint, action or
proceeding is pending or, to Seller's knowledge, threatened that may result in
the (a) the revocation, modification, non-renewal or suspension of any of the
FCC Licenses, (b) the issuance of a cease-and-desist order, or (c) the
imposition of any administrative or judicial sanction with respect to the
Station. Seller has no knowledge of any facts, conditions or events relating
to Seller or the Station including, without limitation, Seller's compliance
with the Children's Television Act, that would reasonably be expected to cause
the FCC to deny the assignment of the FCC Licenses as provided for in this
Agreement. Seller has filed with the FCC all reports, forms and statements
required by the FCC to be filed by Seller relating to the Station, including,
without limitation, applications for renewal of authority required by
applicable Laws.
3.10. REAL PROPERTY.
3.10.1. Seller has good and marketable title to the Real
Property listed in Schedule 2.1.2, free and clear of all Encumbrances, except
for (a) those items listed in Schedule 3.10, and (b) Permitted Encumbrances.
3.10.2. Seller has a valid leasehold interest in all Leased
Property listed as leased by Seller in Schedule 2.1.2. Schedule 2.1.2 lists
all leases and subleases pursuant to which any of the Leased Property is leased
by Seller. Seller is the owner and holder of all the Leased Property purported
to be granted by such leases and subleases. Each such lease and sublease is in
full force and effect and constitutes a legal, valid and binding obligation of,
and is legally enforceable against Seller and to the knowledge of Seller, each
other party thereto and grants the leasehold interest it purports to grant.
Seller has complied with all of the material provisions of such leases and
subleases and is not in default thereunder in
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any material respect, and to Seller's knowledge, there has not occurred any
event which (whether with or without notice, lapse of time or the happening or
occurrence of any other event) would constitute such a default.
3.10.3 The Real Property and the Leased Property listed in
Schedule 2.1.2 constitute all of the real property owned, leased or used by
Seller in the business and operations of the Station.
3.10.4. All buildings, structures, fixtures and other
improvements on the Real Property are in operating condition and adequate
repair (ordinary wear and tear excepted) for the purposes to which they are
currently devoted.
3.10.5. To the knowledge of Seller, no portion of the Real
Property or any building, structure, fixture or improvement thereon is the
subject of, or affected by, any condemnation, eminent domain or inverse
condemnation proceeding currently instituted or pending.
3.10.6. Seller has delivered to Buyer copies of title policies
and surveys prepared in connection with Seller's acquisition of the Real
Property.
3.11. CONDITION OF TANGIBLE ASSETS.
Except as set forth on Schedule 3.11, all tangible Assets
presently in use are in operating condition and adequate repair (ordinary wear
and tear excepted) for the purposes to which they are currently devoted.
3.12. INTELLECTUAL PROPERTY.
Schedule 2.1.4 contains a true, correct and complete listing of
all Intellectual Property owned or licensed by or registered in the name of
Seller which is used in the business and operations of the Station, all of
which is transferable to Buyer by the sole act and deed of Seller; and except
as set forth in Schedule 3.12.1 no consent on the part of any other person is
necessary to validate the transfer to Buyer of such Intellectual Property.
Seller pays no royalty to anyone with respect to the Intellectual Property.
Seller owns or possesses all rights to use all such Intellectual Property
material to the conduct of the business of the Station. Seller does not have
any knowledge and Seller has not received any notice to the effect that any
service rendered by Seller relating to the business of the Station may infringe
on any Intellectual Property right or other legally protectable right of
another. Seller has the right to the use of the call letters "WTOV-TV"
pursuant to the rules and regulations of the FCC.
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3.13. REPORTS AND RECORDS.
All material returns, reports and statements relating to the
Station required to be filed by Seller with the FCC or any other Governmental
Authority have been filed and when filed were correct and complete in all
material respects. All such reports, returns and statements shall continue to
be filed on a current basis until the Closing Date, and will be correct and
complete in all material respects when filed. All documents required by the
FCC's rules to be placed in the Station's public files by Seller have been
placed and are being held in such files. All logs and business records of
every type and nature relating to the business and operations of the Station
have been maintained in all material respects in accordance with the rules and
regulations of the FCC.
3.14. STATION CONTRACTS.
The Station Contracts set forth in Schedules 2.1.5, 2.1.6 and
2.1.8 are all of the contracts and agreements relating to the Assets, to the
Station or to the business and operations thereof, other than (a) Time Sales
Agreements; (b) contracts and agreements which are terminable on no more than
sixty (60) days notice without the payment of a premium or penalty; and (c)
contracts and agreements which do not require payments of more than $10,000 per
contract per year or $150,000 per year in the aggregate. Complete and correct
copies of all such Station Contracts have been made available to Buyer and (a)
each such Station Contract is in full force and effect; (b) Seller is not in
breach or default of the terms of any Station Contract in any material respect;
(c) none of the material rights of Seller under any such Station Contract will
be subject to termination or modification, nor will a default occur, as a
result of the consummation of the transactions contemplated hereby, except to
the extent that failure to obtain the prior consent to assignment thereof (to
the extent set forth on Schedule 3.4.1) of any party thereto shall or could be
interpreted to constitute a termination or modification of or a default under
any such Station Contract, and (d) to the knowledge of Seller, no other party
to any such Station Contract is in material breach or default of the terms
thereunder.
3.15. TAXES.
3.15.1. Seller has (or, in the case of returns becoming due
after the date hereof and on or before the Closing Date, will have prior to the
Closing Date) duly filed all Seller Tax Returns required to be filed by Seller
on or before the Closing Date with respect to all applicable Taxes. In the
case of any Seller Tax Returns which receive an extension for their date of
filing, such Seller Tax Returns will be considered due on, and not considered
required to be filed before, the extended due date. To the Seller's knowledge,
all of Seller Tax Returns are (or, in the case of returns becoming due after
the date hereof and on or before the Closing Date, will be) true and complete
in all material respects. Seller: (a) has paid all
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Taxes due to any Governmental Authority in connection with any of Seller Tax
Returns; or (b) has established (or, in the case of amounts becoming due after
the date hereof, prior to the Closing Date will have established) adequate
reserves (in conformity with generally accepted accounting principles
consistently applied) for the payment of such Taxes.
3.15.2. There is no action, suit, proceeding, audit,
investigation or claim pending or, to the knowledge of Seller, threatened in
respect of any Taxes associated with, or which would become a lien against, the
Assets or operations of the Station for which Seller may become liable, nor has
any deficiency or claim for any such Taxes been proposed, asserted or, to the
knowledge of Seller, threatened. There is no Station Contract, waiver or
consent providing for an extension of time with respect to the assessment or
collection of any Taxes associated with, or which would become a lien against,
the Assets or operations of the Station against Seller, and no power of
attorney granted by Seller with respect to any related tax matters is currently
in force.
3.16. EMPLOYEE BENEFIT PLANS.
3.16.1. Schedule 3.16 lists all Plans and Benefit Arrangements
maintained by or contributed to by ▇▇▇▇▇ Broadcasting Group, Inc. ("SBG") for
the benefit of the employees of the Station (collectively, the "Benefit
Plans"). Each Benefit Plan has been maintained in substantial compliance with
its terms and with the requirements prescribed by applicable Law, including,
without limitation, ERISA and the Code.
3.16.2. Schedule 3.16 sets forth a list of all Qualified Plans.
All Qualified Plans and any related trust agreements or annuity agreements (or
any other funding document) have been maintained in compliance with ERISA and
the Code (including, without limitation, the requirements for Tax qualification
described in Section 401 thereof). The trusts established under such Plans are
exempt from federal income taxes under Section 501(a) of the Code.
3.16.3. Schedule 3.16 lists all funded Welfare Plans that
provide benefits to current or former employees of Seller or its beneficiaries.
The funding under each Welfare Plan does not exceed and has not exceeded the
limitations under Sections 419A(b) and 419A(c) of the Code. Neither SBG nor
Seller is subject to taxation on the income of any Welfare Plan's welfare
benefit fund (as such term is defined in Section 419(e) of the Code) under
Section 419A(g) of the Code.
3.16.4. Except as required by applicable Law, neither SBG nor
Seller has any post-retirement medical, life insurance or other benefits
promised, provided or otherwise due now or in the future to current, former or
retired employees of Seller.
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3.16.5. Except as set forth in Schedule 3.16, SBG has (a) filed
or caused to be filed all returns and reports on the Plans that it is required
to file and (b) paid or made adequate provision for all fees, interest,
penalties, assessments or deficiencies that have become due pursuant to those
returns or reports or pursuant to any assessment or adjustment that has been
made relating to those returns or reports. All other fees, interest, penalties
and assessments that are payable by or for SBG and/or Seller have been timely
reported, fully paid and discharged. There are no unpaid fees, penalties,
interest or assessments due from SBG and/or Seller or from any other person
that are or could become an Encumbrance on any Asset or could otherwise
adversely affect the businesses or Assets. SBG has collected or withheld all
amounts that are required to be collected or withheld by it to discharge its
obligations, and all of those amounts have been paid to the appropriate
Governmental Authority or set aside in appropriate accounts for future payment
when due. SBG has furnished to Buyer true and complete copies of all documents
setting forth the terms and funding of each Plan (including, without
limitation, copies of each severance benefit arrangement and vacation pay
plan).
3.17. LABOR RELATIONS.
3.17.1. Except as set forth in Schedule 3.17.1, there are no
strikes, work stoppages, grievance proceedings, union organization efforts, or
other controversies pending or threatened between Seller and any union or
collective bargaining unit representing such employees. Seller is in
compliance in all material respects with all Laws relating to the employment or
the workplace, including, without limitation, provisions relating to wages,
hours, collective bargaining, safety and health, work authorization, equal
employment opportunity, immigration and the withholding of income taxes,
unemployment compensation, worker's compensation, employee privacy and right to
know and social security contributions. Except as set forth in Schedule 3.17.1
hereto, there are no collective bargaining agreements relating to the Station
or the business and operations thereof and Seller has not agreed to recognize
any union or other collective bargaining unit, nor has any union or collective
bargaining unit been certified as representing any of Seller's employees.
3.17.2. Seller has provided to Buyer a true and complete list
dated as of August 1, 1996 of all employees of Seller who perform significant
services at the Station.
3.18. ENVIRONMENTAL MATTERS.
3.18.1 Schedule 3.18 sets forth all environmental reports and
assessments prepared for and/or delivered to Seller in connection with Seller's
acquisition and operation of the Real Property.
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3.18.2. To the knowledge of Seller, the information set forth
in Schedule 3.18 is true, correct and complete in all material respects. Since
Seller's acquisition of the Station, Seller has operated the Station, the Real
Property and all improvements thereon in material compliance with all
Environmental Laws.
3.18.3 Except as set forth in Schedule 3.18, there are no
pending or, to the knowledge of Seller, threatened actions, suits, claims, or
other legal proceedings based on (and Seller has not received any notice of any
complaint, order, directive, citation, notice of responsibility, notice of
potential responsibility, or information request from any Governmental
Authority arising out of or attributable to): (a) the current or past presence
at any part of the Real Property of Hazardous Materials; (b) the current or
past release or threatened release into the environment from the Real Property
(including, without limitation, into any storm drain, sewer, septic system or
publicly owned treatment works) of any Hazardous Materials; (c) the off-site
disposal of Hazardous Materials originating on or from the Real Property or the
businesses or Assets of Seller; (d) any facility operations or procedures of
Seller which do not conform to requirements of the Environmental Laws; or (e)
any violation of Environmental Laws at any part of the Real Property arising
from Seller's activities involving Hazardous Materials. To the knowledge of
Seller, Seller has been duly issued all permits, licenses, certificates and
approvals required under any Environmental Law, except for such permits the
failure to obtain, will not have, individually or in the aggregate, a Material
Adverse Effect.
3.18.4 Based on the information set forth in Schedule 3.18, the
Real Property contains no underground storage tanks, or underground piping
associated with such tanks, used currently or in the past for Hazardous
Materials.
3.19. TRANSACTIONS WITH AFFILIATES
Except as set forth in Schedule 3.19 attached hereto, Seller is
not now, and since January 1, 1996, has not been, a party, directly or
indirectly, to any contract, lease, arrangement or transaction which is
material to the business or operations of the Station, whether for the
purchase, lease or sale of property, for the rendition of services or
otherwise, with any affiliate of Seller, or any officer, director, employee,
proprietor, partner or shareholder of Seller. The terms and conditions of the
transactions involving Seller and any affiliate of Seller which are identified
on Schedule 3.19 are described briefly therein.
3.20. INSURANCE.
Schedule 3.20 contains a list and brief summary of all policies
of title, property, fire, casualty, liability, life, workmen's compensation,
libel and slander, and other forms of insurance of any kind relating to the
Assets or the business and operations of the Station and held by Seller. All
such policies: (a) are in full force and effect; (b) are sufficient for
compliance in all material respects by
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Seller with all requirements of Law and of all material agreements to which
Seller is a party; and (c) are valid, outstanding, and enforceable policies.
3.21. INTERPRETATION OF CERTAIN PROVISIONS.
Seller has not relied and is not relying on the specification
of any dollar amount in any representation or warranty made in this Agreement
or any Schedule hereto to indicate that such amounts, or higher or lower
amounts, are or are not material, and agrees not to assert in any dispute or
controversy between the parties hereto that specification of such amounts
indicates or is evidence as to whether or not any obligation, item or matter is
or is not material for purposes of this Agreement and the transactions
contemplated hereby.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES BY BUYER
Buyer represents, warrants and covenants to Seller as follows:
4.1. ORGANIZATION AND STANDING.
Buyer is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and by the Closing Date
will be duly qualified to do business as a foreign corporation where such
qualification is necessary unless the failure to be so qualified would not
materially and adversely affect Buyer's ability to consummate the transactions
contemplated by this Agreement. Buyer has the full corporate power and
corporate authority to enter into and perform the terms of this Agreement and
the other Buyer Documents and to carry out the transactions contemplated hereby
and thereby.
4.2. AUTHORIZATION.
The execution, delivery and performance of this Agreement and
of the other Buyer Documents, and the consummation of the transactions
contemplated hereby and thereby, have been duly and validly authorized by all
necessary actions of Buyer (none of which actions has been modified or
rescinded and all of which actions are in full force and effect). This
Agreement and the Deposit Escrow Agreement constitute, and upon execution and
delivery each such other Buyer Document will constitute, a valid and binding
agreement and obligation of Buyer, enforceable against Buyer in accordance with
its respective terms, except as the same may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws of general
applicability relating to or affecting creditors' rights generally and by the
application of general principles of equity.
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4.3. COMPLIANCE WITH LAWS.
As of the Closing Date, Buyer shall have obtained and shall
hold all material permits, licenses and approvals (none of which will have been
modified or rescinded and all of which shall be in full force and effect) from
all Governmental Authorities necessary in order to conduct the operations of
the Station as presently conducted and to own, use and maintain the Assets.
4.4. CONSENTS AND APPROVALS; NO CONFLICTS.
4.4.1. The execution and delivery of this Agreement, and the
performance of the transactions contemplated herein by Buyer, will not require
any consent, approval, authorization or other action by, or filing with or
notification to, any Person or Governmental Authority where the failure to make
such filing or obtain such consent will have a material adverse effect on
Buyer's ability to consummate the transactions contemplated by this Agreement,
except as follows: (a) filings required under ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇, (b) approvals
of the assignment of the FCC Licenses to Buyer by the FCC, and (c) based upon
Seller's representations set forth in Section 3.4.1, certain of the Station
Contracts may be assigned only with the consent of third parties, as specified
in Schedule 3.4.1.
4.4.2. Assuming all consents, approvals, authorizations and
other actions described in Section 4.4.1 have been obtained and all filings and
notifications described in Section 4.4.1 have been made, the execution,
delivery and performance of this Agreement and the other Buyer Documents by
Buyer do not and will not (a) conflict with or violate any Law applicable to
Buyer, (b) conflict with or result in any breach of or constitute a default (or
an event which with notice or lapse of time or both would become a default) of
any contract or agreement to which Buyer is a party or by which Buyer is bound,
or (c) conflict with or violate the organizational documents of Buyer.
4.5. AVAILABILITY OF FUNDS.
Buyer will have available on the Closing Date sufficient funds
to enable it to consummate the transactions contemplated hereby.
4.6. QUALIFICATION OF BUYER.
Buyer is, and pending Closing will be legally, technically,
financially and otherwise qualified under the Communications Act and all rules,
regulations and policies of the FCC to acquire and operate the Station. There
are no facts or proceedings which would reasonably be expected to disqualify
Buyer under the Communications Act or otherwise from acquiring or operating the
Station or would cause the FCC not to approve the assignment of the FCC
Licenses to Buyer. Buyer
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has no knowledge of any fact or circumstance relating to Buyer or any of
Buyer's affiliates that would reasonably be expected to (a) cause the filing of
any objection to the assignment of the FCC Licenses to Buyer, or (b) lead to a
delay in the processing by the FCC of the applications for such assignment. No
waiver of any FCC rule or policy is necessary to be obtained for the grant of
the applications for the assignment of the FCC Licenses to Buyer, nor will
processing pursuant to any exception or rule of general applicability be
requested or required in connection with the consummation of the transactions
herein. As of the Closing Date, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, SBG or another Person
controlled by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ will own all the voting stock or other voting
interests of Buyer.
4.7. NO OUTSIDE RELIANCE.
Buyer has not relied and is not relying on any statement,
representation or warranty by Seller not made in this Agreement, any Schedule
hereto or any certificate to be delivered by Seller to Buyer at the Closing
pursuant to this Agreement. Buyer is not relying on any projections or other
predictions contained or referred to in the Schedules or other materials that
have been or may hereafter be provided to Buyer or any of its Affiliates,
agents or representatives, and Seller make no representations or warranties
with respect to any such projections or other predictions.
4.8. INTERPRETATION OF CERTAIN PROVISIONS.
Buyer has not relied and is not relying on the specification of
any dollar amount in any representation or warranty made in this Agreement or
any Schedule hereto to indicate that such amounts, or higher or lower amounts,
are or are not material, and agrees not to assert in any dispute or controversy
between the parties hereto that specification of such amounts indicates or is
evidence as to whether or not any obligation, item or matter is or is not
material for purposes of this Agreement and the transactions contemplated
hereby.
ARTICLE 5.
PRE-CLOSING FILINGS
5.1. APPLICATION FOR FCC CONSENT.
As promptly as practicable and no later than November 15, 1996,
Seller and Buyer shall jointly file a Form 316 application with the FCC
requesting the consent of the FCC to the assignment of the FCC Licenses for the
Stations from Seller to Buyer. Seller and Buyer will diligently take, or fully
cooperate in the taking of, all necessary and proper steps, and provide any
additional information reasonably requested in order to obtain promptly the
requested consents and
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approvals of the application by the FCC; provided, however, that none of the
parties hereto shall have any obligation to participate in any evidentiary
hearing.
5.2. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇.
As promptly as practicable and no later than November 22, 1996,
Seller and Buyer shall complete any filing that may be required pursuant to
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ (each an "HSR Filing"), or shall mutually agree that no such
filing is required. Seller and Buyer shall diligently take, or fully cooperate
in the taking of, all necessary and proper steps, and provide any additional
information reasonably requested in order to comply with, the requirements of
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇.
ARTICLE 6.
COVENANTS AND AGREEMENTS OF SELLER
Each Seller covenants and agrees with Buyer as follows:
6.1. NEGATIVE COVENANTS.
Pending and prior to the Closing, Seller will not, without the
prior consent of Buyer, do or agree to do any of the following:
6.1.1. DISPOSITIONS; MERGERS.
Sell, assign, lease or otherwise transfer or dispose of
any of the Assets other than in the Ordinary Course of Business; or merge or
consolidate with or into any other entity or enter into any contracts or
agreements relating thereto.
6.1.2. ACCOUNTING PRINCIPLES AND PRACTICES.
Change or modify any of Seller's accounting principles
or practices or any method of applying such principles or practices.
6.1.3. TRADE-OUT AGREEMENTS.
Enter into any Trade-out Agreement except in the
Ordinary Course of Business.
6.1.4. BROADCAST TIME SALES AGREEMENTS.
Enter into any Time Sales Agreement except in the
Ordinary Course of Business.
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6.1.5. NETWORK AFFILIATION AGREEMENTS AND LOCAL MARKETING
ARRANGEMENTS.
Acquire or enter into any network affiliation
agreements, local marketing arrangements, joint operating agreements, time
brokerage agreements or other similar contracts.
6.1.6. ADDITIONAL AGREEMENTS.
Acquire or enter into any new Station Contracts not
referred to in Sections 6.1.3, 6.1.4 or 6.1.5 above, or renew, extend, amend,
alter, modify or otherwise change any existing Station Contract, except for
Station Contracts obligating Seller to make payments of less than $50,000 per
contract per year and $250,000 per year in the aggregate (collectively,
"Additional Agreements").
6.1.7. BREACHES.
Do or omit to do any act which will cause a material
breach of any Station Contract.
6.1.8. EMPLOYEE MATTERS.
Except as set forth on Schedule 6.1.8, enter into or
become subject to any employment, labor, union, or professional service
contract not terminable at will, or any bonus, pension, insurance, profit
sharing, incentive, deferred compensation, severance pay, retirement,
hospitalization, employee benefit, or other similar plan; or increase the
compensation payable or to become payable to any employee, or pay or arrange to
pay any bonus payment to any employee, except in the Ordinary Course of
Business.
6.1.9. ACTIONS AFFECTING FCC LICENSES.
Take any action which may jeopardize the validity or
enforceability of or rights under the FCC Licenses.
6.1.10. PROGRAMMING.
Program or broadcast any Program Contract or syndicated
program, except in the Ordinary Course of Business.
6.1.11. AFFILIATED TRANSACTIONS.
Except for the transactions described in Schedule 3.19,
enter any transaction with any affiliate of Seller, including, without
limitation, any renewal, extension, modification or other change in, any
existing contract or agreement to which an affiliate of Seller is a party or
any other transaction
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involving an affiliate of Seller which will have continued effectiveness after
the Closing Date.
6.2. AFFIRMATIVE COVENANTS.
Pending and prior to the Closing Date, each Seller will:
6.2.1. PRESERVE EXISTENCE.
Preserve its partnership existence and business
organization intact, maintain its existing franchises and licenses, use
commercially reasonable efforts to preserve for the Buyer the relationships of
the Station with suppliers, customers, employees and others with whom the
Station has business relationships, and keep all Assets substantially in their
present condition, ordinary wear and tear excepted.
6.2.2. NORMAL OPERATIONS.
Subject to the terms and conditions of this Agreement
(including, without limitation, Section 6.1), (a) carry on the businesses and
activities of the Station, including without limitation, the sale of
advertising time, entering into other contracts and agreements, or purchasing
and scheduling of programming, in the Ordinary Course of Business; (b) pay or
otherwise satisfy all obligations (cash and barter) of the Station in the
Ordinary Course of Business; (c) maintain its books of account, records, and
files in substantially the same manner as heretofore; (d) maintain its Assets
in customary repair, maintenance and condition, except to the extent of normal
wear and tear, and repair or replace, consistently with the Ordinary Course of
Business, any Asset that may be damaged or destroyed, and (e) continue to
collect and write-off Accounts Receivables in the Ordinary Course of Business.
6.2.3. MAINTAIN FCC LICENSES.
Maintain the validity of the FCC Licenses, and comply
in all material respects with all requirements of the FCC Licenses and the
rules and regulations of the FCC and all other applicable Laws.
6.2.4. NETWORK AFFILIATION.
Use its reasonable efforts to maintain in full force
and effect Seller's present network affiliation agreements for the Station (and
any and all modifications and renewals thereof).
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6.2.5. STATION CONTRACTS.
Pay and perform its obligations in the Ordinary Course
of Business under the Station Contracts and under any Additional Agreements
that shall be entered into between the date hereof and the Closing pursuant to
Section 6.1.6, in accordance with the respective terms and conditions of such
Station Contracts.
6.2.6. TAXES.
Pay or discharge all Taxes when due and payable in the
Ordinary Course of Business.
6.2.7. PARTNERSHIP ACTION.
Take all partnership action (including, without
limitation, all partner action) under the Laws of any state having jurisdiction
over Seller necessary to effectuate the transactions contemplated by this
Agreement and by the other Seller Documents.
6.2.8. ACCESS.
Cause to be afforded to representatives of Buyer
reasonable access during normal business hours to offices, properties, assets,
books and records, contracts and reports of the Station, as Buyer shall from
time to time reasonably request; provided, however, that such investigation
shall only be upon reasonable notice and shall not unreasonably disrupt the
personnel or operations of Seller or the Station. All requests for access to
the offices, properties, assets, books and records, contracts and reports of
the Station shall be made to such representatives as Seller shall designate in
writing, who shall be solely responsible for coordinating all such requests and
all access permitted hereunder. Buyer acknowledges and agrees that neither
Buyer nor its representatives shall contact any of the employees, customers,
suppliers, partners, or other associates or affiliates of Seller or the
Stations, in connection with the transactions contemplated hereby, whether in
person or by telephone, mail or other means of communication, without the
specific prior written authorization of such representatives of Seller.
6.2.9. INSURANCE.
Maintain in full force and effect all of its existing
casualty, liability, and other insurance through the day following the Closing
Date in amounts not less than those in effect on the date hereof.
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6.2.10. FINANCIAL STATEMENTS.
Provide Buyer with unaudited monthly statements of
assets and liabilities of Seller relating to the business and operations of the
Station, and statements of revenues and expenses reflecting the results of
business and operations of the Station for October, 1996 and for each month
thereafter, within forty-five (45) days after the end of each such month.
6.3. CONSENTS.
Prior to, on and after the Closing, Seller shall take all
reasonable action required to obtain all consents, approvals and agreements of
any third parties necessary to authorize, approve or permit the consummation of
the transactions contemplated by this Agreement, including, without limitation,
any consent of the parties to the Station Contracts designated as necessary in
Schedule 3.4.1 in order to consummate the transactions contemplated hereby
(collectively, the "Restricted Contracts"). Notwithstanding anything to the
contrary set forth in this Agreement or otherwise, to the extent that the
consent or approval of any third party is required under any Restricted
Contract, Seller shall only be required to use reasonable efforts (not
involving the payment by Seller of any money to any party to any such
Restricted Contract) to obtain such consents and approvals.
6.4. CONFIDENTIALITY.
Seller shall, at all times, maintain strict confidentiality
with respect to all documents and information furnished to Seller by or on
behalf of Buyer. Nothing shall be deemed to be confidential information that:
(a) is known to Seller at the time of its disclosure to Seller; (b) becomes
publicly known or available other than through disclosure by Seller; (c) is
received by Seller from a third party not actually known by Seller to be bound
by a confidentiality agreement with or obligation to Buyer; or (d) is
independently developed by Seller. Notwithstanding the foregoing provisions of
this Section 6.3, Seller may disclose such confidential information (x) to the
extent required or deemed advisable to comply with applicable Laws; (y) to its
officers, directors, employees, representatives, financial advisors, attorneys,
accountants, and agents with respect to the transactions contemplated hereby
(so long as such parties agree to maintain the confidentiality of such
information, subject to clauses (x) and (z) of this sentence); and (z) to any
Governmental Authority in connection with the transactions contemplated hereby.
In the event this Agreement is terminated, Seller will return to Buyer all
documents and other material prepared or furnished by Buyer relating to the
transactions contemplated hereunder, whether obtained before or after the
execution of this Agreement. In the event that Seller is requested or required
(including without limitation by oral question, interrogatories, requests for
information or documents, subpoena, civil investigative demand or similar legal
process) to disclose any confidential information, Seller will promptly notify
Buyer
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of such request or requirements so that Buyer may, as it may elect, either seek
an appropriate protective order or waive Seller's compliance with the
provisions of this Section 6.3. In the event that such protection or other
remedy is not obtained or that the Buyer waives compliance, Seller agree to
furnish only that portion of the confidential information which Seller is
advised by counsel is legally required and to exercise Seller's reasonable
efforts to obtain assurance that confidential treatment will be accorded such
confidential information.
ARTICLE 7.
COVENANTS AND AGREEMENTS OF BUYER
Buyer covenants and agrees with Sellers as follows:
7.1. CONFIDENTIALITY.
Buyer shall, at all times prior to the Closing, maintain strict
confidentiality with respect to all documents and information furnished to
Buyer by or on behalf of Seller. Nothing shall be deemed to be confidential
information that: (a) is known to Buyer at the time of its disclosure to
Buyer; (b) becomes publicly known or available other than through disclosure by
Buyer; (c) is received by Buyer from a third party not actually known by Buyer
to be bound by a confidentiality agreement with or obligation to Seller; or (d)
is independently developed by Buyer. Notwithstanding the foregoing provisions
of this Section 7.1, Buyer may disclose such confidential information (x) to
the extent required or deemed advisable to comply with applicable Laws; (y) to
its officers, directors, partners, employees, representatives, financial
advisors, attorneys, accountants, agents, underwriters, lenders, investors and
any other potential sources of financing with respect to the transactions
contemplated hereby (so long as such parties agree to maintain the
confidentiality of such information, subject to clauses (x) and (z) of this
sentence); and (z) to any Governmental Authority in connection with the
transactions contemplated hereby or the financing thereof. In the event this
Agreement is terminated, Buyer will return to Seller all documents and other
material prepared or furnished by Seller relating to the transactions
contemplated by this Agreement, whether obtained before or after the execution
of this Agreement. In the event that Buyer is requested or required (including
without limitation by oral question, interrogatories, requests for information
or documents, subpoena, civil investigative demand or similar legal process) to
disclose any confidential information, Buyer will promptly notify Seller of
such request or requirements so that Seller may, as it may elect, either seek
an appropriate protective order or waive Buyer's compliance with the provisions
of this Section 7.1. In the event that such protection or other remedy is not
obtained or that the Seller waives compliance, Buyer agrees to furnish only
that portion of the confidential information which Buyer is advised by counsel
is legally required and to exercise Buyer's reasonable efforts to obtain
assurance that confidential treatment will be accorded such confidential
information.
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7.2. CORPORATE ACTION.
Prior to the Closing, Buyer shall take all corporate action
(including, without limitation, all shareholder action) under the Laws of any
state having jurisdiction over Buyer necessary to effectuate the transactions
contemplated by this Agreement and the other Buyer Documents.
7.3. ACCESS.
For a period of seven (7) years from and after the Closing
Date, Buyer shall cause to be afforded to representatives of Seller reasonable
access during normal business hours to the offices, books and records,
contracts and reports of the Station which relate to the operations of the
Station during the period during which the Station was owned by Seller, as
Seller shall from time to time reasonably request for Seller's reasonable
business purposes; provided, however, that such investigation shall only be
upon reasonable notice and shall not disrupt the personnel or operations of
Buyer or the Station. All requests for access to the offices, books and
records, contracts and reports of the Station shall be made to such
representatives as Buyer shall designate in writing, who shall be solely
responsible for coordinating all such requests and all access permitted
hereunder. For a period of seven (7) years from and after the Closing Date,
Buyer shall not dispose of any books and records, contracts and reports of the
Station which relate to the operations of the Station during the period during
which the Station was owned by Seller without consulting with Seller prior to
disposal thereof and taking any reasonable action requested by Seller with
respect to retention and transfer to Seller thereof.
ARTICLE 8.
MUTUAL COVENANTS AND UNDERSTANDINGS
OF SELLER AND BUYER
8.1. POSSESSION AND CONTROL.
Between the date hereof and the Closing Date, Buyer shall not
directly or indirectly control, supervise or direct, or attempt to control,
supervise or direct, the business and operations of the Station, and such
operation, including complete control and supervision of all programming, shall
be the sole responsibility of Seller. On and after the Closing Date, Seller
shall have no control over, or right to intervene, supervise, direct or
participate in, the business and operations of the Station.
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8.2. RISK OF LOSS.
The risk of loss or damage by fire or other casualty or cause
to the Assets until the Closing Date shall be upon Seller. In the event of any
such loss or damage prior to the Closing Date which causes a Material Adverse
Effect, Seller shall have the right to restore, replace or repair the damaged
Assets to their previous condition at Seller's sole cost and expense. In the
event that as of the Closing Date, any such loss or damage shall not have been
restored, replaced, or repaired and Seller desires to restore, replace or
repair such damaged Assets, Seller shall have the right to defer the Closing
Date, by written notice to Buyer, until such date (the "Extended Closing Date")
which is the later to occur of (a) the date which is nine (9) months after the
date of this Agreement, or (b) the date which is sixty (60) days after the date
on which such loss or damage occurred. In the event that any such loss or
damage shall not be restored, replaced, or repaired as of the Extended Closing
Date, Buyer shall, at its option, either:
(a) proceed with the Closing and receive at Closing, the
insurance proceeds or an assignment of the right to receive such insurance
proceeds, as applicable, to which Seller otherwise would be entitled, whereupon
Seller shall have no further liability to Buyer for such loss or damage
(pursuant to the indemnification provisions of this Agreement or otherwise); or
(b) terminate this Agreement by written notice to Seller and
receive the immediate return of the Deposit, whereupon no party to this
Agreement shall have any liability to any other party to this Agreement, and
this Agreement in its entirety shall be deemed null, void and of no further
force and effect, except for the provisions set forth in Section 13.2 (which
shall survive such termination).
Buyer and Seller acknowledge and agree that nothing in this
Section 8.2 shall be deemed to waive any requirement that the representations
and warranties be restated as of Closing as provided for in Section 9.1 of this
Agreement.
8.3. PUBLIC ANNOUNCEMENTS.
Between the date hereof and the Closing Date, Seller and Buyer
shall consult with each other before issuing any press release or otherwise
making any public statements with respect to this Agreement or the transactions
contemplated herein and shall not issue any such press release or make any such
public statement without the prior written consent of the other party, which
shall not be unreasonably withheld; provided, however, that a party may,
without the prior written consent of the other party, issue such press release
or make such public statement as may be required by Law or any listing
agreement with a national securities exchange to which Seller or Buyer is a
party if it has used all
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reasonable efforts to consult with the other party and to obtain such party's
consent but has been unable to do so in a timely manner.
8.4. EMPLOYEE MATTERS.
8.4.1. TRANSFERRED EMPLOYEES.
(a) Upon consummation of the Closing hereunder, Buyer
shall offer employment to each of the employees of the Station, who are
actively employed as of the Closing Date by the Seller, at a comparable salary,
position and place of employment as held by each such employee immediately
prior to the Closing Date, and Buyer shall adopt employee benefit plans,
policies and arrangements covering such employees substantially similar to the
Benefit Plans of Seller in effect as of the date hereof. Buyer shall also
offer employment to each employee of the Station who is temporarily absent from
active employment on the Closing Date upon termination of such temporary
absence provided such employee is able to perform the essential functions of
the position such employee held prior to such absence and any such employee
shall be treated as a "Transferred Employee" (as defined herein) from and after
the Closing Date.
(b) To the extent such employees accept employment with
Buyer (collectively, "Transferred Employees"), such Transferred Employees will
be included in Buyer's employee benefit plans and will be subject to Buyer's
employment policies, as generally applicable to Buyer's employees who are
similarly situated. Buyer agrees that Transferred Employees shall be credited
under all of Buyer's applicable employee benefit plans covering such employees
with their service at any of the Jupiter/▇▇▇▇▇ Stations for purposes of
determining any period of eligibility to participate or to vest in benefits to
the same extent such service was counted under the Benefit Plans of Seller.
Buyer agrees that during the ninety (90) day period immediately following the
Closing Date Buyer shall not (i) terminate any Transferred Employee except for
termination for good cause, or (ii) adversely change the terms of any
Transferred Employee's employment; provided, however, thereafter, subject to
applicable laws, Buyer shall have the right, at any time thereafter, to dismiss
any or all Transferred Employees at any time thereafter, with or without cause,
and to change the terms and conditions of their employment (including
compensation and employee benefit plans, policies or arrangements, provided to
them).
8.4.2 VACATION AND SICK LEAVE.
In furtherance of and not in limitation of the
obligations and liabilities of Buyer set forth in Section 8.4.1, Buyer shall
assume, without duplication of benefits, the obligations and liabilities of
Seller to Transferred Employees as of the Closing Date for unused and unpaid
vacation and sick leave, but only to the extent reflected in the employee
records of Sellers. Except as
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otherwise required by applicable law, Buyer shall provide, without duplication
of benefits, all Transferred Employees with vacation time or sick leave, as the
case may be, rather than cash in lieu thereof, for such unused and unpaid
vacation and sick leave in accordance with Buyer's policies. Buyer shall be
liable for, and shall indemnify, defend and hold harmless Sellers from and
against, all Liabilities of Sellers to Transferred Employees with respect to
unused sick leave and unused vacation leave.
8.4.3 SEVERANCE BENEFITS.
In furtherance of and not in limitation of the
obligations and liabilities of Buyer set forth in Section 8.4.1, with respect
to each Transferred Employee, Buyer shall establish a severance benefit plan
similar to the severance plan of Seller set forth on Schedule 3.16.1.
Transferred Employees shall be credited under Buyer's severance benefit plan
with their service at any of the Jupiter/▇▇▇▇▇ Stations for purposes of
determining the amount of severance benefits to which they may be entitled
under such plan; provided, however, that any service at any of the
Jupiter/▇▇▇▇▇ Stations for which severance had previously been paid shall be
disregarded. Buyer shall be liable for, and shall indemnify, defend and hold
harmless Sellers from and against any and all claims by Transferred Employees
after the Closing Date for severance benefits to the extent not provided by
Buyer's severance benefits plans adopted pursuant to Buyer's obligation set
forth in Section 8.4.1 to provide employee benefit plans substantially similar
to the severance benefits plan of Sellers set forth on Schedule 3.16.1.
8.4.4 REPRESENTED EMPLOYEES.
(a) In furtherance of and not in limitation of the
obligations and liabilities of Buyer set forth in Section 8.4.1, upon
consummation of the Closing hereunder, Buyer shall: (i) recognize the unions
and labor organizations which are parties to the collective bargaining
agreements set forth in Schedule 3.17.1; (ii) employ all active employees of
the Stations represented by any such union or labor organization (collectively,
"Represented Employees"); (iii) adopt employee benefit plans, policies and
arrangements covering such Represented Employees substantially similar to the
Benefit Plans of Sellers in effect as of the date hereof and as required by
such collective bargaining agreements; and (iv) negotiate in good faith with
the collective bargaining representatives of the employees of Seller regarding
the substitution of Buyer's employee benefit plans, policies and arrangements
for the Benefit Plans of Sellers.
(b) Upon consummation of the Closing hereunder, Sellers
shall assign to Buyer, and Buyer shall assume the collective bargaining
agreements listed in Schedule 3.17.1. including, without limitation, all
obligations, if any, to provide severance benefits in connection with the
termination after the Closing Date of any Represented Employee. Such
assignment and assumption shall not
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obligate Buyer to assume any Benefit Plans of Sellers. Except for any
Liabilities of Sellers with respect to unused sick leave or unused vacation
(which Buyer expressly assumes), Buyer shall not be responsible for any
Liabilities of Sellers under the collective bargaining agreement listed in
Schedule 3.17.1, which arose on or prior to the consummation of the Closing,
including, without limitation, any Liabilities for wages and any Benefit Plans
of Seller.
(c) The Seller agrees to cooperate with Buyer in
arranging for such meetings as Buyer may reasonably request with the collective
bargaining representatives of the employees of Seller to discuss Buyer's
assumption of the collective bargaining agreements listed in Schedule 3.17.1
and the implementation of employee benefits plans, policies and arrangements of
the Buyer; provided, however, that any such meeting (i) shall be subject to the
prior written approval of Seller upon reasonable notice to Seller, and (ii)
shall not unreasonably disrupt the personnel or operations of the Seller or the
Station.
8.4.5. COBRA OBLIGATIONS.
Buyer shall satisfy and discharge any obligations of
Seller to provide health care continuation coverage as required by the
Consolidated Omnibus Budget Reconciliation Act of 1985 and as described in
Section 4908B of the Code and Sections 601 through 608 of ERISA and as required
by any applicable state continuation of health coverage provisions
(collectively, "COBRA Obligations") to (a) any employee to whom Buyer offers
employment pursuant to Section 8.4.1 who does not accept such offer of
employment, or (b) any employee of the Station terminated prior to the Closing
Date to whom Sellers have on-going COBRA Obligations. Sellers and Buyer shall
reasonably cooperate in good faith to comply with Seller's COBRA Obligations
with respect to all such employees by having Buyer assume such obligations on
Seller's behalf and offering health care continuation coverage under Buyer's
group health plans to all such employees. Buyer shall indemnify, defend and
hold harmless Seller from and against, all obligations of Buyer set forth in
this Section 8.4.5.
8.4.6. SELLER BENEFITS PLANS.
As between Buyer and Seller, Seller agrees to be
responsible and liable for any medical, disability or other benefits owed under
Seller's benefit plans. Except as otherwise specified in Section 8.4.5,
Sellers will be responsible for providing, at its cost, all medical, life and
other insurance coverage and benefits, and disability benefits to which any
employee of Sellers who was terminated from service with Seller prior to the
Closing Date or who was disabled prior to the Closing Date is entitled under
Seller's benefit plans or otherwise.
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8.4.7. 401(K) PLANS.
Buyer agrees to permit those Transferred Employees, at
each such Transferred Employee's option, to transfer as a rollover to Buyer's
401(k) Plan their respective pre-tax account balances under SBG's 401(k) Plan,
provided that such plan is a tax-qualified plan under Section 401(a) and 401(k)
of the Code and that the transfer as a rollover of any such pre-tax account
balance will not affect the tax qualified status of Buyer's 401(k) Plan. SBG
agrees that if any such Transferred Employee elects to transfer as a rollover
its pre-tax account balance to Buyer's 401(k) Plan, SBG will cause the trustees
of SBG's 401(k) Plan to transfer each such electing Transferred Employee's
account to the trustee of Buyer's 401(k) Plan.
8.4.8. EMPLOYMENT CONTRACTS.
Buyer acknowledges and agrees that Buyer's obligations
pursuant to this Section 8.4 are in addition to, and not in limitation of,
Buyer's obligation to assume the employment contracts set forth on Schedule
2.1.8.
8.5. ALLOCATION OF PURCHASE PRICE.
Seller and Buyer each represent, warrant, covenant, and agree
with each other that the Purchase Price shall be allocated among the classes of
Assets for the Station, as agreed by the parties within thirty (30) days after
the date hereof. Seller and Buyer agree, pursuant to Section 1060 of the Code
that the Purchase Price shall be allocated in accordance with this Section 8.5,
and that all Tax returns and reports shall be filed consistent with such
allocation. Notwithstanding any other provision of this Agreement, the
provisions of this Section 8.5 shall survive the Closing Date without
limitation.
If Seller and Buyer are unable to agree on such allocation,
within thirty (30) days following execution of this Agreement, Seller and Buyer
agree to retain Bond & ▇▇▇▇▇▇ (the "Appraisal Firm") to update their 1996
appraisal of the classes of Assets of the Station in accordance with the
allocation for the Station set forth in Section 2.7 and to deliver a report to
Seller and Buyer as soon as reasonably practicable (the "Appraisal Report").
Buyer shall pay the fees, costs and expenses of the Appraisal Firm whether or
not the transactions contemplated hereby are consummated.
8.6. DISCLOSURE SCHEDULES.
Seller and Buyer acknowledge and agree that Seller shall have
the right from time to time after the date hereof to update or correct the
Schedules attached hereto to reflect (a) immaterial omissions from the
Schedules, and (b) changes permitted in accordance with the terms of Article 6.
The inclusion of
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any fact or item on a Schedule referenced by a particular section in this
Agreement shall, should the existence of the fact or item or its contents, be
relevant to any other section, be deemed to be disclosed with respect to such
other section whether or not an explicit cross-reference appears in the
Schedules if it is reasonably apparent on the face of the Schedule in which
such item is referenced that such item is relevant to such other section.
8.7. BULK SALES LAWS.
Buyer hereby waives compliance by Seller, in connection with
the transactions contemplated hereby, with the provisions of any applicable
bulk transfer laws; provided, however, that Seller shall indemnify and hold
harmless Buyer from and against any Losses attributable to Seller's
non-compliance with any applicable bulk transfer laws, without regard to the
provisions of Article 12.
ARTICLE 9.
CONDITIONS PRECEDENT TO
BUYER'S OBLIGATION TO CLOSE
The obligations of Buyer to purchase the Assets and to proceed
with the Closing are subject to the satisfaction (or waiver in writing by
Buyer) at or prior to the Closing of each of the following conditions:
9.1. REPRESENTATIONS AND COVENANTS.
The representations and warranties of Seller made in this
Agreement shall be true and correct in all material respects on and as of the
Closing Date with the same effect as though such representations and warranties
had been made on and as of the Closing Date (provided that any representation
or warranty contained herein that is qualified by a materiality standard shall
not be further qualified hereby), except as modified by the Schedules updated
after the date hereof (in accordance with Section 8.6) and except for
representations and warranties that speak as of a specific date or time other
than the Closing Date (which need only be true and correct in all material
respects as of such date or time), and the covenants and agreements of Seller
required to be performed on or before the Closing Date in accordance with the
terms of this Agreement shall have been performed in all material respects.
9.2. REQUIRED CONSENTS.
Seller shall have obtained prior to the Closing Date all
consents, authorizations or approvals necessary to effect valid assignments to
Buyer of those Station Contracts listed on Schedule 9.2.
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9.3. DELIVERY OF DOCUMENTS.
Seller shall have delivered to Buyer all contracts, agreements,
instruments and documents required to be delivered by Seller to Buyer pursuant
to Section 11.2.
9.4. FCC ORDER.
The FCC Order shall have become a Final Order with respect to
the Station.
9.5. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇.
All applicable waiting periods under ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ shall
have expired or terminated.
9.6 LEGAL PROCEEDINGS.
No injunction, restraining order or decree of any nature of any
court or Governmental Authority of competent jurisdiction shall be in effect
that restrains or prohibits the transactions contemplated by this Agreement.
9.7 THREE-STATION AGREEMENT.
The consummation of the transactions contemplated by the
Three-Station Agreement shall have occurred concurrently with the Closing
hereunder.
ARTICLE 10.
CONDITIONS PRECEDENT TO
SELLER'S OBLIGATION TO CLOSE
The obligations of Seller to sell, transfer, convey and deliver
the Assets and to proceed with the Closing are subject to the satisfaction (or
waiver in writing by Seller) at or prior to the Closing of each of the
following conditions:
10.1. REPRESENTATIONS AND COVENANTS.
The representations and warranties of Buyer made in this
Agreement shall be true and correct in all material respects on and as of the
Closing Date with the same effect as though such representations and warranties
had been made on and as of the Closing Date (provided that any representation
or warranty contained herein that is qualified by a materiality standard shall
not be further qualified hereby) except for representations and warranties that
speak as of
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a specific date or time other than the Closing Date (which need only be true
and correct in all material respects as of such date or time), and the
covenants and agreements of Buyer required to be performed on or before the
Closing Date in accordance with the terms of this Agreement shall have been
performed in all material respects.
10.2. DELIVERY BY BUYER.
Buyer shall have delivered to Seller the Purchase Price, to the
extent required to be paid on the Closing Date pursuant to Section 2.5, and all
contracts, agreements, instruments and documents required to be delivered by
Buyer to Sellers pursuant to Section 11.3.
10.3. FCC ORDER.
The FCC Order shall have become a Final Order with respect to
the Station.
10.4. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇.
All applicable waiting periods under ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ shall
have expired or terminated.
10.5. LEGAL PROCEEDINGS.
No injunction, restraining order or decree of any nature of any
court or Governmental Authority of competent jurisdiction shall be in effect
that restrains or prohibits the transactions contemplated by this Agreement.
10.6. THREE-STATION AGREEMENT.
The consummation of the transactions contemplated by the
Three-Station Agreement shall have occurred concurrently with the Closing
hereunder.
ARTICLE 11.
THE CLOSING
11.1. CLOSING.
The Closing hereunder shall be deemed to take place as of 12:00
p.m. (midnight) on the last day of the calendar month during which the FCC
Order becomes a Final Order unless there shall be an Extended Closing Date as
contemplated by Section 8.2 of this Agreement or Section 8.2 of the
▇▇▇▇▇-▇▇▇▇▇▇▇
- ▇▇ -
▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇; provided, however, notwithstanding the foregoing, in no
event shall the Closing hereunder occur prior to January 31, 1997 (the "Closing
Date"). The Closing shall be held at 10:00 A.M. local time on the Closing Date
at the offices of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇,
▇.▇. or at such other time and place as the parties may agree.
11.2. DELIVERY BY SELLER.
At or before the Closing, Seller shall deliver to Buyer the
following:
11.2.1. AGREEMENTS AND INSTRUMENTS
The following bills of sale, assignments and other instruments
of transfer, dated as of the Closing Date and duly executed by Seller:
(a) the Indemnity Escrow Agreement;
(b) the ▇▇▇▇ of Sale;
(c) the Assignment of FCC Licenses;
(d) the Assignment of Contracts and Leases;
(e) the Assumption Agreement;
(f) certificates of title with respect to the motor vehicles
listed on Schedule 2.1.10 or if any such motor vehicles are leased by
Seller; an assignment of such lease;
(g) special or limited warranty deeds for all Real Property
owned by Seller in the forms attached hereto as Exhibit G; and
(h) real and personal property transfer tax forms, including,
without limitation, those set forth in Exhibit H attached hereto.
11.2.2. CONSENTS.
Copies of all consents Seller has been able to obtain
to effect the assignment to Buyer of the Station Contracts listed on Schedule
3.4.1.
11.2.3. CERTIFIED RESOLUTIONS.
A copy of the approval of the partners of Seller,
certified as being correct and complete and then in full force and effect,
authorizing the execution, delivery and performance of this Agreement, and of
the other Seller Documents, and the consummation of the transactions
contemplated hereby and thereby.
11.2.4. OFFICERS' CERTIFICATES.
(a) A certificate of Seller certifying the matters set
forth in Section 9.1; and
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(b) a certificate of Seller as to the incumbency of the
representatives of Seller executing this Agreement or any of the other Seller
Documents on behalf of Seller.
11.2.5. ORGANIZATIONAL DOCUMENTS.
Copies of the organizational documents of Seller and
SBG certified by an executive officer of SBG as being correct and complete.
11.2.6. DEPOSIT
Seller and the Three-Station Sellers shall have
instructed the Deposit Escrow Agent in writing to return the Deposit to Buyer
and the Three-Station Buyer.
11.3. DELIVERY BY BUYER.
At or before the Closing, Buyer shall deliver to Seller the
following:
11.3.1. PURCHASE PRICE PAYMENT.
The Purchase Price in the amount and manner set forth
in Section 2.
11.3.2. AGREEMENTS AND INSTRUMENTS.
The following assumption agreement and other
instruments of transfer, dated as of the Closing Date and duly executed by
Buyer: (a) the Indemnity Escrow Agreement;
(b) the Assumption Agreement; and
(c) real and personal property transfer tax forms,
including, without limitation, those set forth in Exhibit H
attached hereto.
11.3.3. CERTIFIED RESOLUTIONS.
Copies of the resolutions of the directors of Buyer,
certified as being correct and complete and then in full force and effect,
authorizing the execution, delivery and performance of this Agreement and of
the other Buyer Documents, and the consummation of the transactions
contemplated hereby and thereby.
11.3.4. OFFICERS' CERTIFICATE.
(a) A certificate of Buyer signed by an officer of
Buyer certifying the matters set forth in Section 10.1; and
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46
(b) a certificate signed by the Secretary of Buyer as
to the incumbency of the officers of Buyer executing this Agreement or any of
the other Buyer Documents on behalf of Sellers.
ARTICLE 12.
SURVIVAL; INDEMNIFICATION
12.1. SURVIVAL OF REPRESENTATIONS.
Unless otherwise set forth herein, all representations and
warranties, covenants and agreements of Seller and Buyer contained in or made
pursuant to this Agreement or in any certificate furnished pursuant hereto
shall survive the Closing Date and shall remain in full force and effect for a
period of twelve (12) months after the Closing Date, except that (a) any
representation, warranty, covenant or agreement that is the subject of a claim
which is asserted by the party seeking indemnification hereunder in a
reasonably detailed writing delivered to the other party or parties, as the
case may be, prior to the expiration of such twelve-month period shall survive
with respect to such claim or dispute until the final resolution thereof, and
(b) the following covenants and agreements shall continue in full force and
effect until fully discharged: Sections 6.3 and 7.1 (which relate to
confidentiality), Sections 6.2.8 and 7.3 (which relate to access), Section 8.4
(which relates to employee matters), and Article 15 (which relates to
miscellaneous matters). No claim for indemnification may be made pursuant to
this Article 12 after the survival period set forth in this Section 12.1.
12.2. INDEMNIFICATION BY SELLER.
Subject to the conditions and provisions of Section 12.4 and
Section 12.5, from and after the Closing Date, Seller and the Three-Station
Sellers, jointly and severally, agree to indemnify, defend and hold harmless
Buyer, the Three-Station Buyer, and their respective officers, directors,
employees, agents and shareholders ("Buyer Indemnified Parties") from and
against and in any respect of any and all Losses, asserted against, resulting
to, imposed upon or incurred by any Buyer Indemnified Parties, directly or
indirectly, by reason of or resulting from: (a) any failure by Seller to pay,
perform or discharge any Liabilities of Seller not expressly assumed by Buyer
pursuant hereto or pursuant to any Buyer Document; (b) the business or
operations of the Station during the period on or prior to the Closing Date
(except to the extent Buyer has expressly assumed the Liability for any such
Losses pursuant hereto); (c) any misrepresentation or breach of the
representations and warranties of Seller contained in or made pursuant to this
Agreement or any other Seller Document; or (d) any breach by Seller of any
covenants of Seller contained in or made pursuant to this Agreement or any
other Seller Document. Subject to the limitations on indemnification set forth
in Article 12 of the Three-Station Agreement, Seller hereby agrees for the
benefit of the Buyer
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47
Indemnified Parties to be jointly and severally liable with the Three-Station
Sellers for any indemnification obligations of the Three-Station Sellers set
forth in Article 12 of the Three-Station Agreement.
12.3. INDEMNIFICATION BY BUYER.
Subject to the conditions and provisions of Section 12.4 and
Section 12.5, from and after the Closing Date, Buyer and the Three-Station
Buyer, jointly and severally hereby agree to indemnify, defend and hold
harmless Seller, the Three-Station Sellers and their respective officers,
directors, employees, agents and partners ("Seller Indemnified Parties") from,
against and with respect of any and all Losses, asserted against, resulting to,
imposed upon or incurred by any Seller Indemnified Parties, directly or
indirectly, by reason of or resulting from: (a) any failure by Buyer to pay,
perform or discharge any Liabilities expressly assumed by Buyer pursuant hereto
or pursuant to any Buyer Document; (b) the business or operations of the
Station during the period after the Closing Date; (c) any misrepresentation or
breach of the representations and warranties of Buyer contained in or made
pursuant to this Agreement or any other Buyer Document; or (d) any breach by
Buyer of any covenants of Buyer contained in or made pursuant to this Agreement
or any other Buyer Document. Subject to the limitations on indemnification set
forth in Article 12 of the Three-Station Agreement, Buyer hereby agrees for the
benefit of the Seller Indemnified Parties to be jointly and severally liable
with the Three-Station Buyer for any indemnification obligations of the
Three-Station Buyer set forth in Article 12 of the Three-Station Agreement.
12.4. LIMITATIONS ON INDEMNIFICATION
12.4.1. Notwithstanding any other provision of this Agreement
to the contrary, in no event shall Losses include a party's incidental,
consequential or punitive damages, regardless of the theory of recovery. Each
party hereto agrees to use reasonable efforts to mitigate any Losses which form
the basis for any claim for indemnification hereunder.
12.4.2. Neither the Jupiter/▇▇▇▇▇ Sellers (taken as a whole)
nor the HMTF/▇▇▇▇▇ Buyers (taken as a whole) shall be liable to the other in
respect of any indemnification hereunder except to the extent that the
aggregate Losses of the party to be indemnified under this Agreement and under
the Three-Station Agreement (taken as a whole) exceeds Two Hundred Fifty
Thousand Dollars ($250,000) (the "Basket Amount"), and then only to the extent
of the excess over the Basket Amount; provided, however, the Basket Amount and
the limitations set forth in Section 12.4.3 shall not be applicable to (a) any
Losses incurred by any Seller Indemnified Party in connection with Buyer's
failure to comply with the covenants, agreements and indemnities set forth in
Section 2.7.1 or Section 8.4, or (b) any amounts owed in connection with the
Final Net Working Capital Amount.
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12.4.3. Notwithstanding any other provision of this Agreement
to the contrary (other than Section 12.4.2), the Buyer acknowledges and agrees
as follows: (a) the maximum aggregate liability of the Jupiter/▇▇▇▇▇ Sellers
(taken as a whole) pursuant to this Agreement and the Three-Station Agreement
(taken as a whole) to the Buyer Indemnified Parties and any third parties for
any and all Losses shall not exceed the Indemnity Escrow Amount, regardless of
whether the Buyer Indemnified Parties seek indemnification pursuant to this
Article 12 or Article 12 of the Three-Station Agreement, regardless of the form
of action, whether in contract or tort, including negligence, and regardless of
whether or not the Jupiter/▇▇▇▇▇ Sellers are notified of the possibility of
damages to the Buyer Indemnified Parties or any other third party, and (b) any
indemnification payments by the Jupiter/▇▇▇▇▇ Sellers pursuant to this Article
12 shall be solely payable from the funds held by the Indemnity Escrow Agent
pursuant to the Indemnity Escrow Agreement; provided, however, nothing in this
Section 12.4.3 shall be construed to constitute a waiver or limitation of any
claims by Buyer based on fraud.
12.4.4. Each party (a "recipient party") shall notify the other
party (the "representing party") reasonably promptly of any perceived breach by
the representing party of which the recipient party has knowledge of any
representations and warranties, covenants, and agreements and of any Losses
(including a brief description of the same) of the recipient party caused
thereby. In the event of any breach that is cured prior to the Closing Date in
accordance with the terms of this Agreement, the representing party shall have
no obligation under Section 12.2 or Section 12.3 or otherwise to indemnify the
recipient party with respect to such Losses.
12.5. CONDITIONS OF INDEMNIFICATION.
The obligations and liabilities of Seller and of Buyer
hereunder with respect to their respective indemnities pursuant to this Section
12, resulting from any Losses, shall be subject to the following terms and
conditions:
12.5.1. The party seeking indemnification (the "Indemnified
Party") must give the other party or parties, as the case may be (the
"Indemnifying Party"), notice of any such Losses promptly after the Indemnified
Party receives notice thereof; provided that the failure to give such notice
shall not affect the rights of the Indemnified Party hereunder except to the
extent that the Indemnifying Party shall have suffered actual damage by reason
of such failure.
12.5.2. The Indemnifying Party shall have the right to
undertake, by counsel or other representatives of its own choosing (reasonably
acceptable to the Indemnified Party), the defense of such Losses at the
Indemnifying Party's risk and expense.
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49
12.5.3. In the event that the Indemnifying Party shall elect
not to undertake such defense, or, within a reasonable time after notice from
the Indemnified Party of any such Losses, shall fail to defend, the Indemnified
Party (upon further written notice to the Indemnifying Party) shall have the
right to undertake the defense, compromise or settlement of such Losses, by
counsel or other representatives of its own choosing, on behalf of and for the
account and risk of the Indemnifying Party (subject to the right of the
Indemnifying Party to assume defense of such Losses at any time prior to
settlement, compromise or final determination thereof (with counsel reasonably
acceptable to the Indemnified Party)). In such event, the Indemnifying Party
shall pay to the Indemnified Party, in addition to the other sums required to
be paid hereunder, the costs and expenses incurred by the Indemnified Party in
connection with such defense, compromise or settlement as and when such costs
and expenses are so incurred.
12.5.4. Anything in this Section 12.5 to the contrary
notwithstanding, (a) if there is a reasonable probability that Losses may
materially and adversely affect the Indemnified Party other than as a result of
money damages or other money payments, the Indemnified Party shall have the
right, at its own cost and expense, to participate in the defense, compromise
or settlement of the Losses, (b) the Indemnifying Party shall not, without the
Indemnified Party's written consent, settle or compromise any Losses or consent
to entry of any judgment which does not include as an unconditional term
thereof the giving by the claimant or the plaintiff to the Indemnified Party of
a release from all liability in respect of such Losses in form and substance
satisfactory to the Indemnified Party, and (c) in the event that the
Indemnifying Party undertakes defense of any Losses, the Indemnified Party, by
counsel or other representative of its own choosing and at its sole cost and
expense, shall have the right to consult with the Indemnifying Party and its
counsel or other representatives concerning such Losses and the Indemnifying
Party and the Indemnified Party and their respective counsel or other
representatives shall cooperate with respect to such Losses (d) in the event
that the Indemnifying Party undertakes defense of any Losses, the Indemnifying
Party shall have an obligation to keep the Indemnified Party informed of the
status of the defense of such Losses and furnish the Indemnified Party with all
documents, instruments and information that the Indemnified party shall
reasonably request in connection therewith, and (e) in the event that both the
Indemnified Party and the Indemnifying Party are parties (directly or through
interpleader) to any Losses giving rise to indemnification hereunder and the
Indemnified Party is advised by counsel that there is or may be a conflict of
interest in the representation of both the Indemnified Party and the
Indemnifying Party by one firm of counsel, the Indemnified Party shall be
entitled to assume, at the sole cost and expense of the Indemnifying Party, the
defense, compromise and settlement (subject to clause (b) above) of such Loss
with counsel (in addition to local counsel) reasonably satisfactory to the
Indemnifying Party.
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12.5.5 In the event that an Indemnified Party has a good faith
basis for a claim for indemnification which does not involve a claim against it
by a third party (a "Direct Claim"), the Indemnified Party shall notify the
Indemnifying Party in writing of such Direct Claim with reasonable promptness,
specifying, to the extent known, the nature, circumstances and amount of such
Direct Claim (a "Direct Claim Notice"), including with particularity the
specific representation and warranty or covenant and agreement alleged to have
been breached. If the Indemnifying Party notifies the Indemnified Party that
it disputes an Indemnified Party's right of indemnification with respect to a
particular Direct Claim, the parties shall use their reasonable efforts to
negotiate a resolution of such dispute promptly. Except to the extent of the
limitations on indemnification set forth in this Article 12, nothing in this
Section 12.5.5 shall be deemed to prevent any Indemnified Party from initiating
litigation under this Agreement with respect to any Direct Claim disputed by
the Indemnifying Party for the purpose of establishing the Indemnified Party's
right to indemnification hereunder.
12.6. CURE OF BREACH
Notwithstanding any other provision of this Agreement to the
contrary, a breach by Seller of any representations and warranties or a failure
to perform any covenant or agreement hereunder may be cured prior to the
Closing Date by Sellers (a) by reducing the Purchase Price in an amount equal
to the Losses to Buyer caused by such breach, (b) by making payment to a third
party or taking other action to discharge the Losses, (c) by placing an amount
equal to the Losses in an escrow account under an escrow arrangement reasonably
satisfactory to Seller and Buyer, or (d) a combination of the foregoing. If
the foregoing actions fully cure the breach, Seller shall have no obligation
under Section 12.2 or otherwise to indemnify Buyer with respect to the Losses
caused by such breach; if such actions partially cure the breach, Seller shall
continue to have an obligation under Section 12.2 to indemnify Buyer with
respect to the remaining portion of the Losses caused by such breach.
ARTICLE 13.
TERMINATION
13.1. TERMINATION
This Agreement may be terminated at any time prior to the
Closing by:
13.1.1. the mutual consent of Seller and Buyer;
13.1.2. either Buyer or Seller, by written notice of
termination delivered to the other, if (a) the FCC Order for the Station has
not become a Final
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51
Order and/or the Closing has not occurred within nine (9) months after the date
of this Agreement; provided, however, that the failure of the FCC Order to
become a Final Order or the failure of the Closing to have occurred within nine
(9) months of the date of this Agreement shall not be attributable to the
breach of this Agreement by the party seeking termination pursuant to this
Section 13.1.2; provided, further, that Buyer's right to terminate this
Agreement pursuant to this Section 13.1.2 shall be subject to the Seller's
rights to extend the Closing Date pursuant to Section 8.2 and the rights of the
Three-Station Sellers to extend the Closing Date under the Three-Station
Agreement pursuant to Section 8.2 thereof, or (b) the FCC designates the
applications contemplated by Section 5.1 for an evidentiary hearing;
13.1.3. either Buyer or Seller in the event that any court or
Governmental Authority of competent jurisdiction shall issue a final,
non-appealable injunction prohibiting the transactions contemplated by this
Agreement; provided, however, that the issuance of such final, non-appealable
injunction shall not be attributable to the breach of this Agreement by the
party seeking termination pursuant to this Section 13.1.3;
13.1.4. either Buyer or Seller in accordance with the terms and
conditions of Article 14;
13.1.5 Buyer, by written notice of termination delivered to
Seller, in the event that the Three-Station Buyer has terminated the
Three-Station Agreement pursuant to the terms thereof; or
13.1.6 Seller, by written notice of termination delivered to
Buyer, in the event that the Three-Station Seller has terminated the
Three-Station Agreement pursuant to the terms thereof.
13.2. EFFECT OF TERMINATION
13.2.1 In the event this Agreement is terminated as provided in
Sections 13.1.1, 13.1.2 or 13.1.3, Buyer shall receive the immediate return of
the Deposit and this Agreement shall be deemed null, void and of no further
force or effect, and the parties hereto shall be released from all future
obligations hereunder; provided, however, that the obligations of Buyer and
Sellers set forth in Sections 6.3 and 7.1 (which relate to confidentiality),
and Section 15.3 (which relates to payment of certain expenses), shall survive
such termination and the parties hereto shall have any and all remedies to
enforce such obligations provided at law or in equity or otherwise (including,
without limitation, specific performance).
13.2.2 In the event this Agreement is terminated as provided
in Sections 13.1.4, this Agreement shall be deemed null, void and of no further
force or effect, and the parties hereto shall be released from all future
obligations
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52
hereunder; provided, however, that the obligations of Buyer and Sellers set
forth in (a) Sections 6.3 and 7.1 (which relate to confidentiality), and
Section 15.3 (which relates to payment of certain expenses), shall survive such
termination and the parties hereto shall have any and all remedies to enforce
such obligations provided at law or in equity or otherwise (including, without
limitation, specific performance), and (b) Article 14 (which relates to
remedies and return of the Deposit) shall survive such termination and the
parties shall have such remedies as are set forth in Article 14.
13.2.3 In the event this Agreement is terminated as provided in
Sections 13.1.5 or 13.1.6, this Agreement shall be deemed null, void and of no
further force or effect, and the parties hereto shall be released from all
future obligations hereunder; provided, however, that (a) if the Three-Station
Agreement was terminated by the Three-Station Buyer or the Three-Station
Sellers pursuant to Sections 13.1.1, 13.1.2 or 13.1.3 thereof, Buyer shall
receive the immediate return of the Deposit and the obligations of Buyer and
Sellers set forth in Sections 6.3 and 7.1 (which relate to confidentiality),
and Section 15.3 (which relates to payment of certain expenses), shall survive
the termination of this Agreement and the parties hereto shall have any and all
remedies to enforce such obligations provided at law or in equity or otherwise
(including, without limitation, specific performance), and (b) if the
Three-Station Agreement was terminated by the Three-Station Buyer or the
Three-Station Sellers pursuant to Sections 13.1.4 thereof, the obligations of
Buyer and Sellers set forth in (i) Sections 6.3 and 7.1 (which relate to
confidentiality), and Section 15.3 (which relates to payment of certain
expenses), shall survive the termination of this Agreement and the parties
hereto shall have any and all remedies to enforce such obligations provided at
law or in equity or otherwise (including, without limitation, specific
performance), and (ii) Article 14 (which relates to remedies and return of the
Deposit) shall survive such termination and the parties shall have such
remedies as are set forth in Article 14.
ARTICLE 14.
REMEDIES
14.1. DEFAULT BY BUYER.
If Buyer shall default in the performance of Buyer's
obligations under this Agreement, or if, as a result of Buyer's action or
failure to act, the conditions precedent to Seller's obligation to close
specified in Section 10 are not satisfied, and for such reason or reasons this
Agreement is not consummated, and provided that Seller shall not then be in
default in the performance of Seller's obligations hereunder, Seller shall be
entitled, by written notice to Buyer, to terminate this Agreement, and as
Seller's sole remedy under this Agreement, to receive the Deposit as liquidated
damages, and upon such payment Buyer shall be discharged from all further
liability under this Agreement, provided, however,
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53
Buyer shall have a period of ten (10) business days after receipt of Seller's
written termination notice to cure any such default and if Buyer cures such
default within such ten (10) business day period, Seller shall have no right to
terminate this Agreement based on such default.
14.2. FINAL ORDER DELAY BY BUYER.
In the event that a Final Order is not obtained prior to the
date which is nine (9) months from the date of this Agreement and such failure
is primarily attributable to (a) Buyer's default under, or breach of, any of
the terms of this Agreement, including, without limitation, a breach of Buyer's
representations and warranties contained in Section 4.6 and Buyer's agreements
contained in Section 15.6, and/or (b) any of (i) Buyer's capitalization, (ii)
Buyer's ownership structure, (iii) Buyer's proposed or intended operation of
the Station, or (iv) any other media interest of Buyer or any affiliate of
Buyer, Seller shall be entitled, by written notice to Buyer, to terminate this
Agreement, and as Seller's sole remedy under this Agreement, to receive the
Deposit as liquidated damages, and upon such payment Buyer shall be discharged
from all further liability under this Agreement; provided, however, Seller
shall not have the right to terminate this Agreement pursuant to this Section
14.2 if the failure to obtain a Final Order is also attributable to Seller's
default under, or breach of, any of the terms of this Agreement or to the
operation of the Station by Sellers prior to the Closing.
14.3. DEFAULT BY SELLER.
If Seller shall default in the performance of Seller's
obligations under this Agreement, or if, as a result of Seller's action or
failure to act, the conditions precedent to Buyer's obligation to close
specified in Section 9 are not satisfied, and for such reason or reasons this
Agreement is not consummated, and provided that Buyer shall not then be in
default in the performance of Buyer's obligations hereunder, Buyer shall be
entitled, by written notice to Sellers, to terminate this Agreement, to receive
the immediate return of the Deposit, and to pursue any other remedies Buyer has
at law or in equity or otherwise, provided, however, Seller shall have a period
of ten (10) business days after receipt of Buyer's written termination notice
to cure any such default and if Seller cures such default within such ten (10)
business day period, Buyer shall have no right to terminate this Agreement
based on such default.
14.4. LIQUIDATED DAMAGES.
Seller and Buyer have provided for the amount of the Deposit to
be liquidated damages as a remedy for Seller after having considered carefully
the anticipated and actual ▇▇▇▇▇ and losses that would be incurred if Buyer
defaults and thus fails to perform its obligations to consummate the
transactions
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54
contemplated hereunder, the difficulty of ascertaining at this time the actual
amount of damages, special and general, that Seller will suffer in such event,
and the inconvenience or nonfeasibility of otherwise obtaining an adequate
remedy in such event.
14.5. SPECIFIC PERFORMANCE.
Seller hereby acknowledges that the Assets are unique, and that
the harm to Buyer resulting from the failure of Seller to perform its
obligations hereunder cannot be adequately compensated by damages.
Accordingly, Seller agrees that Buyer shall have the right to have all
obligations, undertakings, agreements, covenants and other provisions of this
Agreement specifically performed by Seller.
ARTICLE 15.
GENERAL PROVISIONS
15.1. ADDITIONAL ACTIONS, DOCUMENTS AND INFORMATION.
Buyer agrees that it will, at any time, prior to, at or after
the Closing Date, take or cause to be taken such further actions, and execute,
deliver and file or cause to be executed, delivered and filed such further
documents and instruments and obtain such consents, as may be reasonably
requested by Seller in connection with the consummation of the purchase and
sale contemplated by this Agreement. Seller agrees that it will, at any time,
prior to, at or after the Closing Date, take or cause to be taken such further
actions, and execute, deliver and file or cause to be executed, delivered and
filed such further documents and instruments and obtain such consents, as may
be reasonably requested by Buyer in connection with the consummation of the
purchase and sale contemplated by this Agreement, including, without
limitation, taking such further actions (at Buyer's sole cost and expense) to
enforce Seller's rights, if any, under purchase agreements with previous owners
of the Station to require such previous owners to execute, deliver and file
such further documents and instruments and obtain such consents as may be
reasonably requested by Buyer in connection with the consummation of the
purchase and sale contemplated by this Agreement.
15.2. BROKERS.
Seller represents to Buyer that, except for the brokerage fees
payable to Sellers' Broker (which fees are solely the responsibility of
Seller), Seller have not engaged, or incurred any unpaid liability (for any
brokerage fees, finders' fees, commissions or otherwise) to, any broker, finder
or agent in connection with the transactions contemplated by this Agreement;
Buyer represents to Seller that, except for the fees payable to Buyer's Advisor
(which fees are the sole responsibility
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55
of Buyer), Buyer has not engaged, or incurred any unpaid liability (for any
brokerage fees, finders' fees, commissions or otherwise) to, any broker, finder
or agent in connection with the transactions contemplated by this Agreement;
and Seller agree to indemnify Buyer, and Buyer agrees to indemnify Seller,
against any claims asserted against the other parties for any such fees or
commissions by any person purporting to act or to have acted for or on behalf
of the indemnifying party. Notwithstanding any other provision of this
Agreement, this representation and warranty shall survive the Closing without
limitation and shall not be subject to the Basket Amount contained in Section
12.4.2 or the limitations of Section 12.4.3.
15.3. EXPENSES AND TAXES.
Each party hereto shall pay its own expenses incurred in
connection with this Agreement and in the preparation for and consummation of
the transactions provided for herein. Notwithstanding the foregoing, (a) Buyer
shall pay all sales (including, without limitation, bulk sales), use,
documentary, stamp, gross receipts, registration, transfer, conveyance, excise,
recording, license and other similar Taxes and fees ("Transfer Taxes")
applicable to, imposed upon or arising out of the transactions contemplated
hereby whether now in effect or hereinafter adopted and regardless of which
party such Transfer Tax is imposed upon, (b) Seller and Buyer shall each pay
one-half of any FCC filing fees incurred in connection with the assignment of
the FCC Licenses, and (c) Buyer shall pay any fees and expenses incurred in
connection with any HSR Filings.
15.4. NOTICES.
All notices, demands, requests, or other communications which
may be or are required to be given or made by any party to any other party
pursuant to this Agreement shall be in writing and shall be hand delivered,
mailed by first-class registered or certified mail, return receipt requested,
postage prepaid, delivered by overnight air courier, or transmitted by
telegram, telex, or facsimile transmission addressed as follows:
If to Buyer:
▇▇▇▇▇ Acquisition Company
c/▇ ▇▇▇▇▇ Broadcasting Partners, L.P.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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56
and to
Hicks, Muse, ▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
Weil, Gotshal & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to Seller:
▇▇▇▇▇ Broadcasting Partners, L.P.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and to:
Jupiter/▇▇▇▇▇ TV Holdings, L.P.
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
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57
▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address as the addressee may indicate by written notice to the
other parties.
Each notice, demand, request, or communication which shall be
given or made in the manner described above shall be deemed sufficiently given
or made for all purposes at such time as it is delivered to the addressee (with
the return receipt, the delivery receipt, the affidavit of messenger or (with
respect to a telex) the answerback being deemed conclusive but not exclusive
evidence of such delivery) or at such time as delivery is refused by the
addressee upon presentation.
15.5. WAIVER.
No delay or failure on the part of any party hereto in
exercising any right, power or privilege under this Agreement or under any
other instrument or document given in connection with or pursuant to this
Agreement shall impair any such right, power or privilege or be construed as a
waiver of any default or any acquiescence therein. No single or partial
exercise of any such right, power or privilege shall preclude the further
exercise of such right, power or privilege, or the exercise of any other right,
power or privilege. No waiver shall be valid against any party hereto unless
made in writing and signed by the party against whom enforcement of such waiver
is sought and then only to the extent expressly specified therein.
15.6. BENEFIT AND ASSIGNMENT.
(a) No party hereto shall assign this Agreement, in whole or in
part, whether by operation of law or otherwise, without the prior written
consent of the other party hereto; provided, however, upon written notice to
Seller, Buyer may assign all or any portion of Buyer's rights and obligations
under this Agreement to one or more Permitted Assignees, provided, that (i)
prior to or concurrently with such assignment, Buyer shall have represented,
warranted and certified to Sellers in writing that (A) there are no facts or
proceedings which would reasonably be expected to disqualify any such Permitted
Assignee under the Communications Act or under the rules and regulations of the
FCC from acquiring or operating the Station or would cause the FCC not to
approve the assignment of the FCC Licenses to any such Permitted Assignee, (B)
Buyer has no knowledge of any fact or circumstance relating to any such
Permitted Assignee or any of any such Permitted
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58
Assignee's affiliates that would reasonably be expected to (1) cause the filing
of any objection to the assignment of the FCC Licenses to any such Permitted
Assignee, or (2) lead to a delay in the processing by the FCC of the
applications for such assignment, and (C) no waiver of an FCC rule or policy is
necessary to be obtained for the grant of the applications for the assignment
of the FCC Licenses to any such Permitted Assignee, nor will processing
pursuant to any exception or rule of general applicability be requested or
required in connection with the consummation of the transactions herein, (ii)
prior to or concurrently with such assignment, each such Permitted Assignee
shall assume in writing all of Buyer's obligations to Seller, and each such
Permitted Assignee shall deliver to Seller a certificate representing and
warranting to Sellers as to the matters set forth in Article 4, (iii)
notwithstanding such assumption, Buyer shall not be released from any
liabilities or obligations hereunder, (iv) Buyer and any such Permitted
Assignee shall be jointly and severally liable for the liabilities or
obligations of Buyer and any such Permitted Assignee hereunder (including,
without limitation, any obligation pursuant to Article 12 hereof), and (v) such
assignment shall not cause a delay in the receipt of the FCC Order or the Final
Order. Buyer may also assign, subject to compliance with the provisions of
this Section 15.6, Buyer's right to acquire the FCC Licenses from Sellers to a
wholly-owned subsidiary of Buyer
(b) From and after the Closing Date, without releasing
Buyer from any of Buyer's obligations hereunder, nothing herein shall prevent
or limit Buyer from making a collateral assignment of Buyer's rights under this
Agreement to any institutional lender that, directly or indirectly, provides
funds to Buyer without the consent of the Seller. Seller shall execute an
acknowledgment of such collateral assignments in such forms as Buyer or Buyer's
institutional lenders may reasonably request; provided, however, that unless
written notice is given to Seller that any such collateral assignment has been
foreclosed upon (in compliance with the Communications Act and the rules and
regulations of the FCC), Seller shall be entitled to deal exclusively with
Buyer as to any matters arising under this Agreement or any of the other
agreements delivered pursuant hereto.
(c) Any purported assignment contrary to the terms
hereof shall be null, void and of no force and effect. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns as permitted hereunder. No Person, other
than the parties hereto, is or shall be entitled to bring any action to enforce
any provision of this Agreement against any of the parties hereto, and the
covenants and agreements set forth in this Agreement shall be solely for the
benefit of, and shall be enforceable only by, the parties hereto or their
respective successors and assigns as permitted hereunder.
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59
15.7. ENTIRE AGREEMENT; AMENDMENT.
This Agreement, including the Schedules and Exhibits hereto and
the other instruments and documents referred to herein or delivered pursuant
hereto including, without limitation, that certain side letter agreement dated
as of the date hereof between Buyer and Seller with respect to preparation of
financial statements, contains the entire agreement among the parties with
respect to the subject matter hereof and supersedes all prior oral or written
agreements, commitments or understandings with respect to such matters. No
amendment, modification or discharge of this Agreement shall be valid or
binding unless set forth in writing and duly executed by the party or parties
against whom enforcement of the amendment, modification or discharge is sought.
15.8. SEVERABILITY.
If any part of any provision of this Agreement or any other
contract, agreement, document or writing given pursuant to or in connection
with this Agreement shall be invalid or unenforceable under applicable law,
such part shall be ineffective to the extent of such invalidity or
unenforceability only, without in any way affecting the remaining parts of such
provisions or the remaining provisions of said contract, agreement, document or
writing.
15.9. HEADINGS.
The headings of the sections and subsections contained in this
Agreement are inserted for convenience only and do not form a part or affect
the meaning, construction or scope thereof.
15.10. GOVERNING LAW; JURISDICTION.
This Agreement, the rights and obligations of the parties
hereto, and any claims or disputes relating thereto, shall be governed by and
construed under and in accordance with the laws of the state of New York,
excluding the choice of law rules thereof. The parties hereto hereby
irrevocably consent to the nonexclusive jurisdiction and venue of the courts of
the State of New York and of any Federal Court located in New York County, New
York, in connection with any action, suit or proceeding arising out of or
relating to this Agreement. The parties hereto hereby waive personal service of
any process in connection with any such action, suit or proceeding and agree
that the service thereof may be made by certified or registered mail addressed
to or by personal delivery to the other party, at such other party's address
set forth pursuant to Section 15.4 hereof. In the alternative, in its
discretion, any of the parties hereto may effect service upon any other party
in any other form or manner permitted by law.
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60
15.11. SIGNATURE IN COUNTERPARTS.
This Agreement may be executed in separate counterparts, none
of which need contain the signatures of all parties, each of which shall be
deemed to be an original, and all of which taken together constitute one and
the same instrument. It shall not be necessary in making proof of this
Agreement to produce or account for more than the number of counterparts
containing the respective signatures of, or on behalf of, all of the parties
hereto.
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61
IN WITNESS WHEREOF, each of the parties hereto has executed this Asset
Purchase Agreement, or has caused this Asset Purchase Agreement to be duly
executed and delivered in its name on its behalf, all as of the day and year
first above written.
▇▇▇▇▇ TELEVISION-WTOV, L.P.
By: ▇▇▇▇▇ Broadcasting Partners, L.P., its
general partner
By: ▇▇▇▇▇ Broadcasting Group, Inc., its
general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
▇▇▇▇▇ TELEVISION-WTOV LICENSE, L.P.
By: ▇▇▇▇▇ Television-WTOV, L.P., its
general partner
By: ▇▇▇▇▇ Broadcasting Partners, L.P., its
general partner
By: ▇▇▇▇▇ Broadcasting Group, Inc., its
general partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Executive Vice President
▇▇▇▇▇ ACQUISITION COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Title: President
-------------------------------------
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62
ANNEX I
DEFINITIONS
"ACCOUNTING FIRM" shall have the meaning specified in Section 2.6.
"ACCOUNTS RECEIVABLE" means all cash accounts receivable with respect to
the Stations as of the end of the broadcast day on the Closing Date.
"ADDITIONAL AGREEMENTS" shall have the meaning set forth in Section
6.1.6.
"APPRAISAL FIRM" shall have the meaning set forth in Section 8.5.
"APPRAISAL REPORT" shall have the meaning set forth in Section 8.5.
"ASSETS" shall have the meaning set forth in Section 2.1.
"ASSUMED LIABILITIES" shall have the meaning specified in Section 2.7.1.
"ASSIGNMENT OF CONTRACTS AND LEASES" means that certain Assignment of
Contracts and Leases, dated as of the Closing Date and executed by Sellers,
substantially in the form attached hereto as Exhibit E.
"ASSIGNMENT OF FCC LICENSES" means that certain Assignment of FCC
Licenses, dated as of the Closing Date and executed by Sellers, substantially
in the form attached hereto as Exhibit D.
"ASSUMPTION AGREEMENT" means that certain Assumption Agreement, dated
the Closing Date and executed by Buyer and Sellers, substantially in the form
attached hereto as Exhibit F.
"BASE PURCHASE PRICE" shall have the meaning set forth in Section 2.4.
"BASKET AMOUNT" shall have the meaning set forth in Section 12.4.
"BENEFIT ARRANGEMENT" means a benefit program or practice providing for
bonuses, incentive compensation, vacation pay, severance pay, insurance,
restricted stock, stock options, employee discounts, company cars, tuition
reimbursement or any other perquisite or benefit (including, without
limitation, any fringe benefit under Section 132 of the Code) to employees,
officers or independent contractors that is not a Plan.
"BENEFIT PLANS" shall have the meaning specified in Section 3.16.1.
63
"▇▇▇▇ OF SALE" means that certain ▇▇▇▇ of Sale and Assignment of Assets,
dated as of the Closing Date and executed by Sellers, substantially in the form
attached hereto as Exhibit C.
"BUYER'S ADVISOR" means an affiliate of Hicks, Muse, ▇▇▇▇ & ▇▇▇▇▇
Incorporated who has advised Buyer with respect to this Agreement.
"BUYER DOCUMENTS" shall mean, collectively, this Agreement, the Deposit
Escrow Agreement, the Indemnity Escrow Agreement and the Assumption Agreement.
"BUYER INDEMNIFIED PARTIES" shall have the meaning specified in Section
12.2.
"CLOSING" means the closing of the purchase, assignment and sale of the
Assets contemplated hereunder.
"CLOSING DATE" shall have the meaning specified in Section 11.1.
"COBRA OBLIGATIONS" shall have the meaning specified in Section 8.4.5.
"CODE" means the Internal Revenue Code of 1986, as amended, and all Laws
promulgated pursuant thereto or in connection therewith.
"COMMUNICATIONS ACT" means the Communications Act of 1934, as amended.
"CURRENT BALANCE SHEET DATE" shall have the meaning specified in Section
3.5.2.
"DEPOSIT" shall have the meaning specified in Section 2.3.
"DEPOSIT ESCROW AGENT" means Citibank, N.A.
"DEPOSIT ESCROW AGREEMENT" means that certain Escrow Agreement dated as
of the date hereof by and among Buyer, the Three-Station Buyer, Seller, the
Three-Station Sellers and the Deposit Escrow Agent, in the form of Exhibit A
attached hereto.
"ENCUMBRANCES" mean any mortgages, pledges, liens, security interests,
defects in title, easements, encumbrances, and any other matters affecting
title.
"ENVIRONMENTAL LAWS" means any federal, state, local, or foreign law
(including common law), statute, code, ordinance, rule, regulation, or other
requirement relating to the environment, natural resources, public, or employee
ANNEX I-2
64
health and safety, and Hazardous Materials generation, production, use,
storage, treatment, transportation or disposal, and includes, but is not
limited to the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, ("CERCLA") as amended by the Superfund Amendments and
Reauthorization Act of 1986 ("▇▇▇▇"), 42 U.S.C. Section 9601 et seq.; the
Toxic Substances Control Act ("TSCA"), 15 U.S.C. Section 2601 et seq.; the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1802 et seq.; the
Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. Section 9601 et
seq.; the Clean Water Act ("CWA"), 33 U.S.C. Section 1251 et seq.; the Safe
Drinking Water Act, 42 U.S.C. Section 300f et seq.; the Clean Air Act ("CAA"),
42 U.S.C. Section 7401 et seq.; the Toxic Substances Control, 15 U.S.C.
Section 2601 et seq., the Federal Insecticide, Fungicide, and Rodenticide Act,
7 U.S.C. Section 2701 et seq., and the Occupational Safety and Health Act, 29
U.S.C. Section 651 et seq., as such laws have been amended or supplemented,
and the regulations promulgated pursuant thereto, and all analogous state or
local statues.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and all Laws promulgated pursuant thereto or in connection therewith.
"EXCLUDED ASSETS" shall have the meaning specified in Section 2.2.
"EXTENDED CLOSING DATE" shall have the meaning specified in Section 8.2.
"FCC" means the Federal Communications Commission.
"FCC LICENSES" shall have the meaning specified in Section 2.1.1.
"FCC ORDER" means an unconditional order or orders (except for standard
conditions imposed by the FCC on all assignments of licenses) of the FCC, or of
the Chief, Mass Media Bureau of the FCC, acting under delegated authority,
consenting to the assignment to Buyer of the FCC Licenses for the Stations.
"FINAL ORDER" means an FCC Order as to which the time for filing a
request for administrative or judicial review, or for instituting
administrative review sua sponte, shall have expired without any such filing
having been made or notice of such review having been issued; or, in the event
of such filing or review sua sponte, as to which such filing or review shall
have been disposed of favorably to the grant and the time for seeking further
relief with respect thereto shall have expired without any request for such
further relief having been filed.
"GOVERNMENTAL AUTHORITY" means any agency, board, bureau, court,
commission, department, instrumentality or administration of the United States
government, any state government or any local or other governmental body in a
state, territory or possession of the United States or the District of
Columbia.
ANNEX I-3
65
"▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended, and all Laws promulgated pursuant thereto or in
connection therewith.
"HMTF/▇▇▇▇▇ BUYERS" means, collectively, Buyer and the Three-Station
Buyer.
"HSR FILING" shall have the meaning specified in Section 5.2.
"HAZARDOUS MATERIALS" means any wastes, substances, or materials
(whether solids, liquids or gases) that are deemed hazardous, toxic,
pollutants, or contaminants, including without limitation, substances defined
as "hazardous wastes," "hazardous substances," "hazardous materials,"
"extremely hazardous waste," "toxic substances," "radioactive materials," or
other similar designations in, or otherwise subject to regulation under, any
Environmental Laws.
"INDEMNIFIED PARTY" and "INDEMNIFYING PARTY" shall have the respective
meanings specified in Section 12.5.1.
"INDEMNITY ESCROW AGENT" shall mean ▇▇▇▇▇▇ ▇▇▇▇▇ Bank, N.A.
"INDEMNITY ESCROW AGREEMENT" means that certain Escrow Agreement dated
as of the Closing Date by and among Buyer, the Three-Station Buyer, Seller, the
Three-Station Sellers and the Indemnity Escrow Agent, in the form of Exhibit B
attached hereto.
"INDEMNITY ESCROW AMOUNT" shall have the meaning specified in Section
2.5.2.
"INTELLECTUAL PROPERTY" shall have the meaning specified in Section
2.1.4.
"JUPITER/▇▇▇▇▇ SELLERS" means, collectively, the Seller and the other
limited partnerships which own and operate the the Jupiter/▇▇▇▇▇ Stations.
"JUPITER/▇▇▇▇▇ STATIONS" means WTOV and all other television broadcast
stations for which ▇▇▇▇▇ Broadcasting Partners, L.P. is the general partner and
Jupiter/ ▇▇▇▇▇ TV Holdings, L.P. is a direct or indirect investor.
"LAWS" means any federal, state or local law, statute, code, ordinance,
regulation, order, writ, injunction, judgment or decree applicable to the
specified Person and to the businesses and assets thereof.
"LEASED PROPERTY" shall have the meaning set forth in Section 2.1.2.
"LIABILITIES" shall mean, as to any Person, all debts, adverse claims,
liabilities and obligations, direct, indirect, absolute or contingent of such
Person,
ANNEX I-4
66
whether accrued, vested or otherwise, whether in contract, tort, strict
liability or otherwise and whether or not actually reflected, or required by
generally accepted accounting principles to be reflected, in such Person's
balance sheets or other books and records.
"LOSSES" means any and all demands, claims, complaints, actions or
causes of action, suits, proceedings, investigations, arbitrations,
assessments, losses, damages, liabilities, obligations (including those arising
out of any action, such as any settlement or compromise thereof or judgment or
award therein) and any costs and expenses, including, without limitation,
reasonable attorneys' fees and disbursements.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the
business, operations, assets or financial condition of the Jupiter/▇▇▇▇▇
Stations taken as a whole, except for any material adverse affect resulting
from (a) general economic conditions applicable to the television broadcast
industry, or (b) general conditions in the markets in which the Jupiter/▇▇▇▇▇
Stations operate.
"NET WORKING CAPITAL" shall mean as of the end of the broadcast day on
the Closing Date (a) the sum of (i) the amount equal to ninety-five percent
(95%) of the aggregate dollar value of the Accounts Receivable, plus (ii) the
balances of all other current assets of the Station (including all deposits and
prepaid expenses) as of such date exclusive of any cash, any other Excluded
Assets and any assets related to Program Contracts (other than deposits paid in
respect of Program Contracts under which the programs licensed are not
available for exhibition prior to Closing); less (b) the sum of the balances of
the current liabilities of the Station as of such date exclusive of (i) any
liabilities related to any Excluded Assets, (ii) the current portion of long
term debt, (iii) accrued interest and other liabilities not being assumed by
Buyer, (iv) any liabilities for accrued vacation and accrued sick leave, and
(v) any liabilities related to Program Contracts.
"NET WORKING CAPITAL AMOUNT" shall mean, where applicable, either the
Estimated Net Working Capital Amount or the Final Net Working Capital Amount.
"OPERATING CONTRACTS" shall have the meaning specified in Section 2.1.8.
"ORDINARY COURSE OF BUSINESS" means, with respect to Seller, the
ordinary course of business consistent with past practices of Seller; any
actions taken pursuant to the requirements of law or contracts existing on the
date hereof shall be deemed to be action in the Ordinary Course of Business.
"PENSION PLAN" means an "employee pension benefit plan" as such term is
defined in Section 3(2) of ERISA.
ANNEX I-5
67
"PERMITTED ASSIGNEE" means any Person that, directly or indirectly, is
in control of, is controlled by or is under common control with Buyer and/or
▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
"PERMITTED ENCUMBRANCES" means (a) Encumbrances arising in connection
with equipment or maintenance financing or leasing, (b) Encumbrances on Real
Property that do not interfere with the use of the Real Property in the
operations or business of the Station, (c) Encumbrances for Taxes not yet due
and payable or which are being contested in good faith and by appropriate
proceedings if adequate reserves with respect thereto are maintained on
Seller's books in accordance with generally accepted accounting principles, (d)
Encumbrances which do not secure indebtedness of Seller and that, individually
or in the aggregate, do not and would not materially detract from the value of
any of the Assets or materially interfere with the use thereof as currently
used, or (e) those matters identified as permitted encumbrances on Schedule 3.8
or Schedule 3.10.
"PERSON" shall mean any individual, corporation, partnership, limited
liability company, joint venture, trust, unincorporated organization, other
form of business or legal entity or Governmental Authority.
"PLAN" means any plan, program or arrangement, whether or not written,
that is or was an "employee benefit plan" as such term is defined in Section
3(3) of ERISA and (a) which was or is established or maintained by Seller; (b)
to which Seller contributed or was obligated to contribute or to fund or
provide benefits; or (c) which provides or promises benefits to any person who
performs or who has performed services for Seller and because of those services
is or has been (i) a participant therein or (ii) entitled to benefits
thereunder.
"PROGRAM CONTRACTS" shall have the meaning specified in Section 2.1.5.
"PURCHASE PRICE" shall have the meaning specified in Section 2.4.
"QUALIFIED PLAN" means a Pension Plan that satisfies, or is intended by
Seller to satisfy, the requirements for tax qualification described in Section
401 of the Code.
"REAL PROPERTY" shall have the meaning set forth in Section 2.1.2.
"REPRESENTED EMPLOYEES" shall have the meaning set forth in Section
8.4.4.
"RESTRICTED CONTRACTS" shall have the meaning specified in Section
6.2.11.
"SBG" shall have the meaning set forth in Section 3.16.1.
ANNEX I-6
68
"SCHEDULES" shall mean the disclosure schedules delivered by Seller to
Buyer in connection herewith.
"SELLER DOCUMENTS" shall mean, collectively, this Agreement, the
Deposit Escrow Agreement, the Indemnity Escrow Agreement, the Assignment of
Contracts and Leases, the ▇▇▇▇ of Sale, the Assignment of FCC Licenses, and the
Assumption Agreement.
"SELLER INDEMNIFIED PARTIES" shall have the meaning set forth in Section
12.3.
"SELLER TAX RETURNS" means all federal, state, local, foreign and other
applicable Tax returns, declarations of estimated Tax reports required to be
filed by any of Seller (without regard to extensions of time permitted by law
or otherwise).
"SELLER'S BROKER" means Salomon Brothers Inc.
"▇▇▇▇▇-WTOV" means ▇▇▇▇▇ Television-WTOV, L.P., a Delaware limited
partnership.
"STATION CONTRACTS" shall have the meaning specified in Section 2.1.8.
"TAXES" means all federal, state and local taxes (including, without
limitation, income, profit, franchise, sales, use, real property, personal
property, ad valorem, excise, employment, social security and wage withholding
taxes) and installments of estimated taxes, assessments, deficiencies, levies,
imports, duties, license fees, registration fees, withholdings, or other
similar charges of every kind, character or description imposed by any
Governmental Authorities.
"THREE-STATION AGREEMENT" means that certain Asset Purchase Agreement
dated as of the date hereof by and among the Three-Station Sellers and the
Three-Station Buyer pursuant to which the Three-Station Sellers have agreed to
sell, and the Three-Station Buyer has agreed to purchase, the Three-Stations.
"THREE-STATION BUYER" means STV Acquisition Company, a Delaware
corporation.
"THREE-STATION INDEMNITY ESCROW AMOUNT" means the indemnity escrow
amount of One Million Five Hundred Thousand Dollars ($1,500,000) delivered by
the Three-Station Buyer to the Indemnity Escrow Agent pursuant to the
Three-Station Agreement.
"THREE-STATIONS" means, collectively, the Jupiter/▇▇▇▇▇ Stations other
than WTOV.
ANNEX I-7
69
"THREE-STATION SELLERS" means, collectively, the Jupiter/▇▇▇▇▇ Sellers
other than the Seller.
"TIME SALES AGREEMENTS" shall have the meaning specified in Section
2.1.7.
"TRADE-OUT AGREEMENTS" shall have the meaning specified in Section
2.1.6.
"TRANSFER TAXES" shall have the meaning specified in Section 15.3.
"TRANSFERRED EMPLOYEE" shall have the meaning specified in Section
8.4.1.
"WELFARE PLAN" means an "employee welfare benefit plan" as such term is
defined in Section 3(1) of ERISA.
"WTOV" means television broadcast station WTOV-TV, Channel 9,
Steubenville, Ohio.
"WTOV INDEMNITY ESCROW AMOUNT" shall have the meaning specified in
Section 2.5.2.
"WTOV LICENSEE" means ▇▇▇▇▇ Television-WTOV License, L.P., a Delaware
limited partnership.
ANNEX I-8