ASSET PURCHASE AGREEMENT
BY AND AMONG
TUSCALOOSA BROADCASTING, INC.,
WPTZ LICENSEE, INC.,
WNNE LICENSEE, INC.
AS SELLERS
AND
STC BROADCASTING OF VERMONT, INC.
AS BUYER
DATED AS OF FEBRUARY 3, 1998
TABLE OF CONTENTS
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ARTICLE 1. DEFINITIONS AND REFERENCES........................................2
ARTICLE 2. SALE AND PURCHASE OF ASSETS.......................................2
2.1. Asset Sale and Purchase of Assets.................................2
2.1.1. FCC Licenses............................................3
2.1.2. Real and Leased Property Interests......................3
2.1.3. Tangible Personal Property..............................3
2.1.4. Intellectual Property...................................4
2.1.5. Program Contracts.......................................4
2.1.6. Trade-out Agreements....................................4
2.1.7. Broadcast Time Sales Agreement..........................4
2.1.8. Network Affiliation Agreements..........................4
2.1.9. Operating Contracts.....................................5
2.1.10. Vehicles................................................5
2.1.11. Files and Records.......................................5
2.1.12. Auxiliary Facilities....................................5
2.1.13. Permits and Licenses....................................5
2.1.14. Goodwill................................................5
2.1.15. Other Assets............................................6
2.2. Excluded Assets...................................................6
2.2.1. Cash....................................................6
2.2.2. Accounts Receivable.....................................6
2.2.3. Personal Property Disposed Of...........................6
2.2.4. Insurance...............................................6
2.2.5. Employee Plans and Assets...............................7
2.2.6. Right to Tax Refunds....................................7
2.2.7. Certain Books and Records...............................7
2.2.8. Third-Party Claims......................................7
2.2.9. Rights Under this Agreement and the Heritage Agreement..7
2.2.10. Names...................................................7
2.2.11. Deposit and Prepaid Expenses............................7
2.2.12. WFFF Licenses...........................................7
2.2.13. Miscellaneous Excluded Assets...........................8
2.3. Escrow Deposit....................................................8
2.4. Purchase Price....................................................8
2.5. Payment of Purchase Price.........................................8
2.6. Proration Amount..................................................8
TABLE OF CONTENTS (continued)
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2.7. Allocation of Base Purchase Price................................10
2.8. Assumption of Liabilities........................................11
ARTICLE 3. REPRESENTATIONS AND WARRANTIES BY SELLERS........................12
3.1. Organization and Standing........................................12
3.2. Authorization....................................................12
3.3. Compliance with Laws.............................................12
3.4. Consents and Approvals; No Conflicts.............................13
3.5. Financial Statements; Undisclosed Liabilities....................13
3.6. Absence of Certain Changes or Events.............................14
3.7. Absence of Litigation............................................14
3.8. Assets...........................................................14
3.9. FCC Matters......................................................15
3.10. Real Property....................................................15
3.11. Intellectual Property............................................16
3.12. Station Contracts................................................17
3.13. Taxes............................................................17
3.14. Employee Benefit Plans...........................................18
3.15. Labor Relations..................................................20
3.16. Environmental Matters............................................21
3.17. Insurance........................................................21
3.18. Reports..........................................................21
ARTICLE 4. REPRESENTATIONS AND WARRANTIES BY BUYER..........................22
4.1. Organization and Standing........................................22
4.2. Authorization....................................................22
4.3. Consents and Approvals; No Conflicts.............................22
4.4. Availability of Funds............................................23
4.5. Qualification of Buyer...........................................23
4.6. WARN Act.........................................................24
4.7. No Outside Reliance..............................................24
4.8. Interpretation of CertainProvisions..............................24
ARTICLE 5. PRE-CLOSING FILINGS..............................................25
5.1. Applications for FCC Consent.....................................25
5.2. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇................................................25
5.3. Non-Required Actions.............................................25
ARTICLE 6. COVENANTS AND AGREEMENTS OF SELLERS..............................25
6.1. Negative Covenants...............................................25
6.1.1. Dispositions; Mergers..................................26
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TABLE OF CONTENTS (continued)
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6.1.2. Accounting Principles and Practices....................26
6.1.3. Trade-out Agreements...................................26
6.1.4. Broadcast Time Sales Agreements........................26
6.1.5. Network Affiliation Agreements and LMAs................26
6.1.6. Additional Agreements..................................26
6.1.7. Breaches...............................................27
6.1.8. Employee Matters.......................................27
6.1.9. Actions Affecting FCC Licenses.........................27
6.1.10. Programming............................................27
6.1.11. Encumbrances...........................................28
6.1.12. Transactions With Affiliates...........................28
6.2. Affirmative Covenants............................................28
6.2.1. Preserve Existence.....................................28
6.2.2. Normal Operations......................................28
6.2.3. Maintain FCC Licenses..................................29
6.2.4. Network Affiliation....................................29
6.2.5. Station Contracts......................................29
6.2.6. Taxes..................................................29
6.2.7. Access.................................................29
6.2.8. Insurance..............................................30
6.2.9. Financial Statements...................................30
6.2.10. Consents...............................................31
6.2.11. Corporate Action.......................................32
6.2.12. Environmental Audit....................................32
6.2.13. Heritage Agreement.....................................32
6.3. Confidentiality..................................................32
6.4. Heritage Acquisition.............................................33
ARTICLE 7. COVENANTS AND AGREEMENTS OF BUYER................................33
7.1. Confidentiality..................................................33
7.2. Corporate Action.................................................34
7.3. Access...........................................................34
7.4. Collection of Receivables........................................35
ARTICLE 8. MUTUAL COVENANTS AND UNDERSTANDINGS OF SELLERS AND BUYER........35
8.1. Possession and Control...........................................35
8.2. Risk of Loss.....................................................35
8.3. Public Announcements.............................................36
8.4. Employee Matters.................................................37
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8.5. Disclosure Schedules.............................................38
8.6. Bulk Sales Laws..................................................39
8.7. Tax Matters......................................................39
8.8. Preservation of Books and Records................................39
8.9. TBA Agreement....................................................39
ARTICLE 9. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER....................40
9.1. Closing Under the Heritage Agreement.............................40
9.2. Representations and Covenants....................................40
9.3. No Transmission Defects..........................................40
9.4. Delivery of Documents............................................41
9.5. FCC Order........................................................41
9.6. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇................................................41
9.7. Legal Proceedings................................................41
ARTICLE 10. CONDITIONS PRECEDENT TO OBLIGATION OF SELLERS...................41
10.1. Closing Under the Heritage Agreement.............................41
10.2. Representations and Covenants....................................42
10.3. Delivery by Buyer................................................42
10.4. FCC Order........................................................42
10.5. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇................................................42
10.6. Legal Proceedings................................................42
ARTICLE 11. CLOSING; NON-LICENSE TRANSFER....................................43
11.1. Closing..........................................................43
11.2. Non-License Transfer.............................................44
11.3. Time and Place of Non-License Transfer and Closing...............44
11.4. Deliveries by Sellers............................................44
11.4.1. Agreements and Instruments.............................44
11.4.2. Consents...............................................45
11.4.3. Certified Resolutions..................................45
11.4.4. Officers' Certificates.................................45
11.4.5. Good Standing Certificates.............................45
11.5. Deliveries by Buyer..............................................46
11.5.1. Purchase Price Payment.................................46
11.5.2. Agreements and Instruments.............................46
11.5.3. Certified Resolutions..................................46
11.5.4. Officers' Certificate..................................46
ARTICLE 12. SURVIVAL; INDEMNIFICATION.........................................46
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TABLE OF CONTENTS (continued)
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12.1. Survival of Representations......................................47
12.2. Indemnification By Sellers.......................................47
12.3. Indemnification By Buyer.........................................47
12.4. Limitations on Indemnification...................................48
12.5. Conditions of Indemnification....................................49
12.6. Cure of Breach...................................................50
ARTICLE 13. TERMINATION......................................................51
13.1. Termination by the Parties.......................................51
13.2. Automatic Termination............................................51
13.3. Effect ofTermination.............................................51
ARTICLE 14. REMEDIES.........................................................52
14.1. Default by Buyer.................................................52
14.2. Liquidated Damages...............................................52
14.3. Specific Performance.............................................52
ARTICLE 15. GENERAL PROVISIONS...............................................53
15.1. Additional Actions, Documents and Information....................53
15.2. Brokers..........................................................53
15.3. Expenses and Taxes...............................................53
15.4. Notices..........................................................54
15.5. Waiver...........................................................56
15.6. Benefit and Assignment...........................................56
15.7. Entire Agreement; Amendment......................................56
15.8. Severability.....................................................57
15.9. Headings.........................................................57
15.10. Governing Law....................................................57
15.11. Signature in Counterparts........................................57
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SCHEDULES
Schedule 2.1.1 FCC Licenses
Schedule 2.1.2 Real Property Interests
Schedule 2.1.3 Tangible Personal Property
Schedule 2.1.5 Program Contracts
Schedule 2.1.6 Trade-out Agreements
Schedule 2.1.8 Network Affiliation Agreements
Schedule 2.1.9 Operating Contracts
Schedule 2.1.10 Vehicles
Schedule 2.2.13 Excluded Assets
Schedule 3.4 Consents
Schedule 3.6 Absence of Certain Changes or Events
Schedule 3.7 Litigation
Schedule 3.8 Encumbrances on Assets
Schedule 3.9 FCC Matters
Schedule 3.14 Employee Benefit Plans
Schedule 3.15 Employee Matters
Schedule 3.16 Environmental Matters
Schedule 3.17 Insurance
Schedule 4.5.1 Buyer Stations
Schedule I License Assets
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EXHIBITS
EXHIBIT A Form of ▇▇▇▇ of Sale and Assignment of Assets
EXHIBIT B Form of Assignment of FCC Licenses
EXHIBIT C Form of Assignment of Contracts and Leases
EXHIBIT D Form of Assumption Agreement
EXHIBIT E Form of TBA Agreement
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is entered into as of
this 3rd day of February, 1998, by and among STC BROADCASTING OF VERMONT, INC.,
a Delaware corporation ("Buyer"), TUSCALOOSA BROADCASTING, INC., a Maryland
corporation ("Tuscaloosa"), WPTZ LICENSEE, INC., a Maryland corporation ("WPTZ
Licensee"), and WNNE LICENSEE, INC., a Maryland corporation ("WNNE Licensee")
(Tuscaloosa, WPTZ Licensee and WNNE Licensee, collectively, the "Sellers" and,
individually a "Seller").
WHEREAS, pursuant to an Asset Purchase Agreement dated as of July 16,
1997 (the "Heritage Agreement"), by and among ▇▇▇▇▇▇▇▇ Broadcast Group, Inc., a
Maryland corporation ("▇▇▇▇▇▇▇▇") and certain indirect subsidiaries of Heritage
Media Corporation, a Delaware corporation ("HMC"), ▇▇▇▇▇▇▇▇ has agreed to buy,
and such subsidiaries have agreed to sell, certain broadcast stations owned,
controlled or operated by such subsidiaries, including (i) television broadcast
station WPTZ-TV, Channel ▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ("▇▇▇▇"); (ii) certain assets
and rights relating to television broadcast station WFFF-TV, Channel 44,
Burlington, Vermont ("WFFF"); and (iii) television broadcast station WNNE-TV,
Channel 31, Hartford, Vermont ("WNNE") (WPTZ, WFFF and WNNE each, individually,
a "Station" and, collectively, the "Stations") (such subsidiaries of HMC
transferring assets related to the Stations pursuant to the Heritage Agreement
are referred to herein as the "Heritage Subsidiaries");
WHEREAS, each Seller is a wholly-owned indirect subsidiary of ▇▇▇▇▇▇▇▇,
and ▇▇▇▇▇▇▇▇ has assigned to Sellers ▇▇▇▇▇▇▇▇'▇ rights to acquire the Stations,
subject to and in accordance with the terms and conditions of the Heritage
Agreement;
WHEREAS, pursuant to a Transfer Agreement dated as of May 2, 1997,
among ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (the "Trustee"), HMC, The News Corporation Limited, a
South Australia corporation and Heritage Media Services, Inc., a Iowa
corporation and wholly-owned subsidiary of HMC ("HMSI"), on August 20, 1997,
HMSI transferred to the Trustee to hold in trust for the benefit of HMSI, all of
the outstanding capital stock of HMI Broadcasting Corp., a Delaware corporation
and owner of all of the outstanding capital stock of the Heritage Subsidiaries;
WHEREAS, pursuant to a guaranty given as of the date hereof by ▇▇▇▇▇▇▇▇
to Buyer, ▇▇▇▇▇▇▇▇ has guaranteed to Buyer the prompt and complete performance
of the obligations of Sellers arising under this Agreement and the other Seller
Documents;
WHEREAS, Buyer is a wholly-owned indirect subsidiary of STC
Broadcasting, Inc., a Delaware corporation ("STC");
WHEREAS, pursuant to a guaranty given as of the date hereof by STC to
Sellers, STC has guaranteed to Sellers the prompt and complete performance of
the obligations of Buyer arising under this Agreement and the other Buyer
Documents;
WHEREAS, the parties hereto desire to enter into this Agreement to
provide for the sale, assignment and transfer by Sellers to Buyer of the assets
of the Stations, all subject to the terms described in this Agreement; and
WHEREAS, upon the satisfaction of certain conditions set forth herein,
the parties desire to enter into operating agreements pursuant to which Buyer
will commence operating the Stations, subject to compliance with all
requirements of the FCC.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the parties hereto hereby agree
as follows:
ARTICLE 1.
DEFINITIONS AND REFERENCES
Capitalized terms used herein without definition shall have the
respective meanings assigned thereto in Annex I attached hereto and incorporated
herein for all purposes of this Agreement (such definitions to be equally
applicable to both the singular and plural forms of the terms defined). Unless
otherwise specified, all references herein to "Articles" or "Sections" are to
Articles or Sections of this Agreement.
ARTICLE 2.
SALE AND PURCHASE OF ASSETS
2.1. ASSET SALE AND PURCHASE OF ASSETS.
Subject to the terms and conditions hereof and in reliance upon the
representations, warranties and agreements contained herein, Sellers shall sell,
assign, transfer, convey and deliver to Buyer free and clear of any Encumbrances
other than Permitted Encumbrances, and Buyer shall purchase, acquire, pay for
and accept from Sellers, all right, title and interest of Sellers in, to and
under all real, personal and mixed assets, rights, benefits and privileges, both
tangible and
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intangible, owned, leased, used or useful by Sellers in connection with the
business and operations of the Stations (collectively, the "Assets"); but
excluding the Excluded Assets described in Section 2.2.
The Assets shall include, without limitation, all right, title and
interest of Sellers in, to and under the following:
2.1.1. FCC LICENSES.
All licenses, permits and other authorizations issued by the
FCC to any Seller or any Heritage Subsidiary for the operation of the Stations
(the "FCC Licenses"), including without limitation those listed in Schedule
2.1.1, and all applications therefor, together with any renewals, extensions or
modifications thereof and additions thereto.
2.1.2. REAL AND LEASED PROPERTY INTERESTS.
(a) All the real property owned by any Seller or any Heritage
Subsidiary including, without limitation, all land, fee interests, easements and
other interests of every kind and description in real property, buildings,
structures, fixtures, appurtenances, towers and antennae, and other improvements
thereon owned by any Seller or any Heritage Subsidiary used or useful in
connection with the business and operations of the Stations ("Real Property"),
including, without limitation, all of those items listed in Schedule 2.1.2.
(b) All the real property leasehold interests of any Seller
or any Heritage Subsidiary including, without limitation, leases and subleases
of any land, easements and other real property leasehold interests of every kind
and description in real property, buildings, structures, fixtures,
appurtenances, towers and antennae, and other improvements thereon leased by any
Seller or any Heritage Subsidiary in connection with the business and operations
of the Stations ("Leased Property"), including, without limitation, all of those
items listed in Schedule 2.1.2.
2.1.3. TANGIBLE PERSONAL PROPERTY.
All of the furniture, fixtures, furnishings, machinery,
computers, equipment, inventory, spare parts, supplies, office materials and
other tangible property of every kind and description owned, leased or used by
any Seller or any Heritage Subsidiary in connection with the business and
operations of the Stations, together with any replacements thereof and additions
thereto made before the Closing Date, and less any retirements or dispositions
thereof made before the Closing Date in the Ordinary Course of Business,
including, without limitation, those items which have a book value in excess of
Five Thousand Dollars ($5,000),
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all of which as of the date of the Heritage Agreement are set forth and
identified in Schedule 2.1.3.
2.1.4. INTELLECTUAL PROPERTY.
All of the service marks, copyrights, franchises, trademarks,
trade names, jingles, slogans, logotypes and other similar intangible assets
maintained, owned, leased or used by any Seller or any Heritage Subsidiary in
connection with the business and operations of the Stations (including any and
all applications, registrations, extensions and renewals relating thereto) (the
"Intellectual Property"), and all of the rights, benefits and privileges
associated therewith including, without limitation, the right to use the call
letters for the Stations.
2.1.5. PROGRAM CONTRACTS.
The program licenses and contracts under which any Seller or
Heritage Subsidiary is authorized to broadcast programs on the Stations
(collectively the "Program Contracts") including, without limitation, (a) all
program (cash and non-cash) licenses and contracts listed on Schedule 2.1.5, and
(b) any other such program contracts that are entered into between the date of
this Agreement and the Closing Date in accordance with the terms of this
Agreement.
2.1.6. TRADE-OUT AGREEMENTS.
All contracts and agreements (excluding Program Contracts)
pursuant to which any Seller or Heritage Subsidiary has sold, traded or bartered
commercial air time on the Stations in consideration for any property or
services in lieu of or in addition to cash (collectively, the "Trade-out
Agreements") including, without limitation, those set forth and identified in
Schedule 2.1.6.
2.1.7. BROADCAST TIME SALES AGREEMENT.
All contracts and agreements pursuant to which any Seller or
Heritage Subsidiary has sold commercial air time on the Stations for cash
(collectively the "Time Sales Agreements").
2.1.8. NETWORK AFFILIATION AGREEMENTS.
All network affiliation agreements or other contracts of the
Stations with any television broadcast network (collectively, the "Network
Agreements") including, without limitation, those listed on Schedule 2.1.8.
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2.1.9. OPERATING CONTRACTS.
All other operating contracts and agreements relating to the
business or operations of the Stations, all material such contracts as of the
date of the Heritage Agreement being listed on Schedule 2.1.9 (including,
without limitation, any LMA, all employment agreements and talent contracts, all
leases and subleases relating to the Leased Property, all agreements relating to
any motor vehicles, and all national and local advertising representation
agreements for the Stations), together with all contracts and agreements that
are entered into between the date of the Heritage Agreement and the Closing Date
in accordance with the terms of this Agreement (collectively, the "Operating
Contracts" and together with the Program Contracts, Trade-out Agreements, Time
Sales Agreements and the Network Agreements, the "Station Contracts").
2.1.10. VEHICLES.
All automotive equipment and motor vehicles maintained,
owned, leased or otherwise used by any Seller or any Heritage Subsidiary in
connection with the business and operations of the Stations, including, without
limitation, those set forth and described in Schedule 2.1.10.
2.1.11. FILES AND RECORDS.
All engineering, business and other books, papers, logs,
files and records pertaining to the business and operations of the Stations, but
not the organizational documents and records described in Section 2.2.7.
2.1.12. AUXILIARY FACILITIES.
All translators, earth stations, and other auxiliary
facilities, and all applications therefor owned, leased or otherwise used or
useful by any Seller or any Heritage Subsidiary in connection with the business
and operations of the Stations.
2.1.13. PERMITS AND LICENSES.
All permits, approvals, orders, authorizations, consents,
licenses, certificates, franchises, exemptions of, or filings or registrations
with, any court or Governmental Authority (other than the FCC) in any
jurisdiction, which have been issued or granted to or are owned or used or
useful by any Seller or any Heritage Subsidiary in connection with the business
and operations of the Stations and all pending applications therefor.
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2.1.14. GOODWILL.
The business of the Stations as a "going concern", customer
relationships and goodwill.
2.1.15. OTHER ASSETS.
All other real, personal and mixed assets, rights, benefits
and privileges, both tangible and intangible, acquired by Sellers pursuant to
the Heritage Agreement that are owned, leased, used or useful in connection with
the business and operations of the Stations.
2.2. EXCLUDED ASSETS.
Notwithstanding anything to the contrary in this Agreement, there shall
be excluded from the Assets and retained by Sellers, to the extent in existence
as of the Closing Date, the following assets (collectively, the "Excluded
Assets").
2.2.1. CASH.
All cash, cash equivalents or deposits held by Sellers, all
interest payable in connection with any such cash, cash equivalents or deposits
or short term investments, bank balances and rights in and to bank accounts,
marketable and other securities of Sellers.
2.2.2. ACCOUNTS RECEIVABLE.
All Accounts Receivable arising out of the business and
operations of the Stations.
2.2.3. PERSONAL PROPERTY DISPOSED OF.
All tangible personal property disposed of or consumed in the
Ordinary Course of Business as permitted by this Agreement.
2.2.4. INSURANCE.
All contracts of insurance and all insurance plans and the
assets thereof.
2.2.5. EMPLOYEE PLANS AND ASSETS.
All Plans, Benefit Arrangements (except for any Station
Contracts, Proration Items or other matters which are specifically assumed by
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Buyer pursuant to the terms hereof), Qualified Plans and Welfare Plans and the
assets thereof.
2.2.6. RIGHT TO TAX REFUNDS.
Any and all claims of Sellers with respect to any Tax
refunds.
2.2.7. CERTAIN BOOKS AND RECORDS.
All of each Seller's (a) organizational documents, corporate
books and records (including minute books and stock ledgers and records), and
originals of account books of original entry, (b) duplicated copies of any
books, records, accounts, checks, payment records, Tax records (including
payroll, unemployment, real estate and other Tax records) and other similar
books, records and information relating to such Seller's operation of the
business of the Stations prior to the Closing Date, (c) records prepared by or
on behalf of such Seller in connection with the sale of the Stations, and (d)
records and documents relating to any Excluded Assets.
2.2.8. THIRD-PARTY CLAIMS.
All rights and claims of Sellers whether mature, contingent
or otherwise, against third parties relating to the Assets or the Stations,
whether in tort, contract, or otherwise.
2.2.9. RIGHTS UNDER THIS AGREEMENT AND THE HERITAGE AGREEMENT.
All rights of Sellers under or pursuant to this Agreement and
the Heritage Agreement or any other rights in favor of Sellers pursuant to the
other agreements contemplated hereby or thereby.
2.2.10. NAMES.
All rights to the names "▇▇▇▇▇▇▇▇ Broadcasting", "Heritage
Broadcasting" and "Heritage Media" and any logo or variation thereof and the
goodwill associated therewith.
2.2.11. DEPOSIT AND PREPAID EXPENSES.
All deposits and prepaid expenses of Sellers, provided,
however, any deposit and prepaid expenses shall be included in the Assets
conveyed pursuant hereto to the extent that any Seller receives a credit
therefor in the calculation of the Proration Amount pursuant to Section 2.6.
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2.2.12. WFFF LICENSES.
All licenses, permits and other authorizations issued by the
FCC for the operation of WFFF (all of such licenses, permits and authorizations
being issued to Champlain Valley Telecasting).
2.2.13. MISCELLANEOUS EXCLUDED ASSETS.
The assets listed and identified on Schedule 2.2.13.
2.3. ESCROW DEPOSIT.
For and in partial consideration of the execution and delivery of this
Agreement, simultaneously with the execution and delivery of this Agreement,
Buyer is depositing in escrow with the Deposit Escrow Agent an original,
irrevocable letter of credit (the "Letter of Credit") issued for the benefit of
Sellers and the Deposit Escrow Agent by The Chase Manhattan Bank for an amount
equal to SEVEN MILLION TWO HUNDRED THOUSAND DOLLARS ($7,200,000) (the
"Deposit"), such Letter of Credit to be held in accordance with the terms and
conditions of the Deposit Escrow Agreement. Buyer and Sellers shall cause the
Letter of Credit to be returned to Buyer on the Transfer Date.
2.4. PURCHASE PRICE.
For and in consideration of the conveyances and assignments of the
Assets described herein and in addition to the assumption of Liabilities as set
forth in Section 2.8, Buyer agrees to pay to Sellers, and Sellers agree to
accept from Buyer, an amount equal to SEVENTY TWO MILLION DOLLARS ($72,000,000)
(the "Base Purchase Price"), plus or minus (as the case may be) the Proration
Amount (collectively, the "Purchase Price").
2.5. PAYMENT OF PURCHASE PRICE.
2.5.1. At the Non-License Transfer pursuant to Section 11.2, Buyer
shall pay to Sellers by wire transfer of immediately available funds to an
account which will be identified by Sellers not less than two (2) days prior to
the Non-License Transfer Date, an amount equal to SEVENTY MILLION DOLLARS
($70,000,000) of the Base Purchase Price (plus or minus, as the case may be, the
Proration Amount).
2.5.2. The Purchase Price (less any amounts paid to Sellers at a
Non-License Transfer) shall be payable to Sellers at the Closing by wire
transfer of
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immediately available federal funds to an account which will be identified by
Sellers not less than two (2) days prior to the Closing Date.
2.6. PRORATION AMOUNT.
2.6.1. At least five (5) days prior to the Transfer Date, Sellers shall
make a good faith estimate of the adjustments to the Base Purchase Price
customary in television broadcast station transactions for Proration Items (the
"Proration Amount") to reflect that all Proration Items of the Stations shall be
apportioned between Buyer and Sellers in accordance with the principle that
Sellers shall receive the benefit of all revenues, refunds, deposits (other than
deposits for Program Contracts which shall be prorated based on the percentage
of the term that the film or program was aired on the Stations before the
Transfer Date and the percentage available to be aired on and after the Transfer
Date) and prepaid expenses, and shall be responsible for all expenses, costs and
liabilities allocable to the conduct of the businesses or operations of the
Stations for the period prior to the Transfer Date, and Buyer shall receive the
benefit of all revenues, refunds, deposits and prepaid expenses, and shall be
responsible for all expenses, costs and liabilities allocable to the conduct of
the businesses or operations of the Stations from and after the Transfer Date;
provided, however, that there shall be no adjustment or proration for any
negative or positive net trade balance except to the extent that the negative
trade balance (i.e., the amount by which the value of goods or services to be
received is less than the value of any advertising time remaining to be run) for
any Station exceeds Fifty Thousand Dollars ($50,000) as of the Transfer Date;
provided, further, that if there shall be a Non-License Transfer, then
prorations and adjustments for Proration Items related to the License Assets
shall be made pursuant to this Section 2.6 as of the Closing Date.
Determinations pursuant to this Section 2.6.1 shall be made in accordance with
generally accepted accounting principles consistently applied for the period
prior to the Non-License Transfer Date or the Closing Date, as applicable.
2.6.2 Within ninety (90) days after the Transfer Date, Buyer shall
deliver to Sellers in writing and in reasonable detail a good faith final
determination of the Proration Amount determined as of the Transfer Date under
Section 2.6.1 ("Final Proration Amount"). Sellers shall assist Buyer in making
such determination, and Buyer shall provide Sellers with reasonable access to
the properties, books and records relating to the Stations for the purpose of
determining the Final Proration Amount. Sellers shall have the right to review
the computations and workpapers used in connection with Buyer's preparation of
the Final Proration Amount. If Sellers disagree with the amount of the Final
Proration Amount determined by Buyer, Sellers shall so notify Buyer in writing
within thirty (30) days after the date of receipt of Buyer's Final Proration
Amount, specifying in detail any point of disagreement; provided, however, that
if Sellers fail to notify
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Buyer in writing of Sellers' disagreement within such thirty (30) day period,
Buyer's determination of the Final Proration Amount shall be final, conclusive
and binding on Sellers and Buyer. After the receipt of any notice of
disagreement, Buyer and Sellers shall negotiate in good faith to resolve any
disagreements regarding the Final Proration Amount. If any such disagreement
cannot be resolved by Sellers and Buyer within thirty (30) days after Buyer has
received notice from Sellers of the existence of such disagreement, Buyer and
Sellers shall jointly select a nationally recognized independent public
accounting firm (the "Accounting Firm"), to review Buyer's determination of the
Final Proration Amount and to resolve as soon as possible all points of
disagreement raised by Sellers. All determinations made by the Accounting Firm
with respect to the Final Proration Amount shall be final, conclusive and
binding on Buyer and Sellers. The fees and expenses of the Accounting Firm
incurred in connection with any such determination shall be shared one-half by
Buyer and one-half by Sellers.
If the Final Proration Amount is such that Buyer's payment of
the Proration Amount was an underpayment to Sellers, then Buyer shall pay such
underpayment amount to Sellers in cash, within two (2) business days following
the final determination of the Final Proration Amount. If the Final Proration
Amount is such that Buyer's payment of the Proration Amount was an overpayment
to Sellers, then Sellers shall pay such overpayment amount to Buyer in cash
within two (2) business days following the final determination of the Final
Proration Amount. Any amounts paid pursuant to this Section 2.6.2 shall be by
wire transfer of immediately available funds for credit to the recipient at a
bank account identified by such recipient in writing.
Buyer and Sellers agree that prior to the date of the final
determination of the Final Proration A mount pursuant to this Section 2.6.2 (by
the Accounting Firm or otherwise), neither party will destroy any records
pertaining to, or necessary for, the final determination of the Final Proration
Amount.
Each Seller hereby appoints ▇▇▇▇▇▇▇▇ as its attorney-in-fact
with power and authority to act for and on behalf of each Seller in connection
with all matters arising under this Section 2.6. Buyer shall be entitled to rely
on such appointment and treat ▇▇▇▇▇▇▇▇ as the duly appointed attorney-in-fact of
each Seller.
2.7. ALLOCATION OF BASE PURCHASE PRICE.
Each party hereto represents, warrants, covenants and agrees with each
other party hereto that the Base Purchase Price shall be allocated among the
classes of Assets for each Station as agreed by the parties within sixty (60)
days after the date hereof; provided, however, that if the parties are unable to
agree on such allocation within such sixty (60) day period, each party shall
have the right to
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allocate the classes of Assets for each Station based upon its own
determination. The parties agree, pursuant to Section 1060 of the Code, that the
Base Purchase Price shall be allocated in accordance with this Section 2.7, and
that all Tax returns and reports shall be filed consistent with such allocation.
The parties acknowledge and agree that the payment of the Purchase Price as
contemplated herein does not reflect the allocation among the classes of Assets
for each Station as determined pursuant to this Section 2.7. Notwithstanding any
other provision of this Agreement, the provisions of this Section 2.7 shall
survive the Closing Date without limitation.
2.8. ASSUMPTION OF LIABILITIES.
2.8.1. At the Non-License Transfer, Buyer shall assume, pay, perform,
discharge and indemnify and hold Sellers harmless from and against (a) all
Liabilities arising out of events occurring on or after the Non-License Transfer
Date related to the businesses or operations of the Stations by Buyer or Buyer's
ownership of the Non-License Assets, (b) all Liabilities arising on or after the
Non-License Transfer Date under the Station Contracts (including, without
limitation, Trade-out Agreements) pursuant to their terms (except for
Liabilities for any breaches thereunder by any Seller occurring prior to the
Non-License Transfer Date), (c) all Liabilities for which there is a downward
adjustment to the Base Purchase Price in connection with the calculation of the
Proration Amount, and (d) all Liabilities to employees of the Stations to be
assumed by Buyer in accordance with Section 8.4 hereof.
2.8.2. To the extent not assumed by Buyer at the Non-License Transfer,
at the Closing, Buyer shall assume, pay, perform, discharge and indemnify and
hold Sellers harmless from and against (a) all Liabilities arising out of events
occurring on or after the Closing Date related to the businesses or operations
of the Stations or Buyer's ownership of the Assets, (b) all Liabilities arising
out of events occurring on or after the Closing Date with respect to the FCC
Licenses, (c) all Liabilities arising on or after the Closing Date under the
Station Contracts (including, without limitation, Trade-out Agreements) pursuant
to their terms (except for Liabilities for any breaches thereunder by any Seller
occurring prior to the Closing Date), (d) all Liabilities for which there is a
downward adjustment to the Base Purchase Price in connection with the
calculation of the Proration Amount, and (e) all Liabilities to employees of the
Stations to be assumed by Buyer in accordance with Section 8.4 hereof.
2.8.3. Except for the Assumed Liabilities, Buyer assumes no other
Liabilities of any kind or description including, without limitation, any
obligations under or pursuant to the Heritage Agreement.
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ARTICLE 3.
REPRESENTATIONS AND WARRANTIES BY SELLERS
Each Seller, jointly and severally with the other Sellers, represents
and warrants to Buyer as follows:
3.1. ORGANIZATION AND STANDING.
Each Seller is duly organized, validly existing and in good standing
under the laws of the state of its organization and will at Closing be duly
qualified to do business and is in good standing in any jurisdiction where such
qualification is necessary in order to consummate the transactions contemplated
under this Agreement, except for those jurisdictions where the failure to be so
qualified would not, individually or in the aggregate, have a Material Adverse
Effect. Prior to the Transfer Date, each Seller will have the corporate power
and authority to own, lease and otherwise to hold and operate such Seller's
Assets, and to carry on the business of the Stations as now conducted. Each
Seller has the corporate power and authority to enter into and perform the terms
of this Agreement, the other Seller Documents and the transactions contemplated
hereby and thereby.
3.2. AUTHORIZATION.
The execution, delivery and performance of this Agreement and of the
other Seller Documents to which it is a party, and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action (none of which actions has been
modified or rescinded and all of which actions are in full force and effect).
This Agreement and the Deposit Escrow Agreement constitute, and upon execution
and delivery each other Seller Document to which it is a party will constitute,
valid and binding agreements and obligations of each Seller, enforceable against
it in accordance with their respective terms, except as the same may be limited
by bankruptcy, insolvency, reorganization, moratorium and other similar laws of
general applicability relating to or affecting creditors' rights generally and
by the application of general principles of equity.
3.3. COMPLIANCE WITH LAWS.
To the knowledge of Sellers and the Heritage Subsidiaries, Sellers and
the Heritage Subsidiaries are in material compliance with all Laws applicable to
the Assets and to the business and operations of the Stations. The Heritage
Subsidiaries have obtained and hold (and Sellers will obtain and hold prior to
the Transfer Date) all material permits, licenses and approvals (none of which
has been modified or rescinded and all of which are in full force and effect)
from all
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Governmental Authorities necessary in order to conduct the operations of the
Stations as presently conducted.
3.4. CONSENTS AND APPROVALS; NO CONFLICTS.
3.4.1. The execution and delivery of this Agreement, and the
performance of the transactions contemplated herein by Sellers, will not require
any consent, approval, authorization or other action by, or filing with or
notification to, any Person or Governmental Authority, except as follows: (a)
filings required under ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇, (b) consents to the assignment of the
FCC Licenses to Buyer by the FCC, (c) filings, if any, with respect to real
estate transfer taxes, (d) filings with the Securities and Exchange Commission,
and (e) certain of the Station Contracts may be assigned only with the consent
of third parties, as specified in Schedule 3.4.
3.4.2. Assuming all consents, approvals, authorizations and other
actions described in Section 3.4.1 have been obtained and all filings and
notifications described in Section 3.4.1 have been made, the execution, delivery
and performance of this Agreement and the other Seller Documents by each Seller
do not and will not (a) conflict with or violate in any material respect any Law
applicable to such Seller, the Assets or Stations or by which any of the Assets
or Stations is subject or affected, (b) conflict with or result in any breach of
or constitute a default (or an event which with notice or lapse of time or both
would become a default) of any Station Contract or other material agreement to
which such Seller is a party or by which such Seller is bound or to which any of
the Assets or Stations is subject or affected, (c) result in the creation of any
Encumbrance upon the Assets, or (d) conflict with or violate the organizational
documents of such Seller.
3.5. FINANCIAL STATEMENTS; UNDISCLOSED LIABILITIES.
3.5.1. Seller has provided to Buyer an unaudited balance sheet of the
Stations as of December 31, 1997 (the "Balance Sheet"), and an unaudited
statement of income and operating cash flows for the Stations for the twelve
(12) month period ending December 31, 1997. The financial statements referred to
in this Section 3.5.1 (a) present fairly in all material respects the financial
condition of the Stations as of the date and the results of operations and
operating cash flows for the period indicated, and (b) have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis (except that the financial statements referred to in this Section 3.5.1 do
not contain all footnotes and cash flow information from investing and financing
activities required under generally accepted accounting principles and are
subject to customary year-end adjustments).
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3.5.2. There exist no Liabilities of the Stations relating to, or
arising out of, the business or operations of the Stations, contingent or
absolute, matured or unmatured, known or unknown, except (a) as reflected on the
Balance Sheet and (b) for Liabilities that (i) were incurred after December 31,
1997 (the "Current Balance Sheet Date") in the Ordinary Course of Business, or
(ii) were not required to be reflected on the Balance Sheet in accordance with
generally accepted accounting principles applied on a consistent basis.
3.6. ABSENCE OF CERTAIN CHANGES OR EVENTS.
Except as set forth and described in Schedule 3.6, since the Current
Balance Sheet Date, there has been no Material Adverse Effect. Since the Current
Balance Sheet Date, the business of the Stations has been conducted in the
Ordinary Course of Business, and neither any Seller nor any Heritage Subsidiary
has (a) incurred any extraordinary loss of, or injury to, any of the Assets as
the result of any fire, explosion, flood, windstorm, earthquake, labor trouble,
riot, accident, act of God or public enemy or armed forces, or other casualty;
(b) incurred, or become subject to, any Liability, except current Liabilities
incurred in the Ordinary Course of Business; (c) discharged or satisfied any
Encumbrance or paid any Liability other than current Liabilities shown in the
Balance Sheet, current Liabilities incurred since the Current Balance Sheet Date
in the Ordinary Course of Business, and Liabilities (including, without
limitation, partial and complete prepayments) arising under any credit or loan
agreement between any Seller and its lenders; (d) mortgaged, pledged or
subjected to any Encumbrance any of the Assets (except for Permitted
Encumbrances); (e) made any material change in any method of accounting or
accounting practice; (f) sold, leased, assigned or otherwise transferred any of
the material Assets other than obsolete Assets which have been replaced by
suitable replacements; (g) made any material increase in compensation or
benefits payable to any employee other than in the Ordinary Course of Business;
or (h) made any agreement to do any of the foregoing.
3.7. ABSENCE OF LITIGATION.
Except as set forth on Schedule 3.7, as of the date of the Heritage
Agreement, there is no material or, to the knowledge of Sellers and the Heritage
Subsidiaries, immaterial action, suit, investigation, claim, arbitration,
litigation or similar proceeding, nor any order, decree or judgment pending or,
to the knowledge of Sellers and the Heritage Subsidiaries, threatened against
any Seller, any Heritage Subsidiary, the Assets or Stations before any
Governmental Authority.
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3.8. ASSETS.
Except for the Excluded Assets, the Assets include all of the assets or
property used or useful in the businesses of the Stations as presently operated
and all of the assets or property acquired by Sellers under the Heritage
Agreement. Except for leased or licensed Assets, the Heritage Subsidiaries are
(and Sellers will be prior to the Transfer Date) the owner of, and have (and
Sellers will have prior to the Transfer Date) good title to, the Assets free and
clear of any Encumbrances, except for Permitted Encumbrances (including, without
limitation, those items set forth on Schedule 3.8). At the Non-License Transfer
and the Closing, Buyer shall acquire good title to, and all right, title and
interest in and to the Assets being transferred at the Non-License Transfer and
the Closing, respectively, free and clear of all Encumbrances, except for the
Permitted Encumbrances.
3.9. FCC MATTERS.
The Heritage Subsidiaries hold (and Sellers will hold prior to the
Transfer Date) the FCC Licenses listed as held by the Heritage Subsidiaries on
Schedule 2.1.1. Such FCC Licenses constitute all of the licenses, permits and
authorizations from the FCC which have been issued to the Heritage Subsidiaries
or the Sellers that are required for the business and operations of the
Stations. Except as set forth on Schedule 3.9, such FCC Licenses are valid and
in full force and effect through the dates set forth on Schedule 2.1.1,
unimpaired by any condition, other than as set forth in the FCC Licenses. Except
as set forth on Schedule 3.9, no application, action or proceeding is pending
for the renewal or modification of any of the FCC Licenses, and, except for
actions or proceedings affecting television broadcast stations generally, no
application, complaint, action or proceeding is pending or, to the knowledge of
Sellers and the Heritage Subsidiaries, threatened that may result in the (a) the
revocation, modification, non-renewal or suspension of any of the FCC Licenses,
or (b) the issuance of a cease-and-desist order. Except as set forth in Schedule
3.9, no Seller or Heritage Subsidiary has knowledge of any facts, conditions or
events relating to any Seller, any Heritage Subsidiary or the Stations that
would reasonably be expected to cause the FCC to revoke any FCC License or not
to grant any pending applications for renewal of the FCC Licenses or to deny the
assignment of the FCC Licenses to a qualified Buyer as provided for in this
Agreement.
3.10. REAL PROPERTY.
3.10.1. The Heritage Subsidiaries have (and Sellers will have prior to
the Transfer Date) good and marketable fee simple title to all fee estates
included in the Real Property and good title to all other owned Real Property,
in each case free and clear of all Encumbrances, except for Permitted
Encumbrances.
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3.10.2. The Heritage Subsidiaries have (and Sellers will have prior to
the Transfer Date) a valid leasehold interest in all Leased Property listed as
leased by the Heritage Subsidiaries or Sellers in Schedule 2.1.2. Schedule 2.1.2
lists all leases and subleases pursuant to which any of the Leased Property is
leased by the Heritage Subsidiaries and Sellers in connection with the business
and operations of the Stations. The Heritage Subsidiaries are (and Sellers will
be prior to the Transfer Date) the owner and holder of all the Leased Property
purported to be granted by such leases and subleases. Each such lease and
sublease is valid as to the lessee and sublessee thereunder and, to the
knowledge of Sellers and the Heritage Subsidiaries, valid as to any other party
thereto, and is in full force and effect and, to the knowledge of Sellers and
the Heritage Subsidiaries, constitutes a legal and binding obligation of, and is
legally enforceable against the lessee or sublessee thereunder and each other
party thereto and grants the leasehold interest it purports to grant, including
any rights to nondisturbance and peaceful and quiet enjoyment that may be
contained therein. The lessees and sublessees are, and to the knowledge of
Sellers and the Heritage Subsidiaries all other parties are, in compliance in
all material respects with the provisions of such leases and subleases.
3.10.3. The Real Property and the Leased Property listed in Schedule
2.1.2 constitute all of the real property owned, leased or used by Sellers or
the Heritage Subsidiaries in the business and operations of the Stations which
is material to the business and operations of the Stations.
3.10.4. No portion of the Real Property or any building, structure,
fixture or improvement thereon is the subject of, or affected by, any
condemnation, eminent domain or inverse condemnation proceeding currently
instituted or pending or, to the knowledge of Sellers and the Heritage
Subsidiaries, threatened. To the knowledge of Sellers and the Heritage
Subsidiaries and to the extent that such documents are in the possession of
Sellers or a Heritage Subsidiary, Sellers have delivered to Buyer true, correct
and complete copies of the following documents with respect to the Real Property
and Leased Property: (a) deeds, by which the current owner has received a fee
interest in any of the Real Property; (b) leases for all of the Leased Property;
(c) title insurance policies or commitments; (d) surveys; and (e) inspection
reports or other instruments or reports, including, without limitation, any
phase I or phase II environmental reports or other similar environmental
reports, surveys or assessments (including any and all amendments and other
modifications of such instruments).
3.11. INTELLECTUAL PROPERTY.
The Heritage Subsidiaries possess (and Sellers will possess prior to
the Transfer Date) adequate rights, licenses and authority to use all
Intellectual Property necessary to conduct the business of the Stations as
presently conducted.
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The Heritage Subsidiaries have (and Sellers will have prior to the Transfer
Date) good title to all Intellectual Property that the Heritage Subsidiaries or
Sellers own in connection with the business and operations of the Stations, free
and clear of any Encumbrances, except for Permitted Encumbrances. No Heritage
Subsidiary is (and no Seller will be as of the Transfer Date) obligated to pay
any royalty or other fees to anyone with respect to the Intellectual Property.
Neither Seller nor any Heritage Subsidiary has received any written notice to
the effect that any service rendered by any Seller or any Heritage Subsidiary
relating to the business of the Stations may infringe, or that any Seller or any
Heritage Subsidiary is otherwise infringing, on any Intellectual Property right
or other legally protectable right of another. No director, officer or employee
of any Seller or any Heritage Subsidiary has any interest in any Intellectual
Property.
3.12. STATION CONTRACTS.
Complete and correct copies of the Station Contracts set forth in
Schedules 2.1.5, 2.1.6, 2.1.8 and 2.1.9 (which schedules, to Sellers' knowledge
are and which have been represented to Sellers by the Heritage Subsidiaries
making such representations to be, true and correct in all material respects)
have been made available to Buyer and (a) each such material Station Contract
and, to the knowledge of Sellers and the Heritage Subsidiaries, each such
immaterial Station Contract, is in full force and effect and constitutes a
legal, valid and binding obligation of the owner of the Station that is a party
thereto, and, to the knowledge of Sellers and the Heritage Subsidiaries, of each
other party thereto; (b) no owner of a Station is in breach or default in any
material respect of the terms of any Station Contract; (c) none of the material
rights of the owner of a Station under any such Station Contract will be subject
to termination, nor will a default occur, as a result of the consummation of the
transactions contemplated hereby, except to the extent that failure to obtain
the prior consent to assignment thereof of any party thereto shall or could be
interpreted to constitute a termination or modification of or a default under
any such Station Contract; and (d) to the knowledge of Sellers and the Heritage
Subsidiaries, no other party to any such Station Contract is in breach or
default in any material respect of the terms thereunder.
3.13. TAXES.
The Heritage Subsidiaries have (or, in the case of returns becoming due
after the date hereof and on or before the Transfer Date, the Heritage
Subsidiaries or Sellers will have prior to the Transfer Date) duly filed all
material Seller Tax Returns required to be filed by them on or before the
Transfer Date with respect to all material applicable Taxes. In the case of any
Seller Tax Returns which receive an extension for their date of filing, such
Seller Tax Returns will be considered due on, and not considered required to be
filed before, the extended due
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date. To the knowledge of Sellers and the Heritage Subsidiaries, all Seller Tax
Returns are (or, in the case of returns becoming due after the date hereof and
on or before the Transfer Date, will be) true and complete in all material
respects. The Heritage Subsidiaries or Sellers have: (a) paid all Taxes due to
any Governmental Authority as indicated on the Seller Tax Returns; or (b)
established (or, in the case of amounts becoming due after the date hereof,
prior to the Transfer Date will have established) adequate reserves (in
conformity with generally accepted accounting principles consistently applied)
for the payment of such Taxes.
3.14. EMPLOYEE BENEFIT PLANS.
3.14.1. Schedule 3.14 lists all Plans and Benefit Arrangements
(exclusive of severance arrangements and retention agreements) maintained by or
contributed to for the benefit of the employees of the Stations (collectively,
the "Benefit Plans"). Each Benefit Plan has been maintained in material
compliance with its terms and with ERISA, the Code and other applicable Laws.
3.14.2. Schedule 3.14 sets forth a list of all Qualified Plans
maintained by or contributed to for the benefit of the employees of the
Stations. All such Qualified Plans and any related trust agreements or annuity
agreements (or any other funding document) have been maintained in material
compliance with ERISA and the Code (including, without limitation, the
requirements for tax qualification described in Section 401 thereof), other than
any Multiemployer Plan. To the knowledge of Sellers and the Heritage
Subsidiaries, any trusts established under such Plans are exempt from federal
income taxes under Section 501(a) of the Code.
3.14.3. Schedule 3.14 lists all funded Welfare Plans that provide
benefits to current or former employees of the Stations or their beneficiaries.
To the knowledge of Sellers, the funding under each such Welfare Plan does not
exceed and has not exceeded the limitations under Sections 419A(b) and 419A(c)
of the Code. To the knowledge of Sellers and the Heritage Subsidiaries, no
Seller Party is subject to taxation on the income of any such Welfare Plan's
welfare benefit fund (as such term is defined in Section 419(e) of the Code)
under Section 419A(g) of the Code.
3.14.4. There are no post-retirement medical, life insurance or other
benefits promised, provided or otherwise due now or in the future to current,
former or retired employees of the Stations.
3.14.5. To the knowledge of Sellers and the Heritage Subsidiaries,
except as set forth in Schedule 3.14, the Seller Parties have (a) filed or
caused to be filed all returns and reports on the Plans that they are required
to file and (b) paid
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or made adequate provision for all fees, interest, penalties, assessments or
deficiencies that have become due pursuant to those returns or reports or
pursuant to any assessment or adjustment that has been made relating to those
returns or reports. All other fees, interest, penalties and assessments that are
payable by or for the Seller Parties have been timely reported, fully paid and
discharged. There are no unpaid fees, penalties, interest or assessments due
from any Seller Party or from any other person that are or could become an
Encumbrance on any of the Assets or could otherwise adversely affect the
businesses of the Stations or the Assets. To the knowledge of Sellers and the
Heritage Subsidiaries, the Seller Parties have collected or withheld all amounts
that are required to be collected or withheld by them to discharge their
obligations, and all of those amounts have been paid to the appropriate
Governmental Authority or set aside in appropriate accounts for future payment
when due. Sellers have furnished to Buyer true and complete copies of all
documents setting forth the terms and funding of each Plan.
3.14.6. Except as set forth in Schedule 3.14, neither any Seller Party
nor any ERISA Affiliate has ever sponsored or maintained, had any obligation to
sponsor or maintain, or had any liability (whether actual or contingent, with
respect to any of its assets or otherwise) with respect to any Plan subject to
Section 302 of ERISA or Section 412 of the Code or Title IV of ERISA (including
any Multiemployer Plan). Neither any Seller Party nor any ERISA Affiliate (since
January 1, 1989) has terminated or withdrawn from or sought a funding waiver
with respect to any plan subject to Title IV of ERISA, and no facts exist that
could reasonably be expected to cause such actions in the future; no accumulated
funding deficiency (as defined in Code Section 412), whether or not waived,
exists with respect to any such plan; no reportable event (as defined in ERISA
Section 4043) has occurred with respect to any such plan (other than events for
which reporting is waived); all costs of any such plans have been provided for
on the basis of consistent methods in accordance with sound actuarial
assumptions and practices, and the assets of each such plan, as of its last
valuation date, exceeded its "Benefit Liabilities" (as defined in ERISA Section
4001(a)(16)); and, since the last valuation date for each such plan, no such
plan has been amended or changed to increase the amounts of benefits thereunder
and, to the knowledge of Sellers and the Heritage Subsidiaries, there has been
no event that would reduce the excess of assets over benefit liabilities; and
except as set forth in Schedule 3.14, neither any Seller Party nor any ERISA
Affiliate has ever made or been obligated to make, or reimbursed or been
obligated to reimburse another employer for, contributions to any Multiemployer
Plan.
3.14.7. No claims or lawsuits are pending or, to the knowledge of
Sellers and the Heritage Subsidiaries, threatened by, against, or relating to
any Benefit Plan. To the knowledge of Sellers and the Heritage Subsidiaries, the
Benefit Plans are not presently under audit or examination (nor has notice been
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received of a potential audit or examination) by the IRS, the Department of
Labor, or any other governmental agency or entity and no matters are pending
with respect to any Qualified Plan under the IRS's Voluntary Compliance
Resolution program, its Closing Agreement Program, or other similar programs.
3.14.8. With respect to each Plan, there has occurred no non-exempt
"prohibited transaction" (within the meaning of Section 4975 of the Code) or
transaction prohibited by Section 406 of ERISA or breach of any fiduciary duty
described in Section 404 of ERISA that would, if successful, result in any
liability for any of the Seller Parties.
3.14.9. No Seller Party has any liability (whether actual, contingent,
with respect to any of its Assets or otherwise) with respect to any employee
benefit plan that is not a Benefit Plan (exclusive of severance arrangements and
retention agreements) or with respect to any employee benefit plan sponsored or
maintained (or which has been or should have been sponsored or maintained) by
any ERISA Affiliate.
3.14.10. All group health plans of the Seller Parties and the ERISA
Affiliates covering any current or former employees of the Stations have been
operated in material compliance with the requirements of Sections 4980B (and its
predecessor) and 5000 of the Code, and the Seller Parties have provided, or will
have provided before the Transfer Date, to individuals entitled thereto all
required notices and coverage pursuant to Section 4980B with respect to any
"qualifying event" (as defined therein) occurring before or on the Transfer
Date.
3.15. LABOR RELATIONS.
Sellers have made available to Buyer a true and complete list of all
employees of the Heritage Subsidiaries and Sellers engaged in the business or
operations of the Stations as of the date set forth on the list, together with
such employee's position, salary and date of hire. Schedule 3.15 lists all
written employment contracts with any such employees and all written agreements,
plans, arrangements, commitments and understandings pursuant to which any of the
Seller Parties have severance obligations or retention obligations with respect
to such employees. No labor union or other collective bargaining unit represents
or, to the knowledge of Sellers and the Heritage Subsidiaries, claims to
represent, any of the employees of the Stations. There are no strikes, work
stoppages, grievance proceedings, union organization efforts, or other
controversies pending between any Seller or any Heritage Subsidiary and any
union or collective bargaining unit representing (or, to the knowledge of
Sellers and the Heritage Subsidiaries, claiming to represent) any employees of
the Stations. The Heritage Subsidiaries are (and Sellers will be as of the
Transfer Date) in compliance with all Laws
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relating to the employment of employees of the Stations or the workplace of the
Stations, including, without limitation, provisions relating to wages, hours,
collective bargaining, safety and health, work authorization, equal employment
opportunity, immigration and the withholding of income taxes, unemployment
compensation, worker's compensation, employee privacy and right to know and
social security contributions, except for any noncompliance which would not have
a Material Adverse Effect. There are no collective bargaining agreements
relating to the Stations or the business and operations thereof.
3.16. ENVIRONMENTAL MATTERS.
3.16.1. Except as set forth in Schedule 3.16, to the knowledge of
Sellers and the Heritage Subsidiaries (which knowledge is based on the items set
forth on Schedule 3.16), the Heritage Subsidiaries are (and Sellers will be as
of the Transfer Date) in material compliance with, and the Real Property and all
improvements thereon are in material compliance with, all Environmental Laws.
3.16.2. Except as set forth in Schedule 3.16, there are no pending or,
to the knowledge of Sellers and the Heritage Subsidiaries, threatened actions,
suits, claims, or other legal proceedings based on (and neither any Seller nor
any of the Heritage Subsidiaries has received any written notice of any
complaint, order, directive, citation, notice of responsibility, notice of
potential responsibility, or information request from any Governmental Authority
arising out of or attributable to): (a) the current or past presence at any part
of the Real Property of Hazardous Materials; (b) the current or past release or
threatened release into the environment from the Real Property (including,
without limitation, into any storm drain, sewer, septic system or publicly owned
treatment works) of any Hazardous Materials; (c) the off-site disposal of
Hazardous Materials originating on or from the Real Property or the Assets or
businesses of the Stations; (d) any facility operations or procedures of the
Stations which do not conform to requirements of the Environmental Laws; or (e)
any violation of Environmental Laws at any part of the Real Property arising
from activities of the Stations involving Hazardous Materials. To the knowledge
of Sellers and the Heritage Subsidiaries, the Heritage Subsidiaries have been
(and Sellers will have been prior to the Transfer Date) duly issued all material
permits, licenses, certificates and approvals required under any Environmental
Law.
3.17. INSURANCE.
Schedule 3.17 contains a true and complete list and brief summary of
all policies of title, property, fire, casualty, liability, life, workmen's
compensation, libel and slander, and other forms of insurance of any kind
relating to the Assets or the business and operations of the Stations. All such
policies: (a) are in full force
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and effect; (b) are sufficient for compliance in all material respects with all
requirements of Law and of all material agreements to which any Station owner is
a party; and (c) to the knowledge of Sellers and the Heritage Subsidiaries, are
valid, outstanding, and enforceable policies and the policy holder is not in
default in any material respect thereunder.
3.18. REPORTS.
All material returns, reports and statements that the Stations are
currently required to file with the FCC or any governmental agency have been
timely filed, and all reporting requirements of the FCC and other governmental
authorities having jurisdiction thereof have been complied with by Sellers and
the Heritage Subsidiaries in all material respects. All of such reports, returns
and statements are complete and correct in all material respects as filed. To
the knowledge of Sellers and the Heritage Subsidiaries, all documents required
by the FCC to be deposited by the owners of the Stations in their public files
(as defined in the rules and regulations of the FCC) during the period of
operation of the Stations by the Heritage Subsidiaries and Sellers have been
deposited therein.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES BY BUYER
Buyer represents, warrants and covenants to Sellers as follows:
4.1. ORGANIZATION AND STANDING.
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and by the Transfer Date will
be duly qualified to do business as a foreign corporation in the State of New
York and the State of Vermont. Buyer has the full corporate power and corporate
authority to enter into and perform the terms of this Agreement and the other
Buyer Documents and to carry out the transactions contemplated hereby and
thereby.
4.2. AUTHORIZATION.
The execution, delivery and performance of this Agreement and of the
other Buyer Documents, and the consummation of the transactions contemplated
hereby and thereby, have been duly and validly authorized by all necessary
actions of Buyer (none of which actions has been modified or rescinded and all
of which actions are in full force and effect). This Agreement and the Deposit
Escrow Agreement constitute, and upon execution and delivery each such other
Buyer Document will constitute, a valid and binding agreement and
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obligation of Buyer, enforceable against Buyer in accordance with its respective
terms, except as the same may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws of general applicability
relating to or affecting creditors' rights generally and by the application of
general principles of equity.
4.3. CONSENTS AND APPROVALS; NO CONFLICTS.
4.3.1. The execution and delivery of this Agreement, and the
performance of the transactions contemplated herein by Buyer, will not require
any consent, approval, authorization or other action by, or filing with or
notification to, any Person or Governmental Authority, except as follows: (a)
filings required under ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇, (b) approvals of the assignment of the
FCC Licenses to Buyer by the FCC, (c) filings, if any, with respect to real
estate transfer taxes and (d) filings with the Securities and Exchange
Commission.
4.3.2. Assuming all consents, approvals, authorizations and other
actions described in Section 4.3.1 have been obtained and all filings and
notifications described in Section 4.3.1 have been made, the execution, delivery
and performance of this Agreement and the other Buyer Documents by Buyer do not
and will not (a) conflict with or violate any material Law applicable to Buyer,
(b) conflict with or result in any breach of or constitute a default (or an
event which with notice or lapse of time or both would become a default) of any
material contract or material agreement to which Buyer is a party or by which
Buyer is bound, or (c) conflict with or violate the organizational documents of
Buyer.
4.4. AVAILABILITY OF FUNDS.
Buyer will have available on the Non-License Transfer Date and the
Closing Date sufficient funds to enable it to consummate the transactions
contemplated hereby.
4.5. QUALIFICATION OF BUYER.
4.5.1. Except as disclosed in Schedule 4.5.1, Buyer is, and pending
Closing will remain legally, financially and otherwise qualified under the
Communications Act and all rules, regulations and policies of the FCC to acquire
and operate the Stations. There are no facts or proceedings which would
reasonably be expected to disqualify Buyer under the Communications Act or
otherwise from acquiring or operating any of the Stations or would cause the FCC
not to approve the assignment of the FCC Licenses to Buyer. Except as disclosed
in Schedule 4.5.1, Buyer has no knowledge of any fact or circumstance relating
to
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Buyer or any of Buyer's Affiliates that would reasonably be expected to (a)
cause the filing of any objection to the assignment of the FCC Licenses to
Buyer, or (b) lead to a delay in the processing by the FCC of the applications
for such assignment. Except for existing waivers pertaining to the Stations, no
waiver of any FCC rule or policy is necessary to be obtained for the grant of
the applications for the assignment of the FCC Licenses to Buyer, nor will
processing pursuant to any exception or rule of general applicability be
requested or required in connection with the consummation of the transactions
herein.
4.5.2. As of the date hereof and through the later to occur of the HSR
Filing and the filing of the FCC Applications, except as set forth on Schedule
4.5.1, neither Buyer nor any Affiliate of Buyer (a) owns, controls or operates
any television or radio station located in the Burlington DMA; (b) has any
direct or indirect interest, including, without limitation, any equity, debt,
security or any other financial interest, whether or not "attributable" (as
defined in the rules and regulations of the FCC), or management interest, in (i)
any television or radio station located in the Burlington DMA, or (ii) any
applicant seeking to construct or acquire, by assignment of license or transfer
of control, any such television or radio station (an "Applicant"); or (c) is a
party to any TBA with a television or radio station located in the Burlington
DMA, or with any Applicant. Buyer acknowledges and agrees that the
representations set forth in this Section 4.5.2 shall take into account and
include (a) the consummation of any proposed or pending acquisition (as of the
date hereof and through the later to occur of the HSR Filing and the filing of
the FCC Applications) of television or radio stations (including the acquisition
of the Stations) by Buyer or any Affiliate of Buyer or any Applicant, and (b)
any TBA or proposed or pending TBA (as of the date hereof and through the later
to occur of the HSR Filing and the filing of the FCC Applications) to which
Buyer or any Affiliate of Buyer is or may become a party.
4.6. WARN ACT.
Buyer is not planning or contemplating, and has not made or taken, any
decisions or actions concerning the employees of the Stations after the Transfer
Date that would require the service of notice under the Worker Adjustment and
Retraining Act of 1988, as amended.
4.7. NO OUTSIDE RELIANCE.
Buyer has not relied and is not relying on any statement,
representation or warranty not made in this Agreement, any Schedule hereto or
any certificate to be delivered to Buyer at the Non-License Transfer or the
Closing pursuant to this Agreement. Buyer is not relying on any projections or
other predictions contained or referred to in materials (other than the
Schedules) that
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have been or may hereafter be provided to Buyer or any of its Affiliates, agents
or representatives, and Sellers make no representations or warranties with
respect to any such projections or other predictions.
4.8. INTERPRETATION OF CERTAIN PROVISIONS.
Buyer has not relied and is not relying on the specification of any
dollar amount in any representation or warranty made in this Agreement or any
Schedule hereto to indicate that such amounts, or higher or lower amounts, are
or are not material, and agrees not to assert in any dispute or controversy
between the parties hereto that specification of such amounts indicates or is
evidence as to whether or not any obligation, item or matter is or is not
material for purposes of this Agreement and the transactions contemplated
hereby.
ARTICLE 5.
PRE-CLOSING FILINGS
5.1. APPLICATIONS FOR FCC CONSENT.
Within five (5) business days following the execution of this
Agreement, Sellers and Buyer (or any permitted assignee of Buyer under Section
15.6.1) shall jointly file applications for the Stations with the FCC requesting
consent to the assignment of the FCC Licenses for the Stations from Sellers to
Buyer (the "FCC Applications"). Sellers and Buyer will diligently take, or fully
cooperate in the taking of, all necessary and proper steps, and provide any
additional information reasonably requested in order to obtain promptly the
requested consents and approvals of the FCC Applications by the FCC.
5.2. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇.
Within five (5) business days following the execution of this
Agreement, Sellers and Buyer shall complete any filing that may be required
pursuant to ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ (each an "HSR Filing"). Sellers and Buyer shall
diligently take, or fully cooperate in the taking of, all necessary and proper
steps, and provide any additional information reasonably requested in order to
comply with, the requirements of ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇.
5.3. NON-REQUIRED ACTIONS.
Neither Buyer nor any Seller shall have any obligation to take any
steps pursuant to Section 5.1 or Section 5.2 which would be reasonably expected
to
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result in the incurrence of a material cost or other liability or which would
require the divestiture of any business or assets of any party hereto or any
Affiliate thereof.
ARTICLE 6.
COVENANTS AND AGREEMENTS OF SELLERS
Each Seller covenants and agrees with Buyer as follows:
6.1. NEGATIVE COVENANTS.
Pending and prior to the Non-License Transfer and the Closing, such
Seller will not, and will use its commercially reasonable efforts to enforce
such rights under the Heritage Agreement to cause the Heritage Subsidiaries not
to, without the prior written consent of Buyer (which consent will not be
unreasonably withheld, delayed or conditioned, except in the case of matters
referred to in Sections 6.1.6(b), 6.1.7, 6.1.9 and 6.1.11, with respect to which
Buyer's consent may be withheld in its sole and absolute discretion), do or
agree to do any of the following insofar as such actions (or failure to act)
relate to the Stations:
6.1.1. DISPOSITIONS; MERGERS.
Sell, assign, lease or otherwise transfer or dispose of any
of the Assets other than at substantially fair market value and in the Ordinary
Course of Business; or merge or consolidate with or into any other entity or
enter into any contracts or agreements relating thereto.
6.1.2. ACCOUNTING PRINCIPLES AND PRACTICES.
Change or modify any accounting principles or practices or
any method of applying such principles or practices.
6.1.3. TRADE-OUT AGREEMENTS.
Enter into or renew any Trade-out Agreement that would be
binding on Buyer after the Non-License Transfer Date or the Closing Date, except
in the Ordinary Course of Business and which requires the provision of broadcast
time having a value of less than (a) Twenty-Five Thousand Dollars ($25,000)
individually, and (b) together with existing Trade-out Agreements still in
effect as of the Non-License Transfer Date or the Closing Date, as the case may
be, Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate as of the
Non-License Transfer Date or the Closing Date, as the case may be.
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6.1.4. BROADCAST TIME SALES AGREEMENTS.
Enter into or renew any Time Sales Agreement except in the
Ordinary Course of Business and which are for cash at prevailing rates for a
term not exceeding twelve (12) months.
6.1.5. NETWORK AFFILIATION AGREEMENTS AND LMAS.
Except for the TBA Agreement, acquire or enter into or renew
any LMA or network affiliation agreement.
6.1.6. ADDITIONAL AGREEMENTS.
(a) Acquire or enter into any new Station Contracts not
referred to in Sections 6.1.3, 6.1.4 or 6.1.5 above, or renew, extend, amend,
alter, modify or otherwise change any existing Station Contract, except in the
Ordinary Course of Business (collectively, "Additional Agreements"); provided,
however, such Seller shall not, and shall use its commercially reasonably
efforts to cause each Seller Party not to, enter into (a) any Program Contract
for any Station which will be binding on Buyer after the Non-License Transfer
Date or the Closing Date, or (b) any other Station Contract requiring payments
by a Seller Party under each Station Contract in excess of Fifty Thousand
Dollars ($50,000). For purposes of clause (a) above, each Seller acknowledges
that it shall not be unreasonable for Buyer to withhold its consent to approve
of any Program Contract where Buyer, acting in good faith, has reason to
conclude that it can acquire such programming on better terms.
(b) From and after the Sellers' acquisition of the Stations
from the Heritage Subsidiaries, Sellers shall not, without the prior written
consent of Buyer, acquire or enter into any new Station Contract or renew,
extend, amend, alter, modify or otherwise change any existing Station Contract,
which in any case requires payments by a Seller Party under any such Station
Contract in excess of Twenty-Five Thousand Dollars ($25,000).
6.1.7. BREACHES.
Do or omit to do any act which will cause a material breach
of any Station Contract.
6.1.8. EMPLOYEE MATTERS.
Enter into or become subject to any employment, labor, union,
or professional service contract not terminable at will, or any bonus, pension,
insurance, profit sharing, incentive, deferred compensation, severance pay,
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retirement, hospitalization, employee benefit, or other similar plan; or
increase the compensation payable or to become payable to any employee, or pay
or arrange to pay any bonus payment to any employee, except in the Ordinary
Course of Business.
6.1.9. ACTIONS AFFECTING FCC LICENSES.
Take any action which may jeopardize the validity or
enforceability of or rights under the FCC Licenses.
6.1.10. PROGRAMMING.
Program or broadcast any Program Contract or syndicated
program, except in the Ordinary Course of Business.
6.1.11. ENCUMBRANCES.
Create, assume or permit to exist any Encumbrances upon any
of the Assets except for Permitted Encumbrances and Encumbrances that will be
discharged prior to or on the Transfer Date.
6.1.12. TRANSACTIONS WITH AFFILIATES.
Enter into any transaction with any Affiliate of a Seller
Party that will be binding upon Buyer, the Assets or any Station on or after the
Non-License Transfer Date or the Closing Date, except for transactions not
otherwise prohibited by this Section 6.1 and transactions between and among
Stations operating in the same DMA in the Ordinary Course of Business, in each
case on arm's length terms.
6.2. AFFIRMATIVE COVENANTS.
Pending and prior to the Non-License Transfer and the Closing, each
Seller will, and will use its commercially reasonable efforts to enforce such
rights under the Heritage Agreement to cause the Heritage Subsidiaries to take
the following actions insofar as such actions relate to the Stations:
6.2.1. PRESERVE EXISTENCE.
Preserve its corporate existence and business organization
intact, maintain its existing franchises and licenses, use commercially
reasonable efforts to preserve for Buyer the relationships of the Stations with
suppliers, customers, employees and others with whom the Stations have business
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relationships, and keep all of the Assets substantially in their present
condition, ordinary wear and tear excepted.
6.2.2. NORMAL OPERATIONS.
Subject to the terms and conditions of this Agreement
(including, without limitation, Section 6.1) and the TBA Agreement, (a) carry on
the businesses and activities of the Stations, including without limitation,
promotional activities, the sale of advertising time, entering into other
contracts and agreements, or purchasing and scheduling of programming, in the
Ordinary Course of Business; (b) pay or otherwise satisfy all obligations (cash
and barter) of the Stations in the Ordinary Course of Business; provided,
however, each Seller shall cause to be brought current as of the Transfer Date
all payments that are due and payable under Program Contracts as originally
contracted; (c) maintain books of account, records, and files with respect to
the business and operations of the Stations in substantially the same manner as
heretofore; and (d) maintain the Assets in customary repair, maintenance and
condition, except to the extent of normal wear and tear, and repair or replace,
consistently with the Ordinary Course of Business, any Asset that may be damaged
or destroyed; notwithstanding the foregoing, Buyer acknowledges that no Seller
shall be obligated to spend any funds on capital expenditures after the date
hereof, except for the repair or replacement of Assets that may be damaged or
destroyed.
6.2.3. MAINTAIN FCC LICENSES.
Maintain the validity of the FCC Licenses, and comply in all
material respects with all requirements of the FCC Licenses and the rules and
regulations of the FCC.
6.2.4. NETWORK AFFILIATION.
Use commercially reasonable efforts to maintain in full force
and effect the present network affiliation agreements for the Stations (and any
and all modifications and renewals thereof).
6.2.5. STATION CONTRACTS.
Pay and perform obligations in the Ordinary Course of
Business under the Station Contracts and under any Additional Agreements that
shall be entered into pursuant to Section 6.1.6, in accordance with the
respective terms and conditions of such Station Contracts and in accordance with
the TBA Agreement.
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6.2.6. TAXES.
Pay or discharge all Taxes when due and payable.
6.2.7. ACCESS.
Subject to the cooperation of the Trustee and the Heritage
Subsidiaries, cause to be afforded to representatives of Buyer reasonable access
during normal business hours to offices, properties, assets, books and records,
contracts and reports of the Stations, as Buyer shall from time to time
reasonably request; provided, however, that (a) such investigation shall only be
upon reasonable notice and shall not unreasonably disrupt the personnel or
operations of any Seller Party or the Stations, and (b) under no circumstances
shall any Seller Party be required to provide access to Buyer or any
representative of Buyer (i) any information or materials subject to
confidentiality agreements with third parties required to be kept confidential
by applicable Laws, or (ii) any privileged attorney-client communications or
attorney work product. All requests for access to the offices, properties,
assets, books and records, contracts and reports of the Stations shall be made
to such representatives as Sellers shall designate in writing, who shall be
solely responsible for coordinating all such requests and all access permitted
hereunder. Buyer acknowledges and agrees that neither Buyer nor its
representatives shall contact any of the employees, customers, suppliers,
partners, or other associates or Affiliates of any Seller Party or the Stations,
in connection with the transactions contemplated hereby, whether in person or by
telephone, mail or other means of communication, without the specific prior
written authorization of such representatives of Sellers. Subject to and in
accordance with the terms of this Section 6.2.7, each Seller shall, and shall
use its commercially reasonable efforts to enforce such rights under the
Heritage Agreement to cause each other Seller Party to, cooperate in all
reasonable respects with Buyer's request to conduct an audit of any financial
information of the Stations as Buyer may reasonably determine is necessary to
satisfy any public company reporting requirements pursuant to the Securities Act
of 1933 or the Securities Exchange Act of 1934 including, without limitation,
(a) using commercially reasonable efforts to obtain the consent of auditors to
permit Buyer, any Affiliate of Buyer and their respective auditors to have
access to such auditors' work papers, and (b) consenting to such access by
Buyer. Under no circumstance shall the preparation of any financial statements
pursuant to such audit: (a) require any Seller Party to change or modify any
accounting policy, (b) cause any unreasonable disruption in the business or
operations of any Station, or (c) cause any delay that is more than de minimis
in any internal reporting requirements of any Seller Party. All costs and
expenses incurred in connection with the preparation of (and assimilation of
relevant information for) any such financial statements shall be paid by Buyer.
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6.2.8. INSURANCE.
Maintain in full force and effect all of its existing
casualty, liability, and other insurance in amounts not less than those in
effect on the date hereof.
6.2.9. FINANCIAL STATEMENTS.
Prior to Sellers' acquisition of the Stations from the
Heritage Subsidiaries, provide Buyer with, to the extent received by Seller in
connection with the Heritage Agreement (a) unaudited monthly statements of
assets and liabilities relating to the business and operations of the Stations,
and monthly statements of revenues and expenses reflecting the results of
business and operations of the Stations for January 1998 and for each month
thereafter, within thirty (30) days after the end of each such month, and (b)
weekly sales pacing reports for the Stations and copies of any financial
statements. After Sellers' acquisition of the Stations from the Heritage
Subsidiaries and prior to the Transfer Date, provide Buyer with (a) unaudited
monthly statements of assets and liabilities relating to the business and
operations of the Stations, and monthly statements of revenues and expenses
reflecting the results of business and operations of the Stations for the month
following the month such financial statements were last provided and for each
month thereafter, within thirty (30) days after the end of each such month, and
(b) weekly sales pacing reports for the Stations and copies of any financial
statements.
6.2.10. CONSENTS.
(a) Take all reasonable action required to obtain all
consents, approvals and agreements of any third parties necessary to authorize,
approve or permit the consummation of the transactions contemplated by this
Agreement, including, without limitation, any consent of the parties to the
Station Contracts designated as necessary in Schedule 3.4 in order to consummate
the transactions contemplated hereby (collectively, the "Restricted Contracts").
Notwithstanding anything to the contrary set forth in this Agreement or
otherwise, to the extent that the consent or approval of any third party is
required under any Restricted Contract, such Seller shall only be required to
use reasonable efforts (not involving the payment by such Seller of any money to
any party to any such Restricted Contract, except to the extent required by
Section 6.2.10(b)) to obtain such consents and approvals, and in the event that
such Seller fails to obtain any such consent or approval, Buyer shall have no
right to terminate this Agreement.
(b) Notwithstanding anything to the contrary in clause (a)
above, each Seller shall, and shall use its commercially reasonable efforts to
enforce such rights under the Heritage Agreement to cause a Heritage Subsidiary
to retain
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until such time as any required consents shall have been obtained by such
Seller, all rights to and under any Station Contract which requires the consent
of any other party thereto for assignment to Buyer if such consent has not been
obtained on the Closing Date (the "Deferred Contract"). Until the assignment of
the Deferred Contract, (i) each Seller shall continue to use all commercially
reasonable efforts and Buyer shall cooperate with Sellers to obtain the consent
and/or to remove any other impediments to such assignment, and (ii) Sellers and
Buyer agree to cooperate in any lawful arrangement to provide (to the extent
permitted without breach of such Deferred Contract) that Buyer shall receive the
benefits of such interest after the Closing Date to the same extent as if it
were the lessee thereunder; provided, however, if Buyer shall fail to receive
such benefits after the Closing Date for any Leased Property that is a main
transmitter tower site or a studio site for any Station (the "Designated
Properties"), Sellers agree to make such payments as are necessary for Buyer to
receive such benefits as long as the aggregate amount of all such payments does
not exceed Two Hundred Thousand Dollars ($200,000) for all such Designated
Properties under this Agreement. If, subsequent to the Closing, any Seller shall
obtain required consents to assign any Deferred Contract, the Deferred Contract
for which consent to assign has been obtained shall at that time be deemed to be
conveyed, granted, bargained, sold, transferred, setover, assigned, released,
delivered and confirmed to Buyer, without need of further action by any Seller
or of future documentation.
6.2.11. CORPORATE ACTION.
Take all corporate action (including, without limitation, all
shareholder action), under the Law of any state having jurisdiction over such
Seller necessary to effectuate the transactions contemplated by this Agreement
and the other Seller Documents.
6.2.12. ENVIRONMENTAL AUDIT.
Subject to the cooperation of the Trustee, permit Buyer and
Buyer's agents, as soon as practical after the date hereof and upon Buyer's
request therefor, access to the Real Property and the Leased Property for the
purpose of conducting, at Buyer's expense, Phase I and Phase II environmental
audits. Any such environmental audits shall be conducted by a reputable
environmental investigatory firm of Buyer's choice subject to the reasonable
approval of Sellers and in a manner as will not unreasonably interfere with the
normal business and operations of any of the Stations.
6.2.13. HERITAGE AGREEMENT.
Consummate the acquisition of the Assets in accordance with
all of the provisions of the Heritage Agreement and use commercially
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reasonable efforts to pursue in a timely manner any claims relating to the
Stations that Sellers may have under the Heritage Agreement.
6.3. CONFIDENTIALITY.
Each Seller shall, at all times, maintain strict confidentiality with
respect to all documents and information furnished to such Seller by or on
behalf of Buyer. Nothing shall be deemed to be confidential information that:
(a) is known to a Seller at the time of its disclosure to such Seller; (b)
becomes publicly known or available to a Seller other than through disclosure by
such Seller; (c) is received by a Seller from a third party not actually known
by such Seller to be bound by a confidentiality agreement with or obligation to
Buyer; or (d) is independently developed by a Seller. Notwithstanding the
foregoing provisions of this Section 6.3, each Seller may disclose such
confidential information (a) to the extent required or deemed advisable to
comply with applicable Laws; (b) to its officers, directors, employees,
representatives, financial advisors, attorneys, accountants, and agents with
respect to the transactions contemplated hereby (so long as such parties agree
to maintain the confidentiality of such information); (c) to the Heritage
Subsidiaries and the Trustee, as necessary, with respect to the transactions
contemplated hereby (so long as such parties agree to maintain the
confidentiality of such information); and (d) to any Governmental Authority in
connection with the transactions contemplated hereby. In the event this
Agreement is terminated, each Seller will return to Buyer all documents and
other material prepared or furnished by Buyer relating to the transactions
contemplated hereunder, whether obtained before or after the execution of this
Agreement.
6.4. HERITAGE ACQUISITION.
Upon receipt of a written notice by Sellers from Buyer that the Buyer
is prepared to proceed with the Non-License Transfer hereunder simultaneously
with (or immediately following) the acquisition of the Stations from the
Heritage Subsidiaries, Sellers agree to acquire the Stations from the Heritage
Subsidiaries as promptly as possible to the extent permitted under the Heritage
Agreement. Notwithstanding the foregoing, nothing in the preceding sentence
shall constitute a waiver by Buyer of any conditions precedent to Buyer's
obligation to proceed with the Non-License Transfer.
ARTICLE 7.
COVENANTS AND AGREEMENTS OF BUYER
Buyer covenants and agrees with Sellers as follows:
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7.1. CONFIDENTIALITY.
Buyer shall, at all times prior to the Non-License Transfer and the
Closing, maintain strict confidentiality with respect to all documents and
information furnished to Buyer by or on behalf of a Seller. Nothing shall be
deemed to be confidential information that: (a) is known to Buyer at the time of
its disclosure to Buyer; (b) becomes publicly known or available other than
through disclosure by Buyer; (c) is received by Buyer from a third party not
actually known by Buyer to be bound by a confidentiality agreement with or
obligation to a Seller; or (d) is independently developed by Buyer.
Notwithstanding the foregoing provisions of this Section 7.1, Buyer may disclose
such confidential information (a) to the extent required or deemed advisable to
comply with applicable Laws; (b) to its officers, directors, partners,
employees, representatives, financial advisors, attorneys, accountants, agents,
underwriters, lenders, investors and any other potential sources of financing
with respect to the transactions contemplated hereby (so long as such parties
agree to maintain the confidentiality of such information); and (c) to any
Governmental Authority in connection with the transactions contemplated hereby.
In the event this Agreement is terminated, Buyer will return to Sellers all
documents and other material prepared or furnished by Sellers relating to the
transactions contemplated by this Agreement, whether obtained before or after
the execution of this Agreement.
7.2. CORPORATE ACTION.
Prior to the Non-License Transfer and the Closing, Buyer shall take all
corporate action (including, without limitation, all shareholder action), under
the Laws of any state having jurisdiction over Buyer necessary to effectuate the
transactions contemplated by this Agreement and the other Buyer Documents.
7.3. ACCESS.
From and after the Transfer Date for a period of three (3) years, Buyer
shall cause to be afforded to representatives of Sellers and the Heritage
Subsidiaries reasonable access during normal business hours to the offices,
books and records, contracts and reports of the Stations which relate to the
operations of the Stations during the period during which the Stations were
owned by the Sellers or the Heritage Subsidiaries, as Sellers or the Heritage
Subsidiaries shall from time to time reasonably request; provided, however, that
(a) such investigation shall only be upon reasonable notice and shall not
unreasonably disrupt the personnel or operations of Buyer or the Stations, and
(b) under no circumstances shall Buyer be required to provide access to any
Seller, any Heritage Subsidiary or any representatives of any Seller or any
Heritage Subsidiary (i) any information or materials subject to confidentiality
agreements with third parties required to be
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kept confidential by applicable Laws, or (ii) any privileged attorney-client
communications or attorney work product. All requests for access to the offices,
books and records, contracts and reports of the Stations shall be made to such
representatives as Buyer shall designate in writing, who shall be solely
responsible for coordinating all such requests and all access permitted
hereunder. Buyer agrees not to dispose of any such books and records, contracts
and reports of the Stations which relate to the operations of the Stations
during the period during which the Stations were owned by Sellers or the
Heritage Subsidiaries without consulting with Sellers prior to disposal thereof
and taking any reasonable action requested by Sellers with respect to retention
and transfer to Sellers thereof.
7.4. COLLECTION OF RECEIVABLES.
At the earlier of the Non-License Transfer or the Closing, Sellers
shall assign the Accounts Receivable to Buyer for collection purposes only, and,
within ten (10) business days after the Transfer Date, Seller shall furnish to
Buyer a list of the Accounts Receivable by accounts and the amounts then owing.
Buyer agrees, for a period of one hundred fifty (150) days following the
Transfer Date, without any requirement to litigate to collect the Accounts
Receivable, to use its reasonable efforts (with at least the care and diligence
Buyer uses to collect its own accounts receivable) to collect for Sellers the
Accounts Receivable and to remit to Sellers (or their designees) on the fifth
day following the last day of each month occurring during such one hundred fifty
(150) day period (or, if any such day is a Saturday, Sunday or holiday, on the
next day on which banking transactions are resumed), collections received by
Buyer with respect to the Accounts Receivable. Buyer shall not make any referral
or compromise of any Accounts Receivable to a collection agency or attorney for
collection and shall not compromise for less than full value any Account
Receivable without the prior written consent of Sellers. Any Account Receivable
not collected by Buyer within one hundred fifty (150) days following the Closing
Date shall revert to Sellers (or their designees). Buyer shall reassign, without
recourse to Buyer, each Account Receivable and deliver to Sellers, all records
relating thereto on the same day as it remits to Sellers (or their designees)
the collections received. All payments in respect of the Accounts Receivable
received during the one hundred fifty (150) day period shall be first applied to
the oldest balance then due on the Accounts Receivable unless the account debtor
indicates in writing that payment is to be applied otherwise due to a dispute
over an Account Receivable. Buyer agrees, upon the reasonable request of
Sellers, to furnish to Sellers periodic reports on the status of its Accounts
Receivable. Buyer shall have no right to set-off any amounts collected for
Accounts Receivable for any amounts owed to Buyer by Sellers; provided, however,
that Buyer shall have the right to seek indemnification in accordance with the
terms and conditions of this Agreement.
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ARTICLE 8.
MUTUAL COVENANTS AND UNDERSTANDINGS
OF SELLERS AND BUYER
8.1. POSSESSION AND CONTROL.
Between the date hereof and the Closing Date, Buyer shall not directly
or indirectly control, supervise or direct, or attempt to control, supervise or
direct, the business and operations of the Stations, and such operation,
including complete control and supervision of all programming, shall be the sole
responsibility of the owners of the Stations, except as contemplated by the LMA
Agreement after the Non-License Transfer. On and after the Closing Date, Sellers
shall have no control over, or right to intervene, supervise, direct or
participate in, the business and operations of the Stations.
8.2. RISK OF LOSS.
The risk of loss or damage by fire or other casualty or cause to the
Assets until the Transfer Date shall be upon Sellers. Except as otherwise
provided in Section 9.3, in the event of loss or damage prior to the Transfer
Date with respect to which Sellers have adequate replacement cost insurance and
which has not been restored, replaced, or repaired as of the Transfer Date,
Buyer shall proceed with the Non-License Transfer or the Closing, as applicable,
and receive at the Non-License Transfer or the Closing, as applicable, the
insurance proceeds or an assignment of the right to receive such insurance
proceeds, as applicable, to which Sellers otherwise would be entitled, whereupon
Sellers shall have no further liability to Buyer for such loss or damage.
8.3. PUBLIC ANNOUNCEMENTS.
Sellers and Buyer shall consult with each other before issuing any
press release or otherwise making any public statements with respect to this
Agreement or the transactions contemplated herein and shall not issue any such
press release or make any such public statement without the prior written
consent of the other parties hereto, which shall not be unreasonably withheld;
provided, however, that a party may, without consulting with the other parties,
issue such press release or make such public statement as may be required by Law
or any listing agreement with a national securities exchange to which STC or
▇▇▇▇▇▇▇▇ is a party if it has used all reasonable efforts to consult with the
other party and to obtain such party's consent but has been unable to do so in a
timely manner.
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8.4. EMPLOYEE MATTERS.
8.4.1. Upon the earlier of the Non-License Transfer or the Closing,
Buyer shall offer employment to each of the employees of the Stations (including
those on leave of absence, whether short-term, long-term, family, maternity,
disability, paid, unpaid or other), at a comparable salary, position and place
of employment as held by each such employee immediately prior to the Transfer
Date (such employees who are given such offers of employment and accept such
offers are referred to herein as the "Transferred Employees"); provided,
however, that the two (2) employees of the Stations designated in the TBA
Agreement shall continue as employees of Sellers and shall not become
Transferred Employees hereunder until the Closing. Nothing in this Section 8.4.1
is intended to guarantee employment for any Transferred Employee for any length
of time after the Transfer Date.
8.4.2. Except as provided otherwise in this Section 8.4, Sellers shall
pay, discharge and be responsible for (a) all salary and wages arising out of or
relating to the employment of the employees of the Stations prior to the
Transfer Date and (b) any employee benefits arising under the Benefit Plans of
any Seller Party, any Heritage Subsidiary and their Affiliates during the period
prior to the Transfer Date. From and after the Transfer Date, Buyer shall pay,
discharge and be responsible for all salary, wages and benefits arising out of
or relating to the employment of the Transferred Employees by Buyer on and after
the Transfer Date. Buyer shall be responsible for all severance Liabilities, and
all COBRA Liabilities for any Transferred Employees of the Stations terminated
by Buyer on or after the Transfer Date, including, without limitation all
Liabilities under the retention and severance agreements set forth on Schedule
8.4.8 (subject to the reimbursement obligations of Sellers set forth in Section
8.4.8).
8.4.3. Buyer shall cause all Transferred Employees as of the Transfer
Date to be eligible to participate in its "employee welfare benefit plans" and
"employee pension benefit plans" (as defined in Section 3(1) and 3(2) of ERISA,
respectively) of Buyer in which similarly situated employees of Buyer are
generally eligible to participate; provided, however, that all Transferred
Employees and their spouses and dependents shall be eligible for coverage
immediately after the Transfer Date (and shall not be excluded from coverage on
account of any pre-existing condition) to the extent provided under such plans
with respect to Transferred Employees.
8.4.4. For purposes of any length of service requirements, waiting
periods, vesting periods or differential benefits based on length of service in
any such plan for which a Transferred Employee may be eligible after the
Transfer Date, Buyer shall ensure that, to the extent permitted by law, service
by such Transferred Employee with any Seller, any Heritage Subsidiary or any
Affiliate of
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Sellers or the Heritage Subsidiaries shall be deemed to have been service with
Buyer. In addition, Buyer shall ensure that each Transferred Employee receives
credit under any welfare benefit plan of Buyer for any deductibles or
co-payments paid by such Transferred Employee and his or her dependents for the
current plan year under a plan maintained by any Seller, any Heritage Subsidiary
or any Affiliate of Sellers or the Heritage Subsidiaries. Buyer shall grant
credit to each Transferred Employee for all sick leave in accordance with the
policies of Buyer applicable generally to its employees after giving effect to
service for any Seller or any Heritage Subsidiary as service for Buyer. To the
extent taken into account in determining the Final Proration Amount, Buyer shall
assume and discharge Liabilities of Sellers for the payment of all unused
vacation leave accrued by Transferred Employees as of the Transfer Date. To the
extent any claim with respect to such accrued vacation leave is lodged against
Sellers, with respect to any Transferred Employee, Buyer shall indemnify, defend
and hold harmless Sellers from and against any and all losses, directly or
indirectly, as a result of, or based upon or arising from the same.
8.4.5. As soon as practicable following the Transfer Date, Buyer shall
establish and maintain a defined contribution plan or plans (which may be a
preexisting plan or plans (the "Buyer's Plan") intended to be qualified under
Section 401(a) and 401(k) of the Code for the benefit of the Transferred
Employees. Effective as of the Transfer Date, Sellers shall, and shall use their
commercially reasonable efforts to enforce such rights under the Heritage
Agreement to cause the Heritage Subsidiaries to, cause appropriate amendments to
be made to all retirement savings plans to which any Transferred Employees
participate (the "Sellers' Plan") to provide that the Transferred Employees
shall be fully vested in their accounts under the Sellers' Plan. As soon as
practicable after the Transfer Date, Buyer shall take all necessary action to
qualify the Buyer's Plan under the applicable provisions of the Code (including
but not limited to Section 401), if it is not yet so qualified, and Buyer and
Sellers shall make any and all filings and submissions to the appropriate
governmental agencies required to be made by them in connection with the
transfer of assets described hereafter. As soon as practicable following the
earlier of the receipt of a favorable determination letter from the Internal
Revenue Service regarding the qualified status of both the Sellers' Plan and the
Buyer's Plan (each as amended to the date of transfer) or sooner, if Sellers and
Buyer so agree, Sellers shall, and shall use their commercially reasonable
efforts to enforce such rights under the Heritage Agreement to, cause the
Heritage Subsidiaries to cause to be transferred to the Buyer's Plan, in cash
and in kind, all of the individual account balances of Transferred Employees
under the Sellers' Plan, including any outstanding plan participant loan
receivables allocated to such accounts.
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8.4.6. Buyer acknowledges and agrees that Buyer's obligations pursuant
to this Section 8.4 are in addition to, and not in limitation of, Buyer's
obligation to assume the employment contracts set forth on Schedule 2.1.8.
8.4.7. Except as otherwise provided in this Section 8.4 or in any
employment, severance or retention agreements of any Transferred Employees, all
Transferred Employees shall be at-will employees, and Buyer may terminate their
employment or change their terms of employment at will. No employee (or
beneficiary of any employee) of the Stations may ▇▇▇ to enforce the terms of
this Agreement, including specifically this Section 8.4, and no employee or
beneficiary shall be treated as a third party beneficiary of this Agreement.
Except to the extent provided for herein, Buyer may cover the Transferred
Employees under existing or new benefit plans, programs, and arrangements, and
may amend or terminate any such plans, programs, or arrangements at any time.
8.4.8. To the extent that Sellers receive any severance payments from
the Heritage Subsidiaries in connection with the termination of employment by
Sellers or Buyer of a general manager for the Stations in accordance with the
terms of the Heritage Agreement, Sellers shall pay any such amounts received
from the Heritage Subsidiaries to Buyer within five (5) days of receipt.
8.5. DISCLOSURE SCHEDULES.
Prior to Sellers' acquisition of the Stations from the Heritage
Subsidiaries, Sellers shall have the right from time to time to update or
correct Schedules 2.1.5, 2.1.6, 2.1.9, 2.1.10, 3.4 and 3.17 attached hereto
solely to reflect actions by Sellers or the Heritage Subsidiaries after the date
hereof which are not prohibited by Section 6.1 of the Heritage Agreement or this
Agreement. From and after Sellers' acquisition of the Stations from the Heritage
Subsidiaries and prior to the Transfer Date, Sellers shall have the obligation
to update or correct Schedules 2.1.5, 2.1.6, 2.1.9, 2.1.10, 3.4 and 3.17
attached hereto solely to reflect actions by Sellers which are not prohibited by
Section 6.1 hereof. The inclusion of any fact or item on a Schedule referenced
by a particular section in this Agreement shall, should the existence of the
fact or item or its contents, be relevant to any other section, be deemed to be
disclosed with respect to such other section whether or not an explicit
cross-reference appears in the Schedules.
8.6. BULK SALES LAWS.
Buyer hereby waives compliance by Sellers, in connection with the
transactions contemplated hereby, with the provisions of any applicable bulk
transfer laws.
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8.7. TAX MATTERS.
Each party hereto represents, warrants, covenants and agrees that for
tax purposes the sale of Assets (except for the License Assets) is not effective
until the Transfer Date, and the sale of the License Assets is not effective
until the Closing Date. Seller and Buyer agree that all Tax returns and reports
shall be filed consistent with the sale of Assets taking place as aforesaid.
8.8. PRESERVATION OF BOOKS AND RECORDS.
For a period of three (3) years after the Closing Date, Sellers agree
not to dispose of, and agree to provide Buyer reasonable access to, any material
books or records in possession of Sellers immediately after the Transfer Date
that relate to the business or operations of the Stations prior to the Transfer
Date.
8.9. TBA AGREEMENT.
At the Non-License Transfer pursuant to Section 11.2, Buyer and Sellers
shall enter into a time brokerage agreement for the Stations substantially in
the form of Exhibit E hereto (the "TBA Agreement").
ARTICLE 9.
CONDITIONS PRECEDENT TO
OBLIGATIONS OF BUYER
The obligations of Buyer to purchase the Assets and to consummate the
Non-License Transfer or proceed with the Closing, as applicable, are subject to
the satisfaction (or waiver in writing by Buyer) at or prior to the Non-License
Transfer or the Closing, as applicable, of each of the following conditions:
9.1. CLOSING UNDER THE HERITAGE AGREEMENT.
Sellers shall have acquired the Assets pursuant to the terms of the
Heritage Agreement.
9.2. REPRESENTATIONS AND COVENANTS.
The representations and warranties of Sellers made in this Agreement
shall be true and correct on and as of the Non-License Transfer Date or the
Closing Date, as applicable, with the same effect as though such representations
and warranties had been made on and as of the Non-License Transfer Date or the
Closing Date, as applicable (except as modified by the Schedules updated after
the date hereof in accordance with Section 8.5 and except
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for representations and warranties that speak as of a specific date or time
other than the Non-License Transfer Date or the Closing Date, as applicable
(which need only be true and correct in all material respects as of such date or
time)), and the covenants and agreements of Sellers required to be performed on
or before the Non-License Transfer Date or the Closing Date, as applicable, in
accordance with the terms of this Agreement shall have been performed in all
respects, except to the extent that the failure of such representations and
warranties to be true and correct and the failure to perform such covenants
shall not have, when considered together, had a material adverse effect on any
material FCC Licenses or on the broadcast transmissions of any Station (a
"Transmission Defect"); provided, however, if a Transmission Defect exists as of
the Non-License Transfer Date or the Closing Date, as applicable, then either or
both of Sellers and Buyer shall be entitled, by written notice to the other, to
postpone the Non-License Transfer Date or the Closing Date, as applicable, for a
period of up to sixty (60) days to resume such Station's broadcast transmission.
9.3. NO TRANSMISSION DEFECTS.
There shall not exist any loss or damage at any of the Stations which
has resulted in the regular broadcast transmission of such Station (including
its effective radiated power) to be diminished in any material respect;
provided, that if any such loss or damage does exist, then either or both of
Sellers and Buyer shall be entitled, by written notice to the other, to postpone
the Non-License Transfer Date or the Closing Date, as applicable, for a period
of up to sixty (60) days to resume such Station's broadcast transmission.
9.4. DELIVERY OF DOCUMENTS.
Sellers shall have delivered to Buyer all contracts, agreements,
instruments and documents required to be delivered by Sellers to Buyer pursuant
to Section 11.4.
9.5. FCC ORDER.
The FCC Order shall have been issued with respect to each Station;
provided, however, that there shall be no requirement that the FCC Order shall
have been issued as of the Non-License Transfer Date.
9.6. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇.
All applicable waiting periods under ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ shall have
expired or terminated.
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9.7. LEGAL PROCEEDINGS.
No injunction, restraining order or decree of any nature of any court
or Governmental Authority of competent jurisdiction shall be in effect that
restrains or prohibits the transactions contemplated by this Agreement.
ARTICLE 10.
CONDITIONS PRECEDENT TO
OBLIGATION OF SELLERS
The obligations of Sellers to sell, transfer, convey and deliver the
Assets and to consummate the Non-License Transfer or to proceed with the
Closing, as applicable, are subject to the satisfaction (or waiver in writing by
Sellers) at or prior to the Non-License Transfer or the Closing, as applicable,
of each of the following conditions:
10.1. CLOSING UNDER THE HERITAGE AGREEMENT.
Sellers shall have acquired the Assets pursuant to the terms of the
Heritage Agreement.
10.2. REPRESENTATIONS AND COVENANTS.
The representations and warranties of Buyer made in this Agreement
shall be true and correct in all material respects on and as of the Non-License
Transfer Date or the Closing Date, as applicable, with the same effect as though
such representations and warranties had been made on and as of the Non-License
Transfer Date or the Closing Date, as applicable, (except for representations
and warranties that speak as of a specific date or time other than the
Non-License Transfer Date or the Closing Date, as applicable, (which need only
be true and correct in all material respects as of such date or time)), and the
covenants and agreements of Buyer required to be performed on or before the
Non-License Transfer Date or the Closing Date, as applicable, in accordance with
the terms of this Agreement shall have been performed in all material respects.
10.3. DELIVERY BY BUYER.
Buyer shall have delivered to Sellers the Purchase Price in accordance
with Section 2.5 and all contracts, agreements, instruments and documents
required to be delivered by Buyer to Seller pursuant to Section 11.5.
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10.4. FCC ORDER.
The FCC Order shall have been issued with respect to each Station;
provided, however, that there shall be no requirement that the FCC Order shall
have been issued as of the Non-License Transfer Date.
10.5. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇.
All applicable waiting periods under ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ shall have
expired or terminated.
10.6. LEGAL PROCEEDINGS.
No injunction, restraining order or decree of any nature of any court
or Governmental Authority of competent jurisdiction shall be in effect that
restrains or prohibits the transactions contemplated by this Agreement.
ARTICLE 11.
CLOSING; NON-LICENSE TRANSFER
11.1. CLOSING.
11.1.1. To the extent not previously transferred pursuant to the
Non-License Transfer, the closing for all of the Assets hereunder (the
"Closing") shall be held on a date specified by Buyer that is within ten (10)
days after the later of (a) the date on which all applicable waiting periods
under ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ shall have expired or terminated, or (b) the date on
which all of the FCC Orders for all Stations shall have been issued (the date on
which the Closing shall occur pursuant to this Section 11.1 is referred to
herein as the "Closing Date").
11.1.2. If the Closing shall not have occurred on or prior to such date
which is two (2) years after the date of this Agreement due to the failure to
receive an FCC Order for reasons relating solely to Buyer's qualifications,
Buyer shall designate a successor licensee and the parties will cooperate to
secure the necessary governmental approvals to cause the designated successor to
become the licensee. If the Closing shall not have occurred on or prior to such
date which is four (4) years after the date of this Agreement due to the failure
to receive an FCC Order for reasons relating solely to any Seller, Sellers shall
jointly and severally indemnify, defend and hold Buyer harmless from and against
any and all actual Losses incurred by Buyer as a result of the FCC's failure to
issue such FCC Order by such date for such reasons. All proceeds received from a
transfer of the License Assets to any such successor licensee shall be for
Buyer; provided, however, to the
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extent Buyer has not incurred any Losses for which the Sellers have indemnified
Buyer pursuant to the preceding sentence, Sellers shall receive the amount of
TWO MILLION DOLLARS ($2,000,000) which would otherwise have been payable to
Sellers at Closing pursuant to Section 2.5.2.
11.1.3. If the Closing shall not have occurred on or prior to such date
which is four (4) years after the date of this Agreement, Sellers and Buyer
acknowledge and agree to cooperate and use commercially reasonable efforts to
consummate the sale to a third party of both the License Assets and the
Non-License Assets in an orderly and mutually satisfactory manner (the "Third
Party Sale"). At the closing of the Third Party Sale pursuant to this Section
11.1.3, (a) up to Two Million Dollars ($2,000,000) of the proceeds therefrom
shall be paid directly to Sellers by wire transfer of immediately available
funds to an account identified by Sellers in writing, and (b) any proceeds
therefrom in excess of the Two Million Dollars ($2,000,000), if any, shall be
paid directly to Buyer by wire transfer of immediately available funds to an
account identified by Buyer writing.
11.2. NON-LICENSE TRANSFER.
11.2.1. Notwithstanding anything to the contrary herein, provided that
the conditions set forth in Article 9 (except for Section 9.5) and Article 10
(except for Section 10.4) shall have been satisfied and the Closing shall not
have occurred, there shall be a closing (the "Non-License Transfer") for the
purchase and sale of all of the Assets, other than the License Assets, upon the
earlier to occur of (a) such date which is seventy-five (75) days after the date
of this Agreement (the "Outside Date"), or (b) any date prior to the Outside
Date specified by Buyer in writing at least five (5) days prior to such date
(the date on which the Non-License Transfer shall occur pursuant to this Section
11.2.1 is referred to herein as the "Non-License Transfer Date"). The parties
acknowledge and agree that if the conditions set forth in Article 9 (except for
Section 9.5) and Article 10 (except for Section 10.4) are not satisfied as of
the Outside Date, the Outside Date shall be such date which is ten (10) days
after satisfaction of all such conditions (subject to rights of Sellers and
Buyer to terminate this Agreement prior to such date in accordance with Article
13).
11.2.2. At the Non-License Transfer, Sellers shall sell, assign,
transfer, convey and deliver to Buyer free and clear of any Encumbrances other
than Permitted Encumbrances, and Buyer shall purchase, acquire, pay for and
accept from Sellers, all right, title and interest of Sellers in, to and under
the Assets, other than the License Assets.
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11.3. TIME AND PLACE OF NON-LICENSE TRANSFER AND CLOSING.
The Closing and the Non-License Transfer shall be held at 10:00 A.M.
local time on the Closing Date and the Non-License Transfer Date, respectively,
at the offices of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, or at such other time and place as the parties may agree.
11.4. DELIVERIES BY SELLERS.
At the Non-License Transfer and the Closing, as applicable, Sellers
shall deliver to Buyer the following:
11.4.1. AGREEMENTS AND INSTRUMENTS
The following bills of sale, assignments and other
instruments of transfer duly executed by Sellers:
(a) a ▇▇▇▇ of Sale;
(b) an Assignment of FCC Licenses; provided
that the Assignment of Licenses shall not
be delivered at a Non-License Transfer;
(c) an Assignment of Contracts and Leases;
(d) an Assumption Agreement;
(e) certificates of title with respect to the
motor vehicles listed on Schedule 2.1.9
or if any such motor vehicles are leased
by a Seller, an assignment of such lease;
(f) special or limited warranty deeds for all
Real Property in the form appropriate to
the jurisdictions in which such Real
Property is located; and
(g) the TBA Agreement.
11.4.2. CONSENTS.
Copies of all consents Sellers have been able to obtain to
effect the assignment to Buyer of the Station Contracts listed on Schedule 3.4.
11.4.3. CERTIFIED RESOLUTIONS.
A copy of the approval of the board of directors and the
stockholders of each Seller, certified as being correct and complete and then in
full force and effect, authorizing the execution, delivery and performance of
this Agreement, and of the other Seller Documents, and the consummation of the
transactions contemplated hereby and thereby.
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11.4.4. OFFICERS' CERTIFICATES.
(a) A certificate of each Seller certifying the matters set
forth in Section 9.2; and
(b) A certificate of each Seller as to the incumbency of the
representatives of such Seller executing this Agreement or any of the other
Seller Documents on behalf of such Seller, and true and correct copies of the
organizational documents of each Seller.
11.4.5. GOOD STANDING CERTIFICATES.
To the extent available from the applicable jurisdictions,
certificates as to the formation and/or good standing of each Seller issued by
the appropriate governmental authorities in the states of organization and each
jurisdiction in which such Seller is qualified to do business, each such
certificate (if available) to be dated a date not more than a reasonable number
of days prior to the Transfer Date.
11.5. DELIVERIES BY BUYER.
At the Non-License Transfer and the Closing, Buyer shall deliver to
Sellers the following:
11.5.1. PURCHASE PRICE PAYMENT.
The Purchase Price in the amount and manner set forth in
Section 2.5.
11.5.2. AGREEMENTS AND INSTRUMENTS.
The Assumption Agreement and other instruments of transfer
duly executed by Buyer.
11.5.3. CERTIFIED RESOLUTIONS.
Copies of the resolutions of the board of directors and
stockholder of Buyer, certified as being correct and complete and then in full
force and effect, authorizing the execution, delivery and performance of this
Agreement and of the other Buyer Documents, and the consummation of the
transactions contemplated hereby and thereby.
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11.5.4. OFFICERS' CERTIFICATE.
(a) A certificate of Buyer signed by an officer of Buyer
certifying the matters set forth in Section 10.2; and
(b) A certificate signed by the Secretary of Buyer as to the
incumbency of the officers of Buyer executing this Agreement or any of the other
Buyer Documents on behalf of Buyer, and true and correct copies of the
organizational documents of Buyer.
ARTICLE 12.
SURVIVAL; INDEMNIFICATION
12.1. SURVIVAL OF REPRESENTATIONS.
12.1.1. Unless otherwise set forth herein (including, without
limitation, Section 12.1.2), all representations and warranties, covenants and
agreements of Sellers and Buyer contained in or made pursuant to this Agreement
or in any certificate furnished pursuant hereto shall survive the Non-License
Transfer Date or the Closing Date, as applicable, and shall remain in full force
and effect to the following extent: (a) representations and warranties with
respect to the Non-License Assets shall survive for a period of twelve (12)
months after the Non-License Transfer Date, (b) representations and warranties
with respect to the License Assets shall survive for a period of twelve (12)
months after the Closing Date, (c) the covenants and agreements with respect to
the Non-License Assets which by their terms survive the Non-License Transfer
Date shall continue in full force and effect until fully discharged (but not
beyond the expiration of twelve (12) months after the Non-License Transfer
Date), (d) the covenants and agreements with respect to the License Assets which
by their terms survive the Closing Date shall continue in full force and effect
until fully discharged (but not beyond the expiration of twelve (12) months
after the Closing Date), and (e) any representation, warranty, covenant or
agreement that is the subject of a claim which is asserted in a reasonably
detailed writing prior to the expiration of the survival period set forth in
this Section 12.1.1, shall survive with respect to such claim or dispute until
the final resolution thereof.
12.1.2. No claim for indemnification may be made pursuant to this
Article 12 after the survival period set forth in this Section 12.1.
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12.2. INDEMNIFICATION BY SELLERS.
Subject to the conditions and provisions of Section 12.4 and Section
12.5, from and after the Transfer Date, Sellers jointly and severally agree to
indemnify, defend and hold harmless Buyer from and against and in any respect
of, on a net after-tax basis, any and all Losses, asserted against, resulting
to, imposed upon or incurred by Buyer, directly or indirectly, by reason of or
resulting from: (a) any failure by Sellers to pay, perform or discharge any
Liabilities not assumed by Buyer pursuant hereto; (b) the business or operations
of the Stations during the period prior to the Transfer Date (except to the
extent Buyer has assumed the Liability for any such Losses pursuant hereto); (c)
any misrepresentation or breach of the representations and warranties of any
Seller contained in or made pursuant to this Agreement or any other Seller
Document; (d) any breach by Sellers of any covenants of Sellers contained in or
made pursuant to this Agreement or any other Seller Document; or (e) the failure
of any Seller to comply with the provisions of any applicable bulk transfer law.
12.3. INDEMNIFICATION BY BUYER.
Subject to the conditions and provisions of Section 12.4 and Section
12.5, from and after the Transfer Date, Buyer hereby agrees to indemnify, defend
and hold harmless Sellers from, against and with respect of, on a net after-tax
basis, any and all Losses, asserted against, resulting to, imposed upon or
incurred by Sellers, directly or indirectly, by reason of or resulting from: (a)
any failure by Buyer to pay, perform or discharge any Liabilities assumed by
Buyer pursuant hereto; (b) the business or operations of the Stations during the
period from and after the Transfer Date; (c) any misrepresentation or breach of
the representations and warranties of Buyer contained in or made pursuant to
this Agreement or any other Buyer Document; or (d) any breach by Buyer of any
covenants of Buyer contained in or made pursuant to this Agreement or any other
Buyer Document.
12.4. LIMITATIONS ON INDEMNIFICATION.
12.4.1. Notwithstanding any other provision of this Agreement to the
contrary, in no event shall Losses include a party's incidental, consequential
or punitive damages, regardless of the theory of recovery. Each party hereto
agrees to use reasonable efforts to mitigate any losses which form the basis for
any claim for indemnification hereunder.
12.4.2. Notwithstanding any other provision of this Agreement to the
contrary, Sellers shall not be liable to Buyer in respect of any indemnification
hereunder except to the extent that the aggregate amount of Losses of Buyer
under
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this Agreement exceeds Five Hundred Thousand Dollars ($500,000) (the "Basket
Amount"), and then only to the extent of the excess over the amount of Two
Hundred Fifty Thousand Dollars ($250,000); provided, however, that the aggregate
amount of Losses of Buyer under this Agreement shall not exceed Four Million
Dollars ($4,000,000) (the "Indemnity Cap"); further provided, however, the
Basket Amount shall not be applicable to any amounts owed in connection with the
determination of the Proration Amount pursuant to Section 2.6, to the payment or
reimbursement obligations of Sellers under Sections 8.2 and 8.4.8, or to the
indemnities set forth in Section 12.2(a) or Section 12.2(b); further provided,
however, the Indemnity Cap shall not be applicable (i) if the transfer of the
License Assets to Buyer has not occurred on or prior to such date which is four
(4) years from the date of this Agreement as a result of a default under, or
breach of, any of the terms of this Agreement by Sellers, (ii) if the Closing
has not occurred on or prior to such date which is four (4) years from the date
of this Agreement under the circumstances described in the second sentence of
Section 11.1.2, or (iii) in the event of fraud.
12.4.3. Notwithstanding any other provision of this Agreement to the
contrary, Buyer acknowledges and agrees that the maximum aggregate liability of
Sellers pursuant to this Agreement to Buyer and any third parties for any and
all Losses shall not exceed the Indemnity Cap, regardless of whether Buyer seeks
indemnification pursuant to this Article 12, regardless of the form of action,
whether in contract or tort, including negligence, and regardless of whether or
not Sellers are notified of the possibility of damages to Buyer or any other
third party; provided, however, the Indemnity Cap shall not be applicable if the
transfer of the License Assets to Buyer has not occurred on or prior to such
date which is four (4) years from the date of this Agreement as a result of a
default under, or breach of, any of the terms of this Agreement by Sellers, (ii)
if the Closing has not occurred on or prior to such date which is four (4) years
from the date of this Agreement under the circumstances described in the second
sentence of Section 11.1.2, or (iii) in the event of fraud.
12.4.4. Each party (a "recipient party") shall notify the other party
in writing (the "representing party") reasonably promptly of any perceived
breach by the representing party of which the recipient party has knowledge of
any representations, warranties, covenants and agreements, and of any Losses
(including a brief description of the same) of the recipient party caused
thereby. In the event of any breach that is cured prior to the Transfer Date in
accordance with the terms of this Agreement, the representing party shall have
no obligation under Section 12.2 or Section 12.3 or otherwise to indemnify the
recipient party with respect to such Losses.
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12.5. CONDITIONS OF INDEMNIFICATION.
The obligations and liabilities of Sellers and of Buyer hereunder with
respect to their respective indemnities pursuant to this Article 12, resulting
from any Losses, shall be subject to the following terms and conditions:
12.5.1. The party seeking indemnification (the "Indemnified Party")
must give the other party or parties, as the case may be (the "Indemnifying
Party"), notice of any such Losses promptly after the Indemnified Party receives
notice thereof; provided that the failure to give such notice shall not affect
the rights of the Indemnified Party hereunder except to the extent that the
Indemnifying Party shall have suffered actual damage by reason of such failure.
12.5.2. The Indemnifying Party shall have the right to undertake, by
counsel or other representatives of its own choosing, the defense of such Losses
at the Indemnifying Party's risk and expense.
12.5.3. In the event that the Indemnifying Party shall elect not to
undertake such defense, or, within a reasonable time after notice from the
Indemnified Party of any such Losses, shall fail to defend, the Indemnified
Party (upon further written notice to the Indemnifying Party) shall have the
right to undertake the defense, compromise or settlement of such Losses, by
counsel or other representatives of its own choosing, on behalf of and for the
account and risk of the Indemnifying Party (subject to the right of the
Indemnifying Party to assume defense of such Losses at any time prior to
settlement, compromise or final determination thereof). In such event, the
Indemnifying Party shall pay to the Indemnified Party, in addition to the other
sums required to be paid hereunder, the costs and expenses incurred by the
Indemnified Party in connection with such defense, compromise or settlement as
and when such costs and expenses are so incurred.
12.5.4. Anything in this Section 12.5 to the contrary notwithstanding,
(a) if there is a reasonable possibility that Losses may materially and
adversely affect the Indemnified Party other than as a result of money damages
or other money payments, the Indemnified Party shall have the right, at its own
cost and expense, to participate in the defense, compromise or settlement of the
Losses, (b) the Indemnifying Party shall not, without the Indemnified Party's
written consent, settle or compromise any Losses or consent to entry of any
judgment which does not include as an unconditional term thereof the giving by
the claimant or the plaintiff to the Indemnified Party of a release from all
liability in respect of such Losses in form and substance satisfactory to the
Indemnified Party, and (c) in the event that the Indemnifying Party undertakes
defense of any Losses, the Indemnified Party, by counsel or other representative
of its own choosing and at its sole cost and expense, shall have the right to
consult with the Indemnifying
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Party and its counsel or other representatives concerning such Losses and the
Indemnifying Party and the Indemnified Party and their respective counsel or
other representatives shall cooperate with respect to such Losses and (d) in the
event that the Indemnifying Party undertakes defense of any Losses, the
Indemnifying Party shall have an obligation to keep the Indemnified Party
informed of the status of the defense of such Losses and furnish the Indemnified
Party with all documents, instruments and information that the Indemnified Party
shall reasonably request in connection therewith.
12.6. CURE OF BREACH.
Notwithstanding any other provision of this Agreement to the contrary,
a breach by Sellers of any representations and warranties or a failure to
perform any covenant or agreement hereunder may be cured by Sellers prior to the
Transfer Date (a) by reducing the Purchase Price in an amount equal to the
Losses to Buyer caused by such breach, (b) by making payment to a third party or
taking other action to discharge the Losses, (c) by placing an amount equal to
the Losses in an escrow account under an escrow arrangement reasonably
satisfactory to Sellers and Buyer or (d) a combination of the foregoing. If the
foregoing actions fully cure the breach, Sellers shall have no obligation under
Section 12.2 or otherwise to indemnify Buyer with respect to the Losses caused
by such breach; if such actions partially cure the breach, Sellers shall
continue to have an obligation under Section 12.2 to indemnify Buyer with
respect to the remaining portion of the Losses caused by such breach.
ARTICLE 13.
TERMINATION
13.1. TERMINATION BY THE PARTIES.
This Agreement may be terminated at any time prior to the Closing by:
13.1.1. the mutual consent of Sellers and Buyer;
13.1.2. Sellers in accordance with, and subject to, the terms and
conditions of Section 14.1; and
13.1.3. Buyer if any loss or damage at a Station described in Section
9.3 shall not have been cured within the sixty (60) day period described in
Section 9.3.
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13.1.4. Buyer if the closing of the Heritage Agreement with respect to
the Stations shall not have occurred on or prior to July 16, 1998.
13.2. AUTOMATIC TERMINATION.
This Agreement shall automatically terminate without further action by
the parties upon the termination of the Heritage Agreement in accordance with
its terms.
13.3. EFFECT OF TERMINATION.
13.3.1. In the event this Agreement is terminated as provided in
Sections 13.1.1, 13.1.3, 13.1.4 and 13.2, Buyer shall receive the immediate
return of the Letter of Credit, this Agreement shall be deemed null, void and of
no further force or effect, and the parties hereto shall be released from all
future obligations hereunder; provided, however, that the obligations of Buyer
and Sellers set forth in Sections 6.3 and 7.1 (which relate to confidentiality),
and Section 15.3 (which relates to payment of certain expenses), shall survive
such termination and the parties hereto shall have any and all remedies to
enforce such obligations provided at law or in equity or otherwise (including,
without limitation, specific performance).
13.3.2. In the event this Agreement is terminated as provided in
Section 13.1.2, this Agreement shall be deemed null, void and of no further
force or effect, and the parties hereto shall be released from all future
obligations hereunder; provided, however, that the obligations of Buyer and
Sellers set forth in Sections 6.3 and 7.1 (which relate to confidentiality),
Article 14 (which relates to remedies and the Letter of Credit) and Section 15.3
(which relates to payment of certain expenses), shall survive such termination
and the parties hereto shall have any and all remedies to enforce such
obligations provided at law or in equity or otherwise (including, without
limitation, specific performance).
ARTICLE 14.
REMEDIES
14.1. DEFAULT BY BUYER.
If Buyer shall default in the performance of its obligations under this
Agreement in any material respect and such default is not cured within thirty
(30) days after notice thereof (it being understood that Buyer shall have no
right to such thirty (30) day cure period with respect to a payment default
under Section 2.5), and provided that Sellers shall not then be in material
default in the performance of
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their obligations hereunder, Sellers shall be entitled, by written notice to
Buyer, to terminate this Agreement, and as the sole and exclusive remedy of
Sellers under this Agreement, to receive the Deposit by drawing on the Letter of
Credit in accordance with the terms of the Deposit Escrow Agreement and the
Letter of Credit (without set-off, deduction or counterclaim) as liquidated
damages, and upon such payment Buyer shall be discharged from all further
liability under this Agreement.
14.2. LIQUIDATED DAMAGES.
Sellers and Buyer have provided for the amount of the Deposit to be
liquidated damages as a remedy for Sellers after having considered carefully the
anticipated and actual ▇▇▇▇▇ and losses that would be incurred if Buyer defaults
and thus fails to perform its obligations to consummate the transactions
contemplated hereunder, the difficulty of ascertaining at this time the actual
amount of damages, special and general, that Sellers will suffer in such event,
and the inconvenience or nonfeasibility of otherwise obtaining an adequate
remedy in such event.
14.3. SPECIFIC PERFORMANCE.
Sellers acknowledge that the Assets to be sold and delivered to Buyer
pursuant to this Agreement are unique and that Buyer has no adequate remedy at
law if Sellers shall fail to perform any of their obligations hereunder, and
Sellers therefore confirm and agree that Buyer's right to specific performance
is essential to protect the rights and interests of Buyer. Accordingly, in
addition to any other remedies which Buyer may have hereunder or at law or in
equity or otherwise, Sellers hereby agree that Buyer shall have the right to
have all obligations, undertakings, agreements and other provisions of this
Agreement specifically performed by Sellers and that Buyer shall have the right
to obtain an order or decree of such specific performance in any of the courts
of the United States or of any state or other political subdivision thereof.
ARTICLE 15.
GENERAL PROVISIONS
15.1. ADDITIONAL ACTIONS, DOCUMENTS AND INFORMATION.
Buyer agrees that it will, at any time, prior to, at or after the
Transfer Date, take or cause to be taken such further actions, and execute,
deliver and file or cause to be executed, delivered and filed such further
documents and instruments and obtain such consents, as may be reasonably
requested by Sellers in
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connection with the consummation of the purchase and sale contemplated by this
Agreement. Sellers agree that they will, at any time, prior to, at or after the
Transfer Date, take or cause to be taken such further actions, and execute,
deliver and file or cause to be executed, delivered and filed such further
documents and instruments and obtain such consents, as may be reasonably
requested by Buyer in connection with the consummation of the purchase and sale
contemplated by this Agreement.
15.2. BROKERS.
Each Seller represents to Buyer that such Seller has not engaged, or
incurred any unpaid liability (for any brokerage fees, finders' fees,
commissions or otherwise) to, any broker, finder or agent in connection with the
transactions contemplated by this Agreement; except for ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
(whose fee is the sole responsibility of Buyer), Buyer represents to Sellers
that Buyer has not engaged, or incurred any unpaid liability (for any brokerage
fees, finders' fees, commissions or otherwise) to, any broker, finder or agent
in connection with the transactions contemplated by this Agreement; and Seller
agrees to indemnify Buyer, and Buyer agrees to indemnify Sellers, against any
claims asserted against the other party for any such fees or commissions by any
person purporting to act or to have acted for or on behalf of the indemnifying
party. Notwithstanding any other provision of this Agreement, this
representation and warranty shall survive the Transfer Date without limitation
and shall not be subject to the Basket Amount contained in Section 12.4.
15.3. EXPENSES AND TAXES.
Each party hereto shall pay its own expenses incurred in connection
with this Agreement and in the preparation for and consummation of the
transactions provided for herein. Notwithstanding the foregoing, Buyer, on the
one hand, and Sellers, on the other hand, shall each pay one-half of (a) all
sales (including, without limitation, bulk sales), use, documentary, stamp,
gross receipts, registration, transfer, conveyance, excise, recording, license
and other similar Taxes and fees ("Transfer Taxes") applicable to, imposed upon
or arising out of the sale by Sellers and the purchase by Buyer of the Assets
whether now in effect or hereinafter adopted and regardless of which party such
Transfer Tax is imposed upon (except for any Taxes incurred by Sellers from any
gain realized on the sale of the Assets hereunder, which Taxes shall be the sole
responsibility of Sellers), (b) any FCC filing fees incurred in connection with
the assignment of the FCC Licenses to Buyer, (c) any fees and expenses incurred
in connection with any HSR Filings, and (d) the fees and expenses of ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ for the environmental site assessments performed on the Real Property as
disclosed on Schedule 3.16.
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15.4. NOTICES.
All notices, demands, requests, or other communications which may be or
are required to be given or made by any party to any other party pursuant to
this Agreement shall be in writing and shall be hand delivered, mailed by
first-class registered or certified mail, return receipt requested, postage
prepaid, delivered by overnight air courier, or transmitted by telegram, telex,
or facsimile transmission addressed as follows:
If to Buyer:
STC Broadcasting, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with copies (which shall not constitute notice) to:
▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and to:
Hicks, Muse, ▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Seller:
▇▇▇▇▇▇▇▇ Broadcast Group, Inc.
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇, President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with copies (which shall not constitute notice) to:
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▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and to:
▇▇▇▇▇▇▇▇ Communications, Inc.
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address as the addressee may indicate by written notice to the
other parties.
Each notice, demand, request, or communication which shall be given or
made in the manner described above shall be deemed sufficiently given or made
for all purposes at such time as it is delivered to the addressee (with the
return receipt, the delivery receipt, the affidavit of messenger or (with
respect to a telex) the answerback being deemed conclusive but not exclusive
evidence of such delivery) or at such time as delivery is refused by the
addressee upon presentation.
15.5. WAIVER.
No delay or failure on the part of any party hereto in exercising any
right, power or privilege under this Agreement or under any other instrument or
document given in connection with or pursuant to this Agreement shall impair any
such right, power or privilege or be construed as a waiver of any default or any
acquiescence therein. No single or partial exercise of any such right, power or
privilege shall preclude the further exercise of such right, power or privilege,
or the exercise of any other right, power or privilege. No waiver shall be valid
against any party hereto unless made in writing and signed by the party against
whom enforcement of such waiver is sought and then only to the extent expressly
specified therein.
15.6. BENEFIT AND ASSIGNMENT.
15.6.1. No Seller shall assign this Agreement, in whole or in part,
whether by operation of law or otherwise, without the prior written consent of
Buyer and any purported assignment contrary to the terms hereof shall be null,
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void and of no force and effect. The Buyer shall not assign this Agreement, in
whole or in part, whether by operation of law or otherwise, without the prior
written consent of Sellers and any purported assignment contrary to the terms
hereof shall be null, void and of no force and effect; provided, however, Buyer
shall be entitled, without the consent of Sellers, to assign Buyer's rights and
interests hereunder (in whole or in part as to any Station) (a) prior to the
Transfer Date, to any Person that directly or indirectly is in control of, or is
controlled by, or is under common control with Buyer; further provided, however,
that Buyer gives Seller written notice thereof and such assignee shall be
responsible for all representations, covenants and agreements of Buyer hereunder
as if such assignee was a party hereto, and that any such assignment shall not
relieve Buyer of any of its Liabilities hereunder; and (b) from and after the
Transfer Date, to any Person.
15.6.2. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns as
permitted hereunder. No Person, other than the parties hereto and their
respective successors and assigns as permitted hereunder, is or shall be
entitled to bring any action to enforce any provision of this Agreement against
any of the parties hereto, and the covenants and agreements set forth in this
Agreement shall be solely for the benefit of, and shall be enforceable only by,
the parties hereto or their respective successors and assigns as permitted
hereunder.
15.7. ENTIRE AGREEMENT; AMENDMENT.
This Agreement, including the Schedules and Exhibits hereto and the
other instruments and documents referred to herein or delivered pursuant hereto,
contains the entire agreement among the parties with respect to the subject
matter hereof and supersedes all prior oral or written agreements, commitments
or understandings with respect to such matters. No amendment, modification or
discharge of this Agreement shall be valid or binding unless set forth in
writing and duly executed by each of the parties hereto.
15.8. SEVERABILITY.
If any part of any provision of this Agreement or any other contract,
agreement, document or writing given pursuant to or in connection with this
Agreement shall be invalid or unenforceable under applicable law, such part
shall be ineffective to the extent of such invalidity or unenforceability only,
without in any way affecting the remaining parts of such provisions or the
remaining provisions of said contract, agreement, document or writing.
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15.9. HEADINGS.
The headings of the sections and subsections contained in this
Agreement are inserted for convenience only and do not form a part or affect the
meaning, construction or scope thereof.
15.10. GOVERNING LAW.
This Agreement, the rights and obligations of the parties hereto, and
any claims or disputes relating thereto, shall be governed by and construed
under and in accordance with the laws of the State of New York, excluding the
choice of law rules thereof.
15.11. SIGNATURE IN COUNTERPARTS.
This Agreement may be executed in separate counterparts, none of which
need contain the signatures of all parties, each of which shall be deemed to be
an original, and all of which taken together constitute one and the same
instrument. It shall not be necessary in making proof of this Agreement to
produce or account for more than the number of counterparts containing the
respective signatures of, or on behalf of, all of the parties hereto.
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IN WITNESS WHEREOF, each of the parties hereto has executed this Asset
Purchase Agreement, or has caused this Asset Purchase Agreement to be duly
executed and delivered in its name on its behalf, all as of the day and year
first above written.
STC BROADCASTING OF VERMONT, INC.
By:______________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Chief Financial Officer
TUSCALOOSA BROADCASTING, INC.
By:______________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: Treasurer and Secretary
WPTZ LICENSEE, INC.
By:______________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: Treasurer and Secretary
WNNE LICENSEE, INC.
By:______________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇
Title: Treasurer and Secretary
ANNEX I
DEFINITIONS
"ACCOUNTING FIRM" shall have the meaning set forth in Section 2.6.2.
"ACCOUNTS RECEIVABLE" means all cash accounts receivable with respect
to the Stations as of the end of the broadcast day immediately preceding the
Transfer Date.
"ADDITIONAL AGREEMENTS" shall have the meaning set forth in Section
6.1.6(a).
"AFFILIATE" shall mean, with respect to any Person, any other Person
that, (a) directly or indirectly is in control of, is controlled by, or is under
common control with, the first Person, (b) is an officer, director, trustee,
partner (general or limited), employee or holder of five percent (5%) or more of
any class of any voting or non-voting securities or other equity in the first
Person, (c) is an officer, director, trustee, partner (general or limited),
employee or holder of five percent (5%) or more of any class of the voting or
non-voting securities or other equity in any Person which directly or indirectly
is in control of, is controlled by, or is under common control with, the first
Person, and (d) any Family of any individual included in (a), (b) or (c). For
purposes of this definition, "control" (including with correlative meanings
"controlled by" and "under common control with") shall mean possession, directly
or indirectly, of either (X) five percent (5%) or more of the voting power of
the securities having ordinary voting power for the election of directors of the
first Person, or (Y) the power to direct or cause the direction of the
management or policies of the first Person (whether through ownership of
securities, partnership interests or any other ownership or debt interests, by
contract or otherwise).
"AGREEMENT" shall have the meaning set forth in the Preamble.
"APPLICANT" shall have the meaning set forth in Section 4.5.2.
"ASSETS" shall have the meaning set forth in Section 2.1.
"ASSIGNMENT OF CONTRACTS AND LEASES" means that certain Assignment of
Contracts and Leases, dated as of the Transfer Date and executed by Sellers,
substantially in the form attached hereto as Exhibit C.
"ASSIGNMENT OF FCC LICENSES" means that certain Assignment of FCC
Licenses, dated as of the Closing Date and executed by Sellers, substantially in
the form attached hereto as Exhibit B.
"ASSUMED LIABILITIES" mean the Liabilities assumed by Buyer pursuant to
Section 2.8.
"ASSUMPTION AGREEMENT" means that certain Assumption Agreement, dated
the Transfer Date and executed by Buyer and Sellers, substantially in the form
attached hereto as Exhibit D.
"BALANCE SHEET" shall have the meaning set forth in Section 3.5.1.
"BASE PURCHASE PRICE" shall have the meaning set forth in Section 2.4.
"BASKET AMOUNT" shall have the meaning set forth in Section 12.4.2.
"BENEFIT ARRANGEMENT" means any benefit arrangement, obligation,
custom, or practice, whether or not legally enforceable, to provide benefits,
other than salary, as compensation for services rendered, to present or former
directors, employees, agents, or independent contractors, other than any
obligation, arrangement, custom or practice that is a Plan, including, without
limitation, employment agreements, executive compensation arrangements,
incentive programs or arrangements, sick leave, vacation pay, plant closing
benefits, salary continuation for disability, consulting, or other compensation
arrangements, workers' compensation, retirement, deferred compensation, bonus,
stock option or purchase, hospitalization, medical insurance, life insurance,
tuition reimbursement or scholarship programs, perquisite, company cars, any
plans subject to Code Section 125, and any plans providing benefits or payments
in the event of a change of control, change in ownership, or sale of a
substantial portion (including all or substantially all) of the assets of any
business or portion thereof, in each case with respect to any present or former
employees, directors, or agents.
"BENEFIT PLANS" shall have the meaning set forth in Section 3.14.1.
"▇▇▇▇ OF SALE" means that certain ▇▇▇▇ of Sale and Assignment of
Assets, dated as of the Transfer Date and executed by Sellers, substantially in
the form attached hereto as Exhibit A.
"BUYER DOCUMENTS" shall mean, collectively, this Agreement, the Deposit
Escrow Agreement, the Assumption Agreement and the TBA Agreement.
"BUYER'S PLAN" shall have the meaning set forth in Section 8.4.5.
"CLOSING" shall have the meaning set forth in Section 11.1.1.
"CLOSING DATE" shall have the meaning set forth in Section 11.1.1.
"CODE" means the Internal Revenue Code of 1986, as amended, and all
Laws promulgated pursuant thereto or in connection therewith.
ANNEX I-2
"COMMUNICATIONS ACT" means the Communications Act of 1934, as amended.
"CURRENT BALANCE SHEET DATE" shall have the meaning set forth in
Section 3.5.2.
"DEFERRED CONTRACT" shall have the meaning set forth in Section
6.2.10(b).
"DEPOSIT" shall have the meaning set forth in Section 2.3.
"DEPOSIT ESCROW AGENT" means ▇▇▇▇▇▇ ▇▇▇▇▇ Bank.
"DEPOSIT ESCROW AGREEMENT" means that certain Escrow Agreement dated as
of the date hereof by and among Buyer, Sellers and the Deposit Escrow Agent.
"DESIGNATED PROPERTIES" shall have the meaning set forth in Section
6.2.10(b).
"DMA" means the designated market area for a particular television or
radio station as determined by the ▇.▇. ▇▇▇▇▇▇▇ Co.
"ENCUMBRANCES" mean any mortgages, pledges, liens, security interests,
defects in title, easements, rights-of-way, encumbrances, restrictions and any
other matters affecting title.
"ENVIRONMENTAL LAWS" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, ("CERCLA") as amended by the Superfund
Amendments and Reauthorization Act of 1986 ("▇▇▇▇"), 42 U.S.C. ss. 9601 et seq.;
the Toxic Substances Control Act ("TSCA"), 15 U.S.C. ss. 2601 et seq.; the
Hazardous Materials Transportation Act, 49 U.S.C. ss. 1802 et seq.; the Resource
Conservation and Recovery Act ("RCRA"), 42 U.S.C. ss. 9601 et seq.; the Clean
Water Act ("CWA"), 33 U.S.C. ss. 1251 et seq.; the Safe Drinking Water Act, 42
U.S.C. ss. 300f et seq.; the Clean Air Act ("CAA"), 42 U.S.C. ss. 7401 et seq.;
or any other applicable federal, state, or local laws relating to Hazardous
Materials generation, production, use, storage, treatment, transportation or
disposal, or the protection of the environment from Hazardous Materials
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and all Laws promulgated pursuant thereto or in connection therewith.
ANNEX I-3
"ERISA AFFILIATE" means any person that, together with any Seller
Party, would be or was prior to March 17, 1997 treated as a single employer
under Section 414 of the Code or Section 4001 of ERISA.
"EXCLUDED ASSETS" shall have the meaning set forth in Section 2.2.
"FAMILY" of an individual includes (a) the individual, (b) the
individual's spouse and former spouses and any other natural person who resides
with such individual, (c) any other natural person who is related to the
individual or any person described in the preceding clause (b) within the second
degree.
"FCC" means the Federal Communications Commission.
"FCC APPLICATIONS" shall have the meaning set forth in Section 5.1.
"FCC LICENSES" shall have the meaning set forth in Section 2.1.1.
"FCC ORDER" means an order or orders of the FCC, or of the Chief, Mass
Media Bureau of the FCC, acting under delegated authority, consenting to the
assignment to Buyer of the FCC Licenses for the Stations.
"FINAL PRORATION AMOUNT" shall have the meaning set forth in Section
2.6.2.
"GOVERNMENTAL AUTHORITY" means any agency, board, bureau, court,
commission, department, instrumentality or administration of the United States
government, any foreign government, any state government or any local or other
governmental body in a state, territory or possession of the United States or
the District of Columbia.
"▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended, and all Laws promulgated pursuant thereto or in
connection therewith.
"HAZARDOUS MATERIALS" means any wastes, substances, or materials
(whether solids, liquids or gases) that are deemed hazardous, toxic, pollutants,
or contaminants, including without limitation, substances defined as "hazardous
wastes," "hazardous substances," "toxic substances," "radioactive materials," or
other similar designations in, or otherwise subject to regulation under, any
Environmental Laws.
"HERITAGE SUBSIDIARIES" shall have the meaning set forth in the
Recitals.
ANNEX I-4
"HERITAGE AGREEMENT" shall have the meaning set forth in the Recitals.
"HMSI" shall have the meaning set forth in the Recitals.
"HSR FILING" shall have the meaning set forth in Section 5.2.
"INDEMNITY CAP" shall have the meaning set forth in Section 12.4.2.
"INDEMNIFIED PARTY" and "INDEMNIFYING PARTY" shall have the respective
meanings set forth in Section 12.5.1.
"INTELLECTUAL PROPERTY" shall have the meaning set forth in Section
2.1.4.
"LAWS" means any federal, state or local law, foreign law, statute,
code, ordinance, regulation, order, writ, injunction, judgment or decree
applicable to the specified Person and to the businesses and assets thereof.
"LEASED PROPERTY" shall have the meaning set forth in Section 2.1.2(b).
"LETTER OF CREDIT" shall have the meaning set forth in Section 2.3.
"LIABILITIES" shall mean, as to any Person, all debts, adverse claims,
liabilities and obligations, direct, indirect, absolute or contingent of such
Person, whether accrued, vested or otherwise, whether in contract, tort, strict
liability or otherwise and whether or not actually reflected, or required by
generally accepted accounting principles to be reflected, in such Person's
balance sheets or other books and records.
"LICENSE ASSETS" shall mean the FCC Licenses and the other Assets
described on Schedule I hereto.
"LMA" means any time brokerage agreement, local marketing arrangement,
joint sales agreement, joint operating agreement, limited management agreement
or other similar agreement or contract.
"LOSSES" means any and all demands, claims, complaints, actions or
causes of action, suits, proceedings, investigations, arbitrations, assessments,
losses, damages, liabilities, obligations (including those arising out of any
action, such as any settlement or compromise thereof or judgment or award
therein) and any costs and expenses, including, without limitation, reasonable
attorneys' fees and disbursements.
ANNEX I-5
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the
business, assets or financial condition of the Stations taken as a whole, except
for any such material adverse effect resulting from (a) general economic
conditions applicable to the television broadcast industry, (b) general
conditions in the markets in which the Stations operate, (c) circumstances that
are not likely to recur and either have been substantially remedied or can be
substantially remedied without substantial cost or delay, or (d) the refusal by
Buyer to consent to any new Program Contract.
"MULTIEMPLOYER PLAN" means any Plan described in Section 3(37) of
ERISA.
"NETWORK AGREEMENT" shall have the meaning set forth in Section 2.1.8.
"NON-LICENSE ASSETS" shall mean the Assets, other than the License
Assets.
"NON-LICENSE TRANSFER" shall have the meaning set forth in Section
11.2.1.
"NON-LICENSE TRANSFER DATE" shall have the meaning set forth in Section
11.2.1.
"OPERATING CONTRACTS" shall have the meaning set forth in Section
2.1.9.
"ORDINARY COURSE OF BUSINESS" means the ordinary course of business of
the Stations consistent with past practices of the Heritage Subsidiaries both
with respect to type and amount; any actions taken pursuant to the requirements
of law or contracts existing on the date hereof shall be deemed to be action in
the Ordinary Course of Business.
"OUTSIDE DATE" shall have the meaning set forth in Section 11.2.1.
"PERMITTED ENCUMBRANCES" means (a) Encumbrances of a landlord, or other
statutory lien not yet due and payable, or a landlord's liens arising in the
Ordinary Course of Business, (b) Encumbrances arising in connection with
equipment or maintenance financing or leasing under the terms of the Station
Contracts set forth on the Schedules which have been made available to Buyer,
(c) Encumbrances arising pursuant to the terms of leases on Real Property or
Leased Property as set forth on Schedule 2.1.1 and Schedule 2.1.9 which are
subject to any lease or sublease to a third party, (d) Encumbrances for Taxes
not yet due and payable or which are being contested in good faith and by
appropriate
ANNEX I-6
proceedings if adequate reserves with respect thereto are maintained on Seller's
books in accordance with generally accepted accounting principles, (e)
Encumbrances that do not materially detract from the value of any of the Assets
or materially interfere with the use thereof as currently used, or (f) those
Encumbrances on Schedule 3.8.
"PERSON" shall mean any individual, corporation, partnership, limited
liability company, joint venture, trust, unincorporated organization, other form
of business or legal entity or Governmental Authority.
"PLAN" means any plan, program or arrangement, whether or not written,
that is or was an "employee benefit plan" as such term is defined in Section
3(3) of ERISA and (a) which was or is established or maintained by any Seller
Party or any ERISA Affiliate for the benefit of any current or former employees
of the Stations; (b) to which any Seller Party contributed or was obligated to
contribute or to fund or provide benefits or had any liability (whether actual
or contingent) with respect to any of its assets or otherwise for the benefit of
any current or former employees of the Stations; or (c) which provides or
promises benefits to any person who performs or who has performed services for
the Stations and because of those services is or has been (i) a participant
therein or (ii) entitled to benefits thereunder.
"PROGRAM CONTRACTS" shall have the meaning set forth in Section 2.1.5.
"PRORATION AMOUNT" shall have the meaning set forth in Section 2.6.1.
"PRORATION ITEMS" shall mean any power and utility charges, business
and license fees (including retroactive adjustments thereof), sales and service
charges, commissions, special assessments, and rental payments and personal and
real estate Taxes and assessments with respect to the Real Property, taxes
(except for Taxes arising from the transfer of the Assets hereunder), deposits,
Trade-out Agreements, accrued vacation, unused sick leave and other similar
prepaid and deferred items and any other operating expenses incurred in the
Ordinary Course of Business (except with respect to Program Contracts, only
those payments due and payable during the month in which the Transfer Date
occurs shall be prorated). The parties acknowledge and agree that there shall be
excluded from Proration Items the following: (a) severance pay relating to any
employee of any Seller who shall have been terminated prior to the Transfer
Date, and (b) any Liabilities not being assumed by Buyer in accordance with
Section 2.8.
"PURCHASE PRICE" shall have the meaning set forth in Section 2.4.
ANNEX I-7
"QUALIFIED PLAN" means a Plan that satisfies, or is intended by any
Seller Party to satisfy, the requirements for tax qualification described in
Section 401 of the Code including, without limitation, any Plan that was
terminated on or after July 1, 1989, as to which any Seller Party may have any
actual or contingent liability.
"REAL PROPERTY" shall have the meaning set forth in Section 2.1.2(a).
"RESTRICTED CONTRACTS" shall have the meaning set forth in Section
6.2.10(a).
"SCHEDULES" shall mean the disclosure schedules delivered by Seller to
Buyer in connection herewith.
"SELLER DOCUMENTS" shall mean, collectively, this Agreement, the
Deposit Escrow Agreement, the Assignment of Contracts and Leases, the ▇▇▇▇ of
Sale, the Assignment of FCC Licenses, the Assumption Agreement and the TBA
Agreement.
"SELLER PARTIES" shall mean, collectively, Sellers, HMC and the
Heritage Subsidiaries.
"SELLER TAX RETURNS" means all federal, state, local, foreign and other
applicable Tax returns, declarations of estimated Tax reports required to be
filed by any Seller or any of the Heritage Subsidiaries in connection with the
business and operations of the Stations (without regard to extensions of time
permitted by law or otherwise).
"SELLERS' PLAN" shall have the meaning set forth in Section 8.4.5.
"STATION" and "STATIONS" shall have the meaning set forth in the
Recitals.
"STATION CONTRACTS" shall have the meaning set forth in Section 2.1.9.
"STC" shall have the meaning set forth in the Recitals.
"TAXES" means all federal, state and local taxes (including, without
limitation, income, profit, franchise, sales, use, real property, personal
property, ad valorem, excise, employment, social security and wage withholding
taxes) and installments of estimated taxes, assessments, deficiencies, levies,
imports, duties, license fees, registration fees, withholdings, or other similar
charges of every kind, character or description imposed by any Governmental
Authorities.
ANNEX I-8
"TBA AGREEMENT" shall have the meaning set forth in Section 8.9.
"THIRD PARTY SALE" shall have the meaning set forth in Section 11.1.3.
"TIME SALES AGREEMENTS" shall have the meaning set forth in Section
2.1.7.
"TRADE-OUT AGREEMENTS" shall have the meaning set forth in Section
2.1.6.
"TRANSFER DATE" shall mean the earlier of the Non-License Transfer Date
or the Closing Date.
"TRANSFER TAXES" shall have the meaning set forth in Section 15.3.
"TRANSFERRED EMPLOYEES" shall have the meaning set forth in Section
8.4.1.
"TRANSMISSION DEFECT" shall have the meaning set forth in Section 9.2.
"TRUSTEE" shall have the meaning set forth in the Recitals.
"WELFARE PLAN" means an "employee welfare benefit plan" as such term is
defined in Section 3(1) of ERISA.
"WFFF" shall have the meaning set forth in the Recitals.
"WNNE" shall have the meaning set forth in the Recitals.
"WPTZ" shall have the meaning set forth in the Recitals.
ANNEX I-9
EXHIBIT E
TIME BROKERAGE AGREEMENT
This TIME BROKERAGE AGREEMENT (this "Agreement") is entered into as of
the ___ day of ________, 1998, by and among TUSCALOOSA BROADCASTING, INC., a
Maryland corporation ("Tuscaloosa"), WPTZ LICENSEE, INC., a Maryland corporation
("WPTZ Licensee") and WNNE LICENSEE, INC., a Maryland corporation ("WNNE
Licensee") (Tuscaloosa, WPTZ Licensee and WNNE Licensee, collectively, "Owner"),
and STC BROADCASTING OF VERMONT, INC., a Delaware corporation ("Programmer").
RECITALS:
WHEREAS, Owner is the licensee, pursuant to authorizations issued by
the Federal Communications Commission ("FCC"), of television broadcast station
WPTZ-TV, Channel ▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ("▇▇▇▇") and television broadcast
station WNNE-TV, Channel 31, Hartford, Vermont ("WNNE"), licensed to WPTZ
Licensee and WNNE Licensee, respectively;
WHEREAS, Owner is the programmer of television broadcast station
WFFF-TV, Channel 44, Burlington, Vermont ("WFFF") (WPTZ, WNNE and WFFF,
individually, a "Station" and collectively, the "Stations");
WHEREAS, Programmer and Owner entered into an Asset Purchase Agreement
dated February 3, 1998 (the "Asset Purchase Agreement") pursuant to which Owner
has agreed to sell and Programmer has agreed to acquire substantially all of the
assets (the "Assets"), including (without limitation) the FCC licenses held by
Owner in connection with its ownership and operation of the Stations;
WHEREAS, Programmer is experienced in broadcast ownership and
operation;
WHEREAS, during the terms of this Agreement, Owner wishes to retain
Programmer to provide programming and related services for the Stations, all in
conformity with Station policies and procedures, FCC rules and policies for time
brokerage arrangements, and the provisions hereof,
WHEREAS, Programmer agrees to use the Stations to broadcast such
programming of its selection that is in conformity with all rules, regulations
and policies of the FCC, subject to Owner's full authority to manage and control
the operation of the Stations;
WHEREAS, Programmer and Owner agree to cooperate to make this Agreement
work to the benefit of the public and both parties and as contemplated by the
terms set forth herein; and
WHEREAS, all capitalized terms used herein but not otherwise defined
have the meaning ascribed to such terms in the Asset Purchase Agreement.
AGREEMENT:
NOW, THEREFORE, in consideration of the above recitals, and mutual
promises and covenants contained herein, the parties intending to be legally
bound, agree as follows:
SECTION 1 USE OF STATION AIR TIME.
1.1 Scope. During the term of this Agreement, Owner shall make
available to Programmer broadcast time on the Stations as set forth in this
Agreement. Programmer shall deliver such programming, at its expense, to the
Stations' transmitters or other authorized remote control points designated by
Owner. Programmer shall provide such programming of Programmer's selection
complete with commercial matter, news, public service announcements and other
suitable programming to the Stations for at least one hundred and sixty-six
(166) hours
2
per week. Except as otherwise provided in this Agreement, Owner agrees to
broadcast such programming in its entirety, including commercials at the times
specified, on the facilities of the Stations without interruption, deletion, or
addition of any kind. Owner may use such time as Owner may require up to two (2)
hours per week, for the broadcast of its own regularly-scheduled news, public
affairs, and other nonentertainment programming on the Stations, to be scheduled
at mutually agreeable times. Owner may elect to set aside additional air time
(up to two (2) hours per week) (the "Additional Time") to be scheduled at a
mutually agreeable time, for the broadcast of specific non-entertainment
programming on issues of importance to the local community. Owner shall provide
Programmer with as much notice as possible, but in no event less than three (3)
weeks' notice, of its intention to set aside such Additional Time. All program
time not reserved by or designated for Owner shall be available for use by
Programmer. Owner agrees that Programmer may sell, or engage a third party to
sell, commercial time during the programming provided by Programmer to the
Stations for Programmer's account.
1.2 Term. This Agreement shall commence on the date of the Non-License
Transfer as contemplated in the Asset Purchase Agreement (the "Effective Date"),
and end on the Closing Date (the "Term"), unless terminated earlier pursuant to
any of the provisions of Section 5 hereof.
SECTION 2 STATION OPERATIONS.
2.1 Owner Control Over Station Operations.
(a) Owner shall retain full authority, power and control over
the management and operations of the Stations during the Term, including
specifically, control over the personnel, programming and finances of the
Stations.
3
(b) Subject to Owner's full authority, power and control over
the management and operations of the Stations, Programmer agrees to provide
programming and related services to the Stations. Such related services shall
include: (i) the sale of advertising time on the Stations; (ii) coordination of
traffic and billing functions; (iii) maintenance, repair and replacement of the
Stations' transmitting or studio equipment and the other Assets, and (iv) other
administrative or operational functions as Owner and Programmer may agree to,
consistent with FCC rules and regulations relating to time brokerage agreements.
Programmer shall provide and perform Programmer's obligations hereunder,
including all related services, diligently and in a manner consistent with
broadcast industry practices.
(c) Owner shall employ at WPTZ's main studio location, at
Owner's expense, a Station Manager and a staff level employee, who will direct
the day-to-day operations of the Stations, and who will report to and be
accountable to Owner. Such employees shall be paid reasonable compensation
commensurate with their job responsibilities, as mutually agreed to by Owner and
Programmer.
(d) When on the Owner's premises, all employees of Programmer
used to provide Programmer's programming or other services to the Stations shall
be subject to the overall supervision of Owner's management personnel.
2.2 Station Expenses. During the Term, Programmer shall be responsible
for and shall reimburse Owner within fifteen (15) days following receipt of a
request for reimbursement by Owner for any direct out-of-pocket costs incurred
by Owner as necessary to preserve and maintain the FCC Licenses and other Assets
of the Stations then owned by Owner (including the expenses of Owner as a result
of Section 2.1(c) above).
2.3 Consideration. As consideration for the air time made available
hereunder and the
4
other agreements of the parties made hereunder, Programmer agrees to pay Owner
the payments set forth in Attachment 2.3 hereto. Notwithstanding any provision
of this Agreement to the contrary, in the event of a preemption by Owner of
Programmer's programming under Sections 1.1 (with respect to the Additional Time
only), 3.2, 4.1 or 4.2 of this Agreement, the Monthly Payment as defined in
Attachment 2.3 shall be reduced by an amount equal to (a) the amount of the
Monthly Payment multiplied by (b) a fraction the numerator of which is the
number of minutes of Programmer's programming preempted by Owner during such
month and the denominator of which is one hundred sixty-six (166).
SECTION 3 STATION PUBLIC INTEREST OBLIGATIONS.
3.1 Owner Authority. Owner shall be responsible for the Stations'
compliance with all applicable provisions of the Communications Act of 1934, as
amended (the "Act"), the rules, regulations and policies of the FCC and all
other applicable laws. Programmer shall cooperate with Owner, at Programmer's
expense, in taking such actions as Owner may reasonably request to assist Owner
in maintaining the Stations' compliance with the Act, rules, regulations and
policies of the FCC and all other applicable laws. Notwithstanding any other
provision of this Agreement, Programmer recognizes that Owner has certain
obligations to operate the Stations in the public interest, and to broadcast
programming to meet the needs and interests of the Stations' communities of
license and service area. From time to time Owner shall air, or if Owner
requests, Programmer shall air, programming on issues of importance to the local
community. Nothing in this Agreement shall abrogate or limit the unrestricted
authority of Owner to discharge Owner's obligations to the public and to comply
with the Act and the rules, regulations and policies of the FCC, and Owner shall
have no liability or obligation to Programmer, for
5
taking any action that Owner deems necessary or appropriate to discharge such
obligations or comply with such laws, rules, regulations or policies.
3.2 Additional Owner Obligations. Although both Owner and Programmer
shall cooperate in the broadcast of emergency information over the Stations,
Owner shall retain the right, without any liability or obligation to Programmer,
to interrupt Programmer's programming in case of an emergency or for programming
which, in the good faith judgment of Owner, is of greater local or national
public importance. In all such cases, Owner shall use Owner's commercially
reasonable efforts to provide Programmer notice of Owner's intention to
interrupt Programmer's programming. Owner shall coordinate with Programmer each
Station's hourly station identification and any other announcements required to
be aired by FCC rules or regulations. Owner shall (a) continue to maintain and
staff a main studio in compliance with the rules of the FCC, (b) maintain each
Station's local public inspection file within each Station's community of
license, and (c) prepare and place in such inspection file in a timely manner
all material required by Section 73.3526 of the FCC's Rules, including without
limitation each Station's quarterly issues and program lists and FCC Form 398.
Programmer shall, upon request by Owner, promptly provide Owner with such
information concerning Programmer's programs and advertising as is necessary to
assist Owner in the preparation of such information or to enable Owner to verify
independently the Stations' compliance with any other laws, rules, regulations
or policies applicable to the Stations' operation. Owner shall also maintain the
station logs, receive and respond to telephone inquiries, and control and
oversee any remote control point for the Stations.
6
SECTION 4 STATION PROGRAMMING & OPERATIONAL POLICIES.
4.1 Broadcast Station Programming Policy Statement. Owner has adopted a
Broadcast Station Programming Policy Statement (the "Policy Statement"), a copy
of which appears as Attachment 4.1 hereto and which may be amended from time to
time in order to comply with the rules and regulations of the FCC by Owner upon
written notice to Programmer. Programmer agrees and covenants to comply in all
material respects with the Policy Statement, with all rules and regulations of
the FCC, and with all changes subsequently made by Owner or the FCC. Programmer
shall furnish or cause to be furnished the artistic personnel and material for
the programs as provided by this Agreement and all programs shall be prepared
and presented in conformity with the rules, regulations and policies of the FCC
and with the Policy Statement. All advertising spots and promotional material or
announcements shall comply with all applicable federal, state and local
regulations and policies and the Policy Statement, and shall be produced in
accordance with quality standards established by Programmer. If Owner determines
that a program, commercial announcement or promotional material supplied by
Programmer is for any reason, in Owner's reasonable discretion, unsatisfactory
or unsuitable or contrary to the public interest, or does not comply with the
Policy Statement Owner may, upon written notice to Programmer (to the extent
time permits such notice), and without any liability or obligation to Programmer
suspend or cancel such program, commercial announcement or promotional material
and substitute its own programming or, if Owner requests, Programmer shall
provide promptly suitable programming, commercial announcement or other
announcement or promotional material.
4.2 Owner Control of Station Programming. Notwithstanding any contrary
provision contained in this Agreement, and consistent with Owner's obligations
pursuant to the Act and the
7
rules and regulations of the FCC, Owner shall have the right, without any
liability or obligation to Programmer to delete any material contained in any
programming or commercial matter furnished by Programmer for broadcast over the
Stations that Owner determines is unsuitable for broadcast or the broadcast of
which Owner believes would be contrary to the public interest. Owner shall have
the right, without any liability or obligation to Programmer to broadcast
Owner's own programming in place of such deleted material.
4.3 [INTENTIONALLY OMITTED].
4.4 Political Advertising. Owner shall oversee and shall take ultimate
responsibility for the Stations' compliance with the political broadcasting
rules of the FCC and Sections 312 and 315 of the Act, including but not limited
to, the provision of equal opportunities, compliance with lowest unit charge
requirements, and the provision of reasonable access to federal political
candidates. Programmer shall cooperate with Owner, at Programmer's expense, to
assist Owner in complying with the political broadcasting rules of the FCC.
Programmer shall supply such information promptly to Owner as may be necessary
to comply with the lowest unit charge and other applicable political broadcast
requirements of federal law. To the extent that Owner deems necessary or
appropriate, Programmer shall release advertising availabilities to Owner to
permit Owner to comply with the political broadcasting rules of the FCC and
Sections 312 and 315 of the Act. Programmer shall be entitled to all revenues
received by Owner for such advertising.
4.5 Advertising of Credit Terms. To the extent prohibited by the rules
of the Federal Trade Commission, no advertising of credit terms shall be made
over broadcast material supplied hereunder by Programmer beyond mention of the
fact that credit terms are available.
4.6 Payola/Plugola. In order to enable Owner to fulfill Owner's
obligations under Section 317 of the Act, Programmer, in compliance with Section
507 of the Act, will, in advance
8
of any scheduled broadcast by the Stations, disclose to Owner any information of
which Programmer has knowledge or which has been disclosed to Programmer as to
any money, service, or other valuable consideration that any person has paid or
accepted, or has agreed to pay or to accept, for the inclusion of any matter as
a part of the programming or commercial matter to be supplied to Owner pursuant
to this Agreement. Programmer will cooperate with Owner, at Programmer's
expense, as necessary to ensure compliance with this provision. Commercial
matter with obvious sponsorship identifications shall not require disclosure in
addition to that contained in the commercial copy.
4.7 Programmer Compliance with Copyright Act. Programmer represents and
warrants that Programmer will have full authority to broadcast the programming
on the Stations; that Programmer shall not broadcast any material in violation
of the Copyright Act; and the performing rights to all music contained in
broadcast material supplied hereunder by Programmer are licensed by BMI, ASCAP,
or SESAC, are in the public domain, are controlled by Programmer, or are cleared
at the source by Programmer.
SECTION 5 TERMINATION.
5.1 Termination by Programmer.
Unless terminated pursuant to the provisions of Section 1.2,
this Agreement may be terminated by Programmer by written notice to Owner, if
Programmer is not then in material default or breach hereof, upon the occurrence
of either of the following:
(a) five (5) days following the date of termination of the
Asset Purchase Agreement; or
(b) Owner is in material breach of Owner's representations or
Owner's material obligations hereunder or under the Asset Purchase Agreement and
has failed to cure
9
such breach within thirty (30) days of notice from Programmer.
5.2 Termination by Owner. Unless terminated pursuant to the provisions
of Section 1.2, this Agreement may be terminated by Owner by written notice to
Programmer, if Owner is not then in material default or breach hereof, upon the
occurrence of any of the following:
(a) five (5) days following the date of termination of the
Asset Purchase Agreement; or
(b) Programmer is in material breach of Programmer's
representations or Programmer's material obligations hereunder or under the
Asset Purchase Agreement and has failed to cure such breach within thirty (30)
days of notice from Owner.
5.3 Termination. If not otherwise earlier terminated, this Agreement
will terminate, upon the first to occur of any of the following:
(a) this Agreement is declared invalid or illegal in whole or
substantial part by an order or decree of an administrative agency or court of
competent jurisdiction and such order or decree has become final and no longer
subject to further administrative or judicial review, unless as a result of
actions taken by Programmer in violation of the terms hereof;
(b) there has been a material change in FCC rules or policies
that would cause this Agreement to be in violation thereof and such change is in
effect and not the subject of an appeal or further administrative review,
provided that in such event the parties shall first negotiate in good faith and
attempt to agree on an amendment to this Agreement that will provide the parties
with a valid, binding and enforceable agreement that conforms to the new FCC
rules, policies or precedent; or
(c) the mutual, written consent of both parties.
5.4 Severability. The parties hereto intend that the transactions
contemplated
10
hereunder comply in all respects with the Act and all applicable rules,
regulations, and policies of the FCC. If any provision of this Agreement shall
be declared void, illegal, or invalid by any governmental authority with
jurisdiction thereof, the remainder of this Agreement shall remain in full force
and effect without such offending provision so long as such remainder
substantially reflects the original agreement of the parties hereunder.
Furthermore, in such event, the parties shall use their commercially reasonable
efforts to reach agreement promptly on lawful substitute provisions in place of
said offending provision so as to effectuate more closely their intent as
expressed hereunder. If any governmental authority grants to any other entity or
individual rights which are not contained in this Agreement, then the parties
shall use their commercially reasonable efforts to amend this Agreement to
provide the parties hereto such lawful provisions which comport with any rules,
regulations and policies adopted after the date of this Agreement.
5.5 Force Majeure. Any failure or impairment of the Assets or any delay
or interruption in the broadcast of programs, or failure at any time to furnish
facilities, in whole or in part, for broadcast, due to Acts of God, restrictions
by any governmental authority, civil riot, floods or any other similar cause not
reasonably within the control of Owner, shall not constitute a breach of this
Agreement and Owner will not be liable to Programmer for any liability or
obligation with respect thereto.
5.6 Insurance; Risk of Loss.
(a) From the date hereof through the end of the Term, Owner
shall maintain with reputable insurance companies reasonably acceptable to
Programmer, commercially reasonable amounts of insurance as is conventionally
carried by broadcasters operating television stations in the area comparable to
those of the Stations, including replacement cost insurance and general
liability insurance, with respect to the Assets and shall cause Programmer to be
named as
11
an additional insured on Owner's policies. The risk of any loss, damage,
impairment, confiscation, or condemnation of any equipment or other personal
property owned and used by Owner in the business and operations of the Stations
("Risk of Loss") shall be borne by Owner at all times throughout the Term, to
the extent of, but solely to the extent of, Owner's receipt of insurance
proceeds in respect thereof and in no event shall Owner have any liability or
obligation to Programmer in respect of any such loss, damage, impairment,
confiscation or condemnation. The Risk of Loss beyond that specifically borne by
the Owner in accordance with the immediately preceding sentence shall be borne
by Programmer. Owner shall use such proceeds of insurance to repair or replace
any such equipment or such other personal property of Owner to the extent of
such proceeds. At Owner's request and subject to Owner's supervision and
direction, Programmer shall effect in a timely fashion any repairs to or
replacement of any of Owner's damaged equipment or property.
(b) From the date hereof through the end of the Term,
Programmer shall maintain with reputable insurance companies reasonably
acceptable to Owner, insurance in such amounts and with respect to such risks,
as reasonably requested by Owner, including broadcast liability insurance,
naming Owner as an additional insured, and general comprehensive insurance, also
naming Owner as an additional insured, each with a commercially reasonable
amount of coverage as is conventionally carried by broadcasters operating
television stations in the area comparable to those of the Stations. The risk of
any loss, damage, impairment, confiscation, or condemnation of any equipment or
other personal property owned or leased and used by Programmer in the
performance of its obligations hereunder shall be borne by Programmer at all
times throughout the Term.
12
SECTION 6 INDEMNIFICATION.
6.1 Indemnification by Programmer. Programmer shall indemnify and hold
harmless Owner from and against any and all claims, losses, costs, liabilities,
damages, expenses, including any FCC fines or forfeitures (including reasonable
legal fees and other expenses incidental thereto), of every kind, nature and
description (collectively "Damages") arising or resulting from or relating to
(a) Programmer's breach of any representation, covenant, agreement or other
obligation of Programmer contained in this Agreement, (b) any action taken by
Programmer or Programmer's employees and agents with respect to the Stations, or
any failure by Programmer or Programmer's employees and agents to take any
action with respect to the Stations, including, without limitation, Damages
relating to violations of the Act, or any rule, regulation or policy of the FCC,
slander, defamation or other claims relating to programming provided by
Programmer or Programmer's broadcast and sale of advertising time on the
Stations, or (c) the business or operations of the Stations by Programmer
(except where Damages are caused by Owner's negligence, recklessness, willful
misconduct, or a breach of Owner's representations or obligations under this
Agreement or the Asset Purchase Agreement) from and after the date of this
Agreement.
6.2 Indemnification by Owner. Owner shall indemnify and hold harmless
Programmer from and against any and all Damages arising or resulting from or
relating to (a) Owner's breach of any representation, covenant, agreement or
other obligation of Owner contained in this Agreement, (b) any action taken by
Owner or Owner's employees and agents with respect to the Stations, or any
failure by Owner or Owner's employees and agents to take any action with respect
to the Stations, including, without limitation, Damages relating to violations
of the Act, or any rule, regulation or policy of the FCC, slander, defamation or
other
13
claims relating to programming provided by Owner or Owner's broadcast and sale
of advertising time on the Stations, or (c) the business or operations of the
Stations by Owner (except where Damages are caused by Programmer's negligence,
recklessness, willful misconduct, or a breach of Programmer's representations or
obligations under this Agreement or the Asset Purchase Agreement) from and after
the date of this Agreement.
6.3 Indemnification Procedure. Neither Owner nor Programmer shall be
entitled to indemnification pursuant to this Section 6.3 unless (a) such claim
for indemnification is asserted in writing delivered to the other party,
together with a statement as to the factual basis for the claim and the amount
of the claim and (b) such claim, in the aggregate with all other claims made by
such party under this Agreement and the Asset Purchase Agreement, exceeds Five
Hundred Thousand Dollars ($500,000), and then only to the extent of the excess
over the amount of Two Hundred Fifty Thousand Dollars ($250,000); provided,
however, that the aggregate dollar amount of claims under this Agreement and the
Asset Purchase Agreement shall not exceed Four Million Dollars ($4,000,000). The
party making the claim (the "Claimant") shall make available to the other party
(the "Indemnitor") the information relied upon by the Claimant to substantiate
the claim. The Indemnitor under this Section 6.3 shall have the right to conduct
and control through counsel of such Indemnitor's own choosing the defense of any
third party claim, action or suit (and the Claimant shall cooperate fully with
the Indemnitor), but the Claimant may, at its election, participate in the
defense of any such claim, action or suit at its sole cost and expense; provided
that, if the Indemnitor shall fail to defend any such claim, action or suit,
then the Claimant may defend through counsel of its own choosing such claim,
action or suit, and (so long as it gives the Indemnitor at least fifteen (15)
days' notice of the terms of the proposed settlement thereof and permits the
Indemnitor to then undertake the defense thereof) settle such
14
claim, action or suit, and to recover from the Indemnitor the amount of such
settlement or of any judgment and the costs and expenses of such defense. The
Indemnitor shall not compromise or settle any third party claim, action or suit
without the prior written consent of the Claimant, which consent will not be
unreasonably withheld or delayed.
6.4 Arbitration. To the fullest extent not prohibited by law, any
controversy, claim or dispute arising out of or relating to this Agreement,
including the determination of the scope or applicability of this Agreement to
arbitrate, shall be settled by final and binding arbitration in accordance with
the rules then in effect of the American Arbitration Association ("AAA"), as
modified or supplemented under this section, and subject to the Federal
Arbitration Act, 9 U.S.C. ▇▇.▇▇. 1-16. The decision of the arbitrators shall be
final and binding provided that, where a remedy for breach is prescribed
hereunder or limitations on remedies are prescribed, the arbitrators shall be
bound by such restrictions, and judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof.
If any series of claims arising out of the same or related transactions
shall involve claims which are arbitrable under the preceding paragraph and
claims which are not, the arbitrable claims shall first be finally determined
before suit may be instituted upon the others and the parties will take such
action as may be necessary to toll any statutes of limitations, or defenses
based upon the passage of time, that are applicable to such nonarbitrable claims
during the period in which the arbitrable claims are being determined. In the
event of any controversy, claim or dispute that is subject to arbitration under
this Section 6.4, any party thereto may commence arbitration hereunder by
delivering notice to the other party or parties thereto; provided, in advance of
the commencement of any arbitration each of the parties agrees to participate in
a non-binding mediation effort (not to exceed thirty (30) days) in an attempt to
resolve such
15
controversy, claim or dispute. The arbitration panel shall consist of three (3)
arbitrators, appointed in accordance with the procedures set forth in this
paragraph. Within ten (10) business days of delivery of the notice of
commencement of arbitration referred to above, Owner, on the one hand, and
Programmer, on the other hand, shall each appoint one arbitrator, and the two
arbitrators so appointed shall within ten (10) business days of their
appointment mutually agree upon and appoint one additional arbitrator (or, if
such arbitrators cannot agree on an additional arbitrator, the additional
arbitrator shall be appointed by the AAA as provided under its rules); provided,
that persons eligible to be selected as arbitrators shall be limited to
attorneys at law who (a) are on the AAA's Large, Complex Case Panel, (b) have
practiced law for at least fifteen (15) years as an attorney specializing in
either general commercial litigation or general corporate and commercial
matters, and (c) are experienced in matters involving the broadcasting industry.
The arbitration hearing shall be held in Washington, D.C. and shall
commence no later than thirty (30) business days after the completion of the
selection of the arbitrators. Consistent with the intent of the parties hereto
that the arbitration be conducted as expeditiously as possible, the parties
agree that (a) discovery shall be limited to the production of such documents
and the taking of such depositions as the arbitrators determine are reasonably
necessary to the resolution of the controversy, claim or dispute and (b) the
arbitrators shall limit the presentation of evidence by each side in such
arbitration to not more than ten (10) full days' (equivalent thereof) or such
shorter period as the arbitrators shall determine to be necessary in order to
resolve the controversy, claim or dispute. The arbitrators shall be instructed
to render a decision within ten (10) business days of the close of the
arbitration hearing. If arbitration has not been completed within ninety (90)
days of the commencement of such arbitration, any party to the arbitration may
initiate litigation upon ten (10) days' written notice to the other party(ies);
provided, however,
16
that if one party has requested the other to participate in an arbitration and
the other has failed to participate, the requesting party may initiate
litigation before the expiration of such ninety-day period; and provided
further, that if any party to the arbitration fails to meet any of the time
limits set forth in this Section 6.4 or set by the arbitrators in the
arbitration, any other party may provide ten (10) days' written notice of its
intent to institute litigation with respect to the controversy, claim or dispute
without the need to continue or complete the arbitration and without awaiting
the expiration of such ninety-day period. The parties hereto further agree that
if any of the rules of the AAA are contrary to or in conflict with any of the
time periods provided for hereunder, or with any other aspect of the matters set
forth in this Section 6.4, that such rules shall be modified in respects
necessary to accord with the provisions of this Section 6.4 (and the arbitrators
shall be so instructed by the parties).
The arbitrators shall base their decision on the terms of this
Agreement and applicable law and judicial precedent in the State of New York,
and shall render their decision in writing and include in such decision a
statement of the finding of fact and conclusions of law upon which the decision
is based. Each party agrees to cooperate fully with the arbitrator(s) to resolve
any controversy, claim, or dispute. The arbitrators shall not be empowered to
award punitive damages or damages in excess of actual damages.
6.5 Damages: Specific Performance.
(a) In the event of a material breach by Owner of Owner's obligations
hereunder, Programmer shall be entitled to seek monetary damages against Owner.
The parties recognize, however, that given the unique nature of the Stations and
this Agreement, monetary damages alone will not be adequate to compensate
Programmer for any injury resulting from Owner's breach. Programmer shall
therefore be entitled, as an alternative to the right to seek and collect
17
monetary damages, to obtain specific performance of the terms of this Agreement.
(b) In the event of a material breach by Programmer of its obligations
hereunder, Owner shall be entitled to seek monetary damages against Programmer.
SECTION 7 REPRESENTATIONS, WARRANTIES, AND COVENANTS.
7.1 Representations, Warranties, and Covenants of Owner. Owner
represents, warrants, and covenants that:
(a) Owner is legally qualified, empowered, and authorized to
enter into this Agreement, and that the execution, delivery and performance
hereof shall not constitute a breach or violation of any agreement, contract or
other obligation to which Owner is subject or by which Owner is bound.
(b) Owner is now, and for so long as this Agreement shall be
in effect, will be the holder of the FCC Licenses necessary for the operation of
WPTZ and WNNE as then being operated.
(c) Owner does not know of any current or prospective
governmental investigation having a material adverse effect on the Stations,
their properties or business.
(d) As of this date, Owner does not know of any facts which
would cause the Commission to refuse to renew the FCC Licenses.
(e) Owner shall not take any action or omit to take any action
which would have a materially adverse impact upon Owner, the Assets, the
Stations or upon Owner's ability to perform this Agreement.
(f) This Agreement constitutes the legal, valid and binding
obligation of Owner, enforceable in accordance with its terms, except to the
extent that the enforcement
18
thereof may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium, or similar law affecting creditors' rights and remedies generally,
and (ii) general principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity).
7.2 Representations, Warranties and Covenants of Programmer. Programmer
represents, warrants, and covenants that:
(a) Programmer is legally qualified, empowered, and authorized
to enter into this Agreement, and that the execution, delivery and performance
hereof shall not constitute a breach or violation of any agreement, contract or
other obligation to which Programmer is subject or by which Programmer is bound.
(b) This Agreement constitutes the legal, valid and binding
obligation of Programmer, enforceable in accordance with its terms, except to
the extent that the enforcement thereof may be limited by (i) bankruptcy,
insolvency, reorganizations, moratorium or similar laws affecting creditors'
rights and remedies generally, and (ii) general principles of equity (regardless
of whether enforcement is sought in a proceeding at law or in equity).
SECTION 8: MISCELLANEOUS.
8.1 Assignment. This Agreement shall not be assigned by any party
hereto without the prior written consent of the other party, which consent shall
not be unreasonably withheld, except that Programmer may assign its rights and
interests hereunder to any reputable broadcasting entity provided, that (a)
Programmer gives Owner written notice of any such assignment; (b) such
assignment shall not relieve Programmer of any of its obligations or liabilities
hereunder; and (c) such assignment would not violate any applicable laws, rules,
regulations or policies of any applicable governmental authority. It is
understood and agreed that
19
nothing herein shall be deemed to expand the rights granted hereunder to any
permitted assignee, which rights shall be in combination with, and not in
addition to, the rights of Programmer. This Agreement shall be binding on the
parties' respective heirs and permitted assigns.
8.2 Entire Agreement; Amendments. This Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof
and, except for the Asset Purchase Agreement, and documents delivered pursuant
thereto, supersedes any and all prior agreements, broadcasting commitments, or
any other understandings between Programmer and Owner with respect to such
subject matter. No provision of this Agreement shall be changed or modified, nor
shall this Agreement be discharged in whole or in part, except by an agreement
in writing signed by the party against whom the change, modification, or
discharge is claimed or sought to be enforced, nor shall any waiver of any of
the conditions or provisions of this Agreement be effective and binding unless
such waiver shall be in writing and signed by the party against whom the waiver
is asserted, and no waiver of any provision of this Agreement shall be deemed to
be a waiver of any preceding or succeeding breach of the same or any other
provision.
8.3 Further Assurances. Owner and Programmer shall use commercially
reasonable efforts in the performance and fulfillment of the terms and
conditions of this Agreement in effectuating the intent of such parties as
expressed under this Agreement. From time to time, without further
consideration, Owner and Programmer shall execute and deliver such other
documents and take such other actions as either party hereto reasonably may
request to effectuate such intent.
8.4 Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signatures to each such counterpart
were upon the same instrument.
20
8.5 Notices. All notices, demands and other communications which may or
are required to be given hereunder or with respect hereto shall be in writing,
shall be delivered personally or sent by nationally recognized overnight
delivery service, charges prepaid, or by registered or certified mail,
return-receipt requested, or by facsimile transmission, and shall be deemed to
have been given or made when personally delivered, the next business day after
delivery to such overnight delivery service, when receipt is confirmed by
facsimile transmission, five (5) days after deposited in the mail, first class
postage prepaid, addressed as follows:
(a) If the notice is to Programmer:
STC Broadcasting, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with copies (which shall not constitute notice) to:
▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and to:
Hicks, Muse, ▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as Programmer may from time to
time designate.
21
(b) If to Owner:
▇▇▇▇▇▇▇▇ Broadcast Group, Inc.
▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇, President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with copies (which shall not constitute notice) to:
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and to:
▇▇▇▇▇▇▇▇ Communications, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as Owner may from time to time
designate.
8.6 Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of New York, without regard to its choice
of law rules.
8.7 Taxes. Owner and Programmer shall each pay its own ad valorem
taxes, if any, which may be assessed on such party's personal property for the
periods that such items are owned by such party.
8.8 No Joint Venture or Partnership. Programmer shall act as an
independent contractor in rendering its services hereunder. Neither party shall
have any power or authority to act for or on behalf of the other or to bind the
other in any manner whatsoever, except as and to the extent expressly provided
for in this Agreement. The parties hereto agree that nothing herein shall
constitute a joint venture or partnership between them.
22
8.9 Headings. The headings in this Agreement are for convenience only
and will not affect or control the meaning or construction of the provisions of
this Agreement.
23
IN WITNESS WHEREOF, the parties hereto have executed this Time
Brokerage Agreement as of the date first above written.
PROGRAMMER:
STC BROADCASTING OF VERMONT, INC.
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
OWNER:
TUSCALOOSA BROADCASTING, INC.
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
WPTZ LICENSEE, INC.
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
WNNE LICENSEE, INC.
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
24
ATTACHMENT 2.3
MONTHLY FEE
During the first nine (9) months of this Agreement, Programmer shall
pay to Owner a monthly fee equal to Thirteen Thousand Three Hundred Dollars
($13,300) plus the salaries of the two employees retained by Owner. If the
Closing under the Asset Purchase Agreement has not occurred within nine (9)
months of the date of this Agreement, the monthly fee from and after such date
shall increase to Twenty Thousand Dollars ($20,000) plus the salaries of the two
employees retained by Owner; provided, however, the monthly fee shall not
increase if the reason that the Closing has not occurred by such nine (9) month
date is because of a breach or default by Owner under the Asset Purchase
Agreement.
25
ATTACHMENT 4.1
BROADCAST STATION PROGRAMMING POLICY STATEMENT
I. No Plugola or Payola. Except for commercial messages aired
in compliance with 47 C.F.R. ss.73.1212, Programmer shall not
receive any consideration in money, goods, services, or otherwise,
directly or indirectly (including to relatives) from any persons
or company for the presentation of any programming over the
Stations without reporting the same to Owner's Station Manager.
The commercial mention of any business activity or "plug" for any
commercial, professional, or other related endeavor, except where
contained in an actual commercial message of a sponsor, is
prohibited.
II. No Lotteries. Announcements giving any information about
lotteries or games prohibited by applicable federal or state law
or regulation are prohibited.
III. Election Procedures. At least fifteen (15) days before
the start of any primary or election campaign, Programmer will
clear with Owner's Station Manager the rates Programmer will
charge for the time to be sold for use by qualified candidates for
the public office and/or their supporters to make certain that the
rates charged are in conformance with applicable law and the
Stations' policies.
IV. Required Announcements. Programmer shall broadcast (i) an
announcement in a form satisfactory to Owner at the beginning of
26
each hour to identify the Stations and (ii) any other
announcements that may be required by law or regulation.
V. No Illegal Announcements. No announcements or promotion
prohibited by applicable federal, state law or regulation shall be
made over the Stations. Any game, contest, or promotion relating
to or to be presented over the Stations must be fully stated and
explained in advance to Owner, which reserves the right in its
sole discretion to reject any game, contest, or promotion.
VI. Owner Discretion Paramount. In accordance with the
Owner's responsibility under the Communications Act of 1934, as
amended, and the Rules and Regulations of the Federal
Communications Commission, Owner reserves the right to reject or
terminate any advertising proposed to be presented or being
presented over the Stations which is in conflict with established
policies of the Stations or which in Owner's or its Station
Manager's reasonable judgment would be contrary to the public
interest.
Owner may waive any of the foregoing regulations in specific instances,
if, in its opinion, the Stations will remain in compliance with all applicable
laws, rules, regulations and policies and broadcasting in the public interest is
served. In any case where questions of policy or interpretation arise,
Programmer should submit the same to Owner for decision before making any
commitments in connection therewith.
27