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EXHIBIT 10.50
ASSET PURCHASE AGREEMENT
DATED AS OF NOVEMBER 21, 1996
BY AND AMONG
VALUEVISION INTERNATIONAL, INC.;
VVI MANASSAS, INC.; WVVI(TV), INC.;
▇▇▇▇▇▇ COMMUNICATIONS OF WASHINGTON-66, INC.;
AND
▇▇▇▇▇▇ COMMUNICATIONS CORPORATION
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TABLE OF CONTENTS
Page
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SECTION 1 CERTAIN DEFINITIONS .................................. 1
1.1 Terms Defined in this Section ........................ 1
1.2 Terms Defined Elsewhere in this Agreement ............ 4
SECTION 2 PURCHASE AND SALE OF ASSETS .......................... 6
2.1 Agreement to Sell and Buy ............................ 6
2.2 Excluded Assets ...................................... 7
2.3 Purchase Price and Purchase Price Adjustment ......... 8
2.4 Working Capital Credits and Payment .................. 9
(a) Prorations ...................................... 9
(b) Expenses and Revenues Not Prorated .............. 9
(c) Manner of Determining Prorations and Credits .... 10
(d) Payments at Closing With Respect to
Working Capital Credits ......................... 10
(e) Payments to Reflect Final Determination of
Working Capital Credits ......................... 11
2.5 Assumption of Liabilities and Obligations ............ 11
SECTION 3 REPRESENTATIONS AND WARRANTIES OF SELLERS
AND VALUEVISION ...................................... 12
3.1 Organization, Standing, and Authority ................ 12
3.2 Authorization and Binding Obligation ................. 12
3.3 Absence of Conflicting Agreements .................... 12
3.4 Governmental Licenses ................................ 13
3.5 Real Property ........................................ 13
3.6 Tangible Personal Property ........................... 13
3.7 Contracts ............................................ 13
3.8 Consents ............................................. 14
3.9 Intangibles .......................................... 14
3.10 Financial Statements ................................. 14
3.11 Insurance ............................................ 14
3.12 Reports .............................................. 14
3.13 Labor Relations ...................................... 14
3.14 Taxes ................................................ 14
3.15 Claims and Legal Actions ............................. 15
3.16 Compliance with Licenses ............................. 15
3.17 Conduct of Business in Ordinary Course ............... 15
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3.18 Transactions with Affiliates ......................... 15
3.19 No Broker ............................................ 15
3.20 Accredited Investor; Investment Knowledge;
Distribution ......................................... 15
3.21 Disclaimer of Warranties ............................. 16
SECTION 4 REPRESENTATIONS AND WARRANTIES OF BUYER AND PCC ...... 16
4.1 Organization, Standing, and Authority ................ 16
4.2 Authorization and Binding Obligation ................. 16
4.3 Absence of Conflicting Agreements .................... 16
4.4 Licensee Qualifications .............................. 17
4.5 No Broker ............................................ 17
4.6 Acknowledgment of "As-Is-Where-Is" Sale .............. 17
SECTION 5 OPERATIONS OF THE STATION PRIOR TO CLOSING ........... 18
5.1 Generally ............................................ 18
5.2 Contracts ............................................ 18
5.3 Disposition of Assets ................................ 18
5.4 Encumbrances ......................................... 18
5.5 Licenses ............................................. 18
5.6 Obligations .......................................... 18
5.7 Exclusivity .......................................... 19
5.8 Access to Information ................................ 19
5.9 Maintenance of Assets ................................ 20
5.10 Insurance ............................................ 20
5.11 Consents ............................................. 20
5.12 Books and Records .................................... 20
5.13 Notification ......................................... 20
5.14 Financial Information ................................ 20
5.15 Compliance with Laws ................................. 20
SECTION 6 SPECIAL COVENANTS AND AGREEMENTS ..................... 21
6.1 FCC Consent .......................................... 21
6.2 Control of the Station ............................... 21
6.3 Risk of Loss ......................................... 21
6.4 Confidentiality ...................................... 22
6.5 Cooperation .......................................... 22
6.6 Access to Books and Records .......................... 22
6.7 [Intentionally omitted] .............................. 22
6.8 HSR Act Filing ....................................... 22
6.9 Title to Real Property ............................... 23
6.10 Environmental Survey ................................. 24
6.11 Engineering Study .................................... 24
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6.12 Sales Tax Filings .................................... 25
6.13 Accounts Receivable .................................. 25
(a) Collection ..................................... 25
(b) Payments to ValueVision ........................ 25
(c) Further Obligations ............................ 25
6.14 No Inconsistent Action ............................... 25
6.15 CTN Lease ............................................ 26
6.16 Acquisition of Transmitter Site and Relocation
of Studio ............................................ 26
SECTION 7 CONDITIONS TO OBLIGATIONS OF BUYER AND SELLERS
AT CLOSING ........................................... 26
7.1 Conditions to Obligations of Buyer ................... 26
(a) FCC Consent .................................... 26
(b) [Intentionally omitted ......................... 26
(c) HSR Act ........................................ 26
(d) Deliveries ..................................... 26
(e) Station ........................................ 26
7.2 Conditions to Obligations of Sellers ................. 26
(a) Representations and Warranties ................. 26
(b) Covenants and Conditions ....................... 27
(c) Deliveries ..................................... 27
(d) FCC Consent .................................... 27
(e) HSR Act ........................................ 27
(f) Judgments ...................................... 27
SECTION 8 CLOSING AND CLOSING DELIVERIES ....................... 27
8.1 Closing .............................................. 27
(a) Closing Date ................................... 27
(b) Closing Place .................................. 28
8.2 Deliveries by Sellers ................................ 28
(a) Deeds .......................................... 28
(b) Other Conveyancing Documents ................... 28
(c) Working Capital Payment ........................ 28
(d) Estoppel Certificates and Lessor's Consents .... 28
(e) Consents ....................................... 28
(f) Certificate .................................... 28
(g) Licenses, Contracts, Business Records, Etc...... 28
8.3 Deliveries by Buyer and PCC .......................... 29
(a) Purchase Price ................................. 29
(b) Working Capital Payment ........................ 29
(c) Assumption Agreements .......................... 29
(d) Certificate .................................... 29
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SECTION 9 TERMINATION .......................................... 29
9.1 Termination by Sellers and ValueVision ............... 29
(a) Conditions ..................................... 29
(b) Judgments ...................................... 29
(c) Upset Date ..................................... 29
(d) Breach ......................................... 29
9.2 Termination by Buyer and PCC ......................... 30
(a) Title Defects .................................. 30
(b) Environmental Hazards .......................... 30
(c) Technical Deficiencies ......................... 30
(d) Material Contracts ............................. 30
9.3 Escrow Deposit ....................................... 30
9.4 Rights on Termination ................................ 31
9.5 Specific Performance ................................. 31
9.6 No Special Damages ................................... 32
SECTION 10 INDEMNIFICATION ...................................... 32
10.1 Indemnification by Sellers and ValueVision ........... 32
10.2 Indemnification by Buyer and PCC ..................... 32
10.3 Procedure for Indemnification ........................ 33
SECTION 11 [Intentionally omitted] .............................. 33
SECTION 12 MISCELLANEOUS ........................................ 34
12.1 Fees and Expenses .................................... 34
12.2 Notices .............................................. 34
12.3 Arbitration .......................................... 35
12.4 Benefit and Binding Effect ........................... 35
12.5 Further Assurances ................................... 36
12.6 GOVERNING LAW ........................................ 36
12.7 Headings ............................................. 36
12.8 Gender and Number .................................... 36
12.9 Entire Agreement ..................................... 36
12.10 Waiver of Compliance: Consents ....................... 36
12.11 Counterparts ......................................... 36
ADDENDUM I Registration Rights Provisions
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of November 21, 1996, by and
among VVI MANASSAS, INC., a Minnesota corporation("VVI Manassas"); WVVI(TV),
INC., a Virginia corporation ("WVVI"); VALUEVISION INTERNATIONAL INC., a
Minnesota corporation("ValueVision"); ▇▇▇▇▇▇ COMMUNICATIONS OF WASHINGTON-66,
INC., a Florida corporation ("Buyer"); and ▇▇▇▇▇▇ COMMUNICATIONS CORPORATION, a
Delaware corporation ("PCC").
PRELIMINARY STATEMENT
WHEREAS, WVVI is the licensee of television station WVVI in Manassas,
Virginia (the "Station") pursuant to licenses issued by the Federal
Communications Commission (the "FCC") and the owner of certain assets used in
the operation of the Station; and
WHEREAS, VVI Manassas is the owner of all of the outstanding capital stock
of WVVI and certain assets used in the operation of the Station; and
WHEREAS, VVI Manassas and WVVI desire to sell the assets used or held for
use in the operation of the Station to Buyer, and Buyer desires to purchase
such assets from VVI Manassas and WVVI, for the consideration and on the terms
and conditions herein provided; and
WHEREAS, each of VVI Manassas and WVVI is sometimes hereinafter referred
to as a "Seller," and together they are hereinafter sometimes referred to as
"Sellers."
AGREEMENTS
In consideration of the above recitals and of the mutual agreements and
covenants contained in this Agreement, the parties hereto, intending to be
bound legally, agree as follows:
SECTION 1 CERTAIN DEFINITIONS.
1.1 Terms Defined in this Section. The following terms, as used
in this Agreement, shall have the meanings set forth in this Section:
"Affiliate" means "affiliate" as defined in Rule 12b-2 promulgated
under the Exchange Act.
"Affirmative Decision" means either: (a) a ruling by the Supreme
Court in the ▇▇▇▇▇▇ v. FCC case that affirms in whole (not in part) without
remand for further determination of any issues, the decision of the United
States District Court in ▇▇▇▇▇▇ v. FCC, or (b) a ruling by the Supreme Court in
the ▇▇▇▇▇▇ v. FCC case that affirms the constitutionality of Section 4 of the
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Cable Television Consumer Protection and Competition Act of 1992 as applied to
any class or category of television stations that is finally determined to
include the Station.
"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 (a) all Material Contracts, (b) any other
Contract listed on Schedule 3.7 with respect to which Sellers are able to
obtain and deliver to Buyer at or prior to the Closing any Consent required for
the assignment of such Contract to Buyer, (c) contracts entered into prior to
the date of this Agreement with advertisers for the sale of advertising time or
production services for cash at rates consistent with past practices, (d) any
Contracts entered into by any Seller between the date of this Agreement and the
Closing Date that Buyer agrees in writing to assume, and (e) other contracts
entered into by any Seller between the date of this Agreement and the Closing
Date in compliance with Section 5.2.
"Closing" means the consummation of the purchase and sale of the
Assets pursuant to this Agreement in accordance with the provisions of Section
8.
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to Section 8.
"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,
including consents to the assignment of the Assumed Contracts.
"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 any Seller is a party or that are binding upon
any Seller and that relate to or affect the Assets or the business or
operations of the Station, and (a) that are in effect on the date of this
Agreement or (b) that are entered into by any Seller between the date of this
Agreement and the Closing Date.
"CTN" means Capital Television Network, Inc., a Virginia corporation.
"Effective Time" means 12:01 a.m., Eastern time, on the Closing Date.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Escrow Agent" means First Union National Bank of Florida.
"Escrow Agreement" means the Escrow Agreement to be entered into among
Buyer, ValueVision, and the Escrow Agent in accordance with Section 9.3.
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"Exchange Act" means the Securities and Exchange Act of 1934, as
amended.
"Excluded Assets" means the assets described in Section 2.2(a) through
(k) of this Agreement.
"FCC Consent" means action or actions by the FCC granting its consent to
the assignment of all the FCC Licenses to Buyer as contemplated by this
Agreement.
"FCC Licenses" means all Licenses issued by the FCC to Sellers in
connection with the existing or currently authorized business or operations of
the Station.
"Final Decision" means (a) a decision by the United States Supreme
Court from which no further rehearing, remand, stay, injunction or other
judicial proceedings are required or may be taken, or (b) a decision by a lower
federal court, after remand from the United States Supreme Court, from which no
further appeal, writ of certiorari, rehearing, remand, stay, injunction or
other judicial proceedings are required or may be taken.
"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.
"HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended.
"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 any Seller or under which any Seller is licensed or franchised and that 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, construction permits, and other
authorizations issued by the FCC, the Federal Aviation Administration, or any
other federal, state, or local governmental authorities to any Seller,
currently in effect and used in connection with the conduct of the business or
operations of the Station, together with any additions thereto between the date
of this Agreement and the Closing Date.
"Material Contracts" means those Assumed Contracts that are designated
on Schedule 3.7 as "Material Contracts."
"NCCB" means National Capital Christian Broadcasting, Inc., a Virginia
corporation.
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"PCC Common Stock" means fully paid, non-assessable shares of the Class
A Common Stock, $0.001 par value, of PCC, which shares shall not be registered
under the Securities Act when issued, but shall be subject to the registration
rights set forth in Addendum I to this Agreement.
"Permitted Encumbrances" means (a) liens for current taxes not yet due
and payable, (b) easements, covenants, conditions, and restrictions that are
disclosed on Schedule 3.5, (c) other easements, covenants, conditions, and
restrictions of record that affect any Real Property Interest and do not have a
material adverse effect on the use of such Real Property Interest in the
conduct of the business of the Station or materially detract from the value of
such Real Property Interest in the conduct of the business of the Station, and
(d) other Title Defects that constitute Permitted Encumbrances pursuant to
Section 6.9(c).
"Person" means an individual, corporation, association, partnership,
joint venture, joint stock company, trust, estate, limited liability company,
limited liability partnership, governmental entity, or other entity or
organization.
"Purchase Price" means the purchase price specified in Section 2.3.
"Real Property" means all real property, and all buildings and other
improvements thereon, whether or not owned or held by any Seller, used or
useful in the business or operations of the Station, subject to the provisions
of Section 6.16 of this Agreement.
"Real Property Interests" means all interests in real property,
including fee estates, leaseholds and subleaseholds, purchase options,
easements, licenses, rights to access, and rights of way, and all buildings and
other improvements thereon, owned or held by any Seller that are used or useful
in the business or operations of the Station, subject to the provisions of
Section 6.16 of this Agreement.
"Securities Act" means the Securities Act of 1933, as amended.
"Tangible Personal Property" means all machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant,
inventory, spare parts, and other tangible personal property owned or held by
any Seller that is used or useful in the conduct of the business or operations
of the Station, together with any additions thereto between the date of this
Agreement and the Closing Date.
1.2 Terms Defined Elsewhere in this Agreement. For purposes of
this Agreement, the following terms have the meanings set forth in the Sections
indicated:
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Term Section
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Adjustment Factor Section 2.3(c)
Buyer Preliminary Statement
Buyer's Working Capital Credits Section 2.4(a)
Claimant Section 10.3(a)
Collection Period Section 6.13(a)
Contingent Cash Payment Section 2.3(a)
CTN Lease Section 6.15
DOJ Section 6.8
Environmental Hazard Section 6.10(b)
FCC Preliminary Statement
Financial Statements Section 3.10
FTC Section 6.8
In A Material Way Section 8.2(f)
Indemnifying Party Section 10.3
Law Engineering Phase I Report Section 6.10(a)
Non-Discretionary Carriage Decision Section 2.3(c)
Non-Discretionary Carriage Homes Section 2.3(c)
PCC Preliminary Statement
PCC Stock Consideration Section 2.3(a)
Seller Preliminary Statement
Sellers' Working Capital Credits Section 2.4(a)
Station Preliminary Statement
Stations' Receivables Section 6.13(a)
Technical Deficiency Section 6.11(a)
Title Defect Section 6.9(b)
Transmitter Site Section 6.16
▇▇▇▇▇▇ v. FCC Section 2.3(a)
ValueVision Preliminary Statement
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VVI Manassas Preliminary Statement
Working Capital Credits Section 2.4(a)
WVVI Preliminary Statement
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, Sellers hereby agree to sell, transfer, convey,
assign, and deliver to Buyer on the Closing Date (and ValueVision agrees to
cause each other Seller to sell, transfer, convey, assign, and deliver to Buyer
on the Closing Date), and Buyer agrees to purchase, all of each Seller's right,
title, and interest in the tangible and intangible assets used or useful in
connection with the conduct of the business or operations of the Station,
together with any additions thereto between the date of this Agreement and the
Closing Date, but excluding the assets described in Section 2.2, free and clear
of any claims, liabilities, security interests, mortgages, liens, pledges,
conditions, charges, covenants, easements, restrictions, encroachments, leases,
or encumbrances of any nature (except for Permitted Encumbrances), including
the following:
(a) The Tangible Personal Property;
(b) The Real Property Interests;
(c) The Licenses;
(d) The Assumed Contracts;
(e) The Intangibles and all intangible assets of any Seller relating
to the operation of the Station that are not specifically included within the
Intangibles, including the goodwill of the Station, if any;
(f) All of each 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 any Seller relating to the ownership or
operations of the Station to the extent they relate to the period after the
Effective Time; and
(h) Copies of 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:
(a) [Intentionally omitted.]
(b) Any Seller's cash on hand as of the Closing and any Seller's
interest in its bank accounts;
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(c) Any insurance policies, promissory notes, amounts due from
employees, bonds, letters of credit, certificates of deposit, other similar
items, or deposits or prepaid items (except to the extent that Sellers receive
a Working Capital Credit for any such deposit or prepaid item pursuant to
Section 2.4(a)), and any cash surrender value in regard thereto;
(d) Any pension, profit-sharing, or employee benefit plans,
including any Seller's interest in any welfare plan, pension plan, or benefit
arrangement;
(e) Any collective bargaining agreements;
(f) All tax returns and supporting materials, all original financial
statements and supporting materials, all books and records that any Seller is
required by law to retain, and all records of any Seller relating to the sale
of the Assets;
(g) Any interest in and to any refunds of federal, state, or local
franchise, income, or other taxes for periods prior to the Closing Date;
(h) All accounts receivable of Sellers as of the Closing Date and
any intercompany accounts between the Sellers or any Affiliates thereof;
(i) Any claim or cause of action by any Seller relating to the
period before the Effective Time, including all claims arising under the
purchase agreement pursuant to which VVI Manassas purchased the Station and any
right to any funds deposited in the escrow account established pursuant to that
certain Indemnity Escrow Agreement dated as of March 28, 1994, by and among VVI
Manassas, NCCB, and Norwest Bank Minnesota, N.A.; and
(j) The property and equipment obtained by Sellers and their
Affiliates pursuant to that certain Agreement and Mutual Release with NCCB,
CTN, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, and others entered into on or about April 11, 1996; and
(k) Any Real Property or Real Property Interest constituting the
current studio site utilized by the Station located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or any proceeds of the foregoing, if Sellers shall
exercise their right pursuant to Section 6.16 of this Agreement to discontinue
use of such studio and relocate a similar studio to the Transmitter Site at no
cost or expense to Buyer; provided, however, that in the event Sellers exercise
such right pursuant to Section 6.16 and the studio shall not have been
relocated to the Transmitter Site prior to the Closing Date, Buyer shall have
the right, without payment of additional consideration to Sellers, to use the
current studio site until such studio shall have been relocated to the
Transmitter Site.
2.3 Purchase Price and Purchase Price Adjustment.
(a) Subject to Sections 2.3(b) and (c) hereof, the purchase price for
the Assets (the "Purchase Price") shall be Forty Million Dollars ($40,000,000),
payable as follows at Closing or as otherwise provided: (i) Twenty Million
Dollars ($20,000,000) in cash by wire transfer of immediately available funds,
plus (ii) a fixed number of shares of PCC Common Stock (the "PCC Stock
Consideration") equal to (x) Ten Million Dollars ($10,000,000) divided by (y)
the arithmetic average of the closing prices per share of PCC Common Stock as
reported on the
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American Stock Exchange for the sixty (60) consecutive trading days commencing
on the first trading day following the date of execution of this Agreement,
plus (iii) a contingent payment (the "Contingent Cash Payment"), equal to Ten
Million Dollars ($10,000,000), payable in the event of an Affirmative Decision
in the case of ▇▇▇▇▇▇ Broadcasting Systems, Inc. v. FCC, No. 95-922 ("▇▇▇▇▇▇ v.
FCC"), on the later to occur of (x) the Closing Date and (y) thirty (30) days
after any Final Decision that constitutes an Affirmative Decision.
(b) Notwithstanding Section 2.3(a) hereof, in the event that there is
any ruling by the United States Supreme Court in ▇▇▇▇▇▇ v. FCC which is not an
Affirmative Decision, then the aggregate Purchase Price set forth in Section
2.3(a) hereof payable to Sellers shall be reduced to Thirty Million Dollars
($30,000,000), such adjustment to be effected as follows: (i) If the
adjustment required to be made to the Purchase Price arises on or before the
Closing Date, then Sellers may elect to adjust the Purchase Price by (x)
terminating PCC's obligation to issue the PCC Stock Consideration and electing
that the Contingent Cash Payment be made at Closing or (y) terminating Buyer's
obligation to make the Contingent Cash Payment, or (ii) if the adjustment
required to be made to the Purchase Price arises after the Closing, then,
within thirty (30) days after such decision, Sellers may elect to adjust the
Purchase Price by (x) returning all of the shares of PCC Stock Consideration
issued to Sellers at Closing upon the payment by Buyer to Sellers of the
Contingent Cash Payment or (y) terminating the Buyer's obligation to make the
Contingent Cash Payment. An election by Sellers to receive the Contingent Cash
Payment or PCC Stock Consideration under this Section 2.3(b) shall be
irrevocable once made, and any adjustment to the Purchase Price shall be made
solely pursuant to Section 2.3(c), if applicable.
(c) In the event the decision in ▇▇▇▇▇▇ v. FCC is not an Affirmative
Decision, but nevertheless such decision (a "Non-Discretionary Carriage
Decision") results in the actual non-discretionary requirement of carriage, or
continuation of carriage, of the Station (not on an interim or temporary basis)
by one or more cable television systems through no effort of the Station other
than its election to be so carried (the cable homes on the cable television
systems carrying the Station as a result of any such Non-Discretionary Carriage
Decision being referred to herein as "Non-Discretionary Carriage Homes"), the
Purchase Price set forth in Section 2.3(b) shall be increased by either (i) if
Sellers shall have elected option 2.3(b)(i)(y) or 2.3(b)(ii)(y) above, then an
amount in cash equal to the product of (w) Ten Million Dollars ($10,000,000.00)
and (x) a fraction whose numerator is the total number of Non-Discretionary
Carriage Homes and the denominator of which is 1,301,430 (the "Adjustment
Factor") or (ii) if Sellers shall have elected option 2.3(b)(i)(x) or
2.3(b)(ii)(x), a number of shares of PCC Common Stock equal to the product of
(Y) the PCC Stock Consideration and (Z) the Adjustment Factor, it being the
intention of the parties hereto that under no circumstances shall Buyer be
required to pay more than Thirty Million Dollars ($30,000,000.00) of the
Purchase Price, as adjusted pursuant to this Section 2.3(c), in cash. Any
increase to the Purchase Price required to be made pursuant to the preceding
sentence shall be made on the later to occur of the Closing Date and the date
that is thirty (30) days after any Final Decision that constitutes a
Non-Discretionary Carriage Decision.
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2.4 Working Capital Credits and Payment.
(a) Prorations. All revenues and expenses arising from the
operation of the Station, including tower rental, business and license fees,
utility charges, real and personal property taxes and assessments levied
against the Assets, property and equipment rentals, applicable copyright or
other fees, sales and service charges, taxes (except for taxes arising from the
transfer of the Assets under this Agreement), and similar prepaid and deferred
items, shall be prorated between Buyer and Sellers in accordance with the
principle that Sellers shall receive all revenues and shall be responsible for
all expenses, costs, and liabilities allocable to the operations of the Station
for the period prior to the Effective Time, and Buyer shall receive all
revenues and shall be responsible for all expenses, costs, and obligations
allocable to the operations of the Station for the period after the Effective
Time, subject to Section 2.4(b). To effectuate the proration of expenses and
revenues pursuant to this Section 2.4(a), but subject to Section 2.4(b),
Sellers shall receive a credit equal to the amount of any expenses, costs, or
liabilities that are paid or incurred by Sellers and are allocable to the
operations of the Station for the period after the Effective Time plus the
amount of any revenues that are received by Buyer, and are allocable to the
operations of the Station for the period before the Effective Time, and Buyer
shall receive a credit equal to the amount of any expenses, costs, or
liabilities that are paid or incurred by Buyer and are allocable to the
operations of the Station for the period before the Effective Time plus the
amount of any revenues that are received by Sellers and are allocable to the
operations of the Station for the period after the Effective Time. The credits
to Sellers pursuant to this Section 2.4(a) are referred to as "Sellers' Working
Capital Credits," the credits to Buyer pursuant to this Section 2.4(a) are
referred to as "Buyer's Working Capital Credits," and Sellers' Working Capital
Credits and Buyer's Working Capital Credits are referred to collectively as the
"Working Capital Credits."
(b) Expenses and Revenues Not Prorated.
(1) There shall be no proration of, and Sellers shall remain
solely liable with respect to, liabilities and obligations arising under 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.
(2) Buyer shall receive a credit pursuant to Section 2.4(a) to
the extent that Buyer assumes any liability under any Assumed Contract to
refund (or to credit against payments otherwise due) any security deposit or
similar prepayment paid to any Seller by any lessee or other third party.
(3) No proration shall be made in favor of either Sellers or
Buyer for any difference between the value of the goods or services to be
received by the Station under its trade or barter agreements as of the
Effective Time and the value of any advertising time remaining to be run by the
Station as of the Effective Time.
(4) There shall be no proration of earned vacation time or
other employee compensation. Sellers shall be solely responsible for the
payment of all compensation and commissions owed to the Station's employees up
to the Effective Time. Buyer may, as of the
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Effective Time, employ those employees of the Station as Buyer may elect on
terms and conditions determined by Buyer.
(5) There shall be no proration of music license fees (ASCAP,
BMI, SESAC, etc.); Sellers shall be responsible for filing and paying all music
license fees due and payable as of the Effective Time, and Buyer shall be
responsible for filing and paying all such fees after the Effective Time.
(c) Manner of Determining Prorations and Credits. The prorations
and Working Capital Credits required by Section 2.4(a) shall be determined
finally in accordance with the following procedures:
(1) ValueVision, on behalf of Sellers, shall prepare and
deliver to Buyer not later than five (5) days before the Closing Date a
preliminary settlement statement which shall set forth ValueVision's good faith
estimate of the Working Capital Credits, taking into account all prorations
under Section 2.4(a). The preliminary settlement statement (A) shall contain
all information reasonably necessary to determine the Working Capital Credits,
taking into account all prorations under Section 2.4(a), to the extent such
prorations 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 (B) shall be certified by ValueVision to be true and complete to
ValueVision's knowledge as of the date thereof.
(2) Not later than sixty (60) days after the Closing Date,
Buyer shall deliver to ValueVision a statement setting forth Buyer's
determination of the Working Capital Credits pursuant to Section 2.4(a).
Buyer's statement (A) shall contain all information reasonably necessary to
determine the Working Capital Credits, taking into account all prorations under
Section 2.4(a), and such other information as may be reasonably requested by
ValueVision, and (B) shall be certified by Buyer to be true and complete to
Buyer's knowledge as of the date thereof. If ValueVision disputes the amount of
the Working Capital Credits determined by Buyer, it shall deliver to Buyer
within thirty (30) days after its receipt of Buyer's statement a statement
setting forth its determination of the amount of the Working Capital Credits.
If ValueVision notifies Buyer of its acceptance of Buyer's statement, or if
ValueVision fails to deliver its statement within the thirty-day period
specified in the preceding sentence, Buyer's determination of the Working
Capital Credits shall be conclusive and binding on Sellers and ValueVision as
of the last day of the thirty-day period.
(3) If ValueVision disputes the amount of the Working Capital
Credits determined by Buyer, Buyer and ValueVision shall use good faith efforts
to resolve any dispute involving the determination of the Working Capital
Credits as expeditiously as practicable.
(d) Payments at Closing With Respect to Working Capital Credits.
At Closing:
(1) Sellers shall pay or cause to be paid to or for the account
of Buyer, by wire transfer, the amount, if any, by which Buyer's Working
Capital Credits exceed Sellers' Working Capital Credits, each as estimated in
ValueVision's preliminary settlement statement pursuant to Section 2.4(c)(1).
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(2) Buyer shall pay or cause to be paid to or for the account
of Sellers, by wire transfer, the amount, if any, by which Sellers' Working
Capital Credits exceed Buyer's Working Capital Credits, each as estimated in
ValueVision's preliminary settlement statement pursuant to Section 2.4(c)(1).
(e) Payments to Reflect Final Determination of Working Capital
Credits. Within five (5) business days after the date on which the Working
Capital Credits are finally determined pursuant to Section 2.4(c):
(1) Sellers shall pay or cause to be paid to or for the account
of Buyer, by wire transfer, the amount, if any, by which the sum of the amount
of Buyer's Working Capital Credits, as finally determined pursuant to Section
2.4(c), plus the amount of any payment made by Buyer pursuant to Section
2.4(d)(2) exceeds the sum of amount of Sellers' Working Capital Credits, as
finally determined pursuant to Section 2.4(c), plus the amount of any payment
made by Sellers pursuant to Section 2.4(d)(1).
(2) Buyer shall pay or cause to be paid to or for the account
of Sellers, by wire transfer, the amount, if any, by which the sum of the
amount of Sellers' Working Capital Credits, as finally determined pursuant to
Section 2.4(c), plus the amount of any payment made by Sellers pursuant to
Section 2.4(d)(1) exceeds the sum of amount of Buyer's Working Capital Credits,
as finally determined pursuant to Section 2.4(c), plus the amount of any
payment made by Buyer pursuant to Section 2.4(d)(2).
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 any Seller under the Licenses and the Assumed Contracts to
the extent that either (a) the obligations and liabilities relate to the time
after the Effective Time or (b) Buyer received a Working Capital Credit
therefor under Section 2.4(a) as a result of the proration of such obligations
and liabilities. Buyer shall not assume any other obligations or liabilities
of any Seller, including (i) any obligations or liabilities under any Contract
(including any film or programming license agreement) not included in the
Assumed Contracts, (ii) any obligations or liabilities under the Assumed
Contracts relating to the period prior to the Effective Time except insofar as
Buyer receives a Working Capital Credit therefor under Section 2.4(a), (iii)
any claims, litigation, or proceedings relating to the operation of the Station
prior to the Closing, whether asserted or filed before or after the Effective
Time, (iv) any obligations or liabilities of any Seller under any management
incentive, employee pension, retirement, or other benefit plans, (v) any
obligations or liabilities of any Seller under any collective bargaining
agreements, (vi) any obligation to any employee of the Station for severance
benefits, vacation time, or sick leave accrued prior to the Closing Date, (vii)
any credit agreements, note purchase agreements, indentures, or other financing
arrangements, other than leases or agreements listed on Schedule 3.7 and
included in the Assumed Contracts, (viii) any agreements entered into other
than in the ordinary course of business of the Station, or (ix) any obligations
or liabilities caused by, arising out of, or resulting from any action or
omission of any Seller prior to the Closing, and all such obligations and
liabilities shall remain and be the obligations and liabilities solely of
Sellers.
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SECTION 3 REPRESENTATIONS AND WARRANTIES OF SELLERS AND
VALUEVISION.
Sellers and ValueVision, jointly and severally, represent and warrant
to Buyer and PCC as follows:
3.1 Organization, Standing, and Authority. Each of VVI Manassas
and ValueVision is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Minnesota. WVVI is a corporation duly
organized, validly existing, and in good standing under the laws of the
Commonwealth of Virginia. Each Seller is duly qualified to conduct business as
a foreign corporation in each state in which the nature of its business or the
ownership of its assets requires it to be so qualified, all of which are
identified on Schedule 3.1. Each Seller has all requisite corporate power and
authority (a) to own, lease, and use the Assets as now owned, leased, and used
by it, (b) to conduct the business and operations of the Station as now
conducted by it, and (c) 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 such Seller
hereunder and thereunder. ValueVision owns, directly or indirectly, all of the
outstanding shares of each Seller.
3.2 Authorization and Binding Obligation. The execution, delivery,
and performance of this Agreement by each Seller and ValueVision have been duly
authorized by all necessary actions on the part of such Seller and ValueVision.
This Agreement has been duly executed and delivered by each Seller and
ValueVision and constitutes the legal, valid, and binding obligation of each
Seller and ValueVision, 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
governmental Consents provided for in Section 6.1 and Section 6.8 and the other
Consents listed on Schedule 3.3, the execution, delivery, and performance of
this Agreement and the documents contemplated hereby (with or without the
giving of notice, the lapse of time, or both): (a) do not require the consent
of any third party; (b) will not conflict with any provision of the Articles of
Incorporation or By-Laws of any Seller or ValueVision; (c) 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; (d) 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 any Seller or
ValueVision is a party or by which any Seller or ValueVision may be bound
legally; and (e) will not create any claim, liability, mortgage, lien, pledge,
condition, charge, or encumbrance of any nature upon any of the Assets.
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3.4 Governmental Licenses.
(a) Schedule 3.4 includes a true and complete list of the
Licenses. Sellers have made available to Buyer true and complete copies of the
Licenses (including any amendments and other modifications thereto). The
Licenses have been validly issued, and the Seller designated as such on
Schedule 3.4 is the authorized legal holder thereof. The Licenses listed on
Schedule 3.4 comprise all licenses, permits, and other authorizations required
from the FCC and, to each Seller's knowledge, from any other governmental or
regulatory authority for the lawful conduct in all material respects 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 unusual or
special restriction or condition that could reasonably be expected to limit the
full operation of the Station as now operated. Seller has no reason to believe
that, under existing law, rules, regulations, policies, and procedures of the
FCC, any of the Licenses would not be renewed by the FCC or other granting
authority in the ordinary course. Except as set forth in Schedule 3.4, the
Licenses are in full force and effect. Sellers have timely paid to the FCC all
annual regulatory fees payable with respect to the FCC Licenses.
(b) Schedule 3.4 also includes a true and complete list,
to each Seller's knowledge, of (i) all cable television systems that carry the
signal of the Station, (ii) all retransmission consent and other similar
agreements entered into by any Seller with respect to the Station, and (iii)
all cable television systems to which either Seller has delivered a must carry
notice or retransmission consent notice in accordance with Section 4 of the
Cable Television Consumer Protection and Competition Act of 1992 and the rules
and regulations of the FCC promulgated thereunder.
3.5 Real Property. Schedule 3.5 contains a complete and accurate
description of all Real Property and all Real Property Interests (including
street address, legal description (where known), owner, and Sellers' use
thereof), and all claims, liabilities, security interests, mortgages, liens,
pledges, conditions, charges, covenants, easements, restrictions,
encroachments, leases, or encumbrances known to any Seller.
3.6 Tangible Personal Property. Schedule 3.6 lists all material
items of Tangible Personal Property, to the best of Sellers' knowledge without
inquiry. Except as described in Schedule 3.6, one of the Sellers, as
designated on Schedule 3.6, owns and has good title to each item of Tangible
Personal Property and none of the Tangible Personal Property owned by any
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.
3.7 Contracts. Schedule 3.7 is a true and complete list of all
Contracts except contracts with advertisers for production or the sale of
advertising time on the Station for cash at rates consistent with past
practices and that may be canceled by Sellers without penalty on not more than
thirty (30) days' notice. Sellers have delivered to Buyer true and complete
copies of all written Assumed Contracts and true and complete descriptions of
all oral Assumed Contracts (including any amendments and other modifications to
such Contracts). Schedule 3.7 also includes (a) a schedule summarizing as of
the date of such schedule all contracts with advertisers for production or the
sale of advertising time on the Station and (b) a schedule setting forth the
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following information as of the date of such schedule with respect to each
Assumed Contract under which the Station is licensed to broadcast any
programming: (i) the identity of the licensed programming, (ii) the number of
exhibitions thereof originally licensed, (iii) the number of exhibitions on the
Station then available to Sellers, (iv) the unpaid license fees on a monthly
basis, (v) the expiration of the license, (vi) the purchase price for each
program, and (vii) the purchase price for additional episodes for which Buyer
may be liable. Except for the need to obtain the Consents listed on Schedule
3.3, the Seller that is a party to each Assumed Contract has full legal power
and authority to assign its rights under such Assumed Contracts to Buyer in
accordance with this Agreement, and such assignment will not affect the
validity, enforceability, or continuation of such Assumed Contract.
3.8 Consents. Except for the governmental Consents provided for
in Section 6.1 and Section 6.8 and the other Consents described in Schedule
3.3, to each Seller's knowledge, 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 to consummate this Agreement and the
transactions contemplated hereby or to permit Sellers to assign or transfer the
Assets to Buyer.
3.9 Intangibles. Schedule 3.9 is a true and complete list of all
Intangibles (exclusive of Licenses listed in Schedule 3.4) that are used in the
conduct of the business and operations of the Station as now conducted.
Sellers have made available to Buyer copies of all documents establishing or
evidencing the Intangibles listed on Schedule 3.9. There is no claim or action
pending, or to the knowledge of any Seller threatened, relating to the Station
with respect to any actual or alleged infringement by any Seller upon any
trademark, trade name, service ▇▇▇▇, service name, copyright, patent, patent
application, know-how, method, or process owned by any other Person.
3.10 Financial Statements. Sellers have furnished Buyer with true
and complete copies of the unaudited financial statements of the Station,
containing a balance sheet and a statement of income, as at and for the period
from February 1, 1995 through January 31, 1996, and the seven (7) months ended
August 31, 1996 (collectively, the "Financial Statements").
3.11 Insurance. Schedule 3.11 is a true and complete list of all
insurance policies of any Seller that insure any part of the Assets or the
business of the Station. All policies of insurance listed in Schedule 3.11 are
in full force and effect.
3.12 Reports. All reporting requirements of the FCC and, to each
Seller's knowledge, any other governmental authority with respect to the
Station have been complied with by Sellers in all material respects.
3.13 Labor Relations. No labor union or other collective
bargaining unit represents or claims to represent any of the employees of the
Station. To each Seller's knowledge, there is no union campaign being
conducted to solicit cards from employees to authorize a union to request a
National Labor Relations Board certification election with respect to any
employees at the Station.
3.14 Taxes. Each Seller has filed or caused to be filed all
federal, state, county, local, or city tax returns that are required to be
filed with respect to the ownership and operation of the
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Station, and each Seller has paid or caused to be paid all taxes shown on those
returns or on any tax assessment received by it to the extent that such taxes
have become due. There are no legal, administrative, or tax proceedings
pursuant to which any 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 any Seller.
3.15 Claims and Legal Actions. Except as disclosed on Schedule
3.15 and except for any FCC rulemaking proceedings generally affecting the
television broadcasting industry and not particular to any Seller, there is no
claim, legal action, counterclaim, suit, arbitration, or other legal,
administrative, or tax proceeding, nor any order, decree, or judgment, in
progress or pending, or to the knowledge of any Seller threatened, against or
relating to any Seller with respect to its ownership or operation of the
Station or otherwise relating to the Assets or the business or operations of
the Station, nor does any Seller know of any basis for the same.
3.16 Compliance with Licenses. Each Seller has complied in all
material respects with the Licenses.
3.17 Conduct of Business in Ordinary Course. Since August 31, 1996,
the Sellers have conducted the business and operations of the Station only in
the ordinary course and, except as disclosed in Schedule 3.17:
(a) The Station has not suffered any material damage,
destruction, or loss affecting any assets or transferred any material assets
used or useful in the conduct of the business of the Station;
(b) The Station has not suffered any material write-down
of the value of any Assets; and
(c) The Station has not transferred or granted any right
under, or entered into any settlement regarding the breach or infringement of,
any license, patent, copyright, trademark, trade name, franchise, or similar
right, or modified any existing right relating to the Station.
3.18 Transactions with Affiliates. No Seller has been involved in
any business arrangement or relationship relating to the Station with any
Affiliate of any Seller (other than another Seller or ValueVision), and no
Affiliate of any Seller (other than another Seller or ValueVision) owns any
property or right, tangible or intangible, that is used in the business of the
Station.
3.19 No Broker. Except as set forth in Schedule 3.19, neither the
Sellers nor ValueVision has employed, nor obligated itself, Buyer or PCC to
compensate, any finder, broker, advisor or similar Person in connection with
the transactions contemplated by this Agreement.
3.20 Accredited Investor; Investment Knowledge; Distribution.
ValueVision is an accredited investor within the meaning of Rule 501
promulgated under the Securities Act. ValueVision has sufficient knowledge and
experience in financial and business matters so as to be capable of evaluating
the risks and merits of its investment in PCC and is capable of bearing the
economic risks of such investment. ValueVision has had an opportunity to
discuss the business,
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management and financial affairs of PCC with PCC's representatives, and
ValueVision has had its questions concerning PCC and its business answered to
its full satisfaction. ValueVision has received from PCC all of the
documentation it requires in order to make its investment decision. The shares
of PCC Common Stock to be transferred hereunder to ValueVision are being
acquired for ValueVision's own account for the purpose of investment and not
with a view to or for resale in connection with any distribution thereof or
interest therein. ValueVision understands that (a) such shares of PCC Common
Stock have not been registered under the Securities Act by reason of their
issuance in a transaction exempt from the registration requirements of the
Securities Act pursuant to Section 4(2) thereof, (b) such shares of PCC Common
Stock must be held indefinitely unless subsequent disposition thereof is
registered under the Securities Act or is exempt from such registration, and
(c) such PCC Shares shall bear a legend to such effect.
3.21 Disclaimer of Warranties. Except for the foregoing
representations and warranties specifically set forth in Section 3.1 through
Section 3.20 of this Agreement and the representations and warranties in the
certificate delivered by Sellers pursuant to Section 8.2(f), the Assets are
being transferred by Sellers to Buyer on an "as-is-where-is" basis without any
representation or warranty, all other representations and warranties of any
kind, either express or implied, including warranties of fitness, being hereby
expressly disclaimed.
SECTION 4 REPRESENTATIONS AND WARRANTIES OF BUYER AND PCC.
Buyer and PCC, jointly and severally, represent and warrant to Sellers
and ValueVision 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, on the Closing Date, will be duly qualified to conduct
business in the Commonwealth of Virginia. PCC is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Delaware.
Buyer and PCC each has all requisite corporate 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 it hereunder and thereunder.
4.2 Authorization and Binding Obligation. The execution, delivery,
and performance of this Agreement by Buyer and PCC have been duly authorized by
all necessary actions on the part of Buyer and PCC. This Agreement has been
duly executed and delivered by Buyer and PCC and constitutes the legal, valid,
and binding obligation of Buyer and PCC, enforceable against Buyer and PCC 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
governmental Consents provided for in Section 6.1 and Section 6.8 and the other
Consents listed on Schedule 4.3, the execution, delivery, and performance by
Buyer and PCC of this Agreement and the documents contemplated hereby (with or
without the giving of notice, the lapse of time, or both): (a) do not require
the consent of any third party; (b) will not conflict with the Certificate of
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Incorporation or By-Laws of Buyer or PCC; (c) 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 (d) 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 or PCC is a
party or by which Buyer or PCC may be bound legally, such that Buyer could not
acquire or operate the Assets or PCC could not perform its obligations
hereunder.
4.4 Licensee Qualifications. To Buyer's knowledge, there is no
fact that would, under the Communications Act of 1934, as amended, and the
rules and regulations of the FCC, each as in effect on the date of this
Agreement, disqualify Buyer from being the licensee of the Station other than
Buyer's or its Affiliate's interest in the television station described on
Schedule 4.3. Buyer has sufficient net liquid assets on hand or available from
committed sources to consummate the transactions contemplated by this Agreement
and to operate the Station for three (3) months after Closing and is otherwise
financially qualified under the Communications Act of 1934, as amended, and the
rules and regulations of the FCC, each as in effect on the date of this
Agreement, to be the licensee of the Station.
4.5 No Broker. Except as set forth in Schedule 4.5, neither Buyer
nor PCC has employed, nor obligated itself, any Seller or ValueVision to
compensate, any finder, broker, advisor or similar Person in connection with
the transactions contemplated by this Agreement.
4.6 Acknowledgment of "As-Is-Where-Is" Sale. Buyer acknowledges
and agrees that it is purchasing and accepting the Assets on an
"as-is-where-is" basis, except for the representations and warranties
specifically set forth in Section 3.1 through Section 3.20 of this Agreement
and the representations and warranties in the certificate delivered by Sellers
pursuant to Section 8.2(f). To the fullest extent permitted by law, Buyer and
PCC hereby unconditionally and irrevocably waive and release any and all actual
or potential claims that it might have against any Seller or ValueVision
regarding any form of warranty, express or implied, of any kind or type,
including warranties of fitness, relating to or in connection with the purchase
of the Assets, other than the representations and warranties specifically set
forth in Section 3.1 through Section 3.20 of this Agreement and the
representations and warranties in the certificate delivered by Sellers pursuant
to Section 8.2(f). This waiver and release is, to the fullest extent permitted
by law, absolute, complete, total, and unlimited in every way and includes, to
the fullest extent permitted by law, a waiver and release of express warranties
(other than the representations and warranties specifically set forth in
Section 3.1 through Section 3.20 of this Agreement and the representations and
warranties in the certificate delivered by Sellers pursuant to Section 8.2(f)),
implied warranties, warranties of fitness for a particular use, warranties of
merchantability, warranties of habitability, claims based on apparent or latent
defects or deficiencies, whether now or hereafter existing, and strict
liability rights and claims of every kind and type (including claims regarding
defects that were not or are not discoverable and all other extant or later
created or conceived of strict liability or strict liability-type claims and
rights).
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SECTION 5 OPERATIONS OF THE STATION PRIOR TO CLOSING.
Between the date of this Agreement and the Closing Date, Sellers shall
comply, and ValueVision shall cause each Seller to comply, with the covenants
in this Section 5:
5.1 Generally. Except as otherwise provided in this Agreement,
Sellers shall operate the Station diligently in the ordinary course of business
in accordance with past practices (except where such conduct would conflict
with the following covenants or with Sellers' other obligations under this
Agreement).
5.2 Contracts. Sellers will not amend or terminate any Material
Contract (or waive any material right thereunder), or enter into any contract
or commitment relating to the Station or the Assets (except as provided in
Section 6.16), or incur any obligation (including obligations relating to the
borrowing of money or the guaranteeing of indebtedness and obligations arising
from the amendment of any existing Contract, regardless whether such Contract
is a Material Contract) that will be binding on Buyer after Closing, except for
(a) cash time sales agreements and production agreements made in the ordinary
course of business consistent with Sellers' past practices, and (b) other
contracts (excluding film or programming license agreements and trade or barter
agreements) entered into in the ordinary course of business consistent with
Sellers' past practices that do not involve consideration, in the aggregate, in
excess of $25,000 measured at Closing. Prior to the Closing Date, Sellers
shall deliver to Buyer a list of all Contracts entered into between the date of
this Agreement and the Closing Date and shall make available to Buyer copies of
such Contracts.
5.3 Disposition of Assets. No Seller shall sell, assign, lease,
or otherwise transfer or dispose of any assets that are used or useful in
connection with the conduct of the business or operations of the Station,
except for (a) any transaction permitted by Section 6.16, (b) dispositions of
assets in connection with the acquisition of replacement property of equivalent
kind and value and (c) the assignment and transfer of assets and liabilities
between Sellers and/or ValueVision.
5.4 Encumbrances. No Seller shall create, assume, or permit to
exist any claim, liability, security interest, mortgage, lien, pledge,
condition, charge, covenant, easement, restriction, encroachment, lease, or
encumbrance of any nature upon the Assets, except for (a) liens disclosed on
Schedule 3.5 or Schedule 3.6 that will be removed prior to the Closing Date,
and (b) Permitted Encumbrances.
5.5 Licenses. No Seller shall cause or permit, by any act or
failure to act, any of the Licenses required to be listed on Schedule 3.4 to
expire or to be revoked, suspended, or modified, or take any action that could
reasonably be expected to cause the FCC or any other governmental authority to
institute proceedings for the suspension, revocation, or material adverse
modification of any of the Licenses. Sellers shall use reasonable efforts to
prosecute (a) any applications to any governmental authority necessary for the
operation of the Station and (b) any must-carry proceedings described on
Schedule 5.5.
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5.6 Obligations. Sellers shall pay all obligations relating to
the Station as they become due, consistent with past practices, so that all
such obligations shall be current as of the Closing Date.
5.7 Exclusivity.
(a) Neither any Seller nor any officer, director,
representative, or agent of any Seller shall, directly or indirectly, (i)
solicit, initiate, or encourage the submission of any proposal or offer
relating to (A) any liquidation, dissolution, or recapitalization of any
Seller, (B) any merger or consolidation of any Seller with any other Person,
(C) any acquisition or purchase of securities or assets by any Person from any
Seller, or (D) any similar transaction or business combination involving any
Seller, or (ii) participate in any discussions or negotiations regarding,
furnish any information with respect to, assist or participate in, or
facilitate in any other manner any effort or attempt by any Person to do or
seek any of the foregoing. Sellers shall notify Buyer as soon as practicable
if any Person makes any proposal with respect to any of the foregoing.
(b) Section 5.7(a) shall not apply to any action by any
Seller or any officer, director, representative, or agent of any Seller with
respect to (i) the assignment and transfer by either Seller of all its assets
and liabilities to the other Seller or to ValueVision, or (ii) so long as
ValueVision's ability to perform its obligations under this Agreement is not
adversely affected, any recapitalization of ValueVision, any merger or
consolidation of ValueVision with any other Person, or any acquisition or
purchase of securities or assets (other than the Assets) by any Person from
ValueVision.
5.8 Access to Information.
(a) Each Seller shall give Buyer and its counsel,
accountants, engineers, and other authorized representatives reasonable access
to the Assets and to all other books, records, and documents relating to the
Station for the purpose of audit and inspection, and will furnish or cause to
be furnished to Buyer or its authorized representatives all information with
respect to the affairs and business of the Station that Buyer may reasonably
request (including any financial reports and operations reports produced with
respect to the affairs and business of the Station, a list of all employees of
the Station and a description of their base compensation).
(b) Without limiting the generality of the foregoing,
Sellers shall give Buyer and its counsel, accountants, and other authorized
representatives reasonable access to Sellers' financial records relating to the
operations of the Station and the Station's employees, counsel, accountants,
and other representatives for the purpose of preparing and auditing such
financial statements as Buyer determines, in its reasonable 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. Sellers agree to provide financial statements concerning the
operations of the Station, reviewed by Sellers' accountants, containing
reasonably requested customary representations; provided, however, that the
parties hereto agree that Buyer shall have no right under any circumstance to
delay the Closing or terminate this Agreement on account of the information
contained in any such financial statement or the inability of Sellers or their
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accountants in good faith to make any representation requested by Buyer. The
preparation and auditing of any financial statements pursuant to this Section
5.8(b) shall be at Buyer's sole cost and expense.
5.9 Maintenance of Assets. Except as provided in Section 6.16,
Sellers shall maintain all of the Assets in their condition on the date of this
Agreement (ordinary wear and tear excepted), and use, operate, and maintain all
of the Assets in a reasonable manner. Seller shall maintain inventories of
spare parts and expendable supplies at levels consistent with past practices.
If any insured or indemnified loss, damage, impairment, confiscation, or
condemnation of or to any of the Assets occurs, Sellers shall repair, replace,
or restore the Assets to their prior condition as soon thereafter as possible,
and Sellers shall use the proceeds of any claim under any property damage
insurance policy or other recovery solely to repair, replace, or restore any of
the Assets that are lost, damaged, impaired, or destroyed.
5.10 Insurance. Sellers shall maintain the existing insurance
policies on the Station and the Assets.
5.11 Consents. Sellers shall use their respective reasonable
efforts to obtain all Consents, without any change in the terms or conditions
of any Assumed Contract or License that could reasonably be expected to be less
advantageous to Buyer than those pertaining under the Assumed Contract or
License as in effect on the date of this Agreement. Sellers shall request
estoppel certificates from the lessors of all leasehold and subleasehold
interests included in the Real Property Interests, consents of such lessors to
the collateral assignment by Buyer to its lenders of such leasehold and
subleasehold interests, and estoppel certificates of contracting parties to all
Material Contracts. Sellers 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.
5.12 Books and Records. Each Seller shall maintain its books and
records relating to the Station in accordance with past practices.
5.13 Notification. Sellers shall promptly notify Buyer in writing
of any material change in any of the information contained in Sellers' and
ValueVision's representations and warranties contained in Section 3 of this
Agreement.
5.14 Financial Information. Sellers shall furnish to Buyer within
forty-five (45) 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
balance sheet for and as of the end of such month. All financial information
delivered by Sellers to Buyer pursuant to this Section shall be prepared from
the books and records of Sellers in accordance with generally accepted
accounting principles consistently applied, 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 as at their respective dates and the results of operations for the
periods then ended.
5.15 Compliance with Laws. Each Seller shall comply in all
material respects with all laws, rules, and regulations applicable or relating
to the ownership and operation of the Station.
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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) Sellers and Buyer shall prepare and within five (5)
business days after the date of this Agreement shall file with the FCC
appropriate applications for the FCC Consent, which shall include a commitment
by Buyer to sell the television station described in Schedule 4.3. Buyer shall
file with the FCC the necessary application to sell the television station
described in Schedule 4.3, together with a copy of the executed purchase and
sale agreement, within ten (10) business days of the aforementioned filings by
Sellers and Buyer and shall use its reasonable efforts to sell such station as
expeditiously as practicable. The parties shall prosecute the foregoing
applications (including Buyer's application to sell the station described in
Schedule 4.3) with all reasonable diligence and otherwise use their reasonable
efforts to obtain a grant of the applications, as expeditiously as practicable.
Each party agrees to comply with any condition imposed on it by the FCC
Consent.
(c) Within five (5) business days of any written request
of Sellers, Buyer agrees to use its best efforts to file for and prosecute a
request for any temporary waiver of the FCC rules deemed by Sellers in their
sole discretion to be necessary or desirable in order to permit the Closing to
occur prior to the divestiture of the television station described in Schedule
4.3, the form and substance of which waiver request shall be reasonably
acceptable to Sellers and Buyer.
6.2 Control of the Station. Prior to Closing, Buyer shall not,
directly or indirectly, control, supervise, direct, or attempt to control,
supervise, or direct, the operations of the Station; such operations, including
complete control and supervision of all of the Station's programs, employees,
and policies, shall be the sole responsibility of Sellers until the Closing.
6.3 Risk of Loss.
(a) The risk of any loss, damage or impairment,
confiscation, or condemnation of any of the Assets from any cause shall be
borne by Sellers at all times prior to the completion of the Closing, except
that Buyer will be required to purchase the Assets notwithstanding any such
loss, damage or impairment, confiscation, or condemnation if the conditions
contained in Section 7.1 to the obligations of Buyer at the Closing are
nonetheless satisfied.
(b) In the event of any damage or destruction of the
Assets described above, if the damaged or destroyed Assets have not been
restored or replaced prior to the Closing Date, Sellers shall deliver to Buyer
all insurance proceeds received in connection with such damage or destruction
of the Assets to the extent of the costs and expenses arising in connection
with such restoration and replacement.
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6.4 Confidentiality. (a) Except as necessary for the consummation
of the transactions contemplated by this Agreement, including Buyer's obtaining
of financing related hereto, and except as and to the extent required by law,
including disclosure requirements of federal or state securities laws and rules
and regulations of securities markets, each party will keep confidential any
information obtained from any other party in connection with the transactions
contemplated by this Agreement. If this Agreement is terminated, each party
will return to any other party that furnished it with information in connection
with the transactions contemplated by this Agreement all such information.
(b) No party shall publish any press release or make any
other public announcement concerning this Agreement or the transactions
contemplated hereby without the prior written consent of each other party,
which shall not be withheld unreasonably; provided, however, that nothing
contained in this Agreement shall prevent any party, after notification to each
other party, from making any filings with governmental authorities that, in its
judgment, may be required or advisable in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby.
6.5 Cooperation. Each party hereto shall cooperate fully with
each other party 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 the parties hereto shall execute such other documents
as may be necessary and desirable to the implementation and consummation of
this Agreement, and otherwise use their reasonable efforts to consummate the
transactions contemplated hereby and to fulfill their obligations under this
Agreement. Notwithstanding the foregoing, and except as otherwise expressly
provided in this Agreement, (a) Buyer shall have no obligation to expend funds
to obtain any of the Consents (other than any fee payable to the FCC in
connection with the filing of the applications for FCC Consent and any fee
imposed by the FTC in connection with filings made pursuant to the HSR Act, in
each case to the extent provided in Section 12.1), and (b) Sellers shall have
no obligation to expend funds to obtain any of the Consents (other than any fee
payable to the FCC in connection with the filing of the applications for FCC
Consent and any fee imposed by the FTC in connection with filings made pursuant
to the HSR Act, in each case to the extent provided in Section 12.1).
6.6 Access to Books and Records. Each Seller shall provide Buyer
access and the right to copy for a period of two (2) years from the Closing
Date any books and records relating to the Assets but not included in the
Assets. Buyer shall provide Sellers access and the right to copy for a period
of two (2) years after the Closing Date any books and records relating to the
Assets that are included in the Assets.
6.7 [Intentionally omitted].
6.8 HSR Act Filing. ValueVision and Buyer agree to (a) file, or
cause to be filed, with the U.S. Department of Justice ("DOJ") and Federal
Trade Commission ("FTC") all filings, if any, that are required in connection
with the transactions contemplated hereby under the HSR Act within forty-five
(45) days of the date of this Agreement; (b) submit to the other party, prior
to filing, their respective HSR Act filings to be made hereunder, and to
discuss with the other any comments the reviewing party may have; (c) cooperate
with each other in connection with such
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HSR Act filings, which cooperation shall include furnishing the other with any
information or documents that may be reasonably required in connection with
such filings; (d) promptly file, after any request by the FTC or DOJ, any
information or documents requested by the FTC or DOJ; and (e) furnish each
other with any correspondence from or to, and notify each other of any other
communications with, the FTC or DOJ that relates to the transactions
contemplated hereunder, and to the extent practicable, to permit each other to
participate in any conferences with the FTC or DOJ.
6.9 Title to Real Property.
(a) Buyer may, at its option and expense, obtain the
following title commitments, surveys, and related information:
(1) with respect to each fee estate included in
the Real Property Interests, a title commitment issued by a title insurer
satisfactory to Buyer disclosing the condition of title to such fee estate and
all easements, rights-of-way, and restrictions of record with respect thereto,
as of a date not earlier than the date of this Agreement;
(2) with respect to each leasehold included in
the Real Property Interests, a title commitment issued by a title insurer
satisfactory to Buyer disclosing the condition of title to such leasehold as of
a date not earlier than the date of this Agreement;
(3) with respect to each Real Property Interest
as to which a title commitment is obtained pursuant to this Section 6.9(a),
copies of all instruments evidencing the scope and extent of all easements,
rights-of-way, and restrictions of record with respect thereto; and
(4) with respect to each Real Property Interest
as to which a title commitment is obtained pursuant to this Section 6.9(a), a
current survey of the relevant parcel, prepared and certified to Buyer and to
the title insurer of such Real Property Interest by a licensed surveyor and
conforming to current ALTA Minimum Detail Requirements for Land Title Surveys,
disclosing the location of all improvements, easements, party walls, sidewalks,
roadways, utility lines, and other matters customarily shown on such surveys.
(b) If the title commitments, surveys, and related
information obtained by Buyer pursuant to Section 6.9(a) reveal (i) any
easement, covenant, condition, restriction, encroachment, lack of practical
access to public roads, or other encumbrance, defect, or condition with respect
to any Real Property Interest (other than any easement, covenant, condition, or
restriction that is disclosed on Schedule 3.5) that, individually or in the
aggregate, has a material adverse effect on the use of such Real Property
Interest in the conduct of the business of the Station or materially detracts
from the value of such Real Property Interest in the conduct of the business of
the Station (each, a "Title Defect"), Buyer may give Sellers written notice of
its objection to any such Title Defect at any time within thirty (30) days
after the date of this Agreement. Within seven (7) days after their receipt of
Buyer's objection to any such Title Defect, Sellers shall notify Buyer whether
they agree to cure or correct such Title Defect prior to the Closing. If
Sellers do not agree to cure or correct any such Title Defect, Buyer may
terminate this Agreement pursuant to Section 9.2(a).
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(c) For purposes of this Agreement, "Permitted
Encumbrances" shall include, in addition to the matters described in Section
1.1, any Title Defect (other than any claim, liability, security interest,
mortgage, lien (including any tax or judgment lien), pledge, or other monetary
charge) that is disclosed in the title commitments, surveys, and related
information obtained by Buyer pursuant to Section 6.9(a) if (i) Buyer does not
object to such Title Defect on or before the date specified above for Buyer's
objection, or (ii) Buyer objects to such Title Defect and Sellers notify Buyer
within seven (7) days after their receipt of Buyer's objection of Sellers'
election not to cure or correct such Title Defect.
(d) Sellers shall remove prior to Closing any claim,
liability, security interest, mortgage, lien (including any tax or judgment
lien), pledge, or other monetary charge except for Permitted Encumbrances with
respect to any Real Property Interest.
6.10 Environmental Survey.
(a) Sellers have heretofore provided to Buyer a copy of
the Phase I Environmental Site Assessment of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, prepared for Sellers by Law Engineering and Environmental Services,
Inc., dated October 4, 1996, and Addendum No. 1 thereto dated October 10, 1996
(together, the "Law Engineering Phase I Report"), for the information of Buyer,
but without any representation or warranty being made by Sellers or ValueVision
as to the accuracy or completeness of any of the information contained therein.
(b) Buyer may, at its option and expense, retain an
environmental consultant to be selected by Buyer to perform Phase I
environmental surveys of the properties of the Station. If such survey
discloses any material environmental hazard or material possibility of future
material liability for environmental damages or clean-up costs not identified
in the Law Engineering Phase I Report (each, an "Environmental Hazard"), Buyer
shall so notify Sellers as soon as practicable.
(c) If Buyer notifies Sellers pursuant to Section 6.10(b)
of any Environmental Hazard as indicated in an environmental study described in
Section 6.10(b), within thirty (30) days after the date of this Agreement, then
Sellers may, by notice delivered to Buyer within seven (7) days after their
receipt of such notice from Buyer, agree to remedy such Environmental Hazard
prior to the Closing Date. If Sellers do not agree prior to the end of such
seven-day period to remedy such Environmental Hazard prior to the Closing Date,
then Buyer may terminate this Agreement pursuant to Section 9.2(b).
6.11 Engineering Study.
(a) Buyer may, at its option and expense, retain an
engineering firm or other broadcast engineer to conduct proof of performance
studies 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 either study discloses any
material deficiencies in the operations or equipment of the Station (each, a
"Technical Deficiency"), Buyer shall so notify Sellers as soon as practicable.
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(b) If Buyer notifies Sellers pursuant to Section 6.11(a) of any
Technical Deficiency, as indicated in either engineering study described in
Section 6.11(a), within thirty (30) days after the date of this Agreement, then
Sellers may, by notice delivered to Buyer within seven (7) days after Sellers'
receipt of such notice from Buyer, agree to remedy such Technical Deficiency
prior to the Closing Date. If Sellers do not agree pursuant to this Section
6.11(b) prior to the end of such seven-day period to remedy any Technical
Deficiency prior to the Closing Date, then Buyer may terminate this Agreement
pursuant to section 9.2(c).
6.12 Sales Tax Filings. Sellers shall continue to file Virginia
sales tax returns with respect to the Station in accordance with all applicable
legal requirements and shall concurrently deliver copies of all such returns to
Buyer.
6.13 Accounts Receivable.
(a) Collection. At the Closing, Sellers shall designate
Buyer as their agent to collect any accounts receivable of Sellers in existence
on the Closing Date and arising from the sale of advertising time by the
Station prior to the Closing Date (the "Station's Receivables"). Buyer shall
use reasonable efforts to collect the Station's Receivables during the
"Collection Period," which shall be the period beginning on the Closing Date
and ending on the last day of the fourth calendar month beginning after the
Closing Date. Buyer shall not be obligated to use any extraordinary efforts to
collect any of the Station's Receivables or to refer any of the Station's
Receivables to a collection agency or attorney for collection, and Buyer shall
not make any such referral or compromise, nor settle or adjust the amount of
any of the Station's Receivables, except with the approval of ValueVision.
Sellers and their respective representatives and agents may undertake to
collect any of the Station's Receivables during the Collection Period so long
as Sellers first notify and consult with Buyer concerning Sellers' proposed
collection efforts.
(b) Payments to ValueVision. On or before the twentieth
day after the end of each full calendar month during the Collection Period,
Buyer shall furnish to ValueVision (i) a list of the amounts collected before
the end of such month with respect to the Station's Receivables, and (ii) the
amount collected during such month with respect to the Station's Receivables.
On or before the twentieth day after the end of the Collection Period, Buyer
shall furnish ValueVision with a list of all of the Station's Receivables that
remain uncollected at the end of the Collection Period.
(c) Further Obligations. After the expiration of the
Collection Period, Buyer shall have no further obligation hereunder other than
to make the payment under Section 6.13(b) and to remit to ValueVision any
payments with respect to any of the Station's Receivables that Buyer
subsequently receives, and any Seller itself may act to collect any of the
Station's Receivables that remain uncollected without restriction.
6.14 No Inconsistent Action. Between the date of this Agreement
and the Closing Date, no party shall take any action that is inconsistent with
its obligations under this Agreement in any material respect or that could
reasonably be expected to hinder or delay the consummation of the transactions
contemplated by this Agreement. Between the date of this Agreement and the
Closing Date, Buyer shall not take any action that would disqualify Buyer from
being the licensee
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of the Station under the Communications Act of 1934, as amended, and the rules
and regulations of the FCC, each as in effect on the date of this Agreement.
6.15 CTN Lease. VVI Manassas shall give notice of termination to
CTN of that certain Lease by and between VVI Manassas and CTN dated as of March
28, 1994 (the "CTN Lease"), promptly after execution of this Agreement.
6.16 Acquisition of Transmitter Site and Relocation of Studio.
Anything herein to the contrary notwithstanding, it is expressly agreed by the
parties that Sellers may, in their sole discretion, elect to purchase the real
property currently leased as the transmitter site for the Station and to
relocate the studio for the Station to such site (the "Transmitter Site"). In
the event Sellers elect to enter into any transaction described in the
preceding sentence, such transaction shall be binding on Buyer and shall not
result in any amendment to this Agreement or any change in the Purchase Price,
and Buyer consents in advance to any such transaction(s), whether consummated
before or after the Closing Date, and agrees to cooperate with Sellers in
effectuating such transaction(s), provided that any initial purchase by Sellers
of the Transmitter Site is consummated pursuant to terms and conditions which
shall not impose liability for any portion of the purchase price of the
Transmitter Site on Buyer and any relocation of the studio for the Station is
accomplished at no cost to Buyer prior to Closing or as soon thereafter as
reasonably practicable.
SECTION 7 CONDITIONS TO OBLIGATIONS OF BUYER AND SELLERS AT
CLOSING.
7.1 Conditions to Obligations of Buyer. All obligations of Buyer
at the Closing are subject to the fulfillment prior to or at the Closing Date
of each of the following conditions, any of which may be waived by Buyer in
writing:
(a) FCC Consent. The FCC Consent shall have been
granted.
(b) [Intentionally omitted].
(c) HSR Act. The waiting period under the HSR Act shall
have expired or been terminated without action by the DOJ or the FTC to prevent
the Closing.
(d) Deliveries. Sellers shall have made or stand willing
to make all the deliveries to Buyer set forth in Section 8.2(a),(b), and (e).
(e) Station. The FCC shall have (i) approved the sale of
the television station described in Schedule 4.3 in accordance with the
requirements of Section 6.1(b) and the closing of such sale shall have occurred
or shall be scheduled to occur immediately prior to the Closing, or (ii) the
FCC shall have granted to Buyer a temporary waiver permitting the Closing to
occur prior to the sale of the station described in Schedule 4.3.
7.2 Conditions to Obligations of Sellers. All obligations of
Sellers at the Closing are subject to the fulfillment prior to or at the
Closing Date of each of the following conditions, any of which may be waived by
ValueVision in writing:
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(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, and Sellers shall have received a certificate, executed on behalf
of Buyer by an authorized officer, to that effect.
(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, and Sellers shall have received a certificate,
executed on behalf of Buyer by an authorized officer, to that effect.
(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.
(e) HSR Act. The waiting period under the HSR Act shall have
expired or been terminated without action by the DOJ or the FTC to prevent the
Closing.
(f) Judgments. There shall not be in effect any
judgment, decree, or order that would prevent or make unlawful the Closing.
SECTION 8 CLOSING AND CLOSING DELIVERIES.
8.1 Closing.
(a) Closing Date.
(1) Except as provided in the following sentence
or as otherwise agreed to by Buyer and ValueVision, but subject to Section
8.1(a)(2), the Closing shall take place at 10:00 a.m. on a date, to be set by
Buyer on at least five (5) days' written notice to ValueVision, which shall be
not earlier than the later of February 3, 1997 or the first business day after
the FCC Consent is granted and not later than twenty (20) business days
following the date upon which the FCC Consent has become a Final Order. Except
as otherwise agreed to by Buyer and ValueVision, but subject to Section
8.1(a)(2), if Buyer fails to specify the date for Closing pursuant to the
preceding sentence prior to the fifteenth business day after the date upon
which the FCC Consent has become a Final Order, the Closing shall take place on
the twentieth business day after the date upon which the FCC Consent has become
a Final Order.
(2) Notwithstanding Section 8.1(a)(1), if on the
date that, but for this Section 8.1(a)(2), would be the Closing Date pursuant
to Section 8.1(a)(1), the certificate provided to Buyer under Section 8.2(f)
discloses, or the Buyer has notified Sellers in writing that it has determined
that, any representation or warranty of Sellers and ValueVision contained in
this Agreement is not true and complete In A Material Way, or that Sellers have
failed to comply with their obligations and covenants to be performed under
this Agreement In A Material Way, then (A) Sellers shall take any actions
necessary or appropriate to make such representation or warranty true and
complete or to comply with such obligations and covenants, and (B) the Closing
shall be postponed for such period as is required to cure the conditions
warranting such postponement.
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(b) Closing Place. The Closing shall be held at the
offices of Dow, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ in Washington, D.C., or any other place that
is agreed upon by Buyer and ValueVision.
8.2 Deliveries by Sellers. Prior to or on the Closing Date,
Sellers shall deliver to Buyer the following, in form and substance reasonably
satisfactory to Buyer and its counsel:
(a) Deeds. Duly executed quitclaim deeds that are
sufficient to vest all of any Seller's right, title, and interest in and to all
Real Property Interests (including any real property acquired before Closing
pursuant to Section 6.16 of this Agreement) in the name of Buyer, free and
clear of all claims, liabilities, security interests, mortgages, liens,
pledges, conditions, charges, covenants, easements, restrictions,
encroachments, leases, or encumbrances of any nature, except for Permitted
Encumbrances.
(b) Other Conveyancing Documents. Duly executed bills
of sale, motor vehicle titles, assignments, and other transfer documents that
are sufficient to vest good title to all Assets (other than Real Property
Interests) in the name of Buyer, free and clear of all claims, liabilities,
security interests, mortgages, liens, pledges, conditions, charges, covenants,
easements, restrictions, encroachments, leases, or encumbrances of any nature.
(c) Working Capital Payment. Any payment required to be
made by Sellers pursuant to Section 2.4(d)(1).
(d) Estoppel Certificates and Lessor's Consents. Any estoppel
certificates and consents of lessors that Sellers shall have obtained pursuant
to Section 5.11.
(e) Consents. A manually executed copy of any instrument
evidencing receipt of any Consent.
(f) Certificate. A certificate, dated as of the Closing
Date, executed on behalf of each Seller by an authorized officer, certifying
that, except as specifically stated in such certificate, (1) the
representations and warranties of each Seller and ValueVision 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) each Seller and
ValueVision 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; provided, however,
that if such certificate shall disclose, or Buyer shall notify Sellers in
writing prior to the Closing Date that Buyer has determined that, any
representation or warranty of Sellers or ValueVision contained in this
Agreement is not true and complete as of the Closing Date In A Material Way,
or that Sellers or ValueVision have failed to comply with their obligations
and covenants to be performed under this Agreement as of the Closing Date In
A Material Way, Buyer may elect to delay the Closing until such representation
or warranty is made materially true and complete or such obligation or
covenant is complied with in all material respects, as the case may be, and
Buyer's sole remedy hereunder shall be the remedy of specific performance to
compel Sellers or ValueVision to make such representation or warranty
materially true and complete or such obligation or covenant to be complied
with in all material respects. For purposes of this Agreement, "In A Material
Way" shall mean that an expenditure in excess of $100,000.00 is reasonably
estimated to be required to make
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such representation or warranty materially true and complete or to
materially comply with such obligation or covenant.
(g) 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 any Seller
in connection with its operation of the Station and included in the Assets.
8.3 Deliveries by Buyer and PCC. Prior to or on the Closing Date,
Buyer and PCC shall deliver to Sellers the following, in form and substance
reasonably satisfactory to Sellers and their counsel:
(a) Purchase Price. The Purchase Price as provided in Section 2.3.
(b) Working Capital Payment. Any payment required to be made by
Buyer pursuant to Section 2.4(d)(2).
(c) Assumption Agreements. Appropriate assumption agreements pursuant
to which Buyer shall assume and undertake to perform each Seller's obligations
under the Licenses and Assumed Contracts to the extent provided in Section
2.5.
(d) Certificate. A certificate, dated as of the Closing Date,
executed on behalf of Buyer by an authorized officer, certifying that, except
as specifically stated in such certificate, (1) the representations and
warranties of Buyer and PCC 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) Buyer and PCC have in all material respects performed and
complied with all of their obligations, covenants, and agreements set forth in
this Agreement to be performed and complied with on or prior to the Closing
Date.
SECTION 9 TERMINATION.
9.1 Termination by Sellers and ValueVision. This Agreement may be
terminated by Sellers and ValueVision and the purchase and sale of the Station
abandoned, 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 Sellers set
forth in this Agreement have not been satisfied or waived in writing by
Sellers.
(b) Judgments. If there shall be in effect on the date that would
otherwise be the Closing Date any judgment, decree, or order that would prevent
or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred on or
prior to October 1, 1997; provided, however, that Sellers and ValueVision shall
not be entitled to terminate this Agreement pursuant to this Section 9.1(c) if
(a) the Closing shall not have occurred on or prior to October 1, 1997, as a
result of the intentional breach of this Agreement by Sellers or (b) the
Closing has been postponed beyond October 1, 1997 pursuant to Section
8.1(a)(2), but only for such period as is required to cure the condition
warranting such postponement.
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(d) Breach. If Buyer or PCC is in breach in any material
respect of any of its representations, warranties, or covenants under this
Agreement.
(e) If Buyer shall not have filed with the FCC the
necessary application to sell the station described in Schedule 4.3 within
fifteen (15) business days of the date that Seller and Buyer shall have filed
with the FCC the necessary applications for the FCC Consent, as required by
Section 6.1(b).
9.2 Termination by Buyer and PCC. This Agreement may be
terminated by Buyer and PCC and the purchase and sale of the Station abandoned,
if Buyer and PCC are not then in material default, upon written notice to
Sellers and ValueVision, upon the occurrence of any of the following:
(a) Title Defects. If Buyer shall have notified Sellers
pursuant to Section 6.9(b) of any Title Defect within thirty (30) days after
the date of this Agreement and Sellers shall not have agreed within the period
specified in Section 6.9(b) to cure or correct such Title Defect; provided,
however, that Buyer may only terminate this Agreement pursuant to this Section
9.2(a) by delivering written notice to ValueVision within seven (7) days after
the end of the period specified in Section 6.9(b) during which Sellers had the
right to elect to cure or correct such Title Defect.
(b) Environmental Hazards. If Buyer shall have notified
Sellers pursuant to Section 6.10(a) of any Environmental Hazard within thirty
(30) days after the date of this Agreement and Sellers shall not have agreed
within the period specified in Section 6.10(b) to remedy such Environmental
Hazard; provided, however, that Buyer may only terminate this Agreement
pursuant to this Section 9.2(b) by delivering written notice to ValueVision
within seven (7) days after the end of the period specified in Section 6.10(b)
during which Sellers had the right to elect to remedy such Environmental
Hazard.
(c) Technical Deficiencies. If Buyer shall have notified
Sellers pursuant to Section 6.10(a) of any Technical Deficiency within thirty
(30) days after the date of this Agreement and Sellers shall not have agreed
within the period specified in Section 6.11(b) to remedy such Technical
Deficiency; provided, however, that Buyer may only terminate this Agreement
pursuant to this Section 9.2(c) by delivering written notice to ValueVision
within seven (7) days after the end of the period specified in Section 6.11(b)
during which Sellers had the right to elect to remedy such Technical
Deficiency.
(d) Material Contracts. If Sellers shall not have
obtained and delivered to Buyer, within thirty (30) days after the date of this
Agreement, with respect to each Material Contract, any consent required for the
assignment to Buyer of such Material Contract, without any change in the terms
or conditions of such Material Contract that could reasonably be expected to be
less advantageous to Buyer than those pertaining under the Material Contract as
in effect on the date of this Agreement; provided, however, that Buyer may only
terminate this Agreement pursuant to this Section 9.2(d) by delivering written
notice to ValueVision within seven (7) days after the end of such thirty-day
period if such Consent has not been delivered to Buyer.
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9.3 Escrow Deposit. Simultaneously with the execution and
delivery of this Agreement, Buyer has deposited with the Escrow Agent the
amount of One Million Dollars ($1,000,000.00) in accordance with the Escrow
Agreement. All funds and documents deposited with the Escrow Agent shall be
held and disbursed in accordance with the terms of the Escrow Agreement and the
following provisions:
(a) At the Closing, Buyer and ValueVision shall jointly
instruct the Escrow Agent to disburse all amounts held by the Escrow Agent
pursuant to the Escrow Agreement, including any interest or other proceeds from
the investment of funds held by the Escrow Agent, to or at the direction of
Buyer.
(b) If this Agreement is terminated pursuant to Section
9.1(a), (b) or (c), by Sellers and ValueVision, Buyer and ValueVision shall
jointly instruct the Escrow Agent to disburse all amounts held by the Escrow
Agent pursuant to the Escrow Agreement, including any interest or other
proceeds from the investment of funds held by the Escrow Agent, to or at the
direction of ValueVision.
(c) If this Agreement is terminated by Buyer and PCC
pursuant to Section 9.2, then Buyer and ValueVision shall jointly instruct the
Escrow Agent to disburse all amounts held by the Escrow Agent pursuant to the
Escrow Agreement, including any interest or other proceeds from the investment
of funds held by the Escrow Agent, to or at the direction of Buyer.
9.4 Rights on Termination.
(a) If this Agreement is terminated by Sellers and
ValueVision pursuant to Section 9.1(a), (b), (c), or (e), Buyer shall promptly
pay or cause to be paid to Sellers the sum of Two Million Dollars
($2,000,000.00), which amount shall be liquidated damages and shall constitute
full payment and the exclusive remedy for any damages suffered by Sellers and
ValueVision by reason of such event. The parties hereto agree in advance that
actual damages would be difficult to ascertain and that the sum of Two Million
Dollars ($2,000,000.00) is a fair and equitable amount to reimburse Sellers and
ValueVision for damages sustained due to such event. Any payment to
ValueVision pursuant to Section 9.3(b) shall be credited against Buyer's
obligation to Sellers pursuant to this Section 9.4(a).
(b) If this Agreement is terminated by Sellers and
ValueVision pursuant to Section 9.1(d), Sellers and ValueVision may pursue any
remedy available at law or equity against Buyer and PCC as a result of such
breach, including without limitation an action to recover damages from such
breach (without any limitation as set forth in Section 9.4(a) of this
Agreement).
(c) Termination of this Agreement by Buyer and PCC
pursuant to Section 9.2 shall be without liability or obligation on the part of
any Seller or ValueVision to Buyer or PCC.
9.5 Specific Performance. The parties recognize that if any
Sellers breach this Agreement and refuse 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 to obtain specific
performance of the terms of this Agreement, which shall be Buyer's exclusive
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remedy hereunder. If any action is brought by Buyer to enforce this Agreement,
each Seller shall waive the defense that there is an adequate remedy at law.
9.6 No Special Damages. No party to this Agreement shall be
entitled to any special, incidental, or consequential damages as a result of
the breach of this Agreement by any other party to this Agreement.
SECTION 10 INDEMNIFICATION.
10.1 Indemnification by Sellers and ValueVision. After the
Closing, and regardless of any investigation made at any time by or on behalf
of Buyer or PCC or any information Buyer or PCC may have, each Seller and
ValueVision hereby agree, jointly and severally, to indemnify and hold Buyer
and PCC and their officers, directors, employees, and representatives harmless
against and with respect to, and shall reimburse Buyer and its officers,
directors, employees, and representatives for:
(a) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station prior to the Closing, including
any liabilities arising under the Licenses or the Assumed Contracts that relate
to events occurring prior the Closing Date, or resulting from any other
obligations of any Seller that are not assumed by Buyer pursuant to this
Agreement, including any liabilities arising at any time under any Contract
that is not included in the Assumed Contracts;
(b) Any loss, liability, obligation, or cost resulting
from any agreement with any finder, broker, advisor, or similar Person retained
by or on behalf of any Seller relating to the transactions contemplated by this
Agreement;
(c) Any and all out-of-pocket costs and expenses,
including reasonable legal fees and expenses, incident to any action, suit,
proceeding, claim, demand, assessment, or judgment incident to the foregoing or
incurred in investigating or attempting to avoid the same or to oppose the
imposition thereof, or in enforcing this indemnity.
10.2 Indemnification by Buyer and PCC. After the Closing, and
regardless of any investigation made at any time by or on behalf of any Seller
or ValueVision or any information any Seller or ValueVision may have, Buyer and
PCC hereby agree, jointly and severally, to indemnify and hold each Seller and
ValueVision and their officers, directors, employees, and representatives
harmless against and with respect to, and shall reimburse each Seller and
ValueVision and their officers, directors, employees, and representatives for:
(a) Any and all obligations of such Seller assumed by
Buyer pursuant to this Agreement;
(b) Any and all losses, liabilities, or damages resulting
from the operation or ownership of the Station after the Closing;
(c) Any loss, liability, obligation, or cost resulting
from any agreement with any finder, broker, advisor, or similar Person retained
by or on behalf of Buyer relating to the transactions contemplated by this
Agreement; and
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(d) Any and all out-of-pocket costs and expenses,
including reasonable legal fees and expenses, incident to any action, suit,
proceeding, claim, demand, assessment, or judgment incident to 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 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.
(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 (30) 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 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, if the
Indemnifying Party notifies the Claimant in writing within ten (10) days of its
receipt of notice from the Claimant of the third-party claim that the
Indemnifying Party acknowledges its potential liability to the Claimant 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 fails timely to notify the Claimant in
writing that the Indemnifying Party acknowledges its potential liability to the
Claimant under this Agreement or if the Indemnifying Party does not elect to
assume control or otherwise participate in the defense of any third-party
claim, the Indemnifying Party 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) For the purpose of the procedures set forth in this
Section 10.3, any indemnification claim by any officer, director, employee, or
representative of Buyer shall be made
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by and through PCC, and any indemnification claim by any officer, director,
employee, or representative of any Seller shall be made by and through
ValueVision.
SECTION 11 [Intentionally omitted]
SECTION 12 MISCELLANEOUS.
12.1 Fees and Expenses. ValueVision and Buyer shall each pay
one-half of any filing fees, transfer taxes, recordation taxes, sales taxes,
document stamps, or other charges levied by any governmental entity in
connection with the transactions contemplated by this Agreement, including any
fees payable to the FCC in connection with the filing of the applications for
FCC Consent and the fee imposed by the FTC in connection with filings made
pursuant to the HSR Act. 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, and each
party shall be responsible for all fees or commissions payable to any finder,
broker, advisor, or similar Person retained by or on behalf of such party.
12.2 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 telecopier, by personal delivery, by commercial
delivery service, or by registered or certified mail, return receipt requested,
(c) deemed to have been given on the date on which the telecopy is confirmed,
the date of personal delivery, or the date set forth in the records of the
delivery service or on the return receipt, as applicable, and (d) addressed as
follows:
If to any Seller or ValueVision: ValueVision International, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telecopier: ▇-▇▇▇-▇▇▇-▇▇▇▇
With copies to: ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Attention: M. ▇▇▇▇▇▇▇ ▇▇▇
Telecopier: ▇-▇▇▇-▇▇▇-▇▇▇▇
If to Buyer or PCC: ▇▇▇▇▇▇ Communications Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman
Telecopier: ▇-▇▇▇-▇▇▇-▇▇▇▇
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With a copy to: Dow, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Telecopier: 1-202-776-2222
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
12.2.
12.3 Arbitration. Except as otherwise provided to the contrary
below, any dispute arising out of or related to this Agreement that Sellers
and/or ValueVision and Buyer and/or PCC are unable to resolve by themselves
shall be settled by arbitration in Washington, D.C., by a panel of three
arbitrators. Sellers and/or ValueVision and Buyer and/or PCC shall each
designate one disinterested arbitrator, and the two arbitrators so designated
shall select the third arbitrator. The persons selected as arbitrators 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 for large cases of the
American Arbitration Association. The written decision of a majority of the
arbitrators shall be final and binding on all Sellers, ValueVision, Buyer, and
PCC. The costs and expenses of the arbitration proceeding shall be assessed
between Sellers 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 any Seller, ValueVision, Buyer or
PCC against any other party except (a) an action to compel arbitration pursuant
to this Section 12.3, (b) an action to enforce the award of the arbitration
panel rendered in accordance with this Section, or (c) a suit for specific
performance pursuant to Section 9.5.
12.4 Benefit and Binding Effect. (a) No party may this Agreement
without the prior written consent of the other parties hereto, except that (a)
without the consent of any Seller or ValueVision, Buyer may (i) collaterally
assign its rights and interests under this Agreement to its lenders, and (b)
without the consent of Buyer or PCC, either Seller may assign its rights and
interests under this Agreement to the other or to ValueVision in connection
with the assignment of all its assets and liabilities to the other or to
ValueVision. If either Seller assigns all its assets to the other or to
ValueVision as contemplated by the preceding sentence and, in connection
therewith, ValueVision assumes all obligations and liabilities of such Seller
under this Agreement, Buyer and Sellers agree to amend this Agreement so as to
eliminate such Seller as a party hereto and to reflect the assumption by
ValueVision of all obligations and liabilities of Seller under this
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Agreement. This Agreement shall be binding upon and inure to the benefit of
the parties and their respective successors and permitted assigns.
(b) Upon notice by either Seller or Buyer that an assignment
permitted by Section 12.4(a) has occurred, the other party shall enter into an
Amended and Restated Asset Purchase Agreement to reflect the new parties hereto
as a result of such assignment; provided that the other party shall not
condition its execution of such Amended and Restated Asset Purchase Agreement
upon the modification or inclusion of any provision therein. The other party
shall execute any such Amended and Restated Asset Purchase Agreement within two
(2) business days of presentation of same by Sellers or Buyer, as the case may
be, and any failure or refusal to do so shall be a material breach of this
Agreement.
12.5 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
Sellers, any additional deeds, bills of sale, 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.
12.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED, CONSTRUED,
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE (WITHOUT
REGARD TO THE CHOICE OF LAW PROVISIONS THEREOF).
12.7 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.
12.8 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.
12.9 Entire Agreement. This Agreement, the Escrow 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, PCC, Sellers, and ValueVision with
respect to the subject matter of this Agreement. This Agreement supersedes all
prior negotiations among Buyer, PCC, Sellers, and ValueVision and cannot be
amended, supplemented, or changed except by an agreement in writing that makes
specific reference to this Agreement and that is signed by the party against
which enforcement of any such amendment, supplement, or modification is sought.
12.10 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 in this
Agreement may be waived by the party entitled to the benefits thereof only by a
written instrument signed by the party granting such
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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 12.10.
12.11 Counterparts. This Agreement may be signed in counterparts
with the same effect as if the signature on each counterpart were upon the same
instrument.
IN WITNESS WHEREOF, this Agreement has been executed by Sellers,
ValueVision, Buyer, and PCC as of the date first written above.
VALUEVISION INTERNATIONAL, INC.
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
VVI MANASSAS, INC.
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
WVVI(TV), INC.
By:
---------------------------
Name:
---------------------------
Title:
---------------------------
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▇▇▇▇▇▇ COMMUNICATIONS OF
WASHINGTON-66, INC.
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
▇▇▇▇▇▇ COMMUNICATIONS
CORPORATION
By:
-------------------------------
Name:
----------------------------
Title:
----------------------------
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