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EXHIBIT 10.133
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ASSET PURCHASE AGREEMENT
BY AND BETWEEN
▇▇▇▇▇▇ COMMUNICATIONS TELEVISION, INC.
AND
ALPHA & OMEGA COMMUNICATIONS, L.L.C.
FOR
TELEVISION STATION KOOG-TV
OGDEN, UTAH
* * *
AUGUST 30,1996
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Accounts Receivable". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assets" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Assumed Contracts". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
"Consents" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Construction Permit". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Contracts". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Consent". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"FCC Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Final Order". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Intangibles". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Licenses" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
"Modified Construction Permit" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Purchase Price" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Real Property". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
"Tangible Personal Property" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2. PURCHASE AND SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Agreement to Sell and Buy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Excluded Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.4 Payment of Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.5 Assumption of Liabilities and Obligations . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . . . . . . . . . . . . . 6
3.1 Organization, Standing, and Authority . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.4 Governmental Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.5 Title to and Condition of Real Property . . . . . . . . . . . . . . . . . . . . . . . . 7
3.6 Title to and Condition of Tangible Personal Property . . . . . . . . . . . . . . . . . . 8
3.7 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.8 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.9 Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.10 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.11 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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3.12 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.13 Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.14 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.15 Claims and Legal Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.16 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.17 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.18 Conduct of Business in Ordinary Course . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.19 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.20 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.21 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . 15
4.1 Organization, Standing, and Authority . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.2 Authorization and Binding Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.3 Absence of Conflicting Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.4 Broker . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.5 Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . 16
5.1 Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.2 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.3 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.4 Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.5 Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.6 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.7 Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.8 No Inconsistent Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.9 Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.10 Maintenance of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.11 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.12 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.13 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.14 Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.15 Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.16 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.17 Financing Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.18 Programming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.19 Preservation of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.20 Collection of Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.21 Personnel Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.22 Buyer Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.1 FCC Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.2 Control of the Station . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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6.3 Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.4 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.5 Environmental Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.6 Engineering Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.7 Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.8 Bulk Sales Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.9 [Reserved] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.10 Sales Tax Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.11 Access to Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.12 Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER AT CLOSING . . . . . . . . . . . . . . . . 23
7.1 Conditions to Obligations of Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.2 Conditions to Obligations of Seller . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 8. CLOSING AND CLOSING DELIVERIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.1 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.2 Deliveries by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.3 Deliveries by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 9. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.1 Termination by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.2 Termination by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.3 Rights on Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNIFICATION; CERTAIN REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.1 Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.2 Indemnification by Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
10.3 Indemnification by Buyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
10.4 Procedure for Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.5 Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.6 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.1 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.2 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
11.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.4 Benefit and Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
11.5 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
11.6 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
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11.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
11.8 Gender and Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
11.9 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
11.10 Waiver of Compliance; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.11 Press Release . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
11.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of the 30th day of August,
1996, by and between ▇▇▇▇▇▇ Communications Television, Inc., a Florida
corporation ("Buyer"), and Alpha & Omega Communications, L.L.C., a Utah limited
liability company ("Seller").
R E C I T A L S
A. Seller is the licensee of and owns and operates television
station KOOG-TV, Ogden, Utah (the "Station") pursuant to licenses issued by the
Federal Communications Commission ("FCC").
B. Seller desires to sell, and Buyer desires to buy,
substantially all the assets that are used or useful in the construction,
business or operations of the Station, for the price and on the terms and
conditions set forth in this Agreement.
AGREEMENTS
In consideration of the above recitals and of the mutual agreements
and covenants contained in this Agreement, Buyer and Seller, intending to be
bound legally, agree as follows:
SECTION 1. DEFINITIONS
The following terms, as used in this Agreement, shall have the
meanings set forth in this Section:
"Accounts Receivable" means the rights of Seller to payment for the
sale of advertising time run on the Station by Seller prior to the Closing
Date.
"Assets" means the assets to be sold, transferred, or otherwise
conveyed to Buyer under this Agreement, as specified in Section 2.1.
"Assumed Contracts" means (i) all Contracts listed in Schedule 3.7
that are specifically designated on Schedule 3.7 as Contracts that are to be
assumed by Buyer upon its purchase of the Station, (ii) any Contracts entered
into by Seller between the date of this Agreement and the Closing Date that
Buyer agrees in writing to assume, and (iii) time sales contracts entered into
by Seller in compliance with Section 5.3.
"Closing" means the consummation of the purchase and sale of the
Assets pursuant to this Agreement in accordance with the provisions of Section
8.
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
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"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer
or otherwise to consummate the transactions contemplated by this Agreement.
"Construction Permit" means the FCC authorization (File No.
▇▇▇▇-▇▇▇▇▇▇▇▇, as extended in BMPCT-951103KE) held by Seller for construction
of transmitting facilities for the Station on ▇▇▇▇▇▇▇▇▇▇ Peak, Utah.
"Contracts" means all contracts, leases, non-governmental licenses,
and other agreements (including leases for personal or real property and
employment agreements), written or oral (including any amendments and other
modifications thereto) to which Seller is a party or which are binding upon
Seller and which relate to or affect the Assets or the construction, business
or operations of the Station, and (i) which are in effect on the date of this
Agreement or (ii) which are entered into by Seller between the date of this
Agreement and the Closing Date.
"CTTC" means Channel Twenty Television Company, L.L.C., a Utah limited
liability company and an affiliate of Seller.
"FCC" means the Federal Communications Commission.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
"FCC Licenses" means all Licenses issued by the FCC to Seller in
connection with the construction, business or operations of the Station.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, technical information and data, machinery and equipment
warranties, and other similar intangible property rights and interests (and any
goodwill associated with any of the foregoing), applied for, issued to, or
owned by Seller or under which Seller is licensed or franchised and which are
used or useful in the business and operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Licenses" means all licenses, permits, and other authorizations
issued by the FCC, the Federal Aviation Administration, or any other federal,
state, or local
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governmental authorities to Seller in connection with the conduct of the
construction, business or operations of the Station, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Loan Agreement" shall mean that certain Loan Agreement of even date
herewith pursuant to which Buyer has agreed to make loans to Seller in an
amount up to $750,000.
"Modified Construction Permit" means the Construction Permit as it
will be modified pursuant to the application (File No. BMPCT-960531LF) now
pending before the FCC for a change in the authorized transmitter location of
the Station to the KJZZ-TV tower on Little ▇▇▇▇▇▇▇▇▇▇ Peak, Utah.
"Purchase Price" means the purchase price specified in Section 2.3.
"Real Property" means all real property and interests in real
property, including leaseholds and subleaseholds, rights to access, and rights
of way, and other improvements thereon, and other real property interests which
are used or useful in the construction, business or operations of the Station,
together with any additions thereto between the date of this Agreement and the
Closing Date.
"Tangible Personal Property" means all machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant,
inventory, spare parts, and other tangible personal property of Seller which is
used or useful in the construction, business or operations of the Station,
together with any additions thereto between the date of this Agreement and the
Closing Date.
SECTION 2. PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and
conditions set forth in this Agreement, Seller hereby agrees to sell, transfer,
and deliver to Buyer on the Closing Date, and Buyer agrees to purchase on the
Closing Date, all of the tangible and intangible assets used or useful in
connection with the construction, business or operations of the Station,
together with any additions thereto between the date of this Agreement and the
Closing Date, but excluding the assets described in Section 2.2, free and clear
of any claims, liabilities, security interests, mortgages, liens, pledges,
conditions, charges, or encumbrances of any nature whatsoever (except for liens
for current taxes not yet due and payable), including the following:
(a) The Tangible Personal Property;
(b) The Real Property;
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(c) The Licenses;
(d) The Assumed Contracts;
(e) The Intangibles and all intangible assets of Seller
relating to the Station that are not specifically included within the
Intangibles, including the goodwill of the Station, if any;
(f) All of Seller's proprietary information, technical
information and data, machinery and equipment warranties, maps, computer
discs and tapes, plans, diagrams, blueprints, and schematics, including filings
with the FCC relating to the business and operation of the Station;
(g) All choses in action of Seller relating to the
Station; and
(h) All books and records relating to the business or
operations of the Station, including executed copies of the Assumed Contracts,
and all records required by the FCC to be kept by the Station.
2.2 Excluded Assets. The Assets shall exclude the following
assets:
(a) Seller's cash on hand as of the Closing and all other
cash in any of Sellers bank or savings accounts; any insurance policies,
letters of credit, or other similar items and cash surrender value in regard
thereto; and any stocks, bonds, certificates of deposit and similar
investments;
(b) All books and records that Seller is required by law
to retain or that pertain to Seller's corporate organization;
(c) Any pension, profit-sharing, and employee benefit
plans, and any collective bargaining agreements; and
(d) All property listed on Schedule 2.2 hereto; and
(e) The Accounts Receivable as of 11:59 p.m., Ogden, Utah
time on the day prior to the Closing Date ("Seller's Receivables").
2.3 Purchase Price. The Purchase Price for the Assets shall be
Seven Million Five Hundred Thousand Dollars ($7,500,000) adjusted as provided
below:
(a) Prorations. The Purchase Price shall be increased or
decreased as required to effectuate the proration of expenses. All expenses
arising from the operation of the Station, including business and license fees,
utility charges, real and
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personal property taxes and assessments levied against the Assets, property and
equipment rentals, applicable copyright or other fees, sales and service
charges, taxes (except for taxes arising from the transfer of the Assets under
this Agreement), FCC annual regulatory fees and similar prepaid and deferred
items, shall be prorated between Buyer and Seller in accordance with the
principle that Seller shall be responsible for all expenses, costs, and
liabilities allocable to the period prior to the Closing Date, and Buyer shall
be responsible for all expenses, costs, and obligations allocable to the period
on and after the Closing Date. Notwithstanding the preceding sentence, there
shall be no adjustment for, and Seller shall remain solely liable with respect
to, any Contracts not included in the Assumed Contracts and any other
obligation or liability not being assumed by Buyer in accordance with Section
2.5.
(b) Manner of Determining Adjustments. Any adjustments
will, insofar as feasible, be determined and paid on the Closing Date, with
final settlement and payment by the appropriate party occurring no later than
ninety (90) days after the Closing Date or such other date as the parties shall
mutually agree upon. Seller shall prepare and deliver to Buyer not later than
five (5) days before the Closing Date a preliminary settlement statement which
shall set forth Seller's good faith estimate of the adjustments to the Purchase
Price under Section 2.3(a). The preliminary settlement statement (i) shall
contain all information reasonably necessary to determine the adjustments to
the Purchase Price under Section 2.3(a), to the extent such adjustments can be
determined or estimated as of the date of the preliminary settlement statement,
and such other information as may be reasonably requested by Buyer, and (ii)
shall be certified by Seller to be true and complete in all material respects
as of the date thereof.
2.4 Payment of Purchase Price. The Purchase Price shall be paid
by Buyer to Seller as follows: (a) the sum of Fifty Thousand Dollars ($50,000)
shall be paid to Seller immediately upon the execution hereof and shall be
refundable to Buyer only in the event that the FCC shall (through no fault of
Buyer) refuse to extend the Construction Permit and (b) the remainder of the
Purchase Price, as adjusted pursuant to Section 2.3(a) and as reduced pursuant
to the last sentence of this Section 2.4, shall be paid by Buyer to Seller at
Closing by wire transfer of same-day funds pursuant to wire instructions which
shall be delivered by Seller to Buyer, at least two (2) days prior to the
Closing Date. The loans under the Loan Agreement shall become due and payable
on the Closing Date subject to the terms and conditions of the Loan Agreement.
Five Hundred Thousand Dollars ($500,000) of such loans shall be applied as a
credit in favor of Buyer against the Purchase Price payable at Closing by
Buyer.
2.5 Assumption of Liabilities and Obligations. As of the Closing
Date, Buyer shall assume and undertake to pay, discharge, and perform all
obligations and liabilities of Seller under the Licenses and the Assumed
Contracts insofar as they relate to the time on and after the Closing Date, and
arise out of events related to Buyer's ownership of the Assets or its operation
of the Station on or after the Closing Date. Buyer shall not
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assume any other obligations or liabilities of Seller, including (i) any
obligations or liabilities under any Contract not included in the Assumed
Contracts, (ii) any obligations or liabilities under the Assumed Contracts
relating to the period prior to the Closing Date, (iii) any claims or pending
litigation or proceedings relating to the operation of the Station prior to the
Closing, (iv) any obligations or liabilities arising under capitalized leases
or other financing agreements, (v) any obligations or liabilities arising under
agreements entered into other than in the ordinary course of business, (vi) any
obligations or liabilities of Seller under any employee pension, retirement,
health and welfare or other benefit plans or collective bargaining agreements,
(vii) any obligation to any employee of the Station for severance benefits,
vacation time, or sick leave accrued prior to the Closing Date, or (viii) any
obligations or liabilities caused by, arising out of, or resulting from any
action or omission of Seller prior to the Closing, and all such obligations and
liabilities shall remain and be the obligations and liabilities solely of
Seller.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Organization, Standing, and Authority. Seller is a limited
liability company duly organized, validly existing, and in good standing under
the laws of the State of Utah. Seller has all requisite power and authority
(i) to own, lease, and use the Assets as now owned, leased, and used, (ii) to
conduct the construction, business and operations of the Station as now
conducted, and (iii) to execute and deliver this Agreement and the documents
contemplated hereby, and to perform and comply with all of the terms,
covenants, and conditions to be performed and complied with by Seller hereunder
and thereunder. Except for an informal agreement with CTTC for construction of
a common antenna facility for the Station and Channel 20 on the tower used by
KJZZ-TV, Seller is not a participant in any joint venture or partnership with
any other person or entity with respect to any part of the construction or
operations of the Station or any of the Assets.
3.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement by Seller have been duly authorized
by all necessary actions on the part of Seller and its members. This Agreement
has been duly executed and delivered by Seller and constitutes the legal,
valid, and binding obligation of Seller, enforceable against it in accordance
with its terms except as the enforceability of this Agreement may be affected
by bankruptcy, insolvency, or similar laws affecting creditors' rights
generally, and by judicial discretion in the enforcement of equitable remedies.
3.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents listed on Schedule 3.3, the execution, delivery, and performance of
this Agreement and
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the documents contemplated hereby (with or without the giving of notice, the
lapse of time, or both): (i) do not require the consent of any third party;
(ii) will not conflict with any provision of the organizational documents of
Seller; (iii) will not conflict with, result in a breach of, or constitute a
default under, any law, judgment, order, ordinance, injunction, decree, rule,
regulation, or ruling of any court or governmental instrumentality; (iv) will
not conflict with, constitute grounds for termination of, result in a breach
of, constitute a default under, or accelerate or permit the acceleration of any
performance required by the terms of, any agreement, instrument, license, or
permit to which Seller is a party or by which Seller may be bound; and (v) will
not create any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon any of the Assets.
3.4 Governmental Licenses. Schedule 3.4 includes a true and
complete list of the Licenses. Seller has delivered to Buyer true and complete
copies of the Licenses (including any amendments and other modifications
thereto). The Licenses have been validly issued, and Seller is the authorized
legal holder thereof. Except as set forth in Schedule 3.4, the Licenses listed
on Schedule 3.4 comprise all of the licenses, permits, and other authorizations
required from any governmental or regulatory authority for the lawful
construction in accordance with the Construction Permit (as defined below) and
the conduct of the business and operations of the Station in the manner and to
the full extent they are now conducted, and none of the Licenses is subject to
any restriction or condition that would limit the full operation of the Station
as now operated. Except as set forth in Schedule 3.4, the Licenses are in full
force and effect, and the construction, business and operations of the Station
are in accordance therewith. Except as noted in Schedule 3.4, Seller has no
reason to believe that any of the Licenses would not be renewed by the FCC or
other granting authority in the ordinary course. The Station's city of
license, as determined by the FCC, is located within the Salt Lake City, Utah
Area of Dominant Influence as defined by the 1991-1992 Area of Dominant
Influence Market Guide published by The Arbitron Co. and the Salt Lake City,
Utah Designated Market Area as defined by the ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Television
Household Estimates published by ▇▇▇▇▇▇▇ Media Research. Schedule 3.4 contains
a listing of all cable systems (including identification of cable headend and
subsidiaries) currently carrying the Station and a listing of all cable systems
denying carriage to the Station as known to Seller.
3.5 Title to and Condition of Real Property. Schedule 3.5
contains a complete and accurate description of all the Real Property and
Seller's interests therein (including street address, legal description, owner,
and use and the location of all improvements thereon). The Real Property
listed on Schedule 3.5 comprises all real property interests necessary to
conduct the business and operations of the Station as now conducted. Except as
set forth in Schedule 3.5, with respect to each leasehold or subleasehold
interest included in the Real Property being conveyed under this Agreement so
long as Seller fulfills its obligations under the lease therefor, Seller has
enforceable rights to
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nondisturbance and quiet enjoyment, and Seller holds such leasehold or
subleasehold interests free and clear all liens, mortgages, pledges, covenants,
easements, restrictions, encroachments and other encumbrances of any nature
whatsoever other than real estate taxes not yet due and payable. All towers,
guy anchors, and buildings and other improvements included in the Assets are
located entirely on the Real Property listed in Schedule 3.5. Seller has
delivered to Buyer true and complete copies of all leases pertaining to the
Real Property. All Real Property (including the improvements thereon) (i) is
in good condition and repair consistent with its present use except as set
forth in Schedule 3.5, (ii) is available for immediate use in the conduct of
the business and operations of the Station, and (iii) complies with all
applicable building or zoning codes and the regulations of any governmental
authority having jurisdiction. Seller has full legal and practical access to
the Real Property.
3.6 Title to and Condition of Tanqible Personal Property.
Schedule 3.6 lists all material items of Tangible Personal Property. The
Tangible Personal Property listed on Schedule 3.6 comprises all material items
of tangible personal property necessary to conduct the business and operations
of the Station as now conducted. Seller owns and has good title to each item
of Tangible Personal Property, and none of the Tangible Personal Property owned
by Seller is subject to any security interest, mortgage, pledge, conditional
sales agreement, or other lien or encumbrance, except for liens for current
taxes not yet due and payable and for liens listed on Schedule 3.6 which shall
be removed prior to the Closing. Each item of Tangible Personal Property is
available for immediate use in the business and operations of the Station. All
items of transmitting and studio equipment included in the Tangible Personal
Property have been maintained in a manner sufficient to permit the Station and
any auxiliary broadcast facilities related to the Station to operate in
accordance with the terms of the FCC Licenses and the rules and regulations of
the FCC, and with all other applicable federal, state, and local statutes,
ordinances, rules, and regulations. Buyer recognizes, however, that many of
the items of studio equipment included in the Tangible Personal Property are
not in working order, and that Seller is not obligated to repair or replace
such items except to the extent necessary to keep the Station operating
consistent with the STA filing.
3.7 Contracts. Schedule 3.7 is a true and complete list of all
Contracts except contracts with advertisers for the sale of advertising time on
the Station for cash at prevailing rates and which have not been prepaid and
which may be canceled by the Station without penalty on not more than thirty
days' notice. Seller has delivered to Buyer true and complete copies of all
written Contracts, true and complete memoranda of all oral Contracts (including
any amendments and other modifications to such Contracts), and a schedule
summarizing Seller's obligations under trade and barter agreements relating to
the Station. Other than the Contracts listed on Schedule 3.7 and cash
programming contracts and as disclosed on Schedule 3.7, Seller requires no
contract, lease, or other agreement to enable it to carry on its business as
now conducted. All of the Assumed Contracts are in full force and effect, and
are valid,
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binding, and enforceable in accordance with their terms. There is not under
any Assumed Contract any material default by any party thereto or any event
that, after notice or lapse of time or both, could constitute a material
default. Except as disclosed in Schedule 3.7, Seller is not aware of any
intention by any party to any Assumed Contract (i) to terminate such contract
or amend the terms thereof, (ii) to refuse to renew the Assumed Contract upon
expiration of its term, or (iii) to renew the Assumed Contract upon expiration
only on terms and conditions which are more onerous than those now existing.
Except for the need to obtain the Consents listed in Schedule 3.3, Seller has
full legal power and authority to assign its rights under the Assumed Contracts
to Buyer in accordance with this Agreement, and such assignment will not affect
the validity, enforceability, or continuation of any of the Assumed Contracts.
3.8 Consents. Except for the FCC Consent provided for in
Section 6.1 and the other Consents described in Schedule 3.3, no consent,
approval, permit, or authorization of, or declaration to or filing with any
governmental or regulatory authority, or any other third party is required (i)
to consummate this Agreement and the transactions contemplated hereby, (ii) to
permit Seller to assign or transfer the Assets to Buyer, or (iii) to enable
Buyer to conduct the business and operations of the Station in essentially the
same manner as such business and operations are now conducted and to complete
the construction contemplated by the Modified Construction Permit.
3.9 Intangibles. Schedule 3.9 is a true and complete list of all
Intangibles (exclusive of those listed in Schedule 3.4), all of which are valid
and in good standing and uncontested. Seller has delivered to Buyer copies of
all documents establishing or evidencing all Intangibles. Seller is not
infringing upon or otherwise acting adversely to any trademarks, trade names,
service marks, service names, copyrights, patents, patent applications,
know-how, methods, or processes owned by any other person or persons, and there
is no claim or action pending, or to the knowledge of Seller threatened, with
respect thereto. The Intangibles listed on Schedule 3.9 comprise all
intangible property interests necessary to conduct the business and operations
of the Station as now conducted and to complete the construction contemplated
by the Modified Construction Permit.
3.10 Financial Statements. Schedule 3.10 hereto lists the
financial statements including balance sheets, statements of operations and a
statement of operating cash flow for the period ending December 31, 1995 and
unaudited financial statements including balance sheets, statements of
operations and a statement of operating cash flow for the five (5) month period
ending May 31, 1996 (collectively, the "Financial Statements"). None of the
Financial Statements fails to disclose any material contingent liabilities, or
inflates the revenues of the Station.
3.11 Insurance. Schedule 3.11 is a true and complete list of all
insurance policies of Seller that insure any part of the physical Assets or the
business of the
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governmental investigations or other legal, administrative, or tax proceedings
pursuant to which Seller is or could be made liable for any taxes, penalties,
interest, or other charges, the liability for which could extend to Buyer as
transferee of the business of the Station, and no event has occurred that could
impose on Buyer any transferee liability for any taxes, penalties, or interest
due or to become due from Seller.
3.15 Claims and Legal Actions. Except as set forth in Schedule
3.15 and except for any FCC rulemaking proceedings generally affecting the
broadcasting industry, there is no claim, legal action, counterclaim, suit,
arbitration, governmental investigation or other legal, administrative, or tax
proceeding, nor any order, decree or judgment, in progress or pending, or to
the knowledge of Seller threatened, against or relating to Seller with respect
to its construction, ownership or operation of the Station or otherwise
relating to the Assets or the construction, business or operations of the
Station, nor does Seller know or have reason to be aware of any basis for the
same. In particular, but without limiting the generality of the foregoing, and
except as set forth in Schedule 3.15, there are no applications, complaints or
proceedings pending or, to the best of its knowledge, threatened (i) before the
FCC relating to the construction, business or operations of the Station other
than rule making proceedings which affect the television industry generally,
(ii) before any federal or state agency relating to the construction, business
or operations of the Station involving charges of illegal discrimination under
any federal or state employment laws or regulations, or (iii) before any
federal, state, or local agency relating to the construction, business or
operations of the Station involving zoning issues under any federal, state, or
local zoning law, rule, or regulation.
3.16 Environmental Matters.
(a) To the best of Sellers knowledge, Seller has complied
in all material respects with all laws, rules, and regulations of all federal,
state, and local governments (and all agencies thereof) concerning the
environment, public health and safety, and employee health and safety, and no
charge, complaint, action, suit, proceeding, hearing, investigation, claim,
demand, or notice has been filed or commenced against Seller in connection with
its construction, ownership or operation of the Station alleging any failure to
comply with any such law, rule, or regulation.
(b) To the best of Sellers knowledge, Seller has no
material liability relating to its construction, ownership and operation of the
Station (and there is no basis related to the past or present operations,
properties, or facilities of Seller for any substantial present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand against Seller giving rise to any such liability) under any law, rule,
or regulation of any federal, state, or local government (or agency thereof)
concerning release or threatened release of hazardous substances, public health
and safety, or pollution or protection of the environment.
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(c) To the best of Seller's knowledge, Seller has no
material liability relating to its construction, ownership and operation of the
Station (and Seller has not handled or disposed of any substance, arranged for
the disposal of any substance, or owned or operated any property or facility in
any manner that could form the basis for any substantial present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand (under the common law or pursuant to any statute) against Seller giving
rise to any such liability) for damage to any site, location, or body of water
(surface of subsurface) or for illness or personal injury.
(d) To the best of Seller's knowledge, Seller has no
material liability relating to its construction, ownership and operation of the
Station (and there is no basis for any substantial present or future charge,
complaint, action, suit, proceeding, hearing, investigation, claim, or demand
against Seller giving rise to any such liability) under any law, rule, or
regulation of any federal, state, or local government (or agency thereof)
concerning employee health and safety.
(e) To the best of Seller's knowledge, Seller has no
material liability relating to its construction, ownership and operation of the
Station (and Seller has not exposed any employee to any substance or condition
that could form the basis for any substantial present or future charge,
complaint, action, suit, proceeding, hearing, investigation, claim, or demand
(under the common law or pursuant to statute) against Seller giving rise to any
such liability) for any illness or personal injury to any employee.
(f) In connection with its construction, ownership or
operation of the Station, to the best of Seller's knowledge, Seller has
obtained and been in compliance in all material respects with all of the terms
and conditions of all permits, licenses, and other authorizations which are
required under, and has complied with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules, and
timetables which are contained in, all federal, state, and local laws, rules,
and regulations (including all codes, plans, judgments, orders, decrees,
stipulations, injunctions, and charges thereunder) relating to public health
and safety, worker health and safety, and pollution or protection of the
environment, including laws relating to emissions, discharges, releases, or
threatened releases of pollutants, contaminants, or chemical, industrial,
hazardous, or toxic materials or wastes into ambient air, surface water, ground
water, or lands or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, or chemical, industrial, hazardous, or toxic
materials or wastes.
(g) To the best of Seller's knowledge, no pollutant,
contaminant, or chemical, industrial, hazardous, or toxic material or waste has
ever been manufactured, buried, stored, spilled, leaked, discharged, emitted,
or released by Seller in connection with its construction, ownership and
operation of the Station or, to the best of Sellers knowledge, by any other
party on any Real Property.
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3.17 Compliance with Laws. Seller has complied in all material
respects with the Licenses and all federal, state, and local laws, rules,
regulations, and ordinances applicable or relating to the construction,
ownership and operation of the Station. Neither the ownership or use of the
properties of the Station nor the conduct of the construction, business or
operations of the Station conflicts with the rights of any other person or
entity.
3.18 Conduct of Business in Ordinary Course. Since June 10,1996,
Seller has conducted the construction, business and operations of the Station
only in the ordinary course and has not:
(a) Suffered any material adverse change in the business,
assets, or properties of the Station, including any damage, destruction, or
loss affecting any assets used or useful in the conduct of the business of the
Station;
(b) Made any sale, assignment, lease, or other transfer
of any of the Station's properties other than in the normal and usual course of
business with suitable replacements being obtained therefor;
(c) Canceled any debts owed to or claims held by Seller
with respect to the Station, except in the normal and usual course of business;
or
(d) Transferred or granted any right under, or entered
into any settlement regarding the breach or infringement of, any license,
patent, copyright, trademark, trade name, franchise, or similar right, or
modified any existing right relating to the Station.
3.19 Transactions with Affiliates. Except for an informal
agreement with CTTC for construction of a common antenna facility for the
Station and Channel 20 on the tower used by KJZZ-TV, Seller has not been
involved in any business arrangement or relationship relating to the Station
with any affiliate of Seller, and no affiliate of Seller owns any property or
right, tangible or intangible, which is used in the business of the Station.
As used in this paragraph, "affiliate" has the meaning set forth in Rule 12b-2
promulgated under the Securities and Exchange Act of 1934.
3.20 Broker. Seller will hold Buyer harmless for any finder's or
broker's fees or commissions in connection with the transactions contemplated
by this Agreement, including the commission payable by Seller to Media Services
Group, Inc.
3.21 Full Disclosure. No representation or warranty made by Seller
in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Seller pursuant hereto contains or will contain
any untrue statement of a
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material fact, or omits or will omit to state any material fact and required to
make any statement made herein or therein not misleading.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization, Standing, and Authority. Buyer is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Florida and at Closing will be duly qualified to conduct business as a
foreign corporation in the State of Utah. Buyer has all requisite power and
authority to execute and deliver this Agreement and the documents contemplated
hereby, and to perform and comply with all of the terms, covenants, and
conditions to be performed and complied with by Buyer hereunder and thereunder.
4.2 Authorization and Binding Obligation. The execution,
delivery, and performance of this Agreement by Buyer have been duly authorized
by all necessary actions on the part of Buyer. This Agreement has been duly
executed and delivered by Buyer and constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms
except as the enforceability of this Agreement may be affected by bankruptcy,
insolvency, or similar laws affecting creditors' rights generally and by
judicial discretion in the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents, the execution, delivery, and performance by Buyer of this Agreement
and the documents contemplated hereby (with or without the giving of notice,
the lapse of time, or both): (i) do not require the consent of any third party;
(ii) will not conflict with the Articles of Incorporation or Bylaws of Buyer;
(iii) will not conflict with, result in a breach of, or constitute a default
under, any law, judgment, order, injunction, decree, rule, regulation, or
ruling of any court or governmental instrumentality; or (iv) will not conflict
with, constitute grounds for termination of, result in a breach of, constitute
a default under, or accelerate or permit the acceleration of any performance
required by the terms of, any agreement, instrument, license, or permit to
which Buyer is a party or by which Buyer may be bound, such that Buyer could
not acquire or operate the Assets.
4.4 Broker. Neither Buyer nor any person acting on Buyer's behalf
has incurred any liability for any finders' or brokers fees or commissions in
connection with the transactions contemplated by this Agreement.
4.5 Full Disclosure. No representation or warranty made by Buyer
in this Agreement or in any certificate, document, or other instrument
furnished or to be furnished by Buyer pursuant hereto contains or will contain
any untrue statement of a
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material fact, or omits or will omit to state any material fact and required to
make any statement made herein or therein not misleading.
SECTION 5. OPERATIONS OF THE STATION PRIOR TO CLOSING
5.1 Generally. Seller agrees that, between the date of this
Agreement and the Closing Date, Seller shall operate the Station in the
ordinary course of business in accordance with its past practices (except where
such conduct would conflict with the following covenants or with Seller's other
obligations under this Agreement), and in accordance with the other covenants
in this Section 5.
5.2 Compensation. Seller may increase the compensation, bonuses,
or other benefits payable or to be payable to any person employed in connection
with the conduct of the business or operations of the Station but shall provide
Buyer with written notice thereof within five (5) days of such action.
5.3 Contracts. Seller will not:
(1) enter into any Contract or commitment
relating to the Station or the Assets; or
(2) amend or terminate any contract (or waive any
material right thereunder); or
(3) incur any obligation (including obligations
relating to the borrowing of money or the guaranteeing of indebtedness) that
will be binding on Buyer after Closing, except for cash time sales agreements
made in the ordinary course of business. Prior to the Closing Date, Seller
shall deliver to Buyer a list of all Contracts entered into between the date of
this Agreement and the Closing Date, together with copies of such Contracts.
5.4 Disposition of Assets. Seller shall not sell, assign, lease,
or otherwise transfer or dispose of any of the Assets, except where no longer
used or useful in the business or operations of the Station or in connection
with the acquisition of replacement property of equivalent kind and value.
5.5 Encumbrances. Seller shall not create, assume or permit to
exist any claim, liability, mortgage, lien, pledge, condition, charge, or
encumbrance of any nature whatsoever upon the Assets, except for (i) liens
disclosed on Schedule 3.5 and Schedule 3.6, which shall be removed prior to the
Closing Date, (ii) liens for current taxes not yet due and payable, and (iii)
mechanics' liens and other similar liens, which shall be removed prior to the
Closing Date.
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5.6 Licenses. Seller shall not cause or permit, by any act or
failure to act, any of the Licenses to expire or to be revoked, suspended, or
modified, or take any action that could cause the FCC or any other governmental
authority to institute proceedings for the suspension, revocation, or adverse
modification of any of the Licenses. Seller shall not fail to prosecute with
due diligence any applications to any governmental authority in connection with
the construction or operation of the Station, provided, however, that Seller
shall take all reasonable actions (with the cooperation of Buyer) to join with
▇▇▇▇▇▇▇ Broadcasting Company of Utah in seeking prompt FCC approval and grant
of the application of Seller for the Modified Construction Permit and of the
pending application of ▇▇▇▇▇▇▇ Broadcasting Company of Utah to modify the
facilities of Television Station KZAR-TV (FCC File No. BMPCT-960313KE).
Subject to Seller's compliance with its obligations as set forth below, Buyer
will take no action detrimental to the grant of all such applications,
including the application to modify the Construction Permit and the application
to extend the Construction Permit and Buyer will use its best efforts to secure
the dismissal of the opposition filed by ▇▇▇▇▇▇▇ Broadcasting Company of Utah
("▇▇▇▇▇▇▇") to the application to modify the Construction Permit. Within five
business days following the execution of this Agreement, simultaneously with
the filing of a request by ▇▇▇▇▇▇▇ for dismissal of its opposition, Seller will
file a request for dismissal of its petition to deny the application (File No.
BMPCT-960313KE) of ▇▇▇▇▇▇▇ for modification of the facilities of station
KZAR-TV. Beyond the filing of such request for dismissal, Seller shall not
have an affirmative duty to advocate the grant of the KZAR-TV application, nor
shall Seller interfere with the FCC's processing of the ▇▇▇▇▇▇▇ application for
KZAR-TV.
5.7 Rights. Seller shall not waive any right relating to the
Station or any of the Assets. Seller shall not cause, by any act or failure to
act, any cable system located within the Station's Area of Dominant Influence
to refuse to carry the Station's signal, except for those cable systems to
whose headends the Station does not deliver an off-air signal of -45 dBm as
required by Section 76.55(c)(3) of the FCC's Rules.
5.8 No Inconsistent Action. Seller shall not take any action that
is inconsistent with its obligations under this Agreement or that could hinder
or delay the consummation of the transactions contemplated by this Agreement.
5.9 Access to Information. Seller shall give Buyer and its
counsel, accountants, engineers, and other authorized representatives
reasonable access to the Assets and to all other properties, equipment, books,
records, Contracts, and documents relating to the Station for the purpose of
audit and inspection, including inspections incident to the environmental study
described in Section 6.5 and the engineering study described in Section 6.6,
and will furnish or cause to be furnished to Buyer or its authorized
representatives all information with respect to the affairs and business of the
Station that Buyer may reasonably request (including any financial reports and
operations reports produced with respect to the affairs and business of the
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Station). Without limiting the generality of the foregoing, Seller shall give
Buyer and its counsel, accountants and other authorized representatives
reasonable access to Seller's financial records and Seller's employees,
counsel, accountants and other representatives for the purpose of preparing and
auditing such financial statements as Buyer determines, in its sole judgment,
are required or advisable to comply with federal or state securities laws and
the rules and regulations of securities markets as a result of the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby.
5.10 Maintenance of Assets. Seller shall use its best efforts and
take all reasonable actions to maintain all of the Assets in as good a
condition (ordinary wear and tear excepted as at the date hereof), and use,
operate, and maintain all of the Assets in a reasonable manner and in
accordance with the terms of the pending request for special temporary
authority ("STA") referenced in Schedule 3.4 of the FCC Licenses, all rules and
regulations of the FCC and generally accepted standards of good engineering
practice. Seller shall maintain inventories of spare parts and expendable
supplies at levels consistent with past practices. If any loss, damage,
impairment, confiscation, or condemnation of or to any of the Assets occurs,
Seller shall repair, replace, or restore the Assets to their prior condition as
represented in this Agreement as soon thereafter as possible, and Seller shall
use the proceeds of any claim under any insurance policy solely to repair,
replace, or restore any of the Assets that are lost, damaged, impaired, or
destroyed.
5.11 Insurance. Seller shall maintain the existing insurance
policies on the Station and the Assets.
5.12 Consents. Seller shall obtain the Consents and the estoppel
certificates described in Section 8.2(b), without any change in the terms or
conditions of any Contract or License that could be less advantageous to the
Station than those pertaining under the Contract or License as in effect on the
date of this Agreement. Seller shall promptly advise Buyer of any difficulties
experienced in obtaining any of the Consents and of any conditions proposed,
considered, or requested for any of the Consents. Upon Buyer's request, Seller
shall cooperate with Buyer and use its best efforts to obtain from the lessors
under the studio lease and the transmitter/antenna space lease on Little
▇▇▇▇▇▇▇▇▇▇ Peak such estoppel certificates and consents to the collateral
assignment of the lessee's interest under each such lease as Buyer's senior
lenders may request.
5.13 Books and Records. Seller shall maintain its books and
records relating to the Station in accordance with past practices.
5.14 Notification. Seller shall promptly notify Buyer in writing
of any unusual or material developments with respect to the business or
operations of the Station, and of
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any material change in any of the information contained in Seller's
representations and warranties contained in Section 3 of this Agreement.
5.15 Financial Information. Seller shall furnish to Buyer within
forty days after the end of each month ending between the date of this
Agreement and the Closing Date a statement of income and expense and a
statement of operating cash flow for the month just ended and such other
financial information (including information on payables and receivables) as
Buyer may reasonably request. All financial information delivered by Seller to
Buyer pursuant to this Section shall be prepared from the books and records of
Seller shall accurately reflect the books, records, and accounts of the
Station, shall be complete and correct in all material respects, and shall
present fairly the financial condition of the Station operation as at their
respective dates and the results of operations for the periods then ended
(except for expenses not paid from Station accounts).
5.16 Compliance with Laws. Seller shall comply in all material
respects with all laws, rules, and regulations applicable or relating to the
construction, ownership and operation of the Station, subject to Schedule 3.4.
5.17 Financing Leases. Seller shall satisfy at or prior to Closing
all outstanding obligations under capital and financing leases with respect to
any of the Assets and obtain good title to the Assets leased by Seller pursuant
to those leases so that those Assets shall be transferred to Buyer at Closing
free of any interest of the lessors.
5.18 Programming. Seller shall not make any material changes in
the broadcast hours or in the percentages of types of programming broadcast by
the Station, or make any other material change in the Station's programming
policies, except such changes as in the good faith judgment of the Seller are
required by the public interest.
5.19 Preservation of Business. Seller shall use its best efforts
to preserve the existing business and organization of the Station and use its
best efforts to keep available to the Station its present employees and to
preserve the audience of the Station and the Station's present relationships
with suppliers, advertisers, and others having business relations with it, to
the end that the business, operations, and prospects of the Station shall be
unimpaired at the Closing Date for purposes of Buyer's proposed operation,
provided, however, that Seller may cooperate in efforts by CTTC to develop a
new television station on Channel 20 in Salt Lake City, and Seller shall not
have any duty to preclude employees of the Station from rendering services, to,
or becoming employees of, CTTC. The ordinary and customary operating,
marketing, promotional, sales, and advertising practices of the Station shall
be maintained. Seller shall have no obligation to maintain in force any
contract (including programming syndication contracts) which Buyer has not
agreed to assume.
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5.20 Collection of Accounts Receivable. Seller shall collect the
accounts receivable of the Station only in the ordinary course consistent with
its past practices and will not take any action designed or likely to
accelerate the collection of its accounts receivable.
5.21 Personnel Recommendations. Seller shall promptly notify Buyer
as personnel vacancies occur at the Station and consider for employment all
personnel recommended by Buyer for such vacant positions.
5.22 Buyer Notification. Buyer shall promptly notify Seller in
writing of any material change in any of Buyer's representations and warranties
contained in Section 4 of this Agreement.
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent.
(a) The assignment of the FCC Licenses in connection with
the purchase and sale of the Assets pursuant to this Agreement shall be subject
to the prior consent and approval of the FCC.
(b) Seller and Buyer shall promptly prepare an
appropriate application for the FCC Consent and shall file the application with
the FCC within five (5) business days of the execution of this Agreement. The
parties shall prosecute the application with all reasonable diligence and
otherwise use their best efforts to obtain a grant of the application as
expeditiously as practicable. Each party agrees to comply with any condition
imposed on it by the FCC Consent, except that no party shall be required to
comply with a condition if (1) the condition was imposed on it as the result of
a circumstance the existence of which does not constitute a breach by the party
of any of its representations, warranties, or covenants under this Agreement,
and (2) compliance with the condition would have a material adverse effect upon
it.
(c) Buyer and Seller shall oppose any requests for
reconsideration or judicial review of the FCC Consent except for a request
filed by the other party in an attempt to remove a condition describing in (b)
(1) or (2) above. If the Closing shall not have occurred for any reason within
the original effective period of the FCC Consent, and neither party shall have
terminated this Agreement under Section 9, the parties shall jointly request an
extension of the effective. period of the FCC Consent. No extension of the FCC
Consent shall limit the exercise by either party of its rights under Section 9.
6.2 Control of the Station. Prior to Closing, Buyer shall not,
directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the
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operations of the Station; such operations, including complete control and
supervision of all of the Station programs, employees, and policies, shall be
the sole responsibility of Seller until the Closing.
6.3 Risk of Loss.
(a) The risk of any loss, damage, impairment,
confiscation, or condemnation of any of the Assets from any cause whatsoever
shall be borne by Seller at all times prior to the Closing except for any loss,
damage, impairment, confiscation or condemnation caused by Buyer or agents of
Buyer.
(b) If any damage or destruction of the Assets or any
other event occurs which (i) causes the Station to cease broadcasting
operations for a period of three or more days or (ii) prevents in any material
respect signal transmission by the Station in the normal and usual manner and
Seller fails to restore or replace the Assets so that normal and usual
transmission is resumed within seven days of the damage, destruction or other
event, Buyer, in its sole discretion, may (x) terminate this Agreement
forthwith without any further obligations hereunder upon written notice to
Seller, or (y) proceed to consummate the transaction contemplated by this
Agreement and complete the restoration and replacement of the Assets after the
Closing Date, in which event Seller shall deliver to Buyer all insurance
proceeds received in connection with such damage, destruction or other event.
6.4 Confidentiality. Except as necessary for the consummation of
the transaction contemplated by this Agreement, including Buyers obtaining of
financing related hereto, and except as and to the extent required by law,
including, without limitation, disclosure requirements of federal or state
securities laws and the rules and regulations of securities markets, each party
will keep confidential any information obtained from the other party in
connection with the transactions contemplated by this Agreement. If this
Agreement is terminated, each party will return to the other party all
information obtained by the such party from the other party in connection with
the transactions contemplated by this Agreement.
6.5 Environmental Audit. Buyer may, at its option and expense,
retain an environmental consultant to be selected by Buyer to perform a Phase I
environmental survey of the properties of the Station. If the survey discloses
any material environmental hazard or material possibility of future liability
for environmental damages or clean-up costs, Buyer shall so notify Seller as
soon as practicable.
6.6 Engineering Study. Buyer may, at its option and expense,
retain an engineering firm to conduct a proof of performance study of the
Station and to prepare a report on the Station's compliance with customary
engineering practices and all applicable FCC rules, regulations, prescribed
practices, and technical standards. If the
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survey discloses any material deficiencies in the operations or equipment of
the Station, Buyer shall so notify Seller as soon as practicable.
6.7 Cooperation. Buyer and Seller shall cooperate fully with each
other and their respective counsel and accountants in connection with any
actions required to be taken as part of their respective obligations under this
Agreement, and Buyer and Seller shall execute such other documents as may be
necessary and desirable to the implementation and consummation of this
Agreement, and otherwise use their commercially reasonable efforts to
consummate the transaction contemplated hereby and to fulfill their obligations
under this Agreement. Notwithstanding the foregoing, Buyer shall have no
obligation (i) to expend funds to obtain any of the Consents or (ii) to agree
to any adverse change in any License or Assumed Contract to obtain a Consent
required with respect thereto. Buyer shall have a reasonable opportunity to
consult with Seller prior to October 1, 1996 concerning Seller's decision to
elect must carry or retransmission consent for the Station with respect to
cable television systems located in the Salt Lake City ADI, and Seller shall
not make any such election without Buyers approval.
6.8 Bulk Sales Law. If applicable, the Bulk Sales law of the
State of Utah shall be complied with by Seller. Any loss, liability,
obligation, or cost suffered by Seller or Buyer as the result of the failure of
Seller or Buyer to comply with the provisions of any bulk sales law applicable
to the transfer of the Assets as contemplated by this Agreement shall be borne
by Seller.
6.9 [Reserved]
6.10 Sales Tax Filings. Seller shall continue to file Utah sales
tax returns with respect to the Station in accordance with Sellers past
practices and shall concurrently deliver copies of all such returns to Buyer.
6.11 Access to Books and Records. Seller shall provide Buyer
access and the right to copy for a period of three years from the Closing Date
any books and records relating to the Assets that are not included in the
Assets. Buyer shall provide Seller access and the right to copy for a period
of three years from the Closing Date any books and records relating to the
Assets.
6.12 Appraisal. Buyer and Seller agree to allocate the Purchase
Price for tax and recording purposes in accordance with an appraisal to be
conducted by an appraisal firm selected and paid for by Buyer with experience
in the valuation and appraisal of television station assets.
6.13 Broadcasting After Closing. Following the Closing, Buyer
shall have the right to broadcast the Stations's programming on Seller's Low
Power Television Station
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in Salt Lake City, Utah (the "LPTV") until a date which is thirty days after
the Station has commenced broadcast operations pursuant to the Minor
Modification (as defined below) and during such period, Seller shall broadcast
all of the Station's programming free of charge on Seller's LPTV.
6.14 Assumption of Certain Contracts.
(a) Buyer shall not assume at Closing the Network
Affiliation Agreement, dated as of July 12, 1994, by and between Seller and
Warner Brothers (the "WB Affiliation Agreement"), provided, however, that Buyer
shall be required to broadcast after Closing Warner Brothers' programming in
accordance with the terms of the WB Affiliation Agreement as of the date of
execution of this Agreement until the earlier to occur of (i) the date on which
CTTC commences operation of Channel 20 in the Salt Lake City, Utah market or
(ii) the date which is nine months after the Closing Date (the "WB Termination
Date"). During the period from the Closing Date to the WB Termination Date,
Buyer shall have no obligation or liability under or relating to the WB
Affiliation Agreement other than the broadcasting of Warner Brothers'
programming as set forth in the preceding sentence. Following the WB
Termination Date, Buyer shall have no obligation or liability whatsoever under
or relating to the WB Affiliation Agreement. Prior to Closing, Seller shall
deliver to Buyer a written acknowledgment and acceptance from Warner Brothers
to this programming arrangement.
(b) Buyer shall assume at Closing the Affiliation
Agreement, dated as of March 3, 1994, as amended, by and between Seller and
Home Shopping Network, Inc. (the "HSN Affiliation Agreement") for the remaining
term of such HSN Affiliation Agreement which Seller represents and warrants
will expire on March 1, 1997. During the period after the Closing and prior to
the expiration of the HSN Affiliation Agreement, Buyer shall broadcast Home
Shopping Network's program schedule as is in place under the HSN Affiliation
Agreement on June 12, 1996. Within five business days following the execution
of this Agreement, Seller shall give Home Shopping Network written notice of
its intent to cancel the HSN Affiliation Agreement on March 1, 1997.
(c) Buyer shall assume at Closing the Studio Lease, dated
as of ________________ by and between Seller and AIM Associates (the "Studio
Lease") so long as Buyer-shall have the right to vacate the premises leased
pursuant to the Studio Lease upon ninety days prior written notice to Seller
at which ▇▇▇▇ ▇▇▇▇▇▇ shall assume all payment obligations under the Studio
Lease until the expiration of its term. Seller represents and warrants that
the Studio Lease expires in 1999.
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SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER AT CLOSING
7.1 Conditions to Obligations of Buyer. All obligations of Buyer
at the Closing are subject at Buyer's option to the fulfillment prior to or at
the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations
and warranties of Seller contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
(b) Covenants and Conditions. Seller shall have
performed and complied in all material respects with all covenants, agreements,
and conditions required, by this Agreement to be performed or complied with by
it prior to or on the Closing Date.
(c) Consents. All Consents shall have been obtained and
delivered to Buyer without any adverse change in the terms or conditions of any
agreement or any governmental license, permit, or other authorization.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Buyer of any conditions that need not be complied
with by Buyer under Section 6.1 hereof, Seller shall have complied with any
conditions imposed on it by the FCC Consent, and the FCC Consent shall have
become a Final Order.
(e) Governmental Authorizations. Seller shall be the
holder of all Licenses and there shall not have been any modification of any
License that could have an adverse effect on the Station or the conduct of its
business and operations. No proceeding shall be pending or threatened the
effect of which could be to revoke, cancel, fail to renew, suspend, or modify
adversely any License.
(f) Deliveries. Seller shall have made or stand willing
to make all the deliveries to Buyer set forth in Section 8.2.
(g) Adverse Change. Between the date of this Agreement
and the Closing Date, there shall have been no material adverse change in the
business, assets, or properties of the Station, including any damage,
destruction, or loss affecting any assets used or useful in the conduct of the
business of the Station.
(h) Construction Permit and Minor Modification. Seller
shall have received a grant from the FCC of the application to extend Seller's
Construction Permit with respect to the Station, file number BMPCT-960605__
(the "Extension Application") and the FCC shall have granted the Modified
Construction Permit application to relocate the Station's antenna to Channel
14's transmitter site on Little ▇▇▇▇▇▇▇▇▇▇ Peak, Utah (the "Minor
Modification").
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(i) Tower Lease. Seller shall have entered into a tower
lease for the site specified in the Modified Construction Permit acceptable to
Buyer which permits the Station to install a standby power generator (or to use
an existing standby power generator located at the site), a receive-only
satellite dish and two microwave antennas. Such tower lease shall be assumed
by Buyer at Closing and Seller shall have obtained any necessary Consents to
transfer to Buyer at the Closing such tower lease.
7.2 Conditions to Obligations of Seller. All obligations of
Seller at the Closing are subject at Seller's option to the fulfillment prior
to or at the Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations
and warranties of Buyer contained in this Agreement shall be true and complete
in all material respects at and as of the Closing Date as though made at and as
of that time.
(b) Covenants and Conditions. Buyer shall have performed
and complied in all material respects with all covenants, agreements, and
conditions required by this Agreement to be performed or complied with by it
prior to or on the Closing Date.
(c) Deliveries. Buyer shall have made or stand willing
to make all the deliveries set forth in Section 8.3.
(d) FCC Consent. The FCC Consent shall have been granted
without the imposition on Seller of any conditions that need not be complied
with by Seller under Section 6.1 hereof and Buyer shall have complied with any
conditions imposed on it by the FCC Consent.
SECTION 8. CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date. The Closing shall take place at 10:00
a.m. on a date, to be set by Buyer on at least five days' written notice to
Seller, that is (1) not earlier than the first business day after the FCC
Consent is granted, and (2) not later than ten business days' following the date
upon which the FCC Consent has become a Final Order, subject to satisfaction or
waiver of all other conditions precedent to the holding of the Closing. If
Buyer fails to specify the date for Closing prior to the fifth business day
after the date upon which the FCC Consent becomes a Final Order, the Closing
shall take place on the tenth business day after the date upon which the FCC
Consent becomes a Final Order.
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(b) Closing Place. The Closing shall be held at the
offices of Dow, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, or any other place that is agreed upon by Buyer and
Seller.
8.2 Deliveries by Seller. Prior to or on the Closing Date, Seller
shall deliver to Buyer the following, in form and substance reasonably
satisfactory to Buyer and its counsel:
(a) Transfer Documents. Duly executed warranty bills of
sale, assignments, and other transfer documents which shall be sufficient to
vest good and marketable title to the Assets in the name of Buyer, free and
clear of all claims, liabilities, security interests, mortgages, liens,
pledges, conditions, charges or encumbrances, except for liens for current
taxes not yet due and payable;
(b) Estoppel Certificates. Estoppel certificates of the
lessors of all leasehold and subleasehold interests included in the Real
Property (except for the ▇▇▇▇▇ County transmitter site) and estoppel
certificates of contracting parties to those Assumed Contracts listed in
Schedule 3.7 that are designated to indicate that estoppel certificates are
required under this Paragraph (Seller shall indemnify Buyer from any and all
post-Closing losses, damages or other liabilities with respect to Buyer's
termination of the ▇▇▇▇▇ County transmitter site lease);
(c) Consents. A manually executed copy of any instrument
evidencing receipt of any Consent;
(d) Officer's Certificate. A certificate, dated as of
the Closing Date, executed on behalf of Seller by an officer of Seller,
certifying (1) that the representations and warranties of Seller contained in
this Agreement are true and complete in all material respects as of the Closing
Date as though made on and as of that date; and (2) that Seller has in all
material respects performed and complied with all of its obligations,
covenants, and agreements set forth in this Agreement to be performed and
complied with on or prior to the Closing Date;
(e) Tax, Lien, and Judgment Searches. Results of a
search for tax, lien, and judgment filings in the Secretary of State's records
of the State of Utah as well as the records of those counties in Utah in which
any of the Assets are located, such searches having been made no earlier than
fifteen days prior to the Closing Date;
(f) Licenses, Contracts, Business Records, Etc. Copies
of all Licenses, Assumed Contracts, blueprints, schematics, working drawings,
plans, projections, engineering records, and all files and records used by
Seller in connection with its operations;
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(g) Accounts Receivable. A complete and accurate list of
the Station's accounts receivable as of a date no more than five business days
prior to the Closing Date, including, with respect to each of the accounts
receivable, the account number, date of issuance, name and address of account
debtor, aggregate amount, and balance due;
(h) Opinion of Counsel. An Opinion of Sellers counsel
dated as of the Closing Date, substantially in the form of Schedule 8.2(h)
hereto;
(i) Lender's Certificates. Such certificates and
confirmations to Buyer's senior lenders as Buyer may reasonably request in
connection with obtaining financing for the performance of its payment
obligations hereunder. This paragraph shall not, however, be construed as
placing a substantive obligation on Seller beyond the obligations of Seller
expressed elsewhere herein.
(j) Warner Brothers Acknowledgment. The written
acknowledgment and acceptance from Warner Brothers to be delivered by Seller
pursuant to Section 6.14(a).
8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer
shall deliver to Seller the following, in form and substance reasonably
satisfactory to Seller and its counsel:
(a) Purchase Price. The Purchase Price as provided in
Section 2.3;
(b) Assumption Agreements. Appropriate assumption
agreements pursuant to which Buyer shall assume and undertake to perform
Sellers obligations under the Licenses and Assumed Contracts insofar as they
relate to the time on and after the Closing Date and arise out of events
related to Buyer's ownership of the Assets or its operation of the Station on
or after the Closing Date:
(c) Officers Certificate. A certificate, dated as of the
Closing Date, executed on behalf of Buyer by an officer of Buyer, certifying
(1) that the representations and warranties of Buyer contained in this
Agreement are true and complete in all material respects as of the Closing Date
as though made on and as of that date, and (2) that Buyer has in all material
respects performed and complied with all of its obligations, covenants, and
agreements set forth in this Agreement to be performed and complied with on or
prior to the Closing Date;
(d) Opinion of Counsel. An opinion of Buyer's counsel
dated as of the Closing Date, substantially in the form of Schedule 8.3(d)
hereto.
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SECTION 9. TERMINATION
9.1 Termination by Seller. This Agreement may be terminated by
Seller and the purchase and sale of the Station abandoned, if Seller is not
then in material default, upon written notice to Buyer, upon the occurrence of
any of the following:
(a) Conditions. If on the date that would otherwise be
the Closing Date any of the conditions precedent to the obligations of Seller
set forth in this Agreement have not been satisfied or waived in writing by
Seller.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order that
would prevent or make the Closing unlawful.
(c) Upset Date. If the Closing shall not have occurred
by June 1, 1997.
(d) Breach. Without limiting Seller's rights under the
other provisions of this Section 9.1, if Buyer has failed to cure any material
breach of any of its representations, warranties or covenants under this
Agreement within fifteen days after Buyer received written notice of such
breach from Seller.
9.2 Termination by Buyer. This Agreement may be terminated by
Buyer and the purchase and sale of the Station abandoned, if Buyer is not then
in material default, upon written notice to Seller, upon the occurrence of any
of the following:
(a) Conditions. If on the date that would otherwise be
the Closing Date any of the conditions precedent to the obligations of Buyer
set forth in this Agreement have not been satisfied or waived in writing by
Buyer.
(b) Judgments. If there shall be in effect on the date
that would otherwise be the Closing Date any judgment, decree, or order that
would prevent or make the Closing unlawful.
(c) Upset Date. If the Closing shall not have occurred
by June 1, 1997.
(d) Interruption of Service. If any event shall have
occurred that prevented signal transmission of the Station in the normal and
usual manner for a continuous period of three days within the 45 day period
preceding the Closing, except for operation at reduced power occasioned by a
relocation of the Station's main transmitter to the site specified in the
Modified Construction Permit.
(e) Environmental Hazards. Buyer shall have notified
Seller of material environmental hazards or the material possibility of
environmental damages or clean-up
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costs, as indicated in the environmental study described in Section 6.5, at
least 30 days prior to the Closing Date, and the cause thereof shall not have
been remedied prior to the Closing Date, or if Seller shall not have agreed to
escrow an amount of money from the purchase price reasonably sufficient to
remedy such environmental problem following the Closing Date.
(f) Technical Deficiencies. Buyer shall have notified
Seller of material deficiencies in the operations or equipment of the Station,
as indicated in the engineering study described in Section 6.6, at least 30
days prior to the Closing Date, and the cause thereof shall not have been
remedied prior to the Closing Date, or if Seller shall not have agreed to a
purchase price reduction, reasonably satisfactory to Buyer, to remedy the
technical deficiency.
(g) Breach. Without limiting Buyer's rights under the
other provisions of this Section 9.2, if Seller has failed to cure any material
breach of any of its representations, warranties or covenants under this
Agreement within fifteen days after Seller received written notice of such
breach from Buyer.
9.3 Rights on Termination. If this Agreement is terminated
pursuant to Section 9.1 or Section 9.2 and neither party is in material breach
of this Agreement, the parties hereto shall not have any further liability to
each other with respect to the purchase and sale of the Assets. If this
Agreement is terminated by Buyer due to Seller's material breach of this
Agreement, Buyer shall have all rights and remedies available under Sections
10.5 and 11.2. If this Agreement is terminated by Seller due to Buyer's
material breach of this Agreement, Seller shall have all rights and remedies
available under Section 11.2.
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION;
CERTAIN REMEDIES
10.1 Representations and Warranties. All representations and
warranties contained in this Agreement shall be deemed continuing
representations and warranties and shall survive the Closing for a period of
eighteen months. Any investigations by or on behalf of any party hereto shall
not constitute a waiver as to enforcement of any representation, warranty, or
covenant contained in this Agreement. No notice or information delivered by
Seller shall affect Buyer's right to rely on any representation or warranty
made by Seller or relieve Seller of any obligations under this Agreement as the
result of a breach of any of its representations and warranties.
10.2 Indemnification by Seller. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Buyer or
any information Buyer may have, Seller hereby agrees to indemnify and hold
Buyer harmless against and with respect to, and shall reimburse Buyer for:
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(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Seller contained in this Agreement or in any certificate, document,
or instrument delivered to Buyer under this Agreement.
(b) Any and all obligations of Seller not assumed by
Buyer pursuant to this Agreement, including any liabilities arising at any time
under any Contract not included in the Assumed Contracts.
(c) Any loss, liability, obligation, or cost resulting
from the failure of the parties to comply with the provisions of any bulk sales
law applicable to the transfer of the Assets.
(d) Any and all losses, liabilities, or damages resulting
from the construction, operation or ownership of the Station prior to the
Closing, including any liabilities arising under the Licenses or the Assumed
Contracts which relate to events occurring prior the Closing Date.
(e) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs, and expenses, including reasonable
legal fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
10.3 Indemnification by Buyer. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Seller or
any information Seller may have, Buyer hereby agrees to indemnify and hold
Seller harmless against and with respect to, and shall reimburse Seller for:
(a) Any and all losses, liabilities, or damages resulting
from any untrue representation, breach of warranty, or nonfulfillment of any
covenant by Buyer contained in this Agreement or in any certificate, document,
or instrument delivered to Seller under this Agreement.
(b) Any and all obligations of Seller assumed by Buyer
pursuant to this Agreement.
(c) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station on and after the Closing.
(d) Any and all actions, suits, proceedings, claims,
demands, assessments, judgments, costs and expenses, including reasonable legal
fees and expenses, incident to any of the foregoing or incurred in
investigating or attempting to avoid the same or to oppose the imposition
thereof, or in enforcing this indemnity.
34
- 31 -
10.4 Procedure for Indemnification. The procedure for
indemnification shall be as follows:
(a) The party claiming indemnification (the "Claimant")
shall promptly give notice to the party from which indemnification is claimed
(the "Indemnifying Party") of any claim, whether between the parties or brought
by a third party, specifying in reasonable detail the factual basis for the
claim. If the claim relates to an action, suit, or proceeding filed by a third
party against Claimant, such notice shall be given by Claimant within five days
after written notice of such action, suit, or proceeding was given to Claimant.
(b) With respect to claims solely between the parties,
following receipt of notice from the Claimant of a claim, the Indemnifying
Party shall have thirty days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and/or its authorized representatives the information relied upon by the
Claimant to substantiate the claim. If the Claimant and the Indemnifying Party
agree at or prior to the expiration of the thirty-day period (or any mutually
agreed upon extension thereof) to the validity and amount of such claim, the
Indemnifying Party shall immediately pay to the Claimant the full amount of the
claim. If the Claimant and the Indemnifying Party do not agree within the
thirty-day period (or any mutually agreed upon extension thereof), the Claimant
may seek appropriate remedy at law or equity or under the arbitration
provisions of this Agreement, as applicable.
(c) With respect to any claim by a third party as to
which the Claimant is entitled to indemnification under this Agreement, the
Indemnifying Party shall have the right at its own expense, to participate in
or assume control of the defense of such claim, and the Claimant shall
cooperate fully with the Indemnifying Party, subject to reimbursement for
actual out-of-pocket expenses incurred by the Claimant as the result of a
request by the Indemnifying Party. If the Indemnifying Party elects to assume
control of the defense of any third-party claim, the Claimant shall have the
right to participate in the defense of such claim at its own expense. If the
Indemnifying Party does not elect to assume control or otherwise participate in
the defense of any third party claim, it shall be bound by the results obtained
by the Claimant with respect to such claim.
(d) If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
(e) The indemnifications rights provided in Sections 10.2
and 10.3 shall extend to the shareholders, directors, officers, employees,
members and
35
- 32 -
representatives of any Claimant although for the purpose of the procedures set
forth in this Section 10.4, any indemnification claims by such parties shall be
made by and through the Claimant.
10.5 Specific Performance. The parties recognize that if Seller
breaches this Agreement and refuses to perform under the provisions of this
Agreement, monetary damages alone would not be adequate to compensate Buyer for
its injury. Buyer shall therefore be entitled, in addition to any other
remedies that may be available, including money damages, to obtain specific
performance of the terms of this Agreement. If any action is brought by Buyer
to enforce this Agreement, Seller shall waive the defense that there is an
adequate remedy at law.
10.6 Attorneys' Fees. In the event of a default by either party
which results in a lawsuit or other proceeding for any remedy available under
this Agreement, the prevailing party shall be entitled to reimbursement from
the other party of its reasonable legal fees and expenses.
SECTION 11. MISCELLANEOUS
11.1 Fees and Expenses. Any federal, state, or local sales or
transfer tax arising in connection with the conveyance of the Assets by Seller
to Buyer pursuant to this Agreement shall be paid by Seller. Buyer and Seller
shall each pay one-half of all filing fees required by the FCC in connection
with the FCC Consent. Except as otherwise provided in this Agreement, each
party shall pay its own expenses incurred in connection with the authorization,
preparation, execution, and performance of this Agreement, including all fees
and expenses of counsel, accountants, agents, and representatives. Seller
shall pay at the Closing all brokerage fees and commissions payable to Media
Services Group, Inc., and each party shall be responsible for all fees or
commissions payable to any other finder, broker, advisor, or similar person
retained by or on behalf of such party.
11.2 Arbitration. Except as otherwise provided to the contrary
below, any dispute arising out of or related to this Agreement that Seller and
Buyer are unable to resolve by themselves shall be settled by arbitration by a
panel of three (3) neutral arbitrators who shall be selected in accordance with
the procedures set forth in the commercial arbitration rules of the American
Arbitration Association. The persons selected as arbitrators shall have prior
experience in the broadcasting industry but need not be professional
arbitrators, and persons such as lawyers, accountants, brokers and bankers
shall be acceptable. Before undertaking to resolve the dispute, each
arbitrator shall be duly sworn faithfully and fairly to hear and examine the
matters in controversy and to make a just award according to the best of his or
her understanding. The arbitration hearing shall be conducted in accordance
with the commercial arbitration rules of the American Arbitration Association
in Washington, D.C. The written decision
36
- 33 -
of a majority of the arbitrators shall be final and binding on Seller and
Buyer. The costs and expenses of the arbitration proceeding shall be assessed
between Seller and Buyer in a manner to be decided by a majority of the
arbitrators, and the assessment shall be set forth in the decision and award of
the arbitrators. Judgment on the award, if it is not paid within thirty days,
may be entered in any court having jurisdiction over the matter. No action at
law or suit in equity based upon any claim arising out of or related to this
Agreement shall be instituted in any court by Seller or Buyer against the other
except (i) an action to compel arbitration pursuant to this Section, (ii) an
action to enforce the award of the arbitration panel rendered in accordance
with this Section, or (iii) a suit for specific performance pursuant to Section
10.5.
11.3 Notices. All notices, demands, and requests required or
permitted to be given under the provisions of this Agreement shall be (a) in
writing, (b) delivered by personal delivery, or sent by commercial delivery
service or registered or certified mail, return receipt requested, (c) deemed
to have been given on the date of personal delivery or the date set forth in
the records of the delivery service or on the return receipt, and (d) addressed
as follows:
If to Seller: Alpha & Omega Communications, L.L.C.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
With a copy to: ▇▇▇▇▇ ▇. ▇▇▇▇, Esquire
Jones, Waldo, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
If to Buyer: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman
▇▇▇▇▇▇ Communications Television, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to: ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Esq.
Dow, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
A Professional Limited Liability Company
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
or to any other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
11.3.
37
- 34 -
11.4 Benefit and Binding Effect. Neither party hereto may assign
this Agreement without the prior written consent of the other party hereto;
provided, however, that Buyer may assign its rights and obligations under this
Agreement, in whole or in part, to one or more subsidiaries or commonly
controlled affiliates of Buyer without seeking or obtaining Seller's prior
approval in which event Buyer shall guarantee its assignee's performance
hereunder and Buyer may collaterally assign its rights and interests hereunder
to its senior lenders without seeking or obtaining Sellers prior approval.
Upon any permitted assignment by Buyer or Seller in accordance with this
Section 11.4, all references to "Buyer" herein shall be deemed to be references
to Buyer's assignee and all references to "Seller" herein shall be deemed to be
references to Seller's assignee, as the case may be. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
11.5 Further Assurances. The parties shall take any actions and
execute any other documents that may be necessary or desirable to the
implementation and consummation of this Agreement, including, in the case of
Seller, any additional bills of sale, deeds, or other transfer documents that,
in the reasonable opinion of Buyer, may be necessary to ensure, complete, and
evidence the full and effective transfer of the Assets to Buyer pursuant to
this Agreement.
11.6 Governing Law. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED,
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF UTAH (WITHOUT REGARD
TO THE CHOICE OF LAW PROVISIONS THEREOF).
11.7 Headings. The headings in this Agreement are included for
ease of reference only and shall not control or affect the meaning or
construction of the provisions of this Agreement.
11.8 Gender and Number. Words used in this Agreement, regardless
of the gender and number specifically used, shall be deemed and construed to
include any other gender, masculine, feminine, or neuter, and any other number,
singular or plural, as the context requires.
11.9 Entire Agreement. This Agreement, the schedules, hereto, and
all documents, certificates, and other documents to be delivered by the parties
pursuant hereto, collectively represent the entire understanding and agreement
between Buyer and Seller with respect to the subject matter hereof. This
Agreement supersedes all prior negotiations between the parties and cannot be
amended, supplemented, or changed except by an agreement in writing that makes
specific reference to this Agreement and which is signed by the party against
which enforcement of any such amendment, supplement, or modification is sought.
38
- 35 -
11.10 Waiver of Compliance; Consents. Except as otherwise provided
in this Agreement, any failure of any of the parties to comply with any
obligation, representation, warranty, covenant, agreement, or condition herein
may be waived by the party entitled to the benefits thereof only by a written
instrument signed by the party granting such waiver, but such waiver or failure
to insist upon strict compliance with such obligation, representation,
warranty, covenant, agreement, or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure. Whenever this
Agreement requires or permits consent by or on behalf of any party hereto, such
consent shall be given in writing in a manner consistent with the requirements
for a waiver of compliance as set forth in this Section 11.10.
11.11 Press Release. Neither party shall publish any press release,
make any other public announcement or otherwise communicate with any news media
concerning this Agreement or the transactions contemplated hereby without the
prior written consent of the other party; provided, however, that nothing
contained herein shall prevent either party from promptly making all filings
with governmental authorities as may, in its judgement be required or advisable
in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
11.12 Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
39
- 36 -
IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the day and year first above written.
▇▇▇▇▇▇ COMMUNICATIONS TELEVISION,
INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Secretary
ALPHA & OMEGA COMMUNICATIONS,
L.L.C.
By: /s/ Isaac Max Jaramille
------------------------------
Name:
Title:
40
SCHEDULE 2.2
EXCLUDED ITEMS
1. FCC License (File No. ▇▇▇▇-▇▇▇▇▇▇▇▇) for television translator station
K46BJ, Salt Lake City, Utah.
2. TTC transmitter (1 kW), standby 100 Watt ITS transmitter, 6' ▇▇▇▇▇▇
antenna, 8' tower section and mounts, rf cable, cabinet, tool box and related
translator equipment, including supplies and tools.
3. Lease for translator transmitter/antenna space, Beneficial Life Tower
41
SCHEDULE 3.3
CONSENTS
1. Consent of the Federal Communications Commission to the assignment of
the FCC Licenses for KOOG-TV to Buyer.
2. Consent of WB Communications (cannot unreasonably be withheld, per
Station Affiliation Agreement as of July 12, 1994, Section 7).
3. Consent of Home Shopping Club, Inc.
42
SCHEDULE 3.4
FCC LICENSES; CABLE PENETRATION
1. LICENSE (File No. BRCT-930602KFE) to operate KOOG-TV, Channel 30,
Ogden, Utah.
2. Construction Permit (File No. ▇▇▇▇-▇▇▇▇▇▇▇▇, as extended) for
transmitting facilities on ▇▇▇▇▇▇▇▇▇▇ Peak, Tooele County, Utah.
3. Special temporary authority to operate KOOG-TV at reduced power
(request for extension pending).
4. Existing Studio-Transmitter Link and other microwave licenses,
CABLE SYSTEMS CARRYING KOOG-TV (ALL IN UTAH)
Franchise Area Operator Subscribers*
-------------- -------- ------------
Bear ▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ Insight Cablevision 4,060
▇▇▇▇▇ County TCI 20,965
(includes Farmington, Bountiful,
Centerville, Kaysville, Layton
North Salt Lake, etc.)
Fruit Heights Insight 468
▇▇▇▇▇▇ Insight 3,974
(includes West ▇▇▇▇▇ areas)
▇▇▇▇▇ ▇▇▇ ▇▇,▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ 46,301
43
▇▇▇▇▇ TC1 10,662
Tremonton Insight 1,183
West Valley City TC1 25,301
▇▇▇▇▇▇▇ TC1 232
* Information mostly from 1996 Television & Cable Factbook; some updated
courtesy of cable operator.
Seller has not demanded carriage on systems which are currently unable to
receive the signal of KOOG-TV off air, such as those south of Salt Lake County.
Upon relocation of the Station's transmitting facilities to the ▇▇▇▇▇▇▇▇▇▇ Peak
area, the Station will request carriage on those systems (particularly those in
Utah County, Utah) capable of receiving signals off air from such transmitter
location.
44
SCHEDULE 3.5
LEASES OF REAL PROPERTY
Month to month lease of transmitting/tower site on Little Mountain, ▇▇▇▇▇
County, Utah, with Mr. & ▇▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, rental $1,058 per month(1)
Lease of studio facility at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ with AIM
Associates; rental $2400 per month
(Excluded: Lease for space for translator facility on Beneficial Life Tower;
$300 per month)
-----------------------
(1) Landlord has asserted the validity of a long term lease for the
site, but Alpha & Omega disputes that assertion. The landlord has taken no
legal action to further that position.
45
SCHEDULE 3.6
TANGIBLE PERSONAL PROPERTY
46
KOOG-TV Inventory Asset Location Codes
A: OUTSIDE YARD
B: OUTSIDE YARD
C: MASTER CoNTROL
D: PRODUCTION
E: STUDIO
F: SHIPPING
G: SHOP
H: ENGINEERING
I: MANAGER
J: LOBBY
K: PROGRAMING
L: LIBRARY
M: TRAFFIC
N: SALES
0: BREAK ROOM
P: BENEFICIAL LIFE TOWER- See excluded items
SALT LAKE City
Q: TRANSMITTER WEST
▇▇▇▇▇ COUNTY
R: STORAGE - BELCO
47
A: OPERATIONS
Location Item Status Recommend
------------------------------------------------------------------------------
Sony one inch Record/Play Deck in use 11+yrs replace
Sony BVT Time Base Corrector in use 11+yrs replace
Sony BVC 10 Barcode Printer in use 11+yrs replace
Rack 1 Belar Modulation Monitor can't use 11+yrs replace
Belar Modulation Amplifier can't use 11+yrs replace
Microwave Transmitter 2GHZ in use 11+yrs replace
▇▇▇▇▇ Optimod non-stereo in use 11+yrs replace
InterGroup 982 10x Switcher in use 11+yrs
MRC Marley Remote Modem in use 11+yrs
Scientific Atlanta Receiver [H] in use 11+yrs replace
Scientific Atlanta Receiver [V] in use 11+yrs replace
Tracker for Big Dish IV in use 11+yrs
Rack 2 Tektronix monitor in use used replace
Videotek Audio monitor in use 11+yrs replace
Leader LBO5860A & LVS 5850 in use 11+yrs
BVW40 Sony Beta Record/Play in use 11+yrs replace
BVBC10 Barcode Writer in use 11+yrs replace
Rack 3 Lenco Sync Pulse Generator in use 11+yrs
Duel bank Panasonic 9" monitors in use 11+yrs replace
Sony V05800 Record/Play Deck in use 11+yrs replace
Sony V05850 Record/Play Deck in use 11+yrs replace
Sony RM440 Edit Controller in use 11+yrs
Hedco Distribution Amplifier in use 11+yrs
Rack 4 Leader NTSC Signal Generator in use 11+yrs
Commodore monitor in use used
3M Character Generator in use 11+yrs replace
Patch Panel [Audio] in use 11+yrs
Rack 5 Grass Valley 200 mother board in use 8+yrs
Videotronics monitor in use 11+yrs replace
Standard Sat. receiver HSC only in use 9+yrs
3M Router 12x15 in use used
Patch Panel [Video] in use 11+yrs
Hedco Distribution Amplifier in use 11+yrs
Hedco Distribution Amplifier in use 11+yrs
Rack 6 Inergroup Master Control mother in use 11+yrs replace
Hedco Audio Distribution Amplifier in use 11+yrs
Commodore monitor spare
4 misc. tables
12 misc. tape shelves
48
B: OUTSIDE YARD
Location Item Status Recommend
-------------------------------------------------------------------------
K.U. Sat. receiver in use 10+yrs
3.5 meter Sat. dish & drive in use 11+yrs
10' Sat. dish not in use
10' Sat. dish not in use
60' ▇▇▇▇ Tower in use 11+yrs
Microwave dish in use 11+yrs
Off Air Antenna in use 11+yrs
KOOG TV sign 11+yrs
Basketball standard
misc. LNA and LNS receivers in use 50 spares
Operations Airconditioner
49
C: MASTER CONTROL
Location Item Status Recommend
-------------------------------------------------------------------------
Cart System Sony BVC-10 Betacart System in use 11+yrs replace
4 Sony BVW-11 Cart Machines 1-in use 11+yrs replace
PVW-2600 in use NEW
PVR-11 remote keyboard in use 11+yrs replace
Panasonic monitor in use used
Rack 1 VO-5600 Sony Record/Play in use used
3-bank 9" monitors in use used
3-bank 9" monitors in use used
VO-5850 Record/Play in use 11+yrs replace
Rack 2 2-bank 13" monitors in use 2 years
Sony VO-9850 SP/Record Play in use 2 years
Rack 3 Digital time base corrector in use used replace
Sony BVT 810 TBC in use 11+yrs replace
EBS Encoder in use 11+yrs replace
Master clock controller in use 11+yrs
Wave Form monitor in use used
3-Audio match boxes in use
Intergroup Master Control Switcher in use 11+yrs replace
2-tape shelves
1-Table/Rack combo-Oak in use 11+yrs
misc. wires and cables
Intercom for back door
Executone phone system in use 11+yrs
Private phone Dedicated engineering in use
Alarm system Deactivated
Water heater small replace
2-chairs
50
D. PRODUCTION
Location Item Status Recommend
-------------------------------------------------------------------------
Production Yamaha Audio Switcher in use 11+yrs upgrade
Panasonic Turn table in use 11+yrs
3 Audio Cart Decks in use 11+yrs upgrade
Match Box (audio) in use
Tascom Reel To Reel tape player in use 11+yrs
2 Sony Receivers in use
Sony Cassette player in use
Yamaha CD player in use
misc. Audio carts in use
misc. LPs (records)
misc. Cassettes
misc. Video Tapes
2 tape shelves
Rack 1 2 Sony Camera control units in use 11+yrs
Videotek monitor in use bad replace
3 Sony stereo speakers
Rack 2 Tektroniks monitor bad replace
LBO5800 wave form monitor/monitor in use bad monitor
Barco monitor in use
3M graphics disc server in use needs upgrade
3M graphics keyboard in use
2 Shure audio mixers in use
Rack 3 Panasonic b&w monitor in use
Panasonic monitor in use
Beta SP PVW2800 player/record in use New
Rack 4 Beta SP PVW2600 player for edit in use New
Panasonic monitor in use
Sony TBC remote control in use
Grass Valley power supply rack in use
Grass Valley 200 Production switcher in use 8 years
Intercome remote for studio
misc. production supplies
51
E. STUDIO
Item Status Recommend
-------------------------------------------------------------------------
3 Sony BVP-150 camera in use replace
Portable tripod
2 Pedestal Tripods in use
Portable screen tripod
Flat reflective screen
6 misc. chairs
Desk
Table
Monitor
Pulpit
2 tape shelves
Metal storage cabinet
Camera storage shelf
Misc. stored video tapes
Vacuum cleaner
Fire extinguisher
3 camera boxes
Misc. stage risers
Misc. props
misc. studio items
Overhead lighting Grid
10 misc. studio lights on grid
Large cork mounting board
Misc. cables and wires
Misc. audio supplies
52
F. SHIPPING
Item Status Recommend
-------------------------------------------------------------------------
2 misc. tables
Desk
Sony television in use 11+yrs replace
2 chairs
Scale (shipping)
Misc. video tapes
Misc. shipping and office supplies
G: SHOP ROOM
2 BVW-11 Sony Beta players need repair
BVW15-Sony Beta player need repair
2 VO-5800 Sony Tape record/player need repair
4 misc. monitors need repair
Employee clock in computer in use
Desk
5 misc. chairs
Misc. tools and supplies
Misc. parts
Videocypher 2 descrambler
Ikegami camera control
10 studio lights
2 light kits
Camera case
53
H: ENGINEERING
Item Status Recommend
-------------------------------------------------------------------------
2 BVWII Sony Beta players need repair replace
BVW40 Sony Beta record/player need repair replace
Panasonic camera and stand
[?]
Monitor
RCA television
Portable Realistic TV
Leader 8104 Oscthscope New
3 misc. soldering stations
2 VCR recorder/players
Misc. repair and supply books
Misc. parts and tools
2 Chairs
2 desk
Metal storage cabinet
4 drawer file cabinet
Flake voltmeter
Misc. portable equipment for cameras
Misc. Audio and microphone items
Misc. supporting supplies for entire station
54
I: MANAGER'S OFFICE
Item
---------------------------------------------
2 desks
6 misc. chairs
2 typewriters
Metal shelf
2-4 drawer file cabinets
Misc. office items
J: LOBBY
---------------------------------------------
4-drawer file cabinet
Desk
2-tables
Sofa
Love Seat
3 chairs
Misc. office decorations
Misc. office items
Misc. office supplies
Fire extinguisher
K: Programming
---------------------------------------------
2 desk
4 tables
4-drawer file cabinet
2 book cases
Coat rack
VCR and monitor
Computer and monitor
Printer
Fax
Misc. office items and supplies
55
L: LIBRARY
Item Status Recommend
----------------------------------------------------------
Misc. video tapes
Archives for saved videos
Day to day business saves
3 chairs
M: TRAFFIC OFFICE
----------------------------------------------------------
4 desks
3 tables
5-4 drawer file cabinets
Traffic computer system
Computer System New
Traffic print system
Laser printer New
2 computer monitors
Typewriter
Misc. office supplies
4 chairs
Misc. computer supplies
N: SALES ROOM
----------------------------------------------------------
6 desks
6 chairs
2 tables
Savin copier
Computer and printer
Monitor
Typewriter
Paper cutter
Misc. office supplies
Misc. office items
Room divider
56
O: BREAK ROOM
Item
-----------------------------------------------
Love seat
Chair
3 tables
Small refrigerator
Microwave oven
Coffee pot
Misc. supplies
57
Q: TRANSMITTER
Item Status Recommend
-----------------------------------------------------------------------------------------
Comark IOT Transmitter in use 2 years
IOT is TYPE of TUBE & TECHNOLOGY
Dummy load (antenna power absorber) in use 11 years
Station equipment rack
Belar TV monitor (due to multiplex) can't use 11 years
Sony monitor
Tektronics waveform monitor
Tektronics oscilloscope
Microwave receive dish
▇▇▇▇▇▇ remote receiver
2 modems
Demodulator
Processing Amplifier 11 years
Misc. cable and RF connectors
Staco voltage regulator
Misc. electrical control panels and boxes
Dielectric dehydrator
2 ledgers
Pirod tower (300')
▇▇▇▇▇▇ antenna (60')
Misc. attaching hardware and cable
80% efficient finance 1 year
Overhead Airconditioner needs repair replace
Misc. tools and parts
2 Magnetic cabinets for old transmitter surplus
2 sets of cavities for old transmitter Klystrons surplus
2 Transmitter housing cabinets surplus
Blue equipment rack (old blue) surplus
2 used monitors junk
Telenet demod surplus
Telcine table
Desk
3 chairs
3 tables
Compressor needs repair
Hipotronics voltage regulator surplus
Pump surplus
RF load (oil) surplus
Many extra and spare parts
Contact switch surplus
Grinder (bench)
Vise
Diplexer surplus
110 gals of standby transmitter water
4 fan head exchanger surplus
Powersupply surplus
58
R: STORAGE
Item Status Recommend
-------------------------------------------------------------------------
Copier older replace
[?] older
Snow blower
17' Standby transmitter antenna
RCA projector
2 Quad machines older
Many misc. items broken and surplus
Original boxes for equipment
Misc. tapes and everything not mentioned
59
SCHEDULE 3.7
CONTRACTS
* Leases listed on Schedule 3.5 (*-For Studio Lease)
Insurance policies listed on Schedule 3.11
* Television Affiliation Agreement with Home Shopping Club, Inc. dated as of
March 3, 1994; as amended effective March 1, 1996.
Station Affiliation Agreement with WB Communications dated July 12, 1994.
* Option Agreement dated May 15, 1989 between Ogden Television Company, Inc. and
Royal Television of Utah, Inc., a Nevada corporation. (Royal contends that the
Option Agreement has lapsed or was not effectively assigned to Miracle Rock
Church or to Alpha & Omega Communications, LLC.)
Informal agreement with Channel Twenty Television Company for use of diplexed
antenna to be erected on KIZZ-TV tower, and sublease of transmitter space
PROGRAM CONTRACTS
Twentieth Century Fox Television (Doogie ▇▇▇▇▇▇) ($1,347 per month --expires in
1997)
MTM Entertainment (WKRP, ▇▇▇▇▇▇▇, Hill Street Blues, St. Elsewhere -- $3,000
per month)
Tribune Entertainment (▇▇▇▇▇▇▇) (not renewed for fall 1996)
Barter agreements (substantially all expire September, 1997):
All American Television
Rysher Entertainment
ITC Entertainment (Movie of the Month Package)
King World (movie package)
MTM International Family Entertainment (movie package)
New Vision Syndication
New Line Cinema (movie package)
New Line Television ("Inside America's Courts" (Court TV))
60
Tradewinds Television (Bounty Hunters and Movie Package - "Tradewinds
Movie Specials")
World Vision (Nightstand)
Fishing the West (Vision West and Northwest Hunter)
*Contracts to be assumed by Buyer
61
SCHEDULE 3.9
INTANGIBLES
KOOG-TV logo and call sign
62
SCHEDULE 3.10
FINANCIAL STATEMENTS
Statements of Assets and Liabilities for year end 1995 and May 31, 1996
Statements of Revenues and Expenditures for year end 1995 and May 31, 1996
General Ledger Listings for year end 1995 and May 31, 1996
63
SCHEDULE 3.11
INSURANCE POLICIES
Commercial Package Policy through ▇▇▇▇ ▇. ▇▇▇▇▇▇ & Company (coverage
provided by the Continental Insurance Company), policy no. 50 CBP 06135717-96
Communication Equipment Policy through ▇▇▇▇ ▇. ▇▇▇▇▇▇ & Company
(coverage provided by the Continental Insurance subsidiary Marine Office of
America Corporation), policy no. IMC 841859
64
SCHEDULE 3.13
KOOG-TV
EMPLOYEE LIST
August, 1996
Employee Title Hire Date Salary
-------- ----- --------- ------
▇▇▇▇▇▇, ▇▇▇▇▇ Oper. Assistant/TD 6-15-89 $8.00/hour
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ TD-part time 10-19-95 $6.50/hour
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ Engineer 9-25-85 $2,000/month
▇▇▇▇▇, ▇▇▇▇▇ Production/TD 6-01-94 $7.25/hour
▇▇▇▇▇, ▇▇▇▇▇ TD 10-14-93 S7.50/hour
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ TD-part time 10-01-95 $6.00/hour
▇▇▇▇, ▇▇▇▇▇ Operations/program 3-15-93 $2,000/month
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ TD-part time 8-01-96 $5.00/hour
▇▇▇▇▇, ▇▇▇▇▇▇▇ Office/Taffic 8-25-86 $1,900/month
The last review of compensation occurred August 12, 1996.
65
SCHEDULE 3.15
CLAIMS AND LEGAL ACTIONS
Suit filed by Davidson Enterprises, Inc. in Third Judicial District
Court of Salt Lake County, Utah, Civil No. 960901288CV, vs. Miracle Rock
Church, seeking title to equipment of translator station K46BJ.
Suit filed by Alpha & Omega Communications, LLC, in Second District
Court of ▇▇▇▇▇ County, Utah, Civil No. 960900274, vs. Royal Television of
Utah, Inc. and ▇▇▇▇▇▇▇ Broadcasting Corporation of Utah, Inc., for breach of
Option Agreement dated May 15, 1989.
66
SCHEDULE 8.2(h)
SELLER'S OPINION
1. Seller is a limited liability company duly organized and
subsisting under the laws of the State of Utah.
2. Seller has full corporate power and authority to execute,
deliver and perform the Purchase Agreement and the other Transaction Documents
[Transaction Documents shall mean the documents executed and delivered at
Closing] to which it is a party. Seller's execution, delivery, and performance
of the Purchase Agreement and the other Transaction Documents to which it is a
party have been duly and validly authorized by all necessary corporate action
on the part of Seller.
3. The Purchase Agreement and each of the other Transaction
Documents to which Seller is a party have been duly executed and delivered by
Seller and constitute the valid and binding obligation of Seller, enforceable
against Seller in accordance with their respective terms subject to (i)
bankruptcy, insolvency, reorganization, moratorium and other similar laws now
or hereinafter in effect relating to creditors' rights and (ii) the possibility
that the remedies of specific performance or injunctive or other forms of
equitable relief may be subject to certain equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
4. The execution, delivery and performance by Seller of the
Purchase Agreement and the other Transaction Documents to which Seller is a
party (a) do not require the consent of any third party under any of the Seller
Agreements [Seller Agreements shall mean such agreements that are certified by
Seller to Seller's counsel to be material to the operation of the business of
Seller or the transactions contemplated by the Purchase Agreement], other than
consents set forth on Schedule 3.3 of the Purchase Agreement; (b) do not
violate any provisions of Seller's organizational documents; (c) do not violate
Applicable Law [Applicable Law means those laws and regulations that a lawyer
exercising customary professional diligence would recognize as being applicable
to the transactions contemplated by the Transaction Documents] or any law,
judgment, order, injunction, decree, which is applicable to Seller and known to
us; (d) no not, either alone or with the giving of notice or the passage of
time or both, conflict with, constitute grounds for termination of, or result
in a breach of the terms, conditions or provisions of, or constitute a default
under any of the Seller Agreements; and (e) do not result in the creation of
any lien, charge or encumbrance on any of the Assets pursuant to the terms of
any of the Seller Agreements.
67
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5. All bills of sale, assignments, and other conveyancing
documents delivered by Seller to Buyer on the date hereof are in proper form to
convey and assign all of Seller's right, title, and interest in and to the
Tangible Personal Property to Buyer.
6. The Licenses listed on Exhibit A hereto (the "FCC Licenses")
were validly issued to Seller, are in full force and effect and are not subject
to any condition other than such conditions that are set forth in the FCC
Licenses.
7. Except as specifically identified in the Purchase Agreement,
to the best of our knowledge based on a review of the FCC's files and records,
our internal files and records and the Officer's Certificate, there are no
notices, orders or decrees issued, or complaints, proceedings or investigations
pending or threatened, against Seller, or applications filed by Seller, by or
before the FCC relating to the business or operations of the Station other than
notices, orders, decrees, applications, complaints, proceedings or
investigations which generally affect the television broadcasting industry.
8. The FCC has granted its consent to the assignment of the FCC
Licenses from Seller to Buyer (the "FCC Consent"). To the best of our
knowledge based solely on a review of the FCC's files and records and the
Officer's Certificate, the FCC Consent has not been reversed, stayed, enjoined,
set aside, annulled or suspended, no requests have been filed for
administrative or judicial review, reconsideration, appeal or stay of the FCC
Consent, and the time periods for filing any such requests and for the FCC to
set aside the FCC Consent on its own motion have expired.
9. The execution delivery and performance by Seller of the
Transaction Documents do not violate or otherwise conflict with the
Communications Act of 1934 as amended, the rules and regulations of the FCC or
any of the FCC Licenses listed on Exhibit A.
68
SCHEDULE 8.3(d)
BUYER'S OPINION
1. Buyer is a corporation duly organized and in good standing under the
laws of the State of Florida. Based solely, on certificates obtained from
public officials, Buyer is duly qualified to do business and is in good standing
under the laws of the State of Utah.
2. Buyer has full corporate power and authority to execute, deliver and
perform the Purchase Agreement and the other Transaction Documents
[Transaction Documents shall mean the documents executed and delivered at
Closing], to which it is a party. Buyer's execution, delivery, and
performance of the Purchase Agreement and the other Transaction Documents to
which it is a party have been duly and validly authorized by all necessary
corporate action on the part of Buyer.
3. The Purchase Agreement and each of the other Transaction Documents to
which Buyer is a party have been duly executed and delivered by Buyer and
constitute the valid and binding obligation of Buyer, enforceable against Buyer
in accordance with their respective terms subject to (i) bankruptcy,
insolvency, reorganization, moratorium and other similar laws now or
hereinafter in effect relating to creditors' rights and (ii) the possibility
that the remedies of specific performance or injunctive or other forms of
equitable relief may be subject to certain equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought.
4. The execution, delivery and performance by Buyer of the Purchase
Agreement and the other Transaction Documents to which it is a party (a) do not
require the consent of any third party under any of the Buyer Agreements [Buyer
Agreements shall mean such agreements that are certified by Buyer to Buyer's
counsel to be material to the operation of Buyer's business or the transactions
contemplated by the Purchase Agreement]; (b) do not violate any provisions of
Buyer's corporate charter or by-laws; (c) do not violate any Applicable Law
[Applicable Law means those laws and regulations that a lawyer exercising
customary professional diligence would recognize as being applicable to the
transactions contemplated by the Transaction Documents], or judgment, order,
injunction, or decree, which is applicable to Buyer and known to us; and (d) do
not, either alone or with the giving of notice or the passage of time or both,
conflict with, constitute grounds for termination of, or result in a breach of
the terms, conditions or provisions of, or constitute a default under any of
the Buyer Agreements.
5. The execution, delivery and performance by Buyer and PCC of the
Transaction Documents do not violate or otherwise conflict with the
Communications Act of 1934 as amended, the rules and regulations of the FCC
or any of the FCC Licenses listed on Exhibit A.