ASSET PURCHASE AGREEMENT
BY AND BETWEEN
HERITAGE BROADCASTING GROUP, INC.
as Seller
AND
▇▇▇▇▇▇▇▇ BROADCAST GROUP, INC.
as Buyer
Dated as of July 16, 1997
TABLE OF CONTENTS
Page
ARTICLE 1. DEFINITIONS AND REFERENCES......................................2
ARTICLE 2. SALE AND PURCHASE OF ASSETS.....................................2
2.1. Asset Sale and Purchase of Assets...............................2
2.1.1. FCC Licenses........................................2
2.1.2. Real and Leased Property Interests..................3
2.1.3. Tangible Personal Property..........................3
2.1.4. Intellectual Property...............................3
2.1.5. Program Contracts...................................3
2.1.6. Trade-out Agreements................................4
2.1.7. Broadcast Time Sales Agreement......................4
2.1.8. Operating Contracts.................................4
2.1.9. Vehicles............................................4
2.1.10. Files and Records...................................4
2.1.11. Auxiliary Facilities................................5
2.1.12. Permits and Licenses................................5
2.1.13. Goodwill............................................5
2.2. Excluded Assets.................................................5
2.2.1. Cash................................................5
2.2.2. Accounts Receivable.................................5
2.2.3. Personal Property Disposed Of.......................5
2.2.4. Insurance...........................................6
2.2.5. Employee Plans and Assets...........................6
2.2.6. Right to Tax Refunds................................6
2.2.7. Certain Books and Records...........................6
2.2.8. Third-Party Claims..................................6
2.2.9. Rights Under this Agreement.........................6
2.2.10. Names...............................................6
2.2.11. Deposit and Prepaid Expenses........................7
2.2.12. Miscellaneous Excluded Assets.......................7
2.3. Escrow Deposit..................................................7
2.4. Purchase Price..................................................7
2.5. Payment of Purchase Price at Closing............................7
2.6. Preliminary Payment.............................................8
2.7. Proration Amount...............................................10
2.8. Allocation of Base Purchase Price and Deposit..................13
2.9. Assumption of Liabilities......................................13
2.10. News Corp. Guaranty...........................................14
ARTICLE 3. REPRESENTATIONS AND WARRANTIES BY SELLER.......................14
3.1. Organization and Standing......................................14
3.2. Authorization..................................................15
3.3. Compliance with Laws...........................................15
3.4. Consents and Approvals; No Conflicts...........................15
3.5. Financial Statements; Undisclosed Liabilities.................16
3.6. Absence of Certain Changes or Events..........................16
3.7. Absence of Litigation.........................................17
3.8. Assets........................................................17
3.9. FCC Matters...................................................17
3.10. Real Property.................................................18
3.11. Intellectual Property.........................................19
3.12. Station Contracts.............................................19
3.13. Taxes.........................................................19
3.14. Employee Benefit Plans........................................20
3.15. Labor Relations...............................................22
3.16. Environmental Matters.........................................22
3.17. Insurance.....................................................23
3.18. Reports.......................................................23
ARTICLE 4. REPRESENTATIONS AND WARRANTIES BY BUYER........................24
4.1. Organization and Standing.....................................24
4.2. Authorization.................................................24
4.3. Consents and Approvals; No Conflicts..........................24
4.4. Availability of Funds.........................................25
4.5. Qualification of Buyer........................................25
4.6. WARN Act......................................................26
4.7. No Outside Reliance...........................................26
4.8. Interpretation of Certain Provisions..........................26
ARTICLE 5. PRE-CLOSING FILINGS............................................26
5.1. Applications for FCC Consent..................................26
5.2. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇.............................................27
5.3. Non-Required Actions..........................................27
ARTICLE 6. COVENANTS AND AGREEMENTS OF SELLER.............................27
6.1. Negative Covenants............................................27
6.1.1. Dispositions; Mergers..............................28
6.1.2. Accounting Principles and Practices................28
6.1.3. Trade-out Agreements...............................28
6.1.4. Broadcast Time Sales Agreements....................28
6.1.5. TBAs...............................................28
6.1.6. Additional Agreements..............................28
6.1.7. Breaches...........................................28
6.1.8. Employee Matters...................................29
6.1.9. Actions Affecting FCC Licenses.....................29
6.1.10. Programming........................................29
6.1.11. Encumbrances.......................................29
6.1.12. Transactions With Affiliates.......................29
6.2. Affirmative Covenants.........................................29
6.2.1. Preserve Existence..................................29
6.2.2. Normal Operations...................................30
6.2.3. Maintain FCC Licenses...............................30
6.2.4. Station Contracts...................................30
6.2.5. Taxes...............................................30
6.2.6. Access..............................................30
6.2.7. Insurance...........................................31
6.2.8. Financial Statements................................31
6.2.9. Consents............................................32
6.2.10. Corporate Action...................................33
6.2.11. Environmental Audit................................33
6.3. Confidentiality................................................33
6.4. Trustee Acknowledgment.........................................33
ARTICLE 7. COVENANS AND AGREEMENTS OF BUYER...............................34
7.1. Confidentiality................................................34
7.2. Corporate Action...............................................34
7.3. Access.........................................................34
7.4. Collection of Receivables......................................35
ARTICLE 8. MUTUAL COVENANTS AND UNDERSTANDINGS OF SELLER AND BUYER.......36
8.1. Possession and Control.........................................36
8.2. Risk of Loss...................................................36
8.3. Public Announcements...........................................37
8.4. Employee Matters...............................................37
8.5. Disclosure Schedules...........................................40
8.6. Bulk Sales Laws................................................40
8.7. Tax Matters....................................................40
8.8. Preservation of Books and Records..............................40
ARTICLE 9. CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE...........40
9.1. Representations and Covenants..................................41
9.2. Delivery of Documents..........................................41
9.3. FCC Order......................................................41
9.4. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇..............................................41
9.5. Legal Proceedings..............................................41
ARTICLE 10. CONDITIONS PRECEDENT TO SELLER'S OBLIGATION TO CLOSE.........42
10.1. Consummation of the Merger....................................42
10.2. Representations and Covenants.................................42
10.3. Delivery by Buyer.............................................42
10.4. FCC Order.....................................................42
10.5. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇.............................................42
10.6. Legal Proceedings.............................................43
ARTICLE 11. CLOSING.......................................................43
11.1. Closings.....................................................43
11.2. Delivery by Seller...........................................43
11.2.1. Agreements and Instruments.........................43
11.2.2. Consents...........................................44
11.2.3. Certified Resolutions..............................44
11.2.4. Officers' Certificates.............................44
11.2.5. Good Standing Certificates.........................44
11.2.6. Opinion of Counsel.................................44
11.3. Delivery by Buyer............................................44
11.3.1. Purchase Price Payment.............................44
11.3.2. Agreements and Instruments.........................45
11.3.3. Certified Resolutions..............................45
11.3.4. Officers' Certificate..............................45
11.3.5. Opinion of Counsel.................................45
ARTICLE 12. SURVIVAL; INDEMNIFICATION.....................................45
12.1. Survival of Representations..................................45
12.2. Indemnification by Seller....................................46
12.3. Indemnification by Buyer.....................................47
12.4. Limitations on Indemnification...............................47
12.5. Conditions of Indemnification................................48
12.6. Cure of Breach...............................................49
ARTICLE 13. TERMINATION...................................................50
13.1. Termination by the Parties....................................50
13.2. Automatic Termination.........................................50
13.3. Effect of Termination.........................................50
ARTICLE 14. REMEDIES......................................................51
14.1. Default by Buyer..............................................51
14.2. Default by Seller.............................................52
14.3. Liquidated Damages............................................52
ARTICLE 15. GENERAL PROVISIONS............................................52
15.1. Additional Actions, Documents and Information.................52
15.2. Brokers.......................................................53
15.3. Expenses and Taxes............................................53
15.4. Notices.......................................................53
15.5. Waiver........................................................55
15.6. Benefit and Assignment........................................55
15.7. Entire Agreement; Amendment...................................56
15.8. Severability..................................................57
15.9. Headings......................................................57
15.10. Governing Law................................................57
15.11. Signature in Counterparts....................................57
SCHEDULES
Schedule 2.1.1 FCC Licenses
Schedule 2.1.2 Real Property Interests
Schedule 2.1.3 Tangible Personal Property
Schedule 2.1.5 Program Contracts
Schedule 2.1.6 Trade-out Agreements
Schedule 2.1.8 Operating Contracts
Schedule 2.1.9 Vehicles
Schedule 2.2.12 Excluded Assets
Schedule 3.4 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 3.14 Employee Benefit Plans
Schedule 3.15 Employee Matters
Schedule 3.16 Environmental Matters
Schedule 3.17 Insurance
Schedule 4.5.1 Buyer Stations
EXHIBITS
EXHIBIT A Form of Deposit Escrow Agreement
EXHIBIT B Form of ▇▇▇▇ of Sale and Assignment of Assets
EXHIBIT C Form of Assignment of FCC Licenses
EXHIBIT D Form of Assignment of Contracts and Leases
EXHIBIT E Form of Assumption Agreement
EXHIBIT F Form of Retention Agreement
EXHIBIT G Form of Opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is entered
into as of this 16th day of July, 1997, by and between HERITAGE BROADCASTING
GROUP, INC., a Delaware corporation ("Seller") and ▇▇▇▇▇▇▇▇ BROADCAST GROUP,
INC., a Maryland corporation ("Buyer").
WHEREAS, Heritage Media Corporation, a Delaware corporation
("HMC"), The News Corporation Limited, a South Australia corporation ("News
Corp."), and HMC Acquisition Corp., a Delaware corporation and wholly-owned
subsidiary of News Corp. ("Merger Sub"), are parties to that certain Agreement
and Plan of Merger dated as of March 17, 1997 (the "Merger Agreement"), pursuant
to which, among other things, HMC will be merged with and into Merger Sub (the
"Merger"), with Merger Sub surviving as a wholly-owned subsidiary of News Corp.;
WHEREAS, in connection with the Merger, HMC and News Corp.
have agreed that certain radio stations owned, controlled or operated by certain
subsidiaries of HMC will be divested;
WHEREAS, News Corp., HMC and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (the
"Trustee") have entered into a Transfer Agreement (the "Transfer Agreement")
dated as of May 2, 1997, pursuant to which Heritage Media Services, Inc.
("Heritage Media"), a wholly-owned subsidiary of HMC, has agreed to transfer to
the Trustee all of the stock of HMI Broadcasting Corporation, a wholly-owned
subsidiary of Heritage Media and the direct or indirect sole stockholder of
Seller, pursuant to and in accordance with the terms and conditions of the
Transfer Agreement and a Trust Agreement by and among the Trustee, HMC, News
Corp. and Heritage Media, to be entered into as of the closing of the Merger
(the "Trust Agreement");
WHEREAS, Seller is a wholly-owned indirect subsidiary of
HMC;
WHEREAS, Seller is the licensee of radio broadcast stations
WRNO(FM), New Orleans, Louisiana, WEZB(FM), New Orleans, Louisiana and WBYU(AM),
New Orleans, Louisiana (individually, a "Station" and collectively, the
"Stations") pursuant to certain authorizations issued by the FCC, and Seller
operates the Stations and owns or leases certain assets used in connection with
the operation of the Stations;
WHEREAS, the parties hereto desire to enter into this
Agreement to provide for the sale, assignment and transfer by Seller to Buyer of
the assets owned, leased or used by Seller in connection with the business and
operations of the Stations.
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
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 with respect to the Stations, Seller shall sell, assign, transfer,
convey and deliver to Buyer free and clear of any Encumbrances other than
Permitted Encumbrances, 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, owned, leased, used or useful by Seller in connection with the
business and operations of the Stations (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 Seller for the operation of the Stations (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 and used or useful in connection with the business and
operations of the Stations ("Real Property"), including, without limitation, all
of those items listed 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 Stations ("Leased Property"),
including, without limitation, all of those items listed 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 owned,
leased or used by Seller in connection with the business and operations of the
Stations, 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 Five Thousand Dollars ($5,000),
all of which are set forth and identified in Schedule 2.1.3.
2.1.4. Intellectual Property.
All of the service marks, copyrights,
franchises, trademarks, trade names, jingles, slogans, logotypes and other
similar intangible assets maintained, owned, leased or used by Seller in
connection with the business and operations of the Stations (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, the right to use the call
letters for the Stations.
2.1.5. Program Contracts.
The program licenses and contracts under which
Seller is authorized to broadcast programs on the Stations (collectively the
"Program Contracts") including, without limitation, (a) all program (cash and
non-cash)
licenses and contracts listed on Schedule 2.1.5, 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.
2.1.6. Trade-out Agreements.
All contracts and agreements (excluding Program
Contracts) pursuant to which Seller has sold, traded or bartered commercial air
time on the Stations in consideration for any property or services in lieu of or
in addition to cash (collectively, the "Trade-out Agreements") including,
without limitation, those set forth and identified in Schedule 2.1.6.
2.1.7. Broadcast Time Sales Agreement.
All contracts and agreements pursuant to which
Seller has sold commercial air time on the Stations for cash (collectively the
"Time Sales Agreements").
2.1.8. Operating Contracts.
All other operating contracts and agreements
relating to the business or operations of the Stations, all material such
contracts as of the date hereof being listed on Schedule 2.1.8 (including,
without limitation, any TBA, all employment agreements and talent contracts, all
leases and subleases relating to the Leased Property, all agreements relating to
any motor vehicles, all collective bargaining agreements, all network
affiliation agreements and all national and local advertising representation
agreements for the Stations), 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, Trade-out Agreements and the
Time Sales Agreements, the "Station Contracts").
2.1.9. Vehicles.
All automotive equipment and motor vehicles
maintained, owned, leased or otherwise used by Seller in connection with the
business and operations of the Stations, including, without limitation, those
set forth and described in Schedule 2.1.9.
2.1.10. Files and Records.
All engineering, business and other books,
papers, logs, files and records pertaining to the business and operations of the
Stations, but not the organizational documents and records described in Section
2.2.7.
2.1.11. Auxiliary Facilities.
All translators, earth stations, and other
auxiliary facilities, and all applications therefor owned, leased or otherwise
used or useful by Seller in connection with the business and operations of the
Stations.
2.1.12. 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 or
useful by Seller in connection with the business and operations of the Stations
and all pending applications therefor.
2.1.13. Goodwill.
The business of the Stations 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 for a particular Station, the following assets
(collectively, the "Excluded Assets").
2.2.1. Cash.
All cash, cash equivalents or deposits held by
Seller, all interest payable in connection with any such cash, cash equivalents
or deposits or short term investments, bank balances and rights in and to bank
accounts, marketable and other securities of Seller; provided, however, if Buyer
has made the Preliminary Payment, Buyer shall be entitled to receive the cash
flow from the business and operations of the Stations to the extent provided for
in Section 2.6.
2.2.2. Accounts Receivable.
All Accounts Receivable arising out of the
business and operations of the Stations.
2.2.3. Personal Property Disposed Of.
All tangible personal property disposed of or
consumed in the Ordinary Course of Business as permitted by this Agreement.
2.2.4. Insurance.
All contracts of insurance and all insurance
plans and the assets thereof.
2.2.5. Employee Plans and Assets.
All Plans, Benefit Arrangements (except for any
Station Contracts, Proration Items or other matters which are specifically
assumed by Buyer pursuant to the terms hereof), Qualified Plans and Welfare
Plans and the assets thereof.
2.2.6. Right to Tax Refunds.
Any and all claims of Seller with respect to any Tax
refunds.
2.2.7. Certain Books and Records.
All of (a) Seller's organizational documents,
corporate books and records (including minute books and stock ledgers and
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 Stations prior to the Closing, (c) all records prepared
by or on behalf of Seller in connection with the sale of the Stations, and (d)
all records and documents relating to any Excluded Assets.
2.2.8. Third-Party Claims.
All rights and claims of Seller whether mature,
contingent or otherwise, against third parties relating to the Assets or the
Stations, whether in tort, contract, or otherwise.
2.2.9. 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.
2.2.10. Names.
All rights to the names "Heritage Broadcasting"
and "Heritage Media" and any logo or variation thereof and the goodwill
associated therewith.
2.2.11. Deposit and Prepaid Expenses.
All of Seller's deposits and prepaid expenses,
provided, however, any deposit and prepaid expenses shall be included in the
Assets conveyed pursuant hereto to the extent that Seller receives a credit
therefor in the calculation of the Proration Amount pursuant to Section 2.7.
2.2.12. Miscellaneous Excluded Assets.
The assets listed and identified on Schedule 2.2.12.
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 Multi-Stations Agreement, Buyer is depositing in escrow
with the Deposit Escrow Agent an amount equal to SIXTY-THREE MILLION DOLLARS
($63,000,000) in cash, for the benefit of the Heritage Sellers, such amount to
be held as an ▇▇▇▇▇▇▇ money deposit (the "Deposit"), in accordance with the
terms and conditions of the Deposit Escrow Agreement. Upon the written request
of Buyer, the parties hereto agree to negotiate in good faith an amendment to
the Deposit Escrow Agreement to provide for the replacement of the cash Deposit
with an original, irrevocable letter of credit for the benefit of Seller in the
amount of the Deposit, all on terms and conditions satisfactory to Seller in its
sole and absolute discretion.
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 2.9, Buyer agrees to pay to Seller, and Seller agrees to accept from
Buyer, an amount equal to TWENTY-SIX MILLION DOLLARS ($26,000,000), (the "Base
Purchase Price"), plus or minus (as the case may be) the Proration Amount
(collectively, the "Purchase Price").
2.5. Payment of Purchase Price at Closing.
The Purchase Price shall be payable to Seller at the Closing
(except to the extent that the Purchase Price shall have been paid on the
Preliminary Payment Date pursuant to Section 2.6) as follows:
2.5.1. Buyer and Seller shall cause the Deposit Escrow Agent
to deliver to Seller the amount of Two Million Six Hundred Thousand Dollars
($2,600,000) of the Deposit (the "Allocable Deposit") 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; provided, however, none of the
Allocable Deposit shall be released by the Deposit Escrow Agent at the Closing
until the Deposit Release Date.
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;
provided, however, until such time as the Deposit Release Date shall have
occurred, Buyer shall deliver the entire Purchase Price.
2.6. Preliminary Payment.
2.6.1. If the Closing for the Stations shall not have occurred
prior to such date which is nine (9) months after the date of this Agreement and
Buyer shall not have paid to Seller on or prior to such date the amount of
Twenty-Six Million Dollars ($26,000,000) (the "Preliminary Payment") pursuant to
Section 2.6.3 below, then (a) if the Deposit Release Date shall have occurred,
Seller shall immediately receive the Allocable Deposit, (b) Seller shall sell
the Stations for Seller's account and benefit on terms and conditions to such
buyer or buyers as determined by Seller in its sole and absolute discretion
(such a sale is hereinafter referred to as a "Makewell Sale"), and (c) Seller's
obligations hereunder to proceed with the sale of the Stations to Buyer shall
automatically terminate without further action by the parties. Seller agrees to
use commercially reasonable efforts to consummate such Makewell Sale on arm's
length terms within four (4) years after the date hereof. If the issuance of the
FCC Orders for the Stations is delayed until after the date which is nine (9)
months after the date of this Agreement solely due to any issue raised by the
FCC or any petitioner concerning any Subject Party, then Seller's right to sell
the Stations in a Makewell Sale pursuant to Section 2.6.1 and to receive the
Allocable Deposit pursuant to this Section 2.6.1 shall be delayed until the
issuance of the FCC Orders for the Stations. In the event of such a delay, if
the FCC Application with respect to the Stations shall ultimately be denied by
the FCC and such FCC decision shall become final and non-appealable, then Buyer
shall have the right to terminate the transactions contemplated herein with
respect to the Stations and, if the Deposit Release Date shall have occurred,
then Buyer shall receive the Allocable Deposit or, if later, when the Deposit
Release Date occurs. If the Closing shall not have occurred on or prior to such
date which is nine (9) months after the date of this Agreement due solely to an
intentional breach by Seller which caused the conditions set forth in Section
9.2 not to be satisfied, then Seller's right to sell the Stations in a Makewell
Sale pursuant to Section 2.6.1 and to receive the Allocable Deposit pursuant to
Section 2.6.1 shall be delayed until such breach is cured by Seller.
2.6.2. At the closing of a Makewell Sale pursuant to Section
2.6.1 (the "Makewell Closing"), Seller shall receive all proceeds from such
Makewell Sale, and Buyer shall immediately pay to Seller (the "Makewell
Payment") the amount equal to the greater of (a) the Allocable Deposit or (b)
sum of (i) the amount, if any, by which the Preliminary Payment exceeds the
proceeds received by Seller from such Makewell Sale (net of all Disposition
Expenses other than income Taxes in connection with such Makewell Sale), plus
(ii) interest on the Preliminary Payment (less the Allocable Deposit previously
released to Sellers) at the rate of six percent (6%) per annum from the date
which is nine (9) months after the date of this Agreement until the date that
Seller receives the Makewell Payment from Buyer. Such payment shall be made by
wire transfer of immediately available federal funds to an account identified by
Seller not less than two (2) days prior to the date of the Makewell Closing. If
Seller has received the Allocable Deposit in accordance with this Section 2.6.2,
upon the payment of the Makewell Payment pursuant to this Section 2.6.2, Seller
shall return the Allocable Deposit (but not in excess of the Makewell Payment)
to Buyer by wire transfer of immediately available federal funds to an account
identified by Buyer.
2.6.3. In lieu of a Makewell Sale for the Stations, Buyer
shall have the right to pay to Seller the Preliminary Payment in respect of the
Stations at any time on or prior to such date which is nine (9) months after the
date of this Agreement (the date on which Seller receives the Preliminary
Payment from Buyer pursuant to this Section 2.6.3 is referred to herein as the
"Preliminary Payment Date"). Payment of the Preliminary Payment shall be made as
follows:
(a) Buyer shall cause the Deposit Escrow Agent to deliver to
Seller the Allocable Deposit 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 Preliminary Payment Date; provided, however, the Allocable
Deposit shall not be released by the Deposit Escrow Agent until the Deposit
Release Date.
(b) Buyer shall deliver the balance of the Preliminary Payment
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 Preliminary
Payment Date; provided, however, until such time as the Deposit Release Date
shall have occurred, Buyer shall deliver the entire Preliminary Payment.
2.6.4 From and after the payment of the Preliminary Payment
and continuing until the earlier to occur of the Closing Date or the closing of
an Account Sale (the "Interim Period"), the Stations shall remain under the
ownership and complete control of Seller, and Seller shall operate the Stations
for Buyer's account and benefit; provided, however, that the proceeds from the
collection of Accounts Receivable of the Stations in existence as of the
Preliminary Payment Date shall be for the account of Seller. During the Interim
Period, all revenues from the
operation of the Stations (other than the proceeds from the collection of the
Accounts Receivable of such Stations in existence as of the Preliminary Payment
Date) in excess of the Seller's Cost of Carry (the "Stations' Cash Flow") shall
be maintained by Seller for the benefit of Buyer. For tax purposes, the parties
agree that at all times during the Interim Period, Seller shall be treated as
the owner of the Stations, and all tax reports and returns will be filed
consistent therewith; provided, however, that Buyer shall have the right to
consult with Seller with respect to any tax treatment of the Stations that could
affect Buyer's ownership thereof after Closing. Notwithstanding anything else
herein to the contrary, if during the Interim Period the Stations' Cash Flow is
insufficient to permit Seller to take any action necessary to avoid a breach of
this Agreement, no breach will be deemed to have occurred if Seller gives Buyer
notice and an opportunity to provide the funds necessary to take the required
action.
2.6.5. If the Closing for the Stations shall not have occurred
prior to such date which is two (2) years after the date of this Agreement and
Seller shall have received the Preliminary Payment, then Seller shall have the
right to sell (or at any time following Seller's receipt of the Preliminary
Payment, Buyer shall have the right to cause Seller to sell) the Stations in an
Account Sale. At the closing of an Account Sale pursuant to this Section 2.6.5,
all proceeds therefrom (net of all Disposition Expenses in connection with such
Account Sale), shall be paid directly to Buyer by wire transfer of immediately
available funds to an account identified by Buyer in writing.
2.6.6. Buyer acknowledges and agrees that, notwithstanding
anything to the contrary contained in this Agreement or otherwise, Buyer's
obligation to pay the Makewell Payment pursuant to Section 2.6.2 and the rights
of Seller to receive such payment, (a) shall be absolute and unconditional and
not subject to any right of set-off, deduction or counterclaim and (b) shall not
be affected by any condition, fact or circumstance, including, without
limitation, the existence of any breach of any representations, warranties,
covenants or agreements of Seller. Payment of the Preliminary Payment or the
Makewell Payment shall be final and non-refundable and Buyer shall not seek to
recover all or any part of such payment from Seller for any reason whatsoever;
provided, however, that the foregoing shall not limit Buyer's rights to seek
indemnification in accordance with the terms and conditions of this Agreement.
2.7. Proration Amount.
2.7.1. Subject to the terms and conditions of Section 2.7.2,
at least five (5) days prior to the Closing Date for the Stations, Seller shall
make a good faith estimate of the adjustments to the Base Purchase Price
customary in radio broadcast station transactions for Proration Items (the
"Proration Amount") to reflect that all Proration Items of the Stations shall be
apportioned between Buyer
and Seller in accordance with the principle that Seller shall receive the
benefit of all revenues, refunds, deposits (other than deposits for Program
Contracts which shall be prorated based on the percentage of the term that the
program was aired on the Stations before the Closing Date and the percentage
available to be aired on and after the Closing Date) and prepaid expenses, and
shall be responsible for all expenses, costs and liabilities allocable to the
conduct of the businesses or operations of the Stations for the period prior to
the Closing Date, and Buyer shall receive the benefit of all revenues, refunds,
deposits and prepaid expenses, and shall be responsible for all expenses, costs
and liabilities allocable to the conduct of the businesses or operations of the
Stations from and after the Closing Date; provided, however, that there shall be
no adjustment or proration for any negative or positive net trade balance except
to the extent that the negative trade balance (i.e., the amount by which the
value of goods or services to be received is less than the value of any
advertising time remaining to be run) for all of the Stations exceeds $50,000 as
of the Closing Date. Determinations pursuant to this Section 2.7.1 shall be made
in accordance with generally accepted accounting principles consistently applied
for the period prior to the Closing Date.
2.7.2. Notwithstanding anything to the contrary contained in
Section 2.7.1 and to the extent consistent with Section 2.6.5, if Seller shall
have received the Preliminary Payment, then the Proration Amount for the
Stations shall be determined under Section 2.7.1 on the Closing Date (or the
closing date of an Account Sale, if applicable) in accordance with the principle
that Seller shall receive the benefit of all revenues, refunds, deposits (other
than deposits for Program Contracts which shall be prorated based on the
percentage of the term that the film or program was aired on the Stations before
the Preliminary Payment Date and the percentage available to be aired on and
after the Preliminary Payment Date) and prepaid expenses, and shall be
responsible for all expenses, costs and liabilities allocable to the conduct of
the businesses or operations of the Stations for the period prior to the
Preliminary Payment Date, and Buyer shall receive the benefit of all revenues,
refunds, deposits (other than deposits for Program Contracts which shall be
prorated based on the percentage of the term that the film or program was aired
on the Stations before the Preliminary Payment Date and the percentage available
to be aired on and after the Preliminary Payment Date) and prepaid expenses, and
shall be responsible for all expenses, costs and liabilities allocable to the
conduct of the businesses or operations of the Stations for the period from and
after the Preliminary Payment Date.
2.7.3. Within ninety (90) days after the Closing Date (or the
closing date of an Account Sale, if applicable), Buyer shall deliver to Seller
in writing and in reasonable detail a good faith final determination of the
Proration Amount determined as of the Closing Date under Section 2.7.1 or as of
the Preliminary Payment Date under Section 2.7.2 ("Final Proration 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
Stations for the purpose of determining the Final Proration Amount. Seller shall
have the right to review the computations and workpapers used in connection with
Buyer's preparation of the Final Proration Amount. If Seller disagrees with the
amount of the Final Proration Amount determined by Buyer, Seller shall so notify
Buyer in writing within thirty (30) days after the date of receipt of Buyer's
Final Proration Amount, specifying in detail any point of disagreement;
provided, however, that if Seller fails to notify Buyer in writing of Seller's
disagreement within such thirty (30) day period, Buyer's determination of the
Final Proration 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
Proration Amount. If any such disagreement cannot be resolved by Seller and
Buyer within thirty (30) days after Buyer has received notice from Seller of the
existence of such disagreement, Buyer and Seller shall jointly select a
nationally recognized independent public accounting firm (which has not
performed any service for either Buyer or Seller or any of their respective
subsidiaries at anytime during the two (2) year period prior to the date such
firm is selected (the "Accounting Firm"), to review Buyer's determination of the
Final Proration 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 Proration 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.
If the Final Proration Amount is such that
Buyer's payment of the Proration Amount at Closing (or the closing of an Account
Sale, if applicable) was an underpayment to Seller, then Buyer shall pay such
underpayment amount to Seller in cash, within two (2) business days following
the final determination of the Final Proration Amount. If the Final Proration
Amount is such that Buyer's payment of the Proration Amount at Closing (or the
closing of an Account Sale, if applicable) was an overpayment to Seller, then
Seller shall pay such overpayment amount to Buyer in cash within two (2)
business days following the final determination of the Final Proration Amount.
Any amounts paid pursuant to this Section 2.7.3 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 Proration Amount pursuant to this Section
2.7.3 (by the Accounting Firm or otherwise), neither party will destroy any
records pertaining to, or necessary for, the final determination of the Final
Proration Amount.
2.8. Allocation of Base Purchase Price and Deposit.
2.8.1. Seller and Buyer agree to allocate the Deposit among
the Heritage Stations as set forth in Section 2.9 of the Multi-Stations
Agreement.
2.8.2. Seller and Buyer each represent, warrant, covenant,
and agree with each other that the Base Purchase Price shall be allocated among
the classes of Assets for each Station, as agreed by the parties within sixty
(60) days after the date hereof. Seller and Buyer agree, pursuant to Section
1060 of the Code that the Base Purchase Price shall be allocated in accordance
with this Section 2.8, 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 2.8 shall survive the Closing Date
without limitation.
2.8.3. If Seller and Buyer are unable to agree on such
allocation, within sixty (60) days following execution of this Agreement, Seller
and Buyer agree to retain a nationally recognized appraisal firm experienced in
valuing broadcast properties which is mutually acceptable to Seller and Buyer
(the "Appraisal Firm") to appraise the classes of Assets of each Station in
accordance with the allocation for the Stations set forth in Section 2.8. The
Appraisal Firm shall be instructed to perform an appraisal of the classes of
Assets of each Station and to deliver a report to Seller and Buyer as soon as
reasonably practicable (the "Appraisal Report"). Buyer and Seller shall each pay
one-half of the fees, costs and expenses of the Appraisal Firm whether or not
the transactions contemplated hereby are consummated.
2.9. Assumption of Liabilities.
2.9.1. At the Closing (unless there shall have occurred the
Preliminary Payment Date, in which case the provisions of Section 2.9.3 shall
apply, Buyer shall assume, pay, perform, discharge and indemnify and hold Seller
harmless from and against (a) all Liabilities arising out of events occurring on
or after the Closing Date related to the businesses or operations of the
Stations or Buyer's ownership of the Assets, (b) all Liabilities arising out of
events occurring on or after the Closing Date with respect to the FCC Licenses,
(c) all Liabilities arising on or after the Closing Date under the Station
Contracts (including, without limitation, Trade-out Agreements) pursuant to
their terms (except for Liabilities for any breaches thereunder by Seller
occurring prior to the Closing Date), (d) all Liabilities for which there is a
downward adjustment to the Base Purchase Price in connection with the
calculation of the Proration Amount, and (e) all Liabilities of
Seller to employees of the Stations to be assumed by Buyer in accordance with
Section 8.4 hereof.
2.9.2. If Seller shall have received the Preliminary
Payment, Buyer shall, at the Closing for the Stations, assume, pay, perform,
discharge and indemnify and hold Seller harmless from and against (a) all
Liabilities arising out of events occurring on or after the Preliminary Payment
Date related to the businesses or operations of the Stations or the ownership of
the Assets related to the Stations, (b) all Liabilities arising out of events
occurring on or after the Preliminary Payment Date with respect to FCC Licenses
attributable to the Stations, (c) all Liabilities arising on or after the
Preliminary Payment Date under the Station Contracts (including, without
limitation, Trade-out Agreements) pursuant to their terms (except for
Liabilities for any breaches thereunder by Sellers occurring prior to the
Preliminary Payment Date), (d) all Liabilities for which there is or would be a
downward adjustment to the Preliminary Payment in connection with the
calculation of the Proration Amount for the Stations, and (e) all Liabilities of
Seller to employees of the Stations to be assumed by Buyer in accordance with
Section 8.4 hereof (the Liabilities described in Sections 2.9.1, and 2.9.2,
collectively, the "Assumed Liabilities").
2.9.3. Except for the Assumed Liabilities, Buyer assumes
no other Liabilities of any kind or description.
2.10. News Corp. Guaranty
Contemporaneously with the execution and delivery of this
Agreement, News Corp. has executed and delivered a Guaranty, pursuant to which
News Corp. has absolutely and unconditionally guaranteed the prompt and complete
payment and performance of the obligations of Seller under this Agreement.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES BY SELLER
Seller represents and warrants to Buyer as follows:
3.1. Organization and Standing.
Seller is duly organized, validly existing and in good
standing under the laws of the state of its organization and is duly qualified
to do business and is in good standing in any jurisdiction where it owns or
operates a television or radio station and in each other 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. Seller has the corporate 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 to which it is a
party and the transactions contemplated hereby and thereby.
3.2. Authorization.
The execution, delivery and performance of this Agreement
and of the other Seller Documents to which it is a party, and the consummation
of the transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action (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 to which it is a party 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.
To Seller's knowledge, Seller is in material compliance with
all Laws applicable to Seller, to the Assets and Stations and to its business
and operations. Seller has obtained and holds all material 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 Stations as presently conducted.
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 or Governmental Authority, except as follows: (a)
filings required under ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇, (b) consents to the assignment of the
FCC Licenses to Buyer by the FCC, (c) filings, if any, with respect to real
estate transfer taxes, and (d) certain of the Station Contracts may be assigned
only with the consent of third parties, as specified in Schedule 3.4.
3.4.2. Assuming all consents, approvals, authorizations and
other actions described in Section 3.4.1 have been obtained and all filings and
notifications described in Section 3.4.1 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 in any material respect any Law applicable
to Seller, the Assets or Stations or by which any of the Assets or Stations 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) of any Station Contract or other material agreement to which Seller is
a party or by which Seller is bound or to which any of the Assets or Stations is
subject or affected, (c) result in the creation of any Encumbrance upon the
Assets, and (d) conflict with or violate the organizational documents of Seller.
3.5. Financial Statements; Undisclosed Liabilities.
3.5.1. Seller has provided to Buyer an unaudited balance
sheet of the Stations as of May 31, 1997 (the "Balance Sheet"), and an unaudited
statement of income and operating cash flows for the five month period ending
May 31, 1997. The financial statements referred to in this Section 3.5.1 (a)
present fairly in all material respects the financial condition of the Stations
as of the date and the results of operations and operating cash flows for the
period 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 do not contain all
footnotes and cash flow information from investing and financing activities
required under generally accepted accounting principles and are subject to
customary year-end adjustments).
3.5.2. There exist no Liabilities of any of the Stations
relating to, or arising out of, the business or operations of the Stations,
contingent or absolute, matured or unmatured, known or unknown, except (a) as
reflected on the Balance Sheet and (b) for Liabilities that (i) were incurred
after May 31, 1997 (the "Current Balance Sheet Date") in the Ordinary Course of
Business, or (ii) were not required to be reflected on the Balance Sheet in
accordance with generally accepted accounting principles applied on a consistent
basis.
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. Since the
Current Balance Sheet Date, Seller has conducted the business of the Stations in
the Ordinary Course of Business, and Seller has not (a) incurred any
extraordinary 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; (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 Sheet, 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 the Assets (except for Permitted
Encumbrances); (e) made any material change in any method of accounting or
accounting practice; (f) sold, leased, assigned or otherwise transferred any of
the material Assets other than obsolete Assets which have been replaced by
suitable replacements; (g) made any material increase in compensation or
benefits payable to any employee other than in the Ordinary Course of Business;
or (h) 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 material or, to Seller's knowledge, immaterial action, suit,
investigation, claim, arbitration, litigation or similar proceeding, nor any
order, decree or judgment pending or, to Seller's knowledge, threatened against
Seller, the Assets or Stations before any Governmental Authority.
3.8. Assets.
Except for the Excluded Assets, Seller's Assets include all
of the assets or property used or useful in the businesses of the Stations as
presently operated. Except for leased or licensed Assets, Seller is the owner
of, and has good title to, the Assets free and clear of any Encumbrances, except
for Permitted Encumbrances (including, without limitation, those items set forth
on Schedule 3.8). 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.
Seller holds the FCC Licenses listed as held by Seller on
Schedule 2.1.1. Such FCC Licenses constitute all of the licenses, permits and
authorizations from the FCC which have been issued to Seller that are required
for the business and operations of the Stations. Except as set forth on Schedule
3.9, such FCC Licenses are valid and in full force and effect through the dates
set forth on Schedule 2.1.1, unimpaired by any condition other than as set forth
in 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 Seller's FCC
Licenses, and, except for actions or proceedings affecting radio 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 such FCC Licenses, or (b) the
issuance of a cease-and-desist order. Except as set forth in Schedule 3.9,
Seller has no knowledge of any facts,
conditions or events relating to Seller or the Stations that would reasonably be
expected to cause the FCC to revoke any FCC License or not to grant any pending
applications for renewal of the FCC Licenses or to deny the assignment of the
FCC Licenses to a qualified Buyer as provided for in this Agreement.
3.10. Real Property.
3.10.1. Seller has good and marketable fee simple title to
all fee estates included in the Real Property and good title to all other owned
Real Property, in each case free and clear of all Encumbrances, except for
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 valid
as to Seller and, to Seller's knowledge valid as to any other party thereto, and
is in full force and effect and, to Seller's knowledge, constitutes a legal and
binding obligation of, and is legally enforceable against Seller and each other
party thereto and grants the leasehold interest it purports to grant, including
any rights to nondisturbance and peaceful and quiet enjoyment that may be
contained therein. Seller is, and to the knowledge of Seller all other parties
are, in compliance in all material respects with the provisions of such leases
and subleases.
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 Stations which is material to the
business and operations of the Stations.
3.10.4. 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 or, to the knowledge of Seller, threatened. To Seller's
knowledge and to the extent that such documents are in Seller's possession,
Seller has delivered to Buyer true, correct and complete copies of the following
documents with respect to the Real Property and Leased Property: (i) deeds, by
which Seller has received a fee interest in any of the Real Property; (ii)
leases, by which Seller is the lessee or lessor of any of the Real Property;
(iii) title insurance policies or commitments; (iv) surveys; and (v) inspection
reports or other instruments or reports, including, without limitation, any
phase I or phase II environmental reports or other similar environmental
reports, surveys or assessments (including any and all amendments and other
modifications of such instruments).
3.11. Intellectual Property.
Seller possesses adequate rights, licenses and authority to
use all Intellectual Property necessary to conduct the business of the Stations
as presently conducted. Seller has good title to all Intellectual Property that
it owns, free and clear of any Encumbrances, except for Permitted Encumbrances.
Seller is not obligated to pay any royalty or other fees to anyone with respect
to the Intellectual Property. Seller has not received any written notice to the
effect that any service rendered by Seller relating to the business of the
Stations may infringe, or that Seller is otherwise infringing, on any
Intellectual Property right or other legally protectable right of another. No
director, officer or employee of Seller has any interest in any Intellectual
Property.
3.12. Station Contracts.
Complete and correct copies of the Station Contracts set
forth in Schedules 2.1.5, 2.1.6, and 2.1.8 (which schedules are true and correct
in all material respects) have been made available to Buyer and (a) each such
material Station Contract and, to Seller's knowledge, each such immaterial
Station Contract, is in full force and effect and constitutes a legal, valid and
binding obligation of Seller and, to Seller's knowledge, of each other party
thereto; (b) Seller is not in breach or default in any material respect of the
terms of any Station Contract; (c) none of the material rights of Seller under
any such Station Contract will be subject to termination, 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 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 breach or default in any material respect of the terms thereunder.
3.13. Taxes.
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 material Seller Tax Returns required to be filed by
Seller on or before the Closing Date with respect to all material applicable
Taxes. In the case of 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 Seller's
knowledge, all 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 Taxes due to any
Governmental Authority as indicated on the 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.
3.14. Employee Benefit Plans.
3.14.1. Schedule 3.14 lists all Plans and Benefit
Arrangements (exclusive of severance arrangements and retention agreements)
maintained by or contributed to by Seller or HMC for the benefit of the
employees of the Stations (collectively, the "Benefit Plans"). Each Benefit Plan
has been maintained in material compliance with its terms and with ERISA, the
Code and other applicable Laws.
3.14.2. Schedule 3.14 sets forth a list of all Qualified
Plans maintained by or contributed to by Seller or HMC for the benefit of the
employees of the Stations. All such Qualified Plans and any related trust
agreements or annuity agreements (or any other funding document) have been
maintained in material compliance with ERISA and the Code (including, without
limitation, the requirements for tax qualification described in Section 401
thereof), other than any Multiemployer Plan. To Seller's knowledge, any trusts
established under such Plans are exempt from federal income taxes under Section
501(a) of the Code.
3.14.3. Schedule 3.14 lists all funded Welfare Plans that
provide benefits to current or former employees of Seller or its beneficiaries.
To Seller's knowledge, 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.
To Seller's knowledge, neither HMC 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.
3.14.4. Neither HMC 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 the Stations.
3.14.5. To Seller's knowledge, except as set forth in
Schedule 3.14, HMC 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 HMC and/or
Seller have been timely reported, fully paid and discharged. There are no unpaid
fees, penalties, interest or
assessments due from HMC and/or Seller or from any other person that are or
could become an Encumbrance on any of the Assets or could otherwise adversely
affect the businesses or Assets of Seller. To Seller's knowledge, HMC 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. HMC has furnished to Buyer true and complete copies of
all documents setting forth the terms and funding of each Plan.
3.14.6. Except as set forth in Schedule 3.14, neither Seller
nor any ERISA Affiliate has ever sponsored or maintained, had any obligation to
sponsor or maintain, or had any liability (whether actual or contingent, with
respect to any of its assets or otherwise) with respect to any Plan subject to
Section 302 of ERISA or Section 412 of the Code or Title IV of ERISA (including
any Multiemployer Plan). Neither Seller nor any ERISA Affiliate of Seller (since
January 1, 1989) has terminated or withdrawn from or sought a funding waiver
with respect to any plan subject to Title IV of ERISA, and no facts exist that
could reasonably be expected to cause such actions in the future; no accumulated
funding deficiency (as defined in Code Section 412), whether or not waived,
exists with respect to any such plan; no reportable event (as defined in ERISA
Section 4043) has occurred with respect to any such plan (other than events for
which reporting is waived); all costs of any such plans have been provided for
on the basis of consistent methods in accordance with sound actuarial
assumptions and practices, and the assets of each such plan, as of its last
valuation date, exceeded its "Benefit Liabilities" (as defined in ERISA Section
4001(a)(16)); and, since the last valuation date for each such plan, no such
plan has been amended or changed to increase the amounts of benefits thereunder
and, to the knowledge of Seller, there has been no event that would reduce the
excess of assets over benefit liabilities; and except as set forth in Schedule
3.14, neither Seller nor any ERISA Affiliate has ever made or been obligated to
make, or reimbursed or been obligated to reimburse another employer for,
contributions to any Multiemployer Plan.
3.14.7. No claims or lawsuits are pending or, to the
knowledge of Seller, threatened by, against, or relating to any Benefit Plan. To
Seller's knowledge, the Benefit Plans are not presently under audit or
examination (nor has notice been received of a potential audit or examination)
by the IRS, the Department of Labor, or any other governmental agency or entity
and no matters are pending with respect to any Qualified Plan under the IRS's
Voluntary Compliance Resolution program, its Closing Agreement Program, or other
similar programs.
3.14.8. With respect to each Plan, there has occurred no
non-exempt "prohibited transaction" (within the meaning of Section 4975 of the
Code) or transaction prohibited by Section 406 of ERISA or breach of any
fiduciary duty
described in Section 404 of ERISA that would, if successful, result in any
liability for Seller.
3.14.9. Seller has no liability (whether actual, contingent,
with respect to any of the Assets or otherwise) with respect to any employee
benefit plan that is not a Benefit Plan (exclusive of severance arrangements and
retention agreements) or with respect to any employee benefit plan sponsored or
maintained (or which has been or should have been sponsored or maintained) by
any ERISA Affiliate.
3.14.10. All group health plans of Seller and its ERISA
Affiliates have been operated in material compliance with the requirements of
Sections 4980B (and its predecessor) and 5000 of the Code, and Seller has
provided, or will have provided before the Closing Date, to individuals entitled
thereto all required notices and coverage pursuant to Section 4980B with respect
to any "qualifying event" (as defined therein) occurring before or on the
Closing Date.
3.15. Labor Relations.
Seller has made available to Buyer a true and complete list
of all employees of Seller engaged in the business or operations of the Stations
as of the date set forth on the list, together with such employee's position,
salary and date of hire. Schedule 3.15 lists all written employment contracts of
Seller and all written agreements, plans, arrangements, commitments and
understandings pursuant to which HMC or Seller has severance obligations. Except
as set forth on Schedule 3.15, no labor union or other collective bargaining
unit represents or, to Seller's knowledge, claims to represent, any of the
employees of the Station. Except as set forth in Schedule 3.15, there are no
strikes, work stoppages, grievance proceedings, union organization efforts, or
other controversies pending between Seller and any union or collective
bargaining unit representing (or, to Seller's knowledge, claiming to represent)
Seller's employees. Seller is in compliance 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 for any noncompliance which would
not have a Material Adverse Effect. Except as set forth in Schedule 3.15 hereto,
there are no collective bargaining agreements relating to the Stations or the
business and operations thereof.
3.16. Environmental Matters.
3.16.1. Except as set forth in Schedule 3.16, to Seller's
knowledge (which knowledge is based on the items set forth on Schedule 3.16),
Seller is in material compliance with, and the Real Property and all
improvements thereon are in material compliance with, all Environmental Laws.
3.16.2. Except as set forth in Schedule 3.16, 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 written 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 material permits, licenses, certificates
and approvals required under any Environmental Law.
3.17. Insurance.
Schedule 3.17 contains a true and complete 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 Seller's Assets or the business and operations of the Stations.
All such policies: (a) are in full force and effect; (b) are sufficient for
compliance in all material respects by Seller with all requirements of Law and
of all material agreements to which Seller is a party; and (c) to Seller's
knowledge, are valid, outstanding, and enforceable policies and Seller is not in
default in any material respect thereunder.
3.18. Reports.
All material returns, reports and statements that the
Station is currently required to file with the FCC or any governmental agency
have been timely filed, and all reporting requirements of the FCC and other
governmental authorities having jurisdiction thereof have been complied with by
Seller in all material respects. All of such reports, returns and statements are
complete and correct in all material respects as filed. To Seller's knowledge,
all documents
required by the FCC to be deposited by Seller in Seller's public file (as
defined in the rules and regulations of the FCC) during the period of operation
of the Stations by Seller has been deposited therein.
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 Maryland and by the Closing Date
will be duly qualified to do business as a foreign corporation where such
qualification is necessary. 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.
4.3. Consents and Approvals; No Conflicts.
4.3.1. 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, except as follows: (a)
filings required under
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇, (b) approvals of the assignment of the FCC Licenses to Buyer
by the FCC and (c) filings, if any, with respect to real estate transfer taxes.
4.3.2. Assuming all consents, approvals, authorizations and
other actions described in Section 4.3.1 have been obtained and all filings and
notifications described in Section 4.3.1 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 material 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
material contract or material agreement to which Buyer is a party or by which
Buyer is bound, or (c) conflict with or violate the organizational documents of
Buyer.
4.4. Availability of Funds.
Buyer will have available on the Closing Date, on the
Preliminary Payment Date, and on the date of the Makewell Closing sufficient
funds to enable it to consummate the transactions contemplated hereby.
4.5. Qualification of Buyer.
4.5.1. Except as disclosed in Schedule 4.5.1, Buyer is, and
pending Closing will remain legally, financially and otherwise qualified under
the Communications Act and all rules, regulations and policies of the FCC to
acquire and operate the Stations. Except as disclosed in Schedule 4.5.1, there
are no facts or proceedings which would reasonably be expected to disqualify
Buyer under the Communications Act or otherwise from acquiring or operating any
of the Stations or would cause the FCC not to approve the assignment of the FCC
Licenses to Buyer. Except as disclosed in Schedule 4.5.1, Buyer 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. Except as
disclosed in Schedule 4.5.1, 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.
4.5.2. As of the date hereof and through the later to occur
of the HSR Filing and the filing of the FCC Applications, except as set forth on
Schedule 4.5.1, neither Buyer nor any Affiliate of Buyer (a) owns, controls or
operates any television or radio station located in the DMA; (b) has any direct
or indirect interest, including, without limitation, any equity, debt, security
or any other financial interest, whether or not "attributable" (as defined in
the rules and
regulations of the FCC), or management interest, in (i) any television or radio
station located in the DMA, or (ii) any applicant seeking to construct or
acquire, by assignment of license or transfer of control, any such television or
radio station (an "Applicant"); or (c) is a party to any TBA with a television
or radio station located in the DMA, or with any Applicant. Buyer acknowledges
and agrees that the representations set forth in this Section 4.5.2 shall take
into account and include (a) the consummation of any proposed or pending
acquisition (as of the date hereof and through the later to occur of the HSR
Filing and the filing of the FCC Applications) of television or radio stations
(including the acquisition of the Stations) by Buyer or any Affiliate of Buyer
or any Applicant, and (b) any TBA or proposed or pending TBA (as of the date
hereof and through the later to occur of the HSR Filing and the filing of the
FCC Applications) to which Buyer or any Affiliate of Buyer is or may become a
party.
4.6. WARN Act.
Buyer is not planning or contemplating, and has not made or
taken, any decisions or actions concerning the employees of the Stations after
the Closing Date that would require the service of notice under the Worker
Adjustment and Retraining Act of 1988, as amended.
4.7. No Outside Reliance.
Buyer has not relied and is not relying on any statement,
representation or warranty not made in this Agreement, any Schedule hereto or
any certificate to be delivered to Buyer at the Closing pursuant to this
Agreement. Buyer is not relying on any projections or other predictions
contained or referred to in materials (other than the Schedules) that have been
or may hereafter be provided to Buyer or any of its Affiliates, agents or
representatives, and Seller makes 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. Applications for FCC Consent.
Within ten (10) days following the execution of this
Agreement, Seller and Buyer (or any direct or indirect wholly-owned subsidiary
of Buyer which is a permitted assignee of Buyer under Section 15.6.1) shall
jointly file applications for the Stations with the FCC requesting its consent
to the assignment of the FCC Licenses for the Stations from Seller to Buyer (the
"FCC Applications"). Seller and Buyer will diligently take, or fully cooperate
in the taking of, all necessary and proper steps, and provide any additional
information reasonably requested in order to obtain promptly the requested
consents and approvals of the FCC Applications by the FCC.
5.2. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇.
Within ten (10) days following the execution of this
Agreement, Seller and Buyer shall complete any filing that may be required
pursuant to ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ (each an "HSR Filing"). Seller and Buyer shall
diligently take, or fully cooperate in the taking of, all necessary and proper
steps, and provide any additional information reasonably requested in order to
comply with, the requirements of ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇.
5.3. Non-Required Actions.
None of the parties hereto shall have any obligation to take
any steps pursuant to Section 5.1 or Section 5.2 which would be reasonably
expected to result in the incurrence of a material cost or other liability or
which would require the divestiture of any business or assets of any party
hereto or any Affiliate thereof. Notwithstanding anything to the contrary in the
preceding sentence, Buyer shall have the obligation to make all payments to
Seller in accordance with the terms and conditions herein.
ARTICLE 6.
COVENANTS AND AGREEMENTS OF SELLER
Seller covenants and agrees with Buyer as follows:
6.1. Negative Covenants.
Pending and prior to the earlier of the Closing or the sale
of the Stations under an Account Sale or a Makewell Sale (as applicable), Seller
will not, without the prior written consent of Buyer (which consent will not be
unreasonably withheld, delayed or conditioned, except in the case of matters
referred to in Sections 6.1.7, 6.1.9 and 6.1.11, with respect to which Buyer's
consent may be withheld in its sole and absolute discretion), 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 at substantially fair market value and
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 or renew any Trade-out Agreement that
would be binding on Buyer after the Closing Date, except in the Ordinary Course
of Business and which requires the provision of broadcast time having a value of
less than (a) $25,000 individually, and (b) together with existing Trade-out
Agreements still in effect as of the Closing Date, $250,000 in the aggregate as
of the Closing Date.
6.1.4. Broadcast Time Sales Agreements.
Enter into or renew any Time Sales Agreement
except in the Ordinary Course of Business and which are for cash at prevailing
rates for a term not exceeding twelve (12) months.
6.1.5. TBAs.
Acquire or enter into or renew any TBA.
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
in the Ordinary Course of Business (collectively, "Additional Agreements");
provided, however, Seller shall not
enter into any Station Contract requiring payments by Seller under each Station
Contract in excess of $50,000.
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.
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. Encumbrances.
Create, assume or permit to exist any
Encumbrances upon any of the Assets except for Permitted Encumbrances and
Encumbrances that will be discharged prior to or on the Closing Date.
6.1.12. Transactions With Affiliates.
Enter into any transaction with any Affiliate of
Seller, News Corp. or any Affiliate of News Corp. that will be binding upon
Buyer, the Assets or the Stations on or after the Closing Date, except for
transactions not otherwise prohibited by this Section 6.1 and transactions
between and among the Stations operating in the Ordinary Course of Business, in
each case on arm's length terms.
6.2. Affirmative Covenants.
Pending and prior to the earlier of the Closing Date or the
sale of the Stations under an Account Sale or a Makewell Sale (as applicable),
Seller will:
6.2.1. Preserve Existence.
Preserve its corporate existence and business
organization intact, maintain its existing franchises and licenses, use
commercially reasonable efforts to preserve for Buyer the relationships of the
Stations with suppliers, customers, employees and others with whom the Stations
have business relationships, and keep all of the 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 Stations, including without limitation,
promotional activities, 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 Stations in the Ordinary Course of Business; provided,
however, Seller shall bring current as of the Closing Date all payments that are
due and payable under Program Contracts as originally contracted; (c) maintain
its books of account, records, and files in substantially the same manner as
heretofore; and (d) maintain the 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; notwithstanding the foregoing, Buyer acknowledges that the Seller
shall not be obligated to spend any funds on capital expenditures after the date
hereof, except for repair or replacement of Assets that may be damaged or
destroyed.
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.
6.2.4. Station Contracts.
Pay and perform its obligations in the Ordinary
Course of Business under the Station Contracts to which it is a party and under
any Additional Agreements that shall be entered into by Seller 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.
6.2.5. Taxes.
Pay or discharge all Taxes when due and payable.
6.2.6. 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 Stations, as Buyer shall from
time to time reasonably request; provided, however, that (a) such investigation
shall only be upon reasonable notice and shall not unreasonably disrupt the
personnel or operations of Seller or the Stations, and (b) under no
circumstances shall Seller be required to provide access to Buyer or any
representative of Buyer (i) any information or materials subject to
confidentiality agreements with third parties required to be kept confidential
by applicable Laws, or (ii) any privileged attorney-client communications or
attorney work product. All requests for access to the offices, properties,
assets, books and records, contracts and reports of the Stations 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. Subject to and in
accordance with the terms of this Section 6.2.6, Seller shall cooperate in all
reasonable respects with Buyer's request to conduct an audit of the Seller'
financial information as Buyer may reasonably determine is necessary to satisfy
Buyer's public company reporting requirements pursuant to the Securities Act of
1933 or the Securities Exchange Act of 1934 including, without limitation, (a)
using commercially reasonable efforts to obtain the consent of Seller' auditors
to permit Buyer and Buyer's auditors to have access to such auditors' work
papers, and (b) consenting to such access by Buyer . Under no circumstance shall
the preparation of any financial statements pursuant to such audit: (a) require
Seller to change or modify any accounting policy, (b) cause any unreasonable
disruption in the business or operations of any Station, or (c) cause any delay
that is more than de minimis in any internal reporting requirements of Seller.
All costs and expenses incurred in connection with the preparation of (and
assimilation of relevant information for) any such financial statements shall be
paid by Buyer.
6.2.7. 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.
6.2.8. Financial Statements.
Provide Buyer with unaudited monthly statements
of assets and liabilities of Seller relating to the business and operations of
the Stations, and monthly statements of revenues and expenses reflecting the
results of business and operations of the Stations for May, 1997 and for each
month thereafter, within thirty (30) days after the end of each such month.
Seller further agrees to provide Buyer with weekly sales pacing reports for the
Stations.
6.2.9. Consents.
(a) 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 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, except to the extent required by
Section 6.2.9(b)) to obtain such consents and approvals, and in the event that
Seller fails to obtain any such consent or approval, Buyer shall have no right
to terminate this Agreement.
(b) Notwithstanding anything to the contrary in
clause (a) above, Seller shall retain, until such time as any required consents
shall have been obtained by Seller, all rights to and under any Station Contract
which requires the consent of any other party thereto for assignment to Buyer if
such consent has not been obtained on the Closing Date (the "Deferred
Contract"). Until the assignment of the Deferred Contract, (i) Seller shall
continue to use all commercially reasonable efforts and Buyer shall cooperate
with Seller to obtain the consent and/or to remove any other impediments to such
assignment, and (ii) Seller and Buyer agree to cooperate in any lawful
arrangement to provide (to the extent permitted without breach of such Deferred
Contract) that Buyer shall receive the benefits of such interest after the
Closing Date to the same extent as if it were Seller; provided, however, if
Buyer shall fail to receive such benefits after the Closing Date for any Leased
Property that is a main transmitter tower site or a studio site for any Station
(the "Designated Properties"), Seller agrees to make such payments as are
necessary for Buyer to receive such benefits as long as the aggregate amount of
all such payments does not exceed Two Hundred Thousand Dollars ($200,000) under
this Agreement and the Multi-Stations Agreement for all such Designated
Properties. If, subsequent to the Closing, Seller shall obtain required consents
to assign any Deferred Contract, the Deferred Contract for which consent to
assign has been obtained shall at that time be deemed to be conveyed, granted,
bargained,
sold, transferred, setover, assigned, released, delivered and confirmed to
Buyer, without need of further action by Seller or of future documentation.
6.2.10. Corporate Action.
Take all corporate action (including, without
limitation, all shareholder action), under the Law of any state having
jurisdiction over Seller necessary to effectuate the transactions contemplated
by this Agreement and the other Seller Documents.
6.2.11. Environmental Audit.
Seller shall permit Buyer and Buyer's agents, as
soon as practical after the date hereof and upon Buyer's request therefor,
access to the Real Property and the Leased Property for the purpose of
conducting, at Buyer's expense, Phase I and Phase II environmental audits. Any
such environmental audits shall be conducted by a reputable environmental
investigatory firm of Buyer's choice subject to the reasonable approval of
Seller and in a manner as will not unreasonably interfere with the normal
business and operations of any of the Stations.
6.3. Confidentiality.
Seller shall, at all times, maintain strict confidentiality
with respect to all documents and information furnished to Seller by or on
behalf of Buyer. Nothing shall be deemed to be confidential information that:
(a) is known to Seller at the time of its disclosure to Seller; (b) becomes
publicly known or available other than through disclosure by Seller; (c) is
received by Seller from a third party not actually known by Seller to be bound
by a confidentiality agreement with or obligation to Buyer; or (d) is
independently developed by Seller. Notwithstanding the foregoing provisions of
this Section 6.3, Seller may disclose such confidential information (a) to the
extent required or deemed advisable to comply with applicable Laws; (b) to its
officers, directors, employees, representatives, financial advisors, attorneys,
accountants, and agents with respect to the transactions contemplated hereby (so
long as such parties agree to maintain the confidentiality of such information);
and (c) to any Governmental Authority in connection with the transactions
contemplated hereby. In the event this Agreement is terminated, Seller will
return to Buyer all documents and other material prepared or furnished by Buyer
relating to the transactions contemplated hereunder, whether obtained before or
after the execution of this Agreement.
6.4. Trustee Acknowledgment.
Contemporaneously with the execution and delivery of the
Trust Agreement, Seller shall cause the Trustee to execute a certificate or
acknowledgment for the benefit of Buyer, pursuant to which the Trustee
acknowledges and agrees to those items and obligations set forth in Section
3.1(c) of the Trust Agreement, attached as an exhibit to the Transfer Agreement.
ARTICLE 7.
COVENANTS AND AGREEMENTS OF BUYER
Buyer covenants and agrees with Seller as follows:
7.1. Confidentiality.
Buyer shall, at all times prior to the Closing, maintain
strict confidentiality with respect to all documents and information furnished
to Buyer by or on behalf of Seller. Nothing shall be deemed to be confidential
information that: (a) is known to Buyer at the time of its disclosure to Buyer;
(b) becomes publicly known or available other than through disclosure by Buyer;
(c) is received by Buyer from a third party not actually known by Buyer to be
bound by a confidentiality agreement with or obligation to Seller; or (d) is
independently developed by Buyer. Notwithstanding the foregoing provisions of
this Section 7.1, Buyer may disclose such confidential information (a) to the
extent required or deemed advisable to comply with applicable Laws; (b) to its
officers, directors, 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); and (c) to any Governmental Authority in connection with the
transactions contemplated hereby. In the event this Agreement is terminated,
Buyer will return to Seller all documents and other material prepared or
furnished by Seller relating to the transactions contemplated by this Agreement,
whether obtained before or after the execution of this Agreement.
7.2. Corporate Action.
Prior to the Closing, Buyer shall take all 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.
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 Stations,
as Seller shall from time to time reasonably request; provided, however, that
(a) such investigation shall only be upon reasonable notice and shall not
unreasonably disrupt the personnel or operations of Buyer or the Stations, and
(b) under no circumstances shall Buyer be required to provide access to Seller
or any representatives of Seller (i) any information or materials subject to
confidentiality agreements with third parties required to be kept confidential
by applicable Laws, or (ii) any privileged attorney-client communications or
attorney work product. All requests for access to the offices, books and
records, contracts and reports of the Stations 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. Buyer agrees not to dispose of any books and records, contracts and
reports of the Stations which relate to the operations of the Stations during
the period during which the Stations were 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.
7.4. Collection of Receivables.
At the Closing, Seller shall assign the Accounts Receivables
to Buyer for collection purposes only, and, within ten (10) business days after
the Closing Date, Seller shall furnish to Buyer a list of the Accounts
Receivables by accounts and the amounts then owing. Buyer agrees, for a period
of one hundred fifty (150) days following the Closing Date, without any
requirement to litigate to collect the Accounts Receivables, to use its
reasonable efforts (with at least the care and diligence Buyer uses to collect
its own accounts receivable) to collect for Seller the Accounts Receivables and
to remit to Seller on the fifth day following the last day of each month
occurring during such one hundred fifty (150) day period (or, if any such day is
a Saturday, Sunday or holiday, on the next day on which banking transactions are
resumed), collections received by Buyer with respect to the Accounts
Receivables. Buyer shall not make any referral or compromise of any Accounts
Receivable to a collection agency or attorney for collection and shall not
compromise for less than full value any Account Receivable without the prior
written consent of Seller. Any Account Receivable not collected by Buyer within
one hundred fifty (150) days following the Closing Date shall revert to Seller.
Buyer shall reassign, without recourse to the Buyer, each Account Receivable and
deliver to Seller, all records relating thereto on the same day as it remits to
Seller the collections received. All payments in respect of the Accounts
Receivables received during the one hundred fifty (150) day period shall be
first applied to the oldest balance then due on the Accounts Receivables unless
the account debtor indicates in writing that payment is to be applied otherwise
due to a dispute over an Account Receivable. Buyer agrees, upon the reasonable
request of Seller, to furnish to Seller periodic reports on the status of its
Accounts Receivables. Buyer shall have no right
to set-off any amounts collected for Accounts Receivable for any amounts owed
to Buyer by Seller; provided, however, that Buyer shall have the right to seek
indemnification in accordance with the terms and conditions of this Agreement.
ARTICLE 8.
MUTUAL COVENANTS AND UNDERSTANDINGS
OF SELLER AND BUYER
8.1. Possession and Control.
Between the date hereof and the Closing Date
(notwithstanding that the Preliminary Payment Date shall have occurred or any
other provisions hereof), Buyer shall not directly or indirectly control,
supervise or direct, or attempt to control, supervise or direct, the business
and operations of the Stations, 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 Stations.
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 (or in the event
of the Preliminary Payment Date, thereafter the risk of loss shall be upon the
Buyer). In the event of loss or damage prior to the Closing Date (or the
Preliminary Payment Date, if applicable) with respect to which Seller has
adequate replacement cost insurance and which has not been restored, replaced,
or repaired as of the Closing Date (or the Preliminary Payment Date, if
applicable), Buyer shall proceed with the Closing (or shall pay the Preliminary
Payment, if applicable) and receive at Closing (or immediately after the
Preliminary Payment, if applicable), 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; provided, however, if the failure of such Assets
to be restored, replaced or repaired results in the regular broadcast
transmission of any Station (including its effective radiated power) to be
diminished in any material respect on what would otherwise be the Closing Date
(or the Preliminary Payment Date, if applicable), then either or both of Seller
and
Buyer shall be entitled, by written notice to the other, to postpone the Closing
Date (or the Preliminary Payment Date, if applicable for such Station or, if
later, when the Deposit Release Date occurs) for a period of up to ninety (90)
days; provided, however, any delay in the Closing (or the Preliminary Payment,
if applicable) for any Station shall not result in a delay of the Closing (or
the Preliminary Payment, if applicable) for any other Stations which are to
proceed to the Closing Date hereunder. In the event that such Station's
broadcast transmission has not been resumed by such postponed Closing Date,
either party may terminate the transactions contemplated herein with respect to
such Station (and, if the Deposit Release Date shall have occurred, then Buyer
shall receive that portion of the Allocable Deposit allocable to such Station)
unless Buyer agrees to proceed with the Closing and receive at the Closing
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 with
respect to such Station.
8.3. Public Announcements.
Seller and Buyer shall consult with each other before
issuing any press release or otherwise making any public statements with respect
to this Agreement or the transactions contemplated herein and shall not issue
any such press release or make any such public statement without the prior
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 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. Upon consummation of the Closing hereunder, Buyer
shall offer employment to each of the employees of the Stations (including those
on leave of absence, whether short-term, long-term, family, maternity,
disability, paid, unpaid or other), at a comparable salary, position and place
of employment as held by each such employee immediately prior to the Closing
Date (such employees who are given such offers of employment are referred to
herein as the "Transferred Employees"). Nothing in this Section 8.4.1 is
intended to guarantee employment for any Transferred Employee for any length of
time after the Closing Date.
8.4.2. Except as provided otherwise in this Section 8.4,
Seller shall pay, discharge and be responsible for (a) all salary and wages
arising out of or relating to the employment of the employees of the Stations
prior to the Closing Date and (b) any employee benefits arising under the
Benefit Plans of Seller and its
Affiliates during the period prior to the Closing Date. From and after the
Closing Date, Buyer shall pay, discharge and be responsible for all salary,
wages and benefits arising out of or relating to the employment of the
Transferred Employees by Buyer on and after the Closing Date. Buyer shall be
responsible for all severance Liabilities and all COBRA Liabilities for any
Transferred Employees of the Stations terminated on or after the Closing Date,
including, without limitation all Liabilities under the retention and severance
agreements entered into pursuant to Section 8.4.8 (subject to Sellers'
reimbursement obligations set forth in Section 8.4.8).
8.4.3. Buyer shall cause all Transferred Employees as of the
Closing Date to be eligible to participate in its "employee welfare benefit
plans" and "employee pension benefit plans" (as defined in Section 3(1) and 3(2)
of ERISA, respectively) of Buyer in which similarly situated employees of Buyer
are generally eligible to participate; provided, however, that all Transferred
Employees and their spouses and dependents shall be eligible for coverage
immediately after the Closing Date (and shall not be excluded from coverage on
account of any pre-existing condition) to the extent provided under such plans
with respect to Transferred Employees.
8.4.4. For purposes of any length of service requirements,
waiting periods, vesting periods or differential benefits based on length of
service in any such plan for which a Transferred Employee may be eligible after
the Closing, Buyer shall ensure that, to the extent permitted by law, service by
such Transferred Employee with Seller or any Affiliate of Seller shall be deemed
to have been service with the Buyer. In addition, Buyer shall ensure that each
Transferred Employee receives credit under any welfare benefit plan of Buyer for
any deductibles or co-payments paid by such Transferred Employee and his or her
dependents for the current plan year under a plan maintained by Seller or any
Affiliate of Seller. Buyer shall grant credit to each transferred Employee for
all sick leave in accordance with the policies of Buyer applicable generally to
its employees after giving effect to service for Seller as service for Buyer. To
the extent taken into account in determining the Final Proration Amount, Buyer
shall assume and discharge Seller's Liabilities for the payment of all unused
vacation leave accrued by Transferred Employees as of the Closing Date. To the
extent any claim with respect to such accrued vacation leave is lodged against
Seller, with respect to any Transferred Employee, Buyer shall indemnify, defend
and hold harmless Seller from and against any and all losses, directly or
indirectly, as a result of, or based upon or arising from the same.
8.4.5. As soon as practicable following the Closing Date,
Buyer shall establish and maintain a defined contribution plan or plans (which
may be a preexisting plan or plans (the "Buyer's Plan") intended to be qualified
under Section 401(a) and 401(k) of the Code for the benefit of the Transferred
Employees. Effective as of the Closing Date, Seller shall cause appropriate
amendments to be made to the Heritage Media Corporation Retirement Savings Plan
(the "Seller's Plan") to provide that the Transferred Employees shall be fully
vested in their
accounts under the Seller's Plan (as well as under the Heritage Media
Corporation Deferred Compensation Plan for Key Employees). As soon as
practicable after the Closing Date, Buyer shall take all necessary action to
qualify Buyer's Plan under the applicable provisions of the Code (including but
not limited to Section 401), if it is not yet so qualified, and Buyer and Seller
shall make any and all filings and submissions to the appropriate governmental
agencies required to be made by them in connection with the transfer of assets
described hereafter. As soon as practicable following the earlier of the receipt
of a favorable determination letter from the Internal Revenue Service regarding
the qualified status of both the Seller's Plan and the Buyer's Plan (each as
amended to the date of transfer) or sooner, if Seller and Buyer so agree, Seller
shall cause to be transferred to Buyer's Plan, in cash and in kind, all of the
individual account balances of Transferred Employees under the Seller's Plan,
including any outstanding plan participant loan receivables allocated to such
accounts.
8.4.6. 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.
8.4.7. Except as otherwise provided in this Section 8.4 or
in any employment, severance or retention agreements of any Transferred
Employees, all Transferred Employees shall be at-will employees, and Buyer may
terminate their employment or change their terms of employment at will. No
employee (or beneficiary of any employee) of Seller may ▇▇▇ to enforce the terms
of this Agreement, including specifically this Section 8.4, and no employee or
beneficiary shall be treated as a third party beneficiary of this Agreement.
Except to the extent provided for herein, Buyer may cover the Transferred
Employees under existing or new benefit plans, programs, and arrangements, and
may amend or terminate any such plans, programs, or arrangements at any time.
8.4.8. (a) Within ten (10) business days after the date
hereof, Buyer shall notify Seller in writing if Buyer desires to have the
current Station general manager enter into a retention agreement (the "Retained
General Manager"). If so notified, Seller shall use reasonable efforts to enter
into a retention agreement in the form of Exhibit F hereto with the Retained
General Manager. If within nine (9) months after the Closing Date, Buyer
terminates the employment of the Retained General Manager, Seller shall
reimburse Buyer for any severance payments made by Buyer to the Retained General
Manager pursuant to his or her retention agreement; provided, however, that such
amount shall in no event exceed the Retained General Manager's annual salary in
effect immediately prior to such Closing Date.
(b) The parties hereto acknowledge and agree that prior to
Closing Date there will be only one (1) general manager in the DMA. If a vacant
position for the general manager position shall occur prior to the Closing,
Seller shall consult with Buyer prior to hiring a new general manager to fill
such position. For each such new general manager hired by Seller, upon the
written request of Buyer prior to the hiring of such general manager, Seller
shall enter into a retention agreement with any such general manager in the form
attached hereto as Exhibit F and reimburse Buyer for any severance payments as
provided for in Section 8.4.8(a).
(c) Buyer acknowledges and agrees that if Seller has
reimbursed Buyer for any severance obligations for any employee, neither Buyer
nor any Affiliate of Buyer shall hire, employ or contract with any such employee
for a period of one year from the date Seller has made the reimbursement
payment.
8.5. 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
solely Schedules 2.1.5, 2.1.6, 2.1.8, 2.1.9, and 3.17 attached hereto solely to
reflect actions by Seller after the date hereof which are not prohibited by
Section 6.1 hereof. The inclusion of 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.
8.6. 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.
8.7. Tax Matters.
Seller and Buyer each represent, warrant, covenant and agree
with each other that for tax purposes the sale of Assets described herein is not
effective until the Closing Date. Seller and Buyer agree that all Tax returns
and reports shall be filed consistent with the sale of assets taking place on
the Closing Date.
8.8. Preservation of Books and Records.
For a period of three (3) years after the Closing Date,
Seller agrees not to dispose of, and agrees to provide Buyer reasonable access
to, any material books or records in Seller's possession immediately after the
Closing Date that relate to the business or operations of the Stations prior to
the Closing Date.
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 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 (except as modified by the Schedules updated after the date
hereof in accordance with Section 8.5 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 respects, except to the extent that the failure of
such representations and warranties to be true and correct and the failure to
perform such covenants shall not have, when considered together, had a Material
Adverse Effect.
9.2. Delivery of Documents.
Seller shall have delivered to Buyer all contracts,
agreements, instruments and documents required to be delivered by Seller to
Buyer with respect to the Stations pursuant to Section 11.2.
9.3. FCC Order.
The FCC Order shall have been issued with respect to the
Stations.
9.4. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇.
All applicable waiting periods under ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ shall
have expired or terminated.
9.5. 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.
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. Consummation of the Merger.
The Merger under the Merger Agreement shall have
been consummated in accordance with its terms.
10.2. 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 (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 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.
10.3. Delivery by Buyer.
Buyer shall have delivered to Seller the Purchase Price and
all contracts, agreements, instruments and documents required to be delivered by
Buyer to Seller pursuant to Section 11.3.
10.4. FCC Order.
The FCC Order shall have been issued with respect to the
Stations.
10.5. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇.
All applicable waiting periods under ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ shall
have expired or terminated.
10.6. 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.
ARTICLE 11.
CLOSING
11.1. Closings.
11.1.1. The Closing hereunder shall be held for all of the
Stations on a date specified by Seller that is not later than ten (10) days
after the date on which all of the FCC Orders for all of the Stations shall have
been issued (the "Closing Date").
11.1.2. The Closing hereunder 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 ▇▇▇▇ of Sale;
(b) the Assignment of FCC Licenses;
(c) the Assignment of Contracts and Leases;
(d) the Assumption Agreement;
(e) certificates of title with respect to the
motor vehicles listed on Schedule 2.1.9
or if any such motor vehicles are leased
by Seller, an assignment of such lease;
and
(f) special or limited warranty deeds for all
Real Property owned by Seller in the form
appropriate to the jurisdictions in which
such Real Property is located.
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.
11.2.3. Certified Resolutions.
A copy of the approval of the boards of
directors 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
(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. Good Standing Certificates.
To the extent available from the applicable
jurisdictions, certificates as to the formation and/or good standing of Seller
issued by the appropriate governmental authorities in the states of organization
and each jurisdiction in which Seller is qualified to do business, each such
certificate (if available) to be dated a date not more than a reasonable number
of days prior to the Closing Date.
11.2.6. Opinion of Counsel.
An opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.,
substantially in the form of Exhibit G hereto.
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 (less any amounts previously
paid by Buyer to Seller on the Preliminary Payment Date) in the amount and
manner set forth in Section 2.
11.3.2. Agreements and Instruments.
The Assumption Agreement and other instruments
of transfer, dated as of the Closing Date and duly executed by Buyer.
11.3.3. Certified Resolutions.
Copies of the resolutions of the board of
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 10.2; and
(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 Seller.
11.3.5. Opinion of Counsel.
An opinion of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.A., in a form
reasonably acceptable to Sellers.
ARTICLE 12.
SURVIVAL; INDEMNIFICATION
12.1. Survival of Representations.
12.1.1. Unless otherwise set forth herein
(including, without limitation, Section 12.1.2), 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 to the following extent: (a)
representations and warranties shall survive for a period of twelve (12) months
after the Closing Date, (b) the covenants and agreements which by their terms
survive the Closing shall continue in full force and effect until fully
discharged (but not beyond the expiration of twelve (12) months after the
Closing Date), and (c) any representation, warranty, covenant or agreement that
is the subject of a claim which is asserted in a reasonably detailed writing
prior to the expiration of the survival period set forth in this Section 12.1.1,
shall survive with respect to such claim or dispute until the final resolution
thereof.
12.1.2. Notwithstanding Section 12.1.1, if the Preliminary
Payment shall have been received by Seller and the Closing shall have occurred,
all representations, warranties, covenants and agreements of Seller with respect
to the Stations contained in or made pursuant to this Agreement or in any
certificate furnished pursuant hereto shall survive the Preliminary Payment Date
and shall remain in full force and effect to the following extent: (a)
representations and warranties with respect to the Stations shall survive for a
period of twelve (12) months after the Preliminary Payment Date, (b) the
covenants and agreements relating to the Stations which by their terms survive
the Preliminary Payment Date, shall continue in full force and effect until
fully discharged (but not beyond the expiration of twelve (12) months after the
Closing Date), and (c) any representation, warranty, covenant or agreement that
is the subject of a claim which is asserted in a reasonably detailed writing
prior to the expiration of the survival period set forth in this Section 12.1.1,
shall survive with respect to such claim or dispute until the final resolution
thereof.
12.1.3. 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 agrees to indemnify,
defend and hold harmless Buyer from and against and in any respect of, on a net
after-tax basis, any and all Losses, asserted against, resulting to, imposed
upon or incurred by Buyer, directly or indirectly, by reason of or resulting
from: (a) any failure by Seller to pay, perform or discharge any Liabilities not
assumed by Buyer pursuant hereto; (b) the business or operations of the Stations
during the period prior to the Closing Date (except to the extent Buyer has
assumed the Liability for any such Losses pursuant hereto); provided, however,
that (i) if the Preliminary Payment shall have been received by Seller and the
Closing shall have occurred, Seller's indemnification obligations under this
clause (b) with respect to the Stations shall
be limited to the period prior to the Preliminary Payment Date; (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;
(d) any breach by Seller of any covenants of Seller contained in or made
pursuant to this Agreement or any other Seller Document; or (e) the failure of
Seller to comply with the provisions of any applicable bulk transfer law.
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 hereby agrees to indemnify,
defend and hold harmless Seller from, against and with respect of, on a net
after-tax basis, any and all Losses, asserted against, resulting to, imposed
upon or incurred by Seller, directly or indirectly, by reason of or resulting
from: (a) any failure by Buyer to pay, perform or discharge any Liabilities
assumed by Buyer pursuant hereto; (b) the business or operations of the Stations
during the period from and 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. Notwithstanding the foregoing, if the Preliminary
Payment shall have been received by Seller and the Closing shall have occurred,
Buyer's indemnification obligations under this Section 12.3 with respect to the
Stations shall be from and after the Preliminary Payment Date, and, for purposes
of clause (b) of this Section 12.3, shall be for the period from and after the
Preliminary Payment Date.
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. Notwithstanding any other provision of this
Agreement to the contrary, the Heritage Sellers (taken as a whole) shall not be
liable to Buyer in respect of any indemnification hereunder except to the extent
that (a) the aggregate amount of Losses of Buyer under this Agreement and under
the Multi-Stations Agreement (taken as a whole) exceeds One Million Dollars
($1,000,000) (the "Basket Amount"), and then only to the extent of the excess
over the amount of Five Hundred Thousand Dollars ($500,000), and (b) the
aggregate amount of Losses of Buyer under this Agreement and under the
Multi-Stations Agreement (taken as a whole) is less than Twelve Million Six
Hundred Thousand Dollars ($12,600,000)
(the "Indemnity Cap"); provided, however, the Basket Amount shall not be
applicable to any amounts owed in connection with the determination of the
Proration Amount pursuant to Section 2.7, or to Seller's reimbursement
obligations under Section 8.4.8.
12.4.3. Notwithstanding any other provision of this
Agreement to the contrary, and except for remedies that Buyer may have for
Seller's fraud, which remedies shall not be limited, Buyer acknowledges and
agrees that the maximum aggregate liability of the Heritage Sellers (taken as a
whole) pursuant to this Agreement and the Multi-Stations Agreement (taken as a
whole) to Buyer and any third parties for any and all Losses shall not exceed
the Indemnity Cap, regardless of whether Buyer seeks indemnification pursuant to
this Article 12, regardless of the form of action, whether in contract or tort,
including negligence, and regardless of whether or not the Heritage Sellers are
notified of the possibility of damages to Buyer or any other third party.
12.4.4. Each party (a "recipient party") shall notify the
other party in writing (the "representing party") reasonably promptly of any
perceived breach by the representing party of which the recipient party has
knowledge of any representations, 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, the defense
of such Losses at the Indemnifying Party's risk and expense.
12.5.3. In the event that the Indemnifying Party shall
elect not to undertake such defense, or, within a reasonable time after notice
from the
Indemnified Party of any such Losses, shall fail to defend, the Indemnified
Party (upon further written notice to the Indemnifying Party) shall have the
right to undertake the defense, compromise or settlement of such Losses, by
counsel or other representatives of its own choosing, on behalf of and for the
account and risk of the Indemnifying Party (subject to the right of the
Indemnifying Party to assume defense of such Losses at any time prior to
settlement, compromise or final determination thereof). In such event, the
Indemnifying Party shall pay to the Indemnified Party, in addition to the other
sums required to be paid hereunder, the costs and expenses incurred by the
Indemnified Party in connection with such defense, compromise or settlement as
and when such costs and expenses are so incurred.
12.5.4. Anything in this Section 12.5 to the contrary
notwithstanding, (a) if there is a reasonable possibility 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 and (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.
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 by Seller prior to
the Closing Date or the Preliminary Payment Date (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 by the Parties.
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. Seller in accordance with, and subject to, the
terms and conditions of Section 14.1, and Buyer in accordance with, and subject
to, the terms and conditions of Section 14.2;
13.1.3. either Buyer or Seller in accordance with, and
subject to the terms and conditions of Section 8.2; provided, that a termination
pursuant to this Section 13.1.3 shall only terminate this Agreement with respect
to the Station for which such termination applies under Section 8.2; and
13.1.4 Buyer (a) if the Merger shall not have been
consummated on or prior to December 30, 1997, (b) if the Merger shall have been
rejected by the HMC stockholders at the meeting held for the purpose of voting
on the Merger or (c) any action has been taken by any Governmental Authority
which will preclude the consummation of the Merger on or prior to December 30,
1997
13.2. Automatic Termination.
This Agreement shall automatically terminate without further
action by the parties upon the termination of the Merger Agreement in accordance
with its terms.
13.3. Effect of Termination.
13.3.1. In the event this Agreement is terminated as
provided in Sections 13.1.1, 13.1.3, 13.1.4 and 13.2, Buyer shall receive the
immediate return of the Allocable Deposit (except, in the case of a termination
pursuant to Section 13.1.3, only that portion of the Deposit allocable to the
Station with respect to which this Agreement is terminated and only to the
extent that such portion of
the Deposit may be released pursuant to Section 8.2); this Agreement shall be
deemed null, void and of no further force or effect, and the parties hereto
shall be released from all future obligations hereunder; provided, however, that
the obligations of Buyer and Seller set forth in Sections 6.3 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).
13.3.2. In the event this Agreement is terminated as
provided in Section 13.1.2, this Agreement shall be deemed null, void and of no
further force or effect, and the parties hereto shall be released from all
future obligations hereunder; provided, however, that the obligations of Buyer
and Seller set forth in Sections 6.3 and 7.1 (which relate to confidentiality),
Article 14 (which relates to remedies and return of the Allocable Deposit) 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).
ARTICLE 14.
REMEDIES
14.1. Default by Buyer.
14.1.1. If Buyer shall default in the performance of its
obligations under this Agreement in any material respect and such default is not
cured within thirty (30) days after notice thereof, and provided that Seller
shall not then be in material 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 and exclusive remedy under this Agreement,
to receive the Allocable Deposit (without set-off, deduction or counterclaim) as
liquidated damages, and upon such payment Buyer shall be discharged from all
further liability under this Agreement.
14.1.2. In addition to and notwithstanding the provisions of
Section 14.1.1, if Buyer shall default in the performance of any of its
obligations in any respect in Section 2.6 (it being understood that Buyer shall
have no right to cure any default under such section or any other payment
default hereunder), Seller shall, as Seller's sole and exclusive remedies and as
liquidated damages, be (a) entitled, by written notice to Buyer, to terminate
Seller's obligation to sell the Stations to Buyer and to immediately receive the
Allocable Deposit (without set-off, deduction or counterclaim) as provided in
Section 2.6 hereof, and (b) entitled to take all such other actions as are
provided in Section 2.6 hereof (including, without limitation, conducting the
Makewell Sale). Seller shall have the rights set forth in
this Section 14.1.2 regardless of whether Seller shall then be in breach of any
representations, warranties, covenants or agreements herein.
14.2. Default by Seller.
If Seller shall default in the performance of Seller's
obligations under this Agreement, and such default is not cured within thirty
(30) days after notice thereof and such default has had or is reasonably likely
to have a Material Adverse Effect, and provided that Buyer shall not then be in
material default in the performance of Buyer's obligations hereunder, Buyer
shall be entitled, by written notice to Seller, to terminate this Agreement, to
receive the immediate return of the Allocable Deposit, and upon consummation of
the Merger, to pursue any other remedies Buyer has at law or in equity or
otherwise. In furtherance of the foregoing, Buyer shall have no recourse against
Seller until the Merger shall have been consummated.
14.3. Liquidated Damages.
Seller and Buyer have provided for the amount of the
Allocable Deposit and the Makewell Payment 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 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;
provided, that the foregoing shall not be deemed to limit Buyer's obligation to
make, and Seller's right to receive, the Makewell Payment hereunder which, to
the extent obligated pursuant hereto, shall, together with the Allocable
Deposit, constitute Seller's sole and exclusive remedies hereunder and as
liquidated damages.
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.
15.2. Brokers.
Seller represents to Buyer that, except for the brokerage
fees payable to Seller's Broker (which fees are solely the responsibility of
Seller), Seller 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;
Buyer represents to Seller that Buyer has not engaged, or incurred any unpaid
liability (for any brokerage fees, finders' fees, commissions or otherwise) to,
any broker, finder or agent in connection with the transactions contemplated by
this Agreement; and Seller agrees to indemnify Buyer, and Buyer agrees to
indemnify Seller, against any claims asserted against the other parties for any
such fees or commissions by any person purporting to act or to have acted for or
on behalf of the indemnifying party. Notwithstanding any other provision of this
Agreement, this representation and warranty shall survive the Closing without
limitation and shall not be subject to the Basket Amount contained in Section
12.4.
15.3. Expenses and Taxes.
Each party hereto shall pay its own expenses incurred in
connection with this Agreement and in the preparation for and consummation of
the transactions provided for herein. Notwithstanding the foregoing, Buyer and
Seller shall each pay one-half of (a) 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 sale by
Seller and the purchase by Buyer of the Stations whether now in effect or
hereinafter adopted and regardless of which party such Transfer Tax is imposed
upon, (b) any FCC filing fees incurred in connection with the assignment of the
FCC Licenses to Buyer, (c) any fees and expenses incurred in connection with any
HSR Filings, and (d) the fees and expenses of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ for the
environmental site assessments performed on the Real Property as disclosed on
Schedule 3.16.
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:
▇▇▇▇▇▇▇▇ Broadcast Group, Inc.
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇, President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Seller:
Heritage Media Corporation
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and to:
The News Corporation Limited
c/o News America Publishing Incorporated
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address as the addressee may indicate by written notice to the
other parties.
Each notice, demand, request, or communication which shall
be given or made in the manner described above shall be deemed sufficiently
given or made for all purposes at such time as it is delivered to the addressee
(with the return receipt, the delivery receipt, the affidavit of messenger or
(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.
15.6.1. 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 and any purported assignment contrary
to the terms hereof shall be null, void and of no force and effect; provided,
however, that the parties hereto acknowledge and agree that none of the
transactions contemplated under the Transfer Agreement or the Trust Agreement
shall constitute an assignment, in whole or in part, of any of the terms of this
Agreement; provided further, however, Buyer shall be entitled, without the
consent of Seller, to assign its rights and interests hereunder (in whole or in
part as to any Station) to any direct or indirect wholly-owned subsidiary;
provided, however, that Buyer gives Seller written notice thereof and such
assignee shall be responsible for all representations, covenants
and agreements of Buyer hereunder as if such assignee was a party hereto, and
that any such assignment shall not relieve Buyer of any Liabilities hereunder.
15.6.2. Seller acknowledges and agrees that at the Closing,
Buyer may require that Seller transfers the Assets and Liabilities of the
Stations to a third party designated in writing by Buyer (a "Designee") at least
ten (10) days prior to the Closing; provided, however, that (a) such Designee
shall on or prior to the Closing Date assume all Assumed Liabilities; (b) an FCC
Order shall have been issued on or prior to the Closing Date authorizing such
transfer; (c) the transfer to such Designee would not violate any Laws, (d) the
transfer to such Designee would not delay in any respect the date for the
Closing as required by the terms of this Agreement; (e) the transfer to such
Designee shall not relieve Buyer from any of its obligations hereunder; (f)
there shall be no assignment or transfer (actual or implied) of this Agreement
to such Designee; (g) Seller shall have no Liabilities or obligations to any
such Designee under this Agreement, any Seller Document or otherwise; and (h)
such Designee shall deliver to Seller a written certificate, pursuant to which
the Designee acknowledges and agrees for the benefit of Seller to the terms and
conditions of the designation as described herein. The parties shall cooperate
in all reasonable respects in making any modifications to the closing documents
and deliveries that may be necessary or appropriate in connection with the
transfer of Assets and Liabilities of the Stations to any Designee pursuant to
this Section 15.6.2.
15.6.3. 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.
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, 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 each of the parties hereto and News Corp.
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.
This Agreement, the rights and obligations of the parties
hereto, and any claims or disputes relating thereto, shall be governed by and
construed under and in accordance with the laws of the State of New York,
excluding the choice of law rules thereof.
15.11. 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.
H&H Final
\\\MC - 61599/8 - 0048956.05
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.
HERITAGE BROADCASTING GROUP, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President and Chief Executive
Officer
▇▇▇▇▇▇▇▇ BROADCAST GROUP, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President
ANNEX I-11
ANNEX I
DEFINITIONS
"Account Sale" shall mean a sale of the Stations for Buyer's
account and benefit on terms and conditions and to such buyer or buyers approved
in writing by Buyer (which approval shall not be unreasonably withheld,
conditioned or delayed); provided, however, there shall be no survival of any
representations, warranties, covenants or agreements by Seller in connection
with any such sale, nor any indemnification available to any buyer in respect
thereof from and after the closing of any such sale other than such survival and
indemnification to the extent set forth in Article 12 hereof.
"Accounting Firm" shall have the meaning set forth in Section
2.7.3.
"Accounts Receivable" means all cash accounts receivable with
respect to the Stations as of the end of the broadcast day immediately preceding
the Closing Date; provided, however, that if Seller shall have received the
Preliminary Payment, the Accounts Receivable for the Stations shall mean all
cash accounts receivable with respect to the Stations as of the end of the
broadcast day immediately preceding the Preliminary Payment Date.
"Additional Agreements" shall have the meaning set forth in
Section 6.1.6.
"Affiliate" shall mean, with respect to any Person, any other
Person that, (a) directly or indirectly is in control of, is controlled by, or
is under common control with, the first Person, (b) is an officer, director,
trustee, partner (general or limited), employee or holder of five percent (5%)
or more of any class of any voting or non-voting securities or other equity in
the first Person, (c) is an officer, director, trustee, partner (general or
limited), employee or holder of five percent (5%) or more of any class of the
voting or non-voting securities or other equity in any Person which directly or
indirectly is in control of, is controlled by, or is under common control with,
the first Person, and (d) any Family of any individual included in (a), (b) or
(c). For purposes of this definition, "control" (including with correlative
meanings "controlled by" and "under common control with") shall mean possession,
directly or indirectly, of either (X) five percent (5%) or more of the voting
power of the securities having ordinary voting power for the election of
directors of the first Person, or (Y) the power to direct or cause the direction
of the management or policies of the first Person (whether through ownership of
securities, partnership interests or any other ownership or debt interests, by
contract or otherwise).
"Allocable Deposit" shall have the meaning set forth in
Section 2.5.1.
"Applicant" shall have the meaning set forth in Section 4.5.2.
"Appraisal Firm" shall have the meaning set forth in Section
2.8.3.
"Appraisal Report" shall have the meaning set forth in Section
2.8.3.
"Assets" shall have the meaning set forth in Section 2.1.
"Assignment of Contracts and Leases" means that certain
Assignment of Contracts and Leases, dated as of the Closing Date and executed by
Seller, substantially in the form attached hereto as Exhibit D.
"Assignment of FCC Licenses" means that certain Assignment of
FCC Licenses, dated as of the Closing Date and executed by Seller, substantially
in the form attached hereto as Exhibit C.
"Assumed Liabilities" shall have the meaning set forth in
Section 2.9.2.
"Assumption Agreement" means that certain Assumption
Agreement, dated the Closing Date and executed by Buyer and Seller,
substantially in the form attached hereto as Exhibit E.
"Balance Sheet" shall have the meaning set forth in Section
3.5.1.
"Base Purchase Price" shall have the meaning set forth in
Section 2.4.
"Basket Amount" shall have the meaning set forth in Section
12.4.2.
"Benefit Arrangement" means any benefit arrangement,
obligation, custom, or practice, whether or not legally enforceable, to provide
benefits, other than salary, as compensation for services rendered, to present
or former directors, employees, agents, or independent contractors, other than
any obligation, arrangement, custom or practice that is a Plan, including,
without limitation, employment agreements, executive compensation arrangements,
incentive programs or arrangements, sick leave, vacation pay, plant closing
benefits, salary continuation for disability, consulting, or other compensation
arrangements, workers' compensation, retirement, deferred compensation, bonus,
stock option or purchase, hospitalization, medical insurance, life insurance,
tuition reimbursement or scholarship programs, perquisite, company cars, any
plans subject to Code Section 125, and any plans providing benefits or payments
in the event of a change of control, change in ownership, or sale of a
substantial portion (including all or substantially all) of the assets of any
business or portion thereof, in each case with respect to any present or former
employees, directors, or agents.
"Benefit Plans" shall have the meaning set forth in Section
3.14.1.
"▇▇▇▇ of Sale" means that certain ▇▇▇▇ of Sale and Assignment
of Assets, dated as of the Closing Date and executed by Seller, substantially in
the form attached hereto as Exhibit B.
"Buyer Documents" shall mean, collectively, this Agreement,
the Deposit Escrow Agreement and the Assumption Agreement.
"Buyer's Plan" shall have the meaning set forth in Section
8.4.5.
"Closing" means a closing of the purchase, assignment and sale
of Assets contemplated hereunder.
"Closing Date" shall have the meaning set forth in Section
11.1.1.
"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.
"Cost of Carry" shall be equal to the sum of all expenses
incurred, or liabilities reasonably assumed or discharged, by Seller or any of
its Affiliates, in connection with the business or operation of the Stations,
including any Taxes, professional fees and expenses, payments to employees,
agents, customers, vendors of the Stations and capital expenditures in the
Ordinary Course of Business in respect of the Stations during any Interim
Period. For purposes of computing any Taxes relevant to the determination of
Cost of Carry, Seller and its Affiliates shall each be assumed to be a
corporation that is fully taxable on all of its income or gains at the highest
applicable marginal rates for the Taxes at issue.
"Current Balance Sheet Date" shall have the meaning set forth
in Section 3.5.2.
"Deferred Contract" shall have the meaning set forth in
Section 6.2.9.
"Deposit" shall have the meaning set forth 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, Heritage Sellers, News America
Publishing Incorporated and the Deposit Escrow Agent, in the form of Exhibit A
attached hereto.
"Deposit Release Date" shall have the meaning set forth in the
Multi-Stations Agreement.
"Designated Properties" shall have the meaning set forth in
Section 6.2.9.
"Designee" shall have the meaning set forth in Section 15.6.2.
"Disposition Expenses" shall mean all costs, fees, expenses
and other amounts incurred or payable, directly or indirectly, by Seller, the
Trustee and/or News Corp. (or any Affiliate of Seller or News Corp.), in
connection with the disposition of the Stations pursuant to an Account Sale or a
Makewell Sale, including, without limitation, (i) all reasonable legal,
accounting, brokerage and other professional fees, costs and expenses incurred
for the benefit of any such Person, (ii) all Taxes payable by any such Person or
the Stations, including, without limitation, sales and transfer taxes applicable
to, imposed upon or arising out of such Account Sale or Makewell Sale, as the
case may be, or (iii) all filing, registration and other similar fees and
expenses paid by or on behalf of any such Person, including, without limitation,
any such fees and expenses paid pursuant to ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ and the
Communications Act or the rules, regulations, policies of the FTC and the FCC.
For purposes of computing any Taxes relevant to the determination of Disposition
Expenses, Seller, the Trustee and/or News Corp. (or any Affiliate of Seller or
News Corp.) shall each be assumed to be a corporation that is fully taxable on
all of its income or gains at the highest applicable marginal rates for the
Taxes at issue.
"DMA" means the designated market area for the Stations as
determined by the ▇.▇. ▇▇▇▇▇▇▇ Co.
"Encumbrances" mean any mortgages, pledges, liens, security
interests, defects in title, easements, rights-of-way, encumbrances,
restrictions and any other matters affecting title.
"Environmental Laws" means 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.; or any other applicable federal, state,
or local laws relating to Hazardous Materials generation, production, use,
storage, treatment, transportation or disposal, or the protection of the
environment from Hazardous Materials
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and all Laws promulgated pursuant thereto or in connection
therewith.
"ERISA Affiliate" means any person that, together with Seller,
would be or was prior to March 17, 1997 treated as a single employer under
Section 414 of the Code or Section 4001 of ERISA.
"Excluded Assets" shall have the meaning set forth in Section
2.2.
"Family" shall mean of an individual includes (a) the
individual, (b) the individual's spouse and former spouses and any other natural
person who resides with such individual, (c) any other natural person who is
related to the individual or any person described in the preceding clause (b)
within the second degree.
"FCC" means the Federal Communications Commission.
"FCC Applications" shall have the meaning set forth in Section
5.1.
"FCC Licenses" shall have the meaning set forth in Section
2.1.1.
"FCC Order" means an order or orders 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 Proration Amount" shall have the meaning set forth in
Section 2.7.3.
"FTC" means the Federal Trade Commission.
"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.
"▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended, and all Laws promulgated pursuant thereto
or in connection therewith.
"HSR Filing" shall have the meaning set forth 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," "toxic substances," "radioactive materials," or
other similar designations in, or otherwise subject to regulation under, any
Environmental Laws.
"Heritage Sellers" means the Seller and the Multi-Stations
Sellers.
"Heritage Stations" means the Stations and the Multi-Stations.
"Indemnified Party" and "Indemnifying Party" shall have the
respective meanings set forth in Section 12.5.1.
"Indemnity Cap" shall have the meaning set forth in Section
12.4.2.
"Intellectual Property" shall have the meaning set forth in
Section 2.1.4.
"Interim Period" shall have the meaning set forth in Section
2.6.4.
"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(b).
"Liabilities" shall mean, as to any Person, all debts, adverse
claims, liabilities and obligations, direct, indirect, absolute or contingent of
such Person, 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.
"Makewell Closing" shall have the meaning set forth in Section
2.6.2.
"Makewell Payment" shall have the meaning set forth in Section
2.6.2.
"Makewell Sale" shall have the meaning set forth in Section
2.6.1.
"Material Adverse Effect" means a material adverse effect on
the business, assets or financial condition of the Heritage Stations taken as a
whole, except for any such material adverse effect resulting from (a) general
economic conditions applicable to the television or radio broadcast industry,
(b) general conditions in the markets in which the Heritage Stations operate,
(c) circumstances that are not likely to recur and either have been
substantially remedied or can be substantially remedied without substantial cost
or delay, or (d) the refusal by Buyer to consent to any new Program Contract.
"Merger" shall have the meaning set forth in the Recitals.
"Merger Agreement" shall have the meaning set forth in the
Recitals.
"Multiemployer Plan" means any Plan described in Section 3(37)
of ERISA.
"Multi-Stations Agreement" means that certain Asset Purchase
Agreement dated as of the date hereof by and between the Multi-Stations Sellers
and the Buyer pursuant to which the Multi-Stations Sellers has agreed to sell,
and the Buyer has agreed to purchase the Multi-Stations.
"Multi-Stations Sellers" means WEAR-TV, LTD., an Iowa
corporation, ▇▇▇▇▇▇▇ TELECASTING, INC., a Delaware corporation, WNNE-TV, INC., a
Vermont corporation, KOKH, INC., a Delaware corporation, WCHS, LTD., an Iowa
corporation, WVAE-FM, INC., an Iowa corporation, KCFX-FM, INC., an Iowa
corporation, HERITAGE-WISCONSIN BROADCASTING CORP., a Wisconsin corporation,
KKSN, INC., a Delaware corporation, WBBF, INC., a New York corporation, WIL
MUSIC, INC., a Missouri corporation and KIHT-FM, INC., a Missouri corporation.
"Multi-Stations" means the following: (i) the television
broadcast stations WEAR-TV, Channel 3, Pensacola, Florida, WFGX-TV, Channel 35,
Pensacola, Florida, WPTZ-TV, Channel ▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, WFFF-TV, Channel
▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, WNNE-TV, Channel 31, Hartford, Vermont, KOKH-TV,
Channel 25, Oklahoma City, Oklahoma, and WCHS-TV, Channel 8, Charleston, West
Virginia, and (ii) the radio broadcast stations WGH(FM), Newport News, Virginia,
WGH(AM), Newport News, Virginia and WVCL(FM), Norfolk, Virginia; KXTR(FM),
Kansas City, Missouri, KCFX-FM, Harrisonville, Missouri, KCIY(FM), Liberty,
Missouri, KCAZ(AM), Mission, Kansas and KQRC(FM), Leavenworth, Kansas; WEMP(AM),
Milwaukee, Wisconsin, WMYX(FM), Milwaukee, Wisconsin and WAMG(FM), Wauwatosa,
Wisconsin; KKSN(AM),
Vancouver, Washington, KKSN-FM, Salem, Oregon and KKRH-FM, Salem, Oregon;
WBBF(AM), Rochester, New York, WBEE-FM, Rochester, New York, WKLX(FM),
Rochester, New York and WQRV(FM), Avon, New York; and WRTH(AM), St. Louis,
Missouri, WIL-FM, St. Louis, Missouri; and KIHT(FM), St. Louis, Missouri.
"Operating Contracts" shall have the meaning set forth 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 both
with respect to type and amount; 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.
"Permitted Encumbrances" means (a) Encumbrances of a landlord,
or other statutory lien not yet due and payable, or a landlord's liens arising
in the Ordinary Course of Business, (b) Encumbrances arising in connection with
equipment or maintenance financing or leasing under the terms of the Station
Contracts set forth on the Schedules which have been made available to Buyer,
(c) Encumbrances arising pursuant to the terms of leases on Real Property or
Leased Property as set forth on Schedule 2.1.1 and Schedule 2.1.8 which are
subject to any lease or sublease to a third party, (d) 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,
(e) Encumbrances that do not materially detract from the value of any of the
Assets or materially interfere with the use thereof as currently used, or (f)
those Encumbrances on Schedule 3.8.
"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 or any ERISA Affiliate of a Seller; (b) to which Seller contributed or
was obligated to contribute or to fund or provide benefits or had any liability
(whether actual or contingent) with respect to any of its assets or otherwise;
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.
"Preliminary Payment Date" shall have the meaning set forth in
Section 2.6.3.
"Preliminary Payment" shall have the meaning set forth in
Section 2.6.1.
"Program Contracts" shall have the meaning set forth in
Section 2.1.5.
"Proration Amount" shall have the meaning set forth in Section
2.7.1.
"Proration Items" shall mean any power and utility charges,
business and license fees (including retroactive adjustments thereof), sales and
service charges, commissions, special assessments, and rental payments and
personal and real estate Taxes and assessments with respect to the Real
Property, taxes (except for Taxes arising from the transfer of the Assets
hereunder), deposits, Trade-out Agreements, accrued vacation, unused sick leave
and other similar prepaid and deferred items and any other operating expenses
incurred in the Ordinary Course of Business (except with respect to Program
Contracts, only those payments due and payable during the month in which the
Closing occurs shall be prorated). The parties acknowledge and agree that there
shall be excluded from Proration Items the following: (a) severance pay relating
to any employee of Seller who shall have been terminated prior to the Closing
Date, and (b) any Liabilities not being assumed by Buyer in accordance with
Section 2.10.
"Purchase Price" shall have the meaning set forth in Section
2.4.
"Qualified Plan" means a Plan that satisfies, or is intended
by Seller to satisfy, the requirements for tax qualification described in
Section 401 of the Code including, without limitation, any Plan that was
terminated on or after July 1, 1989, as to which Seller may have any actual or
contingent liability.
"Real Property" shall have the meaning set forth in Section
2.1.2(a).
"Restricted Contracts" shall have the meaning set forth in
Section 6.2.9.
"Retained General Manager" shall have the meaning set forth in
Section 8.4.8.
"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 Assignment of Contracts and Leases, the ▇▇▇▇
of Sale, the Assignment of FCC Licenses, and the Assumption Agreement.
"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 ▇▇▇▇▇ & Company Incorporated and RP
Companies, Inc.
"Seller's Plan" shall have the meaning set forth in Section
8.4.5.
"Stations' Cash Flow" shall have the meaning set forth in
Section 2.6.4.
"Station Contracts" shall have the meaning set forth in
Section 2.1.8.
"Stations" shall have the meaning set forth in the Recitals.
"Subject Party" shall mean the Seller, the Trustee, News
Corp., any Affiliate of News Corp., HMI Broadcasting Corporation, Heritage Media
or the Merger Sub.
"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.
"TBA" means any time brokerage agreement, local marketing
arrangement, joint sales agreement, joint operating agreement, limited
management agreement or other similar agreement or contract.
"Time Sales Agreements" shall have the meaning set forth in
Section 2.1.7.
"Trade-out Agreements" shall have the meaning set forth in
Section 2.1.6.
"Transfer Taxes" shall have the meaning set forth in Section
15.3.
"Transferred Employees" shall have the meaning set forth in
Section 8.4.1.
"Welfare Plan" means an "employee welfare benefit plan" as
such term is defined in Section 3(1) of ERISA.