1
EXHIBIT 10.137
================================================================================
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
CHANNEL 46 OF BOSTON, INC.
AND
MASSACHUSETTS REDEVELOPMENT
LIMITED LIABILITY COMPANY
FOR
TELEVISION STATION WHRC(TV)
NORWELL, MASSACHUSETTS
SEPTEMBER 27, 1996
================================================================================
2
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS
"Assets" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assumed Contracts" . . . . . . . . . . . . . . . . . . . . . . . . 1
"Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Consents" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Contracts" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Escrow Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Escrow Agreement" . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Consent" . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Final Order" . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Real Property" . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Tangible Personal Property" . . . . . . . . . . . . . . . . . . . 3
SECTION 2. PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . 3
2.1 Agreement to Sell and Buy . . . . . . . . . . . . . . . . . 3
2.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . 4
2.4 Payment of Purchase Price . . . . . . . . . . . . . . . . . 5
2.5 Assumption of Liabilities and Obligations . . . . . . . . . 5
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . 6
3.2 Organization, Standing, and Authority . . . . . . . . . . . 7
3.3 Authorization and Binding Obligation . . . . . . . . . . . . 7
3.4 Absence of Conflicting Agreements . . . . . . . . . . . . . 7
3.5 Governmental Licenses . . . . . . . . . . . . . . . . . . . 7
3.6 Title to and Condition of Real Property . . . . . . . . . . 8
3.7 Title to and Condition of Tangible Personal Property . . . . 8
3.8 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.9 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.10 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.11 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.12 Personnel . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.13 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.14 Claims and Legal Actions . . . . . . . . . . . . . . . . . . 10
- i -
3
Page
3.15 Environmental Matters . . . . . . . . . . . . . . . . . . 11
3.16 Compliance with Laws . . . . . . . . . . . . . . . . . . . 12
3.17 Conduct of Business in Ordinary Course . . . . . . . . . . 12
3.18 Transactions with Affiliates . . . . . . . . . . . . . . . 13
3.19 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.20 Full Disclosure . . . . . . . . . . . . . . . . . . . . . 13
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . 14
4.1 Organization, Standing, and Authority . . . . . . . . . . 14
4.2 Authorization and Binding Obligation . . . . . . . . . . . 14
4.3 Absence of Conflicting Agreements . . . . . . . . . . . . 14
4.4 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.5 Full Disclosure . . . . . . . . . . . . . . . . . . . . . 14
4.6 Qualification as Licensee . . . . . . . . . . . . . . . . 15
SECTION 5. CONSTRUCTION AND OPERATIONS OF THE STATION PRIOR TO
CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.1 Generally . . . . . . . . . . . . . . . . . . . . . . . . 15
5.2 Contracts . . . . . . . . . . . . . . . . . . . . . . . . 15
5.3 Disposition of Assets . . . . . . . . . . . . . . . . . . 15
5.4 Encumbrances . . . . . . . . . . . . . . . . . . . . . . . 15
5.5 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.6 Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.7 No Inconsistent Action . . . . . . . . . . . . . . . . . . 16
5.8 Access to Information . . . . . . . . . . . . . . . . . . 16
5.9 Maintenance of Assets . . . . . . . . . . . . . . . . . . 17
5.10 Insurance . . . . . . . . . . . . . . . . . . . . . . . . 17
5.11 Consents . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.12 Books and Records . . . . . . . . . . . . . . . . . . . . 17
5.13 Notification . . . . . . . . . . . . . . . . . . . . . . . 17
5.14 Compliance with Laws . . . . . . . . . . . . . . . . . . . 18
5.15 Financing Leases . . . . . . . . . . . . . . . . . . . . . 18
5.16 Preservation of Business . . . . . . . . . . . . . . . . . 18
5.17 Personnel Recommendations . . . . . . . . . . . . . . . . 18
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . 18
6.1 FCC Consent . . . . . . . . . . . . . . . . . . . . . . . 18
6.2 Control of the Station . . . . . . . . . . . . . . . . . . 19
6.3 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . 19
6.4 Confidentiality . . . . . . . . . . . . . . . . . . . . . 19
6.5 Environmental Audit . . . . . . . . . . . . . . . . . . . 19
-ii-
4
Page
6.6 Engineering Study . . . . . . . . . . . . . . . . . . . . 20
6.7 Cooperation . . . . . . . . . . . . . . . . . . . . . . . 20
6.8 Bulk Sales Law . . . . . . . . . . . . . . . . . . . . . . 20
6.9 Tax Filings . . . . . . . . . . . . . . . . . . . . . . . 20
6.10 Access to Books and Records . . . . . . . . . . . . . . . 20
6.11 Appraisal . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . 21
7.1 Conditions to Obligations of Buyer . . . . . . . . . . . . 21
7.2 Conditions to Obligations of Seller . . . . . . . . . . . 22
SECTION 8. CLOSING AND CLOSING DELIVERIES . . . . . . . . . . . . . . . 23
8.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.2 Deliveries by Seller . . . . . . . . . . . . . . . . . . . 23
8.3 Deliveries by Buyer . . . . . . . . . . . . . . . . . . . 24
SECTION 9. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . 25
9.1 Termination by Seller . . . . . . . . . . . . . . . . . . 25
9.2 Termination by Buyer . . . . . . . . . . . . . . . . . . . 25
9.3 Rights on Termination . . . . . . . . . . . . . . . . . . 26
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES . . . . . . . . . . . . . 27
10.1 Representations and Warranties . . . . . . . . . . . . . . 27
10.2 Indemnification by Seller . . . . . . . . . . . . . . . . 27
10.3 Indemnification by Buyer . . . . . . . . . . . . . . . . . 28
10.4 Procedure for Indemnification . . . . . . . . . . . . . . 29
10.5 Specific Performance . . . . . . . . . . . . . . . . . . . 30
10.6 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . 30
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 30
11.1 Fees and Expenses . . . . . . . . . . . . . . . . . . . . 30
11.2 Arbitration . . . . . . . . . . . . . . . . . . . . . . . 30
11.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.4 Benefit and Binding Effect . . . . . . . . . . . . . . . . 32
11.5 Further Assurances . . . . . . . . . . . . . . . . . . . . 32
11.6 Governing Law . . . . . . . . . . . . . . . . . . . . . . 32
11.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.8 Gender and Number . . . . . . . . . . . . . . . . . . . . 32
11.9 Entire Agreement . . . . . . . . . . . . . . . . . . . . . 32
-iii-
5
Page
11.10 Waiver of Compliance; Consents . . . . . . . . . . . . . 33
11.11 Press Release . . . . . . . . . . . . . . . . . . . . . 33
11.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . 33
-iv-
6
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of the 27th day of September,
1996, by and between Channel 46 of Boston, Inc., a Florida corporation
("Buyer"), and Massachusetts Redevelopment Limited Liability Company, a
Delaware limited liability company ("Seller").
RECITALS
A. Seller is the licensee of television station WHRC(TV),
Norwell, Massachusetts (the "Station") pursuant to construction permits and
licenses issued by the Federal Communications Commission (the "FCC").
B. Seller desires to sell, and Buyer desires to buy,
substantially all the assets that are used or useful in the business or
operations of the Station for the price and on the terms and conditions set
forth in this Agreement.
AGREEMENTS
In consideration of the above recitals and of the mutual agreements
and covenants contained in this Agreement, Buyer and Seller, intending to be
bound legally, agree as follows:
SECTION 1. DEFINITIONS
The following terms, as used in this Agreement, shall have the
meanings set forth in this Section:
"Assets" means the assets to be sold, transferred, or otherwise
conveyed to Buyer under this Agreement, as specified in Section 2.1.
"Assumed Contracts" means (i) all Contracts listed in Schedule 3.8
that are specifically designated on Schedule 3.8 as Contracts that are to be
assumed by Buyer upon its purchase of the Station, (ii) any Contracts entered
into by Seller between the date of this Agreement and the Closing Date that
Buyer agrees in writing to assume, and (iii) time sales contracts entered into
by Seller in compliance with Section 5.2.
"Closing" means the consummation of the purchase and sale of the Assets
pursuant to this Agreement in accordance with the provisions of Section 8.
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
7
- 2 -
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer
or otherwise to consummate the transactions contemplated by this Agreement,
other than the qualification of Buyer as a foreign corporation in the State of
Massachusetts and local business licenses applicable directly to Buyer.
"Contracts" means all contracts, leases, non-governmental licenses, and
other agreements (including leases for personal or real property and employment
agreements), written or oral (including any amendments and other modifications
thereto) to which Seller is a party or which are binding upon Seller and which
relate to or affect the Assets or the construction, business or operations of
the Station, and (i) which are in effect on the date of this Agreement or (ii)
which are entered into by Seller between the date of this Agreement and the
Closing Date.
"Escrow Agent" means First Union National Bank of Florida.
"Escrow Agreement" means the Escrow Agreement dated as of the date
hereof among Buyer, Seller and the Escrow Agent.
"FAA" means the Federal Aviation Administration.
"FCC" means the Federal Communications Commission.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
"FCC Licenses" means all Licenses issued by the FCC in connection with
the business or operations of the Station.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests for administrative or judicial review, reconsideration, appeal, or
stay have been filed within the time for filing any such requests, and the time
for filing any such requests and for the FCC to set aside the action on its own
motion have expired.
"Licenses" means all licenses, permits, and other authorizations
issued by the FCC, the FAA, or any other federal, state, or local governmental
authorities in connection with the business or operations of the Station,
together with any additions thereto between the date of this Agreement and the
Closing Date, other than the qualification of Buyer as a foreign corporation in
the State of Massachusetts and local business licenses applicable directly to
Buyer.
8
- 3 -
"Purchase Price" means the purchase price specified in Section 2.3.
"Real Property" means all real property and interests in real
property, including fee estates, leaseholds and subleaseholds, purchase
options, easements, licenses, rights to access, and rights of way, and all
buildings and other improvements thereon, and other real property interests
which are used or useful in the construction, business or operations of the
Station, together with any additions thereto between the date of this Agreement
and the Closing Date.
"Tangible Personal Property" means all machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant,
inventory, spare parts, and other tangible personal property which is used or
useful in the construction, business or operations of the Station, together
with any additions thereto between the date of this Agreement and the Closing
Date.
SECTION 2. PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and
conditions set forth in this Agreement, Seller hereby agrees to sell, transfer,
and deliver to Buyer on the Closing Date, and Buyer agrees to purchase, all of
the assets of Seller used or useful in connection with the business or
operations of the Station, together with any additions thereto between the date
of this Agreement and the Closing Date, but excluding the assets described in
Section 2.2 (collectively, the "Assets"), free and clear of any claims,
liabilities, security interests, mortgages, liens, pledges, conditions,
charges, or encumbrances of any nature whatsoever (except for liens for current
taxes not yet due and payable), including the following:
(a) The Tangible Personal Property;
(b) The Real Property;
(c) The Licenses;
(d) The Assumed Contracts;
(e) Any rights possessed by Seller to the call signs used
in the operation of the Station and the goodwill of the Station, if any;
(f) All of Seller's proprietary information, rights to
and under any pending application before any federal, state or local
governmental authority, including the FCC, technical information and data,
machinery and equipment warranties, maps, computer discs and tapes, plans,
diagrams, blueprints, and schematics, including all of Seller's rights to
filings with the FCC relating to the construction, business and operation of
the Station;
9
- 4 -
(g) Except as set forth in Section 2.2(d), all choses in
action of Seller relating to the Station; and
(h) All books and records relating to the construction,
business or operations of the Station, including executed copies of the Assumed
Contracts, and all records required by the FCC to be kept by the Station.
2.2 Excluded Assets. The Assets shall exclude the following
assets:
(a) Seller's cash on hand as of the Closing and all other
cash in any of Seller's bank or savings accounts; any insurance policies,
letters of credit, or other similar items and cash surrender value in regard
thereto; and any stocks, bonds, certificates of deposit and similar
investments;
(b) All books and records that pertain to Seller's
corporate organization;
(c) Any pension, profit-sharing, or employee benefit
plans, and any collective bargaining agreements; and
(d) All property and choses in action listed on Schedule
2.2 hereto.
2.3 Purchase Price. The Purchase Price for the Assets and the
covenants of Seller set forth in the Noncompetition Agreement referred to in
Section 6.12 shall be Fifteen Million Dollars ($15,000,000) adjusted as
provided below:
(a) Prorations. The Purchase Price shall be increased or
decreased as required to effectuate the proration of expenses. All expenses
arising from the construction, business or operation of the Station, including
business and license fees, utility charges, real and personal property taxes
and assessments levied against the Assets, property and equipment rentals,
applicable copyright or other fees, sales and service charges, taxes (except
for taxes arising from the transfer of the Assets under this Agreement), FCC
annual regulatory fees and similar prepaid and deferred items, shall be
prorated between Buyer and Seller in accordance with the principle that Seller
shall be responsible for all expenses, costs, and liabilities allocable to the
period prior to the Closing Date, and Buyer shall be responsible for all
expenses, costs, and obligations allocable to the period on and after the
Closing Date. Notwithstanding the preceding sentence, there shall be no
adjustment for, and Seller shall remain solely liable with respect to, any
Contracts not included in the Assumed Contracts and any other obligation or
liability not being assumed by Buyer in accordance with Section 2.5.
(b) Manner of Determining Adjustments. Any adjustments
will, insofar as feasible, be determined and paid on the Closing Date, with
final settlement and payment by
10
- 5 -
the appropriate party occurring no later than ninety (90) days after the
Closing Date or such other date as the parties shall mutually agree upon.
Seller shall prepare and deliver to Buyer not later than five (5) days before
the Closing Date a preliminary settlement statement which shall set forth
Seller's good faith estimate of the adjustments to the Purchase Price under
Section 2.3(a). The preliminary settlement statement (i) shall contain all
information reasonably necessary to determine the adjustments to the Purchase
Price under Section 2.3(a), to the extent such adjustments can be determined or
estimated as of the date of the preliminary settlement statement, and such
other information as may be reasonably requested by Buyer, and (ii) shall be
certified by Seller to be true and complete in all material respects as of the
date thereof.
2.4 Payment of Purchase Price. The Purchase Price, as adjusted,
shall be paid by Buyer to Seller at Closing by wire transfer of same-day funds
pursuant to wire instructions which shall be delivered by Seller to Buyer, at
least two (2) days prior to the Closing Date.
2.5 Assumption of Liabilities and Obligations. As of the Closing
Date, Buyer shall assume and undertake to pay, discharge, and perform all
obligations and liabilities of Seller under the Licenses and the Assumed
Contracts insofar as they relate to the time on and after the Closing Date, and
arise out of events related to Buyer's ownership of the Assets or its operation
of the Station on or after the Closing Date. Buyer shall not assume any other
obligations or liabilities of Seller, including (i) any obligations or
liabilities under any Contract not included in the Assumed Contracts, (ii) any
obligations or liabilities under the Assumed Contracts relating to the period
prior to the Closing Date, (iii) any claims or pending litigation or
proceedings relating to the construction or operation of the Station prior to
the Closing, (iv) any obligations or liabilities arising under capitalized
leases or other financing agreements, (v) any obligations or liabilities
arising under agreements entered into other than in the ordinary course of
business, (vi) any obligations or liabilities of Seller under any employee
pension, retirement, health and welfare or other benefit plans or collective
bargaining agreements, (vii) any obligation to any employee of the Station for
severance benefits, vacation time, or sick leave accrued prior to the Closing
Date, or (viii) any obligations or liabilities caused by, arising out of, or
resulting from any action or omission of Seller prior to the Closing, and all
such obligations and liabilities shall remain and be the obligations and
liabilities solely of Seller.
At Closing, Seller shall retain all choses in action listed on Schedule
2.2 hereto and subject to the following sentences, shall retain exclusive
control over the conduct of litigation relating to such choses in action.
Notwithstanding the foregoing, Buyer and Seller acknowledge that Seller is
conveying to Buyer plans and certain real property interests which Seller has
in a site located in Bridgewater, Massachusetts (hereinafter, the "Bridgewater
Site"). Seller has held a construction permit issued by the FCC for a
1,049-foot tower to be located at the Bridgewater Site, and Seller believes
that the site is suitable for such a tower and transmitter facility. However,
the parties acknowledge that on September 10, 1996
11
- 6 -
Seller filed an amendment to that construction permit as described in Section
5.1 and Seller was denied certain local permits needed to construct the tower
at the Bridgewater Site. Seller understands that Buyer may elect to proceed
with plans to develop the Bridgewater Site as a tower site in the future, and
that if Buyer so elects, Buyer will need to obtain the local permits necessary
to operate the Station from the Bridgewater Site. As a result, Seller hereby
agrees to take at Buyer's expense prior to or following the Closing any and all
action that Buyer may reasonably request to assist Buyer in obtaining such
local permits, including, without limitation, naming Buyer as an additional
plaintiff in the Bridgewater Site litigation, amending or adding a new claim to
such litigation, diligently prosecuting any claims or appeals and/or taking any
and all other actions relating to such litigation that Buyer may reasonably
request in order to facilitate the issuance of the local permits to Buyer as
promptly as possible. Nothing contained herein shall prevent Buyer from
pursuing any separate actions, claims or proceedings or take any and all other
separate actions relating to the Bridgewater Site litigation that Buyer may
want to pursue or take in its sole discretion; provided, however, that Buyer
shall consult with Seller in advance concerning any such action to be taken by
Buyer and shall promptly deliver to Seller copies of all pleadings and other
submissions by Buyer to a court or other tribunal in connection with such
action. Buyer shall not be required to assume any obligations or liabilities
under any litigation as a result of this paragraph and shall not be required to
take any actions under any litigation as a result of this paragraph.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Specific Representations. Notwithstanding any other provision
of this Agreement or the Escrow Agreement, Seller represents to Buyer that the
Station is not operating and has not operated since prior to the ▇▇▇▇ ▇▇▇▇▇▇
purchased said Station. Seller and its predecessor purchased the Station from
the bankruptcy estate of the prior owner, and Seller owns the Station free and
clear of all liens, claims, security interests and encumbrances. Seller has
caused the filing of an application for construction permit with the FCC and an
application for special temporary authority to construct and operate a new
antenna transmitter facility for the Station from a tower of 400 feet above
mean sea level in height located at West Bridgewater, Massachusetts (the "West
Bridgewater Site"). No Licenses are required to operate the Station from the
West Bridgewater Site except for local zoning permits and variances for which
application has been made, the FCC Licenses described above and a studio
transmitter link which Buyer will apply for and pursue diligently. As of the
date hereof, the Station has no studio, and the Tangible Personal Property is
not alone sufficient to operate a television studio for the Station. Seller
has applied for permission from the FCC for the Station to be "dark" as of the
date of this Agreement and will continue to apply for or possess such
permission up to and including the date of resumption of broadcast
operations.
12
- 7 -
3.2 Organization, Standing, and Authority. Seller is a limited liability
company duly organized, validly existing, and in good standing under the laws
of the State of Delaware and is duly qualified as a foreign limited liability
company in the State of Massachusetts and is in good standing in the State of
Massachusetts. Except as otherwise described herein, Seller has all requisite
power and authority (i) to own, lease, or use the Assets as now owned, leased,
or used, (ii) to conduct the business and operations of the Station as now
conducted, and (iii) to execute and deliver this Agreement, the Escrow
Agreement and the documents contemplated hereby and thereby, and to perform and
comply with all of the terms, covenants, and conditions to be performed and
complied with by Seller hereunder and thereunder. Seller is not a participant
in any joint venture or partnership with any other person or entity with
respect to any part of the construction or operations of the Station or any of
the Assets.
3.3 Authorization and Binding Obligation. The execution, delivery, and
performance of this Agreement and the Escrow Agreement by Seller have been duly
authorized by all necessary actions on the part of Seller and its members.
This Agreement and the Escrow Agreement have been duly executed and delivered
by Seller and constitute the legal, valid, and binding obligations of Seller,
enforceable against it in accordance with their respective terms except as the
enforceability of this Agreement and the Escrow Agreement may be affected by
bankruptcy, insolvency, or similar laws affecting creditors' rights generally,
and by judicial discretion in the enforcement of equitable remedies.
3.4 Absence of Conflicting Agreements. Subject to obtaining the
Consents listed on Schedule 3.4, the execution, delivery, and performance of
this Agreement and the Escrow Agreement and the documents contemplated hereby
and thereby (with or without the giving of notice, the lapse of time, or both):
(i) do not require the consent of any third party; (ii) will not conflict with
any provision of the organizational or charter documents of Seller; (iii) will
not conflict with, result in a breach of, or constitute a default under, any
law, judgment, order, ordinance, injunction, decree, rule, regulation, or
ruling of any court or governmental instrumentality; (iv) will not conflict
with, constitute grounds for termination of, result in a breach of, constitute
a default under, or accelerate or permit the acceleration of any performance
required by the terms of, any agreement, instrument, license, or permit to
which Seller is a party or by which Seller may be bound; and (v) will not
create any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon any of the Assets.
3.5 Governmental Licenses. Schedule 3.5 includes a true and complete
list of the Licenses. Seller has delivered to Buyer true and complete copies
of the Licenses (including any amendments and other modifications thereto).
The Licenses have been validly issued and Seller is the authorized legal holder
thereof. Except as set forth in Section 3.1, the Licenses listed on Schedule
3.5 comprise all of the licenses, permits, and other authorizations required
from any governmental or regulatory authority for the lawful construction and
13
- 8 -
operation of the Station in the manner and to the full extent they are now
conducted, and none of the Licenses is subject to any restriction or condition
that would delay or adversely affect such construction and operation. The
Licenses are in full force and effect, and the construction and the conduct of
the business and operations of the Station are in accordance therewith.
Subject to the requirements of Section 312(g) of the Communications Act of
1934, as amended, Seller has no reason to believe that any of the Licenses
would not be renewed by the FCC or other granting authority in the ordinary
course. No cable system has advised Seller of any copyright indemnity or other
prerequisite to cable carriage of the Station's signal, and no cable system has
declined or threatened to decline such carriage for any reason other than
alleged failure of Seller to deliver a signal of minimally required strength,
or failed to respond to a request for carriage or sought any form of relief
from carriage from the FCC.
3.6 Title to and Condition of Real Property. Schedule 3.6 contains a
complete and accurate description of all the Real Property and Seller's
interests therein (including street address, legal description, owner, and use
and the location of all improvements thereon). The Real Property listed on
Schedule 3.6 comprises all real property interests necessary to conduct the
business and operations of the Station as now conducted, except that the
Station has no, studio site. Seller owns no Real Property. With respect to
each leasehold or subleasehold interest included in the Real Property being
conveyed under this Agreement so long as Seller fulfills its obligations under
the lease therefor, Seller has enforceable rights to nondisturbance and quiet
enjoyment and Seller has a valid leasehold interest in such leases, free and
clear of all liens, mortgages, pledges, claims and encumbrances of any nature
whatsoever. All towers, guy anchors, and buildings and other improvements
included in the Assets are located entirely on the Real Property listed in
Schedule 3.6. Seller has delivered to Buyer true and complete copies of all
leases pertaining to the Real Property. All Real Property (including the
improvements thereon) (i) to the best of Seller's knowledge, is in good
condition and repair consistent with its present use, (ii) except as described
in Section 3.1, is available for immediate use in the conduct of the business
and operations of the Station, and (iii) complies with all applicable building
or zoning codes and the regulations of any governmental authority having
jurisdiction. Seller has full legal and practical access to the Real Property.
To the best of Seller's knowledge, all easements, rights-of-way, and real
property licenses have been properly recorded in the appropriate public
recording offices.
3.7 Title to and Condition of Tangible Personal Property. Schedule 3.7
lists all material items of Tangible Personal Property. The Tangible Personal
Property listed on Schedule 3.7 comprises all material items of tangible
personal property necessary to complete construction of and to conduct the
business and operations of the Station as now conducted. Seller owns and has
good title to each item of Tangible Personal Property, and none of the
Tangible Personal Property owned by Seller is subject to any security interest,
mortgage, pledge, conditional sales agreement, or other lien or encumbrance,
except for liens for current taxes not yet due and payable and liens disclosed
on Schedule 3.7 which shall be
14
- 9 -
removed prior to the Closing. Each item of Tangible Personal Property is
available for immediate use in the construction, business and operations of the
Station. To the best of Seller's knowledge, all items of transmitting and
studio equipment included in the Tangible Personal Property (i) have been
maintained in a manner consistent with generally accepted standards of good
engineering practice, and (ii) will be readily usable in operation of the
Station in accordance in all material respects with the terms of the FCC
Licenses and the rules and regulations of the FCC, and with all other
applicable federal, state, and local statutes, ordinances, rules, and
regulations.
3.8 Contracts. Schedule 3.8 is a true and complete list of all
Contracts. Seller has delivered to Buyer true and complete copies of all
Contracts. Other than the Contracts listed on Schedule 3.8 and the lack of a
lease for a studio site, Seller requires no contract, lease, or other agreement
to enable it to complete the construction of and operate the Station in
accordance with the Licenses. To the best knowledge of Seller, all of the
Assumed Contracts are in full force and effect, and are valid, binding, and
enforceable in accordance with. their terms. There is not under any Assumed
Contract any default by Seller or any event that, after notice or lapse of time
or both, could constitute a default by Seller, and to the best of Seller's
knowledge, there is not under any Assumed Contract any default by any other
party thereto or any event that, after notice or lapse of time or both, could
constitute a default by any other party thereto. Seller is not aware of any
intention by any party to any Assumed Contract (i) to terminate such contract
or amend the terms thereof, (ii) to refuse to renew the Assumed Contract upon
expiration of its term, or (iii) to renew the Assumed Contract upon expiration
only on terms and conditions which are substantially more onerous than those now
existing. Except for the need to obtain the Consents listed in Schedule 3.4,
Seller has full legal power and authority to assign its rights under the
Assumed Contracts to Buyer in accordance with this Agreement, and subject to
obtaining such Consents, such assignment will not affect the validity,
enforceability, or continuation of any of the Assumed Contracts.
3.9 Consents. Except for the FCC Consent provided for in Section 6.1
and the other Consents described in Schedule 3.4, no consent, approval, permit,
or authorization of, or declaration to or filing with any governmental or
regulatory authority, or any other third party is required (i) to consummate
this Agreement and the transactions contemplated hereby, (ii) to permit Seller
to assign or transfer the Assets to Buyer, or (iii) to enable Buyer to conduct
the business and operations of the Station after the Closing as contemplated by
this Agreement.
3.10 Insurance. Schedule 3.10 is a true and complete list of all
insurance policies of Seller that insure any part of the Assets or the
construction or business of the Station. All policies of insurance listed in
Schedule 3. 10 are in full force and effect. The insurance policies listed in
Schedule 3.10 are adequate in amount with respect to, and for the full value
(subject to customary deductibles) of, the Assets, and insure the Assets and
the business of
15
- 10 -
the Station against all customary and foreseeable risks. Since Seller has
assumed ownership of the Station, no insurance policy of Seller on the Assets
or the Station has been canceled by the insurer and no application of Seller
for insurance has been rejected by any insurer.
3.11 Reports. All returns, reports, and statements that the
Station is currently required to file with the FCC or with any other
governmental agency have been filed, and all reporting requirements of the FCC
and other governmental authorities having jurisdiction over Seller and the
Station have been complied with in all material respects. All of such returns,
reports, and statements are substantially complete and correct as filed.
Seller has timely paid to the FCC all annual regulatory fees payable with
respect to the FCC Licenses.
3.12 Personnel. Seller has not had at any time nor will it have at
any time prior to Closing any employees. Seller has not had at any time nor
will it have at any time prior to Closing any liability or obligation under any
employee benefit plan, pension plan, workers compensation arrangement or any
other arrangement or plan relating to employees.
3.13 Taxes. Seller has filed or caused to be filed all federal
income tax returns and all other federal, state, county, local, or city tax
returns which are required to be filed, and it has paid or caused to be paid
all taxes shown on those returns or on any tax assessment received by it to the
extent that such taxes have become due, or has set aside on its books adequate
reserves (segregated to the extent required by generally accepted accounting
principles),with respect thereto. There are no governmental investigations or
other legal, administrative, or tax proceedings pursuant to which Seller is or
could be made liable for any taxes, penalties, interest, or other charges, the
liability for which could extend to Buyer as transferee of the business of the
Station, and no event has occurred that could impose on Buyer any transferee
liability for any taxes, penalties, or interest due or to become due from
Seller.
3.14 Claims and Legal Actions. Except for any FCC rulemaking or
other proceedings affecting the television broadcasting industry generally, the
disclosures set forth in Section 2.5 and the actions listed in Schedule 2.2 to
which Seller is a party plaintiff, there is no claim, legal action,
counterclaim, suit, arbitration, governmental investigation or other legal,
administrative, or tax proceeding, nor any order, decree or judgment, in
progress or pending, or to the knowledge of Seller threatened, against or
relating to Seller with respect to its ownership, construction or operation of
the Station or otherwise relating to the Assets or the construction, business
or operations of the Station, nor does Seller know or have reason to be aware
of any basis for the same. In particular, but without limiting the generality
of the foregoing, there are no applications, complaints or proceedings pending
or, to the best of its knowledge, threatened (i) before the FCC relating to the
construction, business or operations of the Station other than rulemaking
proceedings which affect the television industry generally, (ii) before any
federal or state agency relating to the construction, business or operations of
the Station involving charges of illegal discrimination under any
▇▇
- ▇▇ -
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇ employment laws or regulations, or (iii) before any federal,
state, or local agency relating to the construction, business or operations of
the Station involving zoning issues under any federal, state, or local zoning
law, rule, or regulation.
3.15 Environmental Matters.
(a) To the best of Seller's knowledge, Seller has
complied in all material respects with all laws, rules, and regulations of all
federal, state, and local governments (and all agencies thereof) concerning the
environment, public health and safety, and employee health and safety, and no
charge, complaint, action, suit, proceeding, hearing, investigation, claim,
demand, or notice has been filed or commenced against Seller in connection with
its ownership, construction or operation of the Station alleging any failure to
comply with any such law, rule, or regulation.
(b) To the best of Seller's knowledge, after due
investigation, Seller has no liability relating to its ownership, construction
and operation of the Station (and there is no basis related to the past or
present operations, properties, or facilities of Seller for any present or
future charge, complaint, action, suit, proceeding, hearing, investigation,
claim, or demand against Seller giving rise to any such liability) under any
law, rule, or regulation of any federal, state, or local government (or agency
thereof) concerning release or threatened release of hazardous substances,
public health and safety, or pollution or protection of the environment.
(c) To the best of Seller's knowledge, after due
investigation, Seller has no liability relating to its ownership, construction
and operation of the Station (and Seller has not handled or disposed of any
substance, arranged for the disposal of any substance, or owned or operated any
property or facility in any manner that could form the basis for any present or
future charge, complaint, action, suit, proceeding, hearing, investigation,
claim, or demand (under the common law or pursuant to any statute) against
Seller giving rise to any such liability) for damage to any site, location, or
body of water (surface of subsurface) or for illness or personal injury.
(d) To the best of Seller's knowledge, after due
investigation, Seller has no liability relating to its ownership, construction
and operation of the Station (and there is no basis for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand against Seller giving rise to any such liability) under any law, rule,
or regulation of any federal, state, or local government (or agency thereof)
concerning employee health and safety.
(e) To the best of Seller's knowledge, after due
investigation, Seller has no liability relating to its ownership, construction
and operation of the Station (and Seller has not exposed any employee to any
substance or condition that could form the basis for any
17
- 12 -
present or future charge, complaint, action, suit, proceeding, hearing,
investigation, claim, or demand (under the common law or pursuant to statute)
against Seller giving rise to any such liability) for any illness or personal
injury to any employee.
(f) To the best of Seller's knowledge, in connection with
its ownership, construction or operation of the Station, Seller has obtained
and been in compliance in all material respects with all of the terms and
conditions of all permits, licenses, and other authorizations which are
required under, and has complied with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules, and
timetables which are contained in, all federal, state, and local laws, rules,
and regulations (including all codes, plans, judgments, orders, decrees,
stipulations, injunctions, and charges thereunder) relating to public health
and safety, worker health and safety, and pollution or protection of the
environment, including laws relating to emissions, discharges, releases, or
threatened releases of pollutants, contaminants,or chemical, industrial,
hazardous, or toxic materials or wastes into ambient air, surface water, ground
water, or lands or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, or chemical, industrial, hazardous, or toxic
materials or wastes.
(g) To the best of Seller's knowledge, no pollutant,
contaminant, or chemical, industrial, hazardous, or toxic material or waste has
ever been manufactured, buried, stored, spilled, leaked, discharged, emitted,
or released by Seller in connection with its ownership, construction and
operation of the Station or, after due investigation, by any other party on any
Real Property.
3.16 Compliance with Laws. Except with respect to environmental
matters which are covered by Section 3.15, Seller has complied in all material
respects with the Licenses and all federal, state, and local laws, rules,
regulations, and ordinances applicable or relating to the ownership,
construction and operation of the Station. To the best of Seller's knowledge,
neither the ownership or use of the properties of the Station nor the
construction, business or operation of the Station conflicts with the rights of
any other person or entity.
3.17 Conduct of Business in Ordinary Course. Subject to the
disclosures set forth in Section 3.1, Seller has conducted the business and
operations of the Station only in the ordinary course and has not:
(a) suffered any material adverse change in the business,
assets, or properties of the Station, including any damage, destruction, or
loss affecting any assets used or useful in the conduct of the business of the
Station;
18
- 13 -
(b) made any sale, assignment, lease, or other transfer
of any of the Station's properties other than in the normal and usual course of
business with suitable replacements being obtained therefor;
(c) canceled any debts owed to or claims held by Seller
with respect to the Station, except in the normal and usual course of business;
(d) suffered any material write-down of the value of any
Assets; or
(e) transferred or granted any right under, or entered
into any settlement regarding the breach or infringement of, any license
patent, copyright, trademark, trade name, franchise, or similar right, or
modified any existing right relating to the Station.
3.18 Transactions with Affiliates. Seller acquired ownership of
the Station from Massachusetts Redevelopment Corporation, and as part of such
acquisition, Massachusetts Redevelopment Corporation transferred certain
Contracts to Seller. Massachusetts Redevelopment Corporation is not entitled
to any compensation from Seller for the conveyance described herein. Other
than the foregoing, Seller has not been involved in any business arrangement or
relationship relating to the Station with any affiliate of Seller, and no
affiliate of Seller owns any property or right, tangible or intangible, which
is used in the construction or business of the Station. As used in this
paragraph, "affiliate" has the meaning set forth in Rule 12b-2 promulgated
under the Securities and Exchange Act of 1934.
3.19 Broker. Neither Seller nor any person acting on Seller's
behalf has incurred any liability for any finders' or brokers' fees or
commissions in connection with the transactions contemplated by this Agreement.
3.20 Full Disclosure. No representation or warranty made by Seller
in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Seller pursuant hereto contains or will contain
any untrue statement of a material fact, or omits or will omit to state any
material fact and required to make any statement made herein or therein not
misleading.
3.21 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ "holds" more than 50% of
the voting securities of Seller, and he is "controlled" by no other person (as
these terms are defined in 16 CFR Section 801.1). Accordingly, ▇▇. ▇▇▇▇▇▇ is an
"ultimate parent entity" with respect to Seller, as that term is defined in 16
CFR Section 801.1(a)(3). The "total assets" of ▇▇. ▇▇▇▇▇▇ and each entity that
he controls, as (i) stated on his most recent, regularly prepared balance sheet
dated June 30, 1996; and (ii) determined in accordance with 16 CFR Section
801.1 were less than 10 million. Neither Seller, ▇▇. ▇▇▇▇▇▇ nor their
Controlled Entities is "engaged in manufacturing" as that term is defined in 16
CFR Section 801.1.
19
- 14 -
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization, Standing, and Authority. Buyer is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Florida and at Closing will be duly qualified to conduct
business as a foreign corporation in the State of Massachusetts. Buyer has all
requisite power and authority to execute and deliver this Agreement and the
Escrow Agreement and the documents contemplated hereby and thereby, and to
perform and comply with all of the terms, covenants, and conditions to be
performed and complied with by Buyer hereunder and thereunder.
4.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement and the Escrow Agreement by Buyer
have been duly authorized by all necessary actions on the part of Buyer. This
Agreement and the Escrow Agreement have been duly executed and delivered by
Buyer and constitute the legal, valid, and binding obligations of Buyer,
enforceable against Buyer in accordance with their respective terms except as
the enforceability of this Agreement and the Escrow Agreement may be affected
by bankruptcy, insolvency, or similar laws affecting creditors' rights
generally and by judicial discretion in the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents, the execution, delivery, and performance by Buyer of this Agreement
and the Escrow Agreement and the documents contemplated hereby and thereby
(with or without the giving of notice, the lapse of time, or both): (i) do not
require the consent of any third party; (ii) will not conflict with the
Articles of Incorporation or Bylaws of Buyer; (iii) will not conflict with,
result in a breach of, or constitute a default under, any law, judgment, order,
injunction, decree, rule, regulation, or ruling of any court or governmental
instrumentality; or (iv) will not conflict with, constitute grounds for
termination of, result in a breach of, constitute a default under, or
accelerate or permit the acceleration of any performance required by the terms
of, any agreement, instrument, license, or permit to which Buyer is a party or
by which Buyer may be bound, such that Buyer could not acquire or operate the
Assets.
4.4 Broker. Neither Buyer nor any person acting on Buyer's behalf
has incurred any liability for any finders' or brokers' fees or commissions in
connection with the transactions contemplated by this Agreement.
4.5 Full Disclosure. No representation or warranty made by Buyer
in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Buyer pursuant hereto contains or will contain
any untrue statement of a material fact, or omits or will omit to state any
material fact and required to make any statement made herein or therein not
misleading.
20
- 15 -
4.6 Oualification as Licensee. To the best of Buyer's knowledge,
Buyer is not aware of any facts which would, under present law (including the
Communications Act of 1934, as amended, and present rules, regulations,
policies and practices of the FCC), form the basis for a determination by the
FCC that Buyer is not qualified to become the licensee of the Station, the
assignee of the FCC Licenses, and the owner and/or operator of the Station's
Assets, and Buyer will not take, or unreasonably fail to take, any action which
would cause non-qualification. In the event Buyer becomes aware of any facts
or circumstances which might cause such non-qualification, it will promptly
notify Seller in writing thereof and use its commercially reasonable efforts to
prevent and/or cure any such non-qualification or disqualification.
SECTION 5. CONSTRUCTION AND OPERATIONS OF THE STATION PRIOR TO CLOSING
5.1 Generally. Seller agrees that, between the date of this
Agreement and the Closing Date, Seller shall (i) take all actions required to
complete, as expeditiously as possible, the construction of the Station in
accordance with the terms of the Licenses, pursuant to the Construction Permit
of the Station (FCC File No. ▇▇▇▇-▇▇▇▇▇▇▇▇, granted June 12, 1996) as modified
pursuant to Amendment dated September 10, 1996 of Application for New Auxiliary
Transmitter/Antenna Facility (FCC File No. BPCT-96071OKK) which Amendment is
attached hereto as Schedule 5.2 (the "Modified Construction Permit") and (ii)
operate the Station diligently in the ordinary course of business (except where
such conduct would conflict with the following covenants or with Seller's other
obligations under this Agreement), and in accordance with the other covenants
in this Section 5; provided, that Seller shall not be obligated to construct or
operate the Station except to the extent such construction or operation is at
the expense of Buyer.
5.2 Contracts. Seller will not enter into any contract or
commitment relating to the Station or the Assets, or amend or terminate any
Contract (or waive any material right thereunder), or incur any obligation
(including obligations relating to the borrowing of money or the guaranteeing
of indebtedness) that will be binding on Buyer after Closing. Prior to the
Closing Date, Seller shall deliver to Buyer a list of all Contracts entered
into between the date of this Agreement and the Closing Date, together with
copies of such Contracts.
5.3 Disposition of Assets. Seller shall not sell, assign, lease,
or otherwise transfer or dispose of any of the Assets, except where no longer
used or useful in the construction, business or operations of the Station or in
connection with the acquisition of replacement property of equivalent kind and
value.
5.4 Encumbrances. Seller shall not create, assume or permit to
exist any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon the Assets, except for (i) liens
disclosed on Schedule 3.5 and Schedule 3.6, which shall
21
- 16 -
be removed prior to the Closing Date, (ii) liens for current taxes not yet due
and payable, and (iii) mechanics' liens and other similar liens, which shall be
removed prior to the Closing Date.
5.5 Licenses. Seller shall not cause or permit, by any act or
failure to act, any of the Licenses to expire or to be revoked, suspended, or
modified, or take any action that could cause the FCC or any other governmental
authority to institute proceedings for the suspension, revocation, or adverse
modification of any of the Licenses. The parties hereto recognize that under
Section 312(g) of the Communications Act of 1934, as amended, the FCC Licenses
will automatically expire if the Station is not on the air by February 9, 1997.
The parties further recognize that Buyer has the right to terminate this
Agreement under Section 9.2(g) if the Station has not resumed broadcast
operations prior to February 9, 1997. Seller shall prosecute with due
diligence any applications made to any governmental agencies for the
Bridgewater Site and the West Bridgewater Site and any other applications to
any governmental authority made in connection with the construction or
operation of Station.
5.6 Rights. Seller shall not waive any right relating to the
Station or any of the Assets. Seller shall not cause, by any act or failure to
act, any cable system located within the Station's Area of Dominant Influence
to refuse to carry the Station's signal. At the expense of Buyer, Seller shall
demand prior to October 1, 1996 or prior to the date the Station begins on-air
operation mandatory carriage of the Station's signal on all cable systems
located within the Station's Area of Dominant Influence. Buyer shall provide
Seller with letters to such cable systems that Seller shall use to make such
demand.
5.7 No Inconsistent Action. Seller shall not take any action that
is inconsistent with its obligations under this Agreement or that could hinder
or delay the consummation of the transactions contemplated by this Agreement.
5.8 Access to Information. Seller shall give Buyer and its
counsel, accountants, engineers, and other authorized representatives
reasonable access to the Assets and to all other properties, equipment, books,
records, Contracts, and documents relating to the Station for the purpose of
audit and inspection, including inspections incident to the environmental study
described in Section 6.5 and the engineering study described in Section 6.6,
and will furnish or cause to be furnished to Buyer or its authorized
representatives all information with respect to the affairs and business of the
Station that Buyer may reasonably request (including any financial reports and
operations reports produced with respect to the affairs and business of the
Station). Without limiting the generality of the foregoing, Seller shall give
Buyer and its counsel, accountants and other authorized representatives
reasonable access to Seller's financial records and Seller's employees,
counsel, accountants and other representatives for the purpose of preparing and
auditing such financial statements as Buyer determines, in its sole judgment,
are required or advisable to comply with federal or state
22
-17 -
securities laws and the rules and regulations of securities markets as a result
of the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
5.9 Maintenance of Assets. Seller shall use its best efforts and
take all reasonable actions to maintain all of the Assets in the condition in
which said Assets exist as of the date of this Agreement (ordinary wear and
tear excepted), and use, operate, and maintain all of the Assets in a
reasonable manner and in accordance in all material respects with the terms of
the FCC Licenses, all rules and regulations of the FCC and generally accepted
standards of good engineering practice. If any loss, damage, impairment,
confiscation, or condemnation of or to any of the Assets occurs, Seller shall
repair, replace, or restore the Assets to their condition as of the date of
this Agreement as soon thereafter as possible, and Seller shall use the
proceeds of any claim under any insurance policy solely to repair, replace, or
restore any of the Assets that are lost, damaged, impaired, or destroyed.
Notwithstanding any other provisions of this Agreement, Seller makes no express
or implied warranty of fitness for use, merchantability or condition of any of
the Assets except for the representations and warranties set forth in Section 3
of this Agreement.
5.10 Insurance. Seller shall maintain the existing insurance
policies on the Station and the Assets.
5.11 Consents. Seller shall obtain the Consents and shall use
commercially reasonable efforts to obtain the estoppel certificates described
in Section 8.2(b), in each case without any change in the terms or conditions
of any Contract or License that would be materially less advantageous to the
Station than those pertaining under the Contract or License as in effect on the
date of this Agreement. Seller shall promptly advise Buyer of any difficulties
experienced in obtaining any of the Consents and of any conditions proposed,
considered, or requested for any of the Consents. Upon Buyer's request, Seller
shall cooperate with Buyer and use its commercially reasonable efforts to
obtain from the lessors under each Real Property lease such estoppel
certificates and consents to the collateral assignment of the lessee's interest
under each such lease as Buyer's senior lenders may reasonably request and
Seller shall execute and deliver any certificates and confirmations that
Buyer's senior lenders may reasonably request.
5.12 Books and Records. Seller shall maintain its books and
records relating to the Station in accordance with past practices.
5.13 Notification. Seller shall promptly notify Buyer in writing
of any unusual or material developments with respect to the construction,
business or operations of the Station, and of any material change in any of the
information contained in Seller's representations and warranties contained in
Section 3 of this Agreement.
23
- 18 -
5.14 Compliance with Laws. Seller shall comply in all material
respects with all laws, rules, and regulations applicable or relating to the
construction, ownership and operation of the Station.
5.15 Financing Leases. Except to the extent Buyer agrees to assume
in writing any such leases at Closing, Seller will satisfy at or prior to
Closing all outstanding obligations under any capital and financing leases with
respect to any of the Assets and obtain good title to the Assets leased by
Seller pursuant to those leases so that those Assets shall be transferred to
Buyer at Closing free of any interest of the lessors.
5.16 Preservation of Business. Consistent with the representations
of Seller set forth in Section 3. 1, Seller shall use its best efforts to
preserve the business and organization of the Station, to the end that the
business, operations, and prospects of the Station shall be unimpaired at the
Closing Date.
5.17 Personnel Recommendations. In the event that personnel
positions become available at the Station, Seller shall promptly notify Buyer
as personnel vacancies occur at the Station and consider for employment all
personnel recommended by Buyer for such vacant positions.
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) The assignment of the FCC Licenses in connection with
the purchase and sale of the Assets pursuant to this Agreement shall be subject
to receipt of the prior consent and approval of the FCC.
(b) Seller and Buyer shall promptly prepare an
appropriate application for the FCC Consent and shall file the application with
the FCC within ten days of the execution of this Agreement. The parties shall
prosecute the application with all reasonable diligence and otherwise use their
best efforts to obtain a grant of the application as expeditiously as
practicable. Each party agrees to comply with any condition imposed on it by
the FCC Consent, except that no party shall be required to comply with a
condition if (1) the condition was imposed on it as the result of a
circumstance the existence of which does not constitute a breach by the party
of any of its representations, warranties, or covenants under this Agreement,
and (2) compliance with the condition would have a material adverse effect upon
it. Buyer and Seller shall oppose, to the extent that a reasonable basis for
objections exists in law or fact consistent with Rule 11 of the Federal Rules
of Civil Procedure, any requests for reconsideration or judicial review of the
FCC Consent. If the Closing shall not have occurred for any reason within the
original effective period of the FCC Consent, and neither party shall have
terminated this Agreement under Section 9, the parties shall jointly
24
- 19 -
request an extension of the effective period of the FCC Consent. No extension
of the FCC Consent shall limit the exercise by either party of its rights under
Section 9.
6.2 Control of the Station. Prior to Closing, Buyer shall not,
directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Station; such operations, including
complete control and supervision of all of the Station programs, employees, and
policies, shall be the sole responsibility of Seller until the Closing.
6.3 Risk of Loss.
(a) The risk of any loss, damage, impairment,
confiscation, or condemnation of any of the Assets from any cause whatsoever
shall be borne by Seller at all times prior to the Closing.
(b) If any damage or destruction of the Assets or any
other event occurs which (i) prevents the commencement of broadcast operation
of the Station prior to February 9, 1997 or (ii) following the Station's
commencement of broadcast operation, (A) causes the Station to cease
broadcasting operations for a period of three or more days or (B) prevents in
any material respect signal transmission by the Station in the normal and usual
manner and Seller fails to restore or replace the Assets so that normal and
usual transmission is resumed within seven days of the damage, destruction or
other event, Buyer, in its sole discretion, may (i) terminate this Agreement
forthwith without any further obligations hereunder upon written notice to
Seller, in which event all funds held by the Escrow Agent pursuant to the
Escrow Agreement, including all interest and other proceeds from the investment
of such funds, shall be immediately returned to Buyer, or (ii) proceed to
consummate the transaction contemplated by this Agreement and complete the
restoration and replacement of the Assets after the Closing Date, in which
event Seller shall deliver to Buyer all insurance proceeds received in
connection with such damage, destruction or other event.
6.4 Confidentiality. Except as necessary for the consummation of
the transaction contemplated by this Agreement, including Buyer's obtaining of
financing related hereto, and except as and to the extent required by law,
including, without limitation, disclosure requirements of federal or state
securities laws and the rules and regulations of securities markets, each party
will keep confidential any information obtained from the other party in
connection with the transactions contemplated by this Agreement. If this
Agreement is terminated, each party will return to the other party all
information obtained by such party from the other party in connection with
the transactions contemplated by this Agreement.
6.5 Environmental Audit. Buyer may, at its option and expense,
retain an environmental consultant to be selected by Buyer to perform a Phase I
environmental survey
25
- 20 -
of the properties of the Station. If the survey discloses any material
environmental hazard or material possibility of future liability for
environmental damages or clean-up costs, Buyer shall so notify Seller as soon
as practicable.
6.6 Engineering Study. Buyer may, at its option and expense,
retain an engineering firm to conduct a proof of performance study of the
Station and to prepare a report on the Station's compliance with customary
engineering practices and all applicable FCC rules, regulations, prescribed
practices, and technical standards. If the survey discloses any material
deficiencies in the construction, operations or equipment of the Station, Buyer
shall so notify Seller as soon as practicable.
6.7 Cooperation. Buyer and Seller shall cooperate fully with each
other and their respective counsel and accountants in connection with any
actions required to be taken as part of their respective obligations under this
Agreement, and Buyer and Seller shall execute such other documents as may be
necessary and desirable to the implementation and consummation of this
Agreement, and otherwise use their best efforts to consummate the transaction
contemplated hereby and to fulfill their obligations under this Agreement.
Notwithstanding the foregoing, Buyer shall have no obligation to agree to any
material adverse change in any License or Assumed Contract to obtain a Consent
required with respect thereto.
6.8 Bulk Sales Law. If applicable, the Bulk Sales law of the
State of Massachusetts shall be complied with by Seller. Any loss, liability,
obligation, or cost suffered by Seller or Buyer as the result of the failure of
Seller or Buyer to comply with the provisions of any bulk sales law applicable
to the transfer of the Assets as contemplated by this Agreement shall be borne
by Seller.
6.9 Tax Filings. Seller shall continue to file all applicable
Massachusetts tax returns with respect to the Station in accordance with
Seller's past practices and shall concurrently deliver copies of all such
returns to Buyer.
6.10 Access to Books and Records. Seller shall provide Buyer
access and the right to copy for a period of three years from the Closing Date
any books and records relating to the Assets that are not included in the
Assets. Buyer shall provide Seller access and the right to copy for a period
of three years from the Closing Date any books and records relating to the
Assets.
6.11 Appraisal. Buyer and Seller agree to allocate the Purchase
Price for tax and recording purposes in accordance with an appraisal to be
conducted by an appraisal firm selected and paid for by Buyer with experience
in the valuation and appraisal of television station assets.
26
- 21 -
6.12 Noncompetition Agreement. At Closing, Buyer and Seller shall
enter into a Noncompetition Agreement in the form of Schedule 6.12 and $300,000
of the Purchase Price shall be allocated to the covenants of Seller set forth
therein on the Closing Date.
6.13 Commencement of Broadcast Operations.
(a) At the expense of Buyer, Seller shall take all
actions reasonably requested by Buyer for the Station to resume broadcast
operations on or prior to the Closing Date, including, without limitation,
entering into contracts, ordering and installing equipment and building and
constructing or causing to be built or constructed any necessary facilities or
structures. Seller shall consult with Buyer prior to taking any material
action in connection with the construction of the Station and shall consider
Buyer's recommendations in connection therewith. Buyer shall have access at
all times to the assets, properties and facilities of the Station in order to
inspect the construction and condition of the Station. Buyer shall cooperate
with Seller to enable the Station to resume broadcast operations.
(b) Seller shall use its best efforts to obtain all
Licenses necessary for the Station to resume broadcast operations and to
operate the Station from the West Bridgewater Site. Seller shall use its best
efforts to obtain prior to Closing any necessary consents to transfer such
Licenses to Buyer at Closing. Seller is a party to a lease with respect to
each of the West Bridgewater Site (the "West Bridgewater Site Lease") and the
Bridgewater Site (the "Bridgewater Site Lease" and together with the West
Bridgewater Site Lease, the "Leases") which are described more fully on
Schedule 3.6. Such leases are in full force and effect on the date hereof and
Seller shall keep such Leases in full force and effect at all times until the
Closing. Such Leases shall be included among the Assumed Contracts and Seller
shall deliver Consents and estoppel certificates with respect thereto.
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
AT CLOSING
7.1 Conditions to Obligations of Buyer. All obligations of Buyer
at the Closing are subject at Buyer's option to the fulfillment prior to or at
the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations
and warranties of Seller contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
(b) Covenants and Conditions. Seller shall have
performed and complied in all material respects with all covenants, agreements,
and conditions required by this Agreement to be performed or complied with by
it prior to or on the Closing Date.
27
- 22 -
(c) Consents. All Consents shall have been obtained and
delivered to Buyer without any adverse change in the terms or conditions of any
agreement or any governmental license, permit, or other authorization.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Buyer of any conditions that need not be complied
with by Buyer under Section 6.1 hereof, Seller shall have complied with any
conditions imposed on it by the FCC Consent, and the FCC Consent shall have
become a Final Order.
(e) Governmental Authorizations. Seller shall be the
holder of all Licenses and there shall not have been any modification of any
License that would have a material adverse effect on the Station or the conduct
of its business and operations. No proceeding shall be pending or threatened
the effect of which could be to revoke, cancel, fail to renew, suspend, or
modify adversely any License.
(f) Deliveries. Seller shall have made or stand willing
to make all the deliveries to Buyer set forth in Section 8.2.
(g) Adverse Change. Between the date of this Agreement
and the Closing Date, there shall have been no material adverse change in the
business, assets, or properties of the Station, including any damage,
destruction, or loss affecting any assets used or useful in the conduct of the
business of the Station.
(h) Commencement of Broadcast Operations. Seller shall
have completed the construction of the Station pursuant to the Modified
Construction Permit and Seller shall have commenced broadcast operations
pursuant to Program Test Authority (provided that Seller shall not be required
to have obtained a License from the FCC to cover the Modified Construction
Permit). Seller shall have obtained all of the Licenses which are necessary
for the Station to resume such broadcast operations and for the Station to
transmit its programming from the West Bridgewater Site at the full power
authorized by the FCC's grant of licenses resulting from the application for
the Modified Construction Permit and Seller shall have obtained all necessary
Consents for the transfer of the Licenses to Buyer at Closing. The West
Bridgewater Site Lease shall be in full force and effect in accordance with its
terms and there shall be no default thereunder and Seller shall have obtained
any necessary consent for the transfer of such lease to Buyer at Closing.
7.2 Conditions to Obligations of Seller. All obligations of
Seller at the Closing are subject at Seller's option to the fulfillment prior
to or at the Closing Date of each of the following conditions:
28
- 23 -
(a) Representations and Warranties. All representations
and warranties of Buyer contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
(b) Covenants and Conditions. Buyer shall have performed
and complied in all material respects with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date.
(c) Deliveries. Buyer shall have made or stand willing
to make all the deliveries set forth in Section 8.3.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Seller of any conditions that need not be complied
with by Seller under Section 6.1 hereof and Buyer shall have complied with any
conditions imposed on it by the FCC Consent.
SECTION 8. CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date. The Closing shall take place at 10:00
a.m. on a date, to be set by Buyer on at least five days' written notice to
Seller, that is (1) not earlier than the first business day after the FCC
Consent is granted, and (2) not later than ten business days following the date
upon which the FCC Consent has become a Final Order, subject to satisfaction or
waiver of all other conditions precedent to the holding of the Closing. If
Buyer fails to specify the date for Closing prior to the fifth business day
after the date upon which the FCC Consent becomes a Final Order, the Closing
shall take place on the tenth business day after the date upon which the FCC
Consent becomes a Final Order.
(b) Closing Place. The Closing shall be held at the
offices of Dow, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, or any other place that is agreed upon by Buyer and
Seller.
8.2 Deliveries by Seller. Prior to or on the Closing Date, Seller
shall deliver to Buyer the following, in form and substance reasonably
satisfactory to Buyer and its counsel:
(a) Transfer Documents. Duly executed warranty bills of
sale, deeds, motor vehicle titles, assignments, and other transfer documents
which shall be sufficient to vest good and marketable title to the Assets in
the name of Buyer, free and clear of all claims, liabilities, security
interests, mortgages, liens, pledges, conditions, charges or encumbrances,
except for liens for current taxes not yet due and payable;
29
- 24 -
(b) Estoppel Certificates. To the extent required by
Section 5.11, estoppel certificates of the lessors of all leasehold and
subleasehold interests included in the Real Property, including, without
limitation, the Leases;
(c) Consents. A manually executed copy of any instrument
evidencing receipt of any Consent (other than the FCC Consent) and evidence
reasonably satisfactory to Buyer that the FCC Consent has been obtained;
(d) Officer's Certificate. A certificate, dated as of
the Closing Date, executed on behalf of Seller by an officer of the managing
member of Seller, certifying (1) that the representations and warranties of
Seller contained in this Agreement are true and complete in all material
respects as of the Closing Date as though made on and as of that date; and (2)
that Seller has in all material respects performed and complied with all of its
obligations, covenants, and agreements set forth in this Agreement to be
performed and complied with on or prior to the Closing Date;
(e) Tax, Lien. and Judgment Searches. Results of a
search for tax, lien, and judgment filings in the Secretary of State's records
of the State of Massachusetts as well as the records of those counties in
Massachusetts in which any of the Assets are located, such searches having been
made no earlier than fifteen days prior to the Closing Date;
(f) Licenses, Contracts, Business Records, Etc. Copies
of all Licenses, Assumed Contracts, blueprints, schematics, working drawings,
plans, projections, engineering records, and all files and records used by
Seller in connection with its construction or operations;
(g) Qpinion of Counsel. An Opinion of Seller's counsel
dated as of the Closing Date, substantially in the form of Schedule 8.2(g)
hereto; and
(h) Noncompetition Agreement. The Noncompetition
Agreement in the form of Schedule 6.12, duly executed on behalf of Seller.
8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer
shall deliver to Seller the following, in form and substance reasonably
satisfactory to Seller and its counsel:
(a) Purchase Price. The Purchase Price as provided in
Section 2.3;
(b) Assumption Agreements. Appropriate assumption
agreements pursuant to which Buyer shall assume and undertake to perform
Seller's obligations under the Licenses and Assumed Contracts insofar as they
relate to the time on and after the Closing Date and arise out of events
related to Buyer's ownership of the Assets or its operation of the Station on
or after the Closing Date;
30
- 25 -
(c) Officer's Certificate. A certificate, dated as of
the Closing Date, executed on behalf of Buyer by an officer of Buyer,
certifying (1) that the representations and warranties of Buyer contained in
this Agreement are true and complete in all material respects as of the Closing
Date as though made on and as of that date, and (2) that Buyer has in all
material respects performed and complied with all of its obligations,
covenants, and agreements set forth in this Agreement to be performed and
complied with on or prior to the Closing Date;
(d) Qpinion of Counsel. An opinion of Buyer's counsel
dated as of the Closing Date, substantially in the form of Schedule 8.3(d)
hereto.
(e) Noncompetition Agreement. The Noncompetition
Agreement in the form of Schedule 6.12 duly executed by Buyer.
SECTION 9. TERMINATION
9.1 Termination by Seller. This Agreement may be terminated by
Seller and the purchase and sale of the Station abandoned, if Seller is not
then in material default, upon written notice to Buyer, upon the occurrence of
any of the following:
(a) Conditions. If on the date that would otherwise be
the Closing Date any of the conditions precedent to the obligations of Seller
set forth in this Agreement have not been satisfied or waived in writing by
Seller.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order that
would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred
by May 1, 1997.
(d) Breach. Without limiting Seller's rights under the
other provisions of this Section 9.1, if Buyer has failed to cure any material
breach of any of its representations, warranties or covenants under this
Agreement within fifteen days after Buyer received written notice of such
breach from Seller.
9.2 Termination by Buyer. This Agreement may be terminated by
Buyer and the purchase and sale of the Station abandoned, if Buyer is not then
in material default, upon written notice to Seller, upon the occurrence of any
of the following:
(a) Conditions. If on the date that would otherwise be
the Closing Date any of the conditions precedent to the obligations of Buyer
set forth in this Agreement have not been satisfied or waived in writing by
Buyer.
31
- 26 -
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order that
would prevent or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred
by May 1, 1997.
(d) Environmental Hazards. Buyer shall have notified
Seller of material environmental hazards or the material possibility of
environmental damages or clean-up costs, as indicated in the environmental
study described in Section 6.5, at least 30 days prior to the Closing Date, and
the cause thereof shall not have been remedied prior to the Closing Date.
(e) Technical Deficiencies. Buyer shall have notified
Seller of material deficiencies in the proposed operations of the Station, as
indicated in the engineering study described in Section 6.6, at least 30 days
prior to the Closing Date, and the cause thereof shall not have been remedied
prior to the Closing Date.
(f) Breach. Without limiting Buyer's rights under the
other provisions of this Section 9.2, if Seller has failed to cure any material
breach of any of its representations, warranties or covenants under this
Agreement within fifteen days after Seller received written notice of such
breach from Buyer.
(g) If the Station has not commenced broadcast operations
by a date that makes it reasonably likely that the Station will be unable to
resume broadcast operations prior to February 9, 1997.
9.3 Rights on Termination. If this Agreement is terminated
pursuant to Section 9.1 or Section 9.2 and neither party is in material breach
of this Agreement, the parties hereto shall not have any further liability to
each other with respect to the purchase and sale of the Assets. If this
Agreement is terminated by Seller due to Buyer's material breach of this
Agreement, then the payment to Seller of $250,000 pursuant to Section 9.4 below
shall be liquidated damages and shall constitute full payment and the exclusive
remedy for any damages suffered by Seller by reason of Buyer's material breach
of this Agreement. Seller and Buyer agree in advance that actual damages would
be difficult to ascertain and that the amount of $250,000 is a fair and
equitable amount to reimburse Seller for damages sustained due to Buyer's
material breach of this Agreement. If this Agreement is terminated by Buyer
due to Seller's material breach of this Agreement, Buyer shall have all rights
and remedies available at law or equity.
9.4 Escrow Deposit. Buyer has deposited with the Escrow Agent the
sum of $250,000 in accordance with the Escrow Agreement. All such funds
deposited with the
32
- 27 -
Escrow Agent shall be held and disbursed in accordance with the terms of the
Escrow Agreement and the following provisions:
(a) At the Closing, all amounts held by the Escrow Agent
pursuant to the Escrow Agreement, including any interest or other proceeds from
the investment of funds held by the Escrow Agent, shall be disbursed to or at
the direction of Buyer.
(b) If this Agreement is terminated pursuant to Section 9.1 or
9.2 and Buyer is not in material breach of this Agreement, all amounts held by
the Escrow Agent pursuant to the Escrow Agreement, including any interest or
other proceeds from the investment of funds held by the Escrow Agent, shall be
disbursed to or at the direction of Buyer.
(c) If this Agreement is terminated by Seller due to
Buyer's material breach.of this Agreement, then $250,000 of the amount held by
the Escrow Agent pursuant to the Escrow Agreement shall be disbursed to or at
the direction of Seller as liquidated damages under Section 9.3 above and any
interest or other proceeds from the investment of funds held by the Escrow
Agent shall be disbursed by the Escrow Agent to or at the direction of Buyer.
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES
10.1 Representations and Warranties. All representations and
warranties contained in this Agreement shall be deemed continuing
representations and warranties and shall survive the Closing for a period of
six months. Any investigations by or on behalf of any party hereto shall not
constitute a waiver as to enforcement of any representation, warranty, or
covenant contained in this Agreement. No notice or information delivered by
Seller shall affect Buyer's right to rely on any representation or warranty
made by Seller or relieve Seller of any obligations under this Agreement as the
result of a breach of any of its representations and warranties.
10.2 Indemnification by Seller. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Buyer or
any information Buyer may have, Seller hereby agrees to indemnify and hold
Buyer harmless against and with respect to, and shall reimburse Buyer for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Seller contained in this Agreement or in any certificate, document,
or instrument delivered to Buyer under this Agreement.
33
- 28 -
(b) Any and all obligations of Seller not assumed by
Buyer pursuant to this Agreement, including any liabilities arising at any time
under any Contract not included in the Assumed Contracts.
(c) Any loss, liability, obligation, or cost resulting
from the failure of the parties to comply with the provisions of any bulk sales
law applicable to the transfer of the Assets.
(d) Any and all losses, liabilities, or damages resulting
from the operation, ownership or construction of the Station prior to the
Closing, including any liabilities arising under the Licenses or the Assumed
Contracts which relate to events occurring prior the Closing Date.
(e) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs, and expenses, including reasonable
legal fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.3 Indemnification by Buyer. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Seller or
any information Seller may have, Buyer hereby agrees to indemnify and hold
Seller harmless against and with respect to, and shall reimburse Seller for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Buyer contained in this Agreement or in any certificate, document,
or instrument delivered to Seller under this Agreement.
(b) Any and all obligations of Seller assumed by Buyer
pursuant to this Agreement.
(c) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station on and after the Closing.
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses, including reasonable legal
fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
34
- 29 -
10.4 Procedure for Indemnification. The procedure for
indemnification shall be as follows:
(a) The party claiming indemnification (the "Claimant")
shall promptly give notice to the party from which indemnification is claimed
(the "Indemnifying Party") of any claim, whether between the parties or brought
by a third party, specifying in reasonable detail the factual basis for the
claim. If the claim relates to an action, suit, or proceeding filed by a third
party against Claimant, such notice shall be given by Claimant within five
business days after written notice of such action, suit, or proceeding was
given to Claimant.
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying
Party shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and/or its authorized representatives the information relied upon by the
Claimant to substantiate the claim. If the Claimant and the Indemnifying Party
agree at or prior to the expiration of the thirty-day period (or any mutually
agreed upon extension thereof) to the validity and amount of such claim, the
Indemnifying Party shall immediately pay to the Claimant the full amount of the
claim. If the Claimant and the Indemnifying Party do not agree within the
thirty-day period (or any mutually agreed upon extension thereof), the Claimant
may seek appropriate remedy at law or equity or under the arbitration
provisions of this Agreement, as applicable.
(c) With respect to any claim by a third party as to
which the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall
cooperate fully with the Indemnifying Party, subject to reimbursement for
actual out-of-pocket expenses incurred by the Claimant as the result of a
request by the Indemnifying Party. If the Indemnifying Party elects to assume
control of the defense of any third-party claim, the Claimant shall have the
right to participate in the defense of such claim at its own expense. If the
Indemnifying Party does not elect to assume control or otherwise participate in
the defense of any third party claim, it shall be bound by the results obtained
by the Claimant with respect to such claim.
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
(e) The indemnifications rights provided in Sections 10.2
and 10.3 shall extend to the shareholders, directors, officers, employees, and
representatives of any Claimant although for the purpose of the procedures set
forth in this Section 10.4, any indemnification claims by such parties shall be
made by and through the Claimant. Nothing
35
- 30 -
contained in this Section 10.4(e) shall cause any party hereto to have recourse
directly against the shareholders, directors, officers, and representatives of
the other party.
10.5 Specific Performance. The parties recognize that if Seller
breaches this Agreement and refuses to perform under the provisions of this
Agreement, monetary damages alone would not be adequate to compensate Buyer for
its injury. Buyer shall therefore be entitled, in addition to any other
remedies that may be available, including money damages, to obtain specific
performance of the terms of this Agreement. If any action is brought by Buyer
to enforce this Agreement, Seller shall waive the defense that there is an
adequate remedy at law.
10.6 Attorneys' Fees. In the event of a default by either party
which results in a lawsuit or other proceeding for any remedy available under
this Agreement, the prevailing party shall be entitled to reimbursement from
the other party of its reasonable legal fees and expenses.
SECTION 11. MISCELLANEOUS
11.1 Fees and Expenses. Any federal, state, or local sales or
transfer tax arising in connection with the conveyance of the Assets by Seller
to Buyer pursuant to this Agreement shall be paid by Seller. Buyer and Seller
shall each pay one-half of any fees payable to the Escrow Agent and all filing
fees required by the FCC in connection with the FCC Consent. Except as
otherwise provided in this Agreement, each party shall pay its own expenses
incurred in connection with the authorization, preparation, execution, and
performance of this Agreement, including all fees and expenses of counsel,
accountants, agents, and representatives. Each party shall be responsible for
all fees or commissions payable to any finder, broker, advisor, or similar
person retained by or on behalf of such party.
11.2 Arbitration. Except as otherwise provided to the contrary
below, any dispute arising out of or related to this Agreement that Seller and
Buyer are unable to resolve by themselves shall be settled by arbitration by a
panel of three (3) neutral arbitrators who shall be selected in accordance with
the procedures set forth in the commercial arbitration rules of the American
Arbitration Association. The persons selected as arbitrators shall have prior
experience in the broadcasting industry but need not be professional
arbitrators, and persons such as lawyers, accountants, brokers and bankers
shall be acceptable. Before undertaking to resolve the dispute, each
arbitrator shall be duly sworn faithfully and fairly to hear and examine the
matters in controversy and to make a just award according to the best of his or
her understanding. The arbitration hearing shall be conducted in accordance
with the commercial arbitration rules of the American Arbitration Association
in Washington, D.C. The written decision of a majority of the arbitrators shall
be final and binding on Seller and Buyer. The costs and expenses of the
arbitration proceeding shall be assessed between Seller and Buyer in a manner
to be decided by a majority of the arbitrators, and the assessment
36
- 31 -
shall be set forth in the decision and award of the arbitrators. Judgment on
the award, if it is not paid within thirty days, may be entered in any court
having jurisdiction over the matter. No action at law or suit in equity based
upon any claim arising out of or related to this Agreement shall be instituted
in any court by Seller or Buyer against the other except (i) an action to
compel arbitration pursuant to this Section, (ii) an action to enforce the
award of the arbitration panel rendered in accordance with this Section, or
(iii) a suit for specific performance pursuant to Section 10.5.
11.3 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) delivered by personal delivery, or sent by commercial delivery
service or registered or certified mail, return receipt requested, (c) deemed
to have been given on the date of personal delivery or the date set forth in
the records of the delivery service or on the return receipt, and (d) addressed
as follows:
If to Seller: Massachusetts Redevelopment Limited Liability Company
▇▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
With a copies to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇, Scholer, Fierman, ▇▇▇▇ & Handler, L.L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
and
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Schnaeder, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
If to Buyer: Channel 46 of Boston, Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
37
- 32 -
With a copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Tannenwald, P.C.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇., ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
11.3.
11.4 Benefit and Binding Effect. Neither party hereto may assign
this Agreement without the prior written consent of the other party hereto;
provided, however, that Buyer may assign its rights and obligations under this
Agreement, in whole or in part, to one or more subsidiaries or commonly
controlled affiliates of Buyer without seeking or obtaining Seller's prior
approval in which event Buyer shall remain liable hereunder and Buyer may
collaterally assign its rights and interests hereunder to its senior lenders
without seeking or obtaining Seller's prior approval. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
11.5 Further Assurances. The parties shall take any actions and
execute any other documents that may be necessary or desirable to the
implementation and consummation of this Agreement, including, in the case of
Seller, any additional bills of sale, deeds, or other transfer documents that,
in the reasonable opinion of Buyer, may be necessary to ensure, complete, and
evidence the full and effective transfer of the Assets to Buyer pursuant to
this Agreement.
11.6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED,
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA (WITHOUT
REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF).
11.7 Headings. The headings in this Agreement are included for
ease of reference only and shall not control or affect the meaning or
construction of the provisions of this Agreement.
11.8 Gender and Number. Words used in this Agreement, regardless
of the gender and number specifically used, shall be deemed and construed to
include any other gender, masculine, feminine, or neuter, and any other number,
singular or plural, as the context requires.
11.9 Entire Agreement. This Agreement, the schedules, hereto, and
all documents, certificates, and other documents to be delivered by the parties
pursuant hereto, collectively represent the entire understanding and agreement
between Buyer and Seller with respect to
38
- 33 -
the subject matter hereof. This Agreement supersedes all prior negotiations
between the parties and cannot be amended, supplemented, or changed except by
an agreement in writing that makes specific reference to this Agreement and
which is signed by the party against which enforcement of any such amendment,
supplement, or modification is sought.
11.10 Waiver of Compliance, Consents. Except as otherwise provided
in this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement, or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation,
warranty, covenant, agreement, or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 11.10.
11.11 Press Release. Neither party shall publish any press release,
make any other public, announcement or otherwise communicate with any news
media concerning this Agreement or the transactions contemplated hereby without
the prior written consent of the other party; provided, however, that nothing
contained herein shall prevent either party from promptly making all filings
with governmental authorities as may, in its judgement be required or advisable
in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
11.12 Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
39
- 34 -
IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
BUYER:
CHANNEL 46 OF BOSTON, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Chairman
GUARANTOR OF PERFORMANCE OF
BUYER:
▇▇▇▇▇▇ COMMUNICATIONS
CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name:
Title:
SELLER:
MASSACHUSETTS REDEVELOPMENT
LIMITED LIABILITY COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Manager
40
Schedule 2.2
Excluded Assets and Choses in Action
Massachusetts Redevelopment Limited Liability Company excludes the
following assets and choses in action from the Asset Purchase Agreement:
1. ▇▇▇▇▇▇▇▇ broadcast transmitter.
2. Cause of action against the City of Bridgewater and
certain individuals, sounding in tort and statutory violations, known as
Massachusetts Redevelopment Company v. ▇▇▇▇ ▇▇▇▇▇▇▇▇, et al., Land Court
No. 225489.
41
Schedule 3.4
Consents Required by Seller to Close
FCC Consent
Massachusetts Redevelopment Limited Liability Company requires no
other consents, within the meaning of Section 3.4 of the Asset Purchase
Agreement, in order to close the transaction, except for the grant by the FCC
of the pending application for renewal of license of WHRC(TV) and except for
the grant of the modification application (FCC file No. ▇▇▇▇-▇▇▇▇▇▇▇▇)
described in Schedule 3.5
42
Schedule 3.5
Licenses
Massachusetts Redevelopment Limited Liability Company holds the
following licenses and permits:
1. License to operate Commercial Television Station
WHRC(TV), Norwell, Massachusetts, issued by Federal Communications
Commission. However, the application for renewal of licenses of
Television Station WHRC(TV) is presently pending before the FCC.
2. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇▇▇-▇▇▇▇▇▇▇▇, issued June
12, 1996, by the Federal Communications Commission. However,
presently pending before the FCC is an application (FCC File No.
▇▇▇▇-▇▇▇▇▇▇▇▇) for modification of that construction permit.
43
Schedule 3.6
Real Property Interests
Massachusetts Redevelopment Limited Liability Company has only the
following interests in real property:
1. Non-exclusive lease between Massachusetts
Redevelopment Limited Liability Company and Queensferry Realty Trust
to install, maintain and operate (a) transmission and antenna
equipment on television channel 46; (b) two microwave transmitters,
antennas and receivers operating at frequencies assigned pursuant to
Part 74 of the Federal Communications Commission ("FCC") Rules; and
(c) two receive-only earth stations receiving signals transmitted at
frequencies assigned by the FCC in the Domestic Satellite Service; and
transmitting equipment, an electrical generator mounted on a pad, and
other accessory equipment at the Trust's radio tower and/or building
and equipment shelter located in West Bridgewater, Plymouth County,
Massachusetts.
2. Non-exclusive tower license agreement between
Massachusetts Redevelopment Limited Liability Company and BDS/GATX
Limited Partnership I to install, maintain and operate a transmission
and antenna equipment on television channel 46 and accessories on a
1,049 AMSL tower in Bridgewater, Plymouth County, Massachusetts.
44
Schedule 3.7
Tangible Personal Property
Massachusetts Redevelopment Limited Liability Company is conveying the
following tangible personal property pursuant to the Asset Purchase Agreement:
One (1) BASC Model SC-15 Channel 46 antenna
together with any additions to the tangible personal property between the date
of the Asset Purchase Agreement and the Closing Date.
45
Schedule 3.8
Contracts
Massachusetts Redevelopment Limited Liability Company has no contracts
other than the real property interests set out in Schedule 3.6 and the policy
of insurance set out in Schedule 3.10. Buyer will assume at Closing the real
property interests set out in Schedule 3.6 but will not assume the policy of
insurance set out in Schedule 3.10.
46
Schedule 3.10
Insurance Policies
Massachusetts Redevelopment Limited Liability Company has comprehensive
insurance coverage for its assets pursuant to a policy of insurance with Chubb
Group, through agent KDN/Lancaster Corp., Policy No. 35312679, issued April 5,
1996, and expiring April 5, 1997.
47
Schedule 5.2
▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ & HANDLER, LLP
A New York Limited Liability Partnership
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇., ▇▇▇▇▇ ▇▇▇▇ Nine ▇▇▇▇▇ & ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇ ▇▇▇-▇▇▇▇-▇▇▇▇
Fax ▇▇▇ ▇▇▇-▇▇▇▇ ------------------ Fax ▇▇▇-▇▇▇▇-▇▇▇▇
---------- (▇▇▇) ▇▇▇-▇▇▇▇
999 Avenue of The Stars Fax (▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Suite 600 (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
758-1000 Internet E-Mail Address
Fax ▇▇ ▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
----------
September 10, 1996
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Acting Secretary
Federal Communications Commission
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Re: Television Station WHRC(TV)
Channel 46, Norwell, Massachusetts
Application for New Auxiliary Transmitter/
Antenna Facility
(FCC File No. BPCT-96071OKK)
Dear ▇▇. ▇▇▇▇▇:
Submitted herewith for filing, on behalf of our client Massachusetts
Redevelopment Company, licensee of Television Station WHRC(TV), Channel 46,
Norwell, Massachusetts, are an original and two copies of an amendment to its
above-referenced pending application (File No. ▇▇▇▇-▇▇▇▇▇▇▇▇) to construct a
new auxiliary antenna/transmitter facility for Television Station WHRC(TV),
Norwell, Massachusetts.
Please direct any inquiries concerning this submission to the
undersigned.
Respectfully submitted,
▇▇▇▇, SCHOLER, FIERMAN, ▇▇▇▇ &
HANDLER, LLP
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Enclosures
49
▇▇▇▇, SCHOLER, FIERMAN, ▇▇▇▇ & HANDLER, LLP
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
September 10, 1996
Page 2
cc (w/encl.) ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Esq.
Chief, Television Branch
Video Services Division
Mass Media Bureau
Federal Communications Commission
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇
Supervisory Engineer
Television Branch
Video Services Division
Mass Media Bureau
Federal Communications Commission
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Television Branch
Video Services Division
Mass Media Bureau
Federal Communications Commission
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
Television Branch
Video Service Division
Mass Media Bureau
Mail Stop 1800E1
Federal Communications Commission
▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
50
AMENDMENT
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Acting Secretary
Federal Communications Commission
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Re: Television Station WHRC(TV)
Channel 46, Norwell, Massachusetts
Application for New Auxiliary Transmitter/
Antenna Facility
(FCC File No. ▇▇▇▇-▇▇▇▇▇▇▇▇)
Dear ▇▇. ▇▇▇▇▇:
On July 10, 1996, an application, on FCC Form 301. for minor
modification of the authorized technical facilities of Television Station
WHRC(TV), Channel 46, Norwell, Massachusetts, to construct a new auxiliary
transmitter/antenna facility for the station, was tendered for filing with the
Commission on behalf of Massachusetts Redevelopment Company, licensee of
WHRC(TV). That application is hereby amended by submission of the annexed
materials.
Respectfully submitted,
MASSACHUSETTS REDEVELOPMENT COMPANY
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
Date: September 6, 1996
----------------------------
51
AMENDMENT
The pending application (File No. BPCT-96071OKK) of Massachusetts
Redevelopment Company, licensee of Television Station WHRC(TV), Channel 465,
Norwell, Massachusetts, for a minor modification of the authorized technical
facilities of Television Station WHRC(TV) to construct a new auxiliary antenna
transmitter facility for the station is hereby amended as follows:
1. Amend the application in all respects to reflect that the
purpose of the application is no longer to seek authority to construct a new
auxiliary antenna transmitter facility but, rather, to seek authority for a
minor modification of the underlying WHRC(TV) construction permit (File No.
▇▇▇▇-▇▇▇▇▇▇▇▇, granted June 12, 1996). For convenience, a copy of that
construction permit is annexed hereto as Exhibit 1.
As explained in the August 12, 1996 amendment filed by Massachusetts
Redevelopment Company with respect to the instant application, Massachusetts
Redevelopment Company has been in the midst of attempting to obtain all local
zoning and other local regulatory approvals to expeditiously construct the
modified WHRC(TV) main antenna transmitter facility at the newly authorized
transmitter site specified in the annexed construction permit (File No.
▇▇▇▇-▇▇▇▇▇▇▇▇). However, as shown in the aforementioned amendment, the process
of obtaining local zoning and other local regulatory approvals has not yet been
completed and may yet take a significant amount of additional time.
52
Unfortunately, however, Massachusetts Redevelopment Company simply
does not have an unlimited amount of time within which to restore broadcast
operations by WHRC(TV). On February 8, 1996, President Clinton signed into law
the Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Scat. 56 (1996).
Section 403(1) of the Telecommunications Act of 1996 added a new Section 31
12(g) to the Communications Act of 1934, as amended, under which a broadcast
station's license will automatically expire upon the station's failure to
broadcast for a consecutive 12-month period, notwithstanding any provision,
term or condition of a license to the contrary.
In Implementation of Section 403(1) of the Telecommunications Act of
1996 (Silent Station Authorization - FCC Red ___, FCC 96-218 (released May 17,
1996), the Commission adopted rules to implement the new Section 312(g) of the
Communications Act. In this regard, the Commission held that, with respect to
stations which were off the air prior to February 8, 1996 (such as WHRC(TV)),
the commencement date of the 12-month period which triggers license expiration
under Section 312(g) of the Communications Act would be February 8, 1996. Id.,
slip op. at 2, p.5.
In short, under the rules and procedures adopted by the Commission in
Implementation of Section 403(1) of the Telecommunication Act of 1996 (Silent
Station Authorizations), supra the license for Television Station WHRC(TV) will
automatically expire as of February 9, 1997, by virtue of the force of new
Section 312(g) of the Communications Act, if, for any reason, WHRC(TV) has not
resumed broadcast operations by that date. Public Notice entitled,
2
53
"Procedures Announced For Expedited Processing of Applications Filed By Silent
Broadcast Stations", -- FCC Red ___, DA 96-818 (released May 22, 1996).
In light of the delays which inevitably will occur in obtaining local
zoning and other local regulatory approvals to construct WHRC(TV)'s main
transmission facilities at the station's new transmitter site, it is by no
means certain that WHRC(TV) will be able to complete construction and resume
broadcast operations with program test authority with the station's main
transmission facilities by February 9, 1996. Moreover, since cold weather and
freezing conditions in the winter months in New England virtually preclude
construction of a new broadcast tower, in order for WHRC(TV) to have any hope
of completing construction and of resuming broadcast operations by February 9,
1997, construction of the station's new main transmission tower would have to
be completed by September or October. Unfortunately however, this is not a
realistically feasible timetable.
In light of the foregoing, Massachusetts Redevelopment Company had
concluded that the most expeditious way to restore broadcast operations by
WHRC(TV) (and thereby to avoid the possibility of automatic loss of the
station's license for failure to resume broadcast operations by February 9,
1997), was to construct an auxiliary antenna/transmitter facility on an
existing tower and to resume broadcast operations on WHRC(TV) from the
auxiliary technical facilities as expeditiously as possible, while proceeding
expeditiously to obtain all required local zoning and other regulatory
approvals in connection with the WHRC(TV) main antenna/transmitter facilities
and to construct and operationalize those facilities as expeditiously as
possible. Toward that end,
3
54
Massachusetts Redevelopment Company Cited its instant application for a new
auxiliary antenna/transmitter facility on July 10, 1996.
However, based on informal discussions held recently with key members
of the Commission's staff. Massachusetts Redevelopment Company has now
concluded that the most expeditious way to restore broadcast operations by
WHRC(TV) (and thereby to avoid the possibility of automatic loss of the
station's license for failure to resume broadcast operations by February 9,
1997), is to amend its instant application so as to seek authority, not for a
new auxiliary antenna/transmitter facility, but, rather, to modify the annexed
WHRC(TV) construction permit (File No. ▇▇▇▇-▇▇▇▇▇▇▇▇, granted June 12, 1996) so
as to seek authority to construct the main WHRC(TV) antenna/transmitter
facilities in accord with the technical specifications set forth in the instant
application. Immediately upon Want of this application, Massachusetts
Redevelopment Company intends to embark on the construction of the station's
main technical facilities at the new transmitter site as specified in the
instant application. Once the station has been constructed with the modified
technical facility, Massachusetts Redevelopment Company intends to
operationalize the station expeditiously pursuant to Program Test Authority.
Once the station is operational -- hopefully well before the February
9, 1997 statutory deadline under Section 312(g) of the Communications Act -
Massachusetts Redevelopment Company intends to apply for a modification of
license for WHRC(TV) to relocate the station's main antenna/transmitter
facility from the transmitter site specified in the instant application to
4
55
the transmitter site specified in the annexed WHRC(TV) construction permit
(File No. ▇▇▇▇-▇▇▇▇▇▇▇▇).
5
56
EXHIBIT 1
57
[ ? ]
FEDERAL COMMUNICATIONS COMMISSION
TELEVISION BROADCAST STATION
CONSTRUCTION PERMIT
Authorizing Official
Official Mailing Address:
------------------------ ---------------------
▇▇▇▇ ▇. Pancarvis
MASSACHUSETTS REDEVELOPMENT COMPANY Chief TV Branch
[?] ▇▇▇▇▇ ▇▇▇▇▇▇ Video Services Division
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Mass Media Bureau
Grant Date: 6/12/96
Call Sign: WHRC This permit expires 3:00 a.m.
local time. 24 months after
grant date specified above.
Permit File No.: ▇▇▇▇-▇▇▇▇▇▇▇▇
Subject to the provisions of the Communications Act of 1934, as amended,
subsequent acts and treaties, and all regulations heretofore or hereafter made
by this Commission, and further subject to the conditions set forth in this
permit, the permittee is hereby authorized to construct the radio transmitting
apparatus herein described. Installation and adjustment of equipment not
specifically set forth herein shall be in accordance with representations
contained in the permittee's application for construction permit except for
such modifications as are presently permitted, without application, by the
Commission's Rules.
This permit shall be automatically forfeited if the station is not ready for
operation within the time specified (date of expiration) or within such further
time as the Commission may allow, unless completion of the station is prevented
by causes not under the control of the permittee. See Sections 73.3598,
73.3599 and 73.3534 of the Commission's Rules.
Equipment and program tests shall be conducted only pursuant to Sections
73.1610 and 73.1620 of the Commission's Rules.
Name of Permittee:
MASSACHUSETTS REDEVELOPMENT COMPANY
Station Location:
Ma-Norwell
Frequency (MHz): 662.0-668.0
FCC Form 352-A October 21, 1985 Page 1
58
[ ? ]
[ ? ]
[ ? ]
Transmitter Location Access or description
West side of Becirrd Street Rte. 23/23, 2.3 km south of ▇▇▇▇▇ Street.
Approximately ▇.▇ ▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇.
Transmitter: Type Accepted. See Sections 73.1660, 73.1665 and 73.1655
of the Commission's Rules.
Antenna type: (directional or non-directional): Directional
Description: DIELECTRIC FLP32-B
Beam Tile: 0.50 Degrees Electrical
Major lobe directions (degrees true): 340.0
Antenna Coordinates: North Latitude: 41 56 55
West Longitude: 70 58 15
Transmitter output power..............: As required to achieve authorized ERP
Maximum effective radiated power (PEAK): 2450.0 kW
: 33.9 DBK
Height of radiation center above ground ........: 301 Meters
Height of radiation center above mean sea level.: 310 Meters
Height of radiation center above average terrain: 291 Meters
Overall height of antenna structure above ground
(including obstruction lighting if any)....: 311 Meters
Obstructions marking and lighting specifications for antenna structure:
It is to be expressly understood that the issuance of these specifications is
in no way to be considered as precluding additional or modified marking or
lighting as may hereafter be required under the provisions of Section 303(q) of
the Communications Act of 1934, as amended.
PARAGRAPH 03.0, FCC FORM 715 (APRIL 1985):
There shall be installed at the top of the structure one 300 m/m electric code
beacon equipped with two 620- or 700-watt lamps (PS-40, Code Beacon type), both
lamps to burn simultaneously, and equipped with aviation red color filters.
Where a rod or other construction of not more than 20 feet in height and
incapable of supporting this
FCC Form 352-A October 21, 1985 Page 2
59
[ ? ]
PARAGRAPH , FCC FORM (APRIL 1985):
[ ? ]
▇▇▇▇▇▇▇▇▇ ▇▇.▇, ▇▇▇ ▇▇▇▇ ▇▇▇ (▇▇▇▇▇ ▇▇▇▇):
On levels at approximately five-sixths, one-half and one-sixth of the average
height of the tower, at least one 116- or 125-watt lamp. All the enclosed in
an aviation red obstruction light globe shall be installed on each outside
corner of the structure.
PARAGRAPH A . . FCC FORM 715 (APRIL 1985):
All lighting shall burn continuously or shall be controlled by a light
sensitive service adjusted so that the lights will be turned on at a north
sky light intensity level of about 35 foot candles and turned off at a north
sky light intensity level of about 58 foot candles.
PARAGRAPH 22.0, FCC FORM 715 (APRIL 1985):
During construction of an antenna structure, for which obstruction lighting is
required, at least two 116- or 125-watt lamps (A21/TS) enclosed in aviation red
obstruction light globes, shall be installed at the uppermost point of the
structure. In addition, as the height of the structure exceeds each level at
which permanent obstruction lights will be required, two similar lights shall
be displayed nightly from sunset to sunrise until the permanent obstruction
lights have been installed and placed in operation, and shall be positioned so
as to ensure unobstructed visibility of at least one of the lights at any
normal angle of approach. In lieu of the above temporary warning lights, the
permanent obstruction lighting fixtures may be installed and operated at each
required level as each such level is exceeded in height during construction.
PARAGRAPH A. . FCC FORM 715-A (MAY 1985):
There shall be installed at the top of the antenna structure a white [?]
discharge non-directional light which conforms to FAA,FCC specifications L-956,
High Intensity Obstruction Lighting Systems. This light shall be mounted on
the highest point of the structure. If the antenna on other appurtanance at its
highest point is incapable of
FCC Form 352-A October 21, 1985 Page 3
60
[ ? ]
PARAGRAPH , FCC FORM (MAY 19 ):
[ ? ] The complement of units shall admit a white [?]
intensity light and produce an effective intensity of not [ ? ]
daytime uniformly about the antenna structure in the additional plane. The
effective intensity shall be reduced to approximately 20,000 ▇▇▇▇▇▇▇▇ at
twilight, and to approximately 4,000 ▇▇▇▇▇▇▇▇ at night. The light units shall
be mounted in a manner to ensure unobstructed viewing from aircraft at any
normal angle of approach, so that the effective intensity of the full beam is
not impaired on any structural member of the skeletal framework. The units
will normally be adjusted so that the center of the beam is in the horizontal
plane.
PARAGRAPH D . , FCC FORM 715-A (MAY 1985):
At the approximate one-third and two-thirds levels of the skeletal tower there
shall be installed three or more high intensity light units when conform to
FAA/DOD Specficiations L-856, High Intensity Obstruction Lighting Systems. The
complement of units shall emit a white high intensity light and produce an
effective intensity of not less than 200,000 ▇▇▇▇▇▇▇▇ (daytime) uniformly
about the antenna structure in the horizontal plane. The effective intensity
shall be reduced to approximately 20,000 ▇▇▇▇▇▇▇▇ at twilight, and to
approximately 4,000 ▇▇▇▇▇▇▇▇ at night. The light units shall be mounted in a
manner to ensure unobstructed viewing from aircraft at any normal angle of
approach, so that the effective intensity of the full beam is not impaired by
any structural member of the skeletal framework. The normal angular adjustment
of the beam canters above the horizontal shall be two degrees at the one-third
level and one degree at the two-thirds level.
PARAGRAPH 5. , FCC FORM 715-A (MAY 1985):
All lights shall be synchronized to flash simultaneously at 40 pulses per
minute. The light system shall be equipped with a light sensitive control
device which shall face the north sky and cause the intensity steps to change
automatically when the north sky illumination on a vertical surface is as
follows:
1. Day to Twilight: Shall not occur before the illumination drops to 60
footcandles, but shall occur before it drops to 30 footcandles.
2. Twilight to Night: Shall not occur before the illumination drops to 5
foot candles but shall occur before it drops to 2 footcandles.
3. Night to Day: The intensity changes listed in 1. and 2. above
FCC Form 352-A October 21, 1985 Page 4
61
[ ? ]
[ ? ] NOTE: If battery operated, the batteries should be
replaced or recharged at regular intervals to preclude failure during
operations.
Above marking specifications in accordance to paragraphs A,B,C,H,I of FCC Form
715A (Day) and paragraphs 3,6,13,21,22 of FCC Form 715 (Night) - Dual Lighting.
Paragraph A modified to require use of L-865 medium intensity lights in lieu of
L-856.
Special operating conditions or restrictions:
None Required
*** END OF AUTHORIZATION ***
FCC Form 352-A October 21, 1985 Page 5
62
SCHEDULE 6.12
NONCOMPETITION AGREEMENT
This NONCOMPETITION AGREEMENT is dated as of _____________ ____, 1996, by and
among Channel 46 of Boston, Inc., a Florida corporation ("Buyer"), Massachusetts
Redevelopment Limited Liability Company, a Delaware limited liability company
("Seller"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual (the "Principal" and together
with Seller, individually, a "Restricted Party" and collectively, the
"Restricted Parties").
R E C I T A L S:
A. Buyer and Seller have entered into an Asset Purchase Agreement
dated as of September 1996 (the "Purchase Agreement"), pursuant to which Buyer
agreed to purchase from Seller substantially all of the assets (the "Assets")
that are used or useful in the business and operation of television station
WHRC(TV), Norwell, Massachusetts (the "Station").
B. The Principal is a principal of Seller and will derive
substantial benefit from the closing of the Purchase Agreement.
C. The agreement of the Restricted Parties to deliver this
Noncompetition Agreement was a material inducement to Buyer in entering into
the Purchase Agreement, and the delivery of this Noncompetition Agreement by
the Restricted Parties was a condition to Buyer's obligation to purchase the
Assets.
D. Buyer, as the owner of the Station, desires to preclude the
Restricted Parties from competing against it during the term of this Agreement.
AGREEMENT
In consideration of the above recitals and the covenants and
agreements set forth in this Agreement, the parties agree as follows:
SECTION 1. COVENANT
Each Restricted Party hereby covenants and agrees that for a period of
three years after the date of this Agreement, neither such Restricted Party nor
any entity controlled by such Restricted Party (an "Affiliate") will, without
the prior written consent of Buyer, directly or indirectly, own, manage,
operate, join, control, or engage or participate in the ownership, management,
operation, or control of, or be connected as a shareholder, director, officer,
agent, partner, joint venturer, consultant, advisor, or otherwise with, or
render any
63
services to any business or organization any part of which engages in the
business of full power television broadcasting through any television
broadcasting station serving or proposing to serve all or any portion of the
counties served in whole or in part by the Station.
SECTION 2. COMPENSATION
As compensation for the covenant of the Restricted Parties not to
compete with Buyer, the parties have agreed to allocate $300,000 of the
Purchase Price payable under the Purchase Agreement to the covenant of the
Restricted Parties not to compete.
SECTION 3. ENFORCEABILITY; REMEDIES
3.1 Remedies. Each Restricted Party agrees that if such
Restricted Party or any Affiliate thereof engages or threatens to engage in any
activity that constitutes a violation of the provisions of this Agreement,
Buyer shall have the right and remedy to have the provisions of this Agreement
specifically enforced to the extent permitted by law by any court having
jurisdiction, it being acknowledged and agreed that any breach of this
Agreement would cause immediate irreparable injury to Buyer and that money
damages would not provide an adequate remedy at law for any breach. Such right
and remedy shall be in addition to, and not in lieu of, any other rights and
remedies available to Buyer at law or in equity.
3.2 Reformation. If any of the provisions or covenants contained
in this Agreement are held to be unenforceable in any jurisdiction because of
the duration or scope thereof, the court making such determination shall have
the power to reduce the duration and/or scope of the provision or covenant, and
the provision or covenant in its reduced form shall be enforceable; provided,
however, that the determination of such court shall not affect the
enforceability of this Agreement in any other jurisdiction.
SECTION 4. MISCELLANEOUS
4.1 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) delivered by personal delivery, or sent by commercial delivery
service or registered or certified mail, return receipt requested, (c) deemed
to have been given on the date of personal delivery or the date set forth in
the records of the delivery service or on the return receipt, and (d) addressed
as follows:
-2-
64
If to the Restricted Parties: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Massachusetts Redevelopment Limited
Liability Company
▇▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copies to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇, Scholer, Fierman, ▇▇▇▇ & Handler, L.L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
and
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Schnaeder, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
If to Buyer: Channel 46 of Boston, Inc.
14444 ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇▇ ▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & Tannenwald, P.C.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇., ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
4.1.
4.2 Benefit and Binding Effect. No party may assign this
Agreement without the prior written consent of the other party hereto. This
Agreement shall be binding upon and inure to the benefit of the parties and
their respective successors and permitted assigns.
4.3 Further Assurances. The parties shall execute any other
documents that may be necessary and desirable to the implementation and
consummation of this Agreement.
4.4 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED,
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE
-3-
65
STATE OF FLORIDA (WITHOUT REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF).
4.5 Headings. The headings herein are included for ease of
reference only and shall not control or affect the meaning or construction of
the provisions of this Agreement.
4.6 Amendments. This Agreement cannot be amended, supplemented,
or changed except by an agreement in writing that makes specific reference to
this Agreement and which is signed by the party against which enforcement of
any such amendment, supplement, or modification is sought.
4.7 Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-4-
66
IN WITNESS WHEREOF, the parties hereto have duly executed this
Noncompetition Agreement as of the day and year first above written.
CHANNEL 46 OF BOSTON, INC.
By:
----------------------------
Name:
Title:
MASSACHUSETTS REDEVELOPMENT
LIMITED LIABILITY COMPANY
By:
----------------------------
Name:
Title:
--------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
67
Schedule 8.2(g)
Opinion of Seller's Counsel
Massachusetts Redevelopment Limited Liability Company attaches the
following opinion of its counsel:
[H. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ESQ. LETTERHEAD]
_____________, 1996
Channel 46 of Boston, Inc.
14444 ▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Mr. ▇▇▇▇▇ ▇▇▇▇
Re: Asset Purchase Agreement dated as of ______ ___, 1996 (the
"Purchase Agreement"), by and between Channel 46 of Boston,
Inc., a Florida corporation ("Buyer"), and Massachusetts
Redevelopment Limited Liability Company, a Delaware limited
liability company ("Seller").
Ladies and Gentlemen:
I have acted as counsel for Seller in connection with the transactions
contemplated by the Asset Purchase Agreement. This opinion is being delivered
to you pursuant to Section 8.2(g) of the Asset Purchase Agreement. All
capitalized terms not defined in this opinion shall have the meanings set forth
in the Asset Purchase Agreement.
In rendering this opinion, I have reviewed the following documents:
1. the Asset Purchase Agreement;
2. the ▇▇▇▇ of Sale of even date herewith from Seller to
Buyer;
3. the Assignment and Assumption Agreement of even date
herewith by and between Buyer and Seller;
68
Channel 46 of Boston, Inc.
[Date]
Page ____
4. the assignments of leasehold interest of even date
herewith, by and between Buyer and Seller; and
5. the Noncompetition Agreement of even date herewith by
and among Buyer, Seller and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
The documents listed in clauses 1 to 5 above shall be referred to herein as the
"Transaction Agreements."
In rendering this opinion, I have also reviewed such other documents,
certificates and records as I have deemed necessary or appropriate to render
this opinion. In my examination of documents and records I have assumed,
without investigation, the genuineness of all signatures, the legal capacity of
natural persons, the authenticity of all documents submitted to me as
originals, the conformity with originals of all documents submitted to me as
telecopied, certified, photostatic or reproduced copies and the authenticity of
all such documents.
With respect to questions of fact, I have relied, without independent
inquiry or verification by me, solely upon (a) the representations and
warranties set forth in the Asset Purchase Agreement, (b) representations of
officers of Seller and (c) certificates of public officials.
My opinion is limited to matters arising under the laws of the
Commonwealth of Pennsylvania, the Limited Liability Company Act of the State of
Delaware and the laws of the United States of America, including the
Communications Act of 1934 and the rules and regulations of the Federal
Communications Commission (the "FCC"), insofar as such laws apply. I note that
the Transaction Agreements by their terms provide that they are to be governed
by the laws of the State of Florida. My opinion in paragraph 3 is given as if
the Transaction Agreements were to be governed by the laws of Pennsylvania
rather than the laws of Florida. I express no opinion whatsoever as to any
other laws or regulations or as to laws relating to choice of law principles.
Based upon the foregoing, subject to the assumptions, limitations and
exceptions contained herein, I am of the opinion that:
1. Seller is a limited liability company duly organized,
validly existing and in good standing under the laws of Delaware, is
qualified to conduct business as a foreign limited liability company
in Massachusetts, and is in good standing under the laws of
Massachusetts. Seller has all requisite power and authority to
execute and deliver the Transaction Agreements and to perform and
comply with all of the terms, covenants, and conditions to be
performed and complied with by Seller thereunder.
69
Channel 46 of Boston, Inc.
[Date]
Page ___
2. The execution, delivery and performance of the
Transaction Agreements by Seller have been duly and validly authorized
by all necessary actions on the part of Seller and its members.
3. The Transaction Agreements have been duly executed
and delivered by Seller and each Transaction Agreement constitutes
Seller's legal, valid and binding obligation, enforceable against
Seller in accordance with its terms, except that such enforcement may
be subject to bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights generally and to limitations on
the availability of equitable remedies.
4. The execution, delivery and performance by Seller of
the Transaction Agreements and the transactions contemplated thereby
will not violate, conflict with or cause a default under: (a) any
provision of Seller's organizational documents; (b) any statute, law,
regulation or rule or any judgment, decree or order binding upon
Seller; or (c) to the best of my knowledge, any contract, agreement or
commitment to which Seller is a party or by which it is bound.
5. To my knowledge, there is no judgment, award, order,
writ, injunction, arbitration decision or decree materially and
adversely affecting the conduct of the business of the Station or the
Assets, or any litigation, proceeding or investigation pending or
threatened against Seller relating to the Station or to the
transactions contemplated by the Purchase Agreement, except as
specifically identified in Attachment A hereto and except for
proceedings of general applicability to the broadcast industry.
6. Based on my review of information publicly available
at the FCC and my internal files and records and inquiry to officers
of Seller, I conclude that (a) Seller is the holder of the FCC License
and Construction Permit listed in Schedule 3.5 of the Asset Purchase
Agreement; (b) said FCC License and Construction Permit are in full
force and effect; (c) said FCC License and Construction Permit
comprise all of the licenses, permits, and other authorizations
required by the FCC for the lawful conduct of the business and
operations of the Station in the manner and to the full extent they
must be conducted, and (d) the FCC License and Construction Permit are
not subject to any condition or requirement, other than conditions or
requirements that appear on the face of said authorizations or pertain
to the authorizations under generally applicable rules or policies of
the FCC. I am not aware of any act or omission by Seller that could
reasonably be expected to result in the refusal by the FCC to renew
the FCC License for a full term in the normal course upon the timely
filing of a complete and properly executed application for renewal and
the payment of any applicable filing fee.
70
Channel 46 of Boston, Inc.
[Date]
Page ___
7. To the best of my knowledge based on my review of
information publicly available at the FCC and my internal files and
records and inquiry to the officers of Seller, the construction,
ownership and operation of the Station are in compliance in all
material respects with the FCC License and Construction Permit and
with applicable law.
8. All FCC Consents required to assign the aforesaid FCC
License and Construction Permit hereto from Seller to Buyer have been
obtained, are in full force and effect and have become Final Orders.
9. The ▇▇▇▇ of Sale, assignments of leasehold interests
and the Assignment and Assumption Agreement delivered by Seller to
Buyer at Closing are in form sufficient to convey to Buyer good and
marketable title to the Assets free and clear of all claims,
liabilities, security interests, mortgages, liens and other
encumbrances.
The information set forth herein is as of the date hereof. I assume
no obligation to advise you of changes which thereafter may be brought to my
attention. My opinion is based on statutory and judicial decisions in effect
at the date hereof, and I do not opine with respect to any law, regulation,
rule or governmental policy which may be enacted or adopted after the date
hereof, nor assume any responsibility to advise you of future changes in my
opinion.
This letter is solely for your information in connection with the
consummation of the transactions contemplated by the Asset Purchase Agreement
and is not to be quoted in whole or in part or otherwise referred to in any of
your financial statements or public releases, nor is it to be filed with any
governmental agency or other person without the prior written consent of the
undersigned.
Very truly yours,
H. ▇▇▇▇▇▇ ▇▇▇▇▇▇, III
Attorney at Law
71
Schedule 8.3(d)
Opinion of Buyer's FCC Counsel
[▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & TANNENWALD, P.C. LETTERHEAD]
_____________________, 1996
Massachusetts Redevelopment
Limited Liability Company
▇▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
Re: Asset Purchase Agreement dated as of September __. 1996, by
and between Channel 46 of Boston, Inc. and
Massachusetts Redevelopment Limited Liability Company
Ladies and Gentlemen:
We have acted as communications counsel for Channel 46 of Boston,
Inc., a Florida corporation ("Buyer"), in connection with the Asset Purchase
Agreement dated September __, ▇▇▇▇, (▇▇▇ "▇▇▇▇▇▇▇▇ Agreement"), by and between
Buyer and Massachusetts Redevelopment Limited Liability Company ("Seller"),
providing for the sale by Seller and the purchase by Buyer of the Assets of
Television Station WHRC(TV), Norwell, Massachusetts (the "Station"). This
opinion letter is provided to you in accordance with Section 8.3(d) of the
Purchase Agreement. Capitalized terms used but not defined herein have the
meanings given to them in the Purchase Agreement.
For purposes of this opinion, we have made such examination of the
Communications Act of 1934, as amended (the "Communications Act"), and the
published rules, regulations, orders and policies (collectively, the "Rules")
of the Federal Communications Commission (the "FCC") as we have deemed
necessary for this opinion. We have also examined copies of the following
documents:
1. An executed copy of the Purchase Agreement.
2. An executed copy of the Assignment and Assumption Agreement.
3. An executed copy of the Officer's Certificate of Buyer.
72
Massachusetts Redevelopment
Limited Liability Company
__________________, 1996
Page 2
With respect to certain factual matters relating to this opinion, we
have relied upon the above-mentioned documents and certificates, an examination
on ________________________, 1996 of public files of the FCC available on that
date, and pertinent statements and representations of members of the staff of
the FCC relating to the Station. We have not, except as specifically mentioned
above, made any independent review or investigation of factual or other
matters, including the organization, existence, good standing assets, business
or affairs of the Buyer.
In our examination of the Purchase Agreement and the aforesaid
certificates, records, documents, and agreements, we have assumed the
genuineness of all signatures, the accuracy, completeness and authenticity of
all documents submitted to us, the conformity with the original documents of
all documents submitted to us as certified, telecopied, photostatic or
reproduced copies, and the authenticity of all such latter documents. We also
have assumed the accuracy, completeness and authenticity of the foregoing
certifications of corporate officers and statements of fact, on which we are
relying, and have made no independent investigations thereof. We have not
verified the manner in which the Station is now being operated, claim no
expertise in that area and, therefore, render no opinion with respect to
technical matters.
For purposes of this opinion letter, we have assumed that (i) the
Buyer has all requisite power and authority under all applicable laws,
regulations and governing documents to enter into, execute, deliver and perform
its obligations under the Purchase Agreement; (ii) the Buyer has duly
authorized, executed and delivered the Purchase Agreement; (iii) the Buyer is
validly existing and in good standing under the laws of the State of Florida
and is authorized to conduct business in the State of Massachusetts; and (iv)
the Purchase Agreement constitutes a valid and binding obligation of the Buyer,
enforceable against Buyer in accordance with its terms.
As used in this opinion letter, the phrase "to counsel's knowledge"
means the actual knowledge (that is, the conscious awareness of facts or other
information) of lawyers in the firm who have given substantive legal attention
to representation of the Buyer in connection with the Purchase Agreement. In
rendering the following opinions we have relied as to factual matters (but not
as to legal conclusions) without independent investigation, upon the
representations, warranties and certifications made by the Buyer in or pursuant
to the Purchase Agreement and upon the Officer's Certificate identified in
paragraph 3 above, and no information has come to our attention which would
give us knowledge of the inaccuracy of such facts. This opinion is based as to
matters of law solely on the Communications Act and the Rules, and we express
no opinion as to any other laws, statutes, rules, regulations or ordinances.
Our opinion does not address the effect, if any, of any pending legislation or
of any pending proceedings before the FCC, or any proceeding before a court to
which the Seller is not a party. This opinion is given, and all statements
herein are made, in the context of the foregoing.
73
Massachusetts Redevelopment
Limited Liability Company
________________, 1996
Page 3
Based on the foregoing, and in reliance thereon, and subject to the
assumptions, limitations, qualifications and exceptions set forth herein, we
are of the opinion that:
1. The FCC has granted its consent to the assignment to Buyer of
the FCC Licenses set forth on Attachment A hereto and such
consent remains in full force and effect and has become a
Final Order.
We assume no obligation to advise you of any changes in the foregoing
subsequent to the delivery of this opinion. This opinion has been prepared
solely for use by Seller in connection with the closing under the Purchase
Agreement on the date of this letter, and should not be quoted in whole or in
part or otherwise be referred to, or be filed with or furnished to any
governmental agency or other person or entity, without the prior written
consent of this firm.
Very truly yours,
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & TANNENWALD, P.C.
By:
--------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President
74
Schedule 8.3(d)
Buyer's Opinion
_________________, 1996
Massachusetts Redevelopment
Limited Liability Company
▇▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, President
Re: Asset Purchase Agreement dated as of September 1996 (the
"Purchase Agreement"), by and between Channel 46 of Boston,
Inc., a Florida corporation ("Buyer"), and Massachusetts
Redevelopment Limited Liability Company ("Seller").
Ladies and Gentlemen:
We have acted as special counsel for Buyer in connection with the
transactions contemplated by the Purchase Agreement. This opinion is being
delivered to you pursuant to Section 8.3(d) of the Purchase Agreement. All
capitalized terms not defined in this opinion shall have the meanings set forth
in the Purchase Agreement.
In rendering this opinion, we have reviewed the following documents:
1. the Purchase Agreement;
2. the Assignment and Assumption Agreement, of even date
herewith, by and between Buyer and Seller (the "Assumption
Agreement" and collectively with the Purchase Agreement, the
"Transaction Agreements");
3. a certificate dated as of ______________, 1996 from the
Secretary of State of Florida relating to the good standing of
Buyer (the "Good Standing Certificate");
4. the Articles of Incorporation and the Bylaws of Buyer, each in
the form certified to us by the Secretary of Buyer to be true
and complete and in effect on the date of this opinion; and
75
Massachusetts Redevelopment
Limited Liability Company
___________________1996
Page 2
5. resolutions of the Board of Directors of Buyer certified to us
by the Secretary of Buyer to be true and complete, to have
been duly adopted by the Board of Directors of Buyer, and to
be in full force and effect (without having been modified or
rescinded) on the date of this opinion.
In rendering this opinion, we have also reviewed such other documents,
certificates and records as we have deemed necessary or appropriate to render
this opinion. In our examination of documents and records, we have assumed,
without investigation, the genuineness of all signatures, the legal capacity of
natural persons, the authenticity of all documents submitted to us as
originals, the conformity with originals of all documents submitted to us as
telecopied, certified, photostatic or reproduced copies and the authenticity of
all such documents.
In rendering this opinion, we have also assumed that (i) that all
parties to the Transaction Agreements (other than Buyer) are duly organized,
validly existing, and in good standing under the laws of their respective
jurisdictions of organization and have the requisite power to enter into and
perform such Transaction Agreements, (ii) the execution and delivery of the
Transaction Agreements have been duty authorized by all necessary action and
proceedings on the part of all parties thereto other than Buyer, (iii) the
Transaction Agreements have been duly executed and delivered by all parties
thereto other than Buyer, and (iv) the Transaction Agreements constitute legal,
valid, binding and enforceable obligations of all parties thereto other than
Buyer.
With respect to questions of fact, we have relied, without independent
inquiry or verification by us, solely upon (a) the representations and
warranties set forth in the Purchase Agreement, (b) representations of officers
of Buyer and (c) certificates of public officials.
This opinion is limited to the law of the District of Columbia and the
Florida Business Corporation Act, insofar as such laws apply (collectively,
Applicable Law"), except that Applicable Law includes only those laws and
regulations that a lawyer exercising customary professional diligence would
reasonably recognize as being directly applicable to the transactions
contemplated by the Transaction Agreements and excludes those set forth in
Section 19 of the Legal Opinion Accord of the American Bar Association Section
of Business Law (1991). We do not purport to be experts in the laws of the
State of Florida, nor are we familiar with judicial
76
Massachusetts Redevelopment
Limited Liability Company
_______________________1996
Page 3
interpretations of the laws of Florida or the Florida Business Corporation Act.
We have reviewed the text of the Florida Business Corporation Act and applied
it to the transactions described herein in light of our knowledge of the law of
other jurisdictions. We note that the Transaction Agreements by their terms
provide that they are to be governed by the laws of the State of Florida. Our
opinion in paragraph 3 is given as if the Transaction Agreements were to be
governed by the laws of the District of Columbia rather than the laws of the
State of Florida. We express no opinion as to conflicts of law rules, or the
laws of any states or jurisdictions other than as specified above. Additional
limitations are set forth in the text of the opinion.
Based upon the foregoing, subject to the assumptions, limitations and
exceptions contained herein, we are of the opinion that:
1. Based solely upon a review of the Good Standing Certificate,
Buyer is a corporation duly organized, validly existing and in good standing
under the laws of the State of Florida. Buyer has all requisite corporate
power and authority under the Florida Business Corporation Act, its Articles of
Incorporation and its Bylaws to execute and deliver the Transaction Agreements
and to perform and comply with all of the terms, covenants, and conditions to
be performed and complied with by them.
2. The execution, delivery and performance of the Transaction
Agreements by Buyer have been duly and validly authorized by all corporate
actions required to be taken by Buyer under the Florida Business Corporation
Act, Buyer's Articles of Incorporation and Buyer's Bylaws.
3. The Transaction Agreements have been duly executed and
delivered by Buyer and constitute its legal, valid and binding obligation,
enforceable against Buyer in accordance with their terms, except that (a) such
enforcement may be subject to bankruptcy, fraudulent conveyance, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally, and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
4. The execution, delivery and performance by Buyer of the
Transaction Agreements and the transactions contemplated thereby will not
violate or conflict with any provision of Buyer's Articles of Incorporation and
By-Laws.
77
Massachusetts Redevelopment
Limited Liability Company
_______________________, 1996
Page 4
The information set forth herein is as of the date hereof. We assume
no obligation to advise you of changes which may thereafter may be brought to
our attention. Our opinions are based on statutory provisions and judicial
decisions in effect at the date hereof, and we do not opine with respect to any
law, regulation, rule or governmental policy which may be enacted or adopted
after the date hereof, nor assume any responsibility to advise you of future
changes in our opinions.
This letter is solely for your information in connection with the
consummation of the transactions contemplated by the Purchase Agreement and is
not to be quoted in whole or in part or otherwise referred to in any of your
financial statements or public releases, nor is it to be filed with any
governmental agency or other person without the prior written consent of a
member of this firm. This opinion may not be relied upon by any person or
entity other than the person to whom it is addressed.
Very truly yours,
[Buyer's Counsel]
By:
-----------------------------------